updated 7/24/2009 10:21:45 AM ET 2009-07-24T14:21:45

Guest: James Clyburn, Roger Simon, Michael Weisskopf, Stephanie Miller, Michael Medved, Michael Eric Dyson, David Hilzenrath

(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.

Well, there‘s a fight behind closed doors amongst House Democrats. 

Will they work through August?  Congressman Jim Clyburn will be joining me on that.

And over on the Senate side, Harry Reid closes the door on any health care legislation in August.  It‘s not a good deal.

New details about what Dick Cheney was willing to do to get a pardon for his old buddy Scooter Libby. 

Plus, the House investigation is now under way.  I want to know if they‘re going to put “Shooter” under oath.  Won‘t that be entertaining this summer? 

President Obama gave an honest response last night when he was asked about the arrest of a black Harvard professor.  Now the right wing is accusing the Democrats of being against law enforcement and the cops.

Plus, “Psycho Talk,” got a great panel coming up for you tonight. 

Want you to get your phones out, because we‘ve got another tech survey coming up for you, a big question tonight.

But first, tonight‘s “OpEd.”

There‘s only one way you can look at this, folks, and that is that the Republicans again, 40 of them, they got exactly what they wanted.  They got a stall.  It‘s like a four-corner stall; you know?

Harry Reid says the Senate will not vote on health care legislation before the August recess.  Over on the House side, Nancy Pelosi says they‘re ready to go, they‘ve got enough votes the progressive plan.  Of course, the Blue Dogs are saying we‘re not so sure about that.  But the Senate really has got to get their act together, but they just need more time, according to Reid. 

Reid has got to be the pit boss in all of this.  Now, I don‘t know what you think, folks, but my feeling is this is the huge issue, and Harry Reid has been the most under-the-rug Senate majority leader I have ever seen. 

The president was in Cleveland today for a town hall.  He was asked multiple times about what he thought about the Senate delay. 

Here‘s his response. 

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  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 beginning of August.  That‘s OK.  I just want people to keep on working. 

(APPLAUSE)

Just keep working. 

What I don‘t want is what I refer to in my speech, delay for the sake of delay, delay because people are worried about making tough decisions or casting tough votes.  That‘s what I don‘t want to see. 

(END VIDEO CLIP)

SCHULTZ:  Well, it‘s the delay because the lobbyists are doing a little bit better job than the White House right now. 

I‘ve got to be honest with you, folks, I think the president missed an opportunity today and he missed an opportunity last night at the news conference.  There is an undercurrent of frustration among hard-core Democrats in this country.  President Obama, no doubt about it, he is illustrating a great deal of patience with his party in the process, but he‘s also doing it with the people who are trying to destroy him. 

Now, the Republicans are out there just hammering him at every corner. 

And what‘s the president doing?  He‘s offering up an olive branch. 

I almost fell out of the front row last night when he was talking about wonderful the Republicans are and how they‘re working on this stuff.  They haven‘t got any ideas.  He‘s trying to do the statesman-like thing, and you‘ve got to admire him for that, and we are in a delicate place right now throughout this whole process, no question about that.

But this would have been, I think, for President Bush a fighting moment.  So I think we‘re seeing a real contrast on how these administrations differ, and I appreciate that.

I appreciate the fact that we‘ve got the smart guy in office who is showing that he‘s very knowledgeable, very reasonable, and he has a real command of this issue, health care reform in this country.  But I think there‘s an undercurrent, and I‘m right in the middle of it, because I want to see some punches thrown on the Republicans.  They‘re not going to do you any favors. 

And you know what‘s interesting about this?  Back during the campaigning days when the president was trying to be the president, anytime the Clintons came out swinging, he swung right back at them on the campaign trail.  And I think that‘s kind of where we are right now.  I could be totally wrong, but I just want the victory. 

Now, I know he‘s trying to show patience with the process, and I think the Senate delay is a setback.  So many people have got their hopes on the fact that the special interests won‘t have time to go back in August and infiltrate into the small towns, get people thinking the wrong way, and forget all about the election.  Oh, by the way, the economy is not doing what we want to do, Obama is a loser.  That‘s what I‘m afraid of. 

I also think in the big picture that the president is really surprised where he is right now on this issue.  I don‘t think he expected this much pushback from his own party. 

Now, I know the president is trying to usher in a new era of politics, everybody get along, but sooner or later, President Obama is going to have to find a way to deal with these junkyard dogs that are just doing their thing all over the yard and not contributing anything. 

I want you to get out your cell phones.  I want to know what you think. 

Now, we know the GOP talking points are absolutely bogus, but are the Republican attacks starting to sink in with the public?  Text “A” for yes and “B” for no to 622639.

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

Last night, when I was sitting there, I thought for a moment, I wonder if this guy wants to run for reelection.  There were times last night that I thought President Obama was a beaten man.  And I thought, where‘s the fire? 

