updated 3/10/2009 2:19:11 PM ET 2009-03-10T18:19:11

Guests: Jonathan Martin, Paul Krugman, Tom Andrews, Laurie Strongin, Allen Goldberg

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HOST:  Tonight, boosting science by removing the conservative shackles.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  We will lift the band on federal funding for promising embryonic stem-cell research.  We will also vigorously support scientists who support this research. 

SHUSTER:  But as the president highlights science, a top economic guru is increasingly worried about the recession. 

WARREN BUFFETT, CHAIRMAN, BERKSHIRE HATHAWAY:  I‘ve never seen the consumer or Americans more fearful than this. 

SHUSTER:  We will talk live with Nobel Prize-winning economist Paul Krugman. 

Plus, follow the money. 

SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  I think I should have the ability as a United States senator to direct money back to my state. 

SHUSTER:  Many states, including his, get more money than they pay in federal taxes.  We will bring you the list. 

Plus, Karl Rove does it again. 

KARL ROVE, FOX NEWS CONTRIBUTOR:  There‘s this conflict between what he said during the campaign and what he‘s now doing. 

SHUSTER:  Bush‘s brain returns to “Hypocrisy Watch.”

And the things I thought you should know:  President Bush‘s resume revision, Ted Kennedy‘s birthday tribute... 

UNIDENTIFIED MALE:  We‘re going to sing “Happy Birthday” to you tonight, Teddy. 

SHUSTER:  ... and Twitter time.

All tonight on 1600 PENNSYLVANIA AVENUE.

OBAMA:  Well, I‘m excited too. 

(END VIDEOTAPE)

SHUSTER:  A dramatic break from President Bush. 

Hello, everybody.  I‘m David Shuster. 

This was day 49 of the Obama administration.  It was a big one in terms of science policy, and it sparked a very loud debate over how much President Obama should be trying to deal with at once. 

The president spent most of his day in meetings with Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke, but as one public event was on an entirely different issue, reversing Bush administration restrictions on stem-cell research. 

(BEGIN VIDEO CLIP)

OBAMA:  When it comes to stem-cell research, rather than furthering discovery, our government has forced what I believe is a false choice between sound science and moral values.  The majority of Americans from across the political spectrum and from all backgrounds and beliefs have come to a consensus that we should pursue this research, that the potential it offers is great, and will proper guidelines and strict oversight; the perils can be avoided. 

(END VIDEO CLIP)

SHUSTER:  For more, let‘s bring in Politico White House Correspondent Jonathan Martin.  He is live from 1600. 

And Jonathan, explain the significance of the stem-cell decision.  And how did the White House respond to criticism that the president should be restricting his focus right now just to the economy? 

JONATHAN MARTIN, WHITE HOUSE CORRESPONDENT, POLITICO:  Well, this is the overturning, David, of an eight-year ban that was first put in place by then-President George W. Bush.  And it basically now allows for the federal funding for embryonic stem-cell research, something that many in the science community have pushed for. 

You know, as for the question as to how he can do this, David, while also addressing other issues, you know, this is something that Robert Gibbs today said at the briefing that, you know, is like other issues in the sense that this was left over from the previous administration.  There are a host of issues, not just economic, but other issues, including this that now President Obama is going to address.  And even if you don‘t buy that, that‘s the argument they put out there. 

SHUSTER:  Jonathan, now, Warren Buffett, a top economic guru for the president, as you know, criticized the president earlier this morning on CNBC. 

Watch, and then I‘ll get some reaction to that. 

MARTIN:  Sure.

(BEGIN VIDEO CLIP)

BUFFETT:  The message has to be very, very clear as to what government will be doing.  And I think we‘ve had—and it‘s the nature of the political process, somewhat, but we‘ve had muddled messages.  And the American public does not know—they feel they don‘t know what‘s going on, and their reaction then is to absolutely to pull back. 

We need clarity on that point, and they can‘t hear it from Treasury officials or that sort of thing.  People need to—at this point, they‘re scared enough, so they need to hear it from their American president. 

(END VIDEO CLIP)

SHUSTER:  Jonathan, what was the White House reaction to that? 

MARTIN:  Yes.  David, this is a tough spot for them, as you know, because Warren Buffett was a high-profile Obama supporter during the campaign, offered them sort of an important economic credential, I think, and is somebody that the president has talked to on multiple occasions and thinks quite a bit about. 

So, naturally, the reaction was somewhat muted.  They didn‘t want to criticize the “Oracle of Omaha,” but at the same time, they don‘t really want to engage his perspective. 

So what do they do?  They do what White Houses always do.  They try and avoid some of the sort of central argument being made here.  And they‘ve painted this as more of a critique of Washington, of the sort of culture of the capital here, and largely avoided the sound bite, David, that you just played. 

SHUSTER:  Jonathan Martin, White House correspondent for Politico. 

Jonathan, thanks for coming on.  We appreciate it. 

MARTIN:  Thanks, David. 

SHUSTER:  You‘re welcome. 

So, is the Obama administration doing enough to turn around the economy? 

Joining us now is Paul Krugman.  He‘s a professor of economics and international affairs at Princeton University‘s Woodrow Wilson School.  He‘s also a professor at the London School of Economics, and op-ed columnist for “The New York Times.”  And he‘s the winner of the 2008 Nobel Prize in Economics.

