updated 4/29/2009 10:06:38 AM ET 2009-04-29T14:06:38

Guest: Bernie Sanders, Kent Conrad, John Harwood, Jamal Simmons, John Feehery, Ryan Lizza, Rep. Joe Sestak

Spec: Politics; Arlen Specter; Senate; Insurance; Health and Medicine;

Rick Santorum

                (BEGIN VIDEOTAPE)

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

                (END VIDEOTAPE)

                SCHULTZ:  Good evening, Americans. 

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

                How about this?  Arlen Specter switches parties.  The Democrats get a

potential 60th vote in the Senate.  The GOP gets more extreme. 

                This is a once-in-a-lifetime generation opportunity for the Democrats. 

Will they use their supermajority to get real reform on health care? 

                We`ll ask Pennsylvania Congressman Joe Sestak. 

                President Obama is steamrolling to success.  We`ll show you some

numbers from our brand new NBC News poll at 6:30, at the bottom of the

hour. 

                They make it, they own it.  Chrysler workers bet on the future of the

United States auto industry. 

                Plus, "Psycho Talk."  Rick Santorum is back. 

                But first, tonight`s "OpEd." 

                I mean, what a political thriller.  "We`re thrilled to have you." 

That`s what President Obama said when Senator Arlen Specter told him he was

becoming a Democrat. 

                Now, Specter was vilified by Republicans when he crossed the aisle and

voted for the  president`s stimulus plan.  Right-wing talkers pounded on

him.  RNC Chairman Michael Steele threatened to run a campaign against him. 

                And today, Specter told the world he`s had enough of this TEA-partying

and psycho-talking crowd. 

                (BEGIN VIDEO CLIP)

                SEN. ARLEN SPECTER (D), PENNSYLVANIA:  As the Republican Party has

moved farther and farther to the right, I have found myself increasingly at

odds with the Republican philosophy and more in line with the philosophy of

the Democratic Party. 

                (END VIDEO CLIP)

                SCHULTZ:  All right.  Now, what does that mean? 

                Democrats are now looking at 60 votes in the Senate, a supermajority? 

That`s assuming that Minnesota gets its act together and seats Al Franken. 

But Senator Specter can change the key big time here on some key issues

like health care. 

                Democrats are holding all the cards right now.  They have the White

House, the House, and a supermajority in the Senate.  No more excuses;

right? 

                Let me tell you something, folks.  Now is the time for real

progressive action on the number one issue facing this country. 

                This is how I view the Specter move -- man, that`s health care. 

There`s no more hand-wringing.  There`s no more sitting around saying,

well, maybe we can get this done. 

                Democrats, you`ve got to get this deal done. 

                The Republicans will say, oh, you`re nothing but a bunch of

socialists.  Who cares what they think?  They`re a party of "no." 

                They have no solutions on health care.  They have no solutions

actually on anything.  They are the minority that just keeps getting

smaller. 

                In fact, they can`t even get their base cranked up.  Earlier this

week, 21 percent of Americans said that they identified with the GOP. 

                Democrats, you need to act now.  Single-payer health care -- that`s

right -- is it politically feasible right now?  For-profit health care is

absolutely destroying people`s lives and killing small businesses across

this country. 

                Insurance companies, what are they doing?  Well, they are denying

claims.  And nobody is doing anything.  Free market does not work when it

comes to a person`s health care. 

                Now, this move by Specter I think really intensifies the battle on

health care.  Now, for the record, Arlen Specter has signed onto the Wyden

bill.  I think that`s why President Obama picked up the phone today and

said, hey, we`re thrilled to have you.

                There is no better time to put a party in chaos out of their misery

and on the defensive.  OK?  The country wants single payer.  I have heard

it at every health care town hall meeting across America. 

                Prove me wrong.  Show me some numbers. 

                Here is reaction from the Republican Party on the move. 

                Today, Senator Lindsey Graham said, "As Republicans, we`ve got a

problem.  I want to be a member of a vibrant National Republican Party that

can attract people from all corners of the country, and we can govern the

country from a center-right perspective."

                Hold the phone on that, Lindsey Graham.  Your party is very white.  It

doesn`t have any diversity.  And if you noticed the math, you`re pretty

doggoned southern as of late. 

                Now, Senator Olympia Snowe said this, and really hit the nail on the

head.  "Ultimately, we`re heading to have the smallest political tent in

history. "

                Can you imagine that?  This is 2009.  Can you remember just five years

ago, back in 2004? 

                Joining me now is Independent Senator Bernie Sanders of Vermont, who

obviously caucuses with the Democrats. 

                How big a political opening is this, Senator?  Thanks for joining us

tonight.  How big of a political opening is this for the Democrats, and to

really get something done? 

                SEN. BERNIE SANDERS (I), VERMONT:  Well, Ed, it really depends upon

whether or not we can put together a strong grassroots movement that tells

White House, that tells Congress that we are, as you just head, sick and

tired of private health insurance that`s wasting over $300 billion every

single year on administrative efforts.  They have all kinds of

bureaucracies.  They deny people claims that that they are entitled to. 

                Clearly, the United States needs to join the industrialized world with

a real national health care program that guarantees comprehensive health

care to every man, woman, and child, and we save money as we do that. 

                SCHULTZ:  Well, I just got word now that Kathleen Sebelius has been

confirmed as the secretary of Health and Human Services. 

                How big a deal this?  I mean, it looks like the Republicans might be

getting the message here? 

                SANDERS:  Well, she is a moderate Democrat.  She is certainly not a

supporter of single payer.  And let`s not have any illusions that we`re

close to a single payer.

