updated 6/23/2009 11:19:25 AM ET 2009-06-23T15:19:25

Guests: Evan Bayh, Darrell Issa, Lisa Farbstein, Joe Cirincione, Sen. Bob Casey, Ryan Lizza, A.B. Stoddard, Christina Bellantoni

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

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SCHULTZ:  Good evening, Americans. 

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

John McCain, the loser of our last election, is now second-guessing the commander in chief.  The president is taking a lot of heat for his inaction on Iran. 

And the Senate is not on the same page with the American people when it comes to health care.  A new poll out shows 72 percent of the American people want a public option.  The Republicans are calling that a nonstarter. 

Folks, here comes the fight. 

Suspected terrorists—now, they can‘t fly, but they can purchase a gun in the United States.  And the Republican Party is funded by the GOP lobby.  Just another one of those safety issues. 

Get out your cell phones because we‘ve got a text survey coming up for you tonight.  Plus “Psycho Talk,” a great panel. 

But first tonight, folks, before the “OpEd,” we have some serious breaking news.  It‘s coming out of Washington, D.C. 

Two metro trains collided near the D.C./Maryland border just hours ago.  One person is dead according to NBC‘s television station WRC.  Fifty-five people are believed to be injured.  These are preliminary numbers. 

This was a head-on collision.  Part of one train is now on top of another train.  And for those of you who know this metro system, it is the red line. 

People are still trapped inside the wreckage.  Fire and rescue crews are doing a mass casualty recovery right now. 

We‘ll continue to update you with this tragic story throughout the hour right here on MSNBC. 

But first, tonight‘s “OpEd” after our breaking news.

John McCain is now America‘s biggest second-guesser.  The candidate who got his clock cleaned by Barack Obama in November is making the rounds criticizing the president on Iran.  As usual, his Senate lapdog friend Lindsey Graham is right there with him. 

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SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  The president of the United States is supposed to lead the free world, not follow it.  Other nations have been more outspoken, so I hope that we‘ll hear more of this, because the young men and women taking to the streets in Tehran need our support.  But he‘s been timid and passive more than I would like, and I hope he will continue to speak truth to power. 

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SCHULTZ:  Now, we‘ve heard all this before, that he‘s not tough enough. 

John McCain says he wants the president to do more. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA:  I‘m not for sending arms.  I‘m not for fomenting violence.  Nothing, except to say that America‘s position in the world is one of moral leadership.  And that‘s what America‘s all about.  And the United States hasn‘t done anything except to—what we should do, and that is as we did in the Congress on Friday, and that was a joint resolution. 

(END VIDEO CLIP)

SCHULTZ:  A joint resolution?  Senator McCain is puffing about passing a resolution? 

I‘m sure that those people getting beaten in the streets in Iran feel like you‘re right there with them, Maverick. 

Bob Schieffer wasn‘t side with that answer.  He asked point blank, what options does the president have? 

(BEGIN VIDEO CLIP)

MCCAIN:  You know that old Beach Boys song Bomb Iran?  Bomb, bomb, bomb—anyway...

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SCHULTZ:  You know, I don‘t know about you, but I‘m awfully glad this guy is not president.  I remember him being on the campaign trail saying, “My friends, I will deal with these people.” 

OK. 

So the righties say President Obama needs to do more, but when asked what they want the president to do, they just don‘t come up with anything other than that comment.  The right made the same charge against President Obama during the campaign, saying that he just wasn‘t tough enough.  It didn‘t work then and it‘s not going to work now. 

But let‘s remember, if we can.  I think we can be pretty thankful that this president is doing what he‘s doing.  I think we can be thankful that John McCain is not the president. 

I think, and I got a lot of heat for this on the campaign trail when I said John McCain was a warmonger.  Oh, they all wanted to interview the big red head then.  He‘s still a warmonger, and he still has that tag, and he can‘t get enough of this stuff. 

The worst thing President Obama can do right now is inject himself and the United States into this situation to make it only worse or something that it‘s not.  If it‘s going to be a revolution it‘s got to come from the people, not from any government across the sea that is going to try to inflict its will on the region. 

The United States has to know this could be a defining moment to show the world that we‘re not heavy-handed the way we used to be and that we‘re not going to be doing this kind of stuff in foreign relations.  The people have got to do it.  The bottom line is we‘re just not on a crusade. 

This has got to be coming from the people, not from the foreign diplomats.  Obama has been a stellar performer, I think, with this issue, keeping his cool and not overreacting, and not injecting the United States where it doesn‘t belong right now for the first time since World War II. 

Joining me now is Senator Evan Bayh of Indiana.  He‘s a member of the Senate Intelligence and Armed Services Committee. 

Senator, do you agree with me on this, or do you think the president should inject himself more in this process? 