Mr. Krugman, what do you make of the White House argument that was made today that health care reform and freeing up federal money for stem-cell research, that that is part of helping the economy? 

PAUL KRUGMAN, PRINCETON PROFESSOR:  Well, to the extent that you can get health care money out—I mean, basically anything that puts money out there is going to help stimulate the economy.  So that does help.  But, you know, it‘s clearly not the core of the economic policy. 

I have no problem with him talking about other things, but this is not an answer to the critique that the administration isn‘t doing enough. 

SHUSTER:  You‘ve said repeatedly that the stimulus needed to be bigger, and that your argument has essentially been underscored by the unemployment numbers that came out last week.  Clearly, you‘re hitting a nerve in the West Wing. 

Obama‘s chief of staff, Rahm Emanuel, told “The New Yorker,” “How many bills has he passed?”  Referring to you.  “Now, my view is that Krugman, as an economist, is not wrong, but in the art of the possible of the deal, he is wrong.  He couldn‘t get his legislation.”

“No disrespect to Paul Krugman, but has he figured out how to seat the Minnesota senator?  Write a (EXPLETIVE) column on how to seat the (EXPLETIVE).  I would be fascinated with that column.  OK?  Any time they want, they can have it.  I give them my chair.”

KRUGMAN:  Right.

SHUSTER:  Your reaction?

KRUGMAN:  Well, you know, Rahm Emanuel is right that politics is hard. 

But there are things they can do.  And particularly, there is a possibility

it‘s kind of an extreme option, but maybe necessary—which is to—there are ways to structure the process through budget reconciliation which makes it not subject to filibuster. 

There‘s going to have to be a second round of the stimulus.  It‘s just clear now. 

This is—you know, the bill promises 3.5 million jobs saved or created by the end of 2010, which I think is about right.  It‘s a plausible number.  But we‘ve already lost 4.5 million jobs.  And in fact, if you count in the fact that we have got a growing population, we‘re almost six million jobs short of where we ought to be now, and we‘re losing 600,000 jobs a month, so this thing is not big enough. 

SHUSTER:  By so many counts, this economic debate really doesn‘t get solved, I suppose, until we fix the underlying problem with the banks.  You seem to be coming out in favor of bank nationalization.  Explain what that is, why you support it.  And how would it work? 

KRUGMAN:  Well, the way—look, nationalization is not a—in a way, it‘s an unfortunate word, because it gives you the impression that we want the government running the banking system forever.  What we‘re really talking about is we‘re talking about receivership. 

We‘re saying if there are banks that are really not able to stand on their own, then they need to be—they need to be, you know, propped up with government money.  But you don‘t do that to the benefit of the stockholders, you don‘t do that to the benefit of the existing management. 

You take them over, you clean up the balance sheet, you pay off some of the debts, you re-privatize it.  We do that all the time.  The Federal Deposit Insurance Corporation seizes about two banks a week these days, basically doing exactly what I‘ve described, but they‘re small banks.  They‘re banks where the problem is that they have guaranteed deposits, and there‘s a well-established procedure. 

Unfortunately, we‘re probably in a situation where we‘re going to have to do that with some big banks.  It‘s going to involve putting federal money in to make the banks whole again.  It‘s probably going to involve some guarantees of bank liabilities, the things banks owe, not just for the banks that are nationalized, but for some of the other banks so that you create a level playing field. 

It‘s a huge thing to do.  No question.  But it‘s very hard to see how you resolve this situation otherwise. 

And what we‘re doing right now is they‘re sort of—they‘re kind of vague.  Well, the federal government won‘t let a major institution fail, which people sort of believe but don‘t quite believe.  There‘s a steady trickle or almost a gusher of money flowing into financial institutions without solving the problem.  Something more decisive has to be done. 

SHUSTER:  I want to play for you what a couple of Republicans, key Republican senators, argued over the weekend about banks that are in trouble. 

Watch. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA:  I don‘t think they‘ve made the tough decisions.  Some of these banks have to fail. 

SEN. RICHARD SHELBY ®, ALABAMA:  Close them down, get them out of business.  If they‘re dead, they ought to be buried.  We buried the small banks, we‘ve got to bury some big ones.  And it will send a strong message to the market. 

(END VIDEO CLIP)

(CROSSTALK)

KRUGMAN:  Yes.  We don‘t bury small banks, we take them over, we nationalize them.  We don‘t—you know, the bank branch at your corner doesn‘t turn into a smoking ruin.  It, in fact, continues to operate temporarily under government management, and then it‘s re-privatized. 

So if what they mean by shutting them down is in fact putting them into government receivership, yes, that‘s right.  I don‘t think they‘ve got that clear in their minds. 

SHUSTER:  The other thing that seems a little bit unclear is how much some Republicans in the House seem to know about economics and basic economics.  John Boehner suggested that there should be a freeze now on government spending. 

What‘s your reaction to that? 

KRUGMAN:  Boy, you know, we‘re right now in a situation which is known as the paradox of thrift.  Everybody is trying to save more, which makes sense for an individual, but when everybody does it at the same time, it destroys the economy and makes everybody worse off. 