Do you remember last week when the president was out on the campaign trail, he was over there with the governor of New Jersey, Mr. Corzine, trying to get reelected?  He‘s got a tough battle coming up.  The president got up there and he was just getting after it, just getting after it, and I kind of expected that last night, and it wasn‘t there. 

Maybe it‘s the White House, maybe it‘s the setting, the press thing and everything else.  But I don‘t know, my level of disappointment was in the demeanor.  And I know Barack Obama is a very smart guy, I hope he‘s on point, getting this thing done, but today the Senate saying that they‘re not going to get a vote, and Chuck Grassley and Max Baucus, the big takers from the big players on the medical side, they need more time to figure this thing out. 

Hogwash!  They‘ve known all long what the Obama agenda was going to be.  We need to get together.

And folks, you need to communicate with these folks on the Hill and tell them to stay on the job. 

Joining me now is one of the highest ranking members of the Congress who said that Congress should stay put in town until we get the job done.  Hurray for House Majority Whip Jim Clyburn, with us tonight here on THE ED SHOW. 

And you‘re voting, and I know we‘ve got you on the phone here. 

Congressman, how contentious was it behind closed doors with the Democrats today when this subject about working through the recess came up? 

REP. JAMES CLYBURN (D), MAJORITY WHIP:  Well, you know, it‘s a lot of passion in our caucus, wanting to do health care reform.  And there are people who do believe that if we were to leave here without doing this, the headline is not going to be that we‘re going home to listen to voters.  The headline is going to be that we took a vacation while 14,000 people a day lost their health insurance, while three million seniors fell through the doughnut hole.  We‘ve got to stay here so the American people will not view us as vacationing while they continue to suffer. 

SCHULTZ:  Now, do you think that the House has the votes to get this health care package out?  On your side, Nancy Pelosi says she‘s got the votes to get a progressive plan out. 

Do you agree with her on that? 

CLYBURN:  Well, I haven‘t started trying to count votes yet.  Nancy Pelosi is a former whip, she and Steny Hoyer both.  They are pretty good vote counters.

But I, for one, have not started counting yet, simply because I want to wait until the Energy and Commerce Committee finishes its work, then we square these three different bills and blend them into one, and then we‘ll start whipping on the final product.  There‘s going to be some changes made even tonight. 

SCHULTZ:  Changes made tonight.  I mean, it‘s the—the process is very fluid right now. 

CLYBURN:  Absolutely. 

SCHULTZ:  I want to know what your take is, Congressman.  Last night, President Obama did not use the term “public option.”  Today, in his statement at the town hall meeting, he did not use the term “public option.” 

I mean, this is what we‘ve got talking about, the whole country has been focused on.  All of a sudden, the president just conveniently stops using that term? 

Why is that happening, in your opinion? 

CLYBURN:  Well, I don‘t know, but I do believe that a public option is very strongly supported by a majority of the House of Representatives. 

Now, there are some issues as to whether or not the public option—what will trigger a public option.  Should it be there automatically, or should we give the insurance companies a fair opportunity to do the controls we think that need to be done in order to hold the costs down?  And if they don‘t do it, trigger a public option?  There is some sentiment for that, but I do believe the vast majority of the House of Representatives is in favor of a public option. 

SCHULTZ:  If scale one to 100, 50 percent, 80 percent?  What do you think the chances are of the House staying in and working until they get conclusion? 

CLYBURN:  It‘s better than a 50/50 chance that we‘ll do that. 

SCHULTZ:  Interesting.

Congressman Clyburn, good to have you with us tonight. 

CLYBURN:  Thank you so much for having me. 

SCHULTZ:  Thank you.

CLYBURN:  OK.  Bye-bye.

SCHULTZ:  Let me bring in Roger Simon, chief political columnist for “Politico.” 

Roger, what do you make of the Senate not being able to get it done before the recess and Harry Reid saying today that the Senate Finance Committee needs more time to figure this thing out? 

What‘s your take on that? 

ROGER SIMON, COLUMNIST, “POLITICO”:  My take is that the votes just aren‘t there.  The president would love to do this with Republican support, but he‘ll do it with just Democratic support, but he doesn‘t have the Democratic votes yet.  He doesn‘t have the Democratic votes in the Senate, he doesn‘t have the Democratic votes in the House.  And one of the reasons is neither side knows exactly either, A, what this health care plan is going to look like, and, B, how really we‘re going to pay for it. 

And you put your finger on one of the big sticking points—the public option.  A lot of people think the public option is a done deal.  As we just heard, and as you hear more if you talk to Max Baucus, if you listen closely to the president, there‘s two different views. 

There are two different views on what the public option really is.  Is the public option something that‘s going to actually exist, or is it going to be used as a threat to make the insurance companies play ball, or, as the president said last night, to keep the insurance companies honest? 

You know, the progressive wing of the party, reformers, a lot of rank-and-file Democrats, ordinary citizens, they want the public option. 

SCHULTZ:  No doubt.

