updated 7/31/2009 10:22:09 AM ET 2009-07-31T14:22:09

The Ed Show

July 30, 2009

THIS IS A RUSH TRANSCRIPT.

THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

Guests: Carlos Watson, Barney Frank, Jerrold Nadler, Jay Rockefeller, Lionel, Rev. Marcia Dyson, Frank Donatelli, Stephanie Miller, Rep. Rush Holt, Rep. Kevin McCarthy

(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. And it's also Friday.

Tonight, President Obama is showing America how to do conflict resolution. Right now he's defusing the tensions between the Cambridge cop and the Harvard professor at the White House over a couple of cool ones. But get this-the cop shows up with his union rep and his attorney.

Come on, buddy. And now we're hearing he's going to hold a press conference at 7:30. How disingenuous is this?

I mean, I'm down on this cop's program. That was wrong.

Anyway, moving forward, we've got "Airhead America" on the way? Maybe. Sarah "Barracuda" Palin may be hitting the radio airwaves. Sources say she's been testing the waters to see if any stations would pick her up.

I've got an offer for you, former Governor Palin, that you might not want to refuse. It's coming up tonight on THE ED SHOW.

And Democrats in the House have struck a deal on health care, but some leading progressives really feel betrayed and say it's unacceptable.

Folks, we are locked and loaded on this story tonight. Congressman Barney Frank, Congressman Jerry Nadler and Senator Jay Rockefeller are going to be joining me in just a moment.

Plus, "Psycho Talk."

Get your cell phones ready. Our text survey is coming up.

We've got all of that and a great panel. But first, tonight's "OpEd."

Progressive Democrats, oh, gosh, you knew it had to happen. They are finally getting after it, and it's about time.

Nancy Pelosi is on the offensive tonight against the insurance industry (AUDIO GAP) immoral. She's got backup this time. She's got backup.

Progressive Democrats who want a public option are digging in against the compromise deal with the Blue Dogs that was taking place last night. It includes a severely weakened public option.

And folks, it is orchestrated to fail. It would pay the doctors the same rates as private insurance companies. Insurance companies just pass the cost on to consumers. That's you and me.

Now, the whole reason we need a public option is to keep the costs down. Progressives, well, they're putting their foot down. Finally, they are rallying the members to vote against the Blue Dog compromise. This is the first time they can say with confidence that the Democrats seem to be willing to draw a line in the sand over on the House side.

So, how fierce is this fight?

Joining me tonight right here on THE ED SHOW is Congressman Barney Frank, chairman of the Financial Services Committee and the a member of the Progressive Caucus.

Congressman, good to have you with us tonight.

REP. BARNEY FRANK (D), MASSACHUSETTS: Thank you, Ed. Great to be here.

SCHULTZ: What's the beef right now with the conservative Democrats, the Blue Dogs? What is causing the ruckus with your side of the caucus?

FRANK: Well, it's not-in my case, I don't recall it as a betrayal, as a deep philosophical difference.

Look, there are conservative Democrats who are closer to us than they are to the Republicans on some issues, but there are differences on orders. I believe that the majority of Democrats, enough to pass the House, disagree with them.

And the deal that was made today, people should understand three committees have voted on this. Two of the three committees in the House came out with bills that we on the liberal side support.

This bill, the only way to get it out of the committee was to make this kind of compromise. But no one's bound to it, including, by the way, the Blue Dogs. They say they're not bound to it. So, I am confident that the final bill is going to be a much better one.

What we have is a kind of philosophical disagreement, although I have to say it's an odd one. You know, if you accepted their views about what was and wasn't acceptable, we wouldn't have Medicare. And Medicare goes far beyond even a public option. So, there's a kind of a disconnect in people's minds. And by the way, when people tell me that they don't want the government involved in medicine, I respond that in my experience as a member of Congress, the single most popular form of medical care that's administered according to the consumers is the Department of Veterans Affairs, which is wholly government.

