updated 7/24/2009 10:20:08 AM ET 2009-07-24T14:20:08

Guests: Howard Fineman, Lawrence O‘Donnell, Chris Cillizza, Chris Hayes, Charlie Pierce

(BEGIN VIDEOTAPE)

DAVID SHUSTER, GUEST HOST (voice-over):  Which of these stories will we be talking about tomorrow?

The GOP cries uncle in health care reform.  After promising a plan, the Republicans now say they won‘t even offer one.  And the RNC chair says, “Why bother?  The Dems should have the votes anyway.”

But the hard work of governing isn‘t too hard for the president.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  We have never been closer to achieving quality, affordable health care for all Americans.

(END VIDEO CLIP)

SHUSTER:  As Obama explains reform to the masses, will he have a harder time uniting Democrats on Capitol Hill?

A day of distraction after Obama‘s final answer in last night‘s news conference.

(BEGIN VIDEO CLIP)

OBAMA:  The Cambridge police acted stupidly.

(END VIDEO CLIP)

SHUSTER:  The president tonight says he stands by those words and is surprised by the uproar—a reaction led in part by Boss Limbaugh.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  Last week, we saw white firefighters under assault by agents of Barack Obama.  Now, white policemen are under assault from the East Room of the White House.

(END VIDEO CLIP)

SHUSTER:  The two faces of Governor Bobby Jindal.  The stimulus is a failure, D.C. is bad.  Or, “Congratulations, please accept this money from me and here‘s a nice commemorative big fat check with my name on it.”

The two sides of Liz Cheney: Offered a chance to definitely weigh in on Obama citizenship, she decides to throw fuel on the fire instead.

(BEGIN VIDEO CLIP)

LIZ CHENEY, FMR. V.P. CHENEY‘S DAUGHTER:  People are uncomfortable with having, for the first time ever I think, a president who seems so reluctant to defend the nation overseas.

(END VIDEO CLIP)

(MUSIC)

SHUSTER:  And move over “Sopranos,” it‘s too much for “Law & Order.”  “The Real Housewives of New Jersey” pales in comparison with the bust of busts today in the Garden State.  Three mayors, two state assemblymen, several rabbis—nearly four dozen arrests in all for bribery, corruption and trafficking of human organs.

(BEGIN VIDEO CLIP)

ED KAHRER, FBI:  New Jersey‘s corruption problem is one of the worst, if not the worst in the nation.

(END VIDEO CLIP)

SHUSTER:  You think?

All that and more—now on COUNTDOWN.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  We are thick as thieves.

(END VIDEO CLIP)

(END VIDEOTAPE)

SHUSTER:  Good evening from New York.  I‘m David Shuster, in for Keith Olbermann.

For every week that President Obama‘s plan to reform health care gets delayed by Congress, that means another 47,000 more Americans will lose their health insurance, another 17,000 will file for bankruptcy because they can‘t pay their medical bills, and another 400 will die because they did not have health coverage.

No need to worry though because in our fifth story on THE COUNTDOWN:

The Republicans have their own plan to fix medical care in this country. 

It starts and ends with their electoral victory in 2010.

President Obama was back on the stump in Ohio today, making his case for health care reform.  The president took a tour of the Cleveland Clinic, discussing medical concerns and how to pay for them with families.

The Republicans meanwhile seem to be more concerned about themselves.  Senator James Inhofe of Oklahoma admitted today that if the Republicans can stall or block health care reform, he believes it would be a huge help to the GOP in the 2010 midterm elections.

It will help explain why House Republican Leader Boehner would not say whether the GOP would ever release its own plan if it even has one.  Quoting him, “We‘re continuing to put the final touches on our bill as the Democrats are continuing to put the finishing touches on their bill.”

Then there are the Democrats, who seem to be doing all of the dirty work for the Republicans.  “Politico” reports on how well the blue dog Democrats are capitalizing on health care, financially.  So far this year, the political action committee attached to the voting bloc on the House is on track to raise more than $1.1 million.  More than half of that money is from the health care industry.

Meanwhile in the Senate, the bill is stuck in the committee of finance chairman and blue dog Max Baucus.  His fellow Democrats are now complaining publicly about how little information he is sharing with them about the talks and the policies being worked up.

Majority Leader Harry Reid made it official that the Senate bill would not pass before the August recess ostensibly to keep the Republicans happy.  Quote, “We‘ll do what we can to make sure their issues are not buried.”

At a high school in Shaker Heights, Ohio, President Obama was apparently OK with the delay.

(BEGIN VIDEO CLIP)

OBAMA:  We just heard today that, well, we may not be able to get the bill out of the Senate by the end of August or the beginning of August.  That‘s OK.  I just want people to keep on working.  Just keep working.

(APPLAUSE)

OBAMA:  I want the bill to get out of the committees and then I want that bill to go to the floor, and then I want that bill to be reconciled between the House and the Senate, and then I want to sign a bill.

(APPLAUSE)

OBAMA:  And I want it done by the end of this year.  I want it done by the fall.

(END VIDEO CLIP)

SHUSTER:  The president also calibrated expectations of what quick passage of a reform bill would actually bring.

(BEGIN VIDEO CLIP)

OBAMA:  Our target date is to get this done by the fall.  That‘s the bottom line.  But keep in mind that even if we got it done in the fall, most of these changes would be phased in over several years.  So it‘s not as if you‘re going to wake up tomorrow and suddenly the health care system is all changed completely.