SIMON:  A lot of congresspeople, Democratic senators, congresspeople, and, I think, to a greater degree than people suspect, including the president, see it as a tool, a club to hold over the head of the insurance companies.  You heard the word “triggers.”  If you have triggers, that means you‘re not going to have a public option from day one.  It means you might get it some day and you might not.

SCHULTZ:  You know, Roger, one thing I think a lot of Democrats in this country are concerned about who very much are in favor of this getting done ASAP—we know what the issues are, and I think a lot of them are saying, OK, this is going to give the sound machine, the antis, the lobbyists more time to swing public opinion in their direction. 

Is this not the hourglass being turned on the Obama administration?  I mean, between now, almost the first of August, and the end of the year is a long time. 

SIMON:  It is a long time.  And if the Democrats could get it done now, they would get it done now.  And I think you‘re already seeing in the polls exactly what you‘re talking about, Ed.  The public is worried about health care reform. 

They used to be all for it.  Now they‘re, OK, but how are we going to pay for it?  And is it going to cost me my job?  And yes, are we going to soak just the millionaires or are we going to soak the middle class, too? 

And, you know, there are more questions about health care reform now than there were three months ago.  And there will probably be more three months from now than there are now. 

SCHULTZ:  And I thought the president last night came out trying to calm the fears of lower income and middle class Americans that, you‘re not going to have to pay for this.  But at the same time, Roger, he didn‘t get specific on who is going to pay for it, and that‘s going to be a big hurdle. 

Roger, great to have you with us tonight.  Thanks for your time.

Roger Simon, columnist for “Politico,” here on THE ED SHOW. 

Coming up, new revelations about “Shooter” and Scooter.  Cheney almost broke with President Bush because Bush wouldn‘t pardon Scooter Libby.  Cheney thought he was leaving Libby “out on the battlefield”?  Now, you‘ve got to love the war metaphors from a guy who had five deferments.

Coming up, “TIME” magazine, excellent reporting.  They‘ve got some great summer reading for us.

Stay with us.  We‘re right back on THE ED SHOW.   

(COMMERCIAL BREAK)

SCHULTZ:  I want to see Dick Cheney hauled up to Capitol Hill and forced to testify under oath about the CIA‘s secret programs and possibly lying to Congress, and, of course, there‘s so much other stuff out there.  The House Intelligence Committee has launched a full investigation.  We‘ll talk about that at the bottom of the hour, right here on THE ED SHOW. 

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

Dick Cheney pleaded, cajoled, and even pestered President Bush to pardon convicted former chief of staff Scooter Libby.  Cheney argued, “We don‘t want to leave anyone on the battlefield.” 

The president wouldn‘t do it.  “TIME” magazine has an explosive front-cover story showing just how much Dick Cheney put on the line for Scooter. 

It was “... a crusade for Cheney, who seemed prepared to push his nine-year-old relationship with Bush to the breaking point and perhaps past it.” 

Joining me now is Michael Weisskopf.  He co-wrote the story and is a senior correspondent for “TIME” magazine.

Mr. Weisskopf, good to have you with us tonight. 

As a journalist, this had to be kind of a fun story to do, wasn‘t it? 

MICHAEL WEISSKOPF, SR. CORRESPONDENT, “TIME”:  Dealing with the Bush administration has always been like chipping rock, Ed.  And so it was a hard story to get, and—but it was gratifying. 

SCHULTZ:  What was the most startling piece of information that you came across that you think is going to be a real interesting point for the American people who are fascinated with exactly how that administration was run, the nuts and bolts of it? 

WEISSKOPF:  Oh, just the 11th hour nature of it, the fact that after a couple of wars and an economic meltdown, you know, right at the end of the administration, that what really dominated was this political issue, this question of loyalty and the kind of lingering question of how this administration would be seen. 

SCHULTZ:  One of the comments from a Bush family friend was “Cheney really got in the president‘s face.  He just wouldn‘t give it up.” 

Give us a description of what these conversations were like from what you know. 

WEISSKOPF:  Direct, lawyerly, insistent, persistent.  And it got to the point where the president was uncomfortable with hearing more about it. 

SCHULTZ:  Are they friends today? 

WEISSKOPF:  Yes, they are.  And interestingly, although this caused some strain at the end of the administration, it doesn‘t seem to have colored their relations since. 

SCHULTZ:  It seems that President Bush made the personal determination that he thought that Scooter Libby was a liar. 

Can we take it any other way? 

WEISSKOPF:  Well, he might not put it quite in those terms, but yes, you can equate it that way. 

I think the question he asked over and over was, did the jury get it right?  He also wanted to know whether Scooter lied.  And when the answer came back in both cases yes, he decided that it was no good to pardon this verdict, that the jury did get it right. 

It‘s important to note that two years earlier, he commuted the sentence.  And that commutation hung over the final deliberations because the president thought then and he thought two years later that he had done enough. 

