updated 6/8/2009 3:33:12 PM ET 2009-06-08T19:33:12

Guests: Jan Schakowsky, Karen Tumulty, Roger Cressey, Jack Rice, Michael Medved, Bill Press, Lizz Winstead, Austan Goolsbee

(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.

A Republican lawmaker talks to reporters about a confidential intelligence briefing to defend Dick Cheney.  Is this how the GOP is going to be keeping us safe?

Demanding reform on health care.  People in Montana, they are mad as hell, and they are letting Chairman Max Baucus know all about it. 

The next leg of President Obama‘s trip, how our new president is disarming Osama bin Laden in the fight to win over young Muslims.

Plus, “Psycho Talk,”  why Sarah Palin is out of control. 

All that, a great panel.  And “Daily Show” creator Lizz Winstead is going to be here tonight. 

But first, tonight‘s “OpEd.”

Sometimes in life it‘s just good to keep your mouth shut and not say anything at all.  Now, for me that‘s tough sometimes, I know.  But I think this is something that Americans can really relate to. 

You know, I‘m starting to believe that there‘s no such thing as a closed meeting behind closed doors in Washington, D.C.  Now, it appears that some lawmakers just can‘t keep their mouth shut. 

Not long ago, Republican Congressman John Kline of Minnesota came out of an intelligence meeting just flat-out jacking his jaw.  I mean, he went on the record with “The Hill” newspaper after a confidential briefing. 

Now, we as citizens expect more out of our lawmakers, and when they are on an Intelligence Committee, we need to demand more.  There‘s this thing in the military known as “on a need to know basis.”  It would seem to me that that would apply to lawmakers, even if they are not on the committee.  But the public should really not know what is going on in the intelligence community.

Now, I think a member who utters actually anything of any substance at all about intelligence after a meeting should be instantly taken off that committee.  I‘m all for the oversight.  I think the oversight in intelligence would work here.  But any disclosure to the public, absolutely not. 

I mean, isn‘t that commonsense? 

Now we‘ve got this political mudslinging contest on our  hands.  Congressman Kline from Minnesota seemed to be trying to solidify the position of the former vice president on enhanced interrogations.  Well, here we go again.

Here‘s the quote: “Based on what I heard and the documents I have seen, I came away with a very clear impression that we did gather information and did disrupt terrorist plots.”

Well, why don‘t we just tell them everything?  I mean, I think this qualifies for “Psycho Talk.”  

Congressional members should be bound to silence.  Any morsel of information is going to work against the United States‘ security, in my opinion. 

House Intelligence Chairman Sylvestre Reyes says, “Members on both sides need to watch what they say.”

Mr. Chairman, I agree with you, but I don‘t think you‘re going far enough.  The quote ought to read, “These guys need to keep their mouths shut.”

All these right-wingers out there who are so concerned about security and the country and protecting us, maybe they could do us a favor by just being silent and leave it to the oversight committees to get in detail when it comes to that. 

Now, what has happened here is that Congressman Kline opened up the discussion on enhanced interrogations by opening his fat trap after an intel briefing. 

Congressman, I think you ought to come out and explain yourself on this one.  Where is the upside on that?  And do you think it‘s appropriate? 

Cheney has called on President Obama to declassify CIA information that he says will show that enhanced interrogations made us safer.  I‘m all for it.  Let‘s see it.  Heck, if they are going to come out of intelligence meetings and talk like that, we might as well go ahead and see the whole doggoned thing.  Now we‘ve got Congressman Kline running his mouth. 

You know, look at it this way—in the private sector, if you divulge company secrets or company information—it‘s written in a lot of contracts across America—you‘re fired.  I mean, if I go across the street and have a couple of cool ones with the bad guys, you know, and I tell them what is going on at NBC, I‘m probably going to be out of here.  I mean, that‘s standard operating procedure. 

I think it should apply to those in the United States Congress.  You run your mouth, you‘re out. 

Joining me now is Illinois Congresswoman Jan Schakowsky, chief deputy whip and member of the House Select Committee on Intelligence. 

Congresswoman, thanks for joining us tonight, Jan. 

REP. JAN SCHAKOWSKY (D-IL), CHIEF DEPUTY WHIP:  Thank you very much.

SCHULTZ:  How serious is this? 

SCHAKOWSKY:  Well, I chair that subcommittee that John Kline attended, and at the beginning of every committee we have a closed hearing.  A motion is made to close the hearing.  Any roll call is taken.  There is a record of votes to close the hearing, and everybody understands what that means, that we‘re dealing with classified material and that the content of the briefing, all the facts surrounding that briefing, are not to be disclosed. 

And so I think this is a very serious breach of our obligation as members of the committee.  At the very least, I would say it‘s a violation of the rules. 

SCHULTZ:  Shouldn‘t he be thrown off the committee?  I mean, I just said, in the private sector, you know, it‘s in many contracts and businesses across the country.  If you divulge company secrets, you‘re gone. 

Why don‘t they force congressional members to sign off on a pledge that there‘s going to be some retribution on their career if they open their mouth on sensitive information?  I mean, personally, as a citizen, I don‘t want the terrorists know what we get out of anybody we have in captivity. 

