updated 2/17/2009 10:00:27 AM ET 2009-02-17T15:00:27

Guest: Paul Krugman, Chris Van Hollen, John Barrasso, Pat Buchanan, Joan Walsh, Michael Smerconish, Nico Pitney High: The Senate is prepared to pass President Obama‘s stimulus plan later tonight.

Spec: Stimulus Bill; Government Spending; TARP 2; Continental Flight 3407

DAVID SHUSTER, MSN ANCHOR:  Hello, everybody, I‘m David Shuster and welcome to “1600” and it‘s the 25th day of the Obama administration.  And this hour, Congress is headed toward the finish line on the President‘s economic recovery plan.

The U.S. Senate has begun what is known as the final passage, the vote will be completed this evening.  Earlier today the $787 billion measure was approved in the House of Representatives.

(BEGIN VIDEO CLIP)

NANCY PELOSI, (D) HOUSE SPEAKER:  The conference report is adopted, without objection or motion to reconsider is laid upon the table.

(END VIDEO CLIP)

SHUSTER:  The vote in the House of Representatives was 246-183.  And again, not a single Republican voted to support the bill.  Seven Democrats joined the Republicans in opposition.

The reason the process is going to drag on a bit in the U.S. Senate tonight is because of logistics.  Democrats need 60 votes to approve the measure.  So far our unofficial counting has 56 aye votes, that includes Republican Collin, Snow and Specter.

The Senate is waiting for Ohio Democratic Senator Sherrod Brown.  He is traveling back from Ohio where he attended his mother‘s memorial service.  So Majority Leader Harry Reid is essentially keeping the vote open.  Once Brown gets back the measure will be formally approved and then it will be delivered to the White House for the President‘s signature.

Joining us now is Paul Krugman, a Nobel Prize winning economist, he‘s also a New York Times columnist, a professor of economics at Princeton University Woodrow Wilson School.  He is also the author of “The Return of Depression Economics and The Crisis of 2008.”

Mr. Krugman, it‘s an honor to have you here, you‘ve been arguing for months that what the plan Obama has been proposing is not big enough.  What‘s your reaction to what they‘re getting through tonight?

PAUL KRUGMAN, NEW YORK TIMES COLUMNIST:  Well, it‘s still not big enough, it‘s a lot better than nothing, but the odds are pretty good that they‘re going to have to come back for more because the scale of the slump is so great that even $800 billion is not quite what the doctor ordered.

SHUSTER:  And what do you imagine will be the economic reaction in the interim?

KRUGMAN:  Well, you know, this is—in all of the forecasts have basically got the stimulus in it built in and the money won‘t be coming out all that fast.  A lot will come on late this year and into next year, but there‘s going to be a lot of negative economic stories.  We‘re just going to keep on getting lousy jobs reports.  We‘re going to keep on hearing about more problems and more trouble in the financial system.

So it‘s not going to be “happy days are here” again.  It‘s going to be well

if we hadn‘t passed the stimulus, then it would be all hell would have with a broken loose.  But even with it, it‘s going to be a very unpleasant few months.

SHUSTER:  Here‘s what the House Speaker Nancy Pelosi today said about what Congress and the President are doing.  Watch.

(BEGIN VIDEO CLIP)

PELOSI:  The American people know, and historians are judging that this is one remarkable President.  He did something faster than any other President ever has in our history and that is to pass this economic package in just a matter of weeks.  And we salute him for his leadership.

(END VIDEO CLIP)

SHUSTER:  Mr. Krugman, what do you make of the President‘s leadership in all of this?

KRUGMAN:  You know, everything that Speaker Pelosi said is true.  And yet, there had been a lot of talk about the possibility of actually having something like this bill passed even before inauguration so he could have signed it right away.

There was a lot of talk from Obama aides that they were going to get lots of Republican votes behind this and we‘ve seen how that turned out.

So look, I mean, relative to what might have been this is really very good.  Relative to what one might have hoped for, it‘s not everything you might have hoped for.

SHUSTER:  The Obama White House keeps pointing out that this is just one leg in the stool as they like to say.  Here‘s the President from today, talking about some of the other aspects of this economic crisis.  Watch.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  To truly address this crisis, we will also need to address the crisis in our financial sector to get credit flowing again to families and businesses.  And we need to confront the crisis in the housing sector, that‘s been one of the sources of our economic challenges.  I‘ll be discussing that extensively soon.

(END VIDEO CLIP)

SHUSTER:  In fact we‘ve learned that he‘s going to have a speech next week which he‘s going to talk about perhaps $50 billion for foreclosures.  What do you make of that idea?

KRUGMAN:  Well, it will help.  You can mitigate, the fundamental fact of the matter is that we have an enormous housing bubble, prices got way out of line.  Lots of people borrowed more than they could reasonably afford to pay and nothing you do is going to prevent there from being a lot of people unable to pay their mortgages, a lot of people losing their homes.

But there‘s probably a lot of—a fair bit of unnecessary pain in there.  There are places where a deal should be worked out to let somebody stay in their house and it‘s—from everything I hear, they‘re working on a fairly sensible measure, which is, you know, mitigating.

SHUSTER:  I wonder if you might take us through parts of this, despite what you have been saying in terms of this proposal is not big enough.  And for our viewers here‘s where the money goes, 38 percent of this package is aid, $299 billion; 38 percent for tax cuts, $299 billion; and 24 percent for spending $189 billion.