SCHULTZ:  Now, the former vice president has responded to the article in “TIME” magazine.  He says, “Scooter Libby is an innocent man who was the victim of a severe miscarriage of justice.  He was not the source of the leak of Valerie Plame‘s name.  Former deputy secretary of state Rich Armitage leaked the name and hid that fact from most of his colleagues, including the president.”

“Mr. Libby is an honorable man.  He deserved a presidential pardon.”

What‘s your response to Cheney‘s response to your work? 

WEISSKOPF:  Well, this was not a response to our work.  This was the argument he was making internally, and it was rebuffed, his argument. 

You‘ll notice that he didn‘t take exception with the nature of the story.  And whether or not Scooter Libby was a guilty man or not is an issue that will be debated for a long, long time.  But there is a verdict.  It was maintained.  It was not overturned by the president‘s pardon.  And so, really, the jury system speaks for itself. 

SCHULTZ:  Mr. Weisskopf, good to have you on THE ED SHOW tonight. 

Great work.  Thank you so much. 

WEISSKOPF:  You‘re welcome.  Bye-bye.

SCHULTZ:  Next up on THE ED SHOW, “Psycho Talk.”  

You won‘t believe the latest excuse from the party of no ideas.  A Republican lawmaker says they‘re not offering their own bill because it would confuse people? 

It‘s next in “Psycho Talk.”  

Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Oh, welcome back to THE ED SHOW.  “Psycho Talk” time.

I‘ve told you for weeks on end that this health care thing really runs the Republicans right into the ditch.  This time it‘s the chairman of the House GOP Health Care Solutions Group, Congressman Roy Blunt of Missouri.  He‘s a dandy.

Let me say this again.  He is the chairman of the Solutions Group. 

Solutions, got that? 

Now, here‘s what Blunt said to “The Hill” newspaper in Washington:

“Our bill is never going to get to the floor, so why confuse the focus?  We clearly have principles; we could have language, but why start diverting attention from this really bad piece of work they‘ve got to whatever we‘re offering right now?”

Hmm.  Now, let me get this right. 

The House GOP will not produce a health care bill.  That‘s what the chairman of the Solutions Group says.  It sounds like he‘s singing a new tune, doesn‘t it? 

(BEGIN VIDEO CLIP)

REP. ROY BLUNT ®, MISSOURI:  Our plan will help small business owners on Main Street.  Our proposal will also encourage disease prevention. 

We‘ll continue that outreach while drafting our own legislation aimed at helping small businesses and families.  And please take a few moments to look a what we‘re doing to craft a bill that‘s an American health care plan. 

(END VIDEO CLIP)

SCHULTZ:  Now, that was Blunt speaking just last month when Republicans were getting heat for being obstructionists and being known as the party of no ideas.  Now suddenly it‘s better policy to keep the focus on Democrats.  Forget a bill, forget about trying to fix a broken system, forget trying to make health care more affordable, cover millions of Americans who could get insured. 

Forget all that stuff.  Plus, a new bill would only “confuse” people. 

Congressman Roy Blunt, that sure sounds like politics to me.  I‘ll tell you what it is.  It‘s do-nothing, flip-flopping “Psycho Talk.”  

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW on MSNBC. 

Just did a town hall meeting in Madison, Wisconsin.  The place was packed, fever pitch, health care talk.  But I did ask the crowd one question: “How do you feel about the House Intelligence Committee investigating whether the last administration was lying to the CIA and lying to the Congress, and just this whole round-robin?  And how do you feel about Dick Cheney coming in under oath?”

The place went absolutely nuts.  I mean, they‘re just all about it. 

So I‘ve told that to a few people another Hill.  We got to get after this. 

And that‘s the topic of this segment tonight. 

What could this reveal?  MSNBC anchor and political analyst Carlos Watson is with us, also syndicated radio talk show host Stephanie Miller, who will see this as complete entertainment, and nationally syndicated talk show host Michael Medved with us tonight, as well.

Carlos, we could do more than walk and chew gum down in Washington. 

CARLOS WATSON, MSNBC ANCHOR:  So says the president. 

SCHULTZ:  That‘s right, so says the president.  I was taken by that.  There is a real hunger out there across the country.  Could this be a down side for the Democrats if they go down this road, and really start digging into what the CIA actually did and did not tell the Congress? 

WATSON:  I think even more so now, because health care is in a tough place.  As you called it, a slow down dirty shame. 

(CROSS TALK)

WATSON:  If Harry Reid is right and we‘re not going to really get into the heart of it, and Jim Cooper of Tennessee is right, and not only is it going to take a few more weeks, but maybe even a few more months, then the truth of the matter is that kind of political could hurt Democrats in getting health care done. 

SCHULTZ:  Stephanie Miller, what do you think about this?  This would be good summer entertainment, wouldn‘t it? 

STEPHANIE MILLER, RADIO TALK SHOW HOST:  It sure would.  You‘re right.  While they‘re taking a break from screwing up health care, what else do they have to do? 

