updated 11/26/2008 11:07:47 AM ET 2008-11-26T16:07:47

Guest: Mark Halperin, Robert Reich, Ron Brownstein, Michelle Bernard, Lawrence O'Donnell, Jon Meacham

MIKA BRZEZINSKI, HOST: Tonight, page two of President-elect Obama's economic rollout. Two more appointments and a clearer picture of the road ahead. The Fed makes another bold move to try to inject life into the economy. And Sarah Palin back on the campaign trail? It's all straight ahead on 1600 PENNSYLVANIA AVENUE.Fifty-six days until the inauguration of President-elect Obama. Welcome to the show. I'm Mika Brzezinski, in for David Gregory. My headline tonight, "Two More Names and a Call for Action." The president-elect clearly sending a message that he is all over the global economic crisis. For two days now he has held press conferences announcing members of his economic team. And he is not done yet. Obama has announced that tomorrow he'll be holding a third Chicago press conference on the economy but remains tight-lipped as to what ground he'll be covering then. But today the president-elect said part of the charges he'll be issuing his team is to find areas where they can get a "twofer," short-term stimulus and lay ground for economic growth. And he issued a warning as well-this will not come without sacrifice.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: But if we are going to make the investments we need, we also have to be willing to shed the spending that we don't need. In these challenging times, when we're facing both rising deficits and a shrinking economy, budget reform is not an option. It's a necessity.

(END VIDEO CLIP)

BRZEZINSKI: The newest members nominated to the team are Peter Orszag, the director of the Office of Management and Budget. And the man who will serve as his deputy, Rob Nabors. These two certainly have their work cut out for them though. The Office of Management and Budget is the arm of the White House responsible for crafting the federal budget and overseeing the effectiveness of federal programs. The president-elect has pledged to eliminate what are determined to be unnecessary government programs and said that Orszag "... doesn't need a map to know where the bodies are buried in the federal budget." Obama also said there are more announcements to come, including his secretary of labor, who will also be a key player in a team designed to tackle the country's multifaceted financial nightmare. And this just in. According to NBC's Jim Miklaszewski, a source familiar with the selection process says that current Defense Secretary Robert Gates will remain on the job at the Pentagon for at least a year. According to sources, this has been "a done deal" for some time now, and no other name has been seriously floated as a possible candidate. Joining me now to weigh in on all of this, Mark Halperin, editor-at-large and senior political analyst for "TIME" magazine.

Mark, thanks for coming in. No surprise on Gates.

MARK HALPERIN, EDITOR-AT-LARGE, "TIME": Well, it's been there for a while.

BRZEZINSKI: It's been there. Hanging.

HALPERIN: But it is part of the emerging national security team. There has been so much focused on the economy, so much focus on who he would pick, how he's interacting with the White House, what kind of things he'll do come inauguration, that I think the national security team, with the exception of the Hillary Clinton for secretary of state factor, has not gotten as much attention as it should have gotten and that it's going to get. Keeping Gates is a big deal.

BRZEZINSKI: What do you make of it? Because we had Secretary Paulson, who had a press conference today. And then shortly after, Barack Obama held his second in two days, a third coming tomorrow. First of all, how connected do these press conferences seem to be? Do you get a sense of who is in charge? That they're working together?

HALPERIN: A lot is happening that we're seeing. I think the important stuff is the stuff we're not seeing. And we can only speculate about it in an informed way. Clearly, Barack Obama was going to be more visible. He has to be to announce these cabinet choices. But it's also clear they cannot leave a vacuum. And Barack Obama said as much today. He said, "Yes, I still believe"-in response to a reporter's question-"there is only one president at a time." Nice of him to agree with that.

BRZEZINSKI: Yes.

HALPERIN: But you've got to-he said you've got to be sensitive to the fact that the people need to know that he's going to hit the ground running. He has got to step it up. And he has.

BRZEZINSKI: Let go over two sound bites. First, Barack Obama talking about his priorities when it comes to the economy. I want to talk to you about everything form tone to content. Here it is.

(BEGIN VIDEO CLIP)

OBAMA: My first priority and my first job is to get us on the path of economic recovery, to create 2.5 million jobs, to provide relief to middle class families. But as soon as the recovery is well under way, then we've got to set up a long-term plan to reduce the structural deficit.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: It's very important that the next team understand everything we have in place and be able to-to be able to carry them out effectively. And I would say Tim is very well positioned for that because he understands everything we have in place today, and participated very actively in helping put it in place.

(END VIDEO CLIP)

BRZEZINSKI: All right. Well, that was Secretary Paulson right after Barack Obama. I want to ask you about that as well. He was talking about Tim Geithner, the choice for treasury secretary.

HALPERIN: Right.

BRZEZINSKI: Let's start there. Is that a good thing or a bad thing that he links Geithner to the process that's already in place, the bailout process, that some would argue has a lot of holes in it?