And Mr. Krugman, let‘s take for example the aid: $87 billion federal funding for Medicaid; $40.6 billion to help local school districts; $27 billion to extend jobless benefits; $17 billion to increase student aid.

How does that help and where does it come short just in terms of the spending there?

KRUGMAN:  Well, a lot of it is, first of all you‘re helping people who are in distress, so Medicaid, unemployment benefits, those are people who not only are they suffering a lot and this is going to make them suffer a little bit less.  But also this will help them maintain their spending so the demand and the economy stays up.  It helps reduce the extent of the slump.

The aid to Medicaid, aid to state and local government; that‘s going to help because those are governments that are slashing spending.  And again, that‘s cutting services we need and also it‘s depressing on the economy.  So this averts some of that.  All of this is kind of protection against some of the downturn.

All of that stuff, basically what—one of the ways we‘d like to put it is the President of the United States has the option of doing something, state governors basically have to be Herbert Hoover because they have to trim down his budgets.

So this is helping states governors not to be so much like Herbert Hoover and not raising taxes and cutting spending in the face of the slump.  All of this is good, all of this is going to shave one and a half, maybe two points off the peak unemployment rate.  But still it‘s going to be high.

SHUSTER:  The other of course big argument has been over the shape of the tax cuts.  Republicans have been insisting that if fact there will be no more spending, that it‘s just a tax cut.  Here‘s what the proposal does have: $116.2 billion for payroll tax credits; $69.8 billion for the AMT tax fix; nearly $7 billion in terms of tax credits and first time home buyers.  What‘s the good and the bad in this list?

KRUGMAN:  Well, I‘m not very fond of any of it.  The main argument, economic argument for having even any substantial amount of tax cuts in here is that it‘s hard to spend a lot of money fast.

And tax cuts are a way of putting some additional money into the package.  And the payroll tax cut was an Obama campaign promise.  The rest, the AMT fix doesn‘t belong in this bill.  It probably had to be done but it‘s not part of the stimulus.

The thing is—you know I can go into the economic arguments about why tax cuts are not effective.  But you know and maybe the easiest thing is to say, look, George Bush passed $2 trillion worth of tax cuts.  That didn‘t work very well.

How can the Republicans still cling to the faith that tax cuts are the answer to all our problems?

SHUSTER:  Well, I think you‘ve asked the question that a lot of us just simply don‘t know the answer to.

Thank you so much for coming in.  We appreciate it, Paul Krugman, “New York Times” columnist and Nobel Prize winning economist, thank you so much.

KRUGMAN:  Thanks a lot.

SHUSTER:  And as we mentioned—you‘re welcome—the economic recovery bill did not get a single Republican vote in the House.  It‘s not exactly the bipartisanship the White House and many Democrats were hoping for.

Joining us now from our studio, is Democratic Congressman from Maryland, Chris Van Hollen.  He‘s also the Democratic Congressional Campaign Committee Chairman.  The bipartisanship did not work.  Who‘s fault was it?

REP. CHRIS VAN HOLLEN (D-MD) D-CCC CHAIRMAN:  It did not work.  Despite the fact that the President reached out on numerous occasions the Republicans, they came up to Capitol Hill, he invited them down to the White House.  The last time they came up to Capitol Hill, the head of the Republican Party is in the House sending out an email, before the President even arrived, instructing his Republican colleagues to vote no on the bill.

I think that‘s been symbolic of what we heard, my counterpart the Republican counterpart on the campaign committee side said that they had learned the tactics of the Taliban.  I mean, he said that.  So it‘s pretty clear they made a very calculated decision to bank on failure.

Which I think is a terrible message to send to the American people.  Whether you‘re a Republican, a Democrat or an Independent, you want this plan to succeed.

SHUSTER:  What about the argument that Republicans said the President wanted 40 percent of this to be tax cuts, and ended up 38 that maybe if this had been 45, 50, 55 percent tax cuts, you would have gotten some more Republican support.

VAN HOLLEN:  Well, first of all, there‘s a lot of tax relief in this bill.  In fact it is the largest tax relief proposal for middle class Americans in the history of the country.  From that perspective, the Republicans should be happy.

Look, as Paul Krugman was just saying, we have tried the Republican tax cut proposal before.  That is what ran up the deficits and put us in this fiscal situation that we‘re in.

And it was really interesting to see that the Republicans proposed, substituting the Obama tax relief for the middle class with another package that provide a greater relief to higher income tax payers when any economist will tell you if you want people to spend that money more quickly, you‘re much more likely to get that effective if you put it in the hands of people who are little more stretched economically.

SHUSTER:  What about the other part of Paul Krugman‘s argument that this is simply not big enough, that it may mitigate unemployment by a point or two.  But it‘s really not going to have the desired affect.

VAN HOLLEN:  Well, let me pick with what he said, that if we did not do this, all hell would break loose.  This is a very important step in trying to get the economy going.

Nobody can predict how deep this recession is going to be, this down turn, or how long.  It will certainly soften the blow; whether or not it‘s enough at the end of the day, only time will tell.

But if we did not take this measure, the situation would get much worse very quickly.

SHUSTER:  That‘s true but I hear you talking about political realities there.  Would you have preferred that this be much bigger?

VAN HOLLEN:  I would have preferred to see on some of the investment sides maybe on the infrastructure piece, some additional funding.  However, it is important to remember, there is a constraint, there is—you can only spend money effectively so fast.