I mean, tell me where the upside of that is.  But what about the code of silence? 

SCHAKOWSKY:  Well, you know, certainly I think there needs to be accountability.  I don‘t exactly know if sanctions ought to be given or what they ought to be.  That‘s going to be a discussion I think that we‘ll have.  But let me just say one other thing.  I‘m not going to talk about the content, but I would say, recommend, that before people shoot their mouth off to the press, that they ought to wait for the hearing to be completed to make sure that, before they draw any conclusions—still, they shouldn‘t talk about it—they ought to wait and hear everything that is talked about at that hearing. 

SCHULTZ:  All right.  Let me get this...

SCHAKOWSKY:  In this case, Mr. Kline left early...

SCHULTZ:  OK.  I want to get this straight. 

Are you saying that Congressman Kline left the meeting early and then went out and did an interview? 

SCHAKOWSKY:  That‘s exactly what I‘m saying.  And he was joined by the ranking member of the full committee, Mr. Hoekstra, who wasn‘t in the meeting at all and seemed to have some things to say about what was talked about in the meeting.  It‘s really quite remarkable and irresponsible. 

SCHULTZ:  So why should our intelligence agents and our agencies come on over to Capitol Hill and have a big information party, and then have it out on the front page and all the talking channels the next day, or almost instantly?  I mean, I view this as a breach of security. 

Now, I know we‘ve got this big fight over who knew what, when, and everything else, but it would seem to me that this would be a high priority, fighting terrorism, that nothing gets out. 

SCHAKOWSKY:  Absolutely.  You know, look, we can have a debate about classification and what shouldn‘t be.  But clearly the congressman knew that we were dealing with a classified document, documents, and classified briefing, and that it was a closed hearing. 

I believe he was there when he voted to close the hearing.  But in any case, he knew the circumstances, did not stay for the entire hearing, left, and then went ahead and talked to the press, clearly about the content, as he saw it, of the hearing.  This is really...

SCHULTZ:  Yes.  We asked Congressman Kline of Minnesota to come on the program tonight and explain his side of the story and why he did it.  He declined.  Maybe he‘s too busy, but that invitation is open again on Monday and any day next week. 

I would really like to know where the Congress is when it comes to a code of silence.  It really should be almost a military code here.  I mean, if we‘ve got information that is floating around to intelligence committees, and then all of a sudden there‘s competition in the media to make sure we find out what‘s going on, I just have a real problem with that. 

Now, this is Mr. Boehner...

SCHAKOWSKY:  No, there‘s no—oh, go ahead.

SCHULTZ:  No, go ahead.  We have satellite delay, but go ahead. 

SCHAKOWSKY:  Well, I was going to say, there‘s no question that this was politically motivated.  They are trying to, you know, create a certain impression out in the public, and had nothing to do with thinking about national security or the rules of the code of silence, as you put it. 

SCHULTZ:  OK. 

This is Mr. Boehner talking about the speaker of the House, Nancy Pelosi. 

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER ®, MINORITY LEADER:  She‘s made this outrageous claim, she‘s undermined our intelligence officials.  I think had a chilling effect on their ability to do their job, which is to make America safe, and believes that it‘s just all going to go away.  Well, just trust me, it‘s not going to go away. 

(END VIDEO CLIP)

SCHULTZ:  Yes, it‘s a chilling effect when a Democrat does it, but it‘s not a chilling effect and it really doesn‘t mean anything if a Republican comes out and does it.  I mean, I‘m sorry I‘m jaded about that, but that sure as heck seems what‘s being played out here. 

SCHAKOWSKY:  Well, the incredible hypocrisy of that as well, because the ranking member, Representative Hoekstra, has been infuriated himself by the lying that went on to Congress about something very close to his heart, and that‘s a 2001 shoot-down of a plane in Peru where the CIA was involved in that, and the Congress was lied to. 

SCHULTZ:  Sure.

SCHAKOWSKY:  We share that across the aisle in a bipartisan way that, how can that be that for eight years the Congress has been lied to?  He‘s made about it, so he knows all too well that there certainly are times when we‘re not told the full story, or even told a lie. 

SCHULTZ:  Well, it‘s a sad day when they are playing politics with intelligence and playing with people‘s lives like that. 

SCHAKOWSKY:  That‘s right.

SCHULTZ:  Congresswoman, we all know that Senator Burris is pretty much on shaky ground in Illinois.  Are you going to run for the United States Senate?  Are you going to challenge that seat?  Are you going to go for it? 

SCHAKOWSKY:  Well, I‘m still checking all the boxes, but I am going to make an announcement one way or another on Monday.  So we‘re huddling as a family to make a final decision.  You‘ll hear about it soon. 

SCHULTZ:  OK.  So that means you will do that on THE ED SHOW, right? 

I‘m all about it.  We‘ll be here at 6:00 Monday.

Congresswoman...

SCHAKOWSKY:  Happy to do it. 

SCHULTZ:  ... you‘re a charger.  We‘ll see you on Monday.  Thanks so much. 