SEN. EVAN BAYH (D), INDIANA:  Ed, I think president has been the right combination of both tough and smart on this issue.  He‘s put us squarely on the side of the forces of reform with Iran unequivocally, he‘s condemned the violence, but he‘s done it in a smart way. 

The people who would be most elated about us overtly meddling in the internal affairs of Iran would be the reactionaries, the mullahs.  They would use it as an excuse, Ed, to change the narrative away from their oppression and the fraudulent election toward imperialism, western influence, and that kind of thing. 

And so right now, they are losing with their own people.  They‘re losing with world opinion.  Let‘s not let them change the subject. 

SCHULTZ:  Senator, do you think that the Republicans are saber-rattling right now?  Do you think John McCain and Lindsey Graham have gone too far?  I mean, we‘re in the infancy of this crisis right now in Iran, and here they are playing politics trying to blame the president for not being aggressive enough. 

Are they saber-rattling? 

BAYH:  I think it‘s largely semantic differences.  I would love to know from my two friends, what are the magic words? 

I mean, the president has unequivocally endorsed the Democratic movement in Iran, he‘s condemned the violence, he‘s said, look, people have a right to assemble, to speak.  That should be honored.  So you‘ve got to be a little careful.  When you go too far out rhetorically, you can run into a situation as happened in Iraq in the early ‘90s when we encourage encouraged the shia there to rise up, then did nothing for them when Saddam Hussein brutally oppressed them and killed thousands of them. 

So we‘re for the people there, but let‘s not give the regime an excuse for more bloodletting. 

SCHULTZ:  Well, you just said something interesting.  You said you‘d like to know what the magic words are.  So you like the way the president is playing this right now by not overplaying his hand. 

What about the Iranian people who want a dialogue with the West?  Do you think that they feel that we are doing enough?  Do you think that President Obama is doing enough? 

BAYH:  What I hear—and we get some reports in the Intelligence Committee—Ed, is that is even the reformers in Iran don‘t want us to be overtly meddling in their affairs because they know that would give the regime a pretext for their crackdowns.  And look, there‘s a long history there of foreign intervention, and there‘s a deep wellspring of national pride in that country. 

So, we run the risk, Ed, of harming the very people we hope to help if we overplay our hand.  This is a complex, rapidly evolving situation.  We need to speak unequivocally to our values and put ourselves on the right side of freedom and history in that country, but do it in a smart way, not just lashing out in a way that actually undercuts the cause that we hope to advance.  I think the president has struck the right balance in a pretty delicate situation. 

SCHULTZ:  OK.  He struck the right balance in this situation right now.  But if this violence continues, and if this unrest continues, and there are more lives lost—there‘s 17 to count right now—should the president become more aggressive?  Should we do more or should this be our tone throughout this entire crisis? 

What do you think? 

BAYH:  Well, ,you‘ve got to react to events.  And clearly if the bloodshed continues, you‘ve got to, you know, go even further by condemning that. 

I‘ve been advocating something for some time, Ed, with regard to their nuclear program, that we need to impose really tough economic sanctions when it comes to their imports of gasoline.  That could really damage the Iranian economy at a time when they‘re already vulnerable. 

And you know what, Ed?  By the regime being as reactionary as it‘s been, it has rallied world opinion against them and could strengthen our call for that kind of tough financial and economic action.  So I would encourage the president to consider that with regard to their nuclear program. 

SCHULTZ:  Senator Bayh, good to have you with us tonight on THE ED SHOW. 

Thanks so much. 

BAYH:  Always a pleasure. 

SCHULTZ:  You bet.

For more, let me turn to Republican Congressman Darrell Issa of California. 

There are a number of those in the Congress who think that the United States should be more hawkish in this situation.  Congressman Issa is going to be joining us in just a moment. 

The president has taken quite a bit of criticism from those on the right who think that he hasn‘t injected himself enough, that he hasn‘t led this potentially revolutionary move.  When you have 17 people getting killed on the streets of Iran, obviously these people are making a statement.  And some in the Congress think the president should do more.  Short of military action, I would think. 

Congressman Issa joins us now here on THE ED SHOW.

Congressman, what should President Obama be doing?  Many have said that he‘s not doing enough.  Where do you stand on this? 

REP. DARRELL ISSA ®, CALIFORNIA:  Well, the president‘s playing catch-up right now.  The biggest challenge is that he didn‘t get into the story earlier. 

In the House, Congressman Mike Pence really led having the House denounce the violence against protesters.  That‘s really what the president has to do.  He has to catch up on that, on the human rights part of it.

Senator Bayh just talked about the fraudulent election.  I wouldn‘t go there.  I don‘t think the president has to get into the internal politics of the election, but he has to stand up for people being oppressed. 

