updated 6/16/2009 10:38:57 AM ET 2009-06-16T14:38:57

Guests: Jack Rice, Linda Douglass, Rep. Eric Massa, Stephanie Miller, Heidi

Harris, Jack Rice, Sam Stein

ED SCHULTZ, MSNBC HOST, “THE ED SHOW”:  Good evening, Americans.  Live from 30 Rock in New York City, it‘s “THE ED SHOW” on MSNBC.  The head of the CIA says Dick Cheney wants this country to get hit again.  Now, I‘ve heard that before, but now the CIA is getting spooked by a shooter (ph).  They‘re doing a 180 late this afternoon. 

President Obama takes his plan for health care reform to the American Medical Association.  The AMA opposes his plan for health care reform. 

And I say enough of this reaching out stuff.  Let‘s just tell them how it‘s going to be and get to the public option. 

Democrats, listen up.  I went to Buffalo, New York, over the weekend, Saturday night, to find out exactly what Americans really think about what‘s going on in Washington.  They want Democrats to grow a pair. 

We talked to some of the folks on the street today.  We‘ll play that tape. 

Plus “Psycho Talk.” The tea party crowd now is taking on Nancy Pelosi. 

All of that and a great panel coming up. 

But first, tonight‘s “Op Ed.”

Shooter, he‘s back at it.  But somebody‘s calling his bluff now.  Dick Cheney has been on the offensive for months.  His accusation is, well, we‘re all less safe under Obama. 

Now, look.  No matter what his motivation is, whether he‘s trying to legally protect himself or gin up support around the country, it is detrimental to the country, I believe.  It serves no good to anybody. 

But let‘s just roll it back to April 21st on this program. 

(BEGIN VIDEO CLIP)

SCHULTZ:  I think that Dick Cheney wants this country to get hit again

for political gain.  I believe that he thinks in his mind, if we can think

make them think, the enemy, that we‘re weak because Obama can‘t stand up for us, we‘re going to get hit, and then, of course, we can paint the picture that the Democrats can‘t get the job done on national security.  I think Cheney is that mean. 

(END VIDEO CLIP)

SCHULTZ:  I think he‘s still that mean.  I got a lot of response to that, most of it positive. 

Now the director of the CIA, Leon Panetta, is voicing the same concern, at least early on.  Here‘s what he told “The New Yorker” in a May interview that was just recently published in the June edition. 

“I think Cheney smells some blood in the water on the national security issue.  It‘s almost a little bit gallows politics.  When you read behind it, it‘s almost as if he‘s wishing that the country would be attacked again in order to make his point. 

I think that‘s dangerous politics.” 

Now, folks, this is coming out of the mouth of the nation‘s top intelligence officer.  He sees all this classified documents every day.  He knows the threats that this country faces right now.  Cheney uses his title and position to just flat-out spook people politically. 

Now, Panetta shot him down, at least for a while.  Today Cheney responded with this statement. 

(BEGIN VIDEO CLIP)

DICK CHENEY, ® FORMER U.S. VICE PRESIDENT:  I hope my old friend Leon was misquoted.  The important thing is whether the Obama administration will continue the policies that have kept us safe for the last eight years. 

(END VIDEO CLIP)

SCHULTZ:  Well, that‘s incorrect.  We‘ve been hit wind the last eight years. 

Director Leon Panetta made that comment just minutes after Cheney‘s big speech at the American Enterprise Foundation back in May.  Now, when Cheney told the country on national television that President Obama had left us half-exposed to a terror attack. 

(BEGIN VIDEO CLIP)

CHENEY:  The administration seems to pride itself on searching for some kind of middle ground and policies addressing terrorism.  In the fight against terrorism, there is no middle ground, and half-measures keep you half-exposed. 

The terrorists see what they were hoping for—our unity gone, our resolve shaken, our leaders distracted.  In short, they see weakness and opportunity. 

(END VIDEO CLIP)

SCHULTZ:  That‘s enough for “Psycho Talk.”

But late this afternoon, oh, we‘ve got a reversal.  Leon Panetta speaking through a spokesman put out this statement, quote “The director does not believe the former vice president wants an attack.  He didn‘t say that.  He was simply expressing his profound disagreement with the assertion that President Obama‘s security policies have made our country less safe.  Nor did he question anyone‘s motives.”

What?  What the heck?  I‘m going to put myself in “Psycho Talk.” If that‘s not a 180, I don‘t know what is.  I just wish someone would introduce legislation in Washington that we can change the name of Washington, D.C. to Spineless City, USA. 

The Democrats need to grow and up get after it.  The people majority-wise are on your side.  They‘re backing down to anybody that says anything about national security.  They can‘t get it done on health care.  They don‘t have the votes.  I‘ll get to that a little bit later on in the show. 

And when it comes to Wall Street regulations, oh, we‘ll give the bankers anything they want.  We‘re not sure about this regulating Wall Street. 

I‘m going to ask the question.  Where‘s our Tom DeLay?  Where‘s the liberal hammer on this deal?  Are you kidding yourself on this?  It just seems to me that the American people deserve a little bit more out of the majority party. 

And don‘t think that this Cheney talk doesn‘t affect people.  We took the cameras on the streets today in New York to get a flavor of how people feel about this security thing. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I think a lot of the trips overseas, bowing down to other countries, showing them that we‘re weaker, that would be a way of showing obedience, I guess you would say.  It would make us look like a weaker country. 