What Boehner is saying is, let‘s get the government to act as well.  Let‘s make sure that the same problems that are afflicting the private sector now spread to the public sector, and let‘s make this recession worse. 

It‘s astonishing.  It‘s as if the last 80 years of economic thought have just passed them by. 

SHUSTER:  Paul Krugman, Nobel Prize-winning economist, also professor at Princeton. 

Mr. Krugman, thanks so much for coming on.  We appreciate it. 

KRUGMAN:  Thanks a lot. 

SHUSTER:  Up next, a few southern Republican governors have been complaining about federal spending, so we followed the money.  And the fact is, a lot of these southern states receive more money from the federal government than they pay in federal taxes.  We will bring you the list. 

Plus, over the weekend, Karl Rove complained that the Obama administration is going to be increasing the federal debt.  Bush‘s brain lands again in “Hypocrisy Watch.”

And we are taking your questions and video suggestions during the hour over Twitter.  Just go to twitter.com/shuster1600, or we have the link at shuster.msnbc.com. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DAVID GREGORY, HOST, “MEET THE PRESS”:  But Senator McCain is actually giving you a hard time. 

GRAHAM:  Sure.

GREGORY:  He‘s on Twitter.  And number six on his list of pork barrel spending, $950,000 for a convention center in Myrtle Beach, South Carolina. 

GRAHAM:  Yes.

GREGORY:  You want him the president to veto this spending bill? 

GRAHAM:  I voted to take all earmarks out, but I will come back in the new process and put that back in.  I think I should have the ability as a United State senator to direct money back to my state as long as it‘s transparent and it makes sense. 

(END VIDEO CLIP)

SHUSTER:  Welcome back to 1600.

The debate over pork in the $410 billion omnibus pending bill rages on, and it is time for “Follow the Money.”

A second vote on the bill is now expected tomorrow, after Senate Majority Leader Harry Reid came up short of the 60 votes needed to move the bill forward last Thursday. 

You just heard Senator Lindsey Graham on “Meet the Press” making his case on why South Carolina deserves to get money from the federal government, yet South Carolina already gets more money back from the government than it gives.  Take a look at this map highlighting the 10 states getting the most federal money per dollar taxed. 

New Mexico tops the list, getting $2.03 for each dollar they pay in federal taxes.  Interestingly enough, the next eight states getting the most back are all traditionally red: Mississippi, Alaska, Louisiana, West Virginia, North Dakota, Alabama, South Dakota, Kentucky, and Virginia.  Senator Graham‘s state, South Carolina, is 16th on the list, getting back $1.35 per dollar that comes to Washington in federal taxes. 

Now, here‘s a list of the states getting the least.  And you‘ll note they are all blue. 

New Jersey receives 61 cents back for every dollar they pay in taxes.  Next in line in getting back the least are Nevada, Connecticut, New Hampshire, Minnesota, Illinois, Delaware, California, New York, and Colorado. 

Joining us now is Tom Andrews, former Democratic congressman of Maine. 

And Tom, first of all, this would seem to suggest that when southern governors complain about spending, that they are the ones who are actually getting the most government spending per dollar, right? 

TOM ANDREWS (D), FMR. CONGRESSMAN:  Well, David, all I can think of is the movie “Casablanca.”  You know, when the inspector goes in and says, “I‘m shocked,” shocked that there‘s gambling going on in this casino, and then the clerk hands him his winnings.  I mean, it‘s the same basic thing.  There‘s a basic hypocrisy here. 

Tip O‘Neill—former Speaker O‘Neill said, you know, all politics is local.  And so there‘s a certain amount of pressure to bring home the bacon. 

But at the same time, you say, look, pork barrel spending is, by definition, any federal spending that goes on in any congressional district other than mine.  When it comes to my district, it‘s sound, fiscal, federal policy.  So that‘s—the “Hypocrisy Watch” segment is going to get very long, David, if we go into this too deeply. 

I think the Republicans have to be careful here, because not only do they have -- 40 percent of the earmarks in this bill are Republican earmarks, but also, if you look at history, pork barrel spending has always been with the Congress.  But when the Republicans took over the House and the Senate in the ‘90s, this exploded. 

I mean, exponential explosion of pork barrel earmark spending.  So they‘ve got to be careful of this.

But you know, it‘s the same basic approach.  All politics is local.  Make sure we get our bit of it in our district, but any other spending anywhere else, forget it. 

SHUSTER:  Well, and the argument, also, is sort of strange given that at least there‘s some indication that there was more money for earmarks in 2005 than there is this time around.

But in any case, the White House, as far as this spending bill, which is still stuck in the Senate, the White House keeps arguing this is last year‘s business. 

Listen to Peter Orszag on CNN yesterday.  Watch. 

(BEGIN VIDEO CLIP)

PETER ORSZAG, WHITE HOUSE BUDGET DIRECTOR:  We need to get this out of the way and move on to serious business that will include next year, when we are in charge—when we are—when you can hold us responsible—a much different ball game.  We are like—this is like your relief pitcher coming into the ninth inning and wanting to do redo the whole game. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MCCAIN:  It is not last year‘s business.  It‘s money that‘s going to be spent as soon as the president signs the bill.  And he shouldn‘t sign it.  He should veto it. 