Remember, this is a regime that is killing people in Israel.  It‘s caused Palestinians to kill fellow Palestinians.  It backed the revolution—the civil war in Lebanon.  There‘s 30 years‘ worth of history of this regime helping foment violence around the world.  So it is one where we should not be ambiguous about the repression of their own people. 

SCHULTZ:  Well, Congressman, what are the magic words?  What do you want to hear President Obama say or do?  You say he‘s doing catch-up.  What‘s his play right now?  What do you want him to do short of military action, I assume? 

ISSA:  Well, first of all, I think he should go to the United Nations with a resolution denouncing this, because Iran, for better or worse, does want to be part of the league of our nations, and they do look to the United Nations.  That‘s where we could look at the Security Council and even the General Assembly and denounce the violence against the individual citizens there. 

That‘s a real threat.  It has real teeth to the people running Iran, because they don‘t want to be isolated. 

As Senator Bayh said, and rightfully so, we could look at getting with our allies and suspending gasoline as a form of bringing them simply to stop killing their own people on the streets.  But, like China after Tiananmen Square, we have to say that this has to change, that people have human rights, that have civil rights, even in this country, and we stand for that. 

SCHULTZ:  So I‘m hearing you, Congressman, say that you think that President Obama should encourage revolution in that country? 

ISSA:  No, not at all. 

SCHULTZ:  OK. 

ISSA:  He should—just like in China, we did not back Tiananmen Square and talk about the people who gave their lives there from a standpoint of revolution.  We talked about the ability for people to express and have freedoms. 

And China‘s not perfect, and they‘ve got a long way to go.  But after Tiananmen Square, they began looking at a new bargain, a new way of doing business in China. 

China‘s still a mess, but at least in China there‘s communication.  In Iran, they‘ve shut down communication.  They‘ve thrown the American journalists out. 

That‘s where we can go to the United Nations and to the countries around and say we only expect you to treat your own people civilly.  If they‘re nonviolent, you have to be nonviolent.  We can do this and we can do this with the many nations surrounding them. 

SCHULTZ:  OK.  Congressman, good to have you on with us tonight. 

ISSA:  Thank you, Ed.

SCHULTZ:  Thanks so much for your opinion. 

We want to give you the very latest on the breaking news.  Two metro trains collided near the D.C./Maryland border tonight.  One train is on top of the other.  One person is dead.  Dozens of people have been taken off the train. 

Metro‘s general manager just spoke.  He says rescue crews are still working to get people off the train. 

We‘ll continue to bring the updates throughout the hour and the new details of this tragic situation as it unfolds in the nation‘s capital. 

Coming up, North Korea is acting up again.  Now, we‘ve got a ship believed to be loaded with illegal weapons headed for Myanmar. 

And also, President Obama, I think it‘s your move. 

I want to know what you think.  Should the United States intercept and board this North Korean ship?  Text “A” for yes and “B” for no right there.  The numbers is 622639.  And we‘ll tell you what the results are later tonight here on THE ED SHOW.

Stay with us.

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SCHULTZ:  Welcome back to THE ED SHOW.

We want to give you the very latest on the breaking news. 

Two metro trains collided near the D.C./Maryland border tonight.  One train is on top of the other.  Two people are dead.  Dozens of people have been taken off the train. 

Lisa Farbstein is the metro spokeswoman.  She joins us here on MSNBC. 

Lisa, can you tell us tonight what you know, what happened, and the latest information on this? 

LISA FARBSTEIN, METRO SPOKESWOMAN:  Right.  At about 5:00 today, a six-car train headed out of town derailed and it collided with another train that was coming in the opposite direction.  And unfortunately, we have—sad to report that we have two fatalities, several serious injuries to customers on board the train.  Our primary concern at this time is getting medical attention to the customers who are on board, or who were on board the trains. 

SCHULTZ:  OK.  Do you know what caused the derailment tonight? 

FARBSTEIN:  No, we‘re not likely to know the cause of the derailment for several days. 

SCHULTZ:  So is there any speculation at all on what caused it? 

FARBSTEIN:  No, there is not. 

SCHULTZ:  How many crews are on the scene right now? 

FARBSTEIN:  I don‘t know.  I‘m not at the scene.  I can tell you that there are many, many emergency rescue personnel on the scene.  We don‘t measure them by crews. 

SCHULTZ:  OK.  And how many people do you think are injured and how serious are the injuries? 

FARBSTEIN:  We do have reports of several serious injuries.  And obviously, as I mentioned earlier, unfortunately two fatalities.  So that goes to say that their injuries were extremely serious. 

SCHULTZ:  And how many people are still on board the train, and what‘s their situation? 

FARBSTEIN:  Unfortunately, I don‘t know how many people are still on board the train.  The incident happened at about 5:00, and that would have been right at the start of rush hour.  So there would have been—there would have been several hundred people. 

SCHULTZ:  OK.  So high occupancy normally on the red line this time of night, these trains are full? 