UNIDENTIFIED FEMALE:  I feel like there‘s a Republican looking over my shoulder.  I feel more safe because I think he‘ll pause and think about his actions before acting. 

UNIDENTIFIED MALE:  What do you make of Dick Cheney saying he‘s making us less safe? 

UNIDENTIFIED FEMALE:  I think he‘s an advocate for his party, and he‘s trying to make Republicans feel relevant. 

UNIDENTIFIED FEMALE:  I feel less safe.  I‘m filled with concern about, you know, his stance on Guantanamo Bay.  And I feel like if you let, you know, those people out, those people, you know, if we let them out, then statistics have said that, you know, they‘ll go back and recreate another crime. 

UNIDENTIFIED MALE:  There was some inference not only from Dick Cheney but Karl Rove also, that they‘re anticipating that the country will get hit once again, and there may be some forces in place to make that happen. 

(END VIDEO CLIP)

SCHULTZ:  It dint take us very long to get those sound cuts today, folks. 

We are a divided country.  There‘s no question about it.  I give shooter credit.  He‘s doing a good job keeping the narrative out there that we just can‘t protect America.  As Americans, we just can‘t protect ourselves. 

We spend billions of dollars, billions of tax dollars.  We have educated and well-trained professionals that are out there protecting the United States of America.  But fear-mongering has definitely grabbed the hearts and emotions and minds of some people. 

Look, you‘re never going to be 100 percent safe.  All this conversation is just dividing the country.  It doesn‘t do anybody any good at all. 

Again, Mr. Cheney, if you really think we‘re screwing this thing up on security, why don‘t you do the statesman-like thing and go to the White House.  I‘m sure the president will give you time. 

Map out exactly what we‘re doing wrong.  Map out exactly how we‘re creating more terrorists, how the threat is greater now, how diplomacy is not working, and how all of a sudden, in the last several months, all of our professionals in the security business have just been reading “Field and Stream” out in the fish house and they‘re sleeping on the job. 

I can‘t believe how some people just buy into this stuff.  Look, don‘t you respect the troops?  Don‘t you believe that the dedicated professionals that are in uniform protecting this country are working their fannies off?  Of course they are.  And we‘re supporting them with a big budget to get it done. 

But, you see, it‘s all about political failure.  They use that word.  It‘s all about getting back at Obama, giving him more problems than he needs right now.  It‘s really sad that this conversation has gotten to where it is in this country.  But we need to call them out on it. 

Joining me is former CIA officer Jack Rice.  Jack, I want to talk about the reversal today by Leon Panetta.  Was that a 179, a 180, or a 181?  What the heck was that? 

JACK RICE, FORMER CIA OFFICER:  You know, everybody‘s waiting for this.  Everybody‘s waiting for somebody to step up in this town and say, you know what, it is what it is.  Dick Cheney, he was simply in some basement, some—who knows where he was for eight years, being unwilling to talk to anybody.  And now he won‘t shut his mouth. 

It‘s almost like whack-a-mole.  You‘re waiting for him to pop up someplace.  And what he ends up dong is he is ends up essentially creating more and more instability for only one simple purpose, and that‘s to create a political advantage for the Republicans. 

And frankly, it‘s pretty repulsive.  Leon Panetta needs to step and up say so and not back down just because Senator McCain or anybody else says he should. 

SCHULTZ:  Jack, I have to say that I don‘t think “The New Yorker” is in the business of misquoting people.  The reporter is very professional, award-winning, and very accurate. 

The point being here is that it looks like the CIA director got a phone call from somebody at the White House and told him, you‘re going to have to back down on this, because we‘re trying to mop this thing up and move in a different direction. 

Do you think that‘s what happened?  That‘s my speculation.  Do you think that Leon Panetta felt bad about the reporting, or do you think that he got a talking-to? 

RICE:  Again, John McCain stepped up today and said something.  I think it may have ran its way back to the White House and pushed back down. 

But instead of pushing back down, they should push back harder, and say, it‘s time for you to go, go hunting, go retire, go do something else.  But what you‘re doing is making this more difficult. 

If this is about patriotism, if this is about actually protecting the men and women in the field, then let‘s do the right thing.  But apparently that only applies when it‘s good for the Republicans but not good for America.  Hmm, strange. 

SCHULTZ:  I have to say, as far as Cheney is concerned, mission accomplished.  He‘s doing a great job of creating this divide in this country that Obama is not getting the job done, not keeping us safe.  And setting the table, you know, by fear-mongering. 

But as you saw with that clip of people that we had of people on the street, there‘s some folks out there that believe this stuff.  As a former CIA agent, how does this play inside the agency?  Your take on that? 

RICE:  It makes it very, very difficult. 

First of all, we don‘t need the distraction inside the agency or anyplace else, let alone making it any more difficult.  Every time Cheney opens his mouth—I mean this—every time he opens his mouth, what it does is it creates instability, and it may motivate somebody to do something that they may not otherwise do. 

And he knows this.  I mean, he‘s a very smart guy, he‘s a very capable guy, and yet he‘s willing to do that anyway.  And this makes it harder for our people at the agency.  It makes it harder for our men and women in uniform around the world.  And yet he continues to do it.  It‘s really, really extraordinary. 

