updated 7/22/2009 10:57:49 AM ET 2009-07-22T14:57:49

Guest: Nancy-Ann DeParle, Tom Harkin, Dan Eggen, Sam Stein, Jeanne Cummings, Karen Hanretty, Todd Webster, A.B. Stoddard, Larry Thompson, Dave Levinthal

(BEGIN VIDEOTAPE)

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

(END VIDEOTAPE)

SCHULTZ:  Good evening, Americans. 

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

The health care fight is at DEFCON 4.  I am fed up with the obstructionists—not the Republicans, the Democrats.

The White House‘s Nancy-Ann DeParle and Senator Tom Harkin coming up on all of that in just a moment.

Now, we showed you just how much money Finance chairman Max Baucus has been taking from the health care lobby.  Now we‘re going to go further inside the numbers to show you how much more money senators are taking and just how they‘re going to be voting on this so-called reform. 

Americans in the heartland, they‘re still hurting on the economy, but they‘re fighters.  I‘ll talk to a local mayor in Indiana about how his town is coming back.  That‘s in my playbook tonight. 

Plus, “Psycho Talk.”  Another dandy from the Oklahoma senator. 

All of that, a great panel.  But we want you to get your cell phones out again tonight, because we want to know what you think about these weak-kneed Democrats that just can‘t deliver the mail for the president. 

But first, tonight‘s “OpEd.” 

Now, I‘ve got an open letter tonight for the president of the United States.  Opening line, “To hell with the Republicans.” 

Mr. President, you have gone out of your way to work with the Republicans on health care reform.  And I have to say tonight, Mr.  President, it hasn‘t done you any favors at all. 

Republicans are actually wishing for your failure.  They‘re calling health care your Waterloo.  They want you to lose on this. 

Just today—just today—here we go—we learned that Michael Steele and the RNC, they are circulating a private memo—here it is, we intercepted it—telling the righties to delay, to defeat, to do whatever you can, all and any means necessary.  Now health care is at DEFCON 4, and the Democrats need to realize this. 

I have admired you, Mr. President, for a long time trying to go to Washington and change what‘s going on with all these lobbyists.  But part of this fight now is turning into you taking down some of your own Democrats to get their attention.  Forty Republicans are now threatening to torpedo what the American people voted for back in November. 

Mr. President, don‘t leave your base.  Identify the Democrats who are not with you, and call them out. 

The people are with you.  The American people are with you, Mr.  President.  They want the lobbyists out of the way.  They want the people to be put first.  And you‘re the only guy in recent decades that was willing to come forward and say, I want to change Washington, get the lobbyists out of the way.  Here‘s your chance. 

I‘m asking you to call these Democrats out who basically are short on the word “loyalty.”  If they say they‘re not sure about a public option, here‘s what you need to do, Mr. President.  Just remind them that the Democratic Party platform was to bring health care to every American, and it‘s not supposed to be in the form of a co-op, which is just going to be controlled by the insurance industry. 

If they say they need more time to read this bill, then tell them they can stick around Washington all of August.  And also, they can have just as much time to read it as they did the Patriot Act. 

The right goes out there on TV talking about the government getting between you and your doctor.  You know it‘s interesting.  We were thinking about an example of that.  They didn‘t have any problem when the government tried to get between Terri Schiavo and her husband, did they? 

In fact, I believe President Bush flew Air Force One all the way back from wood chopping back into Washington so he could sign a bill to affect one person to go after these activist judges.  Oh, yes, I remember all that stuff. 

Now, we have 60 Senate votes.  We don‘t need a single Republican to get this done.  If Democrats aren‘t willing to stand with their party and their president, then, Mr. President, you need to say, well, go stand with the insurance lobby and be a Republican. 

Whose idea was it?  A resounding idea by the American people to reject all of the ideas that the Democrats, the Republicans came up with.  Right? 

Now, here‘s the key in all of this.  It‘s about choice. 

We need health care reform that does basically three things—cover everybody.  Is this going to cover everybody?  Is this going to allow for a preexisting condition?  And will it reduce rates? 

Actually, we don‘t have to do that right away.  We can do that the next session of Congress. 

And all of this I‘m talking about, Mr. President, it‘s not radical at all.  It‘s what the American people want. 

Thank you and good night.  Your friend, Ed. 

I‘ll be in the front row tomorrow night at the press conference, and I hope you call on me, Mr. President. 

Today the president made the same case.  He says there is a consensus on the Hill about a public option, and he urged the Congress not to wait. 

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  Time and again, we‘ve heard excuses to delay and defeat reform.  Time and again, the American people have suffered because people in Washington played the politics of the moment instead of putting the interests of the American people first. 

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Nancy-Ann DeParle, a counselor to the president and director of the White House Office of Health Care Reform. 

Nancy, good to have you with us tonight. 

I have in my hand this playbook that is being circulated by the RNC. 

Is the White House ready to admit tonight that this is a playbook to defeat you, and it‘s not a playbook to get a bipartisan agreement?  And how do you feel about this? 

NANCY-ANN DEPARLE, DIRECTOR, WHITE HOUSE OFFICE OF HEALTH CARE REFORM: 

Well, I haven‘t seen that playbook, Ed, but I certainly have seen this movie before.  And you‘re right, that‘s what they‘re trying to do. 

