updated 2/6/2009 4:09:31 PM ET 2009-02-06T21:09:31

Guest: Richard Wolffe, Jonathan Alter, Blanche Lincoln, Dan Rather, Ron Christie, Tad Devine, Craig Crawford

DAVID SHUSTER, HOST:  Tonight, Democrats now believe they have the votes to pass President Obama‘s stimulus plan.  Final amendments are being introduced and preparations are being made for a huge vote, possibly tonight.

Plus, President Obama‘s horse-trading.  We will show you what‘s still in, what‘s out, and why two senators have so much power.

Later, the rest of the Senate Republicans.  You won‘t believe what they tried to do.  Economists today were dumbfounded. 

Also, Citigroup‘s latest ranks right up there.  In “Hypocrisy Watch,” the bailout bank is spending heavily to get its name on a baseball stadium. 

Why is this lawmaker driving a 35-year-old convertible in a snowstorm? 

All tonight on 1600 PENNSYLVANIA AVENUE.

Welcome to the show, everybody.  I‘m David Shuster. 

Debate is going on at this hour on the Senate floor, where Democrats and Republicans have been sparring all week over the $900 billion economic stimulus bill.  At this point, a series of amendments are being introduced.  It may take several hours, but there is every intention, according to the Senate Democratic leadership, to have a vote possibly later tonight. 

Earlier today, President Obama has said—and he said again earlier today, he wants a swift, bipartisan bill, but he appears to be getting first rated on both the swift and bipartisan aspects.  And today he got tough, directly taking on Republican opponents to the bill. 

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  In the last few days we‘ve seen proposals arise from some in Congress that you may not have read, but you‘d be very familiar with, because you‘ve been hearing them for the last 10 years.  Maybe longer.  They‘re rooted in the idea that tax cuts alone can solve all our problems, that government doesn‘t have a role to play. 

Those ideas have been tested and they have failed.  They‘ve taken us from surpluses to an annual deficit of over a trillion dollars.  And they‘ve brought our economy to a halt.  And that‘s precisely what the election we just had was all about.  The American people have rendered their judgment. 

(END VIDEO CLIP)

SHUSTER:  Let‘s bring in MSNBC political analyst Richard Wolffe, who has been covering Barack Obama for the last two years. 

That seemed to be perhaps the most determined and perhaps frustrated that we have seen him since taking office.  What do you make of it? 

RICHARD WOLFFE, MSNBC POLITICAL ANALYST:  Well, I think they were taken by surprise at how quickly this has spun out of control, and here you are seeing the president making the case for the stimulus bill, which they should have made from the White House at least a week, maybe two weeks ago.  They need to explain how this works, because what they‘ve done has been shot to a hundred pieces by the small-scale attacks on the various spending programs.  Finally, you get an over overarching story, but it shouldn‘t have to come from the president or from the Department of Energy. 

SHUSTER:  And as far as losing control, there is now every indication all day long that this bill is essentially in the hands of three senators, Democrat Ben Nelson, a moderate from Nebraska, and two Republicans, Susan Collins and Olympia Snowe from Maine.  Those are the two that Democrats had always figured they would need to count on in order to get past the 60 votes in order to break a Republican filibuster. 

Collins has been leading a series of meetings late this afternoon, and here she was describing the process of trying to scrub the bill. 

(BEGIN VIDEO CLIP)

SEN. SUSAN COLLINS ®, MAINE:  So it‘s been a painstaking, very thorough, very comprehensive process where we‘re going through line by line. 

These decisions are difficult.  For example, I think everybody in the room is concerned about a pandemic flu.  But does it belong in this bill?  Should we have $870 million in this bill?  No.  We should not. 

(END VIDEO CLIP)

SHUSTER:  Richard, for those decisions to be made by senators, as opposed to the Obama White House, how frustrating is it to them? 

WOLFFE:  I don‘t think they‘re frustrated by that.  They know that there‘s going to be this kind of deal going on, and there are going to have to be more deals when they come to reconcile this bill with what comes out of the House. 

So the question is, how much are we going to see this dynamic?  I think you‘re going to see it again and again. 

This bill should have been the easy one because of the economic crisis.  What happens when they get to health care, education, you name it?  There are a number of more difficult pieces of legislation coming down the road here, and the power is going to rest with those handful of senators, including, by the way, one Joe Lieberman, who was obviously on a different side of the campaign to this president. 

SHUSTER:  We‘ve heard from so many Democrats over the last couple of days that they felt this was getting away in terms of messages—in terms of controlling the message, owning the media right of this story.  And, in fact, it does seem that the easier punch lines are being delivered by Republicans. 

Here‘s Congressman Wicker, who was talking about how big this package is, and trying to put it into a context that might be easier for people who understand than the context that Obama White House has been offering. 

Here‘s the representative.  Watch. 

(BEGIN VIDEO CLIP)

REP. ROGER WICKER ®, MISSISSIPPI:  If you began spending $1 million per day on the day Jesus was born, and you spent $1 million per day every day since that time until today, you would still not have spent anywhere near $1 trillion. 

(END VIDEO CLIP)

SHUSTER:  It‘s hard to battle against that stuff. 

WOLFFE:  Back to Baby Jesus. 