                There`s a lot of support in the House, less support in the Senate. 

But what we have behind us, as you indicate, are the people. 

                We`ve got 15,000 physicians who believe in single payer.  We have all

of the evidence that we need not spend a nickel more on health care.  We

can guarantee every man, woman, and child health care with a single-payer

system. 

                SCHULTZ:  Senator, that is what just boggles my mind.  We have right

now a political moment in this country. 

                The president has high approval ratings.  You have the people out

there.  Town hall after town hall I hear it, they want single payer. 

You`re close to the supermajority, depending on how -- you know, some of

the...

                (CROSSTALK)

                SANDERS:  But Ed, what are you forgetting in that equation? 

                SCHULTZ:  Well, I`m for getting the filibuster, I guess. 

                SANDERS:  And you`re for getting the power of the insurance

companies...

                SCHULTZ:  Yes, that`s right.

                SANDERS:  ... the huge amounts of money they spend, the power of the

drug companies.  And if you think that every member of the Democratic

caucus is prepared to stand up to those guy, you`re mistaken. 

                SCHULTZ:  Well, then you know what?  Then they shouldn`t be voted in. 

I`ll tell you that right now.  The Democrats should not be in there,

because you`ve got to eventually listen to the people of this country.  And

they are sick and tired of being ripped off by health insurance companies. 

                SANDERS:  You`re damn right they are.  And if we could pass a strong

single-payer system, you know what?  The Democrats would be in power for

the next 20 years, because every American would know the comprehensive,

quality health care that`s affordable to their families will be there. 

                SCHULTZ:  OK. 

                What kind of Democrat is Arlen Specter going to be on health care? 

Now, I mentioned that he signed on to the Wyden bill, which, in my opinion,

doesn`t go far enough, but what kind of Democrat do you think he`s going to

be? 

                SANDERS:  Well, I think he`ll be a moderate to conservative Democrat. 

He has indicated, as I understand it today, that he will oppose the

Employee Free Choice Act.  I suspect he keeps his politics, but on

procedural issues, his vote will be important to give us 60 to end

filibuster. 

                SCHULTZ:  Now, how do you think President Obama views this move today

by Specter?  Does this just give the Democrats more momentum? 

                SANDERS:  I think it does.  I think what it does is it tells -- it

further indicates to the American people, as Specter indicated, that the

Republican Party is an extreme right-wing party way out of touch with the

needs of working families, and simply is the party of "no."  Anything that

the American people want, they say no. 

                SCHULTZ:  Do we need more moderate conservative Democrats... 

                SANDERS:  No, you don`t. 

                SCHULTZ:  I don`t think so either. 

                SANDERS:  You don`t.  Frankly, what you need are progressives who have

the guts to stand up to Wall Street. 

                SCHULTZ:  It`s about guts.  I don`t mean to interrupt you, but it is. 

It truly is about guts.  It is.  It`s about standing up, because if we can

get all of these people in this country without health insurance, if we can

get them covered, if we can reel in the insurance industry in this country,

we`ve got a chance to save the economy. 

                SANDERS:  Absolutely. 

                SCHULTZ:  Don`t you think it`s the economy that`s being butchered by

health care costs?

                SANDERS:  Well, when Obama talks -- when people say we can`t deal with

health care now because of the economy, Obama is right.  You have got to

deal with health care because of the economy, whether it`s General Motors

or a small businessperson.

                People can`t afford escalating outrageously high costs of health care. 

We spent twice as much as any other country on health care, yet we`ve got

46 million people uninsured.  And our outcomes, our health outcomes, are

not particularly good. 

                We need a revolution in health care.  We need to say health care is a

right, not a moneymaking business, which is currently the case. 

                SCHULTZ:  All right.  I guess when I see Arlen Specter, I see a number

of shifts. 

                First he cosponsors the Employee Free Choice Act, then he bails out on

it.  First he says on the campaign trail that he is in favor of solving the

health care issue.  Then he signs on to the Wyden bill.  I don`t think

we`re going to ever get him to universal health care. 

                They`ve thrown him under the bus as far as torture is concerned. 

There are some moderate things there that the Democrats can warm up to. 

                But the question is this: Does this mean that it`s an automatic walk-

in?  Do you think that there could be a Democrat in Pennsylvania, like Joe

Sestak, who could come out there and challenge him?  Or do you think there

was a deal cut that we`re going to leave Specter alone and let him walk in

to the Democratic Caucus?

                SANDERS:  I`m not knowledgeable about Pennsylvania politics.  My

understanding is that Obama said that he will be supporting of Specter,

which is obviously very significant. 

                But the bottom line here, Ed, is, you`re absolutely right.  We have a

Democratic president, strong majority in the House, 60 votes in the Senate.

                If we can`t deliver on energy, on health care, on workers` rights,

then what`s the sense of it all?  And the answer is, people have got to put

pressure on Congress to have the guts to stand up to the insurance

companies, the drug companies, the banks, the military industrial complex. 

                SCHULTZ:  Well, who is going to put pressure on them?  Who do you

think is going to put pressure on them?

                SANDERS:  We`re going to need a strong grassroots movement to make

that happen. 

                SCHULTZ:  OK.  So you think that people can be heard on this? 

                SANDERS:  Absolutely.  Absolutely they can. 

                SCHULTZ:  And if they are not heard, the Democrats pay the political

price down the road? 

                SANDERS:  I think that is exactly correct. 

                SCHULTZ:  Well, I`ll tell I what, I`m with you, Senator.  I don`t know

why the Democrats aren`t going full speed ahead on this.  And there are

some Democrats that are just in the pockets of some insurance companies

that I think, you know, what are you going to do? 