SCHAKOWSKY:  Thank you. 

SCHULTZ:  Next up, Democrats, it‘s truth time.  You know, what do you care about, fixing the broken health care system or some phony show of bipartisanship?  This has really got my ear tonight.

Elections have consequences.  So why are we letting Republicans hold health care reform hostage right now? 

That‘s next on THE ED SHOW.  You‘re going to want to hear what I have to say. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

President Obama says the most important element in fixing the economy is fixing health care.  I agree, I‘m all about it.  But when they tell me single payer is dead, hold on a second.  You better pay attention to what millions of people across the country are seeing. 

Today in Montana, protesters let Senator Max Baucus, chairman of the committee, know the status quo in Washington isn‘t going to cut it.  They rallied outside Baucus‘ field offices all over the state. 

Paul Krugman today offered Congress two pieces of advice.  Number one, don‘t trust the insurance companies.  Don‘t trust the insurance industry. 

Folks, I‘ve been saying that for months. 

President Obama says he‘s committed to a public plan.  Well, here comes the roadblock. 

Late this afternoon, though, he got more support from his employee.  Secretary of Health and Human Services Kathleen Sebelius says that she supports a public plan.  So here come the forces. 

Joining me now is Karen Tumulty, national political correspondent for “TIME” magazine. 

Now, TIME‘s June 15th issue is on newsstands right now.  She has a very interesting and informative article about the five dilemmas for health care reform. 

Karen, what‘s number one?  What is the biggest hurdle in getting reform, as you see it? 

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, “TIME”:  Well, number one, the biggest thing that people are arguing over is this idea of a so-called public plan.  That would be an option for people, if they wanted to, to buy into some kind of government-financed plan. 

Now, what you mean by that is really the question.  Is it going to be something like Medicare, or is it going to be something that looks more like an insurance company but it just happens to be financed by the government?  And that‘s the real question here. 

SCHULTZ:  The president wrote a letter to the committee chairman earlier this week before he left for his overseas trip, and he said in there, and I think this is very important, “If we do end up with a system where people are responsible for their own insurance, we need to provide a hardship waiver to exempt Americans who cannot afford it.  In addition, while I believe employers have a responsibility to support health insurance for their employees, small businesses face a number of special challenges in affording health benefits and should be exempted.”

I‘ll tell you what, that‘s a heavy paragraph, Karen.  You‘ve got hardship labor, you‘ve got employees‘ employers, and you‘ve got small businesses all in one fell swoop there.

Now, what is the hardship waiver?  We called the White House today and they were pretty coy on this hardship labor.  What is it? 

TUMULTY:  Well, that is a loophole to universal coverage that you can drive a Mack truck through.  Between that and exempting small businesses.

Basically, it would say everybody would have to go out and buy health insurance unless they couldn‘t afford it.  Well, guess what?  Those people would remain uninsured.

And then the other part of that sentence was, small businesses would also be exempted from having to provide health benefits for their workers.  So basically what you are talking about, those two things combined, is a lot of people who are uninsured now and the would remain uninsured. 

SCHULTZ:  Senator Max Baucus is taking a lot of heat in Montana.  On this program last night, he flat-out said that he is in favor of taxing health care benefits. 

Here it is. 

(BEGIN VIDEO CLIP)

SEN. MAX BAUCUS (D), CHAIRMAN, FINANCE COMMITTEE:  Place some kind of limitation, I think, makes some sense.  And I would say a large majority of Democrats are also recognizing, yes, that does make some sense.  And the limitation is just this, you get free health care.  It‘s free if you work for a company up to a certain limit, but beyond that it‘s taxable.  So we have to set the limit high enough so it‘s politically appropriate. 

UNIDENTIFIED MALE:  So clearly that will play a role in the finance of this.

BAUCUS:  It will play a role, it will.

(END VIDEO CLIP)

SCHULTZ:  Karen, I find this just terribly interesting.  If I‘m running a company, and I know my employees are going to have to get taxed, why would I offer insurance to them?  I would turn around and say, hey, you don‘t need insurance from me.  Heck, you‘re going to get taxed on it anyway.  Go jump into that public plan they‘ve got cooking.  And I‘m not sure that Max Baucus is correct when he says that so many Democrats are in favor of this. 

What‘s your reporting on this.

TUMULTY:  Well, my reporting is the reason they are looking at this and the White House has not—is being kind of quiet on this issue is it‘s where the money is.  The federal government gives up a lot of money every year because these benefits go to employees as untaxed income. 

And by the way, this is a pretty regressive tax benefit.  The vast majority of the people who get the tax benefit are in the upper income levels.  So basically the argument for doing this—and it‘s something that unions are opposing and a lot of people are opposing, because, again, it‘s taxes something people are getting for free now—is that it‘s where the money is to provide coverage for people who don‘t have health care now. 

SCHULTZ:  All right. 

Well, you know, if you‘re running a public company and all of a sudden there‘s a public option out there, that really affects people‘s bottom line for the positive, I thought. 