You know, yes, it‘s hard because they haven‘t explained a convincing narrative for why the stimulus works the way it does.  So, you know, that‘s what I mean by having the scattergun approach that has taken them to pieces. 

Having the president at this stage, wheeling him out so often and so early, is a sign of how the messaging has not worked.  He is still their best card.  He is still popular.  But look how his popularity has declined.  They cannot afford to lose 10 points a week, because by the time they get to the six-month stage, they really won‘t have that much left to go. 

SHUSTER:  And by popularity, you‘re referring to the fact that his approval rating is about 65, 66 percent, but it was up in the 80s just a week ago. 

WOLFFE:  Right.  They were.  Amazing numbers.  But you don‘t want to see popularity decline even from stratospheric levels that quickly. 

SHUSTER:  We should remind our viewers of what‘s happening. 

Right now on the Senate floor, there are a series of amendments that are being introduced, 13 different amendments in all.  And part of what made this so complicated tonight and the reason that it‘s difficult for people to predict when there is going to be an exact vote, is not only was there horse-trading in terms of the specifics of the final bill, but there‘s also been some gamesmanship and horse-trading in terms of which particular amendments, Republican amendments, Democratic amendments, would be introduced at the end as far as trying to put essentially the final stamp on this bill? 

And so, again, it does appear that the leadership, Harry Reid on the Democratic side, Mitch McConnell on the Republican side, have sort of figured out the way things are going to work tonight.  And again, we are expecting a vote on what would be the largest economic stimulus plan in U.S. history.  Perhaps that vote late tonight, or certainly early tomorrow morning. 

We‘re anticipating that we‘re going to hear in just a couple of minutes from Democrat Senator Blanche Lincoln from Arkansas.  She has been part of this group of members of the Finance Committee who have been involved in these sort of negotiations throughout the day to try to whittle this down.

But in the meantime, let‘s continue talking here with Richard Wolffe. 

Richard, Senator John McCain took issue at the Obama White House today, saying that this was not a bipartisan effort to get this bill crafted. 

Here‘s Senator McCain from the Senate floor earlier today. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA:  And we ought to change the way that we are conducting this legislation in a partisan, non-consultative fashion.  And if the leadership can peel off two or three Republicans, that‘s an accomplishment they will make.  But it‘s not bipartisanship. 

(END VIDEO CLIP)

SHUSTER:  Is he right and does it matter? 

WOLFFE:  I think he‘s going to find it very hard.  I think Republicans are going to find it very hard to argue about being consulted here. 

The president has had them over for cocktails and cookies.  He‘s gone an extra mile or five to try and get Republican votes here. 

The fact that this isn‘t going to be a really bipartisan vote, there are just going to be a handful, is clearly a disappointment to the White House.  But in terms of the messaging, that‘s one thing this White House has got right. 

What they haven‘t done is say, hey, it‘s not just about spending.  It‘s about mitigating, softening the blow of this recession for regular, working Americans.  That‘s the bit they‘ve failed on.  They‘ve let it be hijacked by all this extraneous spending programs.  But when it comes to working with the other party, I mean, the president has gone much further than President Bush. 

SHUSTER:  Let‘s bring in MSNBC analyst Jonathan Alter, who has been spending much of this day on Capitol Hill.  He‘s also with “Newsweek.”

Jonathan, where do the votes stand at this hour, at least based on your latest reporting? 

JONATHAN ALTER, MSNBC ANALYST:  You know, it‘s really hard to say.  This has been a much tougher road than people expected a couple of weeks ago. 

Before the inauguration, they were talking about getting 80 votes.  You remember that?  That the Obama administration was hoping for.  Now I think they‘d be plenty happy with 60. 

SHUSTER:  Let‘s—as far as sort of the 60, I mean, here are some of the things that have had to be scrubbed, Jonathan, in order to get the support of moderate Republicans like Snowe and Collins.  They‘ve had to take out $750 million for NASA exploration; $50 million for the Southwest Border Project; $14 million for cyber security. 

You could make the argument that these are still things that essentially create jobs or save jobs, but for whatever reason, and perhaps Richard was pointing it out, the Obama White House has just not done such a great job of essentially selling this. 

ALTER:  Well, there have been some problems in selling it.  I think the Daschle business got in the way.  It‘s also true that Republicans were very good at kind of cherry-picking three or four—there weren‘t a lot—but three or four things in that House bill that really got a lot of publicity and clearly, you know, struck the public as being at least a little bit extraneous from the purposes of getting out of this recession.  And so they got off on the wrong foot on the stimulus, even though if you actually look at it, the president is right that less than one percent of this bill could be considered objectionable really by anybody. 

It did not become, David, a classic—what they call Christmas tree on Capitol Hill, where every member sticks on the tree every ornament that they want.  And this happens pretty frequently in Washington. 

It did not happen in this case, which makes it ironic that it‘s being treated and portrayed as a Christmas tree bill filled with pork, to mix a metaphor, when, in fact, relatively speaking, it‘s what they call a clean bill.  There are not a lot of special favors for individual members, but it‘s getting picked apart on that basis.

SHUSTER:  And that would underscore, perhaps, the problems then that the White House has had, because as you pointed out, in the House there were no earmarks, no special projects for anybody in any particular district.  They went to great lengths to try to make sure that the spending was only on shovel ready projects, infrastructure that could be started immediately.  And yet, they‘re getting pounded for this.

