updated 5/8/2009 10:10:19 AM ET 2009-05-08T14:10:19

Guest: Tom Harkin, Tom Price, Byron Dorgan, Michael Smerconish, Ed Mckee, Michael Crowley, A.B. Stoddard, Kevin Madden

ED SCHULTZ, MSNBC ANCHOR:  I‘m Ed Schultz.  This is THE ED SHOW.  Good evening, Americans.  Live from 30 Rock in New York City, it‘s THE ED SHOW on MSNBC.  Tonight, the GOP tries to remake itself, but it‘s not their brand that‘s in trouble, it‘s the product.  The Democrats are moving to pass health care reform this year.  Senator Tom Harkin, a key player in that fight, joins me in just a few minutes. We‘ll talk to a Republican congressman who is also a doctor.  Why he says a market-based system is good for patients.  Plus, some Democrats are defending tax loopholes.  What‘s that all about?  And the Fed refuses to stop abusive credit card rate increases.

And a pizza shop owner who hosted a GOP town hall shares his impressions.  Do the Republicans actually get it on the economy or are they still just talking about tax cuts for the rich?  All that in “psycho talk.” 

But, first, tonight‘s op/ed, the rebranding of the GOP.  Is it for real or is it a circus?  Is it a joke or just a pizza party?  Fair questions at this point because they have no plan.  Any marketing agent will tell you to rebrand, you have to reset the issues with a new set of solutions and then communicate.  Where‘s their Reagan?  The rebranding of the GOP, give them credit, it may be—it may be well intended.  But they‘ve still got to be a resident of Jokesville, in my opinion.  They have no ideas.  They have no plan.  They have no real communicators out there with fresh ideas. 

Now, let‘s take health care, for example.  The president wants to get something done this year.  My question, where are the Republicans? Where is their plan to alleviate runaway costs that the middle class is dealing with and uninsured Americans are numbering up every day at 10,000 a day in this recession?  The GOP?  Hey, they‘re the party of the wealthy.

I think they are ill-fitted to fix a system they have embraced for so long.  How do you expect rich people to advance a solution when they don‘t care?  They‘ve never showed any concern.  For the last eight years, we‘ve been told to go out and get a health care savings account.  For eight years, these Republicans did nothing to slow down the rising cost of health care and now they are going to go out and they‘re going to hold a pizza party and they‘re going to rebrand themselves?

Now last week on this show, I interviewed Grover Norquist.  I asked him about the Republican health care plan.  His answer was eliminate state mandates and this. 

(BEGIN VIDEO CLIP)

GROVER NORQUIST, AMERICANS FOR TAX REFORM:  Tort reforms so that the trial lawyers that take billions of dollars out and have made it difficult for rural people, rural areas to have OB/GYNs and general practitioner doctors, getting those trial lawyers hands out of it. 

(END VIDEO CLIP)

SCHULTZ:  Tort reform?  Did you hear that?  Folks, let me give you a number.  Legal expenses due to lawsuits account for less than 1 percent of what we spend on health care in this country.  Folks, don‘t allow tort reform to become a right-wing bullet point in this health care discussion.  It is not essential.  That doggone hunt where I come from. 

Now, their brand is the problem.  They have no product.  They don‘t have one.  And you can‘t put lipstick on that pig enough.  Now, the American people, they don‘t have a confidence, any confidence at all in the Republican Party.  They don‘t seem to be serious about any solutions. 

The most important family issue in this country that is strapping small businesses, the Republicans support profit health care, for profit.  That‘s right, period, that‘s where they are.

Here‘s what the Democrats need to do.  Now they‘ve got to be solution-based.  Number one, the Obama team has got to get everybody covered.  Number two, they‘ve got to reduce costs.  And number three, they‘ve got to make sure that quality doesn‘t diminish.  Now unless the Republicans can signature something of that nature, they are lost.  And that‘s what‘s really got them scared in this generational fight.

So Republicans, may I ask you tonight, can I get some pepperoni on that pizza?  Because that‘s the only thing you‘re serving up right now.  Joining me now is Senator Tom Harkin of Iowa.  He‘s the chairman of the Prevention and Public Health Working Group.  Tom, I‘ve just got to tell it like it is when it comes to it.  I don‘t see a plan but I want to ask you directly, can the Obama team and the Democrats in the Senate really get everybody covered in 2009?

SEN. TOM HARKIN (D), IOWA:  I have no doubt about it, Ed.  We are working hard right now.  In fact, we‘re getting our legislation drafted even as we speak.  Senator Kennedy has asked us to have all our amendments in by May the 22nd.  We will start our markup in June on both our health committee and the finance committee with Senator Baucus from Montana and we‘ll have that mark up in June.  We‘ll finish by the end of June.  We‘ll be on the floor in the Senate in July with our health bill. 

SCHULTZ:  Senator Harkin, here‘s the one question that everybody has.  How are you going to reduce costs? I mean, there are millions of people who are insured in this country.  Their rates are going up.  Mine went up 19 percent this year.  Everybody‘s rates are going up double digit.  How do you reel in these costs?  What‘s going to be in the plan to do that?

HARKIN:  Well, there‘s two approaches, two things you‘ve got to think about, Ed.  There‘s a principle in insurance that the more people in the pool, the cheaper it is for everybody.  So we need a bigger pool.  That‘s what we‘re talking about. 