                Now, this is -- and the point is, there`s real change here.  There`s a

real opportunity for change here. 

                SANDERS:  Ed, you are 100 percent right. 

                SCHULTZ:  I think tomorrow night the president should come out at this

press conference and say, guess what, folks?  Everything is on the table. 

And find out what the people really want. 

                I mean, this idea that Max Baucus is taking single payer off the

table, nothing should be off the table. 

                SANDERS:  Not only that, but some of these Democrats want to make sure

that any important vote requires 60 votes, which means that it becomes a

more conservative proposition. 

                SCHULTZ:  All right.

                SANDERS:  All right.  You keep up the good work, Ed. 

                SCHULTZ:  Well, I just want to know, are you the first socialist that

I`ve ever had on this show?  I mean, they`ve made this list out there.  Are

you a socialist?  Are you...

                (CROSSTALK)

                SCHULTZ:  Senator Sanders, good to have you with us tonight. 

                SANDERS:  Good to be with you, Ed. 

                SCHULTZ:  Thanks so much. 

                SANDERS:  Thank you.

                SCHULTZ:  There`s a fighter for people right there.  Right there, that

guy, he`ll stand up to any corporation, he`ll stand up to any insurance

company.  He`ll get after it because he`s been out listening to the people,

and it can be done. 

                I think this is a real moment for the president.  What if the

president comes out tomorrow night at the press conference, where I will be

tomorrow night broadcasting from Washington?  I would love to hear

President Obama come out and say, look, I don`t have all of the answers,

but everything is on the table. 

                And this idea that single payer is not politically achievable, Mr.

President, respectfully, I think you are wrong on that.  I think it is

politically achievable because the people want it. 

                Coming up, will Senator Specter be a Democrat in name only, or will he

actually help bring change on health care and education?  I`ll talk to

Budget Committee Chairman Kent Conrad when we come back.  He`s the

gatekeeper on a lot of key issues.

                That`s next on THE ED SHOW.

                Stay with us. 

                (COMMERCIAL BREAK)

                SCHULTZ:  Welcome back to THE ED SHOW.

                Democrats cheered Arlen Specter for switching parties, but at a news

conference this afternoon, the Pennsylvania Senator said not so fast. 

                (BEGIN VIDEO CLIP)

                SPECTER:  I will not be changing my own personal independence or my

own approach to individual issues.  I will not be an automatic 60th vote. 

                (END VIDEO CLIP)

                SCHULTZ:  So, will a Democratic Senator Specter be a reliable vote for

President Obama`s budget priorities? 

                Joining me for more on that is North Dakota Senator Kent Conrad,

chairman of the Senate Budget Committee. 

                Kent, great to have you on here tonight. 

                From a budget perspective, is this a good thing for Democrats, that

Arlen Specter is now going to be having lunch with you on Tuesday? 

                SEN. KENT CONRAD (D), NORTH DAKOTA:  Sure it is.  It`s good news, but

look, I don`t think this is as transformational as some have suggested. 

                Look, the Democrats are not always united.  So the notion that we`re

always going to have 60 votes before Arlen Specter or after Arlen Specter,

I don`t think anybody can really count on that. 

                Look, we have a broad, diverse caucus, and there are lots of different

points of views.  This helps, but I think it really helps mostly at the

margins. 

                SCHULTZ:  Well, there is division in the Democratic Party when it

comes to reconciliation.  This is Senator Specter on reconciliation.  Here

it is. 

                (BEGIN VIDEO CLIP)

                SPECTER:  I`m opposed to reconciliation to be used for health care or

any other substantive legislative issues.  I think it would undermine an

important institutional prerogative of the Senate to require 60 votes on

these complicated matters.  I thought that when I -- whether I would be a

Republican or a Democrat. 

                (END VIDEO CLIP)

                SCHULTZ:  Now, Senator, I know that you, too, feel the same way about

reconciliation.  But is this at odds with most Democrats?  Break that down

for us. 

                CONRAD:  Well, I can say this -- in the conference committee, I was

clearly outvoted.  You had the speaker of the House, the majority leader of

the Senate, the president of the United States all believing that it should

be at least an insurance policy.  But I`ve already predicted, I don`t think

reconciliation will be used.  That`s a special fast-track process. 

                I don`t believe it will be used for health care.  The budget

resolution makes it possible, but I don`t think it will be used.  And the

reason I don`t is because it just doesn`t work very well.  As people get

into the details of what really happens, I think most people understand,

much more practical to proceed with health care using the regular Senate

process. 

                SCHULTZ:  How is Arlen Specter going to be received by Democrats,

Senator Conrad?  Because, OK, he went along with the stimulus package.  I

think he has a pretty progressive view when it comes to the torture issue. 

But there are times that we look at the situation.  I mean, he`s in trouble

in Pennsylvania. 

                How genuine is this move?  What do you think? 

                CONRAD:  Well, the place he`s in trouble is in a Republican primary. 

In a general election, I think Arlen Specter does very well. 

                Look, Arlen Specter is respected.  He`s a serious legislator.  And

he`s not always going to be with us, but, look, many members of the caucus

aren`t always with us.  Sometimes I diverge from positions of the caucus. 

                You know, that`s to be expected.  Actually, I think that`s a healthy

thing.  So I think his willingness to join the Democratic caucus is a

positive thing and we welcome it. 

                SCHULTZ:  Boy, things have really changed in the last five years when

it comes to Washington politics.  I mean, back in 2005, after the president

won re-election, the first trip he made was to your town of Fargo, North

Dakota, to talk about privatizing Social Security. 

