updated 3/12/2009 11:44:14 AM ET 2009-03-12T15:44:14

Guest: Harry Reid, Leo Gerard, John Podesta

High: Interview with Senator Reid.


ED SCHULTZ, HOST (voice-over):  Tonight, the president is talking education—merit pay for teachers.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  The relative decline of American education is untenable for our economy, it‘s unsustainable for our democracy, it‘s unacceptable for our children.  We can‘t afford to let it continue.

SCHULTZ:  What‘s the reaction from the teachers union? 

Speaking of unions, the Employee Free Choice Act—the push is on, and the unions want all Democrats on board.  Are they? 

We‘ll visit with Leo Gerard, president of the United Steelworkers International. 

And what about health care?  With premiums going up for all Americans, I gave my bill to Senate Majority Leader Harry Reid.  The Senate leader says he‘s ready to go antitrust on insurance companies. 

SEN. HARRY REID (D-NV), MAJORITY LEADER:  I have sponsored legislation to take away their exemption.  Why should they be treated any different than anyone else? 

SCHULTZ (on camera):  Is the president going to support you on that? 

REID:  I would hope so. 

SCHULTZ (voice-over):  And what is the president‘s plan on health care?  John Podesta responds.

All tonight on 1600 PENNSYLVANIA AVENUE.

OBAMA:  We will start by doing a little housekeeping. 


SCHULTZ:  Day 50 of the Obama administration. 

Good evening, everybody.  I‘m Ed Schultz, in for David Shuster tonight. 

Now, my real job is I‘m a radio talk show host based here in Washington, D.C.  And you know, I‘ve always said if you‘re going to be a good talker, you‘ve got to be a good listener. 

Now, on “The Ed Schultz Show” around America we have been able to do a lot of town hall meetings.  In fact, we have done 12 town hall meetings in the last six months. 

Folks, you know what they‘re talking out there across America?  Health care.  Health care.  Health care. 

In fact, I brought my health care bill to Washington.  Now, this is what Americans are putting up with.  It‘s the economy.  It‘s jobs.  But on your kitchen table, I‘m getting the same thing, an increase of 20 percent. 

Now, here are the numbers. 

Last year, my wife and I spent $781.40 a month, OK?  That‘s an annual cost of $9,376.80.  Now I get the candy gram in the mail.  This year, 2009, oh, I get to spend $936 a month for an annual cost of $11,242.44 a year? 

Now, folks, this is $155.47 a month increase.  This is $1,865.  Who‘s got two grand laying around the table? 

I thought this was supposed to be about the middle class.  I thought this was supposed to be about helping workers across America. 

Where is the stimulus package? 

So I took my bill, I went to Capitol Hill, and had a conversation with Senate Majority Leader Harry Reid. 


SCHULTZ:  We spend 40 percent more money on health care in this country than any other industrialized nation.  We‘re 29th in life expectancy, 42nd in infant mortality. 

Now the Democrats have the White House, the House, and the Senate. 

What do you do to turn those numbers around? 

REID:  Well, Ed, I‘ve had people come to me and say, “With the economic condition of our country, how can you afford to do health care?”  My response is, “How can we afford not to do health care?”

There are almost 50 million Americans with no health insurance, but millions of others who are underinsured.  But, you know, those 50 million-plus people, if they get sick or injured, they go to their family physician and emergency room, the closest emergency room they can go to. 

The most expensive care in America is an emergency room.  Because of that, our insurance premiums are high, our hospital and doctor bills are higher than they should be, indigent taxes are high. 

So we cannot afford to go on longer without health care reform.  We are not getting our money‘s worth, and it is time the American people had health insurance like we have in most other industrialized nations. 


SCHULTZ:  Folks, here‘s the disconnect.  Those are my numbers.  Now let‘s go to the front office, and let me show you some real numbers. 

It‘s not only happening on Wall Street, it‘s happening all across America with executive pay. 

Now let‘s go to the front office of the Michigan Blue Cross/Blue Shield Department.  And you know what you‘re going to find?  You‘re going to find, look at this, Dan Loepp.

I mean, this dude, back in 2006, he had a salary of $990,000.  Apparently, he couldn‘t get it done on that number.  But 24 months later, he was good for $1.8 million. 

After firing 1,000 employees after your health care in Michigan going up by double digits, it doesn‘t stop there.  How about the Blue Cross CFO, Mark Bartlett?

2006, he couldn‘t make it on $975,000 a year, so they had to bump him up to almost $1.25 million.  And it doesn‘t stop there.  It‘s just not in Michigan, where it‘s been a tough economy.

Let‘s go to North Dakota.  Blue Cross & Blue Shield CEO Mike Unhjem, who, by the way, fired today because they are losing the trust and confidence of the people, his salary, $412,000 just 24 months ago.  Well, today, when he left his job, he was making $664,431. 

Now, I want to know.  Do you want to know?  What is Harry Reid and the Congress going to do about this?  So I asked him. 


SCHULTZ:  Would you be willing to see legislation that would reel in the insurance industry? 

