updated 8/10/2009 10:29:35 AM ET 2009-08-10T14:29:35

Guest Host: Lawrence O‘Donnell

Guests: Anthony Weiner, John Harwood, Sam Stein, Robert Reich, Rep. Elliot Engel, Michael Medved, John Harwood, Sam Stein, Joseph Califano

(BEGIN VIDEOTAPE)

ED SCHULTZ, HOST:  I‘m Ed Schultz.  This is THE ED SHOW.

(END VIDEOTAPE)

LAWRENCE O‘DONNELL, HOST: Good evening.

Live from 30 Rock in New York, it‘s THE ED SHOW on MSNBC.

I‘m Lawrence O‘Donnell, in for Ed Schultz, who‘s gone fishing this week. 

He‘ll be back next week.

More town hall ambushes.  One New York congressman may have found a way to beat the mobs.  Congressman Anthony Weiner joins me in just a minute.

Will the anti-reform campaign unite the Democrats?  Rahm Emanuel wants liberal groups to lay off the Blue Dogs.  Will they follow the White House marching orders?

And 44 years ago, Lyndon Johnson got government-run, single-payer health passed by a wide margin.  What can President Obama learn from LBJ?  I‘ll ask Joseph Califano, a top aide to President Johnson, in the playbook.

Plus, “Ed Lines,” the latest twist in the Florida Senate race. 

But first, tonight‘s “OpEd.”

The angry mobs at health care town halls are getting angrier.  Fists are flying. 

In Tampa, a town hall organized by the state Democratic Party was shut down when a crowd of several hundred protesters tried to force its way into the meeting room.  Congresswoman Kathy Castor gave up trying to speak after 15 minutes of being shouted down.  At least one punch was thrown. 

In St. Louis, health care reform supporters started shouting at health care reform opponents.  There was pushing, there was shoving, and six people were arrested. 

What‘s driving these protests?  We got a glimpse in Pueblo, Colorado, where the conservative interest group Patients First made a stop on its cross-country bus tour to “educate” voters about the Democrats‘ health care plan. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  As I recall, Stalin in the 1920s, issued about 20 million end-of-life orders for his fellow Russians.  Pol Pot did it during the Vietnam War.  He ended—issued about two million end-of-life orders. 

It‘s being done in Africa today.  Mugabe is doing it every day. 

Adolf Hitler issued six million end-of-life orders.  He called his program “The Final Solution.” 

I kind of wonder what we‘re going to call ours. 

(END VIDEO CLIP)

O‘DONNELL:  In a mature democracy of 300 million people, can a couple hundred noisy protesters and a few demented ones like this guy actually hijack a serious national debate about health care reform? 

Joining me now is Congressman Anthony Weiner of New York City. 

Congressman Weiner, how do you like being compared to Stalin and Hitler because what you‘re trying to do is extend health care coverage to people in America who don‘t have it? 

REP. ANTHONY WEINER (D), NEW YORK:  Well, you know, they say if you‘ve got the facts, you pound the facts.  If you don‘t have the facts, you pound the table.  I guess nuts like this are really banging a drum for an angry message. 

You know, the problem with all this is these are pretty serious issues we have in front of us, and people really do have legitimate disagreements on how to deal with them.  But we‘re not getting to them because one guy is standing up and shouting so 200 or 300 people can‘t get their questions answered. 

But, you know, history is not written by guys in that tape.  History is written by people who really engage in their democracy in the way it should.  But I kind of welcome it.  You know, I welcome the passion.  If we can figure out a way to let everyone have their say, I think they‘re going to wind up with a better product. 

O‘DONNELL:  Now, “The New York Post” has a report today that you had a meeting of some kind yesterday with constituents in New York City, and the way you did it, they say, is that you just didn‘t announce it ahead of time so the nuts like this couldn‘t go and disrupt it. 

Is that the way to do this thing? 

WEINER:  Well, that‘s funny.  Somehow “The New York Post” knew to go there. 

(LAUGHTER)

O‘DONNELL:  I was wondering about that part. 

WEINER:  If we were trying to hide it, putting it out on the daybook and allowing the press to come by was a strange way to do it.  No, we did...

O‘DONNELL:  But did you schedule it late?  Did you schedule it at the last minute to... 

WEINER:  It wasn‘t—look, we went to a neighborhood senior center as part of a tour I‘m doing all around the district, trying to find people where they are in the middle of August.  But there was no effort to hide from the debate.  And frankly, we had a pretty good debate in that room. 

And you know what was interesting?  A lot of people who were legitimately sacred because of some of the things they‘ve heard on angry radio—you know, I‘ve had so many Medicare recipients stand up and say, “I‘m outraged about government-sponsored health care, let‘s do away with it.”  You know, these are Medicare recipients, so obviously some of the message is getting garbled. 

You know, I‘ve got to admit, Lawrence, I‘m kind of torn.  To some degree, I like a good fight and I think that it makes for sometimes an informed debate.  But we do have a situation now where you have people just standing up and yelling no, no, no, no when people are trying to ask questions.  I don‘t know who really benefits from that. 