But the second thing and the thing I‘m working so hard on is what President Obama said when he addressed a joint session of Congress.  He said, we‘re going to make a major investment in prevention and wellness because that is the surest way to cut costs in the future.  And he‘s absolutely right.  President Obama gets it. 

We have for years not had a health care.  We don‘t have a health care system in America.  We have a sick care system.  If you get sick, you get care.  All of the incentives are on getting you well after you get sick.  There‘s very little incentives in there to keep you healthy in the first place. 

SCHULTZ:  So Senator, are we talking about possible screening clinics, where people could go in and get screening tests to see if they have cancer, to see if they have heart disease?  Is that what we‘re talking about?

HARKIN:  Absolutely.  Ed, what I‘m talking about is mandating to any plan, whatever plan is out there, whether we have a public plan, all the private plans, every plan has to have a set of screenings and prevention interventions that covers everybody.  And that—which there is no co-pays and no deductibles.  And this would cover everyone in the country, putting more emphasis on prevention. 

We also need to change the way that doctors go to medical school.  You can ask the next person, he‘s a doctor, I‘ll bet when he went through medical school, he had very little on prevention.  We had no residencies on prevention and wellness.  We need to change that.

SCHULTZ:  We also have a crisis when it comes to family practitioners.  All of these medical students, they want to go where the bucks are.  They want to go be specialists.  We need family doctors that are out there.  Is there anything that is going to address that?

HARKIN:  Well, what I‘m proposing and others are that if you want to go to medical school to be a family practitioner, primary care, focusing on prevention and wellness, then we‘ll just pay for your medical school.  Just pay it up front if that‘s what you want to do.  I think that‘s the best way to fill the pipeline as soon as possible. 

SCHULTZ:  Senator Harkin, great to have you on.  I have to give you and the other Democrats credit.  I feel that you really want to do something.  I sense that you understand this moment.  Now the president says that he wants to get it done in 2009.  Of course, when we go to 10, it‘s going to be a mudslinging contest in the midterm.  What if we don‘t get something done in 2009?

HARKIN:  I don‘t even want to contemplate that.  We‘re working hard to get it done, Ed, because I‘ve got to say, families are hurting all across this country.  You go to my state of Iowa, people in rural areas, they are hurting.  They don‘t have health care insurance.  They don‘t have coverage.  And they don‘t have primary care doctors.  This is a family crisis happening in America today and we‘re going to solve it.

SCHULTZ:  That‘s my issue.  It is.  Senator, good to see you tonight, thanks so much.

HARKIN:  Thanks, Ed.

SCHULTZ:  Senator Tom Harkin of Iowa.

All right, now I‘ve said that the GOP has no health care plan.  Now let‘s be fair about this.  But a Republican congressman named Tom Price has actually put forth a plan for market-based health care system.  Now, here he is to tell us about it.  Congressman Price, he‘s also a medical doctor who has practiced orthopedic surgery for the past two decades.  Dr. Price, thanks for joining us, congressman, thank you for joining us tonight. 

REP. TOM PRICE ®, GEORGIA:  Thank you, Ed.  Great to be with you.

SCHULTZ:  I read your piece in the “Politico.”  And it just seems to me that you really make the government out to be the boogey man and I just have to get some clarification.  Should the government have any involvement in health care reform outside of Medicare as we have it today?

PRICE:  Well, I think I agree with the American people.  And that is that we don‘t want to put the government, we don‘t want to put bureaucrats between a doctor and a patient.  That‘s the concern that I have and so many individuals across this land have.  We will have a plan that makes it so that we have patient centered health care.  You hear all sorts of talk about market based, consumer driven.  That‘s not what the issue is.  The issue is whether patients and their families, along with doctors, are going to be able to make health care decisions.  If we insert the government in between the patient and the doctor, that‘s not where the American people want it.  And that‘s the concern that we have about the proposals frankly that are being talked about on the other side. 

SCHULTZ:  Well Congressman Price, the one thing that we do have between the patient and the doctor right now is an insurance bureaucrat who is raising everybody‘s rates and nobody is reeling them in.  What‘s the Republican plan for doing that?

PRICE:  And you‘re right.  And that ought not be as well.  But the solution to all of this is to make certain that all Americans have health coverage, that they have health insurance, and that health insurance is owned and controlled by the patient for his or her family. 

You‘ve heard the old saying, the golden rule, the usual golden rule, but the golden rule here in Washington is that he who has the gold makes the rules.  And if we allow Washington to make the rules, then what will happen is that we will insert a bureaucrat between patients and doctors and we ought to empower the patient.

SCHULTZ:  So I think we have some common ground here, congressman, in that you agree that it‘s not patient and doctor.  There‘s somebody in between.  Right now it‘s the insurance companies and the CEOs and all that stuff.  Now, you made the comment, how are we going to get everybody covered without government involvement?  People that can‘t afford premiums right now.  What are we going to do to get them covered?

PRICE:  Well, you‘ve got to have government involvement.  The government is involved in everything.  But the government involvement ought to be empowering patients.  And the way that we do that so that patients and families have real power in the health care system is to make it so that every single American can afford to purchase health insurance regardless of their station in life.  And you can do that through deductions or credits or refundable credits or advanceable refundable credits up and down the economic spectrum.