HALPERIN: Look, ,one advantage Barack Obama has that has not been very much discussed is Democrats control the Senate. He's not going to have bruising confirmation battles for people, even someone like Geithner, who, if there were Republicans controlling the Senate now, you would see lot of going over, what has his role been, what decisions has he made? I think in the end, Barack Obama is going to not want to have a presidency that is run by crisis. He wants to try to bring as much order as quickly as possible. And look, a smart politician like Barack Obama, like his chief of staff, Rahm Emanuel, what is the one rule they live by? You control what you can control, and if you can't control it, you leave it alone. They can't control what this administration is doing. They have input. They're certainly being informed about the decisions, but they're going to inherit what they're going to inherit on Election Day. And I think they're trying to plan as best they can for that. But as we saw today with the Fed's actions, this thing is growing bigger by the day.

BRZEZINSKI: It is. They certainly-I mean, nobody is going to blame them for overestimating it. The concern will be that they underestimate it, because there are a lot of people who know a lot more about this than either you or me who are saying they don't know where the bottom is.

HALPERIN: They certainly don't. And look, we're now seeing money thrown around very quickly, whereas in the early days of this, it took the administration coming forward and saying, virtually publicly, if decisions aren't made, if money is not allocated right away, this economy is going to collapse. You don't hear that absolute grim doomsday talk anymore. But clearly behind the scenes, that is still the belief, because, again, you're seeing money going out the door for all sorts of things now, ,quickly, without a lot of public debate. And again, the Obama team is continuing to be informed, maybe consulted, but they're certainly not making the decisions yet. And that, again, is putting them on Inauguration Day in a position of not knowing what they'll inherit and not being fully responsible for it.

BRZEZINSKI: And just really quickly, on your blog today you said that Obama was much looser and jokier. Setting a tone, I guess, that he's in control? Or what were you gathering from it?

HALPERIN: He was relatively grim yesterday. Today he went out of his way to joke about sports, one of his favorite topics for joking. I think he has got to balance this entire holiday season. He wants people to see him as optimistic, who has got his arms around the problem-he is good at projecting that-but I think there are days when he feels, as apparently he did yesterday, that this is a grim situation, it requires a kind of earnestness and almost a grimness to match the mood and the problems.

BRZEZINSKI: Absolutely. All right. Mark Halperin, we're going to have you back throughout the show. Thanks very much. President-elect Obama says creating 2.5 million new jobs is a cornerstone of his economic recovery plan. Joining me now to go one-on-one is Robert Reich, secretary of labor under President Clinton and the author of "Supercapitalism: The Transformation of Business, Democracy and Everyday Life." Do you got any advice for us in there?

ROBERT REICH, FMR. LABOR SECRETARY: A lot of advice, Mika. And actually, everyday life is going to be getting harder and harder. And 2009, unfortunately, is going to be a very, very hard year.

BRZEZINSKI: Yes, I think that we can all agree on. I want to read from your blog because you slammed the Citi bailout on it. Here's what you say. "If you had any doubt at all about the primacy of Wall Street over Main Street; the utter lack of transparency behind the biggest government giveaway in history to financial executives and their shareholders, directors and creditors; and the intimate connections that lie between the administrations, both Republican and Democrat, and the heavyweights on Wall Street; your doubts should be laid to rest. The senior executives of Citi, including those who have served at the highest levels in the U.S. government, have done their jobs exceedingly well."You're not mincing words. But then we have got Robert Rubin, who was extremely high up at Citi, played a huge role. And a lot of the folks on Barack Obama's new economic team are Rubin acolytes.

REICH: Well, Mika, I am certainly not in any way blaming Bob Rubin for what's happened. And I think that the people who are on the team, from Larry Summers through Tim Geithner and Peter Orszag, are just about the best people in the business. It's a wonderful statement (ph), a sterling team. But there is limited focus that Hank Paulson has brought to this in terms of bailing out Wall Street and not bailing out Main Street. I think that focus is going to change under the new administration, even though Geithner has worked very, very closely with Paulson. I think that Barack Obama, our president-elect, really wants to make sure that some of this money gets down to homeowners who are distressed and small businesses, students who need loans, a lot of creditworthy car buyers. Everybody else on Main Street who has not seen the credit flowing.

BRZEZINSKI: All right. Let me ask you this. And I want to read from "The New York Times" about Mr. Obama's economic advisers. And this involves Tim Geithner. "At the New York Fed, Mr. Geithner has been one of the ringmasters of this year's serial bailouts. It is still unclear Mr. Geithner and other policymakers knew or did not know-or what they thought they knew but didn't-in arriving at those decisions, including who exactly is on the receiving end of the billions of dollars of taxpayer money now flooding the system. Confidence in the system will not be restored as long as top officials fail or refuse to fully explain their actions." I think transparency is needed.

REICH: Yes, Mika, I agree with you completely. I think that one of the big problems of the current administration and one of the big failings of Hank Paulson is failure of transparency. I mean, Wall Street itself, not just the American people, not just our democratic system, ,but Wall Street itself needs transparency. It needs to know what the Treasury is doing and why. And Paulson originally started out in one direction, he was going to buy back a lot of these toxic securities, and then he switched and he went in the direction of recapitalizing Wall Street, throwing a lot of money at Wall Street. And now he has announced a slight change again, trying to go after homeowners. Well, the trouble is, when nobody knows what direction the Treasury Department is going in, you create a lot of uncertainty on Wall Street. And uncertainty itself is a problem itself.