REID:  The insurance industry is the only business in American that‘s exempt from the Sherman Antitrust Act except baseball.  Every other company -- if people who own TV stations got together to try to fix prices, civil and criminal penalties.  People that manufacture shoes, shirts, glasses, it doesn‘t matter who it is, doctors, if they sat down and talked about how to set prices, they‘re subject to criminal and civil penalties, but not the good old insurance industry. 

SCHULTZ:  Well, I should point out that the executives of the insurance company that Wendy and I buy from, the CEO took a 62 percent increase in pay over the last 24 months, and all of the other executives did at least a 40 percent increase. 

So are you in favor of antitrust laws going into insurance? 

REID:  I have sponsored legislation to take away their exemption.  Why should they be treated different than anyone else? 

SCHULTZ:  Is the president going to support you on that? 

REID:  I would hope so. 


SCHULTZ:  Folks, who‘s going to pay for this?  I mean, how are we going to pay for this?  And the conservatives are over there saying, well, we can‘t raise taxes.  What else are you going to do? 

We have got to find a revenue stream to make this happen.  But insurance companies in this country, I think, have got a moral obligation to back off. 

People are losing their jobs.  They‘re absorbing double-digit increases across the board in their premiums.  And you boys in the front office are sticking it to us with $1 million increases?  That‘s crazy.  That‘s crazy. 

Now, talking about how you‘re going to pay for this thing?  Well, you‘ve got to get out of Iraq. 

Senator Reid, what about that? 


SCHULTZ:  And Senator, what about the comment that the president is going to pull 12,000 troops out of Iraq by September?  Are you comfortable with that number?  Is that enough? 

REID:  Hey, I‘ve said for more than two years, let the Iraqis handle their own situation. 

SCHULTZ:  But is that enough troops to get out?  Is that fast enough for you? 

REID:  Well, fast enough for me is one thing.  I‘m going to support the president.  He‘s come up with an Iraq policy that he says in less than 15 -- let‘s see, three—about 15 months we‘ll be down to 35,000 to 50,000.  I can accept that. 


SCHULTZ:  Thirty-five thousand to 50,000?  That‘s a little bit different from what we heard from Senator Reid not long ago.  He was questioning the president‘s numbers.  Now he‘s on board. 

But just remember one thing, taxpayers -- 35,000 to 50,000 troops in Iraq means about $4 billion a month.  Honestly, did you vote for that?  We‘ve got to push hard if we really want to get out of Iraq. 

So then we shifted gears in the interview.  Let‘s go to Wall Street. 

Senator Reid telling me he is not going to let Citigroup fail. 


SCHULTZ:  First, the banks.  How far are you willing to go to help Citigroup and other financial...

REID:  How do the people in America feel?  More than 10 percent of every bank deposit in America is held by Citigroup.  Are we going to let them fail?  I don‘t think so. 

SCHULTZ:  So you‘re not going to let them fail? 

REID:  If I have anything to do with it, I‘m not going to.  These are not gifts to these companies.  We‘re taking an interest in these companies.  The banks are going to start doing better that we‘ve given money to.  And when they do, we‘ll get some of the benefit from that.  We, the taxpayer.

SCHULTZ:  So you will not let Citigroup fail? 

REID:  I‘m going to work with the president and try to do everything I can to make sure that it doesn‘t fail. 


SCHULTZ:  More from my interview with Senator Reid.  That‘s still to come on 1600 PENNSYLVANIA AVENUE.

But up next, President Obama got elected with the help of organized labor.  Now will Democrats and the Obama administration back a new bill making it easier for unions to organize workers?  We‘ll get the view from the president of the United Steelworkers International. 

And later, overhauling the U.S. health care system.  Can the Obama administration get Congress to buy into the president‘s multibillion-dollar plan by tying it to the economy?  The answer from the co-chairman of the Obama/Biden transition team, John Podesta. 

You‘re watching 1600.


SCHULTZ:  Welcome back. 

A mortal combat is shaping up between labor unions and business.  It‘s over the Employee Free Choice Act known as the card check bill. 

There are two ways to organize a union in this country.  The first is by secret ballot in a National Labor Relations Board election.  The second is by card checks.  Simple concept—every employee gets a card asking if they want to form a union in the workplace.  If a majority of employees check “yes” on their cards, a union is created. 

Now, currently, employers have the power to decide how their employees choose representation.  The Employee Free Choice Act would give that power to the employees. 

Now, business likes the secret ballot system.  They claim that secret ballots are the only Democratic way of voting.  It sounds pretty reasonable.  After all, that‘s how we vote in political elections. 

But unlike our political system, workers aren‘t guaranteed the first Tuesday of every November to vote.  And while the voting itself is private and secret, organizing the election is not.  And that gives employers time to run an all-out campaign against unionization, inundating workers with anti-union propaganda, stymieing the process with procedural hurdles, or intimidating employees into voting against their own interest. 

So the sum total of this, folks, is that business hates this bill.  President Obama supports it.  But will the Democrats in Congress actually have a spine and stand up with labor against business? 