(END VIDEO CLIP)

SHUSTER:  Tom, who‘s right here, Orszag, the Obama administration budget director, or Senator John McCain? 

ANDREWS:  Hey, they‘re both right.  This is pure politics, David. 

Let‘s make no mistake about it. 

Of course this was the work that was done over the course of the last Congress.  And yes, this Congress has to pass this bill.  So they‘re both right. 

But this is all about scoring political points.  And of course, the Republicans have decided they‘re going to score points by suddenly becoming fiscally responsible and this is one way to do it, even though, of course, they have to face this whole “Hypocrisy Watch.”

But I‘ll tell you, “Following the Money,” this is the most obvious example.  There‘s all kinds of ways that money is fitted into a whole variety of bills of very unnecessary spending.  The F-22 fighter, for example, in the defense budget goes to 44 states across this country, over 1,000 subcontractors. 

There‘s no purpose for this aircraft.  I call it the plane to nowhere, but 200 members of Congress signed a letter the first week of the session saying we needed the F-22.  I mean, that‘s what this is all about. 

It‘s pure politics, David, and we‘re going to have to follow this money, but also expand that “Hypocrisy Watch” quite a bit I‘m afraid. 

SHUSTER:  Well, and we‘re doing that next. 

Tom Andrews, former Democratic congressman of Maine. 

And Tom, thanks so much for coming on.  We appreciate it. 

ANDREWS:  David, thank you. 

SHUSTER:  You‘re welcome. 

Up next, Karl Rove is now criticizing President Obama‘s budget because it grows the size of the federal debt.  That‘s right, the criticism is from Karl Rove, Bush‘s brain, a key member of the Bush team that turned record surpluses into record deficits. 

“Hypocrisy Watch” is next, here on 1600.

(COMMERCIAL BREAK)

SHUSTER:  Over the weekend, former Bush adviser Karl Rove publicly criticized the Obama administration‘s budget proposals.  And that takes us to tonight‘s “Hypocrisy Watch.”

First, the background. 

Karl Rove is a paid commentator on Fox News.  Yesterday, he complained about President Obama‘s tax policies.  Watch. 

(BEGIN VIDEO CLIP)

ROVE:  During the campaign he talked about—endlessly about cutting taxes for the bottom 95 percent.  In fact, in his Denver convention speech, he never once mentions raising taxes, he just talks about cutting taxes.  And in his speech, I went through and looked at them.  For every four words he said on cutting taxes, he said one word on raising taxes. 

(END VIDEO CLIP)

SHUSTER:  It gets even better.  Rove also criticized President Obama‘s growth of the federal debt. 

(BEGIN VIDEO CLIP)

ROVE:  I mean, there‘s this conflict between what he said during the campaign and what he‘s now doing. 

(END VIDEO CLIP)

SHUSTER:  First, regarding the debt, one of the key reasons the budget debt is higher is because President Obama is including the cost of the Iraq and Afghanistan wars in the budget.  The Bush administration refused to include the war costs in the budget. 

Secondly, on taxes, President Obama cut taxes on 95 percent of working Americans.  The taxes that are going up on the wealthy will happen in 2010 because that‘s when President Bush agreed the cuts should expire. 

Here‘s the video.  There‘s President Bush signing the bill, a bill that spelled out the tax cuts would eventually go back up. 

Finally, whenever Mr. Rove whines about Barack Obama‘s convention speech, consider the promise President Bush made in his 2000 convention speech. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FMR. PRESIDENT OF THE UNITED STATES:  When America uses force in the world, the cause must be just, the goal must be clear, and the victory must be overwhelming. 

(END VIDEO CLIP)

SHUSTER:  Just cause, clear goal, and overwhelming victory.  In Iraq, the Bush administration was 0 for 3. 

I appreciate that Karl Rove, who helped sell the Iraq war, is now trying to rehabilitate his reputation by giving commentary on Fox News. 

But Karl, when you complain about the Obama administration‘s effort to clean up the mess you and your colleagues created, that‘s hypocrisy, and it‘s wrong. 

Up next, President Obama signed an executive order today that will lift Bush-era restrictions on embryonic stem-cell research.  We‘ll talk to a mother and father who were at the White House this morning, seven years after they first sought to use the cutting-edge science to try to save their son‘s life. 

And later, does President Obama have too much on his plate?  That‘s the argument from Republicans and a few Democrats who are increasingly nervous about the economic recession. 

More 1600 ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  There‘s no finish line in the work of science.  The race is always with us—the urgent work of giving substance to hope and answering those many bedside prayers of seeking a day when words like “terminal” and “incurable” are potentially retired from our vocabulary. 

(END VIDEO CLIP)

SHUSTER:  Welcome back to 1600 PENNSYLVANIA AVENUE.  Today, President Obama signed into law an executive order reversing the Bush era restrictions on federal funding of embryonic stem cell research.  Advocates hailed the move, saying it offers new possibility for cell based therapies for diseases like Parkinson‘s, Alzheimer‘s and Diabetes.  The goal is to transform embryonic cells so they can grow and replace diseased tissues. 