(END VIDEO CLIP)

SHUSTER:  While so many Democrats fighting amongst each other, RNC Chairman Michael Steele seems prepared to sacrifice bipartisanship on this one issue.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, RNC CHAIRMAN:  Look at what these guys are saying and doing, not what we‘re saying and doing.  You got 60 votes in the Senate.  You got almost a two-to-one majority in the House.  The Democrats control the entire power structure of the federal government.  If you want health care, get the votes.  Do it.

UNIDENTIFIED MALE:  Yes.

STEELE:  I mean, Republicans can‘t block the bill.  The Republicans can‘t even filibuster in the Senate.

(END VIDEO CLIP)

SHUSTER:  Lots to talk about with our own political analyst, Howard Fineman, the senior Washington correspondent for “Newsweek” magazine.

And, Howard, good evening.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST:  Hi.  Good evening.

SHUSTER:  Howard, so the Republican plan is not to reform health care but to reform the Republican Party in 2010?

FINEMAN:  Well, don‘t forget, it‘s the RNC.  It‘s the Rush-Newt-Cheney, as in Liz, Republican Party.  And based on that RNC, the Republican strategy is to talk about racial fears and resentments, to talk about where Barack Obama was born but not to really talk about health care.

I talked to people on the Hill all day today, talked to Republicans as well as Democrats.  Republicans claim they have plan, they don‘t.  They claim they‘re going to have a plan.  They won‘t.

Their whole strategy, David, is to stand on the sidelines with their arms folded while the Democrats try to work this thing out.  That‘s their whole strategy.

SHUSTER:  Is Senator Inhofe‘s assumption even correct?  I mean, if health care reform is something that Americans want and Republicans don‘t deliver it to them, how does that help Republicans?

FINEMAN:  Well, I don‘t think it does.  And I think a lot of Republicans privately when they‘re in their sort of non-tribal moments will admit that.  The problem is that the economy is in a big herd locker right now and people are concerned about their jobs in part because they‘re concerned about losing their health care.

So it‘s a combination of economic fears and concerns, and ones related to their health care system.  Yes, 85 percent of the American people have health care.  But almost all of them are worried about either losing it or worried that the costs of it are going to bankrupt them.

That is—as I travel the country talking to people and as I studied the polls here—that fear connected with the economy itself is what‘s driving politics today.  Obama is on the right side of that; the Republicans so far on the wrong side of it.

SHUSTER:  Could any of that explain why some Republicans, like Michael Steele, seem willing to let the Democrats fight this out amongst themselves and illustrate and underscore that.  I mean, if they can appear—if they can make it appear as if the Democrats‘ self-sabotage is the hope among Republicans, that they can emerge unscathed.

FINEMAN:  Yes.  I think that‘s exactly right, David.

I think they know that they‘re sitting on their hands here.  They‘re hoping for a failure on health care because they‘re hoping that that will cascade into other political damage for the Obama presidency that will make him seem somehow not in control of events, not presidential.  It will affect the stimulus.  It will affect the economy.

They want a cascade of disasters there politically.  But they don‘t want their hands on it.

So, yes, they‘re hoping that the Democrats will fall apart.  And that‘s frankly why Barack Obama is having senators down to the White House tomorrow.  That‘s why Rahm Emanuel, the chief of staff, was on the Hill today.

I think, if that knowledge permeates the Democratic Party, then that‘s going to help drive them together.  Yes, there are disagreements among Democrats on how to pay for this, how to regulate it, et cetera, et cetera, down the line.  It‘s not easy.

But the president itself has appealed to Democrats behind closed doors and said, “Look, if you study the history, you know that if the party doesn‘t stick with its president, it‘s bad at midterm elections, my friends.”  He has said that to them behind closed doors.  I think they get that.  And that‘s why, in the end, I think, despite all of the tumult now and all the slowing down of the pace of things, the Democrats will get together.

I think, in the end, they‘re going to go with their own way.  They‘re going to forget the Republicans.  They forgot them in the House.

There are no Republicans involve in the House, only two or three in the Senate.  I think that‘s the maximum amount of Republicans you‘re going to see in the end on this.

SHUSTER:  MSNBC political analyst Howard Fineman—Howard, thanks as always.

FINEMAN:  Thank you, David.

SHUSTER:  You‘re welcome.

For more on the Democrats, let‘s turn to Lawrence O‘Donnell, contributor to “The Huffington Post” and former chief of staff of the Senate Finance Committee.

Lawrence, does Harry Reid still not realize that the Democrats won, that he has a filibuster-proof majority?  Why does he have this desire to do what we can to make sure their issues are not buried when the Republicans will never do the same thing for the Democrats?

LAWRENCE O‘DONNELL, MSNBC POLITICAL ANALYST:  Because he doesn‘t have the Democratic votes that he needs.  He‘s not really working and hasn‘t been working for a while on trying to get Republican votes.  They don‘t have 60 liberal Democrats in the Senate.

And so, if you put any of this stuff to a vote on floor of the Senate now, none of it would pass.  That‘s also true in the House.  You have seven Democrats—seven Democrats on Henry Waxman‘s committee in the House that have stopped that committee cold.

They are stuck.  Exactly the way that committee got stuck in 1994 when it was run by John Dingell and it never delivered a bill.  Democrats didn‘t let those bills come up.