Karen, great reporting.  You really lay it out nicely for Americans to get schooled up on this in “TIME” magazine. 

Thanks so much for joining us tonight. 

TUMULTY:  Thanks, Ed. 

SCHULTZ:  Up next on THE ED SHOW, “Psycho Talk.”   Sarah Palin, yes, she‘s back.  She thinks President Obama wants to take control of our minds and he‘s using the Federal Reserve to get it done. 

This is a dandy “Psycho Talk.”  

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

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

It‘s time for “Psycho Talk.”  

Oh, in “Psycho Talk” tonight, she‘s back.  No, Michele Bachmann, although she has been a little quiet lately.  I‘m a little concerned.

But just as good, Sarah Palin, governor of Alaska, spoke to an audience in Anchorage, Alaska.  She was introducing Michael Reagan, the son of the honorable former president Ronald Reagan. 

Her message was very simple: Be afraid, Americans.  Be very afraid. 

The government wants to control the people. 

Listen. 

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN ®, ALASKA:  Friends, we need to be aware of the creation of a fearful population and of fearful lawmakers being led to believe that big government is the answer to bail out the private sector, because then government gets to get in there and control it.  And, mark my words, this is going to happen next, I fear, bail out next debt-ridden states, then government gets to get in there and control the people. 

(END VIDEO CLIP)

SCHULTZ:  Lots of time to think this stuff up when you‘re ice fishing in Alaska, isn‘t it?

Folks, did you hear that?  She said that you should be aware of the creation of a fearful population and fearful lawmakers.  Even better, the government wants to get into those debt-ridden states so they can control the people. 

This is the GOP strategy again, fear mongering?  Making them afraid about the stimulus package, the economy, torture, terrorism, war, the lot (ph), and that‘s how they are going to get back in power? 

I‘m counting the days, the minutes, the seconds for 2012.  I sure hope she announces real soon. 

Let me tell you something, here‘s a tip.  That‘s not going to get you anywhere there, Sarah.  That is “Psycho Talk.”  

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

The Obama White House has really got a new strategy for fighting terrorists.  We are finally taking the fight to them.  Now, that doesn‘t mean that we‘re invading another country.  It means we‘re going into the heart of the Muslim world speaking directly to the younger generation and knocking down all the talking points al Qaeda uses to recruit. 

Take a look. 

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  I have unequivocally prohibited the use of torture by the United States and I have ordered the prison at Guantanamo Bay closed by early next year. 

Now, make no mistake, we do not want to keep our troops in Afghanistan.  We see no military—we seek no military bases there. 

I‘ve made it clear to the Iraqi people that we pursue no bases and no claim on their territory or resources.  Iraq‘s sovereignty is its own.

And I‘m also proud to carry with me the good will of the American people and a greeting of peace for Muslim communities in my country. 

Assalamu alaikum

(APPLAUSE)

(END VIDEO CLIP)

SCHULTZ:  Joining me now is NBC News terrorism analyst Roger Cressey.

Roger, is the president winning the PR war against America‘s number one enemy, Osama bin Laden?  What do you think? 

ROGER CRESSEY, NBC NEWS TERRORISM ANALYST:  Ed, not yet, but he‘s had a great opening round.  I think what you‘re going to see here now in the next few weeks is a series of point/counterpoints.  It was no accident that Ayman al Zawahiri first, the number two in al Qaeda, and then bin Laden, tried to preempt the president‘s message by trying to shape the debate by saying, well, really Obama is just warmed over Bush; nothing has changed. 

Because the president did such a very good job in delivering the speech, al Qaeda has a tremendous challenge, because, in many respects, what Obama is and his election is the exact opposite of al Qaeda‘s argument of why the United States supposedly is at war with Islam. 

SCHULTZ:  Found it interesting, Mike Allen, traveling with the president, reported in “Politico” that the White House believes they are taking down al Qaeda.  A top aide traveling with them on this trip is quoted as saying, quote, “for the first time, they are beginning to lose the propaganda war.”  Another White House official told Allen, “a lot of their best recruiting tricks are being taken off the table.” 

Is the White House being a little bit too optimistic here?  What do you make of these comments?

CRESSEY:  Well, having been there before, I think it‘s always a caveat never to get too cocky when you‘re trying to deal with this potential threat.  They have reason to be encouraged for two things.  One, we are making serious inroads against al Qaeda‘s leadership capability.  This has a lot to do with some of our covert activities inside Pakistan, and it also has to do with al Qaeda‘s strategic mistakes in Iraq and elsewhere. 

The more important thing, Ed, over the long term, is the messenger.  What you are seeing now in President Obama is an entirely different messenger.  Whether you agree or disagree with President Bush, nobody was listening to him by the end of his presidency because no one trusted the messenger. 

So with President Obama, you have a new messenger and a different message that is compelling to that audience, this broad Islamic audience that we are trying to influence.   

SCHULTZ:  So, Roger, you are saying that the president as made some positive inroads here.  What if he were to make this an annual trip to this part of the world and to continue to say the same things, to reaffirm and to back up the actions, and show this change?  Wouldn‘t that really chip away at Osama bin Laden, who is sitting in a cave playing around with a tape recorder?  What do you think? 