Joining me now is Leo Gerard, the president of the United Steelworkers International. 

Mr. Gerard, happy birthday -- 29 years old. 



SCHULTZ:  But it‘s more like 2,900 years of experience in the labor movement, my friend.

GERARD:  Yes.  I‘ve got suits that old. 


Let‘s start it right out.  You‘ve got some adversaries in this.  This is an ad right here.  Let‘s play it.  The U.S. Chamber of Commerce has taken out an ad today that is saying this is a bad deal. 


NARRATOR:  Meet Bill, a real union boss.  Here‘s Bill assaulting a cameraman.  The unions are pressuring Congress to pass the card check bill so union bosses like Bill can know how you vote in union elections, denying you the right to a private vote. 

UNIDENTIFIED MALE:  I‘m going to take this camera and stick it somewhere where you don‘t want it. 

NARRATOR:  Tell Congress you don‘t want to be Bill.  Protect your private vote. 


SCHULTZ:  Mr. Gerard, why not a secret ballot? 

GERARD:  Well, first of all, there‘s nothing secret about that secret ballot.  The fact of the matter is that America is one of only a few countries in the world—there are 70 countries that have the opportunity for workers to choose a union through a card check.  America is the only country of the major industrialized countries that‘s not true. 

And the reasonable I say that it‘s not necessarily a secret ballot is that we‘ve had 29,000 people fired in the last two years just for saying they want to organize the union.  Nothing secret about that when you fire the lead organizer so that everybody else in the plant gets afraid to speak out. 

SCHULTZ:  How adamant are you that the Congress pass this? 

GERARD:  I think for us it‘s a matter of do or die.  I think if this Democratic majority can‘t pass this, then we have to wonder how much we should work for the Democratic majority in the future. 

SCHULTZ:  Well, that is an issue that is going to be coming up if they don‘t support you. 

Now, the manufacturing job losses in this country in the last eight or nine years are really staggering.  What is the number?  Do we have the number?  Is it really six million jobs that have been lost? 

GERARD:  There are six million manufacturing jobs, and maybe more.  We were up to 5.5 million jobs last September.  And we can‘t keep track of how many manufacturing jobs have been lost since September, because almost 4.5 million other jobs have been lost. 

So if you heap that in, we might be above six million manufacturing jobs.  And the reality is that that‘s come about as a result of these same guys that are running these ads. 

These are the guys that told us, let us deregulate the financial market.  These are the guys that told us, we‘re going to have free trade in America, we‘ll be better off. 

We‘re accumulating a $6 trillion trade debt.  We‘ve got to service that debt every year. 

So these same guys are writing these campaigns of fear.  All you‘ve got to do is watch that commercial.  That commercial is meant to drive fear.  It‘s dishonest, it‘s not accurate, and that‘s the way they run the campaign in the plant. 

SCHULTZ:  Do you think that this will enhance union membership in the country?  I mean, if you look at some of the numbers that are out there, you see that the majority of workers in this country certainly want to join. 

Would this knock that barrier down? 

GERARD:  I think it will help that barrier.  But what‘s important to me and I think what‘s more important to the average working person in this country is it‘s going to give them a chance to get part of the American dream. 

It‘s going to give them a chance to have a negotiation about how they share in the productivity and the wealth they create in their workplace, and the service they provide.  This is about trying to rebuild the middle class.  There‘s no way we‘re going to rebuild the middle class if we leave it to benevolent bosses to decide how much they‘re going to give workers. 

SCHULTZ:  In the steel industry...

GERARD:  Yes, sir?

SCHULTZ:  ... how many mills have been shut down?  How many are running right now? 

GERARD:  Look, I couldn‘t begin to tell you today how many are shut down.  I can tell you this—that right now, the steel industry in America is running below capacity.  It‘s running now at capacity utilization that is about the same as was in the Great Depression.  And that‘s because the whole of the manufacturing industry, from the automobile industry to the rail industry, is in a steep, steep decline because of the same guys that are running those ads. 

SCHULTZ:  How big of a setback will it be for union efforts in this country if this law doesn‘t pass? 

GERARD:  I think it will be a huge hurdle for us to continue to build the middle class.  It will be a huge hurdle for us to have a strong labor movement in this country. 

And I remind those people that are running those ads, you show me a strong industrial democracy that doesn‘t have a strong, growing, free labor movement.  You can‘t find one. 

SCHULTZ:  CEO pay has skyrocketed in this country, as opposed to workers.  Do you think that the public will be with you when they see the kind of numbers that are out there right now? 

GERARD:  I think that the public is very aware that one of the things that‘s leading to this huge, huge disparity between the rich and the rest of it is that there‘s no vehicle for workers to negotiate a fair share of the wealth they helped produce, the service they helped provide.  And I think this is the right path, along with President Obama‘s economic renewal program, to lay the foundation for a stronger middle class as we go forward. 

SCHULTZ:  Is the president with you on this? 

GERARD:  He‘s with us, and so is the vice president.  And we hope all the Democrats and a lot of Republicans will be with us, because this is the way to rebuild the middle class. 