And there is always a danger if you try and increase that and push more money out the door quickly, that it gets misspent.  And then you have all sorts of horror stories about money being wasted, we don‘t want to have that.  That‘s why we have accountability and transparency.

So I believe overall this bill does strikes the right balance in terms of getting the money out the door quickly but also creating that accountability and transparency and trying to make sure it‘s spent well.

SHUSTER:  Speaking of the horror stories and whether this is going to be spent well or not here is Congressman John Boehner, the House Minority Leader talking about to his outrage on how this process happened.  Watch.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, ® MINORITY LEADER:  I don‘t know how you can read 1,100 pages between midnight and now.  Not one member has read this.  What happened to the promise that we‘re going to let the American people see what‘s in this bill for 48 hours?  But no, we don‘t have time to do that.

(END VIDEO CLIP)

SHUSTER:  What do you make of that?

VAL HOLLEN:  Well, I was on the floor for that bit of theatrics.  Look, this bill has been vetted more than any other piece of legislation in the history of the country.  It‘s been on the news shows, it‘s been on talk shows, we had the House bill, we had the Senate bill, it‘s been on the Internet.

This final bill is the product of putting those different pieces together, pieces that had been looked over and scrubbed by millions of Americans and the eyeballs of all sorts of viewers around the country and listeners.

So I would say that if you‘re going to measure this by transparency, it has been the most transparent process in the history of any piece of legislation.

SHUSTER:  Well, we found a couple of things in there, as did others and here‘s what the GOP of course is complaining about: $650 million for digital to analog box converter box coupons; $198 million to authorize payment to certain Filipino Veterans in World War II and $50 million for the National Endowment for the Arts.

Let‘s take the payment say to the Filipino Veterans in World War II, how does that help the economy.

VAN HOLLEN:  Right, well, this is something that‘s been long overdue.  People who served their country in war, and have served in the national cause.  And just like any other payment at this time to people who are in need, it‘s money that will be put into the economy.

In that sense it‘s like a tax cut.  If you receive a tax cut, you‘re stretched economically, you go out and spend that money.  This has been a priority that has been as I said something long overdue.

You can argue about whether this is the best place to put it, I will grant you that.  But I do believe that putting this money in the hands of these deserving individuals will be money that is going out into the economy right now.

SHUSTER:  What about the digital to analog converter box coupons?

VAN HOLLEN:  Well, this is trying to address the situation that‘s facing a lot of Americans right now.  And again, that will be money that goes out in the economy as people take those coupons.

So, look, again, you‘ve got a huge forest here, and you can always pick out a single tree in the forest and say, I‘m not sure that‘s as stimulative as this other thing might be.

And I will grant you there are a fair arguments there but—

SHUSTER:  But here is the question as the forest burn down—

VAN HOLLEN:  Yes.

SHUSTER:  If you guys have to come back as Paul Krugman is suggesting, is there any political will there to go back and pass more?

VAN HOLLEN:  Well, the first thing we need to do is to have the other thing that complements this which is he said and Secretary Geithner said is the second round of spending of the TARP Money.

And we do need to put that in the housing sector, we need to address the foreclosure issue.  We need to restore the confidence of the American people.  By finally putting limits on CEO bonuses and those kinds of things, I think the President has bought a little time and little confidence going forward.

But look, this is—nobody knows how this is going to unfold.  We are in a terrible situation, the worst situation since the Great Depression.  We‘re going to continue to monitor the situation just like in 1932-33 period when Franklin Roosevelt faced a terrible economy.  He experimented, not everything they did worked just right the first time.

But over time they took measures to have the confidence of the American people and began to turn things around and that‘s our hope.

SHUSTER:  Democratic Congressman, Chris Van Hollen, good of you to join us tonight.  We appreciate you coming in, sir.  Good to see you.

VAN HOLLEN:  It‘s good to be with you.

SHUSTER:  Still ahead on “1600” while some economists think that what Congress passed today was too little government spending and many Republicans of course believe it was too much.

Up next, we‘ll talk to Republican Senator John Barrasso about his reaction to the bill.

Plus, Karl Rove lands squarely in our “Hypocrisy Watch.”  You won‘t believe what Bush‘s brain has been claiming this week.

President Obama‘s week hasn‘t exactly been an easy one.  What is his grade now after the first three weeks?  Our panel will weigh in.

And later Jay Leno‘s Presidential Jeopardy.  It is one of the funniest skits we have ever seen.  All tonight on “1600.”

(COMMERCIAL BREAK)

SHUSTER:  What a week for President Obama.  What grade would you give the President for his first three weeks in office?  We‘ll ask our all-star panel ahead on “1600.”

(COMMERCIAL BREAK)

SHUSTER:  We are looking at a live picture from Chicago‘s O‘Hare International Airport.  That is of course Air Force One, the President, the First Lady and their daughters and the First Lady‘s mother Mary Robinson have just landed for a weekend break in Chicago.

This is their first time being home since the President was sworn in his Office.  Also traveling with them are policy aide, Heather Haygenbosen (ph) and senior White House adviser Valerie Jarrett who‘s from Chicago.

Aides say the President has a low key four-day holiday weekend planned.  On the agenda—a valentine‘s dinner on Saturday with Michelle; he will probably also find time for a basketball game with some friends.