They‘re trying to delay and slow this thing down so they can kill it.  And this president is fighting for health care reform because he knows that‘s what the American people want and it‘s what they need.  He knows about the 14,000 Americans who lose their health care coverage every day, and he‘s going to fight for them. 

SCHULTZ:  How about the advisers around the president?  Is anybody suggesting to the president, maybe you should forget this bipartisan thing now that you‘ve got Jim DeMint out there saying that it‘s going to be his Waterloo and we want to defeat him? 

DEPARLE:  You know what?  I‘ve been working with Republicans, and I know that they‘re hearing from their constituents and the folks back home the same thing that we‘re hearing, the same thing that this president is hearing in the letters that he gets every day.  I don‘t know if he has seen your letter yet, Ed, but he sees letters every day from Americans who are worried about losing health insurance, from small businesses that are trying to provide and really struggling with the cost of this. 

So that‘s what we‘re focusing on.  We‘re not focusing on the Republican playbook.  We‘re focused on what we need to get done for the American people. 

SCHULTZ:  OK.  But the idea that there is not going to be a true bipartisan effort on the part of Republicans, why doesn‘t the president, from a strategic standpoint, have a lunch someday over at the White House and call in all 60 Democratic senators and say, hey, I guess it‘s us against them, what do you want to do?  And why not pit the Republicans against the American people as the obstructionists? 

DEPARLE:  Well, I don‘t think we‘re at that point in this debate. 

We‘re finding that a lot of people want to work to get this done. 

There‘s a lot of agreement about ending a preexisting condition exclusion so that insurance companies can‘t tell people no, we won‘t cover you because you‘ve been sick before.  There‘s a lot of agreement about prevention and wellness.  There‘s a lot of agreement about getting this done and lowering costs. 

And so we‘re going to keep working with everybody.  We‘re going to bring—we have brought everyone to the table and we‘re going to get this done. 

SCHULTZ:  OK.  Do you have 60 votes in the Senate on preexisting condition? 

DEPARLE:  I think we do.  I think we do.  I think that is an issue that we might even get 100 votes on. 

SCHULTZ:  OK.  Well, that would be reform to start with. 

Now, public option—will the president be able to set up a government entity that will compete against private insurance?  Do you have 60 votes for that? 

DEPARLE:  I don‘t know if we have 60 votes for that yet, but I‘ll tell you this—that is an idea that resonates with the American people.  They understand that there are a lot of insurance markets where there isn‘t a choice right now.  And they understand that having that competition and that choice is part of what will help provide them with a better option and lower their costs.  So it‘s something that they want and it‘s something the president‘s been very strong on.

SCHULTZ:  Nancy-Ann DeParle, I appreciate your time tonight.  Thanks so much. 

DEPARLE:  Thank you, Ed.

SCHULTZ:  Americans, I want to know what you think.  Get your phone out. 

Do you think President Obama will get all 60 Senate Democrats on board for health care reform?  Text “A” for yes, “B” for no at 622639, and we‘ll bring you the answers later on in the show. 

Here‘s a guy that I can guarantee is on board. 

Joining me now is Senator Tom Harkin of Iowa, a member of the Senate Health Committee. 

Senator, when do we drop this idea about a bipartisan agreement and realize what this fight is really all about?  It‘s an ideological struggle between liberals, progressives and also the conservatives who really don‘t want reform. 

What‘s your take on it? 

SEN. TOM HARKIN (D), IOWA:  Well, Ed, you‘re right.  The conservatives, they just want the status quo.  They‘re happy with the system that exists right now, and I think the American people need to know that.  And I think they‘re rapidly understanding that. 

I look at it this way—last fall, the American people voted overwhelmingly for Barack Obama to make some changes.  They also voted overwhelmingly for Democrats to run the House and the Senate.  And so they have asked us to take a leadership position.  And so we need to lead in this and not be afraid to lead, and to push the envelope on health care reform. 

SCHULTZ:  What do you think the president should do to get conservative Democrats who are wavering right now? 

HARKIN:  Well, I think he needs to talk to them.  And I think he needs to show everyone that this is what the American people want. 

We have to have a public option.  We have one in our bill, Ed, that we got out of our health committee here in the Senate. 

SCHULTZ:  Yes, you did.

HARKIN:  It‘s a good public option and it‘s strong.  And we‘ve got to hold on to it. 

SCHULTZ:  Well, you know, it was the Democratic Party platform to bring health care to every American, was it not?  Or did I read that wrong? 

HARKIN:  You‘ve got it right, Ed. 

SCHULTZ:  OK.  So, the president has got his political capital and he‘s got his enemies right now.  Mr. DeMint is over there outlining, we can defeat him, this will be his Waterloo. 

How is—I mean, is Barack Obama too much of a nice guy?  I mean, you had him down at your steak fry in Iowa.  We know he‘s a nice guy, but isn‘t it time to fish or cut bait on some of these righties that just don‘t want to get in line? 

HARKIN:  Well, you know, there‘s a time and a place for everything.  Barack Obama, President Obama, is a nice guy, but he‘s tough.  And I‘ve seen that toughness in him in the past.  He was on our committee here for three years, and I saw that toughness. 