SCHULTZ:  So, if this doesn‘t pass, some might view him as not a strong president. 

GERARD:  I think this is something he said was a priority for him.  I‘ve always accepted him at his word.  I‘m going to stand by him, and I want him to stand by us. 

SCHULTZ:  Mr. Gerard, always a pleasure.  Thanks for joining us. 

GERARD:  My pleasure.  Thank you.

SCHULTZ:  Next up on 1600, it‘s put up or shut up time for the Democrats.  I‘ll tell you what the unions expect from the Obama administration.  And they better deliver. 

And later, it‘s 126 days past the election, and Minnesota still has an open Senate seat.  This is crazy.  This is worse than ice fishing.  You know how boring that is? 

We‘ll have the latest on the Franken/Coleman race and the majority leader‘s take on just when is this going to end?  I say Franken‘s won this thing.

You‘re watching 1600 PENNSYLVANIA AVENUE.

Stay with us.



GEORGE STEPHANOPOULOS, ABC NEWS:  Mr. Donohue, you‘re going to spend about $10 million, I‘ve read, to try to defeat this Employee Free Choice Act which would give unions the ability to organize at a plant if they can get a majority of people at the plant to sign up. 

And Senator McCaskill, let me bring you in on this.  Is there anything you can say, you believe right now, that would convince Mr. Donohue to back off?  And do you have the votes to get this done this year? 

SEN. CLAIRE MCCASKILL (D), MISSOURI:  I‘m not sure that we have the votes, and I have no hope of backing Mr. Donohue off. 


SCHULTZ:  Welcome back to 1600 on MSNBC.  I‘m Ed Schultz, in for David Shuster. 

I‘ve kind of got to control myself in this segment. 

If I may give just Americans a quick reminder and refresher course, you know, if it wasn‘t for the unions in this country, President Barack Obama would not be President Barack Obama.  John McCain would be in the White House. 

The unions put boots on the ground, organized town hall meetings, did the social networking, and financially, flat-out went to the firewall not just for Obama, but for every Democrat.  Now, early on, it‘s payback time. 

There has never been a bigger labor demand in 30 years than the Employee Free Choice Act.  The unions want it and they expect it. 

Democrats in the Congress need to know this: there will be hell to pay down the road politically if all Democrats don‘t get on board with this.  Eighty percent of union membership of this country is now in 16 states.  The progressive movement will expand if the Employee Free Choice Act passes. 

This will end intimidation in the workplace, make it easier to organize.  But most of all, it will bring wages up all across the economy. 

Americans, isn‘t that what we want?  Health care, pension protection, and pay equity, all of the things the Bush administration attacked, the unions have stood for all along. 

Democrats, what do you mean you don‘t have the votes?  This is unacceptable. 

Now, I can tell you, this is a big part of building the middle class in this country—and we‘ve heard a lot about that—and building the middle class in this country starts with the Employee Free Choice Act.  Isn‘t it interesting they got all kinds of money for Wall Street, they got all kinds of money for bailouts?  All the American workers are asking for is a chance for an open process for them to step forward and say I want to organize, I want to join a union. 

Next up, President Obama‘s plan for comprehensive health care.  Budget Director Peter Orszag faced senators today to discuss, well, how to pay for it. 

So where is that money going to be coming from?  Well, we‘ll ask John Podesta, one of the co-chairman of the Obama/Biden transition team. 

And later, should the government continue to bail out companies, or should we just, you know, leave them alone and let them fail?  “Failure,” that‘s a word that conservatives are stuck on. 

We put the question to our political panel.  That‘s coming up on 1600.



OBAMA:  Health care rear form is no longer just a moral imperative, it‘s a fiscal imperative.  If we want to create jobs and rebuild our economy, and get our federal budget under control, then we have to address the crushing cost of health care this year, in this administration. 


SCHULTZ:  Welcome back to 1600.  I‘m Ed Schultz, in for David Shuster.  You know, nearly 50 million Americans are living right now without health care.  Sky rocketing costs are crippling businesses across the country, and driving families actually into bankruptcy.  The number is staggering. 

Now President Obama is pitching health care reform as vital to the economy.  I guess so.  Is he on the mark?  I think so.  I‘m very pleased to be joined right now with John Podesta, who is the president and CEO of the American—Center for American Progress.  He was also the co-chairman of the Obama/Biden transition project. 

John, good to have you with us. 


SCHULTZ:  Day 50, right, today.  Is this president trying to do too much too soon? 

PODESTA:  No, I don‘t think so.  I think the country is in a ditch.  We‘re in a deep hole.  The economy is shedding jobs.  People are losing their health care.  My center calculated we‘re losing—about 14,000 people a day are losing their health insurance in this country.  So he‘s got to—he‘s got to stabilize the economy.  He‘s got to get jobs growing again. 

But he‘s also got to build for a sustainable future.  That starts with reforming health care. 

SCHULTZ:  Does this president know what he wants to do?  Yesterday, I interviewed Senate Majority Leader Harry Reid.  I asked him a number of questions on health care.  I wasn‘t convinced.  Do the Democrats really know what they want to do on this?  What‘s the first step besides talking to everybody? 