We are looking also tonight at a live picture of the Senate chamber right now where the final vote on that $787 billion stimulus bill is expected to be as tight as it gets.  Three Republicans cross the aisle bringing the tally to 57 yea votes, 37 nays.

Right now the Senate is waiting for Ohio Democrat, Sherrod Brown, and he will essentially be the 60th vote later tonight.  He is flying back from his mother‘s memorial service.

As well as an emotionally field day on the Senate floor and on the House floor, Democrats express their passionate views on this bill.

(BEGIN VIDEO CLIP)

SEN ROGER WICKER ® MISSISSIPPI:  A trillion dollars is a terrible thing to waste.  But that‘s exactly what this bill does. 

SEN. MAX BAUCUS, (D) MONTANA:  The cost of inaction will be paid by the heartache of millions of families plunged into economic hardship.

SEN. PAT ROBERTS ® KANSAS:  This bill remains a honey pot for too many special interests.  It reinforces a growing and dangerous mindset.

SEN. CHUCK SCHUMER, (D) NEW YORK:  When we meet you halfway, don‘t give us the back of your hand and say it is not bipartisan.

(END VIDEO CLIP)

SHUSTER:  Joining us now from Capitol Hill, a Republican from Wyoming, Senator John Barrasso.  And senator, what would it have taken for you to support this bill?

SEN. JOHN BARRASSO, ® WYOMING:  All of those speakers were right.  It‘s a honey pot.  It went much too far.  It was much too expensive; a trillion dollars is a terrible thing to waste.  And they should have met us halfway; halfway of the spending amount -- $400 billion not $800 billion.

To me we should have done what Alice Rivlin, who advised Bill Clinton, said which is do what‘s going to stimulate the economy as an emergency and do it now and do it quickly.  And then more thoughtful about some of these other issues.

SHUSTER:  What were some of the spending that you thought that was not stimulative?

SEN. BARRASSO:  I mean, they‘re talking about rewriting, education, energy, health care.  We could have done that over the next couple of months.  There‘s a front page story in the “Wall Street Journal” today and it talks about a $7 billion program.  They‘re going to be lucky if they get that money out eight years from now.

That‘s not going to stimulate the economy today.  You needed things today as part of an emergency package, a much smaller package, to stimulate the economy because every dollar in this package, it doesn‘t stimulate the economy, it‘s just an extra dollar that we‘re going to be borrowing from the Chinese.  And our kids and grandkids are going to have to pay for it.

SHUSTER:  A lot of the Democrats though are arguing that every dollar in government spending on something like education, building schools, greening office buildings—that that is in fact employing somebody.

Here‘s what Senator Olympia Snowe, a Republican colleague of yours, here‘s what she said on “1600” last night.  Then I‘ll get your reaction.

(BEGIN VIDEO CLIP)

SEN. OLYMPIA SNOWE, ® MAINE:  The Republicans, Democrats and Independents, almost universally believe we should have a stimulus package.  Economists of all political and philosophical persuasions believe that we do.

The question is the content and the composition.  I happen to think it strikes the right balance.  It‘s not everything I would want.  It‘s certainly not perfect.  But the fact is inaction is not an option at this point in time.

(END VIDEO CLIP)

SHUSTER:  Are you mad at your Republican colleague Senator Snowe? 

SEN. BARRASSO:  Well, I agree with her that inaction is not in order at this time but all of this action, this extra action, this extraordinary spending.  This is the largest spending bill in the history of the United States.

Where you‘re shooting all of our bullets, if it doesn‘t work we‘re out of ammunition.  I think we should have done in this in a more measured way, a more thoughtful way and really focused on what they talked about from the beginning; something that was timely and temporary and targeted.

This is establishing a lot of new programs that are going to be with us forever at a much higher level of spending.

SHUSTER:  What about the—are you just as concerned, for example, about the trillion dollars that the Iraq war‘s going to cost that‘s also going to be put on the future generations?  I just want to make sure we‘re sort of intellectually consistent here.

SEN. BARRASSO:  We‘re intellectually consistent.  This was a bill that was rushed through the senate and the house right now.  You‘re talking about something that in just the last two weeks, we are spending more than what you just described that we spent than since 9/11.  I don‘t think it was well thought out to make this decision this quickly when we could have done a more temporary and targeted smaller package and then come back to look at all of these things.

You‘re not going to be able to reinvent.  Energy, education, health care and do all of that in such a short period of time.  It is going to be very difficult—

SHUSTER:  It‘s a great point except the difference being that the trillion dollars spent in Iraq doesn‘t have quite the same impact on our economy as a trillion dollars spent in the United States, right? 

SEN. BARRASSO:  Take a look at the front page story in the “Washington post” today.  It talks about money that has been stripped out of this that were the things planned for jobs.  I think they took out a number of the things that were going to do what we needed to do for the economy.  Fix housing first.

They took out the $15,000 tax credit for home buyers and for first-time home buyers and they reduced that number.  That‘s what got us into this problem in the first place.  And instead we have all these problems—you just ran a whole list of all of the different programs.  It seems very wasteful.

What we really should have done is given it at least another week.  Have the members take this massive bill home, take it home with you on the plane or the car or the train and then talk to people at home over the next week and then come back.  And if you do that, I will tell you this bill wouldn‘t have passed the house or the senate if the members had a chance to go home.

I went home last week to Wyoming and the weekend before that and I talked to people all the time at home.  I‘m not convinced that enough members have been doing this with this package.  Because if you hear from folks at home, they would have trimmed this down by a significant amount.