ALTER:  Well, it wasn‘t only shovel ready projects.  Remember, an awful lot of this stimulus is what you can call aid to governors.  A tremendous amount of it is to help the states, all of whom who have constitutions that require a balanced budget, and they are facing gargantuan state deficits that will require massive layoffs of teachers, nurses, all kinds of other people.  You know, a lot of problems meeting Medicaid payments and so forth.

So most of this package is to help out people who are facing real trouble.  But that is also stimulative, because every time somebody does not lose their job, that helps stimulate the economy.  And it also actually helps with the deficit because they don‘t then go on unemployment.

And it‘s extraordinarily important to keep us from slipping deeper into the morass that this bill be passed.  But it hasn‘t been properly conveyed, the gravity of the situation and how important it is to forestall much worse problems down the road by passing this.

SHUSTER:  Well, let‘s get the latest on where things stand right now.

And first of all, Jonathan Alter, thank you very much.

And also thanks to Richard Wolffe. 

Let‘s join now Senator Blanche Lincoln, a Democrat from Arkansas, a member of the Senate Finance Committee. 

Senator, you‘ve been in these meetings all this afternoon.  Where does the bill stand right now? 

SEN. BLANCHE LINCOLN (D), ARKANSAS:  Well, we‘re working hard to make some improvements.  We obviously have worked hard to focus this bill on, you know, capital improvements.  We want to give small businesses and industries an opportunity to grow themselves.  It‘s a jobs bill. 

You know, we want it to be timely.  We want it to be targeted.  And we want it to be temporary.  And that‘s important, to remind people that what we‘re doing here is temporary. 

There are other bills that we‘ll be using down the road, appropriations bills and others, to be able to do some of the other funding that people want.  So, you know, I think we‘re working hard to make it a bipartisan bill. 

I‘ve been in those meetings with the Republicans and other Democrats working hard to try and make it a bipartisan bill, trying to find out what it is that the Republicans need.  We‘ve worked to try to do some cuts that people could agree around.  That‘s been difficult but, nonetheless, we‘ve been working hard at it. 

SHUSTER:  Are you optimistic that the votes will be there, that there will be at least a couple of Republicans that will be joining you to get this passed? 

LINCOLN:  Well, I hope so.  And it‘s not that we haven‘t given the opportunity to other Republicans to join us. 

As I‘ve said, I‘ve been in these meetings with Senator Nelson and others to try and work toward bringing more Republicans on.  I mean, there are some differences in terms of the dollar amounts that people want to spend, but we‘ve been willing to make some cuts in some areas that, you know, I think make sense. 

This is a stimulus package.  We want it to be temporary.  We want to make sure that we‘re—the money that we‘re going to be spending in this bill is money that can be spent.  And we want it to be targeted in areas that make sense. 

The tax portions that I‘ve worked hard on in the Finance Committee I think are.  They‘re targeted to small businesses, whether it‘s the expensing, the depreciation pieces.  One of the things I‘ve worked hard on is being able to—the built-in gains provision, making sure small businesses can use their own capital at a time when credit markets are really, really tough.  So there‘s a lot of good things in this bill. 

And we need to drive this economy.  We need to get it going again.  And I think there are some good things in here.  We can be responsible while we do it, but people have got to be willing to come to the table to make that happen. 

SHUSTER:  Here‘s Senator Lindsey Graham, Republican colleague, today, saying that, despite all these efforts, he still does not like the bill.  Here he is from the Senate floor. 

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  And you can blame George Bush all you want to, but he didn‘t write this bill.  You all did.  This is your bill. 

Republicans spent too much of your money.  Guilty as charged.  This is not the solution.  This makes us look like misers. 

(END VIDEO CLIP)

SHUSTER:  Senator, your reaction to your Republican colleague? 

LINCOLN:  I‘m not blaming George Bush.  I‘m trying to solve the problem. 

We are in an economic crisis right now.  We‘ve increased, and I‘m glad, we‘ve increased the amount of taxes in here, the tax cuts and the tax incentives that will help drive businesses and industries to create those jobs, but we can‘t forget about the people who have already been hurt by this crisis. 

The unemployment piece in here is going to be essential for those thousands of workers that are losing their jobs on a daily basis right now.  Health care right now is in critical shape.  We‘ve got to sure that states will be able to make whole the needs that they‘re seeing both from those people who are losing jobs, with those that they‘ve been serving on Medicaid.  But providing those states the ability to be able to do that in these hard economic times is critical. 

So, you know, I‘m not blaming George Bush.  I want to get this problem solved.  And I‘ve worked hard to create good tax cuts for businesses, small businesses and big businesses.  We‘ve worked hard to make sure we can make folks whole during this crisis time.  But we‘ve got to come together and work hard to make these things happen. 

I don‘t see—you know, if people are willing to come to the table and talk about it, then I‘m willing to come to the table and talk.  And I‘ve certainly proved that by sitting down in these meetings.  But we can‘t just get down on the floor and, you know, throw stones. 

That doesn‘t work.  That doesn‘t get anybody the results that we need in moving this country forward and dealing with this economic crisis that we‘re in, because it‘s not going away.  We‘re going to have to take some serious steps. 