Every single American needs to be able to look at the end of the day and say, it makes financial sense for me and my family to have health insurance.  Once you do that, then you solve all sorts of problems because you empower patients and their families along with doctors to make those health care decisions, instead of government bureaucrats or government takeover, which nobody truly wants.

SCHULTZ:  Well actually, there‘s a lot of surveys out there that show that single payer is very popular, but that‘s another subject.  I want to focus on the Republican plan.  I‘m curious, did I just hear you say that you admit that the government needs to be involves to get these 50 million people who aren‘t covered, covered?  Are you talking about a mandate?

PRICE:  I‘m talking about tax policy that makes it so that when Mr.  and Mrs. America sit out there at the end of the day at their kitchen table and they do their finances and they do their budget that whatever support premium assistance, call it what you want, occurs from the federal government, that it makes financial sense for them to have health insurance, health coverage.  That‘s the only way you get to the solution in this.  We can‘t—we‘ve got to make certain that people everybody has access to appropriate quality, high quality health care coverage.  The other system won‘t work.  It‘s important to appreciate that the European systems and Canadian systems have a lower quality of health care when you look at disease specific problems.  That‘s not what we want to do here.  We don‘t want to repeat the mistakes of Europe.

SCHULTZ:  Congressman, I have to challenge you on that.  That simply is not true that the Europeans and the Canadians have just the kind of quality that the United States has and they put money into research and development just like the United States has and in some areas of health care, even more. 

PRICE:  Ed, I need to take issue with that because it‘s extremely important.  There are five cancers in the United States that had a cure rate of over 90 percent.  There‘s only one cancer in Europe that has a cure rate of over 90 percent. 

SCHULTZ:  When it comes to heart disease, that‘s not the case.  And when it comes to diabetes, that‘s not the case.

PRICE:  Not true. 

SCHULTZ:  No, that is true, congressman. 

PRICE:  If you look at disease-specific treatment, if you take the whole ball of wax and you add certain things that the World Health Organization adds that are truly extraneous to disease treatment, then you get different numbers.  But if you look at who survives heart attacks in this nation and who survives elsewhere, who gets coronary artery bypass procedure and who doesn‘t in Europe, there‘s a huge difference. 

SCHULTZ:  Congressman, we‘re one of the fattest countries on the face of the Earth.  Health care and heart disease is treated not as well as—I just can‘t believe you‘re saying that, but I respect what you‘re saying. 

PRICE:  Do you think the federal government is going to be able to solve obesity?

SCHULTZ:  You know what, congressman, I think that Medicare works for over 90 percent of the people with no complaints in this country.  And I think that if we were to extend that and I think if I could bring into this line of thinking, this is what the American people want to try.  They want an extension of Medicare and they are willing to pay for it.

PRICE:  Ed, tell me why the Mayo Clinic is now limiting the number of Medicare patients that they are seeing?

SCHULTZ:  The Mayo Clinic ...

PRICE:  Why are doctors across this nation limiting the number of Medicare patients?

SCHULTZ:  Sir, a recent survey shows that the health care providers at the Mayo Clinic are for major reform and the majority f the health care providers at the Mayo Clinic, they want single payer. 

PRICE:  What they want is the ability to treat their patients.  I would suggest respectfully, that if we insert the federal government between patient and doctor, that they will not be afforded that privilege to be able to treat that patient. 

SCHULTZ:  You know what, doctor, you have to admit this, on Medicare, you can go to any doctor you want.  You have a choice.  Is that correct?

PRICE:  You can‘t even find a doctor now that takes Medicare because of the system, Ed. 

SCHULTZ:  That‘s because we haven‘t made the commitment the way we want to.  But the system is in place and also their administrative costs are much lower.  Congressman, I‘ve really enjoyed this conversation.

PRICE:  Ed, I thank you.

SCHULTZ:  I appreciate you coming on.  I want to continue this dialogue.  I want the Republicans to have a plan.  I want us to get health care going. 

PRICE:  We have a plan and it‘s patient centered.  That‘s the key, patient-centered.

SCHULTZ:  All right and the cost is going to go down, right?  I can hold you to that? All right, congressman, great to have you on with us. 

PRICE:  Thank you.

SCHULTZ:  Coming up next, some Wall Street companies are stashing their money on remote islands to avoid paying taxes on it.  President Obama wants to close those kinds of tax loopholes.  Who is standing in the way?  Some members of his own party? What‘s that all about? That‘s next on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ:  OK, here we go.  President Obama wants to crack down on tax loopholes, but some Democrats are against it.  Why are members of it the president‘s own party pushing back from this?  That‘s next on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  We told you yesterday about President Obama‘s plan to end offshore tax breaks for big corporations, 18,000 companies list this building in the Cayman Islands as their official address.  This is the legal way of doing business for big companies.  President Obama says fair is fair.  Americans pay their taxes.  Businesses should pay theirs as well. 

But some Democrats in Congress are putting on the brakes.  They say the plan needs further study.  Taxpayers are getting a raw deal.  What more do we need to know about this? Joining me now is Senator Byron Dorgan, a long-time advocate for ending tax abuses.  Senator, you‘ve been talking about this for a long time and now you‘ve got the president focused on it.  How hard is it going to be to reel these companies in?