O‘DONNELL:  Would you have been—would the Democrats have been strategically better off, especially those who believe—there‘s a large group in the House who believe single payer is the way to go—essentially, delete the words “65 and over” from the Medicare statute, open it up to everyone.  If you had gone for a program like that, you would at least have charity in the argument.  It‘s a yes or no vote for something that people understand.  If you don‘t really quite understand Medicare, someone in your family‘s getting it and they can answer for it. 

Right now I‘ve talked to voters, very educated, New York City voters, this past week, Obama supporters, intense Obama supporters.  None of them understand what the House has voted on already in committee.  None of them understand what the Senate Finance Committee is talking about or what the president‘s talking about, and they‘re trying to. 

How do you then go out there and in this month try to turn around that massive confusion into, oh, OK, now as a voter I understand what I support? 

WEINER:  Well, look, you‘re exactly right.  Single-payer, government-run health care, the best way to explain what that looks like to people is point to Medicare.  And you‘re right, if you say to someone who‘s 55 years old, you‘re going to get Medicare 10 years earlier, they‘re thrilled.  People who have Medicare now can tell their kids and their grandkids.

It‘s got its problems, but at least it will be government fixing those...

O‘DONNELL:  Basically, financing problems, which is a solvable problem.

WEINER:  Exactly right.  And you‘re better off being able to call your congressman to fix them than signing up to buy stock of a health care company.  But you‘re right, if we learned a lesson from ‘93 and today, it‘s simplicity is what is—really helps us. 

Now, these are complicated things.  And to some degree, the White House is, I think, making a mistake when they think kind of bringing some of the insurance guys into the tent and some of pharma into the tent—no.  The fact of the matter is the insurance companies are going to have to realize that when they‘re putting hundreds of billions of dollars in their pockets, it‘s taking money out of the health care system.

But all of that being said, one thing is enduring, and that is the Republicans and the opponents of this plan fundamentally are standing for more of the same.  And I think most Americans, when you talk to them, understand that‘s unsustainable. 

O‘DONNELL:  But when I listen to Nancy Pelosi‘s language about attacking the health insurance companies as her final marching orders to you guys as you‘re going into recess, the part that I don‘t get about that is the bills all preserve the health insurance companies and order more customers into their operations. 

So, how do you condemn them, say they‘re the most evil entity in the country, and, oh, by the way, we‘re going to keep propping them up with this legislation? 

WEINER:  You know, you‘re exactly right.  I frankly think that Nancy went a little bit too far. 

Look, health companies are doing what private companies are supposed to do, maximize their profit, give away as little service as they can for as many dollars as they bring in.  That‘s their job.

My job is to do something different, is to try to get taxpayers a value for their buck.  But you‘re right, we are trying to shoehorn this in. 

And believe me, what the Obama plan is way better than the present situation.  But I think that everyone‘s arguing the same thing.  If you have a public plan, then the insurance companies will have to compete. 

Well, if more and more people are choosing the public plan, why are we even bothering with the private plans?  And I think that that‘s the conflict that we‘re in. 

I believe a single-payer plan like Medicare for all is something that people would understand, it would wind up costing us a lot less money.  We take the money that‘s going into insurance company profits, put it into quality health care.  It‘s a sell, but at least it‘s a sell that people understand. 

O‘DONNELL:  Anthony Weiner, thank you very much for joining us today. 

When is your next public meeting scheduled?  Have you scheduled it yet?

WEINER:  I‘m refusing to say. 

O‘DONNELL:  All right.  E-mail me. 

WEINER:  No, we‘re going to be at Key Food in Marine Park. 

O‘DONNELL:  All right.  There you are. 

Anyone who wants to get out there.

Thank you very much, Congressman Weiner. 

For more, let‘s bring in our panel: John Harwood, CNBC‘s Washington correspondent and a political writer for “The New York Times”; and Sam Stein, a political writer for “The Huffington Post.”

John Harwood, Anthony Weiner‘s not afraid of the mobs.  I don‘t think the mobs have made it to New York City.  I don‘t think they‘d be very welcomed here.  But in some of those districts out there, some of those swing states and swing districts, I don‘t see any end to this.

Do you? 

JOHN HARWOOD, CNBC WASHINGTON CORRESPONDENT:  I don‘t.  And I think it‘s going to have a disproportionate impact, especially on those representatives and senators from the red states who are much more electorally nervous than people like Congressman Weiner in the city of New York. 

Look, I think simplicity is a virtue, but I think there is zero chance that Congress is going to pass a single-payer plan.  What I do think is likely, though, is that the heat over August is going to polarize the situation, is going to end up snuffing out any remaining hope of a bipartisan plan, and you‘re going to see Democrats come back after Labor Day and march this thing forward under the banner of reconciliation and try to get the votes on the Democratic side.  They probably can do it. 