PODESTA:  Again, I think if you look at what the president put before the Congress, even during the transition, before he was inaugurated, and then what he signed 25 days later, the core elements of this recovery package are putting people back to work, reforming health care, investing in education, investing in energy transformation, and getting us off our oil addiction, and reforming taxes, so the middle class can succeed. 

Those are the core elements of sustaining the middle class in this country.  He has put an—I call it an all-in budget.  He‘s put together the planks that will lead us to sustainable recovery. 

SCHULTZ:  John, I got my health care bill in the mail last week.  It‘s a 19.7 percent increase.  There goes the stimulus package.  I‘m not a millionaire.  I‘m just a middle class dude.  How are we going to get ahead?

PODESTA:  Look, just to take it from a different perspective, families are getting burdened.  The federal budget is burdened.  Businesses getting crushed.  Look at what happened in the auto industry.  I think that if we don‘t get on top of this medical inflation, over the next four years, we‘ll lose as many jobs as the stimulus will create.  We have to do this simultaneously. 

SCHULTZ:  How important is it to get it done this year?  You all know, with your political experience, when we turn to the midterm, it‘s going to be political mud slinging and all defense. 

PODESTA:  In my own view, it‘s critical.  I think that we try to tackle this job this year.  I think the time is right.  The president had a health care summit last week.  He brought Republicans and Democrats together.  He brought the business, labor, all the providers, doctors, nurses, et cetera, together. 

I think everybody knows the system is in crisis.  I think if we don‘t get this done this year, as I said, we don‘t have the basis for a long-term sustainable recovery.  We cannot go on with the current system we have. 

SCHULTZ:  Has the president eliminated the possibility of single payer? 

PODESTA:  I don‘t think—I think that he‘s in—during the course of the campaign, he said that the better way to do it is to build on what we have, so that people feel confident that if they have health insurance they like, they can keep it.  So I think that is—you know, that is the basis of both his political strategy really and his substantive strategy, which is to let people keep health insurance.  If they like it, they can keep it.  If they like their doctors, they are going to keep them.  They‘re not going to be the radical change that some have—the boogey man that people throw up. 

But he wants to give people choices.  He definitely wants to create a system where family budgets are kept in tact. 

SCHULTZ:  What‘s your call on this?  We just finished a Congressional session that had a record number of filibusters.  What Republicans are going to come over and work with Harry Reid and the Democrats on this?  Who‘s going to cave in and get government money into this? 

PODESTA:  You know, I think there‘s maybe a different call in the House than in the Senate.  People in the House seem to work in lockstep.  I think they‘re following Rush‘s lead.  I think maybe they want to see the president fail. 

But in the Senate I think there‘s openness to trying to find a bipartisan solution.  Senator Widen put together a bill with Senator Bennett.  There are some things I would like to see improved in that bill.  But they have an equal number of Democratic and Republican co-sponsors. 

Senator Baucus has led a bipartisan effort in the Senate Finance Committee.  Senator Kennedy has led a bipartisan effort in the Senate Health Committee with Senator Hatch and others. 

I think there is the possibility, because the country simply can‘t afford the system that we have, to try to find a solution. 

SCHULTZ:  Finally, your organization, the Center for American Progress, where you‘re the CEO and president there, what are the American people telling you?  Do they want this? 

PODESTA:  Absolutely. 

SCHULTZ:  This is overwhelming?  The Congress has to have this message.  Are we talking 70 percent, 80 percent? 

PODESTA:  Oh, absolutely.  Yes, they want to see real reform and they want to see affordable, quality health coverage for every single American. 

SCHULTZ:  John Podesta, thanks for being here. 

PODESTA:  Thank you.

SCHULTZ:  For more let‘s bring in our panel, Michael Graham of WTTK radio in Massachusetts, Jonathan Alter, senior editor for “Newsweek” and Lars Larson, Westwood One nationally syndicated talk show host.

Lars, we‘ll start with you.  Are you ready to write a check for some good health care in this country?  Or do you like the idea that 50 billion people are without health care?  What‘s your solution?

LARSON:  First thing I do is kick all the illegal aliens out of our health care system.  That would save a few dollars.  Secondly, I think Americans enjoy great health care.  What we don‘t need is health insurance provided by the government, the least effective means of providing it.  Ed, I don‘t think that makes any sense. 

SCHULTZ:  Jonathan Alter, can President Obama get bipartisan help on this to get something done this year? 

ALTER:  Yes.  I do think you‘re going to see health care legislation this year.  Just to correct something Lars just said, you know, it sounds counter-intuitive that the government could do anything right.  We‘ve just been through a 25-year period where the ruling ideology was if the government does it, they must be messing it up. 

Actually, if you look at the history of Social Security and Medicare, runs much more efficiently than when the insurance companies take their huge cuts of all this.  What we‘re going to get is some kind of a compromise on this.  John Podesta just indicated that, for instance, Ron Wyden, Democrat, and Bob Bennett, Republican, in the Senate, they have a compromise version that has a number of co-sponsors from both parties. 