SHUSTER:  All right.  Arkansas Democratic Senator Blanche Lincoln.

Senator, thank you for joining us.  We appreciate it. 

LINCOLN:  Thank you. 

SHUSTER:  Coming up later this half-hour, we will talk to a staunch opponent of the president‘s stimulus package, Republican Utah Senator Orrin Hatch. 

Up next, for a president whose approval rating remains sky high, this has been an unexpectedly tough week.  We will have analysis of the Obama White House strategy and the president‘s use of the media with Dan Rather of “Dan Rather Reports.”

Later, how does Secretary Gingrich sound?  The fascinating argument for nominating Newt Gingrich to become health czar from our “Muckraker of the Day.” 

And the Obama administration moved into the White House and they‘re not alone.  Stealthy, four-legged friends are evading Secret Service agents. 

It‘s all ahead on 1600 PENNSYLVANIA AVENUE.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN:  I urge someone to tell the president of the United States that we have $421 billion of tax cuts and spending in this proposal, and spending that‘s meaningful and creates jobs, not loaded down with pork barrel projects, and certainly not one that approves over a trillion-dollar debt on future generations of Americans. 

(END VIDEO CLIP)

SHUSTER:  Welcome back to 1600.

That was John McCain taking on his former rival, now the new president, and fighting for his own alternative stimulus proposal that would cost about half as much as President Obama‘s.  McCain‘s measure, by the way, was defeated late this afternoon.  But Senator McCain was not alone.

Republican after Republican took to the Senate floor today to question, criticize or deride the nearly $1 trillion stimulus package, a cornerstone of the new president‘s agenda.

Joining us now is Dan Rather.  His “Dan Rather Reports” airs on HDNet.

Dan, first of all, thanks for being here. 

DAN RATHER, “DAN RATHER REPOTS”:  Well, glad to be with you.  And you‘ve got a breaking, running story tonight. 

SHUSTER:  What do you make of it?  What do you make of all the amendments and also the fact—I mean, this is the biggest economic stimulus plan in U.S. history.  What do you make of how it‘s developing? 

RATHER:  Well, first of all, someone mentioned earlier that as President Obama came into office, there was talk, will he get the stimulus package passed with 79 or 80 votes?  It looks like if it‘s going to pass, 61, 62, maybe as many as 65. 

I don‘t think there‘s any question by reasonable analysis that the president‘s momentum has been slowed somewhat over the last few days.  The Daschle affair, now the stimulus package.  But we have to go back to what we call on television the wide shot. 

I can‘t find any place in history where an incoming, first-term president has had anything approaching this kind of important bill to get through Congress this early in his presidency.  So if he wins by one vote, yes, it‘s a win.  But I do think he has to explain to the American people, which I guess he plans to do on Monday night with his news conference, transparency, what this bill is, what its potential weaknesses are, how long he thinks it will take, those kinds of things. 

Now, whatever you say about President Barack Obama, he‘s a good explainer.  And this is the time for him to explain. 

SHUSTER:  We saw at the White House the other day that he was trying to explain this bill by having the governor of Vermont, a Republican, come out in support and say, look, some of what‘s in this bill will make it easier for states to hold onto jobs in education, or nurses, or Medicare, whatnot, because it essentially softens the blow.  Today, President Obama penned an op-ed in “The Washington Post” and made it a little bit sort of more direct.  And here‘s what he said. 

“What Americans expect from Washington is action that matches the urgency they feel in their daily lives—action that‘s swift, bold, and wise enough for us to climb out of this crisis.  They‘re patient enough to know that our economic recovery will be measured in years, not months, but they have no patience for the same old partisan gridlock that stands in the way of action while our economy continues to slide.”

That‘s a little more sort of bare knuckles approach than inviting a governor and saying oh, by the way we‘re going to be able to save some education jobs. 

RATHER:  Well, I think they found out that they‘ve got to play a tougher hardball, and much tougher, that President Obama came on as he promised he would be, playing a bit soft.  I think they tried to play it soft, but they found the Republicans, who are marvelously disciplined—whatever else you say about them, they‘re very well disciplined.  They found a disciplined opposition party willing to play hard and tough, so they ratcheted it up. 

But one thing we should note, and that is that President Obama is so articulate, such a good spokesman for himself, that his team has had to go to him, network interviews, a press conference on Monday night.  It‘s a little like a basketball team where you go to your main player.  You go to Kobe Bryant if you‘ve got him.  But it is team ball. 

Beware of sports metaphors. 

But the point is he‘s got to put together a team that can go out and do some of the speaking for him while he has time to make the decisions.  If you look at his schedule, he‘s been appearing all over the place, where I think some people would be saying, you know, I wish he were in the office doing some thinking and planning. 

But it‘s still early in his administration.  He does have a lot of capital with the American public.  I do think that they will be patient. 

One thing, this emphasis on holding onto jobs, as you said the Vermont governor and President Obama is talking about, there is also the question of creating jobs.  And my opinion, clearly labeled, is that people are more open to saying well, listen, we need to create jobs.  Yes, we‘d like to hold the jobs we‘ve got, but create jobs, which is—rebuilding the infrastructure is supposed to take care of, among other things.  But people are going to be looking for the number of jobs created.  Nine months, a year, a year and a half from now, that will be the test of the stimulus package. 