SEN. BYRON DORGAN (D), NORTH DAKOTA:  Well, I hope it‘s not hard.  This should be an easy lift, Ed.  First of all, I want big companies to do well, make lots of money and make profits, but I also want them to pay their taxes.  The house you showed in the Cayman Islands is called the Ugland House.  It‘s on Church Street, a little four or five-story house.  When I first raised that about four years ago in the Florida Senate, it had 12,000 corporations registered there.  Now it has 18,000 corporations.  They are not there.  That‘s just an address for them to avoid paying U.S.  taxes.  I think it‘s shameful and we ought to close those loopholes. 

SCHULTZ:  Well, now this is legal what they are doing and if I have this correctly, most of these laws came in during the Reagan years.  Now there are so many corporations that have tremendous influence, political influence.  How hard is this going to be for the president to do this? Is there a political risk here?

DORGAN:  Well, I hope not.  I mean, let me give you another example.  You know that corporations have been buying sewer systems in Germany, buying a German city sewer systems.  Why?  Because they like sewers or know something about sewers?  No.  An American bank that buys a German sewer system doesn‘t know a thing about sewers.  What they want to do is buy those assets depreciated and save hundreds of millions of dollars in U.S.  taxes.  These things are scams, Ed, and the fact is we ought to shut them down and say to big companies, you know what? You make money, you pay taxes like everybody else in this country pays taxes.  That‘s your jobs.

SCHULTZ:  Senator, why are some Democrats that are opposing the president on this?

DORGAN:  You better ask them.  But they better rethink that.  The American people have had a bellyful of this.  They paid their taxes on April 15th and they understand the responsibility.  The 100 publicly traded, largest corporations in this country, 83 of them have offshore corporations and tax havens, they have 2,040 subsidiaries in tax-haven country.  Is it because they are there?  Because they like those tax havens?  No, it‘s because they want to evade or avoid paying U.S. taxes.

SCHULTZ:  OK, so the mission is to change the tax code on this.  All right, now switching gears here, I want to go back to an April 30th vote on bankruptcy.  You voted against this along with just a few other Democrats.  And Democrats are wondering about that.  Why did you vote against that?

DORGAN:  Because there wasn‘t any limit to how far those mortgages go back.  I‘m interested in dealing with subprime mortgages and perhaps a few mortgages beyond that, but going all the way back, having someone that had a mortgage 10 years ago come in and say, “Oh, by the way, now I‘m under water.  I need help on this mortgage.”  And some of them had a substantial down payment, some have none.  I think you have to treat them differently.  I just didn‘t think it was written very well. 

SCHULTZ:  OK, so would you revisit that in any way?

DORGAN:  Sure. 

SCHULTZ:  What would you like to have it say?

DORGAN:  As you know, we have two other programs to try to help homeowners who are about to lose their homes, try to deal with their mortgages.  I‘m in favor of doing that, Ed.  But when you craft legislation here, I think it has to be crafted the right way and it was too wide open.  We ought not just say yes, any mortgage regardless of time, let‘s go back eight years, 10 years.  I don‘t support that. 

SCHULTZ:  Senator, great to have you with us.  I should probably tell you that E.A. Schultz Construction, we don‘t have that mailbox down there. 

DORGAN:  Well, apparently you can get one, everybody else is getting one.  But you pay your taxes and so do I and so should big companies that try to avoid them.

SCHULTZ:  Good to have you on. 

DORGAN:  Thanks a lot, good to be with you.

SCHULTZ:  Thanks so much.

Next up on THE ED SHOW, “psycho talk.”  Why Lindsey Graham says the GOP is ready to come roaring back.  That‘s next up on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Have you heard some of the crazy things that are being said lately by conservatives?  Time now for “psycho talk.”  Tonight in “psycho talk,” for the first time, Senator Lindsey Graham of South Carolina.  Here‘s the deal.  Senator Graham thinks the GOP is just doing all right.  Actually, he thinks the party is closer to America than, let‘s see, President Obama?  Listen. 

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  I know this.  Our party‘s politics is closer to America ideologically than President Obama. But he‘s connected with young people.  We lost ground with Hispanics.  We‘ve got to repair the damage there. 

(END VIDEO CLIP)

SCHULTZ:  I‘m glad you think I‘m a young guy, senator.  Come on senator, let‘s cut the promotional talk.  Let‘s look at the numbers.  In the last “Washington Post”/ABC News poll, President Obama‘s approval rating stood near 70 percent and that‘s just not with young people.  Meanwhile, the Republican Party is shrinking.  OK, 21 percent of those surveyed identified themselves as Republicans.  That‘s not a high number.  OK, let‘s listen on. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  How confident are you in the leadership at the RNC right now to do that?

GRAHAM:  Well, I think Michael Steele ran a competitive race here in New York.  We lost by 200 votes, a seat that we lost by 10 points.  Things are moving out way, but if Michael, you‘re listening, talk to Tom Ridge.  I am confident that we‘re well positioned if we get good candidates to come roaring back because the Obama agenda is not what people really expected. 

(END VIDEO CLIP)

SCHULTZ:  OK, now hold it right there.  Bud Grant used to say, the former Vikings coach, you show me a loser, I‘ll show you a loser.  There you go again, senator.  Things are definitely moving your way when you lose an election in a Republican district?  And that Obama agenda, just a terrible thing, isn‘t it?  Obama was pretty clear about his agenda, inconsistent, and that‘s why he got elected.  Tonight, Senator Graham, you qualify for what we call “delusional psycho talk.”