FARBSTEIN:  Right.  At that time of day, right at 5, 00 they would not been as full as they would normally be at 5:30. 

SCHULTZ:  How fast were the trains going?  Do we know? 

FARBSTEIN:  No, I don‘t know that.  That will be part of the investigation. 

SCHULTZ:  And was there any operator error?  Was there any miscommunication?  Or do we know for sure that it was a train derailment and came over into the other track and hit the oncoming train? 

FARBSTEIN:  As I said earlier, we‘re going to have a thorough investigation and we won‘t know the cause of this incident until that investigation gets under way. 

SCHULTZ:  OK. 

And finally, Lisa, do you anticipate any other fatalities out of this? 

FARBSTEIN:  I have no way of knowing at this time the nature of the other injuries.  I sure hope not. 

SCHULTZ:  OK.  Lisa Farbstein with us tonight, spokeswoman for the metro, this serious accident on the red line tonight.  Two people are dead after two trains collided in Washington, D.C.  One of the trains was derailed and went into another train.  And of course you see there one is on top of the other.  Many people are injured. 

And we‘ll keep you up to date on all of that tonight right here on MSNBC. 

Iran may be two years away from a nuclear weapon.  North Korea has threatened to launch a ballistic missile towards Hawaii, possibly as soon as Fourth of July.  And the United States is tracking a North Korean ship which may be carrying small arms cargo banned by the U.N. 

North Korea has said it would consider an interception of the ship an act of war.  The nuclear stakes are high and ratcheting up for the White House. 

President Obama has dedicated himself to a nuclear-free world, and we have to wonder if that can really happen with everything going on. 

Joining me is nuclear nonproliferation expert Joe Cirincione, the president of the Ploughshares Fund. 

Joe, good to have you with us tonight.

This ups the stakes, does it not, all these things that are taking place? 

But I want to focus in if I can on this North Korean ship. 

What would it do if we were to intercept this ship and absolutely board it after the North Koreans have said that they would consider this an act of war?  Your thoughts on that? 

JOE CIRINCIONE, PRESIDENT, PLOUGHSHARES FUND:  Well, we have intercepted and boarded North Korean ships before.  You may remember shortly before the war in Iraq, we intercepted a ship that we thought was heading to Iraq with a shipment of scud missiles. 

It turned out it was heading to our ally, Yemen.  It was an embarrassing incident.  We had to let the ship go, and the North Koreans delivered their supply of scuds to our ally, Yemen.  So that interception passed without incident. 

Under these circumstances, I think it‘s a high-risk move to actually intercept this ship.  Remember, as you just reported, we don‘t actually think there‘s nuclear arms on here or nuclear-related technology.  It may be a shipment of small arms. 

Given what North Korea has said, you‘ve got to seriously consider whether it‘s worth the risk of a provocation, of doing something that would almost force North Korea to respond, in order to do what?  Stop some small arms from going to some other country? 

I don‘t think there‘s anything wrong with tracking the ship, following it, monitoring it closely.  But intercepting it?  I‘m afraid that that‘s a move without much payoff. 

SCHULTZ:  This is Senator John McCain, what he had to say about what we should be doing in dealing with this situation.  Here it is. 

(BEGIN VIDEO CLIP)

MCCAIN:  If we have hard evidence that that ship is carrying technology equipment missiles that are in gross violation of the U.N. Security Council Resolutions, I think we should board it.  It‘s going to contribute to the proliferation of weapons of mass destruction to rogue nations that pose a direct threat to the United States. 

(END VIDEO CLIP)

SCHULTZ:  Joe, if there‘s evidence, how could the president be wrong if there‘s a U.N. resolution or U.N. law here that says that they shouldn‘t be doing that?  Where‘s the downside if we do board it? 

CIRINCIONE:  Well, one is the evidence issue.  You‘ve just reported that we think there might be small arms on here.  So John McCain is taking a huge leap here saying that—but he does caveat—if there‘s evidence that it‘s got some nuclear technology.  As far as I know, there is no evidence of that. 

If there is such evidence, there could be a case for multinational interception of the ship.  Actually, when we intercepted the ship with the scud missiles, it was actually the Spanish who stopped the ship, not actually the United States, so that we have precedent for this.  Then there could be a reasonable way of doing it. 

But under these circumstances, you‘re really poking North Korea with a stick here, sort of daring them to do something in response.  The North Koreans have shown in recent months that they will meet any action on our part with a reaction on their part. 

So what‘s the game here?  Where‘s the strategy? 

What I‘m worried about is not these sort of calls from the conservatives that are basically aimed at Obama, saying you‘re chicken if you won‘t take stronger action.  I‘m not worried about that.  I‘m worried about President Obama sort of drifting into a confrontation here with North Korea without much of a plan. 