I think what we have to do is to continue to work, continue to push this bill.  If the Republicans don‘t want to be on board, well, then they don‘t want to be on board.  And I think, finally, the American people will realize that these Republicans just want to keep the system as it is.

I tell you, 70 to 80 percent of the American people want to change the system.  And I think that‘s what we‘ve got going for us.  People want to change it.

SCHULTZ:  Senator Tom Harkin of Iowa here on THE ED SHOW.

Appreciate your time tonight, Tom.  Thanks so much.

HARKIN:  Thanks, Ed.

SCHULTZ:  Last night we told you about the money trail from the big medical interests straight into the Congress‘ wallets.  Senator Max Baucus, he‘s the chairman of the Senate Finance Committee, big taker. 

For more on the takers, joining me now is Dan Eggen, a national political reporter for “The Washington Post.”

Dan, thanks for your time tonight.  And some excellent reporting.

Tell us, what is Max Baucus going to do on vacation in August?  What‘s happening there?

DAN EGGEN, NATIONAL POLITICAL REPORTER, “THE WASHINGTON POST”:  Well, currently, the plans are to hold something called “Camp Baucus,” which is a fund-raiser that will include fishing and swimming and kayaking, maybe.  I‘m not sure.

You know, a lot of things.  It‘s for the whole family.  And all you have to do is have $2,500 or more to donate to his political action committee.

SCHULTZ:  OK.  And it‘s not an election year.  And, of course, the political action committee has been taking a lot of money from the medical interests.

Who else is at the trough right now, either side of the aisle, who may be influenced by this?

EGGEN:  Well, to be honest, everybody.  The health sector is the biggest—one of the biggest givers to Congress.  It always kind of fights with the banks and other financial companies, kind of goes back and forth between hospitals and insurers and banks, and that sort of thing. 

SCHULTZ:  But they‘re spending money at a record pace right now on this issue, are they not? 

EGGEN:  Absolutely.  And not only in the campaign contribution side, but in the lobbying side.  We‘re just seeing new reports coming in.  As you probably know, they have been spending the money at the rate of $1.4 million per day on lobbying in Washington this year. 

SCHULTZ:  So, the rules are set up they can do this, but clearly it‘s a conflict of interest, isn‘t it, to be taking money from these kind of folks, and yet expect to deliver reform for the American people? 

EGGEN:  Well, I don‘t think they would agree.  Lawmakers like Max Baucus say that they are not swayed by these contributions.  They will often point to ways in which they are going against the industry. 

You could argue that health care reform this year in particular is—you know, they‘re shoving a lot of things down the industry‘s throat, if this were to pass, that industry doesn‘t want.  So they would point to that and say the money doesn‘t actually sway us.  But it does always raise a field question in Washington.  If the money doesn‘t sway you, then why are they giving it to you? 

SCHULTZ:  Exactly. 

Who is the biggest taker in Congress? 

EGGEN:  Well, I think McConnell is—Mitch McConnell, the Republican leader in the Senate, just ekes out Max Baucus.  Those two are at the top of those who didn‘t run for president last year. 

SCHULTZ:  Dan Eggen, good to have you with us tonight.  Thanks so much. 

EGGEN:  Thank you. 

SCHULTZ:  Coming up, President Obama is rallying his online army.  He wants the progressive bloggers to hold these shaky Democrats‘ feet to the fire on health care.  The Huffington Post‘s Sam Stein was on the call of the president.  We‘ll get the inside scoop on that next on THE ED SHOW.

Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

David Axelrod said the president was going to be very, very visible on health care.  That‘s exactly what we‘ve been seeing. 

The president went on the offensive again today.  Tomorrow he‘s holding a primetime news conference which we will cover right here on THE ED SHOW at 6:00 p.m., and a special edition of THE ED SHOW at 11:00 tomorrow night from Washington. 

Now, the media blitz isn‘t stopping at the tube or the town hall meetings.  The president is also recruiting bloggers. 

He spoke for about 25 minutes on hand with a picked group of progressive bloggers on Monday.  Now, he wants them to keep the heat on Congress, and asked them to join the fight against the misinformation. 

(BEGIN AUDIO CLIP)

OBAMA:  One of the things that I know that blogs are best at is debunking myths that can slip through a lot of traditional media outlets and a lot of the conventional wisdom.  And that‘s why you‘re going to play such an important role in our success in the weeks and months to come. 

(END AUDIO CLIP)

SCHULTZ:  Well, the Republicans have got their playbook and President Obama has got his bloggers. 

Joining me now is one guy who was on that call, Sam Stein, political reporter for “The Huffington Post.” 

Sam, what do you make of this strategy?  I don‘t think we‘ve ever had a president do this before; have we? 

SAM STEIN, POLITICAL REPORTER, “HUFFINGTON POST”:  Yes, it‘s really calling up all the cavalry, I guess.

This was, like you mentioned, another chance for the president to bring another arm to the fire, essentially.  He called on the bloggers to keep the pressure on Democratic senators and to serve as sort of fact checkers for the media.  He says that‘s the best thing that they can do. 