WATSON:  I like Stephanie. 

MILLER:  I don‘t see how you turn your head from what is blatant law-breaking. 

SCHULTZ:  Michael Medved, are the Republicans concerned about this in any way, shape or form?  Or could you see the Republicans viewing this as, see that?  That‘s all the Democrats want to do, go back and dig up dirty old stories?  What do you think?

MICHAEL MEDVED, RADIO TALK SHOW HOST:  I think it actually helps the Republicans a great deal, because it takes the focus away from President Obama‘s agenda.  That agenda, as you rightly have acknowledged, is in a little bit of trouble right now.  The American people are waking up to it.  They‘re turning against, according to all the polls, President Obama on health care.  This dilutes the focus. 

It‘s sort of the equivalent on the Democratic side of the sick obsession with some people on our side with this birth certificate non-controversy.  That hurts Republicans.  It doesn‘t hurt Obama.  Talking about Cheney, Scooter Libby and the CIA, that hurts Democrats.  It doesn‘t hurt us. 

WATSON:  I‘ll tell us another piece of this, which President Obama saw early in the year.  I‘m, by the way, one of the guys who thinks it would be a good idea for there to be some selective investigation and prosecution here.  I actually think it should be coordinated and it should happen. 

But I think President Obama, one of the things he is really worried about is that to you extent you go into investigations, you will show inflammatory pictures.  And to the extent that you have more troops in Afghanistan, frankly more still going to be needed if we‘re going to stay there for 18, 24 months, maybe even five to seven years, as one of the senior military officials said—I think he‘s worried that it will put more troops in harm‘s way. 

SCHULTZ:  Quickly, around the horn on health care.  Stephanie, how do you think the president did last night and today?  And, of course, the phrase public option has been taken out of his vernacular, at the press conference last night.  He didn‘t mention it today on the stump when he was in Ohio.  What do you think?  

MILLER:  That troubles me, too, Ed.  I know we can‘t expect the thin line of eloquence in explaining difficult issues that we got from George Bush.  But I thought the president did fine last night.  I agree with you, I would have liked a little more fire.  But this is a complex issue.  It really is.  And I think that he answered the questions and he answered them correctly. 

I share your frustration with Democrats and Republicans at this point. 

SCHULTZ:  Michael, what do you think?  Is this announcement today by Harry Reid that the Senate is not going to get anything done as far as a vote is concerned before the recess; this gives the antis a lot of room and a lot of time to push back and turn the thinking of the public?  What do you think? 

MEDVED:  I think that‘s true.  But I think it also gives people a time to have some kind of meaningful compromise, which Democrats have resisted until now.  Look, the president last night in the press conference—he is normally extraordinarily passionate, and a great communicator.  He looked like he was asleep last night. 

I‘ll tell you what highlighted it.  The very last question was about this horrible episode with Professor Gates. 

SCHULTZ:  It was his strongest answer, no doubt. 

MEDVED:  Yes, he was passionate about that.  He cared.  He was awake.  The rest of the time it was almost as if he was talking in his sleep.  It wasn‘t Obama at his best. 

SCHULTZ:  Carlos, I thought the president had a few moments last night where he seemed a little defeated on health care. 

WATSON:  I didn‘t feel it the same way.  I heard a lot of you guys going after him on that. 

SCHULTZ:  I‘m not going after him.  I‘m just making—hey, you know where I am.  I want this guy to get the big victory.  Four press conferences, that one lacked the passion on the biggest domestic agenda. 

WATSON:  Look, I‘m not going to disagree that it lacked the passion.  But I think the president realized, frankly, that a lot of people weren‘t going to watch it.  So what did we end up with, 16, 17 million people watched it?

SCHULTZ:  That‘s the most that that have ever seen him talk about health care. 

WATSON:  The reality is that you and I know he wanted more people than that.  But he was talking to Congress.  And I think he was negotiating with Congress.  And I think he felt like he needed to speak in clear language.  And I think he did lay some things out, Ed, including being open to the millionaire surtax.  How do you feel about that? 

SCHULTZ:  I feel good about it.  I want to tax the top two percent.  I want to repeal the Bush tax cuts.  I would have to pay more, but I think the country needs to do it.  I think we need to take one for the team.  If it doesn‘t work, they can come back in the next session of Congress and fix it.  We‘ve got to get everybody covered.  I just wish I had seen a little bit more passion. 

You have to admit that President Obama talking about health care over in New Jersey and talking about it in Ohio is different from talking to all the of the media and 16 million people at the press conference last night. 

WATSON:  Maybe that‘s the problem.  Maybe that‘s the problem. 

SCHULTZ:  I was taken by that.  Go ahead, Stephanie. 

MILLER:  Ed, I‘ve got to tell you, though, I would be tired too.  Do you know how many times he‘s had to combat Republican lies?  Part of what they‘re fighting with are just lies.  He has to come out and go, if you like the doctor and the plan you have now, you can keep it.  It‘s an option.  He has to keep explaining it, because they‘re not telling the truth on the other side. 