                Now look where they are.  Only 21 percent of the American people even

identify themselves with the Republican Party.  And this is what Lindsey

Graham had to say today: "Today`s decision by Senator Specter puts a great

deal of pressure on red-state Democrat senators.  Their constituents will

look at them to reject a far left-wing agenda." 

                Well, Kent, you`re a red state Democratic senator.  Feel any more

pressure tonight? 

                CONRAD:  No, I really don`t.  Look, I feel pressure every day to do

the right thing for the people I represent, the people of North Dakota. 

And my state is a Republican state, but my state is a place that really

values fiscal responsibility and commonsense government. 

                I try to provide that.  That means sometimes I`m at odds with my

caucus.  Most times I`m not. 

                You know, again, I think disagreement and debate is a healthy thing. 

We`ve had too little of it in the United States Senate.  Arlen Specter is

somebody -- he`s not going to tow any party line.  And you know what? 

That`s a good thing. 

                SCHULTZ:  OK.  Healthy debate is always good.  You`ve always said

that. 

                Senator Conrad, great to have you with us tonight.  Thanks so much. 

                CONRAD:  Good to be with you, Ed. 

                SCHULTZ:  You bet. 

                Next up on THE ED SHOW, "Psycho Talk." 

                Now there`s another Pennsylvania dude in the news.  Former Senator

Rick Santorum, remember him, crazy right-winger from Pennsylvania?  He

claims Democrats are breaking the rules on Capitol Hill.  Does he have

amnesia? 

                That`s next on "Psycho Talk." 

                (COMMERCIAL BREAK)

                SCHULTZ:  Welcome back to THE ED SHOW.

                Have you heard some of the crazy things that are being said by

conservatives? 

                Time again for "Psycho Talk." 

                Oh, you`ve got Cheney, Gingrich, Rove, all vying to lead the

Republican Party again.  Now there`s a blast from the past moving in on

this deal.  We`re talking about former Senator Rick Santorum. 

                Tonight he`s landed in the "Psycho Talk."  

                Now, Santorum jumping into the hysteria over the use of

reconciliation.  Reconciliation is a process that would allow President

Obama`s budget on health care reforms to pass with just 51 votes rather

than 60. 

                Now, Santorum claims reconciliation has never been done before. 

Listen. 

                (BEGIN AUDIO CLIP)

                RICK SANTORUM (R), FMR. SENATOR:  What the Democrats have done here is

try to short-circuit the process on a major piece of legislation.  This has

never been done before.  We have never seen a major long-term policy

prescription, whether it`s Medicare, or you go back throughout history and

look at all of the major pieces of legislation.  None of them have ever

been passed using this procedure.  This is truly an abomination. 

                (END AUDIO CLIP)

                SCHULTZ:  Never been done before?  An abomination?  Does Santorum have

amnesia?

                First of all, ThinkProgres.org points out that reconciliation has been

used nearly 20 times since it was first created back in 1980.  Most

recently, to pass Bush`s tax cuts in 2001 and 2003. 

                But even better than that, Santorum himself has used that.  That`s

right, Santorum was the Senate Republican`s point man in trying to push

welfare reform through the budget, reconciliation in 1995. 

                Rick Santorum, reconciliation has never been done before?  On numerous

occasions by your party it`s happened, and it also happened by you. 

                Your sudden amnesia, you got it, qualifies you for "Psycho Talk."    

                (COMMERCIAL BREAK)

                SCHULTZ:  Welcome back to THE ED SHOW.

                Tonight, a big new poll from NBC News and "The Wall Street Journal." 

                Tomorrow we hit the 100-day mark.  Sixty-one percent approve of the

way President Obama is handling the job. 

                The country is split right down the middle when it comes to whether we

are on the right track.  Forty-three percent say we`re headed in the right

direction and 43 percent say that we are headed in the wrong direction.  A

reality check, In January, the right track number was at 26 percent. 

Confidence in the direction Obama has taken the country really is sky

rocketing. 

                Poll numbers tonight show Americans want real reform from government. 

Ninety one percent of Americans believe our health care system needs some

kind of reform; 33 percent want a major overhaul. 

                Arlen Specter joined the crowd today.  He could hold a key vote on all

of this.  Let`s bring in John Harwood, chief Washington correspondent for

cNBC and political writer for the "New York Times."

                John, great to have you on the program tonight. 

                JOHN HARWOOD, "THE NEW YORK TIMES":  Hi, Ed. 

                SCHULTZ:  These numbers are very encouraging at the 100-day mark.  But

doesn`t it just feel good for the Democrats to have a Republican leave at

the 100-day mark, and come over to President Obama and the Democrats?  I

mean, isn`t this really a momentum move for them? 

                HARWOOD:  Absolutely it is.  And the other thing in the poll that

you`ve mentioned was just how good people are feeling about Barack Obama. 

Sixty one percent saying that they approve of his job performance, but 80

percent of the people in this poll that said they like Barack Obama, even

60 percent of Republicans.

                So when you`ve got a foundation of goodwill of that kind, it`s a very

good sign for the party holding the White House, that they may be able to

make some progress.  But he does have to overcome some of the numbers that

you`ve mentioned, skepticism about the role of government. 

                SCHULTZ:  Well, how does the president cash in on this number?  What

would be his best play in your opinion, from here on? 

                HARWOOD:  Well, he`s playing the chips for all they`re worth right

now, as you know, Ed, because he`s pushing very ambitious policies,

financial regulation, education, energy, health care, all within his first

year, with a goal of action by the end of the year. 

                So what he`s trying to do now, with potentially 60 votes in the

Senate, a solid majority in the House, is to move very quickly. 