Some of the best questions that I heard were asked on that call by some of the most prominent progressive bloggers in the country.  The president was very clear he wants to get this done, but he was also clear that he‘s going to need help to do it. 

There‘s a lot of opposition in terms of Republican opponents.  He urged his—the people who essentially helped him get the presidency to come and rally for him once more. 

SCHULTZ:  Well, Sam, did you get a sense that the president feels he‘s winning on this? 

STEIN:  Yes.  You got the sense that he feels he‘s in good position, but that he knows that the opposition is really mounting.

You know, he didn‘t stress a line in the sand in terms of the August deadline, but he said he wants Congress to stop talking, take action.  He‘s hoping that Senate Majority Leader Reid, Speaker Pelosi will get things moving a little bit faster. 

He also floated for the first time in recent memory that I can recall the idea of doing this through reconciliation.  He said by October, if things are looking in peril, he would look at the idea of doing reconciliation.  It wasn‘t his preference, but he said it‘s on the table. 

SCHULTZ:  By October.  That‘s what scares me. 

You‘ve got a playbook out there—not you, but the Republicans have got a playbook out there on how to defeat President Obama.  They‘re talking Waterloo.  I mean, they‘re going to torpedo this thing. 

This is about getting the victory.  This is about an ideological fight for the country. 

Did you sense that the president knew that these folks aren‘t going to be budging at all? 

STEIN:  Yes and no.  He still held out the hope of getting Republicans, but he tried to make a distinction between those Republicans who want to delay just to kill it, and those who legitimately want to delay it so they could moderate it a little bit. 

Let me make one point. 

There were two Republican congressmen today who pushed back a bit on Senator DeMint‘s comments.  And you get the sense from Congressmen Eric Cantor and Shadegg that both of them realize that there‘s a difference between credited for defeating Obama‘s health care reform and being blamed for defeating health care reform, if you can make that distinction. 

They don‘t want to be known as the party that actually kept health care reform from happening, as much as they want to be known as the party that stopped Obama in his tracks.  So they‘re beginning to sense that there could be a potential pushback.  I wouldn‘t be surprised if you saw more members of Congress from the Republican Party push back at DeMint a little bit more in the days ahead. 

SCHULTZ:  Are the bloggers going to have an impact?  Do you think they can have an impact and continue to gin support for the president? 

STEIN:  Absolutely.  I mean, bloggers have shown throughout the course of the past election and the intervening months in office that they can take a story, they can isolate an instance, and really blow it up so that the media pays attention, that the public pays attention. 

They‘re great on fund-raising, they‘re great on messaging, and they‘re certainly great on fact-checking.  And I think you‘ll see their impact most in terms of the media coverage of health care.  I think they‘ll play a big role there.

Obama recognized that.  David Axelrod recognized that, as well. 

SCHULTZ:  Well, there is definitely lies in the right‘s playbook. 

There‘s no question about that.

Sam Stein, “Huffington Post.”

Always a pleasure. 

STEIN:  Thanks, Ed.

SCHULTZ:  We‘ll see you tomorrow night as well with our special primetime coverage after the president‘s press conference. 

Here‘s what the president ought to do, in my opinion.  Call up every one of these Republicans and say, “Do you disavow yourself from the position of Senator DeMint, or is this the way it‘s going to be?” 

I mean, it seems to me that DeMint is being sent out there by Republicans—here, go say this, say this.  Let‘s keep this fire alive. 

Next up on THE ED SHOW, “Psycho Talk.”  And again, it‘s a Republican. 

Senator Tom Coburn says the health care system that we have in the United States is simply the best.  Yes, if you and I were in the Senate, we would probably be saying the same thing. 

It‘s next in “Psycho Talk.” 

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Oh, it‘s time for another edition of “Psycho Talk” here on

THE ED SHOW.

And it‘s the good doctor from Oklahoma, Senator Tom Coburn.

He came on MSNBC this morning to promote his new show that he‘s doing, “The Senate Doctors Show.”  Gosh, where do they get time to do that?  Coburn thinks because he‘s a doctor, all of a sudden he‘s got all the solutions for fixing health care, although he was absent for eight years. 

Here is a short clip of the senator today in his interview this morning.  It will give you kind of an idea where his head is when it comes to doing nothing for health care. 

Listen up. 

(BEGIN VIDEO CLIP)

SEN. TOM COBURN ®, OKLAHOMA:  We have several programs today.  Let‘s make those work.  That‘s the other thing that Americans are wanting.  Don‘t change and take away the best health care system in the world. 

(END VIDEO CLIP)

SCHULTZ:  The best health care system in the world. 

Here‘s a news flash for you, Doctor.  We do not have the best health care delivery system in the world.  But, of course, none of us are in the Senate except you and 99 other people. 

Now, I would say that a health care system that leaves out millions of people, that‘s a big strike against us.  Now, Coburn says let‘s just make today‘s programs work? 

Folks, that is code for let‘s do nothing.  Republicans did nothing for eight years in the Bush administration, although they did tell you to go out and get that health care savings account.  How did that work out for you? 

They never had a plan for health care, and they have never had a plan to even help those who don‘t have insurance get insurance.  They‘re phonies.