CRESSEY:  Well, there‘s a credibility issue for al Qaeda these days.  We can talk about intent versus capability.  Al Qaeda is only as good as its ability to kill people.  And as that capability is attrited, then really all bin Laden becomes is someone howling at the moon.

But to your point, Ed, about whether he should get down there on a regular basis; he has to.  I think regular repeating of the message, reinforcing it, is important.  But the most important part of it, though, is you‘ve got to walk the walk, besides talk the talk, in the Islamic.  What they‘re going to be looking for is the elimination of the perceived American double standard, which is we support democracy, freedom, human rights, and yet, we do not push for certain things in the Islamic world or we are aligned with leaders in the Islamic world that are totalitarian by nature, and are not allowing progress and freedom among their people right now. 

SCHULTZ:  Roger Cressey, thanks for the take tonight here on THE ED

SHOW.

CRESSEY:  You bet, Ed. 

SCHULTZ:  President Obama visited a concentration camp in Germany today.  He said he would never forget what he saw there.  But he also said that the best way to protect the state of Israel is to establish a Palestinian state. 

(BEGIN VIDEO CLIP)

OBAMA:  I recognize the very difficult politics within Israel of getting that done.  And I‘m very sympathetic to how hard it will be.  But as Israel‘s friend, the United States I think has an obligation to just be honest with that friend about how important it is to achieve the two-state solution for Israel‘s national security interests, as well as ours, as well as the Palestinians. 

(END VIDEO CLIP)

SCHULTZ:  For more, let me bring in our panel tonight.  Jack Rice is a former CIA officer and radio talk show host.  Bill Press, nationally syndicated radio talk show most, as is Michael Medved, radio show host across the country, and author of the book “The Ten Big Lies About America.” 

Jack, let‘s a start with you.  The PR war, do you think it‘s important for the president to make consistent trips to the Middle East?  This may be the first of many.  Does it work? 

JACK RICE, RADIO TALK SHOW HOST:  No question about i.  This actually started in Ankara.  So he‘s already done this before.  This is the second step.  I also this it‘s smart, the president has recognized that this is just one speech.  He even said it.  He wanted to make this very clear. 

He does have to do this again and again and again.  But he has to really make it clear that there‘s a bright line.  This bright line is the previous administration and where he is.  If he can see that connection and say, we are just like you.  You are just like us.  We are fighting the same fight—previously, it was my way or the highway.  That never works.  So he‘s very smart to do this.  He just has to take the next steps and say what are the fundamental things that he will do, rather than just speak.  So that‘s important, too. 

SCHULTZ:  Michael, was it too much of an olive branch, in your opinion?  Or did the president strike the right message? 

MICHAEL MEDVED, RADIO TALK SHOW HOST:  I think a lot of what the president sad was important and was persuasive and was admirable.  But there were a lot of problems with the speech as well.  One of the problems was a moral equivalency problem, the idea that he suggested that there were misunderstandings, for instance, in our history with Iran, without comparing America‘s participation in a coup in 1953 with Iran‘s 30 year history of supporting terrorism.  That is not fair. 

There was also no recognition of the fact that no force on planet Earth has done more to liberate and rescue Muslims in the world than the United States military.  In Kuwait, in Kosovo, in Bosnia, and yes, in Afghanistan and Iraq. 

Finally, there was no mention of suffering Muslims in Africa.  Darfur would have been very appropriate to raise here.  This is a Muslim regime that is butchering literally hundreds of thousands of Muslims today.  That was an absence in the speech that I wish we had heard more about.

SCHULTZ:  Bill Press, what about that? 

BILL PRESS, RADIO TALK SHOW HOST:  First off, let me say, I think, Ed, this speech seriously will go down as one of the most powerful, one of the most important speeches that any American president has ever given.  I find it just shameless, almost, that conservatives and Republicans, the best they can do is nit-pick this speech and say, yes, but he didn‘t say that, he didn‘t say that. 

Look at what he did say.  The most important thing is he went into the heart of the Muslim world.  He went into the belly of the beast, the home of the Muslim Brotherhood, and the home of al Zawahiri, and he said, you have to join us in fighting Islamic extremist, because they are antithetical to everything American stands for, and they‘re antithetical to everything that Islam is all about.  That I think is the most powerful message.  And nobody but Barack Obama could deliver that message. 

SCHULTZ:  Jack, what about this, our friend over at “Politico,” Mike Allen reporting; he gets a quote from an aide on the trip, “for the first, they‘re beginning to lose the propaganda war.”  What do you think about that?  He‘s talking about al Qaeda.  This is a White House aide being quoted in a “Politico” story. 

RICE:  I think this is incredibly important.  That‘s part of the problem.  The bottom line is when the president reaches out, he makes America safer.  He makes our troops in Iraq and Afghanistan safer.  And that‘s a patriotic question in itself.  But he also really draws the distinction between the Muslim world and al Qaeda itself. 

So you put us on the same side of the fence.  You put al Qaeda on the other.  That really does change the game. 