BRZEZINSKI: We don't need uncertainty. We need transparency. And we need trust. I certainly hope we get it. Mr. Reich, thanks very much for joining me this evening.

REICH: Thanks, Mika.

BRZEZINSKI: Up next, we're going to look into the future. What accomplishments can we expect from the Obama administration six months down the road? When 1600 PENNSYLVANIA AVENUE returns right after this.

(COMMERCIAL BREAK)

BRZEZINSKI: Welcome back to 1600 PENNSYLVANIA AVENUE.In his second news conference this week, President-elect Barack Obama rolled out more members of his economic team and vowed to change "the old ways of Washington."

(BEGIN VIDEO CLIP)

OBAMA: This isn't about big government or small government. It's about building a smarter government that focuses on what works. And that's why I will ask my new team to think anew and act anew to meet our new challenges. The old ways of Washington simply can't meet the challenges of today and tomorrow.

(END VIDEO CLIP)

BRZEZINSKI: Joining me now to talk about how today's announcements are likely to translate into policy changes in the next administration, Ron Brownstein, political director for Atlantic Media; Michelle Bernard, president of the Independent Women's Forum and an MSNBC political analyst; Lawrence O'Donnell, former chief of staff to the Senate Finance Committee, also an MSNBC political analyst; and still with us, Mark Halperin, editor-at-large and senior political analyst for "TIME" magazine. Mark, I'm going to start with you. I'm going to go around the block here. For two days now we've heard from Barack Obama. He's been rolling out this economic team. We know of at least six names at this point and more to come. Based on your knowledge of this group and your work looking into them, what do you think we will tangibly see three to six months from now from the Obama administration? Anything?

HALPERIN: I think that we will see an effort made to get bipartisan votes on big package that try do exactly what the president-elect said-deal with the short-term problem, particularly stimulus, shoring up weak financial institutions, and trying to take advantage of the chaos and the crisis by trying to do thing on the environment, and health care in particular, that he would want to do anyway.

BRZEZINSKI: Lawrence, any indication of the direction we'll be headed, as opposed to if we had the present administration still in place?

LAWRENCE O'DONNELL, MSNBC POLITICAL ANALYST: Well, he's made it very clear that he's going to go for a very big public works purchase, the likes of which we haven't seen in a very long time. He is also indicating that he is going to try to fold health care into what they will define as a broad stimulus package. Now, health care is a very slow-moving vehicle legislatively in a normal legislative environment. To think that can be done in the first six months is extremely unlikely, but that would be the very high-speed version of it. And if they do the high-speed version, it would be sort of a bare bones version in policy terms.

BRZEZINSKI: Ron Brownstein, is he being too ambitious or can this team pull it off?

RON BROWNSTEIN, POLITICAL DIRECTOR, ATLANTIC MEDIA: No, they can do a lot. I mean, I think there are two different tracks we're going to see. One is-Rahm Emanuel moderated a panel this summer at the Denver convention on how Obama might governor. And Rahm, then speaking for the Democratic leadership, said, look, the way to establish momentum is to immediately come back to issues where they had a majority in the House and the Senate but Bush blocked it with a veto. That would be an expansion of the Children's Health Insurance Program, for the working poor, repealing Bush's limits on stem-cell research and perhaps some other areas. That's one track. The other track is, as Mark and Larry suggested-Lawrence suggested was folding into the stimulus plan things that he would want to do anyway. And that would include, I think notably, his energy agenda. One of the problems, Mika, he has is that funding for his energy agenda comes from passing a cap and trade bill. Last year they brought it up on the floor. It is not going to pass anytime soon. There are ways with having a consensus for that. And the stimulus bill would allow him to get around that and begin funding his infrastructure bank, his energy proposals, and also his tax cut for the middle class, sort of a rebate against payroll taxes. All of that could easily be folded into a stimulus package and allow him to move forward before some of that underlying legislation has fully coalesced.

BRZEZINSKI: Mark Halperin?

HALPERIN: I think Ron is exactly right, that that's what they'll try. The question for me is, can they do it with meaningful Republican votes? If they have to do it in a partisan way, I think the thing veers in direction both in terms of policy and politics that won't be as helpful to him to establish momentum and that sense of national unity that he wants and needs to tackle things at this level.

BRZEZINSKI: I want to talk about transparency. But before we get there, Michelle Bernard, let me bring you into this.I want to read from "Washington is Busy Spending Lots and Lots of Money." That's the title here. Let me read this to you. "Wars, bailouts, unemployment aid, automakers. Washington has opened the tap on big spending and money is gushing down the pipeline. The national debt now stands at $10.6 trillion compared with about $5.7 trillion in 2000, before George W. Bush took office. Buckle up, because that figure is going to climb." Do we just ignore that, Michelle, because we have got to get out of this hole?