He sort of let this whole situation drift for the last six months.  And now they seem to be making it up as they go along. 

SCHULTZ:  OK.  Joe Cirincione, thanks for your time tonight on THE ED SHOW on MSNBC.  Thanks so much. 

CIRINCIONE:  My pleasure, Ed. 

SCHULTZ:  I want to know what you think.  Should the United States intercept the North Korean ship?  Text “A” for yes, “B” for no to this number: 622639.  Standard text messaging rates apply. 

We‘ll bring you the results later on in the show. 

Up next on THE ED SHOW, more GOP tweeting on Iran?  You won‘t believe what they‘re saying now.  Bird brains next in “Psycho Talk.”  

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, those twitterers, they‘re something else.  Twitterers comparing the deadly protests in Iran to the right-wing TEA parties in the United States?  Cut me some slack. 

State Senator David Thomas of South Carolina tweeted on this Friday.  Here we go. 

He says, “Iran election protests.  TEA parties Middle Eastern style continues.” 

There‘s another one.  “Even Al Jazeera is reporting on protests in Iran. 

Satellite link TV showing much protest video.  TEA parties Mideast style.”

And now you‘ve got Representative Pete Hoekstra of Michigan getting involved in it.  “Iranian Twitter activity similar to what we did in the House last year when Republicans were shut down in the House.”

Congressman John Culberson of Texas twittered about Republicans and Iranians both being an oppressed minority. 

Cut me some slack.  These comparisons are absolutely absurd.  We‘re talking about hundreds of thousands of Iranians taking to the streets to protest an election that they saw as unjust, protests broken up by tear gas and bullets, hundreds arrested and at least 17 people killed, complete censorship, journalists being put behind bars.  Iranians are risking their lives to protest, to twitter, to blog. 

Comparing that to a few hundred protesting with TEA parties?  That‘s “Psycho Talk.”  

(COMMERCIAL BREAK)

(NEWS BREAK)

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SCHULTZ:  Welcome back to THE ED SHOW.  A war is brewing inside the Democratic party over health care.  It‘s the good lefties, the progressives, up against the conservative Democrats, who say we can‘t get it done because it just is going to cost too much, and we don‘t have the votes and they‘ve got all these excuses.  Cut me some slack, will you? 

I‘d like to know who these senators think they‘re representing.  It sure isn‘t the American people.  They‘re overwhelmingly behind major reform.  A new poll out over the weekend showing 72 percent of the American people support—did we get that right—you spell that S-U-P-P-O-R-T—support a government-administered insurance plan, in other words, a public option. 

Somehow, Senate Democrats just aren‘t getting the message.  Senator Dianne Feinstein says President Obama doesn‘t have the votes to get a plan with a public option passed in Congress.  What? 

(BEGIN VIDEO CLIP)

SEN. DIANE FEINSTEIN (D), CALIFORNIA:  Well, to be candid with you, I don‘t know that he has the votes right now.  I think there‘s a lot of concern in the Democratic caucus. 

(END VIDEO CLIP)

SCHULTZ:  What?  Last week, Tom Daschle did a 180 on this, coming out against a government-run plan and a public option.  That was met with immediate backlash from some liberal Democrats, including the number two Democrat in the Senate, Dick Durbin.  They took the fight to the Internet, urging people across the country to demand the public option. 

Joining me now is Senator Bob Casey of Pennsylvania.  He sits on the Health, Education, Labor and Pensions Committee.  Senator, where do you stand on this?  Are you going to fight for a public option? 

SEN. BOB CASEY (D), PENNSYLVANIA:  Ed, we‘ve already started that fight.  I think it‘s vitally important that when you have major health care reform like we‘re working on right now—and our committee, as you know, has already voted on amendments.  We‘re moving on this issue.  But I think it‘s vitally important—

SCHULTZ:  The Republicans have said that‘s a non-starter.  Where does that leave you? 

CASEY:  Ed, look, there will be a lot of rhetoric from the other side.  When you have an option that is based upon a program that works—Medicare has worked for decades.  We know it works.  We know that it will provide the opportunity for people that don‘t have any health insurance to have a health insurance option.  It will also provide competition, as well as providing choice. 

We ought to have a public option.  We‘re going to fight very hard for it.  In our committee, we‘re working on that right now.  We‘re not there yet, in terms of the voting.  We did quality.  We‘re going to work on prevention next.  Then we‘ll get to coverage, which of course includes a public option.  So I‘m a strong supporter. 

SCHULTZ:  OK.  Let‘s get to the money.  People are willing to pay taxes to pay for this universal health care.  “New York Times” poll, 57 percent of the American people are willing; 37 percent not willing and no opinion.  Are you willing to support tax increases to pay for universal health care coverage or that public option, whatever you want to call it? 