SHUSTER:  Republican Senator John Barrasso of Wyoming.  Senator, good of you to join us, we appreciate it.

SEN. BARRASSO:  Thank you, David.

SHUSTER:  Coming up, Karl Rove repeatedly defended President Bush‘s policies by declaring we are a nation at war.  Now Rove is criticizing President Obama and is declaring we are in the midst of peacetime.

“Hypocrisy Watch” is next.

And later it was a Super Bowl resolution in the House of Representatives and at least a few members thought it was an embarrassing waste of time.  We‘ll show you what happened ahead on “1600.”

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to “1600” and time for a look at what‘s on our radar.

A team from the National Transportation Safety Board has now brought back to Washington D.C. the so-called black boxes recovered in the crash last night of Continental connection flight 3407.  Fifty people were killed near Buffalo, New York when a plane crashed six miles short of the runway slamming into a house in the midst of sleet and snow conditions.

We learned this morning that one of the victims Beverly Eckert (ph) was a 9/11 widow who had met president Obama last week to talk about Guantanamo Bay prison.  Eckert‘s husband Sean Rooney was trapped at the top of the south tower on 9/11.  He managed to reach his wife by phone amidst the chaos and died a short time later.

President Obama talked about Ms. Eckert this morning.

(BEGIN VIDEO CLIP)

OBAMA:  Beverly lost her husband on 9/11 and became a tireless advocate for those families whose lives were forever changed on that September day.  And in keeping that with passionate commitment, she was on her way to Buffalo to mark what would have been her husband‘s birthday and launch a scholarship in his memory.  She was an inspiration to me and so many others.  And I pray that her family finds peace and comfort in the hard days ahead. 

(END VIDEO CLIP)

SHUSTER:  We have a follow-up of sorts now to an Hypocrisy Watch item we did earlier this week.  You may recall, we told you about the latest outrage perpetrated by Robert Mugabe, the president of Zimbabwe.  Mugabe is a dictator who is literally starving his own nation to death.  One of the most courageous opposition figures in that nation is a man named Roy Bennett. 

After Bennett‘s party won the election, Mugabe refused to cede power. 

So mediators from neighboring state created a power sharing agreement.  Mugabe agreed to it, but it‘s been a complete sham.  And the latest evidence is the fact that Bennett was about to begin serving as deputy minister of agriculture was just abducted by state agents.  And now Bennett is being kept in a jail known for interrogation and torture. 

Several members of Congress are speaking out about this.  The Obama administration says Mugabe‘s behavior is unacceptable, but it‘s time for more than words of condemnation.  It‘s time for a western government to physically remove Mugabe from power.  In the meantime, the courageous opposition member Roy Bennett has been under arrest one day and counting.  And until he is released, we will keep counting. 

Now back here in this country, the debate continues over President Obama‘s economic recovery plan.  And recently, the criticism came from former Bush adviser Karl Rove.  That takes us to tonight‘s Hypocrisy Watch.  In a “Wall Street Journal” opinion piece this week, Karl Rove, the man known as Bush‘s brain, wrote the following, quote, “the bill President Obama signs will create a raft of new programs and be the biggest peacetime spending increase in American history.” 

Peacetime?  We are now in peacetime?  That‘s interesting, because at the end of December, Karl Rove said we are a nation at war.  Watch. 

(BEGIN VIDEO CLIP)

KARL ROVE, FMR. BUSH ADMINISTRATION ADVISER:  President-Elect Obama will take office in a time of war.  This will be the first president elected in a time of war to take the oath of office for the first time. 

(END VIDEO CLIP)

SHUSTER:  It must drive Karl Rove crazy whenever he‘s reminded that of the Bush administration policies, including the on-going war against a country that had nothing to do with 9/11, turned record surpluses into record deficits.  Furthermore, for all of Rove‘s complaining about the size and cost of the Obama recovery plan, the Bush tax cuts for the rich actually cost our government more. 

But never mind all of that, Karl.  If you want to argue against this government spending and economic recovery plan, that‘s your prerogative.  We welcome the intellectual debate.  But to argue that we are in the midst of peacetime, after insisting we‘re a nation at war, that‘s hypocrisy. 

By the way, I sent a message to Karl Rove today via Twitter about all of this.  He did not respond. 

We are, of course, looking at live pictures still from Chicago, Illinois, where the president and his family are about to get on a helicopter there, from Chicago O‘Hare to get downtown towards their home.  They‘re there for the weekend, a four-day weekend for the president and his family, the first break they have had back in Chicago since the president was sworn in. 

We‘ll have more 1600 in a moment.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600 PENNSYLVANIA AVENUE.  At this hour, the Senate is in the midst of final passage on the economic recovery bill.  Earlier today, the House passed the bill by a partisan vote of 246-183.  So was it a win for the president?  Let‘s watch. 

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER:  The American people know and historians will judge that this is a remarkable achievement for President Barack Obama.  Never before has a president passed his first major economic proposal so boldly and so swiftly. 

REP. JOHN BOEHNER (R-OH), MINORITY LEADER:  The president, when he outlined his desires for this bill, summed it up pretty simply when he said this bill needs to be about jobs.  But a bill that was supposed to be about jobs, jobs, jobs, has turned into a bill that‘s all about spending, spending and spending. 