MICHELLE BERNARD, MSNBC POLITICAL ANALYST: Well, there are people that would argue that we ignore it, but quite frankly, I don't think that the American public has any kind of stomach whatsoever to continue to see industry after industry being bailed out. And the bottom line is that consumers are not feeling a positive net effect. Anyone who looks at our nation's gross national product in comparison to this rising, mounting debt, I think is going to very seriously question any sort of new economic stimulus package that the new administration is going to want. I think most people are going to be more excited, even though it's very difficult, will be more excited and more interested in hearing President-elect Obama's ideas for what needs to be cut out of the budget so that we can reduce spending and get our government sort of more normalized, so to speak.

BRZEZINSKI: Well, and who gets bailed out and why, Ron? Because, I mean, the big three are waiting for their handout. Citi gets one. I mean, who's going to say why they shouldn't?

BROWNSTEIN: Well, first of all, I couldn't really disagree more with what Michelle just said. I don't think that that is where the country is, kind of in a green eyeshade mode now. I think the country is very oriented toward Washington taking bold action to try to move us out of what look like a very precipitous ditch. Now, the question of exactly how that is done is going to be the debate. And don't forget, the Obama-where Obama and the Democrats will try to steer this debate is away from directly putting money into individual industries. Yes, they want to deal with the auto industry. But by and large, they are trying to steer it toward broad social projects-promoting alternative energy, rebuilding infrastructure, a tax cut for the middle class. And I think in this context, all of those ideas are likely to be in fact much more popular than the idea of simply reducing expenditures, although you may have to do some of that on the offset because, in fact, as you point out, there is a genuine concern about the size of this deficit and the national debt, which is functionally doubling under Bush's watch.

BRZEZINSKI: I think there is general concern, Lawrence O'Donnell, all around about where the money is going to come from. I mean I guess at this point, maybe people don't care as much as long as we get jobs?

O'DONNELL: But the number one political demand on a president in this situation is do something. Make something happen positively in terms of economic growth. Now, there is no economic theory that says you will get some economic growth out of spending cuts in this government or out of tax increases that Obama has talked about. And so that's why there's not going to be as much nervousness, as Ron Brownstein has said, about exactly how we're balancing the budget or not as we go forward with these expenditures. And so Obama has got to gamble. He has said he will. He has said he wants to jolt the economy. You don't jolt this economy without a gigantic new spending package that cannot be paid for in current accounts.

BRZEZINSKI: Well, certainly a gigantic amount of money. But Michelle Bernard, I think you bring up a really good point about blank checks being written to different financial institutions, and the lack of transparency. So far, I don't know where this money is exactly going.

BERNARD: We don't know where the money is going. And quite frankly, if you talk to just your average citizen on the street about what's happening in the economy, people want jobs and people raise a very valid question when you ask, who determines who is going to get bailout money, how much they're going to get, and why aren't I, for example, being bailed out? That is a very valid and is a very legitimate concern. Everyone in this nation is looking for change. That's why we have a new president coming in. I think that six months from now, we will begin to really understand just exact what the legacy of the Bush administration will be financially and what the impact is really going to be on this nation.

BRZEZINSKI: Yes.

BERNARD: And a lot of the things that the president-elect wants to enact, I think that the nation will sit back and realize that it is an impossibility financially at this point in time. And people are going to continue to ask, where is the money coming from? If people are unemployed, where is the money coming from to pay for all of these bailouts?

BRZEZINSKI: It's a good question.

Mark Halperin?

HALPERIN: There's going to be nine-ring circus just on the domestic economic crisis that Barack Obama is going to have to deal with. And if conservatives and Republicans take the position that the kinds of things that George Bush did in his last months in office, in terms of bailouts, in terms of money, taxpayer money going to the private sector, if they take the position that that is bad policy, they take it from the populist right, and Obama cannot bring them back in the fold, that ring is going to be on fire and it's going to engulf any effort he makes to try to bring conservatives in. And again, I think that's vital for his long-term success.

BROWNSTEIN: But -- right. Can I jump in?

BRZEZINSKI: Real quick.

BROWNSTEIN: Real quick. The separate issue though is the remaining Republican moderates and swing state voters looking at what's happened in these last two elections, the evisceration of the Republican ranks in blue and blue-leaning states. You do have to wonder whether or not he can bring in some of those more fiscally hawkish members, whether Arlen Specter, who will be up in 2010, or Olympia Snowe, or Susan Collins...

BRZEZINSKI: Yes.

BROWNSTEIN: ... or some these others might feel the need to work with them. And in general, the ability to put some of these agenda items under a stimulus rubric would give him a better chance of moving them forward, I think, that he would have had otherwise...

BRZEZINSKI: Yes.

BROWNSTEIN: ... when you would have, in fact, seen more of the concerns that Michelle raised not only from Republicans, but some of those blue dog Democrats about the overall costs.