O‘DONNELL:  Sam Stein, when you see all of the confusion that surrounds these plans that are basically indescribable to civilians out there, looking back, how about this for a strategy—the Democrats get wiped out on this in 1994, they stay scared and quiet about it for two years, and then they start introducing the Medicare for all legislation, which they know they‘re going to lose on?  They start to get some hearings on it.  And you know, about 15 years later, right around now, the country is actually ready for a real yes or no vote on Medicare for all. 

That seems to me in retrospect to have been a better way to go. 

SAM STEIN, POLITICAL WRITER, “THE HUFFINGTON POST”:  Well, hindsight is always 20/20, I guess.  And ideally, yes, you would have greased the wheels before introducing a comprehensive health care bill. 

You know, the issue here, and I tend to agree with John, is that there are very few avenues to get health care legislated.  And right now, what you‘re seeing with town halls is that some of the doors are attempting to be closed even further. 

And I have to agree, listening to the White House recently, and talking with Senator Schumer as well, which John did as well, the issue of reconciliation is going to come up at some point.  And there is going to be a sort of fed up aspect of the Democratic Caucus, whereby after September 15th, when Finance shuts it down, they‘re going to just go as a party and get what they can get.  And you know, I think that‘s what the ultimate outcome‘s going to be. 

O‘DONNELL:  Well, we‘re going to get some of John‘s interview today with Kent Conrad, the Senate‘s expert on reconciliation, to see what he thinks of the prospects of that actually working. 

But, John Harwood, I don‘t see what‘s different in the current model of behavior both in the House and the Senate from 1994.  I don‘t see what the play is that gets them across the finish line. 

What‘s the different play?  What‘s the new pass play?  What‘s the new double reverse that someone‘s invented in the meantime to get there?

HARWOOD:  Well, a couple of things. 

First of all, you‘ve got a robust majority in the House as you did in ‘93.  However, it is a more ideologically homogenous majority, it is a more liberal majority.  You can control and marshal more votes as a leadership than you could in 1993, when you still had some of those southern Democrats who ended up getting wiped out in ‘94. 

And secondly, you‘ve got 60 votes in the Senate, 59 if Senator Kennedy cannot return.  And I think there is a pent-up appetite.  You do have some business and industry player support.  And I think the combination of those two things and Barack Obama‘s skills means there‘s an opening for this to happen. 

But I‘ve got to tell you, I talked to Dick Gephardt a couple of months ago.  Dick Gephardt said, “I‘m seeing exactly the same dynamics of ‘93, ‘94.  We ought to punt right now on trying to expand coverage for those who don‘t have insurance now, and try cost control and do the coverage part later.” 

I don‘t think the Democratic Caucus has any appetite for doing that.  But it‘s very tough. 

O‘DONNELL:  Sam Stein, as we move closer to the finish line, not one of these bills that‘s been voted on in the House has universal coverage.  And in fact, the amount of coverage that‘s being suggested is getting smaller as we move along in the process. 

When we get to September, October, and the Finance Committee‘s delivered something, and you‘re out on the Senate floor, might the fight actually be this very, very difficult fight that only covers—ends up covering about half of the uninsured, or a little bit more than half of the uninsured, and people start to look and up say, why are we even bothering trying to do all of this if we don‘t get to universal and going to have to come back and campaign for universal again? 

STEIN:  Well, I‘ll take it one step further.  I mean, the irony of this debate is while Obama is being charged with socialism, he‘s pared down his health care plan drastically since the debate began.  So, I don‘t get where these charges are coming from.

The second thing is, the one downside to these town hall protests, there‘s real division within the Democratic Caucus over what‘s happening right now.  I know there‘s a bunch of senators who are threatening not to vote for a health care bill that does not contain a robust public option. 

Republicans could really reap the benefit from exposing the differences within the Democratic Caucus.  But now they‘re sort of getting painted with the pent-up frustration and the Nazi charges that you‘re seeing at these town hall protests.  I don‘t know if that‘s necessarily the image they want to go buy.  They could do it more subtly and they can expose what are really dynamic differences within the Democratic Caucus in the Senate. 

O‘DONNELL:  All right.  We‘ll be back to our panel later. 

Are the ObamaCare protests any different from the HillaryCare protests 15 years ago?  We‘ve seen this movie before, but is there still time to change the ending?  I‘ll ask former Clinton labor secretary Robert Reich next on THE ED SHOW. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  ... that we lost 247,000 jobs in July.  That was nearly 200,000 fewer jobs lost than in June, and far fewer than the nearly 700,000 jobs a month that we were losing at the beginning of the year. 

Today, we‘re pointed in the right direction.  We‘re losing jobs at less than half the rate we were when I took office.  We‘ve pulled the financial system back from the brink. 

(END VIDEO CLIP)

O‘DONNELL:  That was President Obama on today‘s better-than-expected jobs report. 

The unemployment rate dropped a hair, from 9.5 percent to 9.4 percent nationally.  The Obama White House is looking for positive signs, but the bigger question is, how will we know when we‘ve recovered?  The president has already warned that it won‘t look like the good old pre-bust days when the Dow was over 12,000 and people were buying houses with no money down. 