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  No relief for credit card users.  Americans are getting slammed by huge, out of the blue, interest rates hikes.  Rates are doubling and even tripling over night without any warning or reason.  Now, a few weeks back, Senator Dodd was on this program.  And he came to the show tell us that he and Senator Chuck Schumer had asked the Federal Reserve to stop those kind of abuse rate hikes immediately. 

Today, Fed Chair Ben Bernanke went before lawmakers to update them on the state of the economy.  He got an earful from Senator Schumer about the Fed‘s inaction for failing to crack down on credit card companies. 

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER (D), NEW YORK:  Two weeks ago, Senator Dodd and I wrote to you to urge you to use your emergency authority to put the Federal Reserve‘s new credit card rules into place immediately.  In a letter that you sent me yesterday, right here, you declined to do so. 

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN:  We could move up the date on which this prohibition is effective.  My question that I think we need to think through is, would that be good for consumers or not?  If we move it up, the obvious response of the companies would be first to raise rates preemptively.  So that it will happen faster.  And secondly, because I do believe they do need some time to think through how to restructure their business models, so that they can put out credit to riskier consumers in a way that they find profitable—I think that their short-term response will be to cut a lot of people off. 

(END VIDEO CLIP)

SCHULTZ:  OK, consumers, you buying that?  Joining me now is Maria Bartiromo, anchor of CNBC‘s “Closing Bell” and the “Wall Street Journal Report.” 

Full disclosure, my wife and I are big fans.

MARIA BARTIROMO, CNBC ANCHOR:  Thank you.  I‘m your big fans. 

SCHULTZ:  The credit card companies aren‘t budging.

BARTIROMO:  You just heard what he said, right?  We have to see how they will restructure their business and see it will impact their businesses.  The bottom line here is everybody is getting squeezed and the banks recognize that they are losing money on one end, because of all of those subprime mortgages that they are holding.  They‘ve lost so much money. 

So they‘ve yanked up rates on consumers and this has become an incredibly profitable business for them.  And Bernanke is basically saying, look, let‘s give them a little breathing room to see how they are going to make up for that lost revenue, once rates change, before we actually make the move, which is—well, it‘s questionable. 

SCHULTZ:  And that‘s what surprises me.  Middle classers are out there saying, wait a second, they need some room, eight percent to 29 percent?  There‘s a real disconnect here.  I mean, it really illustrates that this is a Wall Streeter.  And he‘s favoring the big guys.

BARTIROMO:  This is poor business practice.  There‘s no doubt about it.  Anybody would look at that say that, because, first of all, so many times you‘ve got it in the fine print.  People don‘t even recognize.  Then they don‘t even recognize that if you miss a payment on let‘s say your utility bill—let‘s say you are late paying Con-Ed, the credit card company can say, we see in your credit history that you were late paying Con-Ed, we‘re taking your rate much higher.  So it‘s really a poor business practice.  Something has got to be done about this. 

SCHULTZ:  Maria, what about the money that was thrown by the institutions, the lobbyists, 42 million dollars?  There‘s outrage out there across America. 

BARTIROMO:  There‘s outrage over the lobbyists.  I don‘t think that Bernanke is always sort of cow-towing to business.  I really don‘t.  I think Bernanke actually has integrity and has done a good job.  on this particular issue, whether it‘s lobbyists or whether it‘s the credit card companies, we have a major issue and we actually need some crack down.  I don‘t always agree with Schumer, but on this issue I certainly do.  And the lobbyists are clearly, clearly at work in an aggressive way. 

SCHULTZ:  OK.  The banks stress tests, they are going to be known later this week.  How do you think they are going to fair?  And do you think the American people have the appetite to throw more money at the banks? 

BARTIROMO:  Absolutely not.  No more appetite to throw more money at the banks, Ed.  I think it‘s not brain surgery to know that a number of banks will need new capital.  This is not new information.  Today, the “Wall Street Journal” reports that ten of the 19 banks will probably need more money.  I think the more important question is, we know they are going to need more money, but where is it going to come from?

There is no more appetite from Congress.  It‘s got to come from the private sector.  The private investors out there may not necessarily want to put money into the bank that they think that the government owns an enormous stake in.  I think we could have a problem. 

SCHULTZ:  So we‘re going to see some banks go under, you think?

BARTIROMO:  Not any major financial institution.  I think the White House has made it very clear that they are not going to allow anything too big to fail.  Having said that, there are 8,500 banks out there.  Yes, we will see an enormous amount of consolidation, whether it means mergers or some going out of business.

SCHULTZ:  Mr. Bernanke made a comment about the economy today.  And he thinks it‘s going to turn around.  What do you think, this year in fact? 

BARTIROMO:  This year.  Of course it will turn around.  This year I think it‘s a reach.  I think it was ladened all day, the speech that he gave, with but.  He said, yes, things will turn at some point in the second half of the year, but we continue to see people hoarding their cash, and we continue to see the credit situation struggling. 

So I think it‘s anybody‘s guess.  I don‘t have a crystal ball, nor does Bernanke.  But I think that at some point we get out of this, it will be tougher before it gets better, Ed. 

SCHULTZ:  Maria Bartiromo, thanks so much. 