CASEY:  Ed, as you know, the Finance Committee is going to be working in the next couple of weeks, and has worked over many months on this issue of how we pay for this health care reform.  Part of that will involve cuts.  There‘s no question about that. 

But I think it‘s about time that those who got hundreds of billions of tax cuts over the last decade, it‘s about time that they paid their fair share to provide the kind of health care coverage we should provide.  And as someone pointed out today—I think it was Paul Krugman pointed out today that all the big estimates of what health care reform will cost is actually less than what the tax cuts added up to over many years. 

I think it‘s about time that the millionaires and the multi-millionaires and the billionaires paid a little bit to make sure that everyone can have health insurance and have a quality, affordable plan that will offer the kind of choice that the American people expect. 

SCHULTZ:  The American people were never told how much Iraq was going to cost.  In fact, that was off-budget for a number of years.  Senator, are you willing to stand by and allow 40 people to deny what millions of Americans want?  Why not force the Republicans to filibuster, and let‘s see who they are when it comes to helping middle-class families in this country.  Why not just throw it right in their court: you‘re either with us or you‘re against us on this reform?

If you‘ve got 72 percent of the American people who want it, where‘s the downside in the Democratic caucus? 

CASEY:  Well, Ed, I‘m a big supporter, as you know, of a public option.  I think it‘s vitally important to give people that kind of choice and to enhance competition.  We don‘t know where this is going to go in the end.  We still have a long way to go.  We‘ve got work that we have to do in our committee, work in the Finance Committee. 

At the end of the day, I believe we‘re going to get this passed.  Whether or not it looks like it does now, we don‘t know.  At the end of the day, we have to make sure that the American people have a choice, that they can stay with the health care that they like, or if they want to make a different choice, that they have not just private options, but a public option as well. 

And Ed, I‘d say one more thing that isn‘t getting much attention at all, even from columnists.  We have to make sure that, at the end of this process, there is one golden rule here: no child worse off.  That should be the goal—one of the major goals of health care legislation.  And some of the proposals could lead to children being worse off, especially poor children and children with special needs.  I think it‘s vitally important that no child be worse off at the end of this road. 

SCHULTZ:  Senator, you are optimistic.  I think it‘s going to be a heck of a battle.  I don‘t think the Republicans are going to be giving any ground.  I think it‘s going to turn out to be a battle royal.  We‘ll see.  Thanks very much. 

CASEY:  It will be a battle, but we‘re ready for it. 

SCHULTZ:  Thank you for joining us tonight.  For more, let me bring in our panel, Washington correspondent for the “New Yorker,” Ryan Lizza, associate editor for “The Hill” A.B. Stoddard with us tonight, and “Washington Times” White House correspondent Christina Bellantoni. 

Let‘s start with you, Christina.  How tough are the Republicans willing to play on public option?  What do you think? 

CHRISTINA BELLANTONI, “THE WASHINGTON TIMES”:  It seems like they‘re willing to play pretty tough.  This is kind of the latest talking point among the GOP right now.  But the Democrats need to decide if they‘re going to do what the Republicans used to do, and muscle something through.  They can do that.  They have the votes to do that from their side.  They‘re trying to compromise and find some common ground. 

So they need to decide if they‘re going to play hardball on this. 

SCHULTZ:  Ryan, is the president using enough political capital?  I mean, do you see him really pushing hard?  I mean, if President Obama fails on this, this will mirror what happened back in the ‘90s with the Clinton administration, which didn‘t bode well politically.  What do you think? 

RYAN LIZZA, “THE NEW YORKER”:  Yes, look, he has to pass health care.  He‘s going to have—his first year will be a failure if he doesn‘t pass some version of health care.  I think he‘s trying to weigh in at the appropriate time.  He wants to put pressure on at the points where it‘s actually going to make a big difference. 

I think the—if you step back for a second, what‘s really happening here is we don‘t in this country accomplish major reforms like this without a sort of mass movement behind them.  And the truth of the matter is the uninsured in this country don‘t represent a mass movement pushing this.  There‘s been a lot of efforts by labor unions, by Obama with his campaign list, to generate a grassroots groundswell for this reform.  And it‘s tough because it‘s not an issue that naturally, you know, brings together people to pressure their Congressmen. 

And people are very afraid of losing their coverage.  And, you know, it‘s not—it‘s not easy to pass something like that. 

SCHULTZ:  A.B., let me ask you, what would it be like for the Obama administration if 40 people deny what 72 percent of the American people want? 

A.B. STODDARD, “THE HILL”:  Oh, Ed, you keep talking about the Republicans fighting this.  The Democrats are fighting among themselves.  They want to tax the wealthy, but there‘s not one consensus tax cut, or two or five or ten on the table to pay for this.  They are disagreeing over every single possible option that Obama floats their way. 