We‘ll be talking about the politics of the stem cell debate with tonight‘s political panel, Chris Kofinis, Anne Kornblut and Chris Plante.  But first, Laurie Strongin and Allan Goldberg lost their son, Henry, in 2002, seven years after he was born with Fanconi anemia, a rare genetic disorder.  Laurie and Allen have been vocal advocates of stem cell research.  Through their foundation, Hope for Henry, they have improved the lives of countless families whose children face life threatening illnesses. 

Welcome both of you to our show.  You were at the White House this morning.  What was it like when the president signed and lifted the stem cell research ban? 

LAURIE STRONGIN, STEM CELL ADVOCATE:  I guess the word I would use was it was really—it was incredible.  And it was eight years in the making.  And it was just a wonderful, wonderful moment.  It was an honor to be there. 

ALLEN GOLDBERG, STEM CELL ADVOCATE:  And I would add that there was a sense of elation.  We were surrounded by probably the top scientists in the country.  And to see these very serious men of science to be as giddy as they were today was truly a sight to be seen.  And it was definitely a great thing to be a part of. 

SHUSTER:  Laurie, tell us about Henry.  What were you told about his chances for survival?  What were the options available to you? 

STRONGIN:  When henry was just two weeks old, he was diagnosed with a rare disease, called Fanconi anemia.  At the time it was considered a fatal disease.  Allen and I desperately did everything we could do remove the word fatal from his disease.  Our only hope was really through stem cell research, for them to better understand the disease and to improve the treatments that were available to him, and ultimately to find a cure. 

And sadly Henry died when he was seven, seven years ago.  And, you know, so today‘s executive order is too late to help him, but we really understand the incredible pain of having a child with a fatal illness, and I think what President Obama did today was really begin to lift the word fatal from a lot of these diseases, and to allow scientific possibility to happen.  It was really a phenomenal thing to witness. 

SHUSTER:  Allen, not everyone, of course, agrees that stem cell research is the way forward, in terms of treating some of these diseases.  Here‘s Representative Chris Smith, who co-chairs the House Pro-Life Caucus today.  Watch. 

(BEGIN VIDEO CLIP)

REP. CHRIS SMITH ®, CO-CHMN HOUSE PRO-LIFE CAUCUS:  Why persist in the dehumanizing of nascent human life when better alternatives exist?  Alternatives that work on both ethics ground and efficacy grounds?

(END VIDEO CLIP)

SHUSTER:  Allen, what do you say to people who argue that scientists should exhaust the possibilities of adult cells before using embryonic cell lines? 

GOLDBERG:  Well, I would say to them that they‘re not giving—allowing science to realize what is possible.  And, you know, so far, the only true therapy that adult stem cells have been able to provide is stem cell transplants, bone marrow transplants.  There has been no other therapy that adult stem cells have been proven to provide.  So if you are unable to allow embryonic stem cell transplant to be studied—I‘m sorry, embryo stem cells to be studied, then you‘re cutting off a whole realm of possibility. 

STRONGIN:  And I think—I mean, if I may add one thing is that there are tens of thousands of frozen embryos in in vitro clinics around the country.  All they are potential for saving lives.  These are embryos that are being discarded as medical waste.  And they have the potential to save the lives of millions of people who are here, living with serious illness. 

So if you have a choice between discarding these embryos or using them to save lives, it seems like a pretty obvious choice to make. 

GOLDBERG:  If I could just quickly close with Representative Smith.  One thing that I think he didn‘t fully understand is not every embryo that is in a in vitro fertilization clinic is able to be given up for adoption and become a life, to become a person.  We, ourselves, experienced that, where we had a number of frozen embryos that just would not become a baby. 

And so I think that he needs to understand that and the opponents of embryo research need to understand that.  And a lot of these embryos are diseased to the point where they have no chance of becoming life. 

SHUSTER:  Allen Goldberg, Laurie Strongin, thank you so much for coming on and sharing your story.  For anybody who wants to help a child facing a life threatening illness, regardless of your political view, their foundation does some incredible work.  The website is HopeForHenry.org.  That‘s HopeForHenry.org.  Thanks again. 

For more on the politics and implications of today‘s White House announcement, let‘s turn now to our panel.  Chris Kofinis is a Democratic strategist who worked on the Edwards campaign.  Chris Plante is a conservative radio talk show host on WMAL radio right here in Washington.  Ann Kornblut is a national political reporter for “Washington Post.”

Anne, why don‘t you start by putting this in perspective.  How much does this sort of essentially change the culture and social dynamics here in Washington because of this? 

KORNBLUT:  It‘s obviously a complete reversal from what we saw over the last eight years.  It was something that former President Bush did early on in his first term in August of 2001.  He imposed some of these limitations that now Barack Obama has reversed.  I think what‘s interesting, and interesting to hear some of the Republicans talking about this, is that this is an issue that separates Democrats from Republicans.  But it‘s also an issue that within the Republican party is pretty divisive.  Most moderate Republicans and independents actually favor lifting the restrictions, as Obama did today.  It‘s conservative who really oppose it. 

Although it‘s something that separates the two parties, it‘s actually also a wedge issue, politically. 

SHUSTER:  Chris Plante, your view? 