SCHULTZ:  Does this motivate the enemy at all? 

RICE:  Yes. 

SCHULTZ:  What do you think? 

RICE:  Yes, very cleanly.  It absolutely does, because what you‘re trying to do now is you‘re trying to find a wedge.  That‘s exactly what Cheney is doing.  He starts the wedge.  The problem is that there are bad people out there who might try to come in behind him and use that wedge to cleave the country apart. 

SCHULTZ:  Well, I wish that Leon Panetta would just have cleaned his clock.  It seems to me that Leon Panetta was a heck of a lot tough over Nancy Pelosi than he was on Dick Cheney.  Figure that one out. 

RICE:  I know.  I‘m pretty confused by that one too, Ed. 

SCHULTZ:  Good to have you on, Jack.  Always a pleasure.  Stay with us tonight.

Coming up, today, President Barack Obama hit back at his critics who were trying to demonize his plan for health care reform.  But he‘s giving those, the very same critics, a seat at the table.  The White House responds next on “The Ed Show,” stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES OF AMERICA:  Health care is the single most important thing we can do for America‘s long-term fiscal health.  We do not fix our health care system, America may go the way of GM, paying more, getting less, and going broke. 

(END VIDEO CLIP)

SCHULTZ:  President Obama charged into the belly of the beast today, trying to sell his health care reform plan to a very skeptical American Medical Association. 

A lot of AMA members oppose a public insurance option.  But Obama stood firm, arguing that a public option is an important part of achieving, achieving universal coverage. 

(BEGIN VIDEO CLIP)

OBAMA:  What I am trying to do, and what a public option will help do is put affordable health care within reach for millions of Americans.  We need to provide assistance to families who need it. 

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Linda Douglass, White House Communications Director for the Office of Health Care reform.  Linda, good to have you on with us tonight. 

LINDA DOUGLASS, WHITE HOUSE COMMUNICATIONS DIRECTOR FOR HEALTH CARE: 

Thanks for having me. 

SCHULTZ:  Does the president have to have the AMA on board to get reform done?  What do you think? 

DOUGLASS:  Well, look, the president has really welcomed all of the groups that in the past have opposed health reform.  As you know, the AMA joined with other health industry groups, came to the White House, said it is absolutely possible to drive down the growth of health care spending, saving $2 trillion over the next 10 years. 

I mean, the AMA came to the president, made proposals to rein in spending, and it is costs that health reform is all about.  Costs, high costs are crushing families, they‘re crushing businesses, they‘re crushing governments, they‘re crushing our economy. 

And the AMA has offered to participate in this.  So we absolutely welcome their participation. 

DOUGLASS:  You have got United States senators that are going on the floor from the Republican Party saying that the Obama administration wants to put the government between patients and doctors.  What‘s your response to that? 

DOUGLASS:  Look, the president wants to build a health care reform system that is built on top of the American system, the private insurance system, the system that is based on employer-sponsored coverage.  No one is talking about replacing that system. 

What the president is talking about is creating more choices, more options for people to buy affordable health coverage, something that is out of reach for so many Americans now, guaranteeing your choice of doctors and plans and assuring that quality and affordable health care is available to everyone. 

SCHULTZ:  I could tell you, Ms. Douglass, I ran into a lot of them Saturday night in Buffalo, New York.  Today the president at his speech at AMA went for almost an hour on this one subject.  He had this to say about the public option.  Here it is. 

(BEGIN VIDEO CLIP)

OBAMA:  Let me also address the illegitimate concern that‘s being put forward by those who are claiming that a public option is somehow a Trojan horse for a single payer system. 

I‘ll be honest, there are countries where a single payer system works pretty well.  But I believe, and I‘ve taken some flack from members of my own party for this belief, that it‘s important for our reform efforts to build on our traditions here in the United States. 

(END VIDEO CLIP)

SCHULTZ:  Linda, there‘s a lot of Democrats across the country and a lot of Americans beyond party that think that the majority party and the president is caving in and not going far enough and not demanding more. 

And they‘re a little concerned that there‘s too much nicety going on here.  We‘ve got to make sure we‘ve got to have a bipartisan agreement. 

I mean, the American people want some action on this, and it seems like the president‘s backing off a little bit.  What about that? 

DOUGLASS:  Well, I don‘t know what you mean, Ed.  The president made it very clear again today that he is strongly in favor of a public option because it achieves the goal of lowering costs, making health care more affordable for all Americans. 

Look, a public option in the market with the private insurance plans increases choices, increases competition, keeps the insurance companies honest, and creates affordable options.  That‘s exactly what he‘s talking about.  He said that in his letter to congress.  He said it to the AMA today. 

So I don‘t know what the concern is.  The president has made it very clear that he wants an option, an affordable option in the market so that all Americans can finally have affordable access to health insurance, quality health insurance, again, just reminding you, that protects your choice of doctors and plans. 

SCHULTZ:  OK.  Linda Douglass, it‘s going to be a heck of a summer, I can tell you that.  I mean, this is going to be a battle-and-a-half, isn‘t it? 

I mean, the battle line is being drawn.  I don‘t think the Republicans are going to cave in.  In fact, I think they would filibuster a public option.  Any sense of that in the White House? 