SCHULTZ:  Michael, it seems to me that the president is, in a sense, kind of taking a hard line with Israel, saying, you know, we‘re your ally, but you‘ve got to work this thing out, too.  What do you make of that? 

MEDVED:  Well, I think it‘s a huge problem, frankly, because that was another absence in the president‘s speech.  And it‘s not nit-picking, for goodness sake, because anyone who talks about pursuing peace in the Middle East has to acknowledge that the first step towards any peace agreement or even any negotiation is some kind of reconciliation of the two Palestinian factions, which have literally been killing each other recently. 

Until you have some agreement between Fatah and Hamas about what you‘re going to negotiate, and who you are going to negotiate with, and who represents the Palestinians, you are nowhere.  Again, this was not addressed in his speech.  It needed to be, because moving or stopping Israeli settlements will have zero impact in moving us closer to peace, unless there is some other party with whom to negotiate. 

PRESS:  You know what we need in the Middle East?  You know, you‘re the master of it, straight talk.  That‘s what we got from Barack Obama in the Middle East.  By the way, he stared out by saying, we have a special bond with Israel that‘s not going to be broken ever.  We‘re going to continue that.

He said, at the same time, Israel has really got to stop building these settlements.  And, on the other hand, he told the Palestinian, yes, we‘re committed to your independent state, but you‘ve got to stop the violence and you‘ve recognize Israel‘s right to exist.  That‘s straight talk.  That‘s the—

(CROSS TALK)

MEDVED:  All decent and reasonable points.  But Bill, what is the possibility of any progress and negotiations at all until the struggle between Hamas, which rejects Israel and rejects all negotiations and rejects all peace, and Fatah -- 

SCHULTZ:  Gentlemen, we will come back to this.  Hold it right there.  We should also point out that Hamas is winning some seats in the government in Lebanon.  We‘ll talk more about it in a moment.  Next up, unemployment in America is at almost 10 percent.  But we‘ve got some better than expected news about jobs today.  It could be a silver lining.  That‘s next in playbook and more with the panel.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, that was Vice President Joe Biden.  He‘s encouraged by today‘s job numbers.  We lost 345,000 jobs last month, the fewest number since last September.  The vice president is also mindful that this recession has now wiped out six million jobs since December of 2007.  Biden warned that there will be more set backs to come. 

And he and the president will announce Monday that they are revamping or ramping up the recovery act implementation over the summer.  The big question, is today‘s job reporting the beginning of a rebound?  Joining us now is Austan Goolsbee, who is a chief economist of the president‘s Economic Recovery Advisory Board. 

All right, Austan, I‘ve got my small business plan here.  I‘m going to be sending it over to the White House. 

AUSTAN GOOLSBEE, WHITE HOUSE ECONOMIST:  I‘m waiting for it. 

SCHULTZ:  You‘re going to be reading it?  All right, buddy. 

GOOLSBEE:  I will. 

SCHULTZ:  I know you will.  These jobs numbers, it‘s not all of a sudden going to shift from negative to positive.  How important is this, that there is a reduction of the numbers that you had anticipated? 

GOOLSBEE:  It‘s important.  But, you know, I swear to god, Ed, as long as I live, you will never hear me describe a minus 345,000 as a good jobs report.  What is encouraging about this report is that we‘ve cut the job loss something like in half, compared to the biggest peak numbers. 

But we‘ve been losing jobs since December of 2007.  And we got a ways to go to get out of this.  As you point out, we‘ve got to turn around the economy first, before you‘re going to see any turn around in the job market.  We want these negatives to get smaller.  But they‘ve got to turn to be positives. 

SCHULTZ:  Is it the stimulus package?  Is that what it is? 

GOOLSBEE:  I think the stimulus package has played some part in it.  I‘m encouraged.  If you breakdown the details in some more granular level, you do find suggestive evidence that the stimulus has helped.  I think the other thing is, you‘ve seen credit flows loosening.  People are getting access to credit. 

We‘ve been pushing on small business, trying to loosen up credit to them.  And that‘s why I want to see your plan, because everybody knows that a lot of the job markets up and downs, where the rubber hits the road, it‘s out in small business. 

So I think the vice president‘s announcement coming on Monday of how we‘re going to try to get this money out the door even quicker is going to be very well received. 

SCHULTZ:  All right, my man.  You asked for it.  I‘m going to give it to you.  I want cheap money. 

GOOLSBEE:  I want it. 

SCHULTZ:  I want the same rate Wall Street has.  I want liberal terms.  That means as long as I can pay—make my monthly payment, I want to extend it out.  And also I want an incentive if I paid it back early.  Now, if you can get Small Business Administration to do all of those things, I think we‘re going to get back to the road recovery. 

I do want to ask you, Austan, what is this talk about a pay czar? 

What would a pay czar do in the Obama administration?  . 

GOOLSBEE:  Let‘s cut out the czar.  I‘m not a big fan of czars.  But what the pay administrator—everybody knows that we want to have an eye towards the long term, hat, as part of our rescue situation, we want to make sure that everybody is playing by the rules, that we‘re all on the same page, that there‘s nobody behaving in a manner that we saw all too frequently over the last eight years, as the president has often said, where it was a mentality of, I‘m going to get in there and make a quick buck for myself, no matter if I mess up the company or mess up, you know, the financial markets. 