SHUSTER:  You mentioned that he‘s got a big news conference Monday night, his first primetime news conference, 8:00 in the White House. 

If you were sitting in that first row among White House reporters, as you did for so many years—and obviously the circumstances are different with President Obama than, say, Richard Nixon—but with all your experience, what would you want to ask him? 

RATHER:  Well, I‘d like between now and Monday to think about it, but I think I would ask him a foreign policy question.  There‘s been so much emphasis, as there should be, on our economy and the stimulus package, but he‘s got really critical decisions to make about Afghanistan, Pakistan.

I might ask a question about what, in fact, does he intend to do and how quickly does he intend to do it about those so-called territories in Pakistan which are the gut problem in that part of the world?  We talk about Afghanistan, but Afghanistan‘s fate depends on what happens in those Pakistan territories.  I might want to ask him a question about that. 

SHUSTER:  And we should note that you were just in Afghanistan.  Give us your sense about how it‘s going there. 

RATHER:  Frankly, I don‘t think it‘s going all that well.  I think the people in charge know it‘s not going all that well, not to say I think it‘s disastrous, that the general in charge, our commander there, General McKiernan, said he thought the glass was half full.  But the trend line in Afghanistan is down. 

Opium production is up.  That means a lot of money for the Taliban. 

There are real deep and abiding problems with corruption in the government. 

Our troops—I mean, it‘s amazing when you see.  We went to one place where there are 30 soldiers responsible for something like 500 or 600 square miles of territory, all mountainous territory. 

Bottom line in Afghanistan, the military can buy some time.  But if we‘re to achieve our mission in Afghanistan, number one, something has to be done about those areas in the western areas of Pakistan.  And number two, we‘re going to prevail with soft power—schools, digging water wells.  And I‘ve said it before and say it again, the women are the key. 

The women in Afghanistan do not want to go back to Taliban rule.  And the Taliban is back big time.  If they are to prevail in the end, it‘ll be the women who decide that. 

SHUSTER:  Dan Rather from “Dan Rather Reports.”

Thank you so much for coming on. 

RATHER:  Thank you, David.

SHUSTER:  I think I‘ve said this to you before—there‘s a whole generation of people my age who grew up inspired by your reporting and your work.  And again, on behalf of all of us who are much younger who face a different set of challenges, thank you for laying the groundwork for us. 

RATHER:  Well, I‘m unworthy of that, but I appreciate it very much. 

Thank you. 

SHUSTER:  Earlier this week we heard from a Democratic senator on the stimulus fight.  I‘m sorry, earlier this hour we heard from a Democratic senator on the stimulus fight.  Up next, we will talk with Republican Senator Orrin Hatch and ask him about an amendment his GOP colleagues attempted that left economists bewildered. 

Also ahead, as “Star Trek” fans know, space is the final frontier. 

But what you may not know is, how many other life forms may be out there? 

We‘ll explain. 

You‘re watching 1600 PENNSYLVANIA AVENUE.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600 PENNSYLVANIA AVENUE.  Call it the new era of obstructionism.  Last night, all but five of the Senate‘s Republican senators voted for an amendment to scrap the entire stimulus and replace it with tax cuts only.  That‘s right, no government spending, not for infrastructure, not for unemployment benefits.  The vote failed.  But today, the GOP continued to rail against the government spending and President Obama‘s proposal.  Here‘s Senator Lindsey Graham.  And remember Graham is known as something of a moderate. 

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  This bill stinks.  The process that‘s led to this bill stinks.  The House did not get one Republican vote.  Maybe every Republican‘s just crazy.  I don‘t think so. 

The reason you didn‘t get a Republican vote in the House is because Nancy Pelosi‘s attitude is, we won; we write the bill. 

There are some people in this body that they can‘t spend enough.  Doing news shows and coming to lunch is not what Ronald Reagan and Tip O‘Neal did to solve the Social Security problem. 

Is this the way we‘re going to solve Social Security?  Look at this bill. 

(END VIDEO CLIP)

SHUSTER:  Is the GOP becoming the party of no?  Why do Republicans think the only way to save the economy in this recession is through tax cuts?  Joining us is Republican strategist Ron Christie and Democratic strategist Tad Divine. 

Ron, a number of economists are pointing out that in this recession, if our government spends 500 million dollars on a bridge or road, we know that money is going to create jobs.  If you give people 500 million dollars in tax cuts, there‘s no guarantee any of it gets circulated in the economy.  Some can be saved.  Some of it can be put in a mattress.  Some of it can be spent on a trip to Mexico.  So why tax cuts as opposed to spending? 

RON CHRISTIE, REPUBLICAN STRATEGIST:  This is a discussion and a debate we need to have.  We have a nearly trillion dollar package, where the Republicans didn‘t have any opportunity to have input or to give their suggestions on how we can stimulate the economy.  What the Republicans were doing, led by Jim DeMint, is said, let‘s take all this wasteful spending out.  Let‘s talk about tax cuts. 

SHUSTER:  They were saying, not wasteful spending, all spending.

CHRISTIE:  Again, let‘s take this all out and have a discussion on the merits of why we need to stimulate the economy.  What—allowing people to have more payroll dollars rather than giving it to the government will stimulate the economy.  Let‘s have that discussion.  I think that‘s what Jim DeMint and the Republicans were saying. 