SCHULTZ: All right, Congressman. You've covered a lot of ground here tonight, which is good, but the bottom line here is, is that, is your side of the caucus willing to draw that line in the sand and say, look, you conservative Democrats, you Blue Dogs, you've got too far, we've given in too much? And Congressman, do you think your side has given in too much?

FRANK: No. On what? I haven't given in too much.

I'm going to put a bill through the House tomorrow that's in the committee that's going to have the most severe restrictions on excessive executive compensation we've seen in a long time. And I think we put through some other important things.

Now, we did lose out in the Senate to three Republicans who reduced the economic recovery package by $25 billion, but that was because of that silly 60-Senate filibuster rule. But yes, we are definitely-I don't think they would be able to get the bill that came out of Energy and Commerce through the House.

SCHULTZ: But Congressman, would you ever sign onto the co-op plan they're talking about over in the Senate? Could you ever embrace that?

FRANK: No. I would only support-look, I'm for single payer, as I think Medicare has shown is the best system. I will accept as second best a very good public option, which, by the way, when the conservatives say the public option may lead to a totally public plan, they're conceding our point, mainly that that people will find that there's a better level of care and better ways.

But I would not accept anything less than a very vigorous public option, and I don't think a majority of the House will either. I don't think that the plan that passed Energy and Commerce-and I understand what they needed to do to get it out (ph) of that committee. It would not pass the House.

SCHULTZ: Congressman Franks, great to have you with us tonight. Thanks for your time.

FRANK: Thank you.

SCHULTZ: You know, the hero so far for liberals in this country has been House Speaker Nancy Pelosi. Now, today she really went after the insurance industry.

Speaker Pelosi said that they are acting in an immoral way and they are sticking it to the American people, and we are not a healthier country because of the way they have been treating consumers. She made the comments late this afternoon. And I'll tell you what, she's taken a lot of flack from a lot of people.

This is why the Republicans want her out. This is why the Republicans always target Nancy Pelosi.

She's a strong woman, she speaks her mind. She's a great leader. And I'm putting my money on Nancy Pelosi. I think there will be a strong public option coming out of the House because of her leadership.

Now, for more on all of this, let's go to Congressman Jerry Nadler. Jerry Nadler, if we can have-is also a member of the Progressive Caucus, and he joins us tonight. Let's go to him if we can wake up a little bit.

All right.

Congressman Nadler, great to have you with us on the program tonight, if we can get a few things straightened out here. There we go.

Good to have you on.

REP. JERROLD NADLER (D), NEW YORK: Good to be here.

SCHULTZ: OK.

You've called this compromise unacceptable. Why? Why is it unacceptable?

NADLER: Well, it basically it does a couple things. It severely limits the usefulness of the public option. It says we still have a public option, but it says that we cannot base the rates, the reimburse rates of doctors and hospitals, on Medicare rates. Instead, the secretary has to negotiate them, which means the rates will be much higher than they should be and that they could be if we let them be based on Medicare rates, which in turn means the cost to the people who subscribe to the public option will be much higher, and it will have much less effect on, as the president puts it, keeping the private insurance companies honest.

One of the major points of the public option is by being there, putting downward pressure on insurance company rates, and insofar as the rates are higher here because we cannot use Medicare-based rates, there'll be less pressure to keep the rates down not only in the public option, but in the private sector.

SCHULTZ: But now it's the liberal wing in the House that is going to be slowing things down. Or is that a wrong assessment on this?

NADLER: Well, I don't know if it's a question of slowing things down. We are very upset with the version of the bill that's now under discussion in the Commerce Committee, in addition to which-in addition to what I said a moment ago, by not saving as much money on the-by not permitting the public option to save as much money, it's going to cost-the bill is going to cost a lot more. And the Blue Dogs, in order to offset those extra costs, are saying, OK, we'll do two things.

Number one, we'll reduce the subsidies and therefore increase the premiums that moderate and middle income people pay for their insurance in the public and private sectors. And secondly, we will impose an unfunded mandate of some of the costs the federal government would have borne on the state governments. I think those are not great ideas.