PLANTE:  Well, I‘m not sure it‘s as easy as Republican/Democrat.  I think there are a lot of Democrats who are pro-life, who believe in life.  There are a lot of people that are pro-life that believe that this is, in essence, harvesting babies for medical experimentation, and is therefore objectionable to people.  That would seem to be a reasonable point to bring in. 

There are also ethical concerns that a lot of medical ethicists have taken into account.  There are serious debates about serious issues, when obviously everyone wants to save Henry.  It‘s a terrible and a tragic story, and everybody else‘s life.  I‘m going to get sick and die at some point too, and I would like to have cures for all diseases. 

There are ethical issues that we have not addressed.  In fact, this administration has kick the ethical issue down the road for another month, before they take up these issues.  And also what the Bush administration did do was they funded embryonic—government funding of embryonic stem cell research on already existing lines, plus non-embryonic stem cell research.  And there was non-government funded embryonic stem cell research going on in universities and elsewhere through the last eight years. 

So the change isn‘t quite that significant, when it comes down to the research itself.  The politics of it and the ethics of it are still something I don‘t think we have had an honest debate about.  Obviously, I would like to see all diseases cured forever.  I‘m a human being, too.  There are practical issues. 

SHUSTER:  Chris, we had you on because we were hoping you would say you don‘t want certain diseases cured.  We thought you were going to come on and say no.  It‘s a good point, though.  Chris Kofinis, if this is such a slam dunk decision for the Obama administration, why did they wait until almost 50 days in.  And secondly, why did they leave some of this up to Congress, in terms of filling in the details? 

KOFINIS:  In terms of why they waited, they wanted to make sure this was done in the appropriate manner.  Listen, there are passionate people on both sides of the issue.  Clearly, this was something I think that needed to be done for a lot of the reasons and the very painful reasons we heard, you know, the couple just talked about in terms of their son, and losing their son.  It‘s a terrible tragedy. 

The idea that somehow you‘re going to allow politicians and members of Congress to define the terms of science and what‘s research I find somewhat strange.  I mean, the notion that Congressman Smith or any member of Congress who is not a scientist, let alone if they are, are going to tell researchers at NIH what is appropriate, I don‘t think passes the lab test. 

So I think what the Obama administration tried to do was find an appropriate balance.  Contrary to what Chris said, what the Obama administration actually did, in terms of the guidelines, is they asked the NIH to go down and research and determine the guidelines that would allow the best way to proceed forward.  Unlike the past administration—

(CROSS TALK) 

SHUSTER:  Really quickly, before we take a break, make your point about the government intrusion, where I think this is going. 

PLANTE:  The idea—apparently Chris is suggesting that we have scientists make policy.  You know, which is it?  Of course, our political leaders make these decisions.  They always have.  Don‘t be silly. 

KOFINIS:  I‘m asking if science should guide policy. 

PLANTE:  Ethics should guide science.  That gets back to the core of the problem, which the Obama administration has once again kicked down the road ahead of this decision.  So we don‘t know what the ethical ramifications are, because we haven‘t decided those yet. 

KOFINIS:  That‘s just not correct.  Unlike the Bush administration, I can guarantee you the Obama administration is going to be transparent about that.  This is the—

PLANTE:  Transparency, famous transparency. 

SHUSTER:  Before we go down that road, I promise we‘ve got a second round coming up.  Anne Kornblut, we‘ll get you back in the middle of this I promise as well. 

Up next, the GOP says President Obama should focus strictly on the economy until he introduces a clear plan for how to fix the banks.  Is the president trying to do too much at once? 

There was a remarkable clash at the White House press briefing today. 

We will show it to you. 

Your Twitter questions are coming up at the end of the hour.  Go to Twitter.com/Shuster1600 or use the link at Shuster.MSNBC.com.  You‘re watching 1600 PENNSYLVANIA AVENUE.

(COMMERCIAL BREAK)

UNIDENTIFIED FEMALE:  Mr. President, are you OK? 

UNIDENTIFIED MALE:  Oh my god.  What happened? 

UNIDENTIFIED MALE:  What happened was you made Barack Obama angry. 

When you make Barack Obama angry, he turns into the Rock Obama. 

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SHUSTER:  Welcome back.  President Obama got a lot of praise today for his new course on stem cells from scientists and advocates.  But with the Dow dropping again, unemployment over eight percent, and the economy at the forefront of everyone‘s mind, why is the president focusing on issues like stem cells today, health care last week, and education tomorrow?  Is the White House diverting too much needed energy and political capital away from the job of fixing the economy? 

Let‘s throw that to our panel, Democratic strategist Chris Kofinis, radio talk show host Chris Plante, and the “Washington Post‘s” Anne Kornblut.  Anne, first of all, earlier in our show tonight, Paul Krugman, the Nobel Prize winning columnist, suggested the Democrats essentially invoke a measure that would only require them 51 votes in order to get some of their efforts through.  Is that such a wise political idea? 

KORNBLUT:  You can see the logic in it from his standpoint.  I think in the long run it might be dangerous for them.  There are already Republicans complaining that they have not been inclusive enough.  That would I think probably aggravate some of those complaints. 

SHUSTER:  All right, now let‘s talk about—assuming that the White House is not going to go there, they did get a lot of questions today.  Robert Gibbs got a lot of questions at the press briefing about this, whether or not the president is trying to focus on too much, instead of just narrowing his focus to the economy.  Here‘s Gibbs responding to reporters.  Watch. 