They‘ve been shut out of the process.  They have not had their voices heard.  They had their chance yesterday.  And the American people—if you look at the latest Gallup poll, the American people, by an overwhelming margin, do not like this bill.  They think it‘s too expensive.  American people do not want to waste money right now. 

SHUSTER:  Fair point.  But most economists would say that in a recession only government spending.  I mean, you can‘t do it by tax cuts alone for that example that I just cited.  Tax cuts would give people some money, but there is no guarantee what they‘ll do with the money.  Whereas if it‘s government spending on a road or a bridge, you know that it is going to create jobs. 

CHRISTIE:  I‘ll agree with that.  I will defer to my colleague here.  I agree with that.  But this is a philosophical discussion that Republicans need to have.  The American people need to hear from the Republicans, need to hear them standing up and saying, we do not want wasteful spending.  That‘s why I believe Senator DeMint did what he did. 

TAD DEVINE, DEMOCRATIC STRATEGIST:  I think we‘ve had an experiment in the Republican philosophy of tax cuts and the effect on the economy for the last eight years.  It‘s been an abysmal failure.  It‘s led us through the worst economy since the Great Depression.  The fact is the Republicans showed their hand last night in that vote.  They showed that they don‘t want any investment.  They don‘t want any spending that could create jobs.  And they don‘t recognize, most importantly, the urgency of the crisis this nation confronts today. 

I think the president understands it.  And I think that‘s why the president will successfully lead this into law, and begin the slow, long process of righting this country‘s economy. 

SHUSTER:  Ron, why strip out unemployment benefits?  I mean, if somebody is—does not have a job, tax cuts don‘t help that person because they don‘t pay taxes to begin with. 

CHRISTIE:  I give you E for effort, my friend, for trying to play gotcha.  This was a discussion—this was a debate that was offered for discussion purposes.  The Republicans wanted to make sure that we understood the merits of tax cuts.  Now, you go back and say this is the worst economy since the Great Depression.  That‘s not true.  If you look at the first quarter when Ronald Reagan came into office, President Carter had an economic GDP that was minus six percent. 

The Democrats have been saying right now, for the last three months of the last fiscal year, it was down minus three.  Minus six is worse than minus three.  This is not the worst economy since the Great Depression.  Democrats are trying to scare people by saying we need to spend a trillion dollars right now.  Let‘s just get it out the door and spend it, because we‘re in the worst depression.  The economic figures don‘t back that up.  Republicans are trying to put the brakes on this wasteful spending and say, let‘s look at more tax cuts. 

We were promised nearly 40 percent of the bill.  The bill now, as it stands, is less than 40 percent of tax cuts.  Republicans want to make sure that American people keep more of their dollars rather than sending it to Washington. 

DEVINE:  That was the assessment of the economy was not mine.  That was the assessment of the economy of the Republican secretary of the Treasury, who told the Democratic leadership in the House and the Senate that unless they passed economic—an urgent economic package, that the credit system of the United States of America would come to a grinding halt, that there would be no banking and no credit in America today. 

This is the worst economic crisis we‘ve faced, not just in our lifetime, but since the Depression, because the failed strategy of George Bush and the Republicans in Congress has been revealed for the world.  These systems don‘t work.  Tax cuts for the rich don‘t work.  A lack of investment doesn‘t work.  Waging wars that shouldn‘t have been waged in the first place don‘t work.  They undermine our economy. 

That‘s what happened to America today.  Failed policies have come home to roost.  We have a trillion dollar deficit, left by President Bush for President Obama.  And unless we change things radically, unless we take a new course, this country will be in a Depression. 

SHUSTER:  Here‘s where the economy stands today.  This is the bad economic numbers, the latest: new jobless claims are at a 26-year high;

Consumer spending is the worst since 1961; 540,000 jobs were lost in January; GDP down 3.8 percent in the fourth quarter. 

Now, despite all that, I‘m going to switch sides now, Tad.  And to set this up, here are some Republicans talking about pork that has been in this bill and things that don‘t make a lot of sense, at least to them.  Watch. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  If you took hundred dollar bills and lined them end to end, you could literally go around the equator almost 39 times. 

GRAHAM:  There is 75 billion dollars in this bill earmarked to the states that have no strings attached.  And what‘s that got to do with stimulating the economy? 

UNIDENTIFIED MALE:  As little as one tenth of one percent of this spending would make it back to my state in projects.  Now, one tenth of one percent return is not a good investment. 

(END VIDEO CLIP)

SHUSTER:  Now, giving money to a state might save education jobs or health care jobs.  But how does it stimulate the economy? 

DEVINE:  Well, you know, these states right now have constitutions which say they must balance their budgets.  If they don‘t balance their budget, they‘re going to have to layoff teachers, firefighters, police officers.  That‘s going to happen in real time all across this country.  And I think the president and the Democrats in Congress recognize this and they recognize that unless we help those states with massive assistance on Medicaid, for example, and with other assistance, unless we begin to create jobs in shovel ready projects that can go put people to work right now, these states are going to be under, and people are going to lose their jobs who are employed by those states. 