DOUGLASS:  You know, many Republicans are working with Democrats right now to achieve the goals of lowering costs, guaranteeing choice, making affordable health care available to all Americans.  Many Republicans are searching now for ways to achieve those goals. 

These are goals that all Americans share.  So that is why these conversations are ongoing.  We‘re making a lot of progress. 

SCHULTZ:  And Linda, yes or no on this.  Is the president in favor of taxing health care benefits?  Will he go that far to pay for this? 

DOUGLASS:  Not going to give you a yes or no.  Ed, you always try that. 

But, you know, clearly the president has said that he is skeptical about taxing health benefits because he wants to enact health care reform that is built upon the employer-based system.  And the tax benefit is an essential part of that system. 

SCHULTZ:  But it‘s on the table? 

DOUGLASS:  So he‘s got his own idea, which is returning the rate of itemized deductions for the very wealthiest Americans back to the level where it was when Ronald Reagan was president.  He thinks that‘s a good idea, and he‘s pushing Congress to consider that. 

SCHULTZ:  Linda Douglass, thanks for joining us tonight. 

DOUGLASS:  Thanks, Ed. 

SCHULTZ:  You bet.

And later in this broadcast we‘re going to have some videotape from my town hall meeting in Buffalo on Saturday night. 

Next up on “The Ed Show” “Psycho Talk,” the tea party crowd is protesting Nancy Pelosi.  These people claim to be the silent majority.  Yes, this looks like mainstream to me.  It‘s next in “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.”

SCHULTZ:  We‘ve got the whole team of them tonight.  “Psycho Talk,” it‘s the anti-Pelosi tea party crowd.  That‘s right.  The House Speaker was in Bush territory over the weekend Friday night.  She went to Houston to give a talk at the Wortham Center. 

Outside a group of hardcore antis protested.  The Houston Tea Party Society put together a video.  Let‘s watch. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I see some very strange and frightening parallels to what happened in Cuba and the things that are happening now in the United States. 

UNIDENTIFIED FEMALE:  Nancy Pelosi is a disgrace to America.  She denigrates those who serve in the military and CIA in trying to draw attention to those sayings that people are either ignoring—

UNIDENTIFIED MALE:  In Cuba, the government was confiscating private business. 

UNIDENTIFIED FEMALE:  Inflation‘s going to be coming.  The third largest budget item right now in the government is paying on our debt. 

UNIDENTIFIED MALE:  Stop it.  Stop wasting our money.  The business of the government is to provide for the people, not take care of them. 

(END VIDEO CLIP)

SCHULTZ:  The Fidel Castro analogy?  OK.  Nothing new. 

But let‘s play this metaphor.  If Nancy Pelosi is really like Fidel Castro, that means the previous regime was a military dictatorship that canceled all elections. 

The Democrats, like Fidel Castro during the Cuban revolution, took Washington by storming the capitol with tanks and guns.  Not sure that analogy works.  More fear-mongering is what it is. 

Here‘s my question.  You know, where were these people for eight years with a Republican president, Republican congress?  Did they think everything was so wonderful?  They got their tax cuts in ‘01 and in ‘03.  The nation went from surpluses to massive deficits. 

They don‘t know what they‘re talking about, the whole crew of them. 

That‘s “Psycho Talk.”

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to “The Ed Show.”

I was in Buffalo, New York on Saturday night for a town hall meeting, the 2009 Tour for Change, “The Ed Schultz Show.”

We had a great turnout, a very passionate crowd at Canisius College, and a heated discussion on health care reform.  And after all the effort to get President Obama elected and the Democrats in the majority, the folks I think are getting pretty impatient.  There is a growing frustration in the middle class that many people felt that the Democrats right now are just caving in on the issue, that they‘re not pushing hard enough.  Throughout my entire career, I‘ve always been one to take the microphone to the people. 

Saturday night, the people in Buffalo, New York, spoke up.  For weeks, I have felt this undercurrent on the radio that Americans are getting frustrated with just how nice and how weak the majority party is acting in Washington.  They‘ve got to get a spine.  I tell you, the message is very clear on three things: forget bipartisanship.  Get it done on health care.  And Democrats, you need to grow a pair. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I am very disappointed.  I‘m a life-long Democrat. 

But they just have no spine.  They‘re just wussing out I guess is the word.  They‘re just backing down.  They seem to be afraid of the Republicans, of Limbaugh, of Cheney.  They‘re just afraid they‘re going to ruffle them up a little bit. 

UNIDENTIFIED MALE:  I really, really think that he‘s listening to the wrong people.  I know he‘s—I know he‘s trying to act like Lincoln.  I know he‘s trying to bring everybody—to get everybody‘s opinion.  But as he goes around the country, people want single payer.  They better start listening or we‘ll throw them all out. 

(END VIDEO CLIP)

SCHULTZ:  Throw them all out, holy smokes.  Joining me now is New York Congressman Eric Massa.  Some of his outspoken constituents were at the townhall meeting Saturday night.  Congressman, good to have you with us.  I have to tell you, I think there is a real disconnect with some of the folks in your district and what is happening at the White House.  They don‘t feel they‘re pushing hard enough, and they think the Democrats are getting spineless on this public option and going strong enough.  What‘s your take? 