BRZEZINSKI: Well, I'm concerned.The panel hangs in for now.Coming up next, Governor Sarah Palin going back on the campaign trail. More on that when we go "Inside the Briefing Room" right after this.

(COMMERCIAL BREAK)

BRZEZINSKI: We're back with a look at what's going on "Inside the Briefing Room." President and Vice President-elect Obama and Biden will be heading to Philadelphia on Tuesday for a meeting of the nation's governors. On the agenda, discussion of the economic crisis and how it's hurting state budgets. The big question, will Governor Palin, Sarah Palin, be there to come face to face with the very ticket that defeated her? But what we do know for sure about the governor's travel schedule is that she'll be in Georgia on Monday campaigning for incumbent Senator Saxby Chambliss, who is heading into a December 2nd runoff against Jim Martin. Rudy Giuliani campaigned for Chambliss in Georgia today. Also, John McCain held his first press conference since losing the election. He held that press conference today and announced that he will run for Senate reelection in 2010. He took questions from the press and defended his decision to pick Palin as his vice presidential running mate.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA: I think she was-did a great job of energizing our base. I'm very proud of her. And it's one of the great pleasures I've had, to get to know her and her family. And I think she has a very bright future in leadership position in the Republican Party, and I'm still extremely proud of the fact that she agreed to be my running mate.

(END VIDEO CLIP)

BRZEZINSKI: Up next, President-elect Obama vows to make the budget smarter. How he plans to do and it who will head up his budget team. We'll have all the news and analysis from day two of Obama's economic rollout when 1600 PENNSYLVANIA AVENUE returns.

(COMMERCIAL BREAK)

BRZEZINSKI: Tonight, fixing the budget "Sopranos" style. President Elect Obama invokes a Mafia metaphor to explain how his team will eliminate government waste, get spending under control and stimulate growth. That was the message from day two of an extraordinary three-day economic rollout, led by the man who is not quite yet in charge at 1600 PENNSYLVANIA AVENUE. Welcome back to 1600 PENNSYLVANIA AVENUE. Today, the president-elect put the focus on the budget, saying reform was, quote, not an option but a necessity. He also announced his new budget director, Peter Orszag, and described in colorful terms how Orszag would rout out waste in the budget.

(BEGIN VIDEO CLIP)

OBAMA: Peter doesn't need a map to tell him where the bodies are buried in the federal budget. He know what works and what doesn't, what is worthy of our precious tax dollars and what is not. Just because a program, a special interest tax break or corporate subsidy is hidden in this year's budget does not mean that it will survive the next.

(END VIDEO CLIP)

BRZEZINSKI: OK. Joining me now, Lawrence O'Donnell, former chief of staff to the Senate Finance Committee and an MSNBC political analyst, John Meacham, "Newsweek" editor, Michelle Bernard, president of the Independent Women's Forum and also an MSNBC political analyst and Ron Brownstein, political director for "Atlantic Media." Also, Dylan Ratigan getting wired up as we speak. I want to show the entire panel Barack Obama. This is how he described how his team will actually operate. Here it is.

(BEGIN VIDEO CLIP)

OBAMA: This isn't about big government or small government. It's about building a smarter government that focuses on what works. We are going to go through our federal budget, as I promised during the campaign, page by page, line by line, eliminating those programs we don't need and insisting that those that we do need operate in a sensible, cost effective way.

(END VIDEO CLIP)

BRZEZINSKI: John Meacham, first of all, I just want to get your thoughts on the record here. What do you think so far about this roll out, this three-day roll out, which is interesting? You thought it would be one big press conference, perhaps. He's dragging this out, probably for a reason.

JON MEACHAM, "NEWSWEEK": He knows how to dominate news cycles.

BRZEZINSKI: That helps.

MEACHAM: And he knows how to control the conversation. This campaign and now this transition has been incredibly effective at setting terms of the conversation, of what people like us talk about, of hopefully what ordinary folk are talking about as they look to him for leadership. He is on a faster pace than most transitions. Most presidents take about seven week to get the whole crew together. And he is moving more quickly. So I think he has done it very effectively so far. To talk about how he is going to solve things by eliminating government waste is-actually been, I think, since Thomas Jefferson, has been trying to do that. So there is a certain familiar-Lawrence buried most of those bodies.

BRZEZINSKI: Yes, he did. Did you make a movie about that, perhaps? Let me read the panel this editorial. I think it's really good, from the "Boston Globe," about the stimulus plan, "in the short term, the stimulus package must be big enough to make a difference and quickly. Still, it's important that the money be spent strategically. Sending rebate checks directly to citizens didn't work for the Bush administration, as anxious Americans mostly banked the cash, and just distributing infrastructure through block grants to the state could end up undermining environmental sustainability, another priority, by contributing to sprawl in the politically powerful suburbs." There are so many reasons and ways this money, Ron Brownstein, could be misused. And so far in the bail outs that we have watched, we don't know where the money goes.