We do have the best doctors in the world, I‘ll give them that.  But saying that our system is the best in the world?  That‘s delusional “Psycho Talk.” 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  Make no mistake, we are closer than ever before to reform that the American people need, and we‘re going to get the job done. 

(END VIDEO CLIP)

SCHULTZ:  I hope so.  Welcome back to THE ED SHOW.  President Obama speaking in the Rose Garden today.  The president emphasizing how close we are to fixing our health care system.  An important message, really, because since the polls have shown him losing a little bit of momentum recently.  The latest “Politico” Public Strategies polls shows the number of Americans that say they trust the president has fallen to 54 percent from 66 percent in March. 

The Democratic party also taking a similar hit.  They‘ve gone down to 42 percent.  The Republicans, not much better.  They have dipped a few points to 36 percent. 

Joining me now to break the numbers down, the assistant managing editor for “Politico,” Jeanne Cummings.  Jeanne, good to have you on tonight.  You also asked some other questions in your poll, and that‘s about quality, about access and about cost. 

First, what do you make of the president eroding.  Is it just the impatience of the American people or do you think they‘re basically starting to figure out that maybe his policy isn‘t going to work? 

JEANNE CUMMINGS, “POLITICO”:  Well, it‘s a number of reasons for the drop in the poll.  I mean, basically, the honeymoon is over.  Back in March, we saw his number soar well above the percentage in which he won the presidency.  So people who voted against him were giving him high approval numbers way back in beginning of his administration. 

Some of those folks now have gone back to their natural tendency, and they are no longer in had support of what he is trying to do. 

Some of it could be frustration.  And some of it is that the president is, indeed, spending his political capital on his top initiatives, health care. 

SCHULTZ:  Jeanne, is there anybody on the left that‘s peeling off when it comes to popularity?  I sense that there are some hard-core Democrats out there that are frustrated with the president; he is being too nice to Republicans.  Is that costing him at all? 

CUMMINGS:  There could be some falloff among hard core Democrats, although the numbers don‘t show any major drop by Democrats.  A lot of these are independents that are becoming nervous about deficits and the direction of things in Washington.  And then much of it also are the Republicans going home. 

SCHULTZ:  Well, you mentioned the president using his political capital.  In an interview with Meredith Vieira, he made this comment about setting a deadline.  Everybody‘s saying, hey, we got to slow down.  We can‘t go too fast.  Here‘s what the president had to say. 

(BEGIN VIDEO CLIP)

OBAMA:  If you don‘t set a deadline in this town, nothing happens.  The default in Washington is inaction and inertia.  And there is a reason why we haven‘t had health care reform in 50 years.  And the deadline is not being set by me.  The deadline is being set by the American people. 

(END VIDEO CLIP)

SCHULTZ:  Jeanne, does the president win on that comment? 

CUMMINGS:  Well, I think that his point is well taken.  If you let Congress talk and talk and talk, they will.  And they‘ll keep going, and they‘ll avoid a tough vote for as long as they possibly can.  So it is important that the White House try to set some kind of deadline or benchmark for action. 

The other reason he is trying to get this done before August, clearly, is because the opponents of health care reform already have mocked up the ads, and they‘re ready to go.  And they‘re going to be all over the members during the August break, even if this vote is taken.  But especially if it‘s not. 

SCHULTZ:  Well, your “Politico” poll, let‘s go to it.  For public option on quality, there are 42 percent of the American people who think it‘s going to be worse.  When it comes to access, 40 percent of the American people think that it‘s going to be worse.  And also, when you go to cost, they think that there‘s going to be an increase of -- 44 percent of the American people think there is going to be an increase in costs. 

I find this astounding, because we‘ve never had a public option, other than the VA, and it works pretty dog gone good!

CUMMINGS:  Well, you know, the question was worded to ask them what they thought about a government-run program.  And I think we touched on people‘s instinctive concern and skepticism that government can run a program well and efficiently.  When you look at some other polls—for instance, the Post released a poll earlier this week, they found that 54 percent of the public likes the whole package that they see shaping up in the House and the Senate, which, of course, is a broader question. 

So I think what we touched is that nerve that people have about, oh, a government.  Government going to run this, will it really be efficient? 

SCHULTZ:  I think the Republican sound machine has taken effect.  That‘s what I think.  Jeanne Cummings, “Politico,” thanks for joining us tonight. 

Let‘s bring in our panel, Democratic strategist Todd Webster, A.B.  Stoddard, associate editor of “The Hill” is with us also tonight, and Republican strategist former communications director for the Republican Congressional Committee, Karen Hanretty. 

Karen, let me ask you, are the Republicans starting to win favor on this, and chipping away at the president? 

KAREN HANRETTY, REPUBLICAN STRATEGIST:  You know, Ed, I‘m not so sure if it‘s Republicans are winning as it is that the Obama administration and the Democratic leadership is losing on this issue.  This is a thousand-plus page bill.  The more people who read it, the more they dig into it, the more reporters report on it, the more there is not to like, or at least the more there is to cause fear and concern among the public, which is why you‘re seeing a lot of these numbers. 

It‘s not like the government has a good track record of running things.  You know, people look at the DMV.  They look at—

SCHULTZ:  The DMV? 

HANRETTY:  Yes!