REP. ERIC MASSA (D), NEW YORK:  Well, Ed, first, it‘s great to be here.  I‘ve got to tell you, a lot of things have been said about me, but spineless has never been one of them.  And I frankly have got a pair of shoes and hands and feet.  And we‘re here to give the back to the White House so that single payer has a seat at this table of national debate. 

I‘ve said that for five years.  I‘ll continue to campaign and to represent that as a member of Congress. 

SCHULTZ:  It seems like single payer, this is the phrase that we can‘t use, and it‘s never going to be on the table, that it can‘t work.  What is your definition of a public option?  But most of all, if I put it this way, do you think that the Republicans, in any way, shape or form will allow competition to be given to the insurance industry, as strong as that lobby is? 

MASSA:  No, of course they won‘t allow competition.  This is coming from a group of people who call themselves capitalists, who believe in competition.  It‘s just not the competition in the sector that may fund their campaigns or rob tens, if not hundreds of millions of dollars, out of the back pocket of Americans who need health insurance. 

Let‘s be very clear about something, Ed.  If the private, for profit health insurance industry was working, we wouldn‘t be having this conversation, because 52 million Americans wouldn‘t be without health insurance.  So, as they say sometimes, the proof is in the reality of the failure of the system, which is what brought me to politics, and which gives me the strength to stand on this issue and deliver this message. 

SCHULTZ:  Well, I want to tell you that your constituents speak very highly of you.  And I know you are aggressive on this.  But the bottom line here is that in the sound chamber, what a lot of lefties in this country are hearing and a lot of people who are in the middle of the road, that want something done when it comes to health care reform, they keep hearing this, we don‘t have the votes.  We don‘t have the votes. 

How the hell do you know whether you‘ve got the votes or not if you don‘t even know what the public option is going to be yet?  Will someone answer that?

MASSA:  So this is what we‘re asking for, to be part of the debate.  I am willing to go anywhere, to speak to any group, always focusing on my district, but taking this message wherever it will be heard.  Frankly, ask any retired American today.  They‘re very satisfied with their public option.  Ask any veteran in America today.  They‘re very happy with their public option.  Ask any military retiree.  They‘re happy with their public option. 

But here‘s the most important thing, Ed.  Ask any member of Congress, because members of Congress have access to the most incredible public option available.  I have refused to accept the Congressional health care benefits plan until all Americans have access to that very same public option. 

I mean what I say about it and I say what I mean.  We‘re going to move forward. 

SCHULTZ:  You do not take your health care benefit in the Congress? 

MASSA:  No, I do not. 

SCHULTZ:  Are you willing on this show tonight to challenge the rest of the members of Congress to do the same thing until we getting something passed in this country?  Because if you did, you‘d be the greatest American on TV today. 

MASSA:  Well, not only have I, not only do I, I don‘t know whether it makes me the greatest American on TV, but it makes me a very lonely person at the dinner table sometimes in the Congressional dining room.  This is not about what we‘re supposed to get as members of Congress.  By the way, make it very clear, I stood on the floor of the House; I said I will not take the Congressional Insurance Program. 

I think every member of Congress ought to examine that.  It‘s an individual decision.  But this isn‘t about us.  It‘s about us being sent to Washington to do what‘s right for the people who have elected us.  It‘s a very clear mandate.  Darn be darned about what the future of elections are going to be.  If everyone‘s focused on whether or not they‘re going to go to Washington and be re-elected, we get a self-perpetuating system. 

I‘m focused on doing what I said I would do, and that‘s to bring access to quality health care to every single American citizen in this nation. 

SCHULTZ:  Congressman Massa, you belong, my friend, in the United States Senate.  You keep fighting.  You‘re right where the people are right now.  I appreciate your time right now on the program. 

MASSA:  Thank you, Ed.  Let me make it very clear: I am the one member of the New York Congressional delegation who is not running for the United States Senate. 

SCHULTZ:  Congressman Massa, thanks so much. 

MASSA:  Thank you, Ed. 

SCHULTZ:  Let‘s turn to our panel now.  We found one Democrat out there, one progressive who‘s got a spine.  You just heard him.  Here‘s another one, Stephanie Miller, syndicated radio talk show host, also Jack Rice, former CIA agent, with us tonight, and Heidi Harris is a talk show host on AM 720 KDWN in Las Vegas. 

Stephanie, good to have you on the program tonight.  What are you hearing from your listeners?  Do they believe the Democrats are going to get this—should I say, the majority party, are they going to get this thing done for the people? 

STEPHANIE MILLER, RADIO TALK SHOW HOST:  You know, Ed, I got to tell you, I agree with you.  Whatever health care plan we decide on, I hope it includes a spinal transplant for Democrats.  I know you were in my home town of Buffalo ripping it up this weekend.  And that‘s the exact same thing I hear on my radio show, same thing you‘re hearing. 

The American people are more liberal than the Democrats in Congress.  I heard Howard Dean say today, Ed, we don‘t need Republican votes.  This co-op plan, this watered-down thing, is not going to work.  We need a public plan. 

SCHULTZ:  Heidi, is there any room for negotiation at all for the conservatives when it comes to a public option?  Or is that—put it this way—off the table? 