Joining me now for more is Robert Reich, former labor secretary for President Clinton and professor at UC Berkeley.  He‘s also author of the book “Supercapitalism,” now available in paperback. 

Robert Reich, you‘re secretary of labor, the new unemployment report comes in, you‘ve gone down .1 of one percent.  How does that feel? 

ROBERT REICH, FMR. LABOR SECRETARY:  Well, I would not break out the champagne, Lawrence.

I mean, for one thing, we are continuing to lose jobs in this country.  The good news is that we‘re worsening at a slower rate.  But that‘s not exactly good news.  And it doesn‘t even include all the people who are too discouraged to look for work, it doesn‘t include all the people who are working part time that would rather be working full time.  It doesn‘t include the millions of people who were lucky enough to get a new job when they lost the old one but are being paid less than the old job paid them. 

So, this is still a terrible situation for most people. 

O‘DONNELL:  How will you define recovery? 

REICH:  I would define recovery as getting unemployment down to three or four or five percent, and also getting the payrolls way, way up, and getting earnings up.  Those are the three issues.  And we‘re nowhere near. 

It may take another year.  It may take another two or three years. 

This is an economic problem.  But Lawrence, it‘s also a big political problem, because next year are the mid-term elections, and every Republican is going to be talking about not only health care, if it‘s still in the works, but also the bad jobs numbers and the Obama administration, and many Democrats are going to have to say, well, we‘re doing everything we can. 

O‘DONNELL:  Now, as labor secretary, you‘re flooded with statistics every day, Bureau of Labor Statistics and all this stuff coming at you.  What would you be asking for most urgently?  What are the indicators you‘d be wanting to look at now to say—to try to predict what you thought would be happening six months, a year from now? 

REICH:  Well, I‘d look at first-time claims for unemployment insurance.  That‘s very useful.  That shows basically where people are, how many people are out of jobs and worrying about it.  I would also try to find some indicators that showed the number of people who have been out of work for six months or more. 

Right now, we have a record number, a record percentage of Americans who have been out of work for six months or more.  They are going to run out of their unemployment insurance, even extended unemployment insurance, in September.  Now, that‘s a very important figure and we‘ve got to make sure that that comes down as well. 

O‘DONNELL:  Now, you‘re a veteran of the Clinton health care wars 15 years ago.  You were around in the ‘60s during the big protest explosions that broke out then.  What do you make of...

REICH:  I‘m not that old, Lawrence. 

O‘DONNELL:  I‘m saying you were in high school when those protests were going on in the ‘60s.  What about—what do you think you‘re witnessing now?  This does seem different to me, what‘s going on in these health care protests. 

What do you think? 

REICH:  Yes, this is much more coordinated and organized.  This is—you know, we have a word for it, and you‘ve used it.  It‘s AstroTurf rather than grassroots. 

A lot of this is front groups.  It‘s coming out of Washington, Washington lobbying groups that are very, very closely associate with the Republican Party.  Some of it‘s being fomented by angry, right-wing talk radio.  But this is designed not to enhance the debate. 

This is designed to bring down health care as part of a long-term strategy as they tried in 1994 to bring down the Clinton administration and regain control of Congress.  That was the Republican strategy.  And to some extent, it worked, because in 1994, they did regain control of Congress. 

O‘DONNELL:  Robert Reich, thanks very much for joining us this afternoon. 

REICH:  Thanks, Lawrence.

O‘DONNELL:  Coming up, a new twist in the Florida Senate race. 

We‘ll explain next on THE ED SHOW.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to THE ED SHOW.

And now for some “Ed Lines.”

President Obama met with New York Senator Schumer at the White House this afternoon to speak about health care reform at the senator‘s request.  The meeting came a day after some House Democrats announced opposition to a White House deal with drug companies that would place a cap on the pharmaceutical industries‘ share of the cost of health care reform. 

Senator Schumer said of the issue, “When I read about it, it gave me heartburn.”  But there could be plenty more in the various health care bills to give a New York senator heartburn. 

One of the little-known economic facts about New York City is that its single-biggest employer is the health care industry.  So, when a president is pushing legislation to reform that industry, a New York senator has a lot to worry about. 

Florida Senator Mel Martinez announced his resignation from the Senate this afternoon. 

(BEGIN VIDEO CLIP)

SEN. MEL MARTINEZ ®, FLORIDA:  At this stage of my life, and after nearly 12 years of public service in Florida and in Washington, it is time to return to Florida and my family.  So, today I‘m announcing my decision to step down from public office effective upon a successor taking office to fill out the remainder of my term. 

(END VIDEO CLIP)

O‘DONNELL:  The Senator had already said he would not run for another term. 

Florida Governor Charlie Crist, who happens to be running for Martinez‘s seat in 2010, could appoint himself as the replacement, but he‘s already said he won‘t do that.  So, now we can assume Charlie Crist is looking for a placeholder to hold on to that seat so that it will be an open seat for Charlie Crist to run for in 2010. 