SCHULTZ: All right. What about Rahm Emanuel, the chief of staff? When he was in the Congress, and during this run-up to this election, you know, he went out and recruited all these conservative Democrats to run because he wanted the majority. Now he's saying, well, you can go ahead and vote however you want on this thing.

Isn't this shortchanging liberals that worked really hard for President Obama? I mean, why is it that it seems that the Democrats just aren't willing to put it to the floorboard to go after what they want when they've got such a sizeable majority in the House?

NADLER: Well, first of all, because, look, a couple of things there. First of all, I think it's not clear what the administration is doing yet, or, for that matter, what our leadership is doing yet.

There are three bills. One came out of Ways and Means, quite a good bill. One came out of Energy and Labor, quite a good bill. And one may come out Energy and Commerce that leaves something to be desired.

Those three bills are going to have to be put together. And a good test of the leadership in the House and of the administration will be, what does the final bill that we bring to the floor of the House look like? Does it look more like the robust public options in the Ways and Means and Education and Labor bills, or does it look like the weak public option that I think is going to come out-that I fear is going to come out of the Commerce Committee?

SCHULTZ: Congressman Nadler, good to have you with us tonight. Thanks so much.

NADLER: You're quite welcome.

SCHULTZ: There are other developments today. In the Senate Finance Committee, chairman Max Baucus is working on his own compromise with Republicans. Of course, they killed the public option all together in that committee. They have signed onto what is known as a co-op plan which I have said all along is an absolute joke.

It's not going to work. There's really no successful model out there to support the basis of them signing onto a co-op. Maybe I'm wrong on this. I mean, I don't think I am.

Joining me now is Senator Jay Rockefeller, a member of the Senate Finance Committee and a supporter of a public option.

Senator, great to have you on.

Would you sign onto a co-op? Or is that unacceptable?

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: That's unacceptable, and I can almost prove it.

We've been in touch with the folks that oversee all the-represent all the co-ops in the country on all subjects, and they point out that there are probably less than 20 health co-ops in the country. There are only two that really work that well, one in Puget Sound, one in Minnesota.

Except for those two, they're all unlicensed. All present health co-ops are unlicensed, they're unregulated, nobody knows anything about them, nobody has any control over them. And nobody's ever, they said, which is a stunning thing to me, no government organization or private organization has ever done a study on what effect they might have in terms of bringing down insurance prices.

SCHULTZ: Well, Senator, they're talking about, if I have this correctly, putting $6 billion in start-up money.

ROCKEFELLER: Well, that all to tell you something. In other words, put $6 billion out on the table in 50 states, and then hope that somebody comes in and picks it up to start it.

Look, health insurance is complex, it has a long history. There's billions and billions of dollars involved.

These little tiny entities that will be starting up in states where there have never been any before-remember, there aren't any in the South, there aren't any in the Northeast, there aren't any in the Mid-Atlantic, there aren't any in the Southwest. They're only in the upper Midwest and the Northwest.

They're not a good idea. They're untested. They are unlicensed. They're unregulated. They're unstudied.

Why would we even think about putting them in as a control on this massive insurance industry instead of the public option?

SCHULTZ: So, Senator Rockefeller, you were at serious odds then with Max Baucus and Kent Conrad on this.

ROCKEFELLER: I would guess that would be the case, yes.

SCHULTZ: OK.

And who's going to win this fight? Is this just going to come out of the Senate Finance Committee with a co-op, we're going to end up on the floor, and then it's going to be a donnybrook and then it's going to go over to the conference committee and that's where it's going to be written?

Is that where we are?

ROCKEFELLER: I don't think so. I don't think so.

Look, you already have two House committees that have come out with a public option, you have one Senate Committee, the Education and Labor and Health. They've come out with a public option. Then you have the Senate Finance, which hasn't come out with anything yet, and we're meeting in about 20 minutes to see where we are.

I have a feeling the tide is beginning to move against the co-op plan, and whether that means it's moving towards public option in the Finance Committee, I'm not sure. But if it moves again the co-op, by definition it's got to be having an effect to help the public option. So maybe the Finance becomes irrelevant, and it's done by the HELP Committee and the leadership, and the public option's put in.