We are talking about the Democrats who can‘t pass health care right now.  Don‘t worry about the Republicans.  They will want to filibuster a public option.  Worry about the Democrats who don‘t want a public option, who say it‘s a non-starter. 

Ryan is right.  There is not enough of a movement behind the public option.  There‘s bailout fatigue.  You can see it in every poll throughout this country, lots of concern about deficit spending.  Even if Obama inherited these deficits, there is a tremendous concern.  And you saw the reaction last week about those cost estimates for this plan, not only among Republicans, among Democrats.  Scared they can‘t pay for this.  And they haven‘t found a way to do so. 

So that‘s the problem.  Keep your eye on the Democrats, and don‘t worry about the Republicans. 

SCHULTZ:  Oh, I‘m keeping my eye—A.B., I agree with you.  I‘m keeping my eye on the Democrats.  I‘m keeping my eye on the weak-kneed Democrats who can‘t read polls, and aren‘t listening to the American people.  If it was 72 percent of the people on any other issue, we‘d say, hey, let‘s go; 72 percent of the American people want a tax cut, hey, let‘s make sure we get a tax cut.  When it comes to health care reform, oh, we can‘t touch that. 

I think this is one of the reasons why.  You‘ve got the “Montana Standard Newspaper” on Max Baucus‘ contributions.  “In the past six years, nearly one-fourth of every dime raised by Baucus, Democrat of Montana, did and his political action committee, has come from groups and individuals associated with drug companies, insurers, hospitals, medical supply firms, health service companies, and other health professionals.  These donations total about 3.4 million, or 1,500 dollars a day, every day, from January 2003 through 2008.” 

I guarantee you, if no public option comes out in this bill, the American people are going to read into this that this Senate is bought and paid for.  Now, Ryan, you know how this works.  The Democrats are going to have to step out and take a hard stand on this and listen to the majority of Americans. 

LIZZA:  And look, you asked about what does Obama have to do?  At a certain point, Obama has to move from conciliation to confrontation, and make an issue of these insurance companies that are standing in the way, and get a little Teddy Roosevelt, FDR style populism in the blood stream. 

I don‘t know if, at the White House, they‘ve decided they‘ve reached that point yet, but they may at some point.  I noticed in his recent radio address, he kind of hinted at that.  That may be the next phase here to get things moving.  But look—go ahead. 

SCHULTZ:  I find this very frustrating.  The president has the people with him.  It‘s just is he strong enough to stand and up tell the Republicans, this is how we‘re going to do business on health care reform.  Panel, stay with us.  We‘re coming back. 

Coming up, the gun lobby has gone I think too far.  If you‘re on the terror watch list, you can‘t fly, but you can buy a gun in America.  I‘m going to tell you what‘s wrong with this picture coming up next in my playbook.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, people on the nation‘s terrorist watch list, they can‘t fly airplanes, but they can buy guns.  Figure that one out.  According to a new GAO study released today, in the past five years, 963 people on that list tried to buy guns or explosives, tried to buy. 

Guess how many were approved: 865.  Folks, that is 90 percent; 90 percent of the people on the terrorist watch list who wanted a weapon were cleared to make the purchase?  In one case, a person on the list bought explosives.  Oh, how heart warming. 

Now, currently, the only way someone can be denied from buying a firearm is the federal officials can find what would be known as a disqualifying factor.  Factors like if you‘ve been convicted of a felony, you know, you‘re an illegal immigrant, or you‘re a drug addict.  Being on the terrorist watch list is not a disqualifying factor.  It‘s not a disqualifying factor. 

Now, Democratic Senator Frank Lautenberg of New Jersey has been on this.  He commissioned a GAO report.  Today, Lautenberg introduced legislation that would give the attorney general authority to stop gun sales or sales of explosives to people on the terror watch list.  It is about time.  I‘ve asked Wayne LaPierre, the president of the National Rifle Association, to come on this program and tell me a little bit about what some people call this a big loophole. 

Keep America safe, that argument, it‘s down the drain when you hear about stuff like this.  I want the NRA to defend this loophole and I want Mr. LaPierre to come on this program and do just that. 

In fact, I own a lot of guns.  So I‘d be the perfect guy for him to talk to about this. 

John McCain is attacking President Obama for not being more to the people protesting in Iran.  OK?  This is the guy who joked about bombing them during the campaign.  It‘s next on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Mr. Bomb bomb bomb bomb bomb Iran has had quite a week.  He‘s been a great talker for us.  He‘s accused President Obama of a lack of leadership.  He said Obama falls short of past presidents. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA:  You and I are both students of history and we‘ve seen this movie before.  When Ronald Reagan stood up for the workers in Poland, when he stood up for the people of Czechoslovakia, in Prague Spring, and America did, and some good Democrats did too—we were on the right side of history. 