BARTIROMO:  Thank you. 

SCHULTZ:  You bet.  Always a pleasure.  For more on this, let‘s turn to our panel tonight.  Michael Crowley, senior editor of the “New Republic,” A.B. Stoddard with us tonight, associate editor for “The Hill,” and Republican strategist Kevin Madden, former senior adviser to Mitt Romney‘s presidential campaign. 

Kevin, we‘ll start with you tonight.  Where do we go if we don‘t throw any more money at these banks, if they fail the stress test? 

KEVIN MADDEN, REPUBLICAN STRATEGIST:  Look, I think the biggest worry here is whether or not the dynamic between the private sector and the government sector becomes too poisoned in this debate.  Right now, the most important thing that we can have for the private sector, to get capital going and to get liquidity back into the partnerships, is that there‘s a partnership between the government, as well as private sector. 

And that is where I think the debate has to go.  How do we find that perfect sweet spot, so that we can help a lot of these banks get back on their feet and we can get more liquidity in the market.  That‘s eventually going to help all of the consumers. 

The one thing we can‘t do is get into a debate like we were a couple of months ago, where we were trying to help the wage earners by pairing down the wage payers. 

SCHULTZ:  Michael, you heard Ben Bernanke there, just a moment ago, talking about what he thinks is happening with credit card companies.  At what point does this start to erode the political capital of the president, if the Congress can‘t get something done about this? 

MICHAEL CROWLEY, “THE NEW REPUBLIC”:  Well, look, the political capital of Congress is in such poor shape.  It‘s a great opportunity I think for them to step in and show that they are empathetic with the pain ordinary people are paying.  Everyone has a credit card.  Everyone can relate to this, even if they haven‘t actually been nailed by the higher rates. 

It‘s a really interesting issue to follow, Ed, because you‘ll probably remember that when there was a big bankruptcy reform bill a few years ago in the Congress that dealt with a lot of these credit card issues, a lot of Democrats sided with their corporate donors, went against the party leadership, actually, and joined with a lot of Republicans to pass a bill that allowed these things to stay in place. 

Here‘s an opportunity for Obama to come back to Congress and say, let‘s do something that can really help people who are struggling.  I think it‘s a really interesting test to see if some of the Democrats now, seeing how the economic climate has changed, the political climate has changed, will come back across and get a little tougher on, frankly, these lobbyists and corporate donors that I think had a lot to do with their votes a few years ago. 

SCHULTZ:  I‘ll tell you what, if we have to go back and get some more money to throw to the banks to keep them solvent, if they don‘t pass these stress tests, this is the kind of information that is really going to thwart any more help.  AIG—here‘s a discrepancy.  AIG claimed that it paid out 120 million dollars in bonuses.  Today, it‘s revealed they actually paid 454 million dollars in bonuses. 

Now, I think there‘s a parallel here when it comes to these two stories, when it comes to public confidence.  A.B., how should the president handle this one? 

A.B. STODDARD, “THE HILL”:  Well, I don‘t think anyone is going to get more mad than they were before on the AIG bonuses.  Everyone reached the tipping point.  I think Michael is right.  The credit card legislation is a perfect opportunity.  That‘s—it‘s actually really going to pass, and there‘s a lot of bipartisan work taking place right now on the final details.  It will be an opportunity for President Obama and the Democrats to say, look what we‘ve done to answer this consumer anger, and no, we‘re not going to bail out any more banks.  We‘ve had it with the AIGs. 

But at the same time, Kevin is right.  President Obama is under tremendous pressure of needing the equity of the private sector, not to poison the well.  This public-private partnership he‘s begun for his toxic asset program is making people extremely nervous.  No one thinks it‘s going to take off.  They are trying to value things that have no value.  It‘s not been done before. 

And at the same time, he‘s obviously trying to make sure that he can stabilize banks and make sure that they have enough capital.  He‘s not going to be able to put more government money in.  So he‘s going to give them six months to find private money.  He‘s really straddling this populist rage, which obviously will be born again tomorrow with the news of AIG, with the need to keep company with the private sector and keep them happy. 

SCHULTZ:  Great insight from all three of you.  Stay with us.  We‘ve got more coming. 

Next up, the GOP brand is hurting.  Do they really have an image problem?  Could it be that they just don‘t have any ideas?  That‘s next.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  OK, in my playbook tonight—I spoke about it earlier tonight in my op-ed.  The GOP can have all of the rebranding parties they want.  They are not going to get anywhere unless they reset the issues with a new set of solutions.  They need a plan, ideas, and a communicator.  Leave it to Jeb Bush to say, one of the smarter things that I‘ve heard from this weekend‘s meeting.  Jeb said, “the other side has something.  I don‘t like it, but they have it.” 

He‘s right.  President Obama has plans and that‘s what the other side does not have.  “Time Magazine‘s” Karen Tumulty reports at a meeting last month, President Obama offered GOP law makers some concessions on health care reform.  The president was willing to curb malpractice awards, tort reform, something Republicans have wanted. 

Tumulty wrote, “what, he wanted to know, did the Republicans have anything to offer in return?  Nothing it turned out.  Republicans were unprepared to make any concessions, if they had any to make at all.” 