(END VIDEO CLIP)

SHUSTER:  Joining us now to decide who‘s right and for some grades for the Obama White House is our political panel.  Michael Smerconish is a nationally syndicated radio talk show host.  Pat Buchanan is an MSNBC political editor.  And Joan Walsh is editor in chief of Salon.com. 

Pat, let‘s start with you.  He got essentially what he wanted.  What‘s his grade? 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  On the bill—I can‘t give him a high grade on the bill, because look, it‘s not an exciting bill.  It‘s not a bill that has any bipartisan support.  He had three Republican senators for it.  The whole thing, David—a lot of us were looking forward to this, frankly, as a brave, new administration, going to have some bold ideas, reform, remake the American economy for the 21st century.  Everybody‘s ready to get behind it.  And this has no excitement about it whatsoever. 

I‘ll tell you, whatever you say about Reagan‘s tax cuts, the people behind him were enthusiastic and wildly excited when they got through.  They fought for him.  They had tremendous belief in him.  I think what Boehner said is true.  It‘s just a big spending bill.  If I were in the Senate or the House as a Republican, I would say the president‘s a fine man.  We appreciate his efforts.  I can‘t vote for this. 

SHUSTER:  Joan Walsh, your view?  How did Obama do this week? 

JOAN WALSH, SALON.COM:  I would give him a B overall.  But I have to say, I respect Pat‘s opinion a lot.  But to say that this is in any way a failure on Obama‘s part—if there‘s a failure at all, it‘s his failure to understand what the Republicans were going to do to him around this bill.  There are way more tax cut in it than Democrats wanted. 

Pat is right on one point, that Democrats are less enthusiastic than they might been about a bigger bill.  They compromised and that‘s the nature of American democracy.  They compromised and he did not get one Republican vote.  That‘s astonishing and it‘s kind of treacherous, in my opinion.  There wasn‘t one Republican who would do what Nancy Pelosi or Chris Van Hollen, who was the senior program, did, and say, hey, it‘s not everything; it‘s not exactly what we want, but in the spirit of compromise and in the spirit of rescuing our economy, I‘m going to vote for this bill, not one.  That‘s astonishing. 

SHUSTER:  Michael Smerconish, why don‘t you weigh in as well on a grade for the president.  Also take Joan‘s argument, what do the Republicans get as far as a grade this week? 

MICHAEL SMERCONISH, RADIO TALK SHOW HOST:  Well, I agree with Joan‘s grade more so than I would agree with Pat‘s in this particular case.  I think there‘s a legitimate philosophical divide in the country as to which direction we should be pursuing at this moment.  But it‘s Friday.  We‘re going into President‘s Weekend, and he got it done. 

We have a significant crisis on our hands.  In the end, it may come back to haunt him.  But the reality is he got it through the House, and he got it through the Senate.  OK, not with a lot of Republican support, but he got it done. 

SHUSTER:  Let‘s look, in fact, at what Obama was originally asking for and what he got.  He was originally asking for 775 billion dollars, 40 percent tax cuts.  What he got was 787 billion dollars, 38 percent tax cuts.  Pat?

BUCHANAN:  Well, look, he‘s got his bill.  And I do give him credit for that.  It‘s a gigantic bill, six percent of the entire Gross National Product.  Frankly, David, there‘s going to be a blip upward in the Gross National Product when this thing takes affect.  But I think in the long term, this is just weighing down the government.  The expansion of government, we have got other things coming with this package of Geithner‘s, which was a disaster. 

We had this week—you had Daschle and then you got Gregg is gone.  I think, overall, on a personal level, Obama is a very attractive figure.  I would give him an A or an A-minus the way he‘s handled himself personally in reaching out.  But, at the same time, in terms of performance, I think you have to grade him the way he grades himself.  I screwed up. 

SHUSTER:  This whole issue, in terms of whether the White House is learning, there was a reporter, CBS‘ Chip Reid, who brought some of this up at today‘s White House briefing and here‘s—and essentially the question gets to whether or not the White House is learning.  Here‘s the exchange. 

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  You guys ask questions for a living.  What might we pose that—are you likely within a seven-day period to come to a different conclusion than the one in which you‘re giving the president?  The president‘s not going to stop reaching out to Republicans because one Republican he respects decided to change his mind. 

(END VIDEO CLIP)

SHUSTER:  I get an F for how I tried to set that one up.  There he‘s talking about Judd Gregg and whether or not they should reach out to another Republican.  Somebody failed in that whole debacle.  Michael Smerconish, who was it? 

SMERCONISH:  Both of them probably.  He was never well suited for that role.  I respect the fact that the president wanted a third Republican in the cabinet.  But at a time when the stimulus package was front and center, if Gregg were not going to be supportive of it, then he was certainly the wrong man to head Commerce.  In the end, it‘s a blip on the screen.

I‘m more troubled by Geithner, a man now who‘s also the titular head of the Internal Revenue Service, with the tax problems that he had.  But the Gregg issue is a non-issue historically. 

SHUSTER:  Joan Walsh, doesn‘t the Obama administration get a very bad grade for Geithner, as far as the rollout of this second Tarp proposal, which the markets hated this week? 

WALSH:  Yes, I would give him a D for the Geithner performance.  I was really struck by just how vague it remained.  And really what the market has been waiting for and everybody‘s waiting for is clarity about how it‘s going to work and what they‘re going to do about these toxic assets, et cetera.  So for him to come out that day and have so little to really tell us concrete was bad planning. 