So I think a little responsibility is always called for. 

SCHULTZ:  Austan, always a pleasure.  Good to have you with us tonight. 

GOOLSBEE:  Great to see you, Ed. 

SCHULTZ:  You bet. 

One more page from my playbook tonight, we‘re watching a heated race in Virginia.  Democrats go to the polls on Tuesday to pick their candidate for governor.  It‘s a tight three-way battle, and anything can happen.  Here‘s where things stand right now.  A Suffolk poll showing State Senator Creigh Deeds has a slight lead at 29 percent.  Former DNC Chairman Terry McAuliffe in at 26 percent, and former House Delicate Brian Moran is at 23 percent.  Take into accounts the survey‘s 4.4 sampling error, and this contest is a statistical dead heat; 22 percent of Virginians also said they are undecided. 

In a twist, McAuliffe got two big endorsements today.  He spoke to Norah O‘Donnell earlier today on MSNBC. 

(BEGIN VIDEO CLIP)

NORAH O‘DONNELL, MSNBC ANCHOR:  Why do you need someone from Montana to endorse you to win in Virginia? 

TERRY MCAULIFFE, CANDIDATE FOR GOVERNOR OF VIRGINIA:  As you know, Governor Schweitzer is the chairman of the Democratic Governors Association, which is responsible for winning governors races.  I think it‘s very significant that Governor Schweitzer would come out.  I should also mention today, Governor Ed Rendell, who is the chairman of the National Governors Association, is also endorsing me today. 

(END VIDEO CLIP)

SCHULTZ:  Those are two high-profile governors and they have positions in the National Governor‘s Association, and they don‘t usually weigh in during primary races.  Terry, if it makes you feel better, I told my relatives to support you down in Virginia.   

Coming up, there‘s a shovel ready project, cleaning up America‘s image after Bush.  President Obama took the first step in Egypt.  How is he doing?  “Daily Show” creator Lizz Winstead weighs in on that next on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  It‘s time for Club Ed.  Joining me to look back at this week‘s news, comedian Lizz Winstead, co-creator of “The Daily Show,” and the brains behind “Wake Up World.” 

Lizz, so much out there.  The president in Cairo, how did he do? 

LIZZ WINSTEAD, COMEDIAN:   Well, you know, it seems to me, Ed, it‘s a full-time job to travel around the world and basically apologize for every single thing Bush has done.  And I think that—right?  But I think he should just go all out, where a Haz-Mat suit, bring a shovel, and say, hello world, I‘m here to pick up the big steaming pile of Bush that you‘ve been left with. 

SCHULTZ:  What do you make of the Fed hiring the former Enron lobbyist to improve its image?  That was kind of a shock, wasn‘t it? 

WINSTEAD:  Well, Obama, good clean up.  Fed, not good clean up.  Seriously?  You want to go with Enron?  There was nobody else?  That‘s sort of like PETA hiring Michael Vick to clean up their image, or, worse, the Republicans hiring Dick Cheney to improve their image?  Isn‘t there someone else out there?  What about the Queer Eyes?  They seem available.  They clean stuff, up and they didn‘t destroy thousands of lives of people. 

SCHULTZ:  Speaking of Cheney, I see there‘s another Cheney out there. 

Liz Cheney, she seems to know an awful lot about national security lately. 

What do you think? 

WINSTEAD:  She did work in the Bush State Department, the worst State Department in history.  Yet again, more Cheneys that we don‘t want to hear from.  The Cheney of command is endless.  I don‘t want to hear from any more Cheneys.  No one does.  They are the lowest rated family in the history of rating people. 

SCHULTZ:  Liz Winstead, always a pleasure.  Thanks for joining us on THE ED SHOW tonight in Club Ed.  Thanks so much. 

WINSTEAD:  Thanks, Ed. 

SCHULTZ:  You bet.  Before I turn back to the panel, here are a few stories out there I‘d like to call Ed-Lines.  First up in Kentucky, pastor says he wants people to bring their guns to church on the Fourth of July.  Can Pagano (ph), pastor of the New Bethel Church in Louisville, Kentucky, says, we‘re just going to celebrate the upcoming theme of the birth of our nation, god and firearms.  Without that, this country wouldn‘t be here.

I don‘t know if Jesus was ever packing firearms.  Whatever?  What is it with guns?  Tennessee lawmakers have just approved that guns are OK in bars.  That makes Tennessee the 38th state with that law.  Let‘s just hope the shots stay in the glass. 

And finally, a real disgusting headline today, courtesy of the “New York Post,” in uncovering the death of David Carradine.  They put this headline on the front.  It says “Hung Fu.”  How low rent is that? 

Time to bring in our political panel tonight, Jack Rice, Bill Press and Michael Medved. 