And today, the Senate Ethics Committee dismissed complaints against Senators Chris Dodd and Kent Conrad.  The senators came under scrutiny last year after questions arose that they may have violated the Senate gift rules by accepting discounted home mortgages from Countrywide Financial.  While the Ethics Committee found they did not violate the rules and there were no sweetheart deals, they did say that Dodd and Conrad “should have exercised more vigilance” in their dealings with Countrywide. 

Coming up, Rahm Emanuel wants liberal groups to play nice with the party‘s centrist members.  Will they listen? 

That‘s next on THE ED SHOW.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back.  As Democrats in Congress take the health care debate to their home states this month, the message from the White House is clear: the Democratic infighting has to stop.  This week, White House Chief of Staff Rahm Emanuel warned liberal groups to stop attacking Blue Dogs in health care ads. 

Meanwhile, President Obama told Democratic senators that he didn‘t like liberal groups spending advertising dollars to take aim at Congressional Democrats. 

Joining me now, Democratic Congressman Elliot Engel.  He serves on the House Energy and Commerce Committee.  He represents New York City.  Congressman Engel, let‘s take a look at an ad that MoveOn.org is running about one of your colleagues on the Energy and Commerce Committee. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Today in Georgia a patient lost insurance coverage for medical care she needs.

UNIDENTIFIED FEMALE:  Hospital bills will eat up another family‘s savings. 

UNIDENTIFIED MALE:  A small business owner is worried about affording health benefits for his employees. 

UNIDENTIFIED FEMALE:  But when Congressman John Barrow recently had a chance to help fix our health care crisis, he voted no.  Instead of helping Georgia families get more affordable quality health care choices, Congressman Barrow sided with the special interests and insurance companies. 

(END VIDEO CLIP)

O‘DONNELL:  Congressman Engel, is that helpful to the process? 

REP. ELIOT ENGEL (D), NEW YORK:  Well, I‘m on that committee and I voted yes.  But I don‘t agree with the ad.  I don‘t think it‘s particularly helpful to the process.  We have a lot of work ahead of us to show the American public why we need health care reform, and we do.  And we can make the case; 47 million Americans without any kind of health coverage; people denied coverage because of pre-existing conditions; and co-payments and the cost of health care premiums has risen way, way beyond the rate of inflation. 

So we should be concentrating on that, on convincing the public that we need health care reform.  I don‘t particularly think an ad like this is very helpful. 

O‘DONNELL:  Now, you and John Barrow have very different districts.  You represent a section of New York City.  He‘s—represents a district in Georgia.  What do you think about his no vote on that bill in the Energy and Commerce Committee?  What do you think motivated him? 

ENGEL:  Well, I know John Barrow.  He‘s a good member of Congress.  And we‘re friends.  We disagree on this particular issue.  I did not like that the seven Blue Dogs, in essence, held the bill hostage until they got what they wanted. 

But, you know, they‘re only doing what I do.  They‘re only fighting for their constituents, for what they believe.  It may be different from what I believe.  But they‘re fighting the good fight. 

O‘DONNELL:  Are they fighting for their campaign contributors? 

ENGEL:  Well, I can‘t say what they‘re fighting for.  All I know is that I‘m fighting for health care reform, because the American public desperately needs it.  We all need it.  The current system is unsustainable, and the Republicans are wreaking havoc throughout the country, disrupting town hall meetings with orchestration, with—right out of a playbook. 

And we need to convince the public that health care, as it currently is, is not sustainable.  And therefore, we need reform.  And I think President Obama is doing the right thing and a good thing by going around the country, spreading his message.  And that‘s what I‘m trying to do. 

O‘DONNELL:  Congressman, are you getting any push back from your constituents on what you voted on so far, and what Charlie Rangel‘s committee has delivered, which includes three new top tax brackets?  That revenue would be taken disproportionately from New York City compared to other areas of the country.  So I can imagine there‘s a certain pressure on you about some of the things that are in this bill already. 

ENGEL:  Well, look, no bill is perfect.  But what we are doing out of the Energy and Commerce Committee, and the three bills that are now—have now passed committees—we are trying to reform health care.  People think that the current health care is just sustainable.  They can continue a year from now, five years from now, to have the same health care. 

We‘re saying, no, it‘s not sustainable.  Premiums are going to rise.  More people are going to be uninsured.  More people are going to be denied coverage.  If you lose your job or change jobs, you‘re going to find that you have no coverage. 

So we‘re trying to reform it to make sure that the American people have the kind of coverage we need and deserve.  There‘s a lot of confusion out there.  What I‘m getting from my constituents is people are asking questions. 

People want to be able to keep the health care they have now.  And that‘s what this does.  If you like your health care, as the president has said, you can keep it.  You can keep your doctor.  We just want to make sure that hospital emergency rooms aren‘t being used—continuing to be used to give so many people primary health care. 

The system is broken and we need to fix it.  And the Democrats have a plan to fix it.  Republicans have a plan to disrupt town hall meetings and to be negative and to just say no.  The same party that voted against Medicare and Medicaid back in the 1960s. 