RON BROWNSTEIN, "ATLANTIC MEDIA": First of all, one of the most questionable aspects of Obama's agenda to me, at least from the beginning, has been this idea of a substantial middle class tax cut at a time we are running record deficits. In effect, that amounts to borrowing the money from the next generation to give ourselves a tax cut. That's functionally what you are doing when you cut taxes and you have a deficit. And there are. I do think it is important to keep in mind here that we're talking about two different kinds of stimulus. And where Obama wants to go is different than what we have been primarily talking about in the last few months, putting money directly into trouble industries and companies, and shifting toward broader social goals, spending that would have been part of his agenda anyway, an infrastructure bank of about 10 billion dollars a year, large investments of 15 billion dollars a year in alternative energy. So the conversation is going to go in a different direction. You still have the same issues you always do about large scale federal spending and some percentage of it is always going to be wasted or go in a direction that isn't necessarily positive. But it is going to be a different kind of spending that he is talking about. And it will make it easier for him to move those ideas forward, as we said before.

BRZEZINSKI: Ron, you make a good point. Michelle, we're talking about such gigantic amounts of money. How does this new president make a process where we actually feel like our money is being put to good use?

BERNARD: Exactly. And how do you open up the process that is transparent and, like you said, Mika, that it's being put to good use? And also, really, how do you open up the process in a way where American citizens are actually feeling that right away, or at least feeling it in the short term, or as soon as absolutely possible. Going back to an earlier point that you made, that it is important to talk about this three-day press conference that he is doing. I think that is the beginning of the process. People have been having a lot of trepidation because we seem to be in this sort of purgatory, this power vacuum, where you're wondering who was in charge. I think the markets seem to be rallying a little bit every time we see the president-elect come out and show us that there is somebody in charge, that there is an adult who will be running the White House shortly, that has ideas, that's bringing in a very fierce team, and is giving the American public some sort of solace that somebody is going to be in office sooner rather than later.

BRZEZINSKI: There is no question, Michelle, there is a lot of hope and excitement about Barack Obama and his taking control of the situation, even a little bit early. Dylan Ratigan, ready to go. That honeymoon could end so quickly. I hate to put it in crass terms, but if people feel like they're getting screwed again, when it comes to bail out money and transparency, we're going to be back at square one, maybe even in a worse situation.

DYLAN RATIGAN, CNBC ANCHOR: There is such an opportunity. We've talked about transparency a dozen times and then some at this point on "MORNING JOE," on this program, on every other program that exists. And yet we still don't get much of it. There is an opportunity for the incoming president to say, I'm going to run a transparent administration. I'm going to utilize technology to do that, so that people can log on and see, as a public servant, what I'm doing. And I'm going to demand that everybody in the Democratic party do the same thing. In other words, Obama is the one person who he is in a situation where he can actually alter the relationship between the public servants in this country and the citizens of this country, and in the process, not only restore confidence, but likely eliminate trillions of dollars in waste.

LAWRENCE O'DONNELL, MSNBC POLITICAL ANALYST: Look, you're going to have 100 percent transparency-you're going to have 100 percent transparency in the stimulus package, as we always have, because it is going to be federal legislation. It is going to be written down on paper and you're going to be able to check it out and read it on the Internet. By the way, it is not going to be block grants, as the "Boston Globe" fears. Do you know what it is going to be? It's going to be that evil thing ear marks. It's going to be the federal government, the public works-No. This is actually wise government. And John McCain has given ear marks a simple minded, stupid label. This will be the federal government saying, let's improve port security in Long Beach, and let's do it this way, not just say to the governor of California --

RATIGAN: Lawrence, why can't we have a situation where those-we keep track of production assistants at MSNBC better than we keep track of the people who are spending a third of our salary in Washington every single day.

O'DONNELL: No, no. Get a copy of the Budget of the United States. It is all in there. It is all written down.

RATIGAN: I know that, Lawrence.

O'DONNELL: It is not easy to read, but it is all public information. There is no secret money being spent.

RATIGAN: What's not there is the expenses, all the lunches with the lobbyists, all the people that are making 200,000 dollars a year at the Treasury to do what, I don't know. There's so many more aspects-

O'DONNELL: No one makes 200,000 dollars a year at the Treasury, just for the record.

RATIGAN: Fair enough. My point is there is so much more of an opportunity to account for how the money in the country is being spent and disclose it by way of technology. There's no apparent reason why we wouldn't do that.

BROWNSTEIN: Can I jump in? First of all, the kinds of thing you're talking about are rounding errors. The real issue in the long term federal spending are Medicare, Medicaid, in particular, the entitlements. When we talk about going through the budget and cutting waste, ultimately, as Peter Orszag well knows and has talked about over the years, the rise in health care cost is the primary driver of the long term threat to the federal government. Second of all, Obama has done exactly what you said, what you called for. It received very little attention, but early in the campaign, he put out a very detailed agenda for how he would use technology to try to increase transparency and create more interface between the government and average citizens. For example, he talked about requiring his cabinet secretaries to hold online town hall meetings. He sponsored a bill with Tom Coburn called "Google For Government," in which he put online all government contracts. There are a variety of other proposals that he's put out to talk about exactly how to do what you're saying. In the end, what we're talking about is kind of a cheap populism here. When you talk about expense account lunches, when you talk about --

RATIGAN: My point is this-

BROWNSTEIN: These are rounding errors in the long term. Ultimately, we have to face the long term costs of health care and whether we can afford the promises we've made to retirees.