                Rahm Emanuel, who I interviewed today, made the comment during the

transition, a crisis is a terrible thing to waste.  They`ve got an economic

crisis.  That has become part of the fuel for trying to get the Congress to

go along with this ambitious agenda. 

                SCHULTZ:  Jon, you mentioned the role of government.  We are really

divided down the middle on this in this country.  Just how much do we want

government involved in anything that we do?  Well, the government role of

government, 47 percent say that the government should do more; 46 percent

say right now they are doing too many things. 

                Is this the hot coals that the president is walking on right now?  Do

the Democrats have to maybe push not their hand too hard here?  What do you

think? 

                HARWOOD:  Ed, that is exactly what the set of hot coals are for the

president.  It`s the one bright spot in our poll, if you look at the

numbers, for the Republican party.  They`ve done better over the last

several weeks in terms of boosting that skepticism by attacking Barack

Obama`s plan as a big government, tax and spend plan, that would give

Washington a larger role in your life. 

                They`ve gotten a modest amount of traction with that argument, as this

poll shows.  And what Obama has to try to do, and his allies on Capitol

Hill, is make the case that, yes, it may be larger government in the

abstract, but here`s how we`re going to help your life.  Here`s how we`re

going to get you health care coverage, where you don`t have it.  Here`s how

we`re going to move to a new energy future that will create more jobs. 

                Those are some of the points that Rahm Emanuel made to me during that

interview today.  And that`s part of the overall message of this White

House. 

                SCHULTZ:  I want to know, after you did the interview with Rahm

Emanuel, did he go behind closed doors with the rest of the team?  And were

they high-fiving one another?  These are great numbers.  They`ve got to

feel good about the first 100 days here.  Do you sense any excitement that,

OK, we`ve got through the first hurdle?  We`ve got some momentum right now? 

                HARWOOD:  There`s no doubt about it, this White House is feeling very

good, on very solid footing right now.  I think the high fiving occurred

before Rahm went into the interview, because it occurred about at noon. 

And the president had already gotten the word and phoned Arlen Specter that

he was going to get a vote on the floor of the U.S. Senate. 

                So this is really the capstone towards this 100 day roll out that the

White House has been stoking for the last several days.  They like what

they see, but they also know they have a lot of work to do, Ed. 

                SCHULTZ:  Jon, great to have you with us tonight.  Thanks so much.   

                HARWOOD:  You bet. 

                SCHULTZ:  Time to turn to our political panel tonight.  Democratic

strategist Jamal Simmons joins us, Washington correspondent for the "New

Yorker" Ryan Lizza, and Republican strategist John Feehery tonight.

                Gentlemen, we`ll get to all of the media issues in a second.  But

today`s story, of course, is Arlen Specter`s.  Jamal, how good of news is

this.  Do you think Arlen Specter is going to be a good Democrat? 

                JAMAL SIMMONS, DEMOCRATIC STRATEGIST:  It is yet to be seen how good a

Democrat Arlen Specter will be.  He`s already said he`s not voting for the

Employee Free Choice Act.  So that`s one thing that I think some of the

labor folks in Pennsylvania are going to be a little concerned about.  But

you`ve got to imagine he`s a pro choice senator.  That`s going to make some

of the women`s groups happy.  Although, there are still some left over

bitterness from the Anita Hill hearings. 

                So it`s going to be interesting to see how the Democrats in the state

respond to Arlen Specter.  Although, I think here in Washington, having 60

votes, makes people feel pretty good about getting some legislation passed. 

                SCHULTZ:  John, let me just put it on the table here.  Are you glad to

get rid of this guy?  He was never a really good Republican anyway? 

                JOHN FEEHERY, REPUBLICAN STRATEGIST:  I`m not, actually.  I think

Arlen Specter should have stayed as a Republican.  I think the reason he

left was he thought he was going to lose the Republican primary.  He`s

leaving chiefly because he voted for a stimulus bill that`s very unpopular

with Republicans. 

                I`ve always liked Arlen Specter.  I think he`s really smart guy.  I

think he`s a talented legislator.  I think he`s been a pretty good

Republican over the years.  Him leaving is a big hole for Republicans.  I`m

not going to sugar coat it.  But I think he`s leaving because I think he

thinks he would have lost the primary. 

                SCHULTZ:  Ryan, isn`t the inside baseball story here, he was going to

get whipped in the primary.  He`s way behind.  He`s doing this for

political expediency, to save his career.  What about that? 

                RYAN LIZZA, "THE NEW YORKER":  Yes, there`s no doubt about that, Ed. 

I don`t think we should be handing out any Profiles in Courage awards to

Arlen Specter.  Look, perfectly nice guy, but if you look at his career,

he`s very often done what has been best for Arlen Specter.  The amazing

thing, in 2004, this guy had the Bush-White House, Karl Rove and Rick

Santorum, backing him in that tough primary fight.  Six years later, he`s

got Biden, Obama, and all of the Democrats backing him in a tough

Democratic primary, not a tough, but a Democratic fight in the same state. 

                So Arlen Specter is doing what is best for Arlen Specter.  There`s no

doubt about it. 

                And to answer your first question to Jamal, of course he`s not going

to be a good Democrat.  He`s going to be a pain in the neck.  But it`s

better to have a pain in the neck caucusing with the Democrats than with

the Republicans. 

                SCHULTZ:  Jamal, if he`s not going to be a good Democrat, is this

over?  Was there a deal cut with Joe Sestak?  We`re going to have him on

the program here in just a few minutes.  Would he be a good guy to run

against him in a primary?  Are Pennsylvania Democrats going to be happy

with this?