So we have a positive plan.  We think that when the public knows the plan, they will support it.  And Charlie Rangel‘s idea was to get some revenue from the top brackets of people who are millionaires, who are making a million dollars or more per year.  If that happens to fall disproportionately on New York City, I‘m glad people in New York City can afford to do that. 

We‘re not looking to tax middle income people or people that can‘t afford it.  If we have any money for this bill, any kind of taxing will go only to people making the million dollars or more a year.  And I think that‘s fair. 

O‘DONNELL:  Congressman Elliot Engel, thank you very much for joining us on THE ED SHOW.

ENGEL:  Thank you.  It‘s my pleasure. 

O‘DONNELL:  For more on the health care wars, let‘s go to our panel.  We‘ve got—what‘s happened here?  We‘ve got Sam Stein.  We‘ve got junk in my teleprompter that‘s not telling me who is on the show.  We‘ve got Sam Stein.  We‘ve got cNBC chief Washington correspondent John Harwood.  John Harwood—and we also have Michael Medved.  I know that only because I see him on the monitor.  Someday the prompt is going to catch up with the show here. 

Michael Medved, what do you make of this protest that‘s going on out there now?  It does seem organized.  And there was an early version of this discussion where we were saying, doesn‘t this work against the protesters?  Because they look so chaotic and they look as if they‘re just there to say no and cause trouble. 

Now as it mature—we‘re calling it maturing over the matter of 48 hours.  Does it start to look like, hey, wait a minute, this whole area is just too contentious and crazy; maybe it just hurts both sides of this reform effort? 

MICHAEL MEDVED, RADIO TALK SHOW HOST:  Yes, I think if you take a look

I haven‘t been to any of these town meetings.  I haven‘t seen it firsthand.  When you look on Youtube, these do not look like the kind of fun events you would want to participate in.  What I think is ironic here is the Democrats so much attacking people for doing what Democrats have called upon, which is people getting involved in the Democratic process. 

Let me tell you, I‘ve had people call my radio show who themselves have gone out to these meetings, and they‘re upset and they‘re concerned.  They are not paid.  They are not foot soldiers of some kind of jack-booted Republican storm troopers.  They‘re normal Americans who are worried about one thing, and that‘s spending.  And that is the 100-pound -- 800-pound gorilla in the room. 

It now appears that we are going to go over two trillion dollars with our deficit.  And the real question about health care—and this is something that Congressman Engel I don‘t think addressed adequately.  The real question is, how do we pay for all this?  Debt is of great concern to Americans, grassroots Americans, ordinary Americans.  And I don‘t think the Democrats are helping themselves, President Obama, by saying you have no right to go out and to protest and to make your concerns known. 

O‘DONNELL:  Sam Stein, the protests are coming from both sides now, including what we just saw from MoveOn.org running an ad against the Democratic Congressman in Georgia.  Barack Obama wants that ad to stop.  Nancy Pelosi wants that ad to stop.  Rahm Emanuel wants that ad to stop.  What‘s going to happen on the left, in the attacks that they‘re aiming at the moderate Democrats? 

SAM STEIN, “THE HUFFINGTON POST”:  They‘re actually going to go up, conversely.  I talked to a few of the officials with the groups actually running these ads, who say they‘re just going to actually increase their ad buy.  They find that these politicians are being too thin-skipped when it comes to these ads.  They can take it.  They‘re elected officials. 

Let me make one distinction about protesting on the Democratic side and the Republican side.  The SEIU, which is sponsoring some of these counter-protests, if you will, received phone calls and threats of gun violence today, proclamations that they were Nazi officials.  Rush Limbaugh listed an address of one of their headquarters in St. Louis and urged people to go there and show up.  Twitter feed telling people that they were going to show up with guns at the headquarters. 

That doesn‘t strike me as the democratic, lowercase D, style of protesting.  I have to believe that is not something that Michael would advocate.  I don‘t think anyone would really advocate that.  I have to say, I don‘t think it‘s proportionate to equate what‘s happening among these labor unions to threats of gun violence and charges of Nazism.  I just don‘t. 

O‘DONNELL:  We‘re going to have to hold it there.  We‘re going to get to John Harwood and his interview with Kent Conrad later in the show. 

Coming up, this country‘s passed government-run health care before. 

How did Lyndon Johnson do it?  I‘ll ask one of his former aides next.

(COMMERCIAL BREAK)

O‘DONNELL:  In the playbook tonight, getting a public health care plan passed is not impossible.  We‘ve done it before, but it seems many people either don‘t remember or just don‘t know it.  Like the people attending a town hall for a Texas Democrat, Jean Green. 

(BEGIN VIDEO CLIP)

REP. GENE GREEN (D), TEXAS:  I‘m serious in this room, how many people by a show of hands oppose any type of socialized or government-run health care? 

(CROSS TALK)

(END VIDEO CLIP)

O‘DONNELL:  In the United States, we have socialized medicine.  It‘s called Medicare.  And all of us will get it eventually.  And all of us know someone who‘s happily on it right now.  Forty three million Americans are covered by the program today.  We‘ve already heard, don‘t touch my Medicare shouts in the health care debate. 