SCHULTZ:  The Division of Motor Vehicles? 

HANRETTY:  I know.  I think that is a perfect analogy.  Ed, you look at how government runs, you know, things that we all have to use on a daily basis, regularly, and they say, it‘s inefficient; you have long lines; you don‘t get good service.  And I honestly think that if you don‘t see the connection that the American people see, that they look at something like the DMV, and they think, oh, my gosh, what if the government does that with my health care? 

SCHULTZ:  You know, Karen, I give you a ten.  On a score of one to ten, I give you a ten on originality.  I have not heard that one about the DMV yet.  But every time I get stopped—and it‘s happened before—the law officer asks me for my license plate.  Within seconds, he kind of knows everything about Ed Schultz. 

HANRETTY:  Well, go to the DMV, stand in line, see how well you think the whole operation works.  Go ask your average person on the street.  Do you think the DMV is run well?  And should health care in America be run like the DMV? 

SCHULTZ:  All right.  Todd Webster, I‘m holding the playbook to defeat President Obama on public option and health care reform.  How do you counter punch this? 

TODD WEBSTER, DEMOCRATIC STRATEGIST:  Well, I mean, there‘s no question that health care is the single-most important issue facing this country right now.  It is consuming one out of every seven dollars. 

SCHULTZ:  But how do you feet what these guys are doing right now?  Throwing the lies out there and everything else, in the playbook, using the term Waterloo?  We got to defeat him, stop him here.  It will kill his presidency. 

WEBSTER:  Because they are the ones who are defending the status quo.  They‘re the ones who are defending my health insurance premiums going up 35 percent this year.  They‘re the ones who are defending this exorbitantly, costly health care system.  And they‘re out there trying to scare people. 

They‘ve been doing it every time a reform proposal comes up.  They‘re the ones who are trying to scare people.  And they‘re the ones who are protecting now the status quo. 

The reality is, what they‘re most afraid of is that Obama and the Democrats will actually pass health care reform.  It would be the biggest legislative victory in forty years.  And they‘re afraid that if Democrats get this victory, and Obama gets this victory, that they will be off in the wilderness for another 40 years, as they were from ‘54 to 1994. 

SCHULTZ:  A.B., nine out of the last ten appearances the president has made, he has been talking about health care.  Got a big press conference prime time tomorrow night.  What do you make of all this?  This is his issue and it‘s at DEFCON Four.  What do you think? 

A.B. STODDARD, “THE HILL”:  They decided that they would wait for urgency, in terms of Obama‘s presence on this issue.  We read about it.  We all asked about it. We talked about it on the show before.  When is he going to step in?  When is he going to own this issue?  He is letting Congress write the bill.  When is he going to come in and take control on negotiations? 

Now is that time.  They decided they picked this time for some reason. 

I guess the Democrats hope it‘s not too late. 

But what we‘re seeing is he‘s talking to bloggers.  He‘s talking to American people.  He is talking about Republicans, but he needs to talk to Democrats in his own party to get the votes to get this passed.  I have talked to the members, the liberals and conservatives alike.  It‘s a mess up there right now. 

I‘m not saying it‘s not going to pass.  But Obama needs to talk privately to these people. and put the pedal to the metal if he wants to move the numbers in the House and Senate, and get something to pass.  All of the pressers in the world aren‘t going to do that.  He needs to talk to the Democrats, not Republicans and not the American people. 

SCHULTZ:  It‘s going to be a long, hot summer.  We‘re halfway through.  Panel, stay with us.  We have a lot more coming up.  Also coming up, Americans are really hurting in this economy.  We‘re going to the heartland, the county fair in Elkhart, Indiana to see how people there are trying to make a comeback and if they are getting any help from the stimulus package money.  That‘s next in my playbook right here on THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, we talk a lot about jobs and job creation.  The stimulus package, it may or may not be working, depending on where you are. 

Let‘s take a look at Elkhart County, Indiana.  Elkhart is featured on our website, MSNBC.com, in a series of reports called “The Elkhart Project.”

This week, we‘re live on location at the Elkhart County Fair.  Folks out there have been hit hard by the recession.  The unemployment rate is at 16.8 percent, and that‘s down from 18.8 percent back in March.  Elkhart used to call itself the RV capital of the world.  But last year‘s sky-high gas prices, four dollars a gallon and then some, took down the RV industry quite a bit. 

The small town of Nappanee took a hit, as well.  About half of its 7,000 residents lost jobs there.  Amazing.  Now they‘re hoping green manufacturing jobs will resurrect the town‘s economy.  Mayor Larry Thompson is the mayor of Nappanee, Indiana, which is an Elkhart county.  He joins me live from the fair, via MSNBC‘s Green Machine, our hybrid SUV with live TV capabilities.

And we should point out, there might be a little bit of a delay here.  But Larry, it‘s good to see you, and it‘s good to have you with us from the heartland tonight.  Give us the state of your town, and what is happening?  How you‘re getting through this recession, and are you bouncing back? 

LARRY THOMPSON, MAYOR OF NAPPANEE, INDIANA:  OK.  Well, thank you.  It‘s a pleasure to be on.  Nappanee is one of three cities in Elkhart County.  We‘re by far the smallest.  And you‘re exactly right.  The downturn in the economy has just about devastated us. 