Another example of the Republicans refusing to do anything.  That‘s my short take on that.  But we like to get all points of video on this program.  Joining me now for his take is MSNBC contributor, talk show host, and author Michael Smerconish, the author of a new book, and I love it, “Morning Drive, Things I Wish I Knew Before I Started Talking.” 

Love the title, guy, love the title.  As a broadcaster, we‘ve all been there.  Michael, the branding end of this thing; don‘t they need a Reagan kind of person to come out and take charge, no matter what the issue is? 

MICHAEL SMERCONISH, RADIO TALK SHOW HOST:  Yes, it‘s funny you say that, because I‘m watching it and it‘s the same old faces.  It‘s almost like saying, nobody is buying our automobile.  Look, here comes a new one of the assembly line.  It looks just like the model that nobody was buying. 

The party needs an attitudinal shift.  And here‘s a great example of where they are off the tracks.  I‘m watching Sarah Palin‘s reemergence now as one those who wants to rebrand the party.  The mistake with Governor Palin is she never should have been the vice presidential candidate.  It should have been someone like Tom Ridge. 

But what happened?  He got caught up on one of those litmus tests.  So my playbook, Ed, would be no more litmus tests at the top of the list.  We need everybody.  We can‘t be in a position and saying, we‘re not going to take you because you don‘t agree with the overwhelming view of the party, which happens to be pro life. 

SCHULTZ:  But it seems that we got about 15 percent of Americans way over to the left, 15 percent of the Americans way over to the right.  We‘ve got this big bunch of folks, Americans in the middle, that are issue based and want solutions.  How long can the Republican party, Michael, keep just floundering when it comes to answers on where they want to take the country, other than tax cuts? 

SMERCONISH:  Yes, and those who seem to be calling the shots, or at least are regarded as the titular heads of the party, are still fighting the election.  They‘re still fighting the election, Ed, with strategies that failed last November.  This business of trying to resurrect the president‘s middle name, or to regard him as a socialist; all of those cheap shots and Internet lore that didn‘t work in the campaign are still being fought. 

That‘s the mentality that you saw in so many of those tea parties.  There‘s nothing wrong with going out and protesting the current tax policy of the president.  But you‘ve always got those nimrods in the audience who take control of the event.  And it was all so predictable. 

SCHULTZ:  I want to get your take on what is happening in Pennsylvania.  Specter, of course, has been the big story over the last several days.  The numbers look like this: if he is up against Toomey, he‘s going to smoke him, 53 percent to 33 percent in the last Quinnipiac poll.  And also if he‘s up against Tom Ridge, he still leads by a score of 46 to 43 over Tom Ridge. 

Do you think this is pretty consistent?  It looks, by these numbers, that Democrats are accepting this guy. 

SMERCONISH:  No doubt they are accepting him.  His approval numbers, as released in that same survey, by the D‘s, are in excess of 80 percent.  Look, here‘s the mistake the GOP made.  Senator Specter has never been loyal to any particular party.  And the Democrats will now recognize that fact.  But Michael Steele, when all of a sudden Arlen Specter was supportive of the president‘s package, financial package, stimulus package, should have embraced him, instead of threatening to take away some of his campaign funding. 

The Republican party needs more Arlen Specters.  They need more independents.  They need more moderates or liberals, instead of this 21 percent mentality.  And you, as a talk show host, will not be surprised to hear that my phone lines melt every day with individuals who say, good riddance and don‘t let the door hit him in the can on the way out. 

SCHULTZ:  Yes, and on the side, we‘re saying, we‘re not really ready to give him a bear hug either.  Michael, your book, tell us about it.  “Morning Drive.”  It‘s a trip to do it. 

SMERCONISH:  It‘s timely because for me it‘s a road map of what the GOP needs to be, which is more libertarian on social issues.  We can‘t be a party that has a platform that we adopt that doesn‘t have an exception for rape or incest on abortion.  Stop with the Schiavo business already.  As Barry Goldwater said, get out of my bedroom.  Be strong on defense.  And have some principles that stand for limited government.  Return to those priorities. 

And then, Ed, I reflect, I hope, with a lot of entertaining stories, about what really goes on in the back of the house of talk radio and the world of television punditry, because I know what it feels like to sit over here with this thing in my ear. 

SCHULTZ:  That‘s right.  It‘s definitely the business of the highest highs and the lowest lows.  I‘m sure that‘s in the book.  Michael, good to have you with us tonight.  Thanks so much. 

SMERCONISH:  Thank you. 

SCHULTZ:  Next up on THE ED SHOW, some top Republicans held a townhall at a Virginia pizza shop this weekend.  It‘s part of their effort to rebuild the party.  The owner of the shop asked about the GOP‘s health care plan.  What answers did he get?  I‘ll ask him next on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  When Republicans wanted to kick off a listing tour last weekend, they turned to a pizza restaurant in Arlington, Virginia.  The restaurant‘s owner, Ed Mckee, was in the audience and Ed had some questions about health care, credit, and the economy.  Listen. 

(BEGIN VIDEO CLIP)

ED MCKEE, RESTAURANT OWNER:  What should, in your opinion, government be doing to assist small business during these times? 

REP. ERIC CANTOR ®, VIRGINIA:  Washington shouldn‘t be the 800 pound gorilla in anything.  We should be providing an environment for you as an entrepreneur to do what you know is going to make your business grow. 