MEDVED:  Maybe he could just explain it a little more credibly, because honestly, the people‘s doubts about it are appropriate. 

SCHULTZ:  Well, credibly—hang on now, Michael.  He‘s got tremendous command of this issue.  I just think he‘s just disappointed.  I don‘t think the president thought he was going to get this much smoke from his own party.  I thought that this was going to be a little bit easier of a lift.  He didn‘t think he would have to bring so many Democrats along. 

WATSON:  I agree with you, Ed.  And you could see him on the edge there with Chuck Todd.  When our Chuck Todd asked him, that‘s where I felt like the president wanted to bring more passion.  That‘s where I felt like he made a decision that my audience wasn‘t the public, it was the Congress. 

(CROSS TALK)

SCHULTZ:  I think he‘s afraid to call on me.  I‘ll break the room up for him. 

MEDVED:  See, Ed, you‘re more honest about this than the president.  What the public and the Congress need to hear is some explanation of how is it you can give people better coverage, you can give people lower cost coverage, you can insure 47 million people who aren‘t insured, and it‘s not going to cost anything. 

SCHULTZ:  Michael, I have to tell you, a closing comment on this;

Medicare has never denied a patient.  Medicare has never told people that they can‘t go see a doctor.  And, by the way, it‘s government-run.  Stay with us, panel.  We‘re coming back. 

Coming up, one of the one-stop shop for Republican talking points on health care.  Here we go. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  The Lewin Group.

UNIDENTIFIED MALE:  The Lewin Group. 

UNIDENTIFIED MALE:  The Lewin Group.

(END VIDEO CLIP)

SCHULTZ:  Guess who owns this consulting firm?  It‘s the insurance giant United Healthcare.  I‘ll tell you all about it.  It‘s the perfect conflict of interest.  I‘m exposing it right here in my playbook on MSNBC on THE ED SHOW, right after this. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  In my playbook tonight, let‘s go I guess you could say to Hail Mary page of the playbook.  The Republicans have never really been fans of the facts, have they?  But they love to quote the research of one of the health care consulting firms.  They‘re known as the Lewin Group. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Well, listen, the government is not a competitor.  The government is a predator.  What you‘re going to have, according to the Lewin Think Tank that specializes in health care—you‘re going to have everybody opting out of private health insurance. 

UNIDENTIFIED MALE:  According to the Lewin Group, 119 million Americans would lose the private coverage that they currently have if we have a government-run system. 

NEWT GINGRICH, FMR. HOUSE SPEAKER:  Well, the Lewin Associates, which is a very respected technical firm, estimated that 131 million Americans would lose their health insurance under this plan. 

(END VIDEO CLIP)

SCHULTZ:  You know who they‘re quoting?  They have no shame at all, do they?  The Republicans are hoping that they can confuse the American people, thinking that the facts are just terrible, that the facts about a public plan are just horrendous.  And they have this great source called the Lewin Group that backs everything up. 

It‘s owned by Ingenix, which is owned by United Healthcare, the insurance giant that raked in big profits.  Ingenix shelled out 400 million dollars to settle accusations they were cooking data in order to bill patients who got out of network care.  And United Health Group just posted a record second quarter profit yesterday.  So I don‘t think they‘re interested in a public plan, do you? 

I think they like this system.  Joining me now is David Hilzenrath.  He wrote about it in today‘s “Washington Post.”  Dave, good to have you with us tonight.

Do you think they‘re succeeding in fooling the American people, this convenient connection between the now famous Lewin Group and United Health Care?  What do you think? 

DAVID HILZENRATH, “THE WASHINGTON POST”:  Well, Ed, I‘m not sure the public is fully informed.  Many people might have watched a Lewin executive on recent town hall meeting on ABC News with the president.  At the time, neither the host, Charlie Gibson, nor the Lewin executive, disclosed this relationship. 

We thought it was noteworthy that opponents of the public option have frequently described Lewin as non-partisan, as independent.  Typically, they neglect to mention that it‘s also a subsidiary of one of the nation‘s largest health insurers, which has a major stake in the debate.  And it‘s a subsidiary of a subsidiary that has been accused of distributing skewed data that favored insurers over consumers in reimbursement matters.

Now, in fairness to Lewin, Ed, Lewin has said it had nothing to do with the Ingenix data that is at the root of that controversy.  Lewin‘s Vice President, John Shields, told me that being owned by this health care company since 2007 has been a terribly difficult adjustment, because it creates an appearance of conflict of interest. 

SCHULTZ:  OK.  But are they going to continue to supply information on the health care front to the Congress?  Because the Congress, on the Republican side, they just can‘t get enough of this. 

HILZENRATH:  Well, Lewin has been in business for about 36 years.  It‘s served a very diverse clientele.  Its clients include the Commonwealth Fund and the Heritage Foundation.  It says it retains editorial independence from its parent company. 