On Judd Gregg, I‘m just going to give that to Judd Gregg.  I think what he did was dishonorable, frankly.  Nothing changed about Barack Obama in those few days.  For him to say yes, and by some accounts lobby for the job, and then say no and publicly slap the president in the face, that‘s just bad behavior.  And I won‘t blame Obama for any of that.   

BUCHANAN:  Let me agree with Joan.  I think Judd Gregg‘s just about 95 percent responsible for this.  He‘s a laconic New Hampshire conservative, socially and politically.  Does he really think he‘s going to go to into an administration and be a cheerleader for the Obama administration?  I blame him for that. 

Let me say of this—Joan, we all have our opinions, but what does the market say?  What the market is saying, it‘s down to a five and a half month low.  It is saying, we have no confidence whatsoever in Geithner or the bank bailout, and we don‘t have great confidence this stimulus package is going to work.   

SHUSTER:  That is, of course, the next big challenge, the next big test for Obama, how is he going to manage the markets and at least satisfy them.  Pat Buchanan, Joan Walsh, Michael Smerconish, thank you all very much.  We appreciate it.  And by the way, if any of you at home want to vote and cast your grade at how the president‘s doing, go to Schuster.MSNBC.com.  Again, you can give your grade to the president and we‘ll present the results on Monday.

Up next, New York Governor David Paterson reacts to those “Saturday Night Live” impressions of him.  But first presidential jeopardy, courtesy of the folks at “The Tonight Show.” 

(BEGIN VIDEO CLIP)

JAY LENO, “THE TONIGHT SHOW”:  Potpourri for 200.  The answer is death and taxes.  President Lincoln?

UNIDENTIFIED MALE:  What are the only two sure things in life? 

LENO:  No, I‘m sorry.  President Obama? 

UNIDENTIFIED MALE:  What are the only two things that will keep you from getting a position in my cabinet? 

LENO:  Yes, death and taxes, that‘s correct.  In the news for 100 dollars.  The answer is the economy.  President Bush? 

UNIDENTIFIED MALE:  What is not my problem. 

LENO:  In the news for 200.  Iraq.  President Bush? 

UNIDENTIFIED MALE:  What is not my problem? 

LENO:  That is correct. 

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SHUSTER:  We‘re back with a look inside the Briefing Room.  Have you ever wondered what your Congressmen and women are accomplishing when they pass resolutions congratulating sports teams?  The issue is at hand again, thanks to House Resolution 110 that congratulates the NFL‘s Pittsburgh Steelers for winning Super Bowl 43, becoming the most successful franchise in NFL history with their record sixth Super Bowl title. 

On the House floor, a few lawmakers have had enough, including Illinois Congressman Mark Kirk and Georgia‘s Jack Kingston.

(BEGIN VIDEO CLIP)  

REP. MARK KIRK ®, ILLINOIS:  Why as the economy tanks Congressional leaders are voting to borrow two trillion dollars, but we‘re debating National Engineers Week and a football resolution.  I watched the game and it was a good game, but it‘s not our core mission. 

REP. JACK KINGSTON ®, GEORGIA:  While unemployment is at an all time high, foreclosures right and left, and there‘s a big credit crunch, we‘re going to spend time and tax dollars congratulating the Pittsburgh Steelers.  Why don‘t we just say, hey, congratulations.  Now we got to get people working again? 

(END VIDEO CLIP)

SHUSTER:  The House has not yet voted on the resolution.  It‘s been postponed for a while.  So the Steelers and their fans in Congress will just have to wait. 

Up next, New York Governor David Paterson, he has now spoken out on camera about a “Saturday Night Live” sketch that pokes fun at his disability.  Paterson is legally blind and he says he cannot repeat what he really thinks about the sketch.  But then he said this. 

(BEGIN VIDEO CLIP)

GOV. DAVID PATERSON (D), NEW YORK:  Apparently anybody who is blind or deaf or has an ambulatory disability or any kind of physical affect that gets to a leadership position in this country is going to be portrayed as if a bunch of third graders, who are still ridiculing them on “Saturday Night Live.”  I think they need to bring back Sarah Palin, because they have obviously run out of material. 

(END VIDEO CLIP)

SHUSTER:  We reached out to our colleagues at SNL to get their reaction to Paterson.  We were told that neither NBC nor “Saturday Night Live” will have a comment on the matter. 

Finally, tomorrow is Valentine‘s Day.  If you are a conservative, and you don‘t know what to get your Valentine, the Republican National Committee is here with some last minute help.  You can e-mail your loved one a Valentine‘s Day card courtesy of the RNC.  Here are a few opinions: one has President Obama‘s picture on the card; it says “this Valentine card hasn‘t been fully vetted.”  Another from the commander in chief says, “want to meet without preconditions?”

The RNC also has a card for your conservative sweety that has pictures of House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid.  It says “we got you a box of chocolate covered pork.”  And, of course, there is a card with former Illinois Governor Rod Blagojevich on it, with the inscription, “aw shucks, did you say I‘m a peach?” 

In the interest of political balancing, we did some Googling and found no Democratic Valentine‘s Day equivalent.  However, a Democrat we spoke with said, every day in the GOP is actual April Fool‘s Day. 