SHUSTER:  Here is the problem with that, as argued by the other side.  Shovel ready jobs, it‘s only 90 billion dollars.  You couldn‘t do it that way.  So why not take tax cuts as a way of trying to get money into people‘s hands?  Or the other alternative is, if there are some of these projects that everyone doesn‘t like, and it‘s only one percent, as Democrats have said, why not remove it from the bill? 

DEVINE:  Listen, I‘m not going to judge whether or not the legislative process or strategy was right until we get to the end of the legislative process.  Obviously, there are things in that House bill that have already been taken out and probably more that will be taken out.  The question is whether or not something will pass the Senate, whether it will be reconciled with the house and whether the president will lead it into law. 

I think he will, because I think this country understands that unless we change course, unless we have a new economic strategy, we‘re going to continue to lose jobs and potentially lose hope. 

SHUSTER:  Ron Christie, I‘m giving you the last word. 

CHRISTIE:  I appreciate that.  Democrats on the left had—Democrats love to say it‘s all George Bush‘s fault.  This bill was supposed to have been targeted.  It‘s not targeted.  It‘s a joke.  It was supposed to be temporary.  It‘s not temporary.  The Democrats want to spend billions of dollars in the out years.  Only 136 billion dollars is going to come in the first year.  This isn‘t really meant to stimulate the economy.  This is a 40-year wish list that the Democrats have said, we‘re going to exploit an economic crisis, try to spend as much as we can.  Let‘s get some fiscal responsibility in.  The president needs to lead.  He hasn‘t led.  Let‘s start over.  Let‘s take out all this pork. 

SHUSTER:  It‘s a good point.  But a victory is a victory.  And I think we would all acknowledge that.  And if a victory is what Obama gets tonight, then we‘ll have a fresh debate tomorrow. 

CHRISTIE:  And the American people will lose. 

SHUSTER:  We‘ll see.  Ron Christie, Tad Devine, thanks for coming in. 

Great stuff, as always. 

Up next, we‘re on hypocrisy watch.  Does Citigroup really have so many millions to spare that they can pay to put their name on new—on the new Mets baseball stadium?  Still ahead on 1600 PENNSYLVANIA AVENUE. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.  We‘re keeping our eye on the Senate floor, where a series of amendments are underway.  We expect that there may be a vote perhaps very late tonight, if not certainly tomorrow.  We had promised that we would bring you Republican Senator Orin Hatch.  That, of course, is California Congresswoman Barbara Boxer.  But Senator Hatch is there in the chamber and is tied up.  When he comes to our camera, we will bring him to you. 

In the meantime, we‘re going to talk about another issue that has certainly shaping the public debate.  And that is the public is clearly skeptical about the impact of government spending.  After all, several financial institutions still can‘t explain what they did with their federal bailout money.  The banks‘ actions continue to be infuriating. 

That takes us again to Citigroup, the subject of tonight‘s Hypocrisy Watch.  Last year, Citigroup received 45 billion dollars in bailout money.  In exchange for the help, the bank promised to cut expenses and run a tighter ship.  As part of that, Citigroup laid off tens of thousands of employees, including thousands in New York. 

Yet Citigroup has decided to move forward with a deal to pay 20 million dollars a year for the naming rights to the new baseball stadium for the New York Mets.  That‘s right.  When you meet the Mets, you‘ll be met at their new home with the sign calling it Citi Field. 

Let me be clear, we have no issues with advertising.  The problem is that stadium naming rights are different.  Experts say they tend to have no impact on the success or failure of a company‘s product line.  In other words, it‘s corporate narcissism.  Citigroup, of course, is not alone. Bank of America received 45 billion dollars in bailout money and is paying 140 million for the rights to the Carolina Panthers stadium. 

JP Morgan Chase received 25 billion dollars and is spending 66 million for the naming rights to the home of the Arizona Diamondbacks. 

The issue is that all of these financial institutions, including Citigroup, asked for and received taxpayer help.  Spending money now to get a stadium name is hypocrisy and it‘s wrong. 

Now let‘s take a look at what else is on our radar today.  At his confirmation hearing before the Senate Intelligence Committee, Leon Panetta, who has been nominated to be Central Intelligence director, responded to Vice President Cheney‘s warning of a terror attack. 

(BEGIN VIDEO CLIP)

LEON PANETTA, CIA DIRECTOR DESIGNATE:  The implication is that somehow this country is more vulnerable to attack because the president of the United States wants to abide by the law and the Constitution.  I am absolutely convinced that we can protect this country.  We can get the information we need.  We can provide for the security of the American people.  And we can abide by the law. 

(END VIDEO CLIP)

SHUSTER:  The Army today announced that more soldiers have killed themselves in January than died in battle in Iraq and Afghanistan.  The announcement comes just a week after a report that 2008 was the worst year for military suicides on record. 

And Supreme Court Justice Ruth Bader Ginsburg had surgery today at the Memorial Sloan Kettering Cancer Center in New York City for early stages of pancreatic cancer.  Ginsburg is 75, making her the second oldest justice. 

At this hour, we have some live pictures now of President Obama.  He has just landed in Williamsburg, Virginia.  This was his first flight aboard one of the 747s that are part of the Air Force One fleet, the presidential fleet.  The president is on his way to visit House Democrats at their retreat.  But again, he has just made his first trip on one of the larger aircraft.  And this one, of course—every time the president flies, it‘s Air Force One.  But his first experience on the giant 747 model. 