I think the issue may be less the Lewin Group than how the Lewin Group has been used by various parties in the debate.  I think it‘s especially interesting to note that one of the widely cited statistics in this debate, Ed, has been Lewin‘s findings that million of Americans, perhaps more than 100 million Americans could end up shifting or being shifted from private, employer-sponsored coverage to a public option. 

But Lewin‘s analysis is actually more complex than that.  And in fact, what a Lewin executive explained to me is that under one version of the public option many employers would cease to provide direct health coverage to their employees.  Instead, they would move their employees into an exchange, where those individuals could choose their own coverage. 

SCHULTZ:  But that‘s what‘s Lewin is saying, but it would also force the insurance industry to be a heck of a lot more creative and really compete.  And it might slow down the record profits and the gouging as well.  David, good to have you with us tonight.  Excellent reporting.  Thank you for bringing that to light.  David Hilzenrath of the “Washington Post.”   

One last page in my playbook; this is the kind of story that really infuriates Americans.  Six bailed out banks, six of them, set aside 74 billions dollars to pay bonuses, 20 percent more than they paid out the year before.  Now you think about that.  We‘re in the middle of a financial crisis, unemployment over nine percent.  We‘re saying we don‘t have the money for health care.  And these guys are handing out bonuses?  Actually, it‘s our tax dollars trying to keep them afloat. 

The Dow just crossed over 9,000 today.  It‘s not like they‘re celebrating a comeback on Wall Street.  They ought to be ashamed.  We weren‘t supposed to be treated like this, were we? 

Coming up, the president set off a controversy when he weighed in on an alleged case of racial profiling.  A lot of strong reaction today.  I‘ll put it to Georgetown professor Michael Eric Dyson on our panel, next.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  President Obama may have stolen his own headline last night.  His strongest response came after a question about the controversial arrest of Harvard Professor Henry Louis Gates.  Here‘s what he said.

(BEGIN VIDEO CLIP)

OBAMA:  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. 

There is a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately. 

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Georgetown University Professor Michael Eric Dyson.  It‘s been too long, my friend.  Good to see you again. 

MICHAEL ERIC DYSON, GEORGETOWN UNIVERSITY:  Brother Schultz, always good to see you again.  Congratulations on the show.  You‘re doing a great job. 

SCHULTZ:  It‘s good to have you with us.  Professor, what did you think of the president‘s response?  It seemed to me it was more than genuine, but he was eager to talk about this.  What did you think? 

DYSON:  No question about it.  I think people have been razzing him all day about, you know, calling the police stupid.  He didn‘t do that.  He said acting stupidly.  There‘s a critical difference there. 

Furthermore, I think it was great of him, Ed, to use his bully pulpit to shine a spotlight on this essential and critical social matter that many people are not familiar with and not aware of, because it doesn‘t affect them.  The fact that it affected the most prominent and powerful scholar in the history of America for African-American studies shows that he‘s, if you will, the Rosa Parks of racial profiling. 

Here‘s a guy who doesn‘t stir up trouble.  He doesn‘t go around fomenting controversy.  He‘s very balanced.  He‘s as at ease, you know, in white America as he is in black America.  Yet he was subjected to arbitrary forms of police, in his estimation and what we may think—police profiling.  It was unfortunate, but it also has helped us understand and grapple with an issue that affects millions of other African-American and Latino men. 

SCHULTZ:  One of the arresting officers was Sergeant Jim Crowley.  Here‘s a radio comment which I find rather startling, that throws fuel on the fire.  Here it is. 

(BEGIN VIDEO CLIP)

SERGEANT JAMES CROWLEY, CAMBRIDGE POLICE:  That apology will never come.  It won‘t come from me as Jim Crowley.  It won‘t come from me as a sergeant in the Cambridge Police Department.  Whatever anyone else chooses to do in the name of the city of Cambridge or the Cambridge Police Department is beyond my control.  I don‘t worry about that.

I know what I did was right.  I have nothing to apologize for. 

(END VIDEO CLIP)

SCHULTZ:  Well, based on that response, professor, it‘s a good thing the president did address it last night. 

DYSON:  Absolutely true.  And, you know, I‘ve had heard that Sergeant Crowley is responsible for sensitivity training, or at least diversity awareness among police people.  This would be a signal moment for him to reassess his skills in that area, but also to become more empathetic and sensitive to the needs of citizens of color in this country. 

Again, nobody is mad at the fact that police are called when it looks like somebody is barging in your door.  But I must say, Ed, I think we owe an apology to the National Association for the Advancement of Black Burglars, because what kind of burglar will burgle a house at 12:45 in the day, trying to get in the front door.  You have to turn in your burglar card on that. 

The reality is I think we have to grapple with the fact that this kind of profiling happens routinely outside of Cambridge, where millions of black and Latino people are subjected to much more than what Professor Gates was subjected to.  Many times, there‘s greater harm, and we‘re glad that nothing more serious happened to him.  But maybe this will spark us to have a conversation in this country. 