SCHULTZ: Yes.

And finally, could this cost Max Baucus his chairmanship? Because there's a lot of Democrats across the country who feel like they have been undeserved, misserved, with his leadership, because no one was talking about a co-op during the campaign, and there's talk about changing these chairmanships every couple of years.

Would you go along with that?

ROCKEFELLER: Yes, I would, but not because of Max Baucus. I mean, I just think it's a good idea.

I'm chairman of the Commerce Committee, and I think people ought to review me every two years and decide whether they want to keep me on. But I do think it's a good idea, but I wouldn't knock Max.

I mean, I think he's been wrong in his approach on this, but he surely is sincere in his approach on this. I mean, he's worked harder than anybody I've ever seen. I just don't want to have a co-op taking on the big insurance companies. I don't want that.

SCHULTZ: Yes.

Senator Rockefeller, I'm with you. I just don't see this co-op doing anything at all.

Great to have you with us tonight. I appreciate your time.

ROCKEFELLER: Thank you.

SCHULTZ: If you're one of those people who just can't get enough of Sarah Palin, you're going to love this one. Radio industry sources are saying she's shopping a deal to get her own nationally syndicated radio show.

Hey, Sarah, I've got an offer for you. See, I'm going on assignment in the north country next week and we're looking for a fill-in. So I'm cutting you a break here, because Clear Channel has already said they don't think you can cut it.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

We're getting our first video of the beer summit at the White House. President Obama, Professor Henry Gates and Sergeant James Crowley sat down at the Rose Garden.

The president is hoping a couple of cool ones will ease the tension between everybody here, between the professor and the cop who arrested him. Now, some people think that this president's beer diplomacy is a bad idea.

Well, guess what? Tonight, the cop shows up with his union rep and an attorney. Just thought we'd throw a few more folks into the party. And, of course, the vice president showed up as well.

We'll debate it at the bottom of the hour with social critic Reverend Marcia Dyson and our panel right here on THE ED SHOW.

An attempt by President Obama to just kind of cool everything down.

All right. Sarah Palin hasn't said what her plans are now that she's not running Alaska anymore, but rumors are surfacing that she's really trying to get a new gig, like radio. Clear Channel has already refused to syndicate Sarah Palin on the radio. They don't think that she can carry a three-hour radio show.

Now, Sarah, I've got a proposition here because I think it would be good entertainment. I'm going to be off the air next week. I'm going fishing north of the border. So, why don't you just guest-host my radio show and then everybody can determine whether you're good enough to make it, and maybe Clear Channel will change their mind? You know, test the waters. See if can you make it on a three-hour radio show.

I think you can-one day.

Let me bring in some experts to weigh in on this-radio talk show host Lionel, and also Stephanie Miller, who is known in the industry as naming Sarah Palin as "Caribou Barbie."

Now, Stephanie, she could get it done for one day, couldn't she? But the question is, could she get it done for a week or two weeks or a month?

What do you think?

STEPHANIE MILLER, RADIO TALK SHOW HOST: You know, Ed, I can't think of a more soothing voice to listen to for three hours. I don't know about you.

Here's the good thing-I think she should take your offer, because I think you could cut a hole in the ice for ice fishing with that radio show, because, like, where you fish up in Minnesota, North Dakota, I think that could come in handy, is all I'm thinking.

SCHULTZ: Lionel, where are we on this?

LIONEL, AIR AMERICA MEDIA: Well, we're here, Ed. But more importantly I can't believe the disdain you have for your legions of millions of fans. That's like a pilot saying, listen, I'm going to take off right now. You, in aisle 3, why don't you come up here and fly the plane?

She would never work on radio because, look, you see that eye thing, the "You betcha"? You know where that comes from? Shooting caribou for years. It stuck.

I would love to see her to try the first 20 minutes. She would have to have call screening that would make getting a TARP loan look like a walk in the park, because people like me would call up and absolutely destroy her. Without the blinking and the "You betcha," she's nothing.