Still ahead, President Obama said he wanted a team of rivals.  But what about former Speaker of the House Newt Gingrich for Health and Human Services Secretary?  Our Muckraker of the day made that proposal in a must read piece on the Obama administration‘s challenges.  There you can see the president walking down now in Virginia, getting into the motorcade, landing in Virginia, coming off Air Force One. 

Again, he‘s meeting with Democrats.  I‘m not sure any of the Democrats tonight are going to push forward this proposal that Newt Gingrich, the former Republican House speaker, should be the secretary of Health and Human Services.  But our Muckraker of the day has a great explainer as to why the issue of Newt Gingrich could perhaps underscore some of the policy challenges that the Obama administration is going to face.  We‘ll have more here on 1600 right after this.

(COMMERCIAL BREAK)

SHUSTER:  We‘re back with a look inside the Briefing Room.  We know that Tom Daschle saw his nomination for HHS secretary crash and burn for his failure to pay taxes on a car and driver.  That may never be a problem for North Carolina Senator Richard Burr.  Take a look at this video posted on TMZ.com.  That‘s Burr getting into the driver‘s seat of the car he‘s owned for the past 18 years.  It‘s a 1974 VW Thing. 

Yes, he drove with the top down during a Washington, D.C. winter snowfall.  What is a VW Thing?  It was first called the VW 181 and started out as a military vehicle.  It was renamed the Thing for sale in the U.S.  Senator Burr‘s car, a 1974 model, was made in Mexico. 

If you are headed to the White House, here is a warning, watch out for raccoons.  White House spokesman Bill Burton has confirmed several of the aggressive animals have been spotted roaming the grounds near the executive mansion and the West Wing.  In a rather understated but amusing quote, Burton told the “Washington Post” “the idea of raccoons on the White House grounds gives us great pause.” 

No kidding.  Raccoons tend to have rabies.  The National Park Service has set out a series of traps filled with apples, cat food, and peanut butter.  But so far, no luck. 

Finally, there was a remarkable report today that caught our attention.  The report examined the potential for life beyond planet Earth.  You know, space, where E.T. probably lives?  Anyway, Scottish scientists declared that, based on their extensive research, the number of intelligent civilizations in our galaxy numbers at least 361.  The scientists hedged their analysis by saying the number of intelligent E.T. colonies could be as high as 38,000. 

Hmm, at least 361, as many as 38,000.  It all means George Lucas was onto something in this scene from Star Wars.

So why haven‘t the aliens visited us yet?  Who says they haven‘t? 

The speculation is underway; who will be President Obama‘s next Health and Human Services secretary.  One name being suggested, Newt Gingrich.  Our Muckraker of the day explains why when 1600 PENNSYLVANIA AVENUE continues. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.  Tom Daschle‘s departure has released a flurry of debate over who should be the nation‘s new health care czar.  This is one you may not have heard: Newt Gingrich, former House speaker, irascible conservative and founder of the Center for Health Transformation.  Joining us now is a reporter and columnist who makes the case, Craig Crawford, our Muckraker of the day. 

Get to—So many people paid attention to why Newt Gingrich?  Get to the challenges you underscore that Gingrich or somebody like him might be able to deal with. 

CRAIG CRAWFORD, CQPOLITICS.COM:  You never miss the little messes I make.  That‘s why you‘re the hardest working man in television.  Actually, after the Commerce mess, when Obama picked a Republican to follow his nominee who had fallen on an ethical cloud, there was a lot of discussion he might do that at Health and Human Services, after Daschle‘s demise.  And so some names got kicked around. 

You know, my Twitter friend over at “Time Magazine,” Karen Tumulty, talked about Mitt Romney who, after all, got national health insurance through Massachusetts for a Republican.  The “New Republic” health blog talked about Arnold Schwarzenegger.  So I thought, well, why not Gingrich?  Here he is, former speaker of the House.  He knows how to work through Congress.  Even Oprah‘s doctor likes him.  Had an online discussion with him about health care the other day.  But he‘s a trigger name. 

SHUSTER:  And the issue being that there are significant challenges that Obama is going to face in getting health care reform.  If you bring somebody in like that, it helps solve some problems. 

CRAWFORD:  Yes.  The idea would be—I mean, I covered health care reform in the early ‘90s for a newspaper that had me doing it every day. 

And Hillary Clinton gets a lot of the blame for how she handled it, but a

big part, if not more, was the array of special interests aligned doing—

against doing anything about health care reform.  And the Republicans are -

you know, they love the socialized medicine attack and bipartisan—getting bipartisan health care done is probably the only way to get it done. 

So the idea is, you know, would he reach out to some Republicans to help develop the plan? 

SHUSTER:  A lot of special interests would have no opportunity to talk to Newt Gingrich at all.  Craig Crawford, very provocative, great stuff.  Very insightful.  Thank you very much, Craig Crawford, CQPolitics.com. 

That is the view from 1600 PENNSYLVANIA AVENUE tonight.  I‘m David Shuster.  Thank you for watching.  We‘ll see you back here at the same time tomorrow night, 6:00 pm Eastern on MSNBC.  Shuster.MSNBC.com, great content there.  I‘m David Shuster.  “HARDBALL” with Chris Matthews starts right now.

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