Fellas, I want to go back to this Congressman that came out of an intelligence meeting and started doing an interview and talking about what was in the briefing papers on enhanced interrogations.  Jack, you‘re a former CIA guy.  What‘s your take on that? 

RICE:  This is what I remember when I was in the CIA.  We would sit back and we would see disclosures that would come out—there‘s actually a unit inside the agency that would chase these down, something that came from us originally and then was disclosed.  They would chase it down and frequently it would go to the White House or it would go to Capitol Hill. 

The worst thing about this is you never know the real ramifications.  People have risked their lives in order to prevent intelligence.  And to simply flip this out there for political reasons, people should be outraged by this.  But sadly, it becomes a political thing.  Then I guess it‘s all right.  Well, it‘s not. 

SCHULTZ:  Michael Medved, they really got all over Nancy Pelosi when she said something several times.  Why isn‘t—why can‘t the Republicans reel in this Congressman from Minnesota, who can‘t wait to leave the briefing and talk to the Hill?  What do you think? 

MEDVED:  It sounds like, from what we‘ve heard of the story so far, that his behavior may have been irresponsible.  But honestly, there will be more to it.  The attack on Nancy Pelosi was truly based on her dissembling, her not telling the truth, her saying that she wasn‘t briefed or informed, when she actually was.  And that‘s a different thing. 

I‘ve got a different thought, Ed, which is I think this obsession right now with the enhanced interrogation techniques—the president of the United States has ended water boarding.  We‘re not going to do it anymore.  You may think it‘s a good idea.  You may think it‘s a bad idea.

He‘s the president.  He‘s the decider.  Wouldn‘t it be appropriate for the nation to either decide we‘re going to try people for war crimes, as some people on the extreme left want, or we‘re going to move on and we‘re going to work together in a more united way to actually win this war on terror? 

SCHULTZ:  Bill, go ahead and take that.  What do you think? 

PRESS:  Yes.  Here‘s the problem, Michael, somebody ought to tell Dick Cheney that, that Barack Obama was elected, that he has ended torture.  Instead, Cheney is out there every day beating the torture drum. 

You know what, Ed, I‘ve got to tell you, first of all, on Kline, I think he ought to be reprimanded, sanctioned, and at the very least, thrown off the committee.  He knows what the rules are.  And the other thing is, I‘d like to see all of these memos.  I wish they would release these memos that Cheney said prove that torture, because I‘ll bet you they don‘t come anywhere close to that. 

SCHULTZ:  Here‘s the thing that bothers me, is that if somebody comes out of an intelligence briefing, and gives a morsel of information to the media, what do you think the media is going to do?  They are going to go right down that road.  They‘re going to work every source that they possibly can.  Jack, this has got to be frustrating for the intelligence community.  

RICE:  Let‘s contemplate who Congressman Kline is.  I know this guy pretty well, spending a lot of time in Minnesota.  I‘ve spent some time personally with him as well.  The guy is a former Marine.  This guy used to carry the football for the White House.  This is the guy.  He knows what he‘s supposed to be doing.  And then he actually specifically says, I‘m going to ignore the rules, knowing full well the potential ramifications. 

When I say outrageous, it really isn‘t strong enough.  Look, if you‘re stupid, OK, and you‘re arrogant about this, I understand one thing.  This is a guy who understands it and then rejects it any way.  That is arrogance at a level we haven‘t even talked about yet.

SCHULTZ:  Michael, your thoughts now?  The media goes after any morsel of information.  The competition in the media to get the story—wouldn‘t it be better just to have an absolute rule, if you‘re on the Intelligence Committee, you can‘t talk about anything. 

MEDVED:  It certainly would be better.  If it was a confidential briefing, there is no excuse and there is justification for going directly out of a meeting.  And I understand he may have left the meeting early to go to talk to a reporter. 

Your job, if you‘re with the Intelligence Committee, is to work with that committee, and it is not to try to spin things with the press. 

SCHULTZ:  OK.  Quickly, around the table, if you have to score it one to ten, Bill Press, what did the president‘s trip do? 

PRESS:  Home run, ten. 

SCHULTZ:  Jack? 

RICE:  Ten, absolutely. 

SCHULTZ:  Mike? 

MEDVED:  Six.  And by the way, take a look at some of the Muslims press, where President Obama has not received such rave reviews from as he received from Bill Press, from people in Beirut and people in Baghdad and people elsewhere gentlemen, where they do—

(CROSS TALK)

PRESS:  He got a hell of a lot better reviews than George W. Bush ever got in that part of the world.

SCHULTZ:  Gentlemen, good to have you with us on a Friday.  Appreciate it so much.  Obviously, you‘ll be back again.  Thanks so much.

That‘s THE ED SHOW.  I‘m Ed Schultz.  We‘ll be back here Monday night, same time, 6:00 Eastern time on MSNBC.  Quick reminder, town hall meeting coming up in Buffalo Saturday evening, 6:00 June 13th, Canesius (ph) College.  Hope you can make it. 

For more information on THE ED SHOW, got to Ed.MSNBC or to my radio website at WeGotEd.com.  “HARDBALL” with Chris Matthews starts right now on MSNBC.

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

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