                SIMMONS:  You know, this may lead to some amount of schism between the

Democrats in the state in Pennsylvania and the Democrats here in

Washington.  I think Governor Rendell is probably a big Arlen Specter fan,

having him in the Democratic party.  And there are probably some Democrats

down ballot who are looking at that seat, saying they might be able to go

get it.  Here in Washington, with Harry Reid and the White, you`re probably

seeing them wanting to clear that field.  We`ll see what happens.

                SCHULTZ:  OK.  John, a number of comments out there by Republicans

saying that the Republican party is being too hard on moderates.  And there

may be more that may be driven away from the party.  And this might be the

tip of the iceberg.  I mean, you`ve got Olympia Snowe out there talking. 

You`ve got Lindsey Graham was saying tonight that the party has got to get

their act together, in a round about way. 

                Is this crisis time right now? 

                FEEHERY:  Well, Ed, it`s been a little bit of crisis for Republicans

since the election.  I do think that this is not a crisis of leadership.  I

think the Republican leaders really wanted Arlen Specter to stay

Republican.  This is really kind of a crisis of followers.  And the

followers just did not like Arlen Specter`s vote on stimulus.  And that`s

why they said we want the other guy.  And that`s why Arlen Specter left. 

                The problem with Republicans right now, they have to communicate all

of their good ideas, and they have to brand those ideas as good ideas.  And

they really have to work the grassroots, and they`ve got to get a unified

party.  Otherwise, they are in big trouble. 

                SCHULTZ:  Fellows, let`s look at some numbers here.  President Obama`s

health care plan; 33 percent of the American people think it`s a good idea,

26 percent a bad idea.  Jamal, this is a high number; 34 percent, after we

go through this exhaustive of finding who`s going to be the president of

the United States, we`re 100 days in, and people don`t have any opinion of

his health care plan?  Are they communicating it well? 

                SIMMONS:  Ed, if you have heard anything about the health care plan in

the last two months, I`d like for to you let me know what it is.  I don`t

think we`ve been talking about it very much.  There are a lot of other

things on the plate. 

                You`ve had to foreign trip, one to Mexico and -- or in South America,

the Caribbean, and one to Europe.  You`ve got the economic crisis.  You`ve

had problems with cabinet secretary.  All sorts of things have been going

on.  There hasn`t been a lot of health care talk since they first announced

it. 

                So they`ve got to do a much better job.  I think they probably

purposely haven`t really been talking about it very much.  Now that we`ve

got Kathleen Sebelius finally getting to HHS, maybe we can get on the ball

and start moving health care. 

                SCHULTZ:  That`s right.  Fellows, stay with us, we`re coming back to

you.  Panel great tonight.  Jamal is right.  Just earlier tonight, Kathleen

Sebelius, in case you missed it, has been confirmed as the secretary of

Health and Human Services.  We`ll have Tom Daschle on this program tomorrow

night. 

                Up next, if you can`t beat them, join them.  That`s right, Chrysler

workers are about to own a major stake of their own company.  Is this the

answer to turning around the automobile industry?  That`s next in my

playbook.  Stick around. 

                (COMMERCIAL BREAK)

                SCHULTZ:  In my playbook today -- hold it right there, I have to get

this out.  Who is the knuckle head that approved this one?  Whose head is

going to roll for allowing one of the president`s plane to joy ride over

New York at, I might say, a low altitude?  I`d like to know.  How about

you.

                Who is going to lose their job on this one?  Look at the reaction of

New Yorkers.  This is video we got from cell phones.  New Yorker`s, what

did they do?  They panicked.  That`s right, they looked up and they saw one

of the president`s plans, official planes, winged by a fighter jet, flying

over lower Manhattan, of all places. 

                It was like a nightmare replay of September 11th.  People evacuated

buildings.  Dispatchers were inundated with calls.  You just have to

wonder, how could this happen?  For what, a few pictures? 

                All they had to do was warn the public.  The news outlets, TV and

radio did not do that.  Mayor Bloomberg said he didn`t even know about

that.  He was furious, saying poor judgment would be a nice way to phrase

it.  This might be President Obama`s worst moment in his first 100 days in

office.  The president said today he didn`t know anything about it either. 

                (BEGIN VIDEO CLIP)

                BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  It was a mistake, as

was stated.  It was something we found out about along with all of you. 

And it will not happen again. 

                (END VIDEO CLIP)

                SCHULTZ:  Uncomfortable moment for the president.  The president did

not answer a follow-up question of whether the director of the White House

military office is the right man for the job.  I think he should be

answered this way: that man, Lewis Caldera, well, he took blame yesterday

for the incident.  All I know is somebody ought to lose their job over

this.  This is really outrageous. 

                Back with me now is our panel, Jamal Simmons, Ryan Lizza and John

Feehery. 

                John, how do you take this?  Somebody joy riding with the -- one of

the planes that carries the president around?  It would seem to me that

somebody is not guarding the fort? 

                FEEHERY:  I actually look at this a little differently.  I think it

could have been an inspirational moment.  You see this plane flying across,

people could have cheered.  Instead of keeping it secret.  They should have

let everybody know.  That was there big mistake on their part, I think. 

                SCHULTZ:  So it could have been a good promotional moment.  People

could have seen the airplane close.

                FEEHERY:  Get inspired by Air Force One right by the Statue of

Liberty.  They just didn`t do that.

                SCHULTZ:  Ryan, what do you think of this? 