I‘m not sure that the final bill will look like what they have.  But it might be a good starting place.  You‘re going to see Chuck Grassley, Republican, working with Max Baucus, Democrat, in the Senate. 

SCHULTZ:  You think it will be there?

ALTER:  There‘s going to be something that comes out of it.  The status quo is unsustainable right now.  It‘s not going to keep going. 

SCHULTZ:  Michael Graham, I want to ask you, I found it interesting last week that the conservatives were so quiet on Capitol Hill, when the big conversation was taking place over at the White House about health care.  What is the Republican plan for health care in this country? 

GRAHAM:  I have no idea what the Republican plan is.  I don‘t think Republicans have an idea what the Republican plan is.  They shouldn‘t feel embarrassed about that.  As John Podesta just acknowledged, the president doesn‘t have an idea of what the plan is.  He sat back, listen, I‘m going to let the Congress do what they did with the screw-ulous package, which they made a disaster of. 

I want to go back to something that Jonathan Alter, my buddy, had to say about how good the government is at administering programs like Medicaid and Medicare.  Jonathan, you know as well as I do that part of the crisis of medical care in America is that almost nobody pays for what they get.  Costs are shifted tremendously.  A small percentage is shifted in the private sector.  The largest part of the shift is people getting government care.  That cost is pushed through the—as doctors are limited on what they can charge, et cetera, on to their private customers. 

As long as you make me pick up the Medicare tab, but never send me the bill, yes, Medicaid and Medicare look great. 

SCHULTZ:  Jonathan, I‘ll let you respond to that. 

ALTER:  Look, there are big problems in both of those programs.  I‘m not trying to say that they, you know, they operate perfectly.  Medicaid, which is mostly state-run program, is in crisis right now.  There are long-term Medicare problems, in terms of financing the system 10, 20 years from now that are severe.  If you look at the actual operation of the programs, they run more efficiently than do—

LARSON:  Ed, I‘ve got to object to this. 

SCHULTZ:  Lars, I want to ask you.  What do we do with 50 million uninsured people in this country?  Do we just say that‘s just a number we‘ve got to live with and that‘s the way it is?  What do we do? 

LARSON:  No, there are ways to solve the problem.  There are ways to make the system more efficient.  I don‘t know if we can cover them all in a couple minutes.  But number one, you don‘t have the government run it.  The way the government saves money on administration is pushing it on to doctors.  The way the government runs efficiently is by telling doctors we‘re going to pay you 50 cents on the dollar for the treatments that you do for your patients.  And you‘re going to push those costs on to everybody else. 

That doesn‘t make sense in running a system.  The system I would like to see is health savings accounts, and transitioning in that direction for everyone.  If you started that with people who are young, as the Bush administration tried to, it would work very well. 


SCHULTZ:  Jonathan, how about health care savings accounts? 

ALTER:  It was a Bush administration idea that went nowhere then and goes even less anywhere today.  It‘s not going to happen.  It basically is for wealthier people.  Look—

LARSON:  No, it‘s not. 

ALTER:  First of all, nobody‘s talking about a government-run system.  As John Podesta just indicated, if you‘re happy with your private health insurance, you‘re going to be able to keep it, no matter what comes out of this Congressional process.  We need to stop stigmatizing, the name calling, the socialized medicine, the government-run programs.  All that is just BS.  This is—


ALTER:  This is about a compromise that‘s going to offer a lot more choices.  It is going to be expensive.  But the question is whether it‘s more expensive to have the status quo.  And health care experts on the left and the right believe that to be the case.  That‘s why we‘re ready for change. 

SCHULTZ:  Gentlemen, stay with us.  Michael Graham, we want to get some more from you on this as well.  Thanks so much.  Stay with us. 

Next up, from Wall Street to Motor City, companies are looking for more government money.  Will these bail outs ever end?  More on 1600 after this. 



SEN. HARRY REID (D-NV), MAJORITY LEADER:  We have one car manufacturer, Ford, who is doing just fine.  They haven‘t asked for any taxpayer money.  So we know they‘re going to be OK.  General Motors is coming forward with a plan to see if we can do something to help stabilize them.  Remember, I think we have to go the extra mile with these car manufacturers. 


SCHULTZ:  Welcome back to 1600 PENNSYLVANIA AVENUE.  Members of the—

President Obama‘s auto task force spent the day in Detroit on Monday visiting General Motors and Chrysler.  Their job is to decide whether to provide an additional 21 billion dollars in loans to the ailing companies by March 31st.  While Senate Majority Leader Harry Reid says we must go the extra mile for the auto companies, there is an increasing chorus of Republican lawmakers calling for bankruptcy. 

They‘re not the only ones out there saying that.  A recent poll shows support for the automakers is starting to drop off across America.  A recent poll found only 32 percent of Americans have a favorable opinion of General Motors.  That compares to 69 percent just a couple of years ago.  And an earlier poll shows 64 percent of U.S. voters are against additional loans. 