SHUSTER:  Did Chairman Steele, though, just give the Democrats an out on bipartisanship to the extent that that could exist and may be not that they needed one—I mean, but should they be looking for one.  I mean, did he essentially make it OK for them to say, “We‘re going to do this our own way”?

O‘DONNELL:  Yes, he sure did.  And they don‘t need an out.  They can go without the Republicans now.  They don‘t have the Democrats, as I‘ve said.

And, you know, look, Steele is using a 15-year-old model.  And there is no other model to refer to.  And that model was the Republicans eventually decided to try to kill Clinton health care.  The Republicans benefited tremendously by killing Clinton health care.

I have to disagree with the analysis I heard from Howard earlier.  Everyone is now forgetting, all the pundits are forgetting—the Republicans killed Clinton health care and they won hugely in the next congressional election.

So, people who look at this and say, “Oh, gee, you know, the Republicans will hurt themselves by doing this.”  I don‘t know what model they‘re looking at.

SHUSTER:  In Ohio today, President Obama seemed to be OK with the delay after the August recess.  Is he OK with having his timeline pushed back?

O‘DONNELL:  He is brokenhearted about this.  But I think the White House made a big mistake by getting Obama involve in the timetables.  They should have whispered to Pelosi and to Harry Reid and to the chairman, “This is the timetable we want.  We want this much done before August.”

But they never should have gone public with it as an Obama timetable.  They should have let the chairman say, “This is my timetable.”  And let Harry Reid say, “This is my timetable.”  So then when they don‘t make that timetable in the Senate, as they‘re not going to, it would be a minor bump for Harry Reid, instead it‘s being portrayed as a big presidential loss, that they‘re not making this arbitrary deadline in August.

SHUSTER:  Given your experience with the Senate Finance Committee, help us understand or comprehend why Harry Reid has given so much time, so much power to Finance Committee Chairman Max Baucus who wasn‘t even consulting with other Democratic members of the committee.  Why is Reid letting Baucus do that?

O‘DONNELL:  Well, the majority leader has not given any power to the chairman of the finance committee or any committee chairman.  Those chairmen already have that power, and the finance chairman has always been a far more powerful position than the majority leader.

The majority leader is really majority scheduler.  That has—it‘s a very serious power.  It‘s the power to schedule what happens on the Senate floor.  But it is impossible for chairman—for majority leaders to try to order chairman around.

I have that experience working for Chairman Moynihan, the Majority Leader George Mitchell who was a member of the committee.  Harry Reid is not even a member of the committee.  George Mitchell tried to urge us to do certain things in certain ways.  And he had absolutely no power to force us to do things.  And, you know, we would do them to the extent that they were agreeable for us to do.

But that chairmanship is all powerful.  Max Baucus can ignore anything that the majority leader says and the majority leader knows it.  And so, he‘s doing what is traditional on this case, which is he‘s working as hard as he can with the Democrats on this committee, trying to pull the Republicans in on the committee, trying to get something that will pass the Senate.

No committee that has delivered a bill so far has delivered something that can pass the Senate.  The Kennedy and Dodd committee has delivered something that is largely irrelevant to processes on the Senate floor, just like they did 15 years ago.  It‘s the finance committee, that‘s the only place where something can come out that has a chance of passing the Senate.

We did it 15 years ago.  We did it right before the August recess.  We got our bill out of the Senate Finance Committee.  It then went out on the Senate floor and the whole exercise died in about four days on the Senate floor.

So, the fact that it gets out of the finance committee is not the end of the story either.  It can all die on the Senate floor.

SHUSTER:  Lawrence O‘Donnell of “The Huffington Post” and MSNBC, who‘s got a wealth of experience in all this—and, Lawrence, thanks for coming on tonight.  We appreciate it.

O‘DONNELL:  Thanks, David.  Thank you.

SHUSTER:  You‘re welcome.

Meantime, President Obama says he is surprised by the response to the statement last night about the arrest of the Harvard professor.  The president did not walk away from his comments that the police department of Cambridge acted stupidly.  And both the professor and the arresting officer are refusing to apologize.

And today, there‘s new information about the professional background of the policeman.

Is the White House now wishing the last few minutes of Obama‘s primetime news conference hadn‘t happened?  That‘s next on COUNTDOWN.

(COMMERCIAL BREAK)

SHUSTER:  The president‘s comments on the racially-charged debate surrounding the arrest of a Harvard professor has thrust the story to national prominence; these comments of Rush Limbaugh crying reverse discrimination; Governor Jindal is complaining about the stimulus money but really loves handing out stimulus dollars; and the buzz so big in New Jersey today that‘s almost hard to believe.

Details in all of that and more—ahead on COUNTDOWN.

(COMMERCIAL BREAK)

SHUSTER:  A prominent American scholar—a 58-year-old black man with 50 honorary degrees to his name, a MacArthur Genius Grant, director of the W.E.B. Du Bois Institute for African and American Research at Harvard—came face-to-face in his home a week ago today with a 42-year-old white man -- a police sergeant with 11 years on the job in one of America‘s most liberal cities, Cambridge, Massachusetts, who has spent the last five years at the teaching at the Lowell Police Academy teaching how not to racial profile—a job for which he was select bid a black police commissioner.