By the way, we just got a picture of what President Obama‘s giving First Lady Michelle for Valentine‘s Day.  It‘s a triple chocolate brownie cake.  It‘s apparently a moist and fudgy brownie take, enrobed in rich chocolate, and blanketed with a shower of dark chocolate shaves.  It‘s topped by milk and dark chocolate glazes, drizzled all over, and a Belgian chocolate plaque that reads, “I love you.” 

I have a feeling that when you‘re the president, it‘s easier to get these things done. 

Up next, we have got two Muckrakers of the day.  They have both been reporting on the big story of the week, the big multi-billion dollar stimulus bill.  We‘ll check in with them and get a Senate update ahead on 1600 PENNSYLVANIA AVENUE.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.  At some point tonight, the Senate will complete its vote to approve the 787 billion dollar stimulus bill.  Debate today has been contentious and often focused on minutiae, including protection of the Bay Area Salt Marsh Harvest Mouse, which Republicans have latched on to as a symbol of what they say is wasteful spending in the bill, and what Democrats call a complete fabrication. 

Here‘s how it went down on the House floor earlier today. 

(BEGIN VIDEO CLIP)

KINGSTON:  Thirty billion for a rat in San Francisco.  Mickey Mouse is going to be envious.  He‘s no longer the mouse with the greatest net worth in California. 

REP. DAVID OBEY (D), WISCONSIN:  I wish the other side would make up their mind whether it‘s mice or rats, neither of which are in this bill, if they will read it. 

UNIDENTIFIED MALE:  I‘ve got it right here, find it and show it to me. 

Show it to me. 

(END VIDEO CLIP)

SHUSTER:  Today the “Huffington Post” argued that more attention should be paid to 15 expenditures in the bill that could have direct impact on the nation‘s economy, now and in the future. 

Joining us now are our two Muckrakers of the day, MSNBC Congressional correspondent Mike Viqueira, who has covered every detail of the stimulus debate, and Nico Pitney is the national editor for the HuffingtonPost.com. 

Mike, let‘s start with you.  What‘s going to happen in the Senate tonight and when? 

MIKE VIQUEIRA, MSNBC CONGRESSIONAL CORRESPONDENT:  Here‘s the state of play, David.  Right now the vote count, 58-48.  They‘re waiting for three senators, actually two, when it comes right down to it.  Both of them Democrats, fortunately, to get them to that 60, if you‘re a supporter of this.  You want to see Evan Bayh come in and you want to see Sherrod Brown come in and cast that vote. 

Evan Bayh, we don‘t know where he is.  He could be in any moment.  Sherrod Brown attending the funeral services for his mother in the Cleveland area.  He‘s been given a government plane by the administration to fly in after the services conclude at about 8:00.  We expect him to come in to Andrews Air Force Base about 10:00, then be brought here to the capital to cast the deciding vote.  That‘s why this vote‘s being held open on the Senate floor. 

As you mentioned, it passed the House with zero Republican support today.  That‘s OK, they didn‘t need them.  The margin is much closer here in the Senate, where they do need that 60 of 100 senators.  They‘re playing it precisely at 60 right now.  Senator Ted Kennedy, he gave them a 61st vote earlier in the week, is not expected to show up for tonight‘s vote, David. 

SHUSTER:  And Nico Pitney, what‘s in this that you think is the most important help to the economy in your view? 

NICO PITNEY, HUFFINGTONPOST.COM:  Well, I mean, I think the point is that contrary to what Pat Buchanan said a few minutes ago, there are elements in this bill that will dramatically reshape the economy, not just in the short-term to kind of address the crisis, but down the line.  Whether it‘s smart grid technology, that will really revolutionize how we use—how regular, ordinary people use energy, whether it‘s high speed rail, or rural broadband, these are major elements.  They‘re things that people are excited about and are not the minutiae that folks are focusing on now. 

SHUSTER:  Mike Viqueira, how nervous are members of Congress who are supporting this things about it possibly not working? 

VIQUEIRA:  I don‘t think anybody is going to know whether this works as a matter of policy, economic policy or politics.  Some of the tactics that we‘ve seen over the past month, as this has made its way through Congress in relatively rapid fashion, if you look at Congress—but we won‘t know the answer until the 2010 midterm term elections.  A lot of these projects, a lot of this spending due to go out in the first 18 months of the bill‘s life.  Some of 787 billion dollars, an estimated 75 percent of it will be spent by that time. 

On the politics side, that‘s when we‘ll find out when those midterm elections for Congress happen in November of 2010, David. 

SHUSTER:  MSNBC Congressional correspondent Mike Viqueira, he deserves to be Muckraker of the day because of his great work all the time.  Nico Pitney, for anybody who thinks that “Huffington Post” is not a big player, they need only look at that news conference and the president called on “Huffington Post” the other night, and did not call on several mainstream newspapers.  Congratulations to you and your organization.  And we appreciate you both. 

PITNEY:  Thank you, David.

SHUSTER:  And that is the view from 1600 PENNSYLVANIA AVENUE tonight.  I‘m David Shuster.  Thank you for watching.  We‘ll see you back here Monday at the same time, 6:00 p.m. Eastern on MSNBC. 

Remember, you can get the latest political news and a sneak peek of what‘s coming up on the show.  Go to Shuster.MSNBC.com, sign up for the Daily Briefing.  Plus, if you‘re into Twittering, I‘ll be online right after the show.  So follow me on Twitter.com/Shuster1600. 

I‘m David Shuster.  “HARDBALL” with Chris Matthews starts right now.

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