And I applaud the president for speaking bravely and directly to this issue.  Sergeant Crowley obviously and unfortunately doesn‘t have the wherewithal or the inclination to address this issue in a self-critical fashion. 

SCHULTZ:  Professor Michael Eric Dyson with us tonight her on THE ED SHOW.  Thanks so much for joining us. 

DYSON:  Thank for having me. 

SCHULTZ:  You bet.  For more, let‘s go back to our panel, Carlos Watkins, Stephanie Miller and Michael Medved.  How did the president handle it.  First of all, I wonder if there‘s an arrest quota with that police department.  But it‘s a pretty gross mistake.  Did the president have to go down this road last night? 

WATSON:  I think he did.  I think he got a very direct question from Lynn Sweet.  I think the White House expected he would get that question.  I think the president has spent a lot of time on this issue, both as an individual and as a state legislator.  He had to—

I have to tell you what, I read what Sergeant James Crowley said before.  I understand that for five years he taught some diversity training within the force.  I have to admit, when I heard the radio thing, I was sad.  I don‘t know how else to say it.  I wasn‘t angry.  I wasn‘t frustrated.  I was sad.  That whole notion that you‘re never going to get an apology from me, there didn‘t sound like there was any reflection.

Now maybe he says, if you truly understand the story, as I did, you would understand why I feel this way.  But I have to be honest, I know Skip Gates a little bit.  I feel like you guys do, a guy in his 60s, middle of the day.  He‘s in his home. 

SCHULTZ:  I don‘t know why the guy didn‘t defuse the situation by saying, no comment right now, we‘re working on it.  Just let it go away.  But for him to say what he did I found rather amazing.  Michael, you pointed out earlier that it was President Obama‘s strongest response on the night.  But he did personalize it.  And I think that connected with a lot of people in America.  Your thoughts. 

MEDVED:  I think you‘re completely correct.  And he said that Skip Gates, Henry Louis Gates, was a friend of his, and I know—

SCHULTZ:  He says he was biased about it too. 

MEDVED:  And he acknowledged that.  I think he reacted like a human being.  And I think that‘s exactly what was lacking in his health care comments.  There was no sense of personal stake in this. 

Look, this case—I have great sympathy for our police officers.  They‘re put on the front lines.  They‘re asked to do all kinds of tremendous difficulty.  But one of the things you have to do if you‘re in that kind of position is recognize when you‘re wrong.  And I don‘t care whether the guy is black or white, if you are arresting a guy for the crime of trying to get into his own home and being indignant when you come and hassle him, there‘s something wrong. 

I think Sergeant Crowley should reconsider. 

SCHULTZ:  Stephanie, how could they have made such a gross mistake after he produced identification and proved this was his house? 

MILLER:  Ed, you know what?  I‘m so glad the president said something.  If this happens to a Harvard professor who‘s friends with the president, imagine what‘s happening to people that aren‘t?  Like any good liberal, some of my best friends are black, Ed, and they‘ve been pulled over driving a nice car in Beverly Hills, because they couldn‘t possibly own that car or live there. 

I think if we‘ve earned one thing, if you‘re a black person, you have to keep like six extra keys, under the mat, in the potted plant, on the door jam, put one in the dog‘s collar. 

WATSON:  I only have three.  So I‘m glad you said it.  I‘m going to double up later tonight. 

SCHULTZ:  I was not going to profile the question and ask you how many keys you had? 

WATSON:  Now that I‘ve profiled myself—I‘ll tell you what, Ed, I always—it‘s still a tough issue.  I‘m going to profile you now.  What‘s the best way to get more white Americans comfortable talking about race?  Not just for any old reason, but because of the real issues like that.  As Stephanie said, it happens to a lot of people who aren‘t friends of the president. 

SCHULTZ:  I think we live in an age where we have a lot of overzealous law enforcement, I really do.  Now if the law enforcement officials know the community, they should have known that this guy lived there.  I mean, that‘s what I think. 

MEDVED:  This is one of my questions.  Apparently his neighbor called in.  How come this Professor Gates wasn‘t recognized by his own neighbors?  That also says something about what‘s going on in the neighborhood?  It‘s troubling. 

SCHULTZ:  Stephanie? 

MILLER:  Here‘s the good news for the economy.  Home Depot, anywhere that makes extra keys is going to see a huge surge. 

WATSON:  I like Stephanie with the bright side.  Why not? 

SCHULTZ:  Well, the president had a sense of humor about it last night as well.  Thanks for joining us tonight, panel.  You‘re great. 

Earlier I asked you what you thought, are the Republican attacks starting to sink in with the public; 52 percent of you said yes, 48 percent of our respondents tonight said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information on THE ED SHOW, go to Ed.MSNBC.com or check out my radio website at WeGotEd.com.

“HARDBALL” with Chris Matthews starts right now on the place for politics, MSNBC.

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

END   

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