Then, in our story tonight, the nation‘s first black president weighed in on a story about black and white that was never black and white and the right-wing started salivating.  Professor Henry Louis Gates returned from overseas last week to find his front door stuck shut and got his driver to help open it.  A neighbor called the police saying two black men were trying to break down.

Sergeant James Crowley responded after the driver left, after Gates got in.  Not knowing whether Gates was a burglar or whether burglars remain inside, Crowley asked Gates for his I.D., which Gates initially refused.

Then it got ugly.  Gates is accusing Crowley of racism, allegedly talking about Crowley‘s mother.  Later claiming Crowley refused to identify himself, something Crowley claims gates could not hear because Gates would not stop yelling.

Crowley arrested Gates for disorderly conduct.  He spent time four hours in lockup with charges dropped this week.

(BEGIN VIDEO CLIP)

HENRY LOUIS GATES, HARVARD PROFESSOR:  What it made me realize is how vulnerable all black men are, how vulnerable all people of color are and all poor people to capricious forces like a rogue policeman.  And this man clearly was rogue policeman.

(END VIDEO CLIP)

SHUSTER:  The charge of racial profiling flew.  Last night, Mr. Obama was asked about it.

(BEGIN VIDEO CLIP)

OBAMA:  I don‘t know, not having been there and not seeing all of the facts, what role race played in that.  But I think it‘s fair to say, number one, any of us would be pretty angry.  Number two, that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home.  And number three, what I think we know separate and apart from this incident is that there‘s a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately.  That‘s just a fact.

(END VIDEO CLIP)

SHUSTER:  That got back to Sergeant Crowley.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  You probably have heard what the president had to say last night.  And I just wonder what your thoughts are concerning his comments.

SGT. JAMES CROWLEY, CAMBRIDGE POLICE DEPT.:  I didn‘t vote for him.

UNIDENTIFIED MALE:  When he said the Cambridge police acted stupidly, he was talking about you.  What was your reaction to that?

CROWLEY:  My only reaction was, somebody had told me what he said.  I didn‘t hear the press conference for that, I did listen afterwards.  And I support the president of the United States 110 percent, I think he‘s way off base wading into a local issue without knowing all the facts as he himself stated before he made that comment.

(END VIDEO CLIP)

SHUSTER:  Congressional Republicans e-mailed news releases demanding that Democrats distance themselves.  And, of course, eternal white victim Rush Limbaugh cried racism.

(BEGIN VIDEO CLIP)

LIMBAUGH:  Last week, we saw white firefighters under assault by agents of Barack Obama and Sonia Sotomayor.  We‘re talking about Frank Ricci and the boys of New Haven.  They were under assault during the Sotomayor confirmation hearings; you remember that.  Groups went out to try and destroy these guys.

Now, white policemen are under assault from the East Room of the White House by the president of the United States after admitting he had no—he didn‘t know all the facts, what went on in there.

(END VIDEO CLIP)

SHUSTER:  Never mind that one firefighter was Latino or that Sergeant Crowley was on scene with the Latino officer and a black officer.

Today, Mr. Obama had words of praise for Sergeant Crowley‘s record but suggested Gates should not have been handcuffed and said more broadly that the whole thing is a distraction.

(BEGIN VIDEO CLIP)

OBAMA:  Well, Terry, I think this is a classic example at a time when we‘re struggling about health care, energy, we‘ve got two wars going on, that issues like this get elevated in ways that probably don‘t make much sense.

(END VIDEO CLIP)

SHUSTER:  Let‘s bring in Chris Cillizza, White House reporter for “The Washington Post” and author of the paper‘s political blog, “The Fix.”

And, Chris, good evening.

CHRIS CILLIZZA, THE WASHINGTON POST:  Good evening, David.

SHUSTER:  President Obama not only said the police acted stupidly, he also said, quote, “Any of us would be pretty angry.”  I wonder if any white person would also be pretty angry of Sergeant Crowley‘s behavior or whether some white people might feel less threatened because whites do not have the same history with police.

CILLIZZA:  Well, let me take a cue at least for the first part of what President Obama said and say, “I can‘t comment really about the racial element of this simply not being here.  Obviously, I followed this pretty closely but not being there, I don‘t want to get in to it.”

But I think the political mistake that the president made here, David, was, he had it right when he said, “I don‘t know all the facts here.”  He could have said, “Look, Professor Gates is a friend of mine.  I support him and I—you know, I‘m not sure exactly how this is going to turn out.  But I broadly support him.”

Instead, he gave a much longer answer after that caveat that I think probably got him in to this political hot water where we find him.

SHUSTER:  Do you get the sense that Mr. Obama considers issues around race and police to be a distraction?  Or as you put it, just a tempest over the use of the word “stupid”?

CILLIZZA:  I would bet the latter is what he thinks right now.  I think he—this whole press conference, David, was aimed at health care, driving the health care message.  It‘s urgent.  We need to do it.  It needs to happen now.

Every question except one prior to that last question asked by the “Chicago Sun-Times‘” Lynn Sweet was about health care and the other question was about the economy.  That last question, when he said “acted stupidly,” look, Barack Obama didn‘t get elected president because he is a bad politician.  I am certain he knew that when he said that, he would have liked to take it back.

SHUSTER:  Politically, the right wing condemnation of President Obama seems strange when you consider the libertarian view of government agents who go into your home.  If the homeowner had been a prominent white man and the president had been asked about it and chose not to express outrage, wouldn‘t conservatives and libertarians have hammered Mr. Obama?