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  Let‘s get our banking system fixed.  Let‘s get credit flowing again.  But tell me which business is going to borrow money to expand to add jobs to do stem cell research?  Your analogy about the house is on fire.  Which room are you going to put out first?  Are you going to call the fire department and ask them to put all of it out?  The president has decided to alert the fire department and everyone involved that we have a responsibility to move this country forward, address the long-term problems and the short-term problems, in order to create jobs for the future. 

(END VIDEO CLIP)

SHUSTER:  Chris Plante, what about the argument that the president should be able to walk and chew gum at the same time? 

PLANTE:  This is walking, chewing gum, juggling chain saws, walking a high wire and trying to put fire out at the same time.  They‘re using the smoke from the fire as cover to advance their agenda.  As Rahm Emanuel said, you don‘t want to let a good crisis go to waste.  They‘re certainly not letting our economic crisis go to waste.  They‘re not wasting any time in advancing their agenda. 

This is about spending trillions of dollars on agenda issues, long before they ever even take up the matter of credit flowing or banking or mortgages.  Excuse me.  Where is all the money for that?  Where is all the attention on that?  You know, the noble idea of universalized, socialized medicine in America is all peaches and cream, 634 billion dollars set aside for that so far, 410 billion dollar bill coming through that even Democrats don‘t want to vote for, 787 billion dollar stimulus bill—

SHUSTER:  Chris Kofinis, how about it? 

PLANTE:  Oops, we forgot the banking and mortgage issues. 

KOFINIS:  Yes.  What‘s funny about commentators like Chris is he seems to forget one fundamental fact.  That is that George Bush was the one that created—

PLANTE:  Blame Bush. 

KOFINIS:  No.  You can live in another dimension.  But that‘s the reality.  He created more crises than you could ever possibly imagine that President Obama has had to deal with.  The question is, should he be focusing on one or should he be focusing on all of the crises that George Bush helped create?  Maybe he should ignore the tens of millions of Americans without health care.  Maybe he should ignore the fact there are sick children that can be helped from stem cells.  Maybe he should ignore the fact that our globe is warming. 

Maybe he should ignore every little thing that George Bush helped create.  But the reality of the situation is he has to focus on the series of crisis that George Bush created.  You can criticize him all you want.  Republicans—

SHUSTER:  Chris Plante, your response? 

PLANTE:  Presidents are supposed to be able to prioritize.  President Bush is not responsible for the weather.  Nor will President Obama be responsible for the weather, as much as you‘d like to pretend he will be.  Our taxpayer dollars going to—

KOFINIS:  Do you consider George Bush responsible for anything? 

PLANTE:  Oh, yes, sure, he‘s responsible for winning the war in Iraq, for crushing al Qaeda, issuing a serious defeat to the troglodytes from Hell that Barack Obama wants to sit down and negotiate, while he won‘t talk to Republicans. 

KOFINIS:  Creating the worse economic disaster this country has seen since the Great Depression. 

PLANTE:  That‘s been in the pipeline since Jimmy Carter, Chris, and you know it.  

KOFINIS:  You‘re right, fantastic president.

PLANTE:  Al Qaeda declared Iraq to be their central front in their war against us.  They have been roundly defeated there.  Barack Obama called for a precipitous withdrawal, regardless of the consequences.  The economic situation we‘re dealing with doesn‘t belong to George Bush exclusively.

SHUSTER:  Anne, on the bottom line question of whether or not a president can do a lot of things at once, does President Obama face any politician erosion by—say, for example, Warren Buffett today criticized his economic message.  Does this become a problem at a certain point to focus on all these other things, as long as people are still seeing the economy in such awful shape? 

KORNBLUT:  It‘s amazing he hasn‘t been able to solve the partisan clashing as we‘re seeing on this show tonight.  Listen, the White House knows that no matter what they‘re doing, they have to tie it back to the economy.  That‘s why you‘ve heard the White House say stem cell research is actually tied into the economy.  There will be spending on that.  That‘s not their main message, of course.  They realize they have to come back to it.  They keep coming back to questions even about the stock market.  That‘s—

Excuse me, do you want to go ahead? 

PLANTE:  No, no, go ahead. 

SHUSTER:  Let‘s take a break right there.  I think there‘s still more we can squeeze out of this clash in the next block. 

Still ahead, your questions and video suggestions on Twitter time. 

Plus, a tribute to one of the longest-serving senators in US history.  In a night already full of celebrities, a surprise guest made an appearance at Senator Ted Kennedy‘s birthday celebration.  We‘ll show it to you.  This is 1600.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.  A lot going on today.  Here are a few things I thought you should know.  It was a special 77th birthday celebration for Senator Ted Kennedy.  Washington‘s A-list gathered last night to pay tribute to the lion of the U.S. Senate.  About one month after his true birthday, Caroline Kennedy presented her uncle with the Profile in Courage reward for his efforts to reform U.S. health care.  Comedian Bill Cosby hosted the events and asked for help in singing happy birthday. 

(BEGIN VIDEO CLIP)

BILL COSBY, COMEDIAN:  We‘re going to sing happy birthday for you tonight, Teddy.  For your birthday, one of the great key senators, president of the United States, President Obama. 