So what should the administration do?  Let‘s go back to our panel.  Michael Graham of WTKK radio in Massachusetts, Jonathan Alter, senior editor for “Newsweek,” and also Lars Larson, Westwood One talk show host, nationally syndicated. 

Michael, let‘s start with you this segment, if we may.  How far do we go to help General Motors keep their head from going under and also Chrysler, for that matter?  How far do we go? 

GRAHAM:  Have we seen any indication that we‘re helping them keeping their head—I don‘t see us help—I see us driving straight to the river.  I don‘t know about you guys.  They want 30 billion dollars.  Let me tell you something, there‘s no way GM can stay in business when they lose about 1,100 dollars every time they sell a car.  I thought the point was to sell them.  When they sell them, they lose 1,100 dollars.

The secret, volume, volume, volume.  The only solution for GM and the American auto industry in general has to do with fixing the ridiculous CAFE mileage standards.  That‘s never going to happen.  The unions won‘t let it happen.  The loony libs won‘t let it happen.  So you‘re going to have to keep them alive with my tax dollars, because we won‘t let them win in the private market. 

SCHULTZ:  This is what some Republican senators have to say on the Hill about forking out more money to the auto manufacturers of America. 


SEN. JOHN MCCAIN ®, ARIZONA:  I think the best thing that could probably happen to General Motors, in my view, is to go into Chapter 11. 

SEN. MITCH MCCONNELL ®, MINORITY LEADER:  I don‘t think the government should put any more money there until General Motors shows they can be a viable company for the long term.  Anything short of that is throwing good money after bad. 

SEN. RICHARD SHELBY ®, ALABAMA:  Automobile business, those companies, Chrysler, Ford, General Motors, they‘re in deep trouble.  We know that.  I have suggested they go into Chapter 11.  That‘s where they belong.  Short of that, the UAW will run those companies into the ground. 


SCHULTZ:  Jonathan alter, is this going to be a tough call for the president, to keep supporting the bailout, if the American people are starting to fall off as far as the numbers are concerned?  What do you think? 

ALTER:  Very tough call.  Not at all clear exactly how he should proceed.  One of the problems with coming to the rescue of General Motors is then you hurt Ford.  Ford is getting along OK without a government bailout.  So unlike the banks, where you have to bail them out because they provide the arteries of commerce, the blood supply for the entire rest of the economy—it‘s true the auto industry is pretty central to our economy.  But I‘m not convinced that we want to prop them up and turn GM into a kind of a zombie company that‘s not really standing on its own two feet.  I‘m open to arguments about bankruptcy for GM. 

SCHULTZ:  Lars, I want you to respond to these numbers.  Chrysler, looming deadline is March 31st.  They‘ve received four billion in U.S.  loans.  They need five billion in additional loans, for a total of nine billion.  Lars, we lost that much in Iraq in one week. 

LARSON:  Here‘s the problem, Ed, the word nobody wants to say is unions.  I heard you singing the praises of unions earlier.  Unions helped drive these companies underground.  They‘re in big trouble now because of union cost and union work rules and union wages.  The fact is, the reason people on Capitol Hill are saying bankruptcy is because that would break the union contracts. 

SCHULTZ:  Lars, I‘ve got to ask you, haven‘t the unions given repeated concessions on health care for the younger workers?  Aren‘t they turning the tide on that? 

LARSON:  It‘s not enough.  Ed, Michael‘s right.  If you‘re losing money on every car, and the Japanese car makers in America, subject to the same market forces, are making money on every car—or they were until last year, until the whole economy fell apart—the fact is, if your competition is making money on every car and you‘re losing, you haven‘t given up enough. 

I would like the UAW to walk in and say, let‘s sit down and figure out how we can make cars at a price to make money.  Then we‘ll both make money in the long run.  The UAW won‘t do that. 

SCHULTZ:  Michael Graham—I got to ask you, is it important to have manufacturing jobs in America?  Can‘t we make anything anymore?  Why not support these millions of families? 

GRAHAM:  Actually it‘s interesting.  We can make stuff.  In fact, GM does a good job of making low-mileage luxury and larger cars that Americans want to buy.  They‘re so good at it, they can make them with union labor and still make money.  This is what kills me.  I would like to know what the rest of the panel thinks.  Are we in an economic crisis or not?  If we‘re in an economic crisis, we are talking about health care right now.  We‘re talking about holy crap, create jobs.  If we‘re in an economic crisis, we don‘t worry about CAFE standards to appease Nancy Pelosi‘s greenies.  We say, break the rules and let people make money.  Is this—


ALTER:  Look, this is not about CAFE standards.  That is not why they‘re going bankrupt.  I agree with you on the bottom line.  I think we need to really explore whether it might make sense to let the market work here, and have them go into Chapter 11, as John McCain was suggesting.  Let‘s not pretend it‘s because Nancy Pelosi forced this on them. 

The other—you talked about Japanese cars.  All of them managed to do just fine with strong fuel economy standards.  The Chinese managed to do fine with those fuel economy standards.  It‘s—


SCHULTZ:  Lars, I‘m going to give you the last word here quickly. 