                LIZZA:  I agree with you, Ed.  I you can`t muster enough outrage out

of how ridiculous this is.  I had friends that were downtown, totally

freaked out when they saw this.  It`s like you couldn`t have written a

script like this.  People wouldn`t believe that the government would do

this.  And, look, I don`t know if Caldera is the right person to go down

for this.  But it`s -- you`re right, someone should be held more

accountable and there should be a little bit more than an apology. 

                SCHULTZ:  For promotional pictures.  Jamal, how do you tell the

American people that you`re fiscally responsible when you`re playing around

with an airplane for a few pictures for 68,000 dollars an hour for flying

it? 

                SIMMONS:  I don`t know.  I think this was one of these things

obviously wasn`t done -- wasn`t in good taste.  It wasn`t done with the

most forethought.  But people make mistakes in their jobs.  I don`t know if

someone should be fired for this, whose job it is to manage the military

for the White House, the White House communications, the military office,

whatever else it is that Caldera manages.  But this certainly is something

that is not going to look good in a progress report for the year. 

                SCHULTZ:  The word is that the president was furious about this.  And

I think he should have been.  A very embarrassing moment.  Fellows, thanks

for joining us tonight, Ryan Lizza, Jamal Simmons, John Feehery.  Thanks so

much. 

                Final page in my playbook tonight, Chrysler may soon have a deal with

its union holders and debt holders.  That`s right, the deadline is Thursday

for Chrysler to restructure and form an alliance with Fiat.  Let`s start

with the worker deal.  The UAW will have a piece of the action, which is

good under the agreement. 

                The union will own 55 percent of the company, a piece of the action,

not bad.  It would get representation on the board of directors, and

Chrysler`s stock could be traded publicly again.  In exchange, Chrysler

would pay only half of the 10 billion dollars it owes to the worker`s

health care fund. 

                On Monday, union leaders voted unanimously to recommend approving the

deal.  Ratification votes should be completed by tomorrow. 

                There are also reports Chrysler lenders have reached a tentative

agreement with the Treasury Department to cut the company`s debt.  The deal

would wipe out 6.9 billion of the auto makers debt, in exchange for two

billion dollars in cash.  Reports say the deal has yet to be approved by

all of the debt holders.  Now bankruptcy is still an option.

                Up next, the Democratic party gets Senator Specter.  What does it

really mean?  The Republican party gets smaller.  Is the GOP becoming the

party of tea parties and torture?  We`ll talk about it when we come back

here on THE ED SHOW.

                (COMMERCIAL BREAK)

                SCHULTZ:  Welcome back to THE ED SHOW.  Let`s put it this way, Arlen

specter has never been a great Republican.  He`s crossed the aisle on some

key votes.  He voted with the Democrats on the stimulus package, only one

of three in the Senate.  He says he supports health care reform.  What does

that mean?  What kind of Democrat is specter going to be? 

                Are Pennsylvanians going to be OK with this?  Will there be a

Democratic primary in Pennsylvania?  Folks, the man who can answer that

question the best is Democratic Congressman, former admiral Joe Sestak. 

Joe, we wanted to bring you on tonight to talk about torture, and we`re

going to get to that, but this story developing has been the story of the

day. 

                I`ll ask you straight up.  Does this change your thinking of possibly

running for that Senate in Pennsylvania and jumping into a primary? 

                REP. JOE SESTAK (D), PENNSYLVANIA:  It`s interesting.  I have, as I`ve

been saying not made up my mind, because I have to determine what is best

for my district, as well as potentially Pennsylvania.  All of that said,

no, it absolutely should not change anybody`s mind.  You don`t get into a

race to run against anybody.  You get in to run for something. 

                So this is what`s very interesting.  Arlen found it hard -- too hard

to run against somebody.  So he got out of the race because he thought it

would be easier.  So the question is, what is he running for?  He also

somehow failed to use his leadership to shape the Republican party to be

towards he believes in.  So he`s now going to shape the Democratic party? 

                The final analysis is, would he have done this if an election wasn`t

pending?  Because we in Pennsylvania tend to not want to have something

that has to do with politics, by what the future is about, rather than

legacy. 

                SCHULTZ:  Congressman, I`m hearing you leave the door open tonight. 

                SESTAK:  I haven`t made a decision.  I think this shows that every day

is a new day in politics.  And tomorrow is a new day.  And if anything,

politics is interesting.  But really, Ed, this is about what are the ideals

and principles that people have sent us down here to Washington to take

care of?  It`s not about keeping one`s job at all cost.  And I think that`s

what people are a bit tired about. 

                SCHULTZ:  Well, Congressman, I`ve got to tell you, I`ve gotten a lot

of e-mails this afternoon saying that the Democrats should not embrace

Arlen Specter because he`s not a true Democrat and you can`t count on him. 

Now, it sounds to me like you would get a lot of support if you were to

step up and say, you know, I`m going to run for the Democratic party, the

Senate position in Pennsylvania. 

                SCHULTZ:  I`m not so sure you wouldn`t win that thing.  Why not?

                SESTAK:  You know, I learned exactly what you said when I made an

announcement -- I was about to run for the Democratic nomination in my

district.  I got out of the military.  Then I didn`t know what DCCC,

Democratic Congressional Campaign Committee, stood for.  When I called

them, because I was told I had to to inform them, they said, we don`t want

you in the race.  They called me back the next day and said the same thing. 

                So the Democrats that really matter here is really not the leadership. 

It`s what do the Democratic voters believe?  Let`s find that out.  And I

believe that`s going to be important. 

                SCHULTZ:  Congressman Joe Sestak with us tonight, former admiral. 

Your military experience, what should we do about torture?  What should

President Obama do?  What should the attorney general do?  What is your

call? 