CILLIZZA:  Probably, but that‘s politics, David.

(LAUGHTER)

CILLIZZA:  Remember, you know, maybe I see things through too political a sphere.  But that‘s sort of the lens that I look through in my daily life.  This is politics.

The Republican Party hasn‘t had a lot to distract the public from some of these broader issues.  This is a way to say, look, health care has slowed.  Harry Reid has put up the vote until September now.  Now, you got this issue.

All of these things are moving around.  And what it does, it muddles the White House‘s message.  Any day that Republicans were out of power at the White House, out of power in the Senate, out of power in the House, can muddle the White House Democratic message.  They have to consider it a good day from a purely political perspective.

SHUSTER:  There is something a little poignant here, and possibly revealing our country.  A black man obviously felt threatened by the presence of an armed uniformed white authority figure in his home.  It‘s easy to imagine the white sergeant now feel somewhat under siege as well with his black mayor, black governor and black president all now condemning his actions.

Politically, what should Mr. Obama do with this dynamic now?

CILLIZZA:  You know, I think, David, what he has to hope for is that we don‘t spend another day or two talking about it—to be totally honest with you—that this essentially goes away.  That the police officer doesn‘t talk more to the media.  That the issue goes quietly away and we move back to health care.

If it stays in the limelight, if it comes out that this was, in fact, as the police officer was doing the job that he has been trained to do, then you get into a more shaky and more tenuous political ground for the president.  But what he wants right now, more than anything, is to start talking about health care, even if we start talking about the fact that the health care bill vote has been delayed until September, he‘d much prefer that to this conversation.

SHUSTER:  Chris Cillizza of “The Washington Post”—Chris, thanks as always for coming on.

CILLIZZA:  David, thank you.

SHUSTER:  You‘re welcome.

Governor Schwarzenegger, as you might imagine, had a bit of explaining to do after he was seen brandishing this knife in his office.  And later, New Jersey living up to its corruption reputation—but instead of the mob, its politicians and religious leaders caught up in the sting.  Forty-four arrests, but only three mayors.

(COMMERCIAL BREAK)

SHUSTER:  On this day in 1984, shock and awe felt around the pageant world, as Miss America, Vanessa Williams, gives up her crown.  Nude photos of Williams published in “Penthouse” led to the beauty queen‘s resignation.  All the hub-bub seems terribly quaint now, since it predates Prejean.  Although the former Miss California eventually suffered the same fate, opposite employment. 

On that note, let‘s play Oddball.  

We begin in Osaka, Japan, with a fashion show devoted to bridal couture.  For those who fear both commitment and robots, I suggest you leave the room now.  Our blushing bride is Nemu.  At 5‘2 and 95 pounds, she‘s shorter than most models, although in the same weight category.  With the effortless grace of an automatic, Nemu lumbers down the aisle.  And if you think she is a fine piece of hardware.  Wait until you meet the brides maid, Fembot. 

While the audience was thoroughly creeped, Nemu later told reporters she hasn‘t been this happy since her first marriage to Inspector Gadget. 

To California, where Governor Arnold Schwarzenegger is dealing with a 26 billion dollar budget crisis.  And with Sacramento in turmoil, there‘s only one option left, brandishing a really large knife. 

GOV. ARNOLD SCHWARZENEGGER:  Hey, guys, I just wanted to say, thanks very much for all of the great ideas you‘re giving me. 

SHUSTER:  The governor posted the video to thank Californians for their budget ideas.  Schwarzenegger‘s press secretary says the knife was a gift and it doesn‘t mean anything.  Some residents have criticized the visual, clearly forgetting this. 

SCHWARZENEGGER:  Stick around. 

SHUSTER:  And finally, to Richardson, Texas, where no one is safe from the latest crime spree sweeping the Lone Star State, not even the good folks at Plants and Planters Nursery.  After a series of break-ins and a slew of thefts, the owners installed security cameras to try to nab the low-lifes stealing their seedlings. 

But this whodunnit slowly unravels as the primate suspect becomes clear.  Their robber?  A real baboon.  The security footage shows a small monkey scooping up plants, flowers, and other garden-variety items, and handing them to an unseen accomplice waiting on the other side of the fence.  The two perps are still at large, but police have put together this composite on what the criminals might look like. 

GOP hypocrisy becoming a fine art.  Is the money for all of those big checks you like handing out, Governor Jindal, coming from the stimulus?  Would that be the same stimulus you deride as a failure, governor?  That looks like your name on the checks. 

And Liz Cheney‘s attack on President Obama.  Why she‘s helping fan the flames of the birther conspiracy. 

(COMMERCIAL BREAK)

SHUSTER:  It‘s official, the very first instances of stimulus money fraud, though not the kind that might leap to mind.  In our third story of the COUNTDOWN, the governor has been traveling around his own presenting big fat checks, much of the money from the stimulus package, the same stimulus package he railed again, the same stimulus that he recently called a failure.

Republican Governor Bobby Jindal of Louisiana trying to act like Santa Claus, when he‘s really nothing more than a phony stimulus elf.  Governor Jindal has been touring his state lately to promote, quote, jobs, jobs, jobs.  Here he is in Vernon Parish presenting a check from the state of Louisiana office of the governor.  And yes, that‘s technically true, but more than half of the money comes from the federal stimulus plan. 