But Medicare faced steep opposition in the legislative stage in the early ‘60s.  Critics warned of the dangers of socialized medicine.  You might recognize this face, courtesy of a 1961 American Medical Association campaign. 

(BEGIN VIDEO CLIP)

RONALD REAGAN, FMR. PRESIDENT OF THE UNITED STATES:  Write those letters now.  Call your friends and tell them to write them.  If you don‘t, this program, I promise you, will pass just as surely as the sun will come up tomorrow.  And behind it will come other federal programs that will invade every area of freedom as we have known it in this country. 

Until, one day, as Norman Thomas said, we will awake to find that we have socialism.  And if you don‘t do this, and if I don‘t do it, one of these days, you and I are going to spend our sunset years telling our children, and our children‘s children, what it once was like in America when men were free. 

(END VIDEO CLIP)

O‘DONNELL:  Medicare passed the House on July 27th, 1965.  A day later, it passed the Senate.  And LBJ signed it into law on July 30th, at the Truman Library in Independence, Missouri, with Harry Truman, who had first proposed national health insurance, by his side. 

Joseph Califano was special assistant to President Johnson.  He was also secretary of Health, Education and Welfare for President Carter.  He is now the chairman of the National Center on Addiction and Substance Abuse at Columbia University, and he joins me now by phone. 

Joe Califano, the struggle to pass Medicare was not done in one legislative session.  It was over a few years in the early ‘60s.  And in the end, the vote was actually a very large vote in favor of it, including a surprising number of Republicans, wasn‘t it? 

JOSEPH CALIFANO, COLUMBIA UNIVERSITY:  Yes, it was.  I mean, remember, Lyndon Johnson, right after the tragic Kennedy assassination, said he would fight for Medicare as long as he could breathe—and until he had breath in his body.  He actually had to kill a Social Security proposed increase in 1964 in order to keep the pressure on the Senate and the House in 1965. 

But when it was passed, we had half the Republicans in the House, 70 Republicans for it.  And we had almost half the Republicans in the Senate.  There were a lot fewer than there are now, but we had 13 out of about 30. 

So it—and, you know, what you showed there is exactly right.  That attack—we also were attacked, that Medicare would interfere with the physicians practicing medicine.  In fact, we had to—after the law was passed, the American Medical Association came to see LBJ in the White House.  And the issue was whether the doctors would take part in Medicare. 

It was an incredible meeting, because he—before the—it was classic LBJ, Lawrence.  Before they could say a word, he said, I have a real war going in Vietnam.  I have no civilian doctors.  Will you send volunteers over there in.  And they said, of course.  Then he called the press in.  The first question from the press is, will the doctors participate in Medicare?  And Lyndon Johnson turned to the head of the AMA and he said, these men are willing to risk their lives to help the civilians in Vietnam for their country.  Of course they‘ll participate.  Won‘t you, doctor? 

And the head of the AMA said, yes, Mr. President.  Now they—then they loved it.  They liked it so much that when we tried to change the way we paid them in 1968, three years later, they fought to keep Medicare just the way it was. 

O‘DONNELL:  Yes, this seems like it was nothing better for the wealth of doctors in the second half of the 20th century than Medicare.  And when we saw Ronald Reagan there, Joe, saying that the country was going to sink into socialism over Medicare, did it surprise you when he became a presidential candidate he never once said, we better repeal Medicare? 

CALIFANO:  No.  Nor has any Republican that I‘m aware of, of any significance.  I don‘t think we‘ve ever heard McCain say it.  I don‘t think we‘ve heard George Bush say it.  It really was—it was remarkable. 

The other thing is, it‘s not just Medicare.  We also have Medicaid.  And let‘s remember that while people think of Medicaid as just a bunch of poor people out there, Medicaid provides—created the nursing home care that we have in this country for millions of older Americans.  And they‘re not complaining about that. 

O‘DONNELL:  Joe, there are a lot of similarities and a lot of differences between the early ‘60s, trying to legislate this, and what President Obama‘s trying to do now.  There were 68 Democrats in the Senate when this vote was taken.  Seven Democrats were able to vote against it.  And it still sailed through.  You had a masterful legislator as president of the United States, which we‘d never had really before or since. 

And you had dynamics, cultural dynamics and social and psychological dynamics going on.  For example, as you alluded to earlier, this occurred in the wake of the assassination of President Kennedy.  The country was still in mourning.  The country was still willing to support things on an emotional basis, because it had President Kennedy‘s backing implicit it in. 

How much of that was a factor, do you think, as this moved through the Congress? 

CALIFANO:  I think that was a factor, Lawrence.  I think very much so in Johnson years.  I think there was another factor, which is very important.  The 40 to 50-year-old Americans were suddenly facing having to take care of their parents, because the 65-year-old Americans in 1965 did not have corporate pension—corporate health care plans.  Did not have—really didn‘t have any health care coverage.  So that we had a tremendous amount of pressure from the middle class Americans to do something and help them. 

We also, you know—we made all kinds of agreements, as you‘re well aware, to protect doctors in the practice of medicine, to give them things that they wanted, to give the hospital things that they wanted, some of which we‘re paying for today. 