SCHULTZ: Now, Stephanie, wouldn't it be a good business model to take Sarah Palin on the road, who's doing a nationally syndicated radio talk show, and she sells out the place and she gets a lot of people, she raises a lot of money? I mean, there's stations out there that, you know, might raise their visibility if they were to put her on.

I mean, wouldn't there be a business opportunity here with her visibility?

MILLER: You know, Ed, I think Lionel is right. A, winking, kind of lost on the radio. And B, if you look at the difference between, say, her Katie Couric interview and her speech at the Republican Convention, she's fine when you write it for her.

You can't get it written for you in radio. If she's got to talk-look at the Katie Couric interview. You've got hear three hours of that?

And, I mean-and plus, that voice. I mean, seriously, garage doors flying up. I mean, dogs screaming. It's really...

LIONEL: No, but her show, Ed, would be similar to the famous Tony Schwartz daisy commercial. I think it was on one time, and they said, that's it, pull it.

But Irwin Corey I guess is busy, but wouldn't you listen-be honest-wouldn't everybody, America, be glued into the first 20 seconds before (INAUDIBLE) came out and said, "All right, that's enough"? I just think to be turned down by Clear Channel, bless your heart. Glenn Beck? No problem. Sarah, you don't cut it.

(LAUGHTER)

MILLER: Ed, I've got one other concern. This is all fine and good, but while she's gallivanting around doing radio, who's protecting us from the giant floating Putin head over Alaska? Who's doing that now?

SCHULTZ: OK.

Folks, I tried to do some economic development tonight. I tried to promote Sarah Palin. I'm trying to help her launch the radio career. I just can't get any support from Stephanie and Lionel tonight.

All right. We tried.

Up next on THE ED SHOW, it's "Psycho Talk."

Republican Senator Jon Kyl thinks that our insurance industry doesn't need to be kept honest. That's like saying you trust Dick Cheney in a duck blind.

You don't want to miss this one, folks. It's next on THE ED SHOW. It's "Psycho Talk."

(COMMERCIAL BREAK)

SCHULTZ: And in "Psycho Talk" tonight, oh, it just happens to be another Republican.

I want to talk about all the GOP attacks on a government option for health care.

Now, we cannot let them gain any ground anymore with the American public twisting these polls. It's all an information thing.

The latest spin comes from Senator Jon Kyl. He claims that we don't need a government option because the health insurance industry is already regulated enough.

(BEGIN VIDEO CLIP)

SEN. JON KYL ®, ARIZONA: The health insurance industry is one of the most regulated industries in America. Every state regulates health care, or the health insurance that is issued in their state. They don't need to be kept honest by a competitor from the government.

(END VIDEO CLIP)

SCHULTZ: Insurance companies don't need to be kept honest.

Let's take a look at just how these guys have been doing on their own.

Earlier this year, the New York attorney general and the American Medical Association accused insurance company UnitedHealth of underpaying doctors and hospitals. UnitedHealth ended up settling. I think it was just $400 million.

A payoff like that doesn't exactly scream, "We're innocent!"

Now, that case prompted the Senate Commerce Committee to investigate insurance companies all over the country. Hey, what's going on here? Last month, the committee released a report showing that the health insurers have actually underpaid millions of valid insurance claims nationwide, cheating patients and doctors out of care and payment.

Now, talk about getting between you and your doctor, Senator. Now, that doesn't sound to me like an industry that's just doing fine on its own. That sounds like an industry that needs some serious transparency and regulation.

So, Senator Kyl, you know, the greedy, corrupt insurance industry doesn't need to be kept honest. That's some serious, hot Arizona "Psycho Talk."

All right.

And also coming up, it's happy hour at the White House. President Obama is having a Bud, Professor Gates is tipping back a Red Stripe, and the cop is sipping a Blue Moon. The president, a cop, and a professor. Now, try making that stuff up.

We'll let you know how it's all going coming up.

Plus, Sarah Palin wants a day job on the radio. Now, I'm willing to give her a shot so she can fill in on my program next week.