But if Governor Jindal were to acknowledge that, he might actually contradict himself, since he once tried to refuse stimulus money, and since, just two days ago, he called it a, quote, stimulus that has not stimulated. 

But the big fat checks and the smiling governor abound, along with all the positive local press he‘s getting, like an 18 million dollar check to Pointe Coupee Parish, $15 million of that from a community development bloc grant.  In other words, stimulus money.  The stimulus plan also awarded job training money to Louisiana, also part of what Jindal is presenting, you know, on his jobs, jobs, and jobs tour. 

And so it goes.  When Jindal gives Opoloosa (ph), Louisiana check for close to 17 million dollars and five million dollars to Lafayette County, you would never know that he once tried to block the eight billion dollars in federal stimulus money that his state may ultimately receive. 

Let‘s bring in the Washington editor of “The Nation,” Chris Hayes. 

Chris, good to see you. 

CHRIS HAYES, “THE NATION”:  Good to see you too, David. 

SHUSTER:  Is this the logical end to stimulus money hypocrisy by the GOP, presenting checks with a guileless smile on your face? 

HAYES:  Yes, this is actually really a deep sort of profound part of the conservative DNA.  The fact of the matter is conservative governance doesn‘t work.  We saw it revealed for an absolute failure that it was over the last eight years, and we‘ve seen it as a failure at the state and municipal level as well. 

So the ideal situation, actually, for these Republican governors and Republican politicians in general is to be able to kind of zealously rail against government encroachment, and then be able to take all of the goodies and give them back to their constituents. 

You see this kind of thing all the time.  You have Republicans like Mitch McConnell stuffing appropriations bills with pork for his state, while he‘s railing against government spending, right?  So this isn‘t just some sort of limited example of GOP hypocrisy or Bobby Jindal being hypocritical.  This is part and parcel of the entire conservative MO. 

SHUSTER:  In Jindal‘s case, we looked at four accounts of these check presentations by local Louisiana papers.  None of them gave any credit to the federal stimulus package.  Jindal is getting away with this, at least in the local press. 

HAYES:  Of course he is.  It‘s smart politics.  He gets the best of both worlds.  This is what the Republicans want.  There‘s this amazing quote by a Texas New Deal Democratic Congressman from back in the ‘30s.  He said, nobody ever shot Santa Claus.  That‘s true today, as it was back then, which is that people actually—for all of the anti-government rhetoric you get from conservatives and from the right, people like things like Medicare, right?  They like the Veterans‘ Administration.  They like the Post Office.  They like a lot of things—they use the Post Office. 

There‘s a lot of parts of government that are part and parcel of people‘s lives and are extremely popular.  So if you wage war against them, you have to make sure you do not succeed in destroying them.  Otherwise, you get punished politically. 

SHUSTER:  We also like the National Weather Service, which helps us to understand those lightning storm going on behind you.  As you mentioned, Governor Jindal is not alone in his hypocrisy.  There‘s also, as you mentioned, Governor Rick Perry, Governor Mark Sanford, and soon to be ex-Governor Sarah Palin. 

But come to think of it, none of them seem to be faring that well. 

HAYES:  It‘s not a very good time to be a governor, as a sort of basic fact.  Governor approval ratings tend to track fairly closely with the state of the economy.  And, wow, it‘s really going crazy out there.  Now is not a great time to be a governor precisely because states are hemorrhaging jobs; the economy is in a bad place.  Any incumbent anywhere is not going to be doing very well right now. 

SHUSTER:  How far does this go?  For instance, if the stimulus really does kick in over the next year to measurable effect, and the economy finally gets out of its recession, what do Republicans say then?  That the economy rebounded despite the stimulus plan? 

HAYES:  They‘ll claim credit.  I have no doubt in my mind that when and if the health care is passed, health care reform, you will see conservatives taking credit for it.  Remember, Ronald Reagan wanted to kill Medicare.  He said it was socialized medicine.  He warned of the dark and impending doom of Medicare. 

Is there any Republican politician today that goes back to their constituents and says, I want to get rid of Medicare?  It would be political suicide.  So I guarantee you that they will try to take credit for whatever program ends up getting passed. 

SHUSTER:  And when they‘re confronted by intrepid reporters like yourself, who point out their hypocrisy, what do they say? 

HAYES:  I don‘t know.  My mind doesn‘t work quick enough to deal with the contradictions of being a conservative politician. 

SHUSTER:  Chris Hayes of “The Nation,” in the midst of a heck of a lightning storm down in Washington, D.C.  Chris, thank so much for coming in tonight.  We appreciate your time. 

HAYES:  Thanks, David. 

SHUSTER:  You‘re welcome.  Bribes, money laundering, corruption, even international trafficking of human organs; the massive bust of politicians and rabbis in New Jersey today could make even the Soprano family blush. 

If only the Cheney family would blush at what Liz Cheney said about President Obama.  Why the former vice president‘s daughter is buying into the sympathies of those who think Obama is not an American. 

And when Rachel joins you at the top of the hour, the big headline from papa Cheney, why he‘s still throwing his boss under the bus six months after they left office.

(COMMERCIAL BREAK)

SHUSTER:  Secretive meetings, bribes, an undercover informant looking for favors.  It may sound like a rerun of “The Sopranos.”  But in our number two story on the COUNTDOWN, it‘s a real life corruption probe in New Jersey.  This morning, the FBI arrested several New Jersey political figures for taking payoffs and offering favors.  Also part of the sting, a bizarre operation involving the selling of human organs, with several rabbis in New York and New Jersey involved in a money laundering scheme. 