(SINGING)

(END VIDEO CLIP)

SHUSTER:  The song ended with one of several standing ovations of the night and a hug from President Obama. 

And finally, it appears former President George W. Bush‘s biography at WhiteHouse.gov has been changed.  According to the observant folks at Slate.com and Pro Publica, there have been major changes to what‘s been written about the 43rd president. 

Here‘s an example: the original version says “President Bush worked with Congress to create an ownership society and build a future of security, prosperity and opportunity for all Americans.”  The new version says “President Bush worked has to extend freedom, opportunity, and security at home and abroad.” 

Why the changes?  The Obama White House says the new version isn‘t really new.  It‘s actually an old biography that was written at the end of the Bush administration.  Those are the things I thought you should know. 

It is Twitter time.  Before we throw your questions and videos to our panel, a Twitter time update.  This weekend, ten-term Hawaii Representative Neil Abercrombie joined the 2010 governor‘s race via Tweet.  “Aloha, everybody,” he wrote.  “I want you to know I‘m running for governor of Hawaii in 2010.  Let‘s bring change to Washington.”  Please. 

Whatever he‘s writing there.  I don‘t understand it.  In any case, now let‘s welcome back our panel, Chris Kofinis, Anne Kornblut and Chris Plante.  One of the things we also like to do is throw a video to our panel that has been recommended via Twitter.  The one we got the most recommendations on happened on “Saturday Night Live.”  As you watch this, keep in mind, one is bad, ten is good.  I‘ll ask for your scores.  Here is the video.  Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  What, this? 

UNIDENTIFIED MALE:  Yes. 

UNIDENTIFIED MALE:  That‘s just the electrode that the Limbaugh people put in there. 

UNIDENTIFIED MALE:  Rush Limbaugh put an electrode in your head? 

That‘s crazy.  Why would you let them do that? 

UNIDENTIFIED MALE:  Come on Seth, it‘s all good.  They‘re harmless.  I mean, Rush Limbaugh is just an entertainer—a great entertainer—a beacon of truth and light in times of uncertainty. 

(END VIDEO CLIP)

SHUSTER:  Chris Kofinis, your score, please? 

KOFINIS:  That‘s a ten for being a documentary more than a comedy. 

SHUSTER:  Anne Kornblut, your score? 

KORNBLUT:  On the funny score I‘ll give it somewhere between a five and a ten.  It‘s pretty funny. 

SHUSTER:  All right.  Chris Plante? 

PLANTE:  It‘s not unfunny.  It‘s about a seven.  But I think that might actually be an overcharge button, isn‘t it, that Hillary installed in his head?  Was that the reset button that Hillary brought to Russia?  Since we‘re on the subject of Rush Limbaugh, and we can‘t stop talking about Rush Limbaugh while all these other episodes are on going, and we still haven‘t addressed the economy, I did find a poll today from 2006 in August, when the war in Iraq was at its apex, and 51 percent of Democrats said that they hoped that President Bush fails. 

SHUSTER:  They said they hope he fails or hope that the policy fails? 

PLANTE:  That‘s what Rush Limbaugh said.  The poll question wasn‘t that specific.  Said, regardless of who you voted for in the midterm elections, do you wish President Bush would succeed or not succeed?  And 51 percent of Democrats voted not succeed. 

SHUSTER:  We will take a closer look.  Chris Kofinis, go ahead. 

KOFINIS:  I was going to say, unfortunately, Chris is exemplifying why Republicans are so out of touch with the reality of what America wants.  But it is what it is.  I think at some point—at some point soon they‘re going to learn that the country does not revolve around the right wing elements that watch the Rush Limbaugh Show or listens to Chris‘ show, but they actually involve people who want to move this country forward. 

PLANTE:  That‘s why we have the distraction of talking about Rush Limbaugh in the mainstream news media for a week and a half, when the president still hasn‘t addressed mortgages, lending, banks. 

KOFINIS:  You brought up rush Limbaugh a minute ago.  It wasn‘t us that brought it up. 

SHUSTER:  That‘s going to have to be the last word.  I‘m afraid of the road we‘re headed down now.  Chris Plante, Chris Kofinis, Anne Kornblut, a pleasure having all of you on.  Believe, they‘re all really nice people off camera.  I promise you.

That‘s the view from 1600 PENNSYLVANIA AVENUE.  I‘m David Shuster.  Remember, get the latest political news and previews of the show sent to your inbox with the 1600 Daily Briefing.  Sign up at Shuster.MSNBC.com or for text alerts to your cell phone text PENN 622639.  If you‘re on Twitter, I‘ll be online right after the show, Twitter.com/Shuster1600. 

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

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

END   

Transcription Copyright 2009 CQ Transcriptions, LLC  ALL RIGHTS  RESERVED.

No license is granted to the user of this material other than for research.

User may not reproduce or redistribute the material except for user‘s

personal or internal use and, in such case, only one copy may be printed,

nor shall user use any material for commercial purposes or in any fashion

that may infringe upon NBC and CQ Transcriptions, LLC‘s copyright or other

proprietary rights or interests in the material. This is not a legal

transcript for purposes of litigation.>

Discuss:

Discussion comments

,