HEIDI HARRIS, RADIO TALK SHOW HOST:  They don‘t care.  They don‘t need us.  See, that‘s the whole point.  What I think should happen is the Democrats should go ahead and pass this, and then they will own it.  And the Republicans can actually make a difference in 2010 and regain the majority, which they will when people realize it‘s basically government-sponsored, socialized medicine.  And they will not be happy with it. 

But the Democrats have to take all the blame for this.  That would be perfect. 

SCHULTZ:  Is it socialized medicine, Jack Rice, or do you think the American people are willing to give this a chance? 

JACK RICE, FMR. CIA AGENT:  The American people need to give this a chance.  One in six Americans don‘t have insurance.  There‘s millions more who don‘t have enough insurance.  It‘s the number one reason that people actually file for bankruptcy. 

The need is so desperate right now.  The system is so flawed, so broken, that they need something.  It‘s very clear to everybody who‘s ever faced a real problem, everybody. 

SCHULTZ:  Question comes up, how are we going to pay for it?  That question was posed on “Meet the Press” yesterday by David Gregory to the vice president of the United States.  Here it is. 

(BEGIN VIDEO CLIP)

DAVID GREGORY, “MEET THE PRESS”:  Will the president sign a bill that taxes health care benefits for employees? 

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES:  We made it clear we do not think that is the way to go.  We think that is the wrong way to finance this legislation. 

GREGORY:  So if a bill comes with that—

BIDEN:  No, I didn‘t say that.  We‘ll have to see what the whole bill says.  We made it clear, we do not believe you should be taxing—taxing the benefits that people receive through their employers now. 

(END VIDEO CLIP)

SCHULTZ:  Heidi Harris, what‘s your response to that?  You trust the administration on that? 

HARRIS:  Of course I don‘t.  Of course they‘re going to raise taxes.  They‘re going to have to.  The reality is it‘s not going to save anybody money long-term to do this program.  You talk about inefficiencies.  Of course, there are inefficiencies.  But government taking over?  Are you kidding?  Government doesn‘t do anything well.  They won‘t do this well. 

It‘s a scary prospect.  Besides that, the main reason they‘re doing this is to ace out the insurance companies.  Government‘s going to come in.  They‘re going to put a program together that will be easily affordable for everybody, get everybody on that, and eliminate the insurance companies.  That‘s socialized medicine.  That is scary. 

SCHULTZ:  Stephanie, what do you think? 

MILLER:  Ed, this is the problem with bipartisanship, with our friends like Heidi and Rush Limbaugh.  She just said, she wants health care to fail and then Democrats own it.  Don‘t we all, as Americans, want to fix this health care system? 

SCHULTZ:  I would think so.  Jack Rice, where is the political opening for the Republicans here?  If the American people want a public option—and the latest numbers out there are 64 percent—if they want it, why don‘t they just get on board with it? 

RICE:  Yes, you know why?  Because they‘re trying to find the political lever that they have.  They don‘t have much.  Here‘s the funny thing the Republicans have actually been arguing.  They‘ve been saying that if you get this new system, it will be such a disaster that America will fail.  That‘s on one side. 

Then the other side is, it‘s going to be so good that the private industry will fail.  So which one is it?  It‘s going to be so good or it‘s going to be so bad?  It‘s going to be one or the other.  I‘m really confused. 

SCHULTZ:  Heidi, what is your solution? 

HARRIS:  No, I didn‘t say it was good.  I said the government is going to offer a program that‘s going to be very inexpensive initially, and basically people are going to choose to give up their private insurers.  They will get on the government plan, taxes will go through the roof, and then we‘ll all be waiting in line. 

You‘ve got to have private insurance to cover this.  You can‘t put everybody on the government dole, because you‘re going to wind up with rationing in the health care system. 

SCHULTZ:  The president said if you like what you have, you can keep it.  Nobody‘s going to twist your arm on this. 

HARRIS:  I don‘t believe that, Ed, because of the reason I illustrated.  They‘re going to make it so inexpensive that people are going to go wow, I can save money if I go on the government‘s plan.  And they‘re going to purposely give up their Blue Cross, Blue Shield, whoever they have, and go on the government plan.  And those companies will go bankrupt. 

SCHULTZ:  Stephanie, is this a Trojan Horse to socialized medicine? 

Is it a Trojan Horse to single payer? 

MILLER:  It is not.  I don‘t see how much more clearly the president can explain it.  Heidi, public option, the second part of that phrase is option.  The president keeps saying, if you like what you have, you can keep it.  What‘s so hard about that? 

SCHULTZ:  Panel, we‘ll come back.  Stay with us. 

Coming up, President Obama cozied up to the American Medical Association today, even though the group is trying to basically nuke his health care plan.  The AMA is on the wrong side of this health care issue, folks, and they‘ve been for a long time.  More on that and what they‘ve done to fight it over the years, that‘s next. 

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, I want to look at the American Medical Association and its historic role in helping really block health care reform in this country.  The AMA is the largest physician organization in America.  Back in 1961, the group hired Ronald Reagan to be the spokesman in a campaign to block Medicare.  Here‘s how they fought it back then.  Remember this? 