Our correspondent is Pete Williams. 

(BEGIN VIDEOTAPE)

PETE WILLIAMS, NBC NEWS INVESTIGATIVE CORRESPONDENT (voice-over): 

Federal agents started the roundup at 6:00 a.m., arresting mayors and state legislators in New Jersey, and rabbis in a parallel case in New York, 44 in all. 

ED KAHRER, FBI:  New Jersey‘s corruption problems is one of the worse if not the worst in the nation.  Corruption is not only pervasive, but it‘s become ingrained in New Jersey culture. 

WILLIAMS:  Three mayors were charged with taking bribes, Hoboken‘s Peter Cammarano, Dennis Elwell of Secaucus, and Anthony Suarez of Ridgefield, along with Leona Beldini, the deputy mayor of Jersey City. 

FBI agents were listening in as officials met in diners and parking lots with an undercover informant posing as a real estate developer looking for favors.  It appears that whenever the informant waved around money, hands reached out to grab it.  Some 650,000 dollars in cash paid to city and state officials and go betweens. 

Court documents say Hoboken‘s mayor was recorded telling the informant, “you‘re going to be treated like a friend.”  And when the informant described himself to Mariano Vega, a Jersey City official, as being in good hands, Vega replied, “like Allstate.”

RALPH MARRA, FEDERAL PROSECUTOR:  For these defendants, corruption was a way of life.  They existed in a ethics free zone. 

WILLIAMS:  Jonathan Deanst of New York‘s WNBC TV, who broke the story, said federal agents made a surprising discovery. 

JONATHAN DEANST, WNBC TV, NEW YORK:  The FBI says it also stumbled upon a Brooklyn man who was offering to broker the sale of human kidneys.  They say for 160,000 dollars he would find donors in Israel who needed the money, and then fool U.S. hospitals that the donor and recipient were related.  They say he‘d been doing this for more than ten years. 

WILLIAMS:  And prosecutors say Rabbis at synagogues in New Jersey and New York helped the informant launder over three million dollars by sending it to contacts in Israel, who returned cash. 

(on camera):  The FBI says some New Jersey officials appeared suspicion of the informant, but never wary enough to pass up the cash. 

Pete Williams, NBC News, at the Justice Department. 

(END VIDEOTAPE)

SHUSTER:  Coming up, President Obama signs an order to extend Secret Service to Dick Cheney for six more months.  As a thank you, Liz Cheney goes on TV and helps add fuel to the fire over the false claims Obama is not really an American citizen.  Details ahead on COUNTDOWN.

(COMMERCIAL BREAK)

SHUSTER:  Franklin Delano Roosevelt once said, “in politics nothing happens by accident.  If it happened, you can bet it was planned that way.”  So it is with our first story in the COUNTDOWN; no accident that yet another mainstream Republican refuses to condemn the wing nuts that say President Obama is not an American citizen. 

This time it was Liz Cheney on LARRY KING LIVE Tuesday night, appearing opposite Democratic strategist James Carville.  After being shown video of birther screaming at Delaware Representative Mike Castle, with every chance to denounce the birther nut cases, Cheney instead attacked the president. 

(BEGIN VIDEO CLIP)

LIZ CHENEY, DAUGHTER OF FMR. VICE PRESIDENT CHENEY:  One of the reasons I think you see people so concerned about this—I think this issue is people are uncomfortable with having, for the first time ever, I think, a president who seems so reluctant to defend the nation overseas. 

LARRY KING, CNN ANCHOR:  Are you saying because he‘s a Kenyan?  

CHENEY:  No, not saying that. 

(END VIDEO CLIP)

SHUSTER:  Finally, Carville, referring to what he called the sort of nut wing of the GOP, said this—

(BEGIN VIDEO CLIP)

JAMES CARVILLE, DEMOCRATIC STRATEGIST:  I‘ve been accused of hurling facts around.  Let me hurl a fact around.  These people are—these poor, pathetic people believe this stuff, just like Ms. Cheney tonight.  She refuses to say this is ludicrous because she actually wants to encourages these people to believe it. 

It‘s just a simple thing.  This a nutty thing.  There‘s nothing to this.  I disagree with this president‘s policies.  They can‘t say that. 

(END VIDEO CLIP)

SHUSTER:  Cheney responding to Politico.com about the situation chose her words carefully and still refused to disown the birthers: “I don‘t have any question of Barack Obama‘s right to be president.  My concern is with his policies.  I‘m deeply troubled about the path he is taking this government down, massively expanding the size of government, weakening our national defenses, increasing taxes on all Americans and nationalizing health care.  These are dangerous policies for the nation.” 

Let‘s turn now to Charlie Pierce, staff writer for the “Boston Globe Magazine,” contributing editor for “Esquire Magazine” and author of “Idiot America.”

Charlie, thanks for joining us from Boston tonight. 

CHARLIE PIERCE, “BOSTON GLOBE MAGAZINE”:  Good to be here, David. 

SHUSTER:  FDR was right.  It is no accident that Liz Cheney is refusing to come out and say, the president was born in the United States.  What‘s the game for her and the GOP? 

PIERCE:  It‘s funny because I was listening to Chuck Todd on HARDBALL earlier tonight.  And when Chris asked him about how this thing gets airborne, he immediately jumped in and said the Internet. 