                SESTAK:  Let me tell you what I`m for.  I`m for something that I

learned in the military.  It`s that I was responsible for taking men and

women into harm`s way in a war, but I was also accountable for how I did

that within the rules of law. 

                This Congress of ours, and the executive branches -- you can even ask

Senator Stevens and the Justice Department -- is almost beyond the pale in

partisanship.  We want to correct that. 

                That said, what we should do is go to the third branch of government,

the Judiciary Branch, find some retired judges, have them look at a panel

where there is immunity to find out, how did we do this?  Why didn`t

Congress have the right oversight?  What happened that we felt we couldn`t

go with traditional intelligence, as many members have said would have

worked.  And what`s the lessons learned?

                If a crime by the Justice Department is discovered as they go through

their ethics, they could pass that over to the court system.  We have to

understand that accountability is important, but no witch hunt.  We need to

move on.  That`s why I recommend a judges who are retired to look at

lessons learned.  The accountability can be transparency to the public for

Congress and the executive branch in how we must do this better. 

                It`s about what one believes the ideals of America are about.  It`s

not about being tortured and I`m convinced of that. 

                SCHULTZ:  So admiral, I`m hearing get the politics out of it.  But

move forward and find out what really happened? 

                SESTAK:  Absolutely. 

                SCHULTZ:  Appreciate your time tonight.  Congressman Joe Sestak,

Pennsylvania, here on THE ED SHOW. 

                SESTAK:  Thank you for having me, Ed. 

                SCHULTZ:  Democratic majority continues to grow, while the Republican

minority is shrinking.  A new poll out this week shows that only 21 percent

of Americans call themselves Republicans.  Moderates, like Specter, are on

the run. 

                Let`s bring back our panel, Jamal Simmons, Ryan Lizza and John

Feehery.  John, I`m not so sure that if Joe Sestak decides he wants to be

the senator from Pennsylvania he wouldn`t get it. 

                FEEHERY:  He might.  I think Arlen Specter is on thin ice.  Any time

you switch parties, you`re on thin ice.

                But let me address the other subject, which is a lot of these

Republicans are now saying that they are independent because they don`t

like the Republican brand, but they still like some of the ideas behind the

Republican party.  I think that`s the real challenge for the Republican

party, is brand their good ideas as Republican again.  Get those

independents back in the party. 

                SCHULTZ:  Ryan, your take on Joe Sestak.  I mean, this guy talks about

what the people want.  You run for something, not against somebody else. 

If that`s not a populist comment, I don`t know what is. 

                LIZZA:  Ed, the plot thickens.  He sounded like a candidate right

there.  In the very least, he wants folks like us to say that he`s thinking

about the race.  Very interesting development.  Sestak was a big favorite

of Rahm Emanuel when Rahm Emanuel was running the DCCC.  And I think we

need to know a little bit more about what kind of deal the White House cut

with Specter. 

                SCHULTZ:  Oh, you hit the nail on the head.  You hit the nail on the

head. 

                LIZZA:  Obama has said that -- is Specter going to be the Obama

Democrat in that race or not?  Is he going to raise money for Specter. 

                SCHULTZ:  Jamal, was there a deal cut?  We`ve got to find this out

now.  Is he untouchable or what`s happening?

                SIMMONS:  We do have to find it out.  Again, I think the question is

whether of not the deal was cut in Washington.  But that doesn`t mean the

deal was cut in Pennsylvania.  So there may be some folks in Pennsylvania

who are looking to run against Joe Sestak.  And I can`t imagine that all --

I mean, run against Arlen Specter.  I can`t imagine that all the labor

unions are going to be happy with Arlen Specter, with his position on Card

Check, or the Employee Free Choice Act. 

                There are going to be some questions here.  Looks like the Republican

tent is getting smaller.  The Democratic tent is getting bigger.  We`ll

have to see what happens in this exciting race. 

                SCHULTZ:  Fellows, here`s a great opportunity tonight for the

Democrats to step up and say, hey, competition is a great thing in America. 

We love competition.  I think it`s going to be some people, John, in

Pennsylvania, that are calling Joe Sestak, saying hey buddy, you`ve got to

step up and get after it.  We don`t have a good Democrat in Specter.  What

do you think? 

                FEEHERY:  I hope that Olympia Snowe and Susan Collins are looking at

this very closely.  If you decide to switch parties, you might not get a

free ride, no matter what deal you cut in Washington, DC.  That`s a lesson

to learn.  Don`t switch parties.  All these moderates, stay Republican. 

                SCHULTZ:  Ryan, you`re take?

                LIZZA:  And the truth is, from the White House`s perspective, to have

some pressure from the left on Arlen Specter from someone like Sestak may

help keep him in line in the Senate a little bit more.  So, it may not be

the worst thing in the world for them to say, hey Specter, don`t worry,

we`re on your side.  But by the way, Sestak is going to be primarying you. 

You better be careful how you vote. 

                SCHULTZ:  Ryan Lizza, Jamal Simmons, John Feehery, great to have you

guys on tonight.  Thanks so much.  That`s THE ED SHOW.  I`m Ed Schultz.  Be

sure to tune in tomorrow night.  I`ll be down in Washington, DC for the

president`s news conference.  Full coverage here on MSNBC. 

                If you`d like to send me an e-mail or get more information, go to

Ed.MSNBC.com, or check out my radio website, WeGotEd.com.  Our next town

hall meeting, Buffalo, New York, June 13th. 

                Get text alerts about THE ED SHOW sent to your phone.  Just text the

word Ed to 622639.  Chris Matthews is next on "HARDBALL."

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

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