LARSON:  He‘s ignoring something, the fact that a lot of foreign car makers just pay the fine and don‘t abide the Cafe standards.  Americans have to do it. 

SCHULTZ:  Gentlemen, good to have you with us on 1600, Jonathan Alter, Michael Graham, and Lars Larson.

Next up, the never-ending Senate race in Minnesota.  Can we please end this?  Senate Majority Leader Harry Reid has a prediction ahead on 1600 PENNSYLVANIA AVENUE.  Stay with us.


SCHULTZ:  Welcome back to 1600.  There‘s a lot going on today that I really want you to know about.  I thought you should know.  First of all, I‘m really excited to be here.  The crew here is fantastic.  But I‘m even more excited because, you see, back home, it‘s a march blizzard on the northern tier.  Eight inches of snow, 25 below wind chill, and a high of Glenn Beck‘s I.Q., zero. 

And in sports, Buffalo, my friends, you can have Terrell Owens.  The best news there is it‘s real close to Canada and the Canadian Football League.  I‘ll have to say one thing about Owens; he doesn‘t whine as much as former Senator Norm Coleman in Minnesota.  Coleman doesn‘t believe it‘s over.  I mean, what does Harry Reid think about this? 


REID:  I‘m from Nevada.  And Nevada is famous for its gambling.  I‘m not a gambler.  If I were, there‘s a 90 percent possibility Al Franken will be seated in the Senate within the next 30 to 50 days. 


SCHULTZ:  Back with me, Michael Graham, Jonathan Alter, and Lars Larson.  Michael, let me ask you, has Al Franken won this thing or was it dirty pool?  What do you think? 

GRAHAM:  As a conservative talk show host, I have to lay my bias out front.  Please, god, let Al Franken be the next senator from Minnesota.  There‘s nothing that would be better for my show than to have that guy.  The more he talks, the better for me.  I remember when he was funny when Reagan was president.  He is often humorous unintentionally. 

But there‘s so much local politics here.  I don‘t know how far you want to go.  The way Minnesota handles their elections, county by county system, Republican and Democratic county.  The local biases show up.  The guy, talking about Vegas, the croupier just told you you‘re about to hit Blackjack. 

SCHULTZ:  Jonathan Alter, wasn‘t this the most exhaustive and most transparent and complete election ever in American politics, with the recount? 

ALTER:  It really was.  Look, you had the same thing you had in Florida in 2000, essentially a tie at the end of the process, you know, with just a couple hundred votes separating the candidates.  There was a real distinction between the hash that Florida made of it and the bipartisan model of clean politics that unfolded in Minnesota. 

And so Norm Coleman is not on firm ground here claiming that this is somehow being taken from him.  He should take a lead from Al Gore, get out now, look gracious, and then he would have a future as a possible governor of Minnesota.  He‘s still pretty popular up there. 

The longer he waits—as a prominent Republican Minnesota politician told me recently, the longer he waits, the harder it will be for him to get back into Minnesota politics. 

SCHULTZ:  Lars, do you think that Al Franken would be a good U.S.  senator?  Would he be good for the Democrats? 

LARSON:  Actually, I don‘t on policy issues and a number of other things.  I agree with Michael.  He‘ll be great for talk radio.  I live in the state of Washington where they elected a governor, the Democrats did, only after they had counted every felon and every dead voter.  I‘m sure the Democrats won‘t quit until Franken‘s elected.  By the way, the last time I was in your state, they told me 40 below kept the riff raff out.  I didn‘t know how true that was until tonight. 

SCHULTZ:  How did I end up in Washington, Lars?  Knock it off here. 

LARSON:  That‘s what I mean, they‘re keeping the riff raff out. 

SCHULTZ:  Gentleman, it‘s been a pleasure, appreciate you being on the program with us tonight.  I do have one more questions I want to ask Michael Graham.  How aggressive will you, as a conservative talker, be on President Obama if he can‘t get health care through in 2009?  What will the midterm look like? 

GRAHAM:  I don‘t think it‘s about health care, it‘s about economy, economy, economy.  I disagree with your opening on the show today, where you said health care was the topic of your town halls.  Here in Massachusetts, it‘s about jobs and the economy.  If the economy is improving, he will look like the genius that I have been promised he is.  If it‘s in the tank, I don‘t know how forgiving the American people will be. 

SCHULTZ:  Michael, good to have you with us, Jonathan Alter, and Lars Larson.  We‘ll have you back for sure.  Thanks so much, fellows.  That‘s the view from 1600 PENNSYLVANIA AVENUE tonight.  I‘m Ed Schultz.  David Shuster is going to be back tomorrow night.  Remember, get the latest political news and a sneak peek at what‘s coming up on the show sent to your inbox with the 1600 Daily Briefing.  Can‘t miss it.  Sign up at Shuster.MSNBC.com, or text Penn to 622639 to have alerts sent to your phone. 

Coming up next, “HARDBALL” with Chris Matthews, the guy who does tell it like it is.



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