Well, it wasn‘t the Internet in 1992 that invented Whitewater, that brought us all the way down the rabbit hall.  It was the “New York Times.”  It wasn‘t the Internet in 1999 that put Kathleen Willey on TV to slander somebody, and put Jennifer Flowers on TV to talk about the Clinton body count.  It was Chris Matthews and cNBC. 

It wasn‘t the Internet that were involved with the prolonged act of journalistic malpractice that was the coverage of the Al Gore campaign in 2000.  It was the mainstream media.  Why wouldn‘t these people think this would work again. 

SHUSTER:  Charlie, we‘re talking here about Liz Cheney.  When a prominent Republican like Liz Cheney refuses on multiple occasions to state that President Obama was born in the United States and is a citizen, isn‘t there a danger that moderates and independents would see the birther nuts not as a fringe, but as representative of the Republican party overall? 

PIERCE:  Look, right now the national Republican party looks like it‘s composed mainly of a group of circulated e-mails.  I mean, but Whitewater didn‘t hurt them.  The Swift Boat accusations didn‘t hurt them. 

SHUSTER:  There was an element of truth to Whitewater.  Governor Jim Guy Tucker, the MacDougalls, they got convicted.

(CROSS TALK) 

SHUSTER:  Charlie, there‘s no truth whatsoever to the charge that Barack Obama is not an American, that he was not born in Hawaii.  There‘s absolutely no comparison here. 

PIERCE:  There is a comparison because we‘re floating it, David. 

There‘s no truth to the—

SHUSTER:  We‘re not floating it.  It‘s Liz Cheney who‘s allowing this stuff to stay out there.  Why is it so difficult for Liz Cheney and other prominent Republicans to say, this is garbage.  Let‘s now talk about the policies where we disagree. 

PIERCE:  No, because they have seen in the past the political advantage to doing the nudge-nudge, wink-wink dance on this kind of thing.  This isn‘t anything sillier than what Senator Jim Inhofe says about global warming.  It‘s just the id of the party rather prominently displayed.

SHUSTER:  Here‘s the other side of this: is there an underlying racial component to all of this that Liz Cheney and others are fuelling? 

PIERCE:  Well, as we know, David, nothing is ever about race in this country anymore, now that we have elected Barack Obama to be president.  Of course there is.  There‘s a nasty stew of racism and xenophobia floating around—percolating at the bottom of this.  I don‘t think there is any doubt about that. 

SHUSTER:  If Liz Cheney or anybody else is unwilling to acknowledge the facts of something as basic and clear-cut as President Obama‘s birth, why should Liz Cheney be trusted on anything else that she wants to talk about? 

PIERCE:  I don‘t know.  I‘m not the one who books it.  It‘s the folks on shows like this that book her.  She‘s never shown it—

SHUSTER:  Wait, Charlie, you‘re getting this wrong.  She has never been willing to come on this show.  She‘s never able to come on this show or any show on MSNBC to face any tough questions.  She was on Larry King.  Let‘s be clear. 

PIERCE:  She is also on “MORNING JOE.”  And she‘s on TV a lot. 

SHUSTER:  Charlie, on my afternoon show, we have invited her repeatedly to come on and take the questions about torture and take these questions.  She refuses.  She picks and chooses her spots, where she knows that it‘s up to James Carville to challenge her, where it is a political environment. 

And again, the key question is, how can this possibly help our politics when you have a fringe like this one that believes this stuff, and you have leaders like Liz Cheney—and the fact of the matter is she is a leader.  She‘s allowing this garbage to get out there. 

PIERCE:  I don‘t know that she‘s a leader of any kind.  What I would tell you is she‘s a prominent Republican because she‘s been made a prominent Republican on TV.  If you want to talk about the decline of expertise and the consequences in this society, there is a book you should pick up. 

SHUSTER:  We‘re not going talk about books.  We‘re talking about the book and the history that Dick Cheney and daughter Liz Cheney are trying to write.  Again, Charlie, you acknowledge this is complete garbage. 

PIERCE:  Of course it is.  It‘s complete nonsense. 

SHUSTER:  That‘s what I don‘t understand.  What‘s the political benefit for Liz Cheney.  Everyone is ridiculing the GOP. 

PIERCE:  Everyone? 

SHUSTER:  Everyone who has an independent thinking mind says this is crazy. 

PIERCE:  And, of course, there‘s never been a political advantage taken by anyone who—you do not underestimate it.  You do not underestimate the American people.  I‘m telling you, there‘s not a substantial political advantage to this.  But there is a political advantage within the kind of festival of this stuff that is the modern Republican party. 

SHUSTER:  And appealing to the 10 percent of the public out there that‘s crazy enough to believe anything.  In any case, Charlie Pierce of “The Boston Globe Magazine,” “Esquire,” and author of “Idiot America,” thanks for your time tonight.  We appreciate it. 

PIERCE:  Thanks, David. 

SHUSTER:  That will do it for this Thursday edition of COUNTDOWN.  I‘m David Shuster, in for Keith Olbermann.  You can usually catch me from 3:00 to 5:00 p.m. Eastern with my MSNBC colleague Tamryn Hall.  But now to discuss the latest dispute between Dick Cheney and George W. Bush, ladies and gentlemen, here is Rachel Maddow.  Hey, Rachel.

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

END   

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