But Medicare is undoubtedly one of the most popular programs in the history of this country.  Probably second only to Social Security. 

O‘DONNELL:  Joe Califano, thank you very much for joining us today, teaching us a little history. 

CALIFANO:  Thank you, Lawrence, great to talk to you. 

O‘DONNELL:  Coming up, forget 60 Democrats.  They may only need 50 to pass health care reform in the Senate.  Can the Democrats really do it that way?  John Harwood talks to the only senator who knows.  We‘ll hear that next on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back.  Some Democrats think they should leave Republicans behind and pass a health care bill with 51 Democratic Senate votes.  CNBC‘s John Harwood sat down with Senator Kent Conrad, chairman of the Budget Committee, and a member of the Senate Finance Committee, to ask if the reconciliation process that requires only 51 votes would really work for health care reform. 

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD (D), NORTH DAKOTA:  Be careful what one wishes for.  If you try to write substantive legislation using reconciliation, you‘ll be left as Swiss cheese. 

There‘s one other critically important piece of this people need to know.  Under the rules of reconciliation, everything would have to be deficit-neutral over five years.  Under the budget resolution, you‘d have ten years.  That makes a dramatic difference. 

And under reconciliation, it all has to be deficit-neutral every year after the five years.  That makes trying to cover virtually everybody in the country almost impossible. 

(END VIDEO CLIP)

O‘DONNELL:  Music to my ears.  I could listen to Senate parliamentary procedure discussions all day.  Back with me now is tonight‘s panel, Sam Stein, John Harwood, Michael Medved.  John Harwood, no one knows more about this in the Senate than Kent Conrad.  I can tell you from my experience, no one in the House of Representatives understands Senate parliamentary procedure.  Very few senators do.  Kent Conrad‘s one of them.  Are the rest of the senators and the Democratic caucus listening to him about this?  Do they understand how complex and how much it could misfire? 

JOHN HARWOOD, CNBC ANCHOR:  I think they are and I think certainly Harry Reid is cognizant of that.  I‘d be interested in your view, though, because what I think I learned covering you—and I wish I had e-mail then, because you were hard to get on the phone—was that senators, and particularly senators involved in financial stuff, can sort of figure these things out and make it work and delay things and phase in different provisions to try to work out whatever they want to do. 

So I‘m a little skeptical that they can‘t do it this way.  You tell me, can they make it happen? 

O‘DONNELL:  No, I agree with Conrad.  What happens is—what they will do is raise a budget point of order, saying this provision of the bill right here involving health insurance reform on pre-existing conditions, which is absolutely critical to health care reform legislation, is irrelevant to the federal budget in the following ways: then you need 60 votes to overrule that point. 

So it will take 60 votes within reconciliation to include most of the things that people want included in the bill.  And that‘s basically what Conrad‘s talking about. 

Sam Stein, what about the left out there, the people reading “Huffington Post” and other areas, who believe that they should just forget about Republicans because they think this reconciliation process would work?  Are they going to start studying Senate parliamentary manuals and figuring this out? 

STEIN:  All they have to do is listen to the last part of THE ED SHOW today apparently. 

O‘DONNELL:  It‘s going to be very hot on Youtube.  This segment is about parliamentary procedure, I‘m telling you.

STEIN:  Straight to the greatest hits list.  What I think is going to end up happening is you‘ll see reconciliation used as sort of the lingering prospect out there, whereby you better get on board with the president or this is going to happen. 

The other thing to look out for is that—and this is something quoted by Bernie Sanders a while ago.  Other people are talking about it—is to have all Democrats commit to voting for cloture.  Let them vote against the bill if they want.  The idea is to get around the filibuster, get 60 votes.  You have the numbers if Kennedy votes.  Then you can vote your conscience.  But at least let it get to an up or down vote. 

Those are the two procedures that are sort of lingering out there in the ether. 

O‘DONNELL:  That would probably be a cleaner one.  Michael Medved, John Harwood‘s right that normally in this legislative process, it looks like, when in was working there in these bills, we could pull anything up from our sleeves and get it into the bill in reconciliation.  Once you get into this level of the discussion, the people who are nervous about this, on your side of the world, the more conservative side of the world, viewing this reform effort, don‘t they start to think, hey, it sounds like you‘re cheating.  Isn‘t that the only message they would get from the reconciliation concept? 

MEDVED:  Sure.  I think what is very striking about this is in politics what you want to do is unite your side and divide the other side.  And right now conservatives are very encouraged, because we are united in wanting yes health care reform, but not an independent government plan, a government option, and not wanting some of the more contentious things that are dividing Democrats. 

When you see things like those ads that you showed before, when there are people on the left running ads against Blue Dogs—

O‘DONNELL:  We‘re going to have to leave it there, Michael.  That‘s THE ED SHOW.  I‘m Lawrence O‘Donnell.  Ed Schultz will be back here Monday, 6:00 pm Eastern on MSNBC.  “HARDBALL” with Chris Matthews starts right now.

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

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