(BEGIN VIDEO CLIP)

RONALD REAGAN, FMR. PRESIDENT OF THE UNITED STATES:  My name is Ronald Reagan.  One of the traditional methods of imposing statism or socialism on a people has been by way of medicine.  All of us can see what happens once you establish the precedent that the government can determine a man‘s working place and his working methods.  And behind it will come other federal programs that will invade every area of freedom as we have known it in this country.  Until one day we will awake to find that we have socialism. 

(END VIDEO CLIP)

SCHULTZ:  Are you kidding me?  We should have led the show with that.  That clip you just watched was included in Michael Moore‘s “Sicko.”  Today, President Obama took the fight to the critics.  He spoke to the American Medical Association. 

(BEGIN VIDEO CLIP)

OBAMA:  When you hear the naysayers claim that I‘m trying to bring about government-run health care, know this: they‘re not telling the truth.  What I am trying to do—what I am trying to do, and what a public option will help do, is put affordable health care within reach for millions of Americans. 

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Sam Stein, political reporter for the “Huffington Post.”  He‘s done extensive reporting on the history of the American Medical Association, and how they have fought health care reform over the years in this country.  Do you think the president made any headway at all today with the AMA? 

SAM STEIN, “THE HUFFINGTON POST”:  It‘s a great question.  I was talking to a few observers of the health care debate who say that the AMA could potentially come on board a public plan, but it would have to be so watered down so as to make the public plan virtually ineffective.  That said, about 60 percent of doctors say they support a public option for health insurance.  Any time that the president can take the case directly to them, he can peel a few more off, and he can diminish the effectiveness of the AMA. 

I know that one member of the AMA actually blogged for the “Huffington Post,” said he was so sick of the fact that his group was out against the public option that he was thinking of quitting.  So I think there‘s a fissure there.  I hope Obama‘s trying to take advantage of it, and I think that‘s what he‘s trying to do today. 

SCHULTZ:  Are they going to be as aggressive behind the scenes as they were with Ronald Reagan‘s audio on that most recent commercial?  Well, not most recent, it‘s 40 years ago.  The fact is that they were pulling out all stops back then.  What are they going to do now? 

STEIN:  That was some scary stuff in the Reagan days.  Ironically, the term socialized medicine, which was talked about with your last panel, is reported to have originated with the AMA, when they were trying to defeat FDR‘s efforts to put medicine into the Social Security Act in the 1930s.  The problem with the group right now is that they‘re clout is greatly diminished.  I think there‘s about 250,000, roughly, physicians in the group.  It‘s not a vast majority of the physicians worldwide.  The members tend to be older or college-age students. 

So their lobbying clout, their political clout is diminished.  I know that progressives would like to have them be quiet a little bit, or maybe be on board with the president‘s plan.  But they‘re not entirely concerned about their opposition to the public option at this point. 

SCHULTZ:  In the entire arena, Sam, how much clout does the AMA have?  Are they as strong a lobby group?  Are they playing for keeps?  Could they make some real trouble for Obama if they want to? 

STEIN:  Sure, I think their clout is more in terms of who they are and what they represent, than it is in terms of actual Congressional pull.  These are physicians.  They are well-respected members of society.  My parents are doctors.  They are very well respected as well.  You get a sense that if physician is against something, you trust your doctor.  Obama said it today in his speech, I want to do what you tell me to do. 

So if the doctors are out there saying, we think a public option is a bad idea, there‘s some sort of pull there, because you do generally trust your physician.  But they don‘t have the numbers.  They don‘t have the resources that they used to marshal used the Clinton plan in the early ‘90s.  So, on the Hill, people are not as worried about it this time around. 

SCHULTZ:  Sam, thanks for joining us tonight.  You see breaking news there.  The president has already commented on the situation in Iran.  He says he‘s deeply disturbed by violence after the Iranian election.  We‘ll get to that after the break. 

Coming up here on THE ED SHOW on MSNBC, I said it months ago, Cheney wants this country to get hit again.  The head of the CIA is basically saying the same thing.  Then he did a reversal.  We‘ll have more on that.  Stay with us when we come back, right here on THE ED SHOW, on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  It‘s time for Ed-lines tonight.  Iran‘s supreme leader has ordered an investigation into alleged vote rigging in Friday‘s allegation.  Reform Candidate Mousavi says he is not optimistic of the outcome.  President Obama spoke about this just a few moments ago. 

Let‘s go to our panel, Stephanie Miller, Jack Rice, Heidi Harris.  With all the things that are going on in Iran, Jack Rice—obviously there‘s rioting going on.  There‘s all kinds of dysfunctional things taking place.  Could this, Jack, set the table for a possible revolution or am I maybe overstating that possibility?  What do you think? 

RICE:  It‘s a tough call, because President Obama was just meeting with Prime Minister Berlusconi a couple of blocks from me, MSNBC studios, where I am.  The real issue is this—what this really highlights is the need for the Americans to be able to reach out, because if we had been able to reach out more closely with the Iranians in previous years, we might have driven them to having more transparent election cycles. 

Now what we‘re seeing is even more instability, and that can ripple through the entire Middle East.  It‘s a huge problem because of their impact in places like Lebanon, in places like Palestine.  We really, really have to watch this. 

I tell you what, the Israelis right now are very, very nervous. 

SCHULTZ:  Heidi Harris, what should the president do at this point? 