RATIGAN: There's no question what you're saying is true in terms of our obligations and that that is the fundamental hurdle that we must clear. But to say that it is a rounding error, that the level of waste and inefficiency, the extent to which they are able to alter legislation in secret, in effect, like they did with the bailout bill.

BROWNSTEIN: Ear marks are a rounding error.

RATIGAN: Be that as it may. I don't care if it's a rounding error or not, it is one I would like to get rid of.

(CROSS TALK)

O'DONNELL: Ear marks are less than one percent of the federal budget.

RATIGAN: When people are allowed to keep secrets with other people's money, they do bad things.

O'DONNELL: They're not secrets. The legislation is published. It is written down. It is not an easy thing to go do your homework and read, but it is public information.

BROWNSTEIN: The reason I recoil against that kind of argument is that it makes the choice too easy for the public. In fact, you cannot bring this long term fiscal situation into anything approaching balance --

RATIGAN: But I'm not suggesting that.

(CROSS TALK)

RATIGAN: I'm saying this is the low hanging fruit. I'm not suggesting this is the solution. I'm saying this is the low hanging fruit. Let's just flip the lights on because we can and because we got into a huge financial crisis because the lights were turned off. We credit default swaps secret. We kept the 40 to one leverage secret. The list of secrets in Washington the past ten years is largely the reason we are in the economic situation we're in. Let me finish. I don't believe the burden is on me to argue why we should be transparent. I believe the burden is on our politicians as to why we should not.

BROWNSTEIN: All that may be true. But the reasons why we are facing this enormous debt is not in fact secret. It is right out in front.

RATIGAN: The reason we got into the situation-

(CROSS TALK)

RATIGAN: Let me be very, very clear. Let me be very clear, because I know how we got into this situation. Trust me. When Bill Clinton signed a law making the credit default swap, which is an insurance mechanism for people's home loans, less regulated than a slot machine in Reno, such that they were able to keep pennies on the dollar as collateral and wind up our credit system in a way that has never been seen before-if you're telling me that secret did not go into the situation we're in, I would simply argue that you are mistaken.

BRZEZINSKI: What we have to do, Ron-you're staying on. Dylan has to go. I hate to get in the way of a good conversation, but we to have to leave it there. And I don't like the idea of things flying under the radar. But Ron, I'll give you a moment coming up to continue on with this. Coming up next-Dylan, thanks. Taking a look at the historic transition. How are the Bush and Obama teams cooperating so far? It is pretty unprecedented. Will the outgoing Bush team take a cue from the Clinton folks when it comes to West Wing mischief? 1600 PENNSYLVANIA AVENUE returns right after this.

(COMMERCIAL BREAK)

BRZEZINSKI: Welcome back to 1600 PENNSYLVANIA AVENUE. President-Elect Barack Obama has said repeatedly that there is only one president at a time. But with the economic crisis intensified by the perception of a leadership vacuum in Washington, what lessons can Obama and the outgoing Bush administration take from some of the rocky transitions of the past? And there have been some rocky ones. Back with me, Jon Meacham, editor of "Newsweek Magazine" and author of a great new book, a great new book. There it is, "American Lion, Andrew Jackson in the White House." So you've studied a president or two.

MEACHAM: That was not a good transition.

BRZEZINSKI: Was there gun fire involved?

MEACHAM: Sort of. John Quincy Adams to Andrew Jackson was pretty miserable there in the winter of-Very quickly: 1828, Jackson's wife dies.

BRZEZINSKI: That's bad.

MEACHAM: That's bad. You don't want that. Jackson hated John Quincy Adams so much, kind of like Jesus hates sin. So he did not want anything to do with him, refused to speak with him. They never met. Adams did not come to the inauguration. He learned that he had stopped being president when he heard the cannon fire at the Capitol as he was riding his horse off to his retirement home. The other slightly more modern example is 1932, which our colleague Jonathan Alter has written extremely well about. And FDR trying to avoid responsibility when he had no authority. And what is interesting about what I think Obama is doing is he seems to be somewhere in between. Trying to show that he is on top of things, without actually having to pay a price yet for them if they continue not to go well.

BRZEZINSKI: Also, there's such unprecedented-the moment in history. I think we have to go really far back to find equal challenges happening at a time of transition.

MEACHAM: I would say 1932 and 1980.

BRZEZINSKI: '80. But can they take any lessons from previous-I mean, not going as far back as Jackson, but from perhaps Clinton and Bush, the transitions there.

MEACHAM: Well, the 1992-1993 transition is pretty much considered sea faring on the Titanic. That's not a good example, the first Clinton one. 1980 is interesting, because you had the President Carter and Governor Reagan were not what you would call close.

BRZEZINSKI: It was a tough time.