(END VIDEO CLIP)

SCHULTZ:  A student of history?  Huh?  Mr. McCain had better dust off some of those textbooks and do some studying up.  The Prague Spring happened in 1968, more than 12 years before Ronald Reagan became president.  Next time he wants to call out our president in midst of a tough strategic challenge, maybe Mr. McCain should check to be sure he‘s in the correct decade first. 

Time to bring in our political panel.  Ryan Lizza, A.B. Stoddard, and Christina Bellantoni. 

A.B., the president is being accused of not being aggressive enough.  Do you think that the American people are feeling that right now?  Or is this a political play by his opponents? 

STODDARD:  I think it is—I think many of the criticisms coming from Republicans are—I‘m sure many of them are genuine, but I think many of them are intended to score political points.  I think that if you listen to the experts on Iran, who are not in the realm of politics, they continue to concur with the White House, the stance that the president‘s taking, which is that the worst thing that the United States can do for the reform movement in Iran is to become a foil and to become a target for the regime. 

And this is something they continue to say over and over again.  They have been backed by conservatives, not only MSNBC‘s Pat Buchanan, but obviously by George Will and Henry Kissinger and Brent Skrowcroft and the like.  And I think—I think it is not—he might, as people have been mentioning, come to camera and repeat this a little more often.  If he comes to the camera, it would be, you know—people would play it over and over again, and you would see more of an emphasis, instead of just these statements that are coming out. 

But he has strongly condemned the violence over the weekend, and he has said, over and over again, exactly why he‘s doing this.  And I think the American people are listening to the experts they‘re hearing on television, reading in the paper, who are experts on Iran, who are not in our government, who are saying, this is exactly what we should be doing, because the worst thing we could do for Mousavi or any kind of freedom movement there would be to become the foil. 

SCHULTZ:  Christina, do we still have an element of cowboy diplomacy in the Congress?  I mean, you‘ve got Lindsey Graham being pretty aggressive out there on the talking heads circuit, being pretty critical of President Obama.  Is there a school of thought maybe we should really inject ourselves in this? 

BELLANTONI:  I can tell you that President Obama is not worrying about what Senator McCain or Senator Graham are saying about this.  And he is going to come to the camera tomorrow to have a news conference.  I can bet you right now that a lot of those questions are going to focus on Iran. 

He‘s put out a lot of statements.  But the main issue is exactly what A.B. said, the experts do back up that the United States shouldn‘t meddle.  Also, I think everybody needs to remember that this election in Iran is not about the United States.  It is making a lot of sense to sit back and wait.  And, of course critics, are going to come out against the president, particularly the ones that ran against him last year. 

So I think that you‘re going to hear a lot more from him tomorrow and expect him to say he stands with the people again, and that he understands that it‘s very frustrating to see violence out there, and that he just wants to take a step back. 

SCHULTZ:  Ryan Lizza, earlier in this broadcast tonight, Senator Evan Bayh of Indiana said he wasn‘t quite sure what the magic words were.  If you had to score the president in handling this on a scale of one to 10, where do you think the American people put the president on this issue? 

LIZZA:  Well, I think they trust Obama right now.  They give him a lot of deference to handle this.  And it‘s probably a pretty high score.  You know, I think this is classic McCain.  I say that in the best possible sense.  McCain does have a strong moralistic streak.  He sometimes—that drives his policy-making, and sometimes he doesn‘t think through the consequences. 

He sort of does what feels good or what he thinks is the principled thing to say, despite what the policy experts might say is the most effective thing to influence events over there. 

SCHULTZ:  But A.B., don‘t you think that the president is showing us change, that he is, in a sense, somewhat subdued, not being aggressive, not over-playing his hand.  Opposite of Bush.  I mean, we couldn‘t really speculate what the Bush administration would have done at this point.  But this is change.  Or do you disagree with me on that? 

STODDARD:  No, I think the speech in Cairo was change.  And I didn‘t hear a lot of Republican critics lauding him for going out on a limb and trying to unite forces across the Middle East against extremism when he gave that speech.  But as soon as there was an election, and as soon as it appeared to be rigged, he wasn‘t strong enough fighting for freedom over here in the U.S. of A. 

So I think that—like I said, there‘s too many conservatives who agree with President Obama‘s approach to give any credibility to the ones who are beating this so hard. 

SCHULTZ:  Thank you, A.B.  Panel, great to have you with us tonight. 

Thanks so much. 

Earlier in the show, I asked for you view, should the United States intercept the North Korean ship?  More than of you 1,000 responded.  Here are the results: 57 percent say yes, 43 percent say no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information on “THE ED SHOW,” go to Ed.MSNBC.com or check out my radio website at WeGotEd.com.  Town hall meetings coming up in Madison, Wisconsin, July 19th and in Portland, Oregon on July 31st.  “HARDBALL” with Chris Matthews starts right here on the place for politics, MSNBC.

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

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