Prior to being the RV capital of the world, we were the wood working capital of the world.  And the wood working industry has remained strong.  We have created a few new jobs, so we‘re excited about that. 

The most exciting news for us is that back in January we met a man named Will Cashen (ph) and the alternative energy he wants to bring to us is the electric motors.  We have been working with him, the state of Indiana, the Department of Energy.  We are very encouraged.  We‘re in the process of hiring local people to run the company.  We think it can happen. 

We need Department of Energy help to make it happen in a big way.  We think we can create up to 500-plus jobs in a very short amount of time, meaning six to nine months, if we get some help along the way.  So we‘re encouraged.  We can kind of see the light at the end of the tunnel if we can make this happen. 

SCHULTZ:  Larry, how are your residents getting through this recession?  What are they doing?  And has there been any out migration from the county because they couldn‘t get a job there? 

THOMPSON:  You know, I think people who have been able to find jobs elsewhere have—we have had some people move.  And you can‘t blame them for doing that.  Many people drove into our community every day to work.  Obviously, they‘re finding jobs in other places.  So the impact on the community is they don‘t come in our community every day, and spend their money at local stores and restaurants and things like that. 

So, you know, we‘re just kind of getting by as far as that‘s concerned. 

SCHULTZ:  Larry Thompson, thanks for joining us tonight.  It sounds like the attitude of the people is pretty uplifting, and possibly some jobs are on the way.  Thanks for joining us tonight on THE ED SHOW.

Our website has done a great job of putting together the stories of how Americans in Indiana are rallying in this tough economy.  Be sure to check it out.  It‘s called “The Elkhart Project” on our website, MSNBC.com. 

Coming up, I‘m calling out the senators who are on the take from the health care lobby.  I‘ll go inside the numbers with Dave Levinthal from the Center for Responsive Politics next on THE ED SHOW.  We have more info for you.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  What do you say we smoke them out?  As you know, we have some Democrats who aren‘t on board with President Obama‘s health care plan.  Senator Max Baucus against the public option.  We told you yesterday, he has taken 3.5 million dollars in the past six years from the medical industry to protect their interest. 

In fact, the top three takers—the top three takers of health care money in the Senate are Democrats or independents.  These numbers are from Common Cause.  The number three taker Senator Joe Lieberman.  He has taken nearly six million from the industry since the year 2000. 

The number two taker is the senator from Arkansas, Blanche Lincoln.  She has taken more than six million since the year 2000.  And the number one taker of health care industry money is our new buddy on the Democratic side, Senator Arlen Specter of Pennsylvania.  He has gotten more than seven million since 2000. 

Now, let‘s look at these three when it comes to their position on reforms and the Democratic party.  Joe Lieberman is one of the worst obstructionists in the Congress.  Blanche Lincoln recently—well, she kind of changed her mind with an op-ed in the “Arkansas Gazette,” but we‘re really not sure where she is at after she was hammered by liberals on TV commercials. 

And then there is Senator Specter, who told union workers, I really support the public option, but then again, when we called his office, well, they wouldn‘t put out a statement saying that.  So who knows where they are. 

Joining me now is Dave Levinthal from the Center for Responsive Politics.  Dave, this is nothing but pay to play, isn‘t it? 

DAVE LEVINTHAL, CENTER FOR RESPONSIVE POLITICS:  If you want the access key, if you want to know the secret handshake, you better put your hand out and have some money in it before you get those things.  It is pay to play to a very large degree.  And these are very influential senators.  These are people who, at least in the health care debate, are sitting somewhat on the fence, kind of teetering precariously.  And, as of late, there are a lot of lobbying interests that see this as a ripe opportunity to make their position known to these senators in some very profound ways. 

SCHULTZ:  Give me a percentage of how much more money they‘re spending to defeat reform than maybe they have done in past years. 

LEVINTHAL:  Well, when you look at the lobbying numbers in particular, it‘s going up and up and up.  Over the past several years, it‘s gone up to a significant degree, and we‘re not talking millions of dollars.  We‘re not even talking tens of millions of dollars.  We‘re talking about hundreds of millions of dollars, even billions of dollars of lobbying expenditures. 

They‘re not just going for health care, they‘re going across the board.  But as of late, health care, of course, has been the key issue that‘s been before Congress and before the Senate.  And the money is being funneled there. 

SCHULTZ:  So, can we draw the conclusion that if President Barack Obama succeeds in getting a public option, he will have done probably one of the biggest lifts politically that we have seen a president do in modern time?  Is that fair? 

LEVINTHAL:  Well, I‘ll leave that up to you, Ed.  But I can definitely say this, that if he is able to have it happen, that‘s something that has been tried, and tried again.  You‘re looking at something to a degree that maybe in history one day will be looked upon like Social Security, like some of the public works projects that happened during the FDR administration. 

Will it be that big?  I don‘t know.  It‘s hard to say.  You don‘t have the legislation written yet.  And you don‘t have that history, certainly.  But this is a big, big deal.  And it‘s, of course, never happened in the United States.  A real milepost, and a game-changer. 