I want to know what you think. Should Sarah Palin take me up on my offer to fill in on my nationally syndicated radio talk show?

Text "A" for yes, "B" for no, to 622639. We'll bring you the results later on in the show.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: This is three folks having a drink at the end of the day, and hopefully giving people an opportunity to listen to each other. It is not a summit. It's an attempt to have some personal interaction when an issue has become so hyped and so symbolic that you lose sight of just the fact that these are people involved, including myself, all of whom are imperfect.

(END VIDEO CLIP)

SCHULTZ: Welcome back to THE ED SHOW. That was President Obama talking about having Professor Henry Gates and Sergeant James Crowley over to the White House for a beer tonight. You saw the video there. It looks like they're having a pretty good discussion.

We got our first video of the event just a few minutes ago. You can see Vice President Joe Biden is there as well. I think this whole thing has been a real lesson for the president. I think he's been surprised at the firestorm he created when he weighed in on this whole thing over a week ago, the Gates arrest. It's a classic example of how just a choice of words can turn into a long, drawn-out story.

For more, let's bring in Reverend Marcia Dyson, a social critic and commentator. Reverend, good to have you on tonight. Is anything going to be accomplished by having a beer in the Rose Garden with the parties that be?

REV. MARCIA DYSON, SOCIAL CRITIC: Well, Ed, thank you for having me on this evening. While they're having a happy hour, the sad state of affairs is something is brewing in the melting pot of America. The president campaigned on one issue, by saying that he wanted to change the face of America. I think he was talking about a relationship to our foreign community. But I think right now we need to look at what is happening in America.

I think we used to say when we were kids, sticks and stones hurt our bones, but words will never hurt. But they do hurt. Right now, these words are hurting not only the conversation that we should be having, these teachable moments. We need to be building a curriculum that's sustainable to deal with the differences we have as American citizens.

SCHULTZ: So, reverend, are you saying that the president may have gone too far by bringing everybody together at the White House?

DYSON: No, I think it's a great thing for him to do. Maybe it's something we should all do. But it's distracting from the larger picture, in which every American needs to participate, that transcends even race. There's racism in the whole conversation basically around environment, around the health care reform, around the economy. I mean, sitting in the city of Chicago, where you have 30 percent foreclosures-I'm sitting in Chicago, where there's an increase in black on black crime.

While we are talking about funding for police, we have to also talk about equal and matching funding for agencies for minority kids, not to become victims of police.

SCHULTZ: Reverend Dyson, I don't think anybody is going to argue with any of that. But let's face it, we have got a race issue in this country. And now the president has given it more conversation by bringing these folks in. What makes it worse, I think, tonight, the cop shows up with his union rep and a lawyer. I mean, what kind of signal does that send to anybody? I mean, is this a legal meeting? Or is this, hey, let's just end this thing and let's get along and straighten out this misunderstanding? How are we supposed to take that?

DYSON: We have to get more than along, Ed. I think if he brought his

legal representation as a union person, there's probably side conversations

you know, I guess you would call it bar-side communications that they don't want us privy to. But for the general public, I think we need to have a curriculum. We may not be able to eradicate racism or difference with others, whether it's our sexual orientation, what we're discussing about the military at the time.

We need to have a curriculum of peace and tolerance and understanding in our schools, which are also, by the way, sometimes considered racist. We need take it from a teaching moment to a happy hour moment to the sad reality of it's still in our schools. So maybe our children can do this kind of thing.

SCHULTZ: So the teaching moment is here. Don't be afraid to talk about it. And the conflict resolution is meet. Right?

DYSON: Hey, you know, you cannot talk about it-and like people in the church don't want to talk about AIDS, but it's rampant. We can choose to talk about a whole lot of things that render that situation invisible. LBJ was an unlikely candidate to want to talk about race, but he was forced by incidence and the civil rights movement.

So, in a way, I'm glad this incident happened. I don't know if the poster boys for this particular incident were the right ones. But hey, it's here. Let's go