MEACHAM: You had the Iranian hostage crisis.

BRZEZINSKI: That was awful.

MEACHAM: Terrible misery index.

BRZEZINSKI: And really, really demoralizing for President Carter at the end, at the very final moments. Painful.

MEACHAM: Precisely. You know the story about, they drove-when they rode in the car-Carter had been up for two or three days.

BRZEZINSKI: I hate this story. Tell it, go ahead.

MEACHAM: Sorry. From the White House to the Capitol. They get there and Carter says an aide, all Reagan did was tell stories. Who exactly is this Jack Warner? So Reagan was trying to use his sense of humor and his geniality to get through a very tough thing, and he also-Carter wanted to be president until the very last moment, which is admirable. This is slightly different, in that President Bush is clearly being quite collaborative.

BRZEZINSKI: Incredibly gracious and, as you say, collaborative. We have to go, but they're working together now, the Office of the Treasury open for business for the transition team.

MEACHAM: I think Bush will been over backwards to be gracious at this point.

BRZEZINSKI: And will look quite good for it, I have to say. When it comes to the good of the country, they're doing the right thing and you certainly cannot deny that, even if you are a critic of the Bush administration.

MEACHAM: Which nine out of ten people are.

BRZEZINSKI: Well, if you look at the approval ratings. Jon Meacham, editor of a great new book about President Jackson, thanks very much for coming in tonight. Excuse my blackberry. We'll see you in the morning on "MORNING JOE" still?

MEACHAM: Yes.

BRZEZINSKI: You're still booked. Up next, there's only one president at a time, but which of these men is driving U.S. economic policy right now? We'll talk about that when 1600 returns right after this.

(COMMERCIAL BREAK)

BRZEZINSKI: President-Elect Barack Obama will be holding another news conference in Chicago tomorrow. It will be tomorrow morning, his third in as many days. Once again, it will be focused on the economy. Has the president elect successfully set the stage for recovery? Or is it too soon to tell? Back with me now, Ron Brownstein. Here's your moment, Ron, political director for "Atlantic Media." Let's follow up. I have to say, I was-Dylan was making sense. Why would we want anything to go under the radar? Why wouldn't you attribute some of the problems that we've seen so far to the fact that there has not been transparency?

BROWNSTEIN: You wouldn't. You have to make a clear distinction between regulatory and fiscal issues. Certainly, we need stronger regulation of the financial markets and more disclosure of the different kinds of trades that are going on there. But if you are asking the question of why we are facing unprecedented deficits, it is incredibly misleading and absolving of the American public and ourselves to suggest that it is because of secret deals that are being done at lobbyist luncheons or in the dead of night. All of the big reason why we record deficits and our federal debt is reaching 10 trillion dollars are decisions that were made collectively by our leaders in the full glare of day light. President Bush became the first president in American history, in American history, to cut taxes during war time. We created a massive Medicare prescription drug benefit, again, during war time, without any means to pay for it, with no revenue attached to it. We significantly increased spending on Homeland Security, inevitably, after 9/11. And we ran two wars in Afghanistan and Iraq, again, without any means to pay for it. And for a generation, we've allowed Medicare and Medicaid to gobble up an increasing percentage of the federal budget without dealing with whether we can, in the long term, balance our costs and our obligations. So to say that by restricting lobbyist lunches or by cutting the payroll of the federal employees that you are going to make a meaningful dent in these number is talk show analysis.

BRZEZINSKI: Fine, but hold on. I'm just saying-and I'm personally feeling just about the bail outs a little bit like I've been had, because we don't know exactly what banks got what money. They changed the plans for the money. And I think there is room for improvement in terms of transparency when it comes to bailing out institutions.

BROWNSTEIN: I completely agree. And I think-again, these are-the bailout came at a point when we already were dealing with record deficits. If you're asking me, has the bailout been run as transparently as should? No. If you're asking me, could Barack Obama use technology to more effectively connect Americans to their government? Absolutely, and in fact has laid out an agenda to do that. But if you're asking me whether these kind of secret dealings are why we have moved from three years of surpluses at the end of Bill Clinton's presidency, heading toward-to tack back to Jon Meacham-the first president since Andrew Jackson, potentially, to pay off the federal debt, to why we have a 10 trillion dollar debt now, I would say those are all minor factors. The key factor are things that were done in the bright glare of day, that our leaders did in our name, particularly cutting taxes for the first time in the history of war time.

BRZEZINSKI: I get it. Ron Brownstein, thanks very much for joining us for the show. We appreciate it. And, of course, watch MSNBC's live coverage of Barack Obama's news conference tomorrow. That's the view from 1600 PENNSYLVANIA AVENUE tonight. I'm Mika Brzezinski. Thanks for watching. I'll see you bright and early tomorrow morning on "MORNING JOE," then again right back here on 1600.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END

Copy: Content and programming copyright 2008 NBC. ALL RIGHTS RESERVED. Transcription Copyright 2008 ASC LLC ALL RIGHTS RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon NBC and ASC LLC's copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

Discuss:

Discussion comments

,