SCHULTZ:  So if we‘re talking about—here we are the in the middle of July, and we‘re going to October, how much more money is going to be spent?  I mean, in the next 45 days, are we going to see a record amount of money spent at this time of year? 

LEVINTHAL:  I don‘t think that would be unfair to say at all.  You‘re going to see—already just during the first quarter of 2009 lobbying expenditures are up, just a shade under the billion dollar mark.  So it only—you can only conclude from that over the second quarter, over the third quarter, while health care reform continues to be debated in Congress, that lobbyists are going to put full-court press on, perhaps unlike they ever have before, especially in that health care sector. 

SCHULTZ:  A billion dollars.  How much health care would that buy? 

Dave Levinthal, thanks for your time tonight. 

For more, let‘s bring back our panel, Todd Webster, A.B. Stoddard and also Karen Hanretty. 

Karen, let me ask you, gosh, Republicans, the machine, medical interests out there, big pharma, you‘ve got HMOs, you‘ve got the insurance industry.  This is a big lift for the Obama White House. 

HANRETTY:  Ed, you left out one important name. 

SCHULTZ:  What‘s that? 

HANRETTY:  That‘s not a Republican, that‘s not a lobbyists, that doesn‘t give money, and that‘s the director of the Congressional Budget Office, who was appointed by Democrats, who came out last week and said this plan is going to cost the federal government more money.  It‘s going to put into greater deficit.  That‘s the voice that‘s really scaring people right now. 

SCHULTZ:  Karen—the problem with that, Karen, is that the CBO report didn‘t take into effect if we repeal the Bush tax cuts, and also tax the top two percent again, to get the money back into the Treasury to do this.  They didn‘t take that into account. 

HANRETTY:  But that‘s your own Democrat-appointed Congressional Budget Officer who came up with these numbers.  These are not numbers—

SCHULTZ:  Without new revenues. 

HANRETTY: They‘re not numbers influenced by the insurance industry or by Republicans. 

SCHULTZ:  Without new revenues, you are correct.  Todd, what do you think? 

WEBSTER:  The cost of doing nothing just means all those trillions of dollars are going to go to the insurance companies who add no value to the equation, who don‘t provide any benefit.  They‘re not a bedside nurse or a doctor.  They‘re providing no health care. 

Look, if Barack Obama does get this health care reform, it will make Ronald Reagan‘s ‘83 tax reform bill look like Bill Clinton‘s school uniforms.  It is that big of an issue, and I think all of these Democrats, anybody who calls himself a Democrat, if they are not supporting health care reform, that‘s—that‘s mind-blowing. 

Health care—universal health care is why people are Democrats.  It‘s in our—the fiber of our being.  It would be like a Republican voting against tax cuts. 

SCHULTZ:  A.B., got to ask you, sooner or later, the Obama administration is going to have to come out with a definitive plan on how they‘re going to pay for it.  When is that coming? 

STODDARD:  You know, that‘s an interesting point, Ed, because so far you hear so much about how the Democrats like President Obama, they‘ll meet with him, they‘re not really afraid of him.  Because he‘s let them make all of the decisions.  Until he comes up with a pay for—until he comes up with an idea and puts it on the table and says, this is how we are offsetting everything, this is how the bill is going to be revenue-neutral, then it‘s in the Congress‘s hands.  They‘re kicking around all these different numbers. 

You saw Nancy Pelosi, the House speaker, walk away from the number that was just out last week, to tax 250,000 earners and over.  And then she walked away from it.  She got nervous after listening to a bunch of her freshmen and conservative members.  Unless Barack Obama takes this over, and says, you‘re either with me, this is the plan I‘m behind, or you‘re against me, you‘re going to see all of this shuffling.  It changes every day.  And I‘m up there, it changes every hour. 

SCHULTZ:  No doubt. 

STODDARD:  And that‘s the problem.  He just hasn‘t picked his own plan. 

SCHULTZ:  Well, I want to point out to our listening audience, viewing audience tonight, that this is the playbook for the Republicans, and they have in here template letters to the editor.  So your local newspaper, here‘s a—you know, I see Joe down the street, you know.  He‘s going to write a letter to the editor.  Here it is right there, template letters to the editor.  This is how they‘re going to fight it locally in every small town in America.  Expect it in a newspaper coming towards you. 

Gosh, did they get a good promo.  All right, thanks, panel. 

Appreciate your time tonight.  Great to have you with us. 

Earlier in the show I asked you what you thought; do you think President Obama is going to get 60 Democrats on board for health care.  Text A for yes and B for no to 622639.  How about this, 57 percent said yes, and 43 responded with a no tonight. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  We‘ll be live from Washington, D.C. tomorrow at 6:00 PM Eastern.  I‘ll be attending the president‘s news conference tomorrow at 8:00.  And you can catch a special post game edition of THE ED SHOW at 11:00 PM Eastern, 8:00 Pacific.  You don‘t want to miss it. 

You also don‘t want to miss this.  You know all those right-wingers who are convinced President Obama is not a natural-born citizen?  There are Congressmen who have signed onto a bill that buys into this paranoia.  Chris Matthews takes on one of them coming up on “HARDBALL.”  You won‘t want to miss it.  You‘re watching MSNBC, the place for politics.

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

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