HARRIS:  I don‘t know if it‘s going to matter who ultimately is in charge, because the Mullahs are the ones who really run Iran.  It‘s interesting to see the riots in the streets and a lot of people have known for a long time a lot of the people in Iran are young.  They‘re not happy about Ahmadinejad.  They want a different type of country. 

But as far as who ultimately runs it, the Mullahs are going to be in charge, unless something really drastic happens with them. 

SCHULTZ:  Stephanie, your take on this.  Should the president be very aggressive?  He‘s just said he‘s obviously disturbed.  Should the president inject himself into this, maybe to the point of saying there should be another election?  What do you think? 

MILLER:  I don‘t think that‘s a bad idea, Ed.  I knew there was going to be trouble when I saw Katherine Harris and Ken Blackwell were in charge of the election in Iran. 

HARRIS: Oh, please.  Let‘s get Jimmy Carter down there.  Why doesn‘t Jimmy Carter go and count—

MILLER:  Over 70 percent of the Iranian population is young, Ed.  And they were largely for his opponent.  So—and there was a huge turnout.  This clearly didn‘t add up.  I don‘t think it‘s a bad idea to, you know, look into it. 

SCHULTZ:  All right.  I want to talk more about Dick Cheney, if I can, for just a moment, and the conversation he has created in this country about safety.  His response to Leon Panetta‘s comment was, “I hope my old friend Leon was misquoted.  The important thing is whether the Obama administration will continue the policies that have kept us safe for the last eight years.” 

And then, of course, Leon Panetta backtracked through a spokesman this afternoon.  He says, “the director does not believe the former vice president wants an attack.”  He says he did not say that.  “He was simply expressing his profound disagreement with the assertion that President Obama‘s safety policies have made the country less safe.  Nor did he question anyone‘s motives.” 

Heidi, why do you think that Mr. Panetta backed off on this through a spokesman? 

HARRIS:  I think Dick Cheney went after him and said, I hope he was misquoted.  Dick Cheney‘s correct.  Dick Cheney does not want this country attacked.  Are you kidding? 

SCHULTZ:  No, I‘m not.  I think he does for political gain, but that‘s just my take. 

HARRIS:  I do not believe he wants that for a second.  I think Leon Panetta realized he overstepped his bounds when he tried to infer that.  Big mistake. 

SCHULTZ:  What about it, Stephanie? 

MILLER:  Ed, you‘re absolutely right.  Dick Cheney ran this play in 2004.  He said terrorists will kill you, essentially, if you vote for John Kerry.  Now, he‘s saying terrorists are going to kill you because you voted for Barack Obama.  It is politics and fear mongering at its absolute worst. 

SCHULTZ:  Jack, is he, the former vice president, creating a problem for the agency, continually coming out and making charges that we‘re not as safe under Obama? 

RICE:  No question about it.  Every time he does this, every time he does this, he makes things a little less stable than they were.  Remember, I guess, for eight years, the idea that if you could commit war crimes and you could destroy the Constitution, I guess that makes us safer.  In a weird sort of way, he‘s right. 

SCHULTZ:  All right, I want to go back to the health care issue about taxing.  Heidi, I want to know, do you think that the Republicans will agree to anything when it comes to health care reform in this country with the president?  What will they agree to, if anything? 

HARRIS:  The Republicans have been told very clearly they‘re not necessary.  Everybody talked about bipartisanship until they have the majority.  The Republicans aren‘t necessary.  Barack Obama‘s the one who said, I won the election.  Basically he doesn‘t care.  I think the Republicans should back off, let the Democrats do whatever they want to do, and they‘ll take the blame.  And the Republicans won‘t be listened to regardless.  Why bother? 

SCHULTZ:  Stephanie, why don‘t the Democrats just say, look, your taxes are going to go up.  In fact, we‘re going to repeal the Bush tax cuts to get this done.  I think this is part of the spineless end of it.  They ought to just come out and tell people, this is what we‘re going to do.  Why don‘t they do that? 

MILLER:  I hope Leon Panetta gets included in the spinal transplant for the Democrats.  I‘m with you on this. 

But Heidi, this is the problem.  The president has reached out extraordinarily to the other side.  And he‘s gotten nothing.  He‘s gotten zero votes.  You can‘t say he‘s not trying.  The Republicans are the ones that are not reciprocating. 

I agree with Ed, the American people, largely, if you look at the polls, want his health care plan.  The Democrats need to get it done. 

HARRIS:  The American people want everything. 

RICE:  You‘re right, Stephanie.  Heidi, the president shouldn‘t take Heidi‘s advice.  Don‘t even talk to the Republicans anymore.  Just do what you‘re going to do.  We hired you for a reason.  We hired the Congress, the House and Senate.  Drive forward, do what needs to be done.  We‘ll go on and deal with the consequences. 

Imagine, he‘s actually serving America, shocking. 

SCHULTZ:  I think the president needs to come out and say, look, we‘re going to do health care reform in this country; this is what I was elected to do; we‘re going to have to raise some taxes; we‘re going to repeal the Bush tax cuts to pay for this.  I bet he would just walk to re-election in ‘12, and I don‘t think they would be dinged at all in the midterms. 

We‘ll see.  Panel, great to have you with us, thanks so much.  That‘s THE ED SHOW.  Chris Matthews is next with “HARDBALL,” right here on the place for politics, MSNBC. 

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