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Ed Mckee, the owner of Pie Panda Restaurant, with branches in Arlington and Falls Church, Virginia.  From one Ed to another, Ed, I know you got the best pizza in town.  We‘ll get the promotional stuff out the way.  But quickly, did you get the answers were looking for over the weekend?

MCKEE:  you know, it was interesting because the answers were vague, but I did expect vague.  They are on a listening tour.  They want to get some opinions from the public.  So I kind of expected that. 

The issue for me was to get the question out.  I think the question is important and that was what about small business.  Let that reverberate a little bit and see what comes of it. 

SCHULTZ:  I‘ve been harping on that, you know, getting credit, getting cheap money.  Now, why did you do this?  Why did you host this party? 

MCKEE:  You know, that‘s a great question.  Because you‘re a successful business and are you taking a chance hosting something that some folks might not like in their neighborhood?  Honestly, we had the opportunity to get some big names into our community. 

SCHULTZ:  Sure. 

MCKEE:  And I had the opportunity to ask them a specific question that

was important to me.  And I‘m not going to give that up.  And that‘s just -

you can‘t pass on that. 

SCHULTZ:  No, you can‘t.  You can‘t pass on the promotion.  But when it came to health care, were you satisfied with the answer that you got from the Republicans? 

MCKEE:  Well, yes and no.  It was kind of—it was what I expected.  But they need to know that we need specifics.  We had a 34 percent increase.  We are a small business.  In a business of low volume like ours, great for a restaurant, but low volume, nonetheless, I want to take care of my people.  A 34 percent increase in a recession—

SCHULTZ:  It will bite you. 

MCKEE:  It‘s about cash flow.  And if you‘re going to stimulate the economy, stimulate small business, instill confidence in folks to expand, this is one of those factors that takes away from your cash flow and trickles through your whole mindset on what should I do with my business. 

SCHULTZ:  Ed, you speak volumes.  I appreciate you being on THE ED SHOW tonight.  All the best to you. 

MCKEE:  My pleasure. 

SCHULTZ:  Thank you. 

Let‘s bring back our political panel, Michael Crowley, A.B. Stoddard, and Kevin Madden.  Kevin, this is a guy you‘ve got to win over, isn‘t it?  He‘s talking business.  He‘s talking rates.  He‘s talking increases. 

MADDEN:  You‘re right.  Look, I think it has less to do with a rebranding and it probably has more to do with rebuilding.  But most importantly, Ed, I think this has to do with reconnecting.  The Republican party took a beating in 2008.  There‘s no doubt about that.  We took one in 2006.  I think over those four years what we‘ve seen is that we‘ve lost this middle class.  We haven‘t become the party of reform and the party of proactive ideas, on these issues like education, like health care, like the economy, and energy that we once were. 

I think that‘s where Eric Cantor and Mitt Romney, Kevin McCarthy, Jeb Bush and others are leading the party back, a party again of ideas, centered around reform-based solution oriented approaches on big issues. 

SCHULTZ:  Michael, did that guy seem like a heavy lift for the Republicans? 

CROWLEY:  Yes, I think so.  And I thought Cantor played that question all wrong.  His answer was, government needs to get out of the way, innovation, let businesses flourish.  Sure, everyone wants innovation.  But right now, Americans don‘t feel like government is the problem; government is in the way.  I think Americans feel like government was MIA and small businesses can‘t get credit because the guys on Wall Street were running amuck because there was no regulation, and the regulators weren‘t paying attention, and the government let them completely do what they wanted to do over the last decade.

And I think we‘re in a period where people want to feel that government is at the switch, at the wheel, paying attention, and worrying about people like them.  And Republicans can stick to their principles and repeat their dogma.  They are not going to get guys like that, in my estimation. 

SCHULTZ:  A.B., what‘s your call on this? 

STODDARD:  I think Michael is right.  The two problems for the Republican party right now are this: there has been a transformation in the perception of government.  That changes the popularity of the Republican party.  That‘s why Obama won the middle.

In addition to that, the demographic challenge; the population dynamics that we‘ve seen in the last ten year—how Republicans are going to win back these high growth areas that are changing so fast.  Obviously, they are shrinking everywhere but the shout.  How are they going to win back those areas when things are changing so fact among these groups that they are losing with?  Especially if this perception about government needing to play a role sticks around for another ten years? 

Those two challenges I think really harm the Republican‘s opportunity at kind of making a comeback. 

SCHULTZ:  Well, Kevin, it‘s going to take a lot of small businesses like Ed had to feel comfortable with the Republicans before they come around.  Michael Crowley, A.B. Stoddard, Kevin Madden, I‘m out of time.  I appreciate you being here so much.  We‘ll certainly do it again. 

MADDEN:  Thanks Ed. 

SCHULTZ:  That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information or to send me an email, go to Ed.MSNBC.com, or check out my radio website at WeGotEd.com.  We got a townhall meeting coming up in Buffalo.  You can sign up for that, Saturday night, June 13th.  Get the text alerts about THE ED SHOW sent to your phone.  Just text the word Ed to 622639.  See you back here tomorrow night at 6:00 Eastern.  “HARDBALL” with Chris Matthews is coming up right now.

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

END   

Transcription Copyright 2009 CQ Transcriptions, LLC  ALL RIGHTS  RESERVED.

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

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

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

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

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

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

transcript for purposes of litigation.>

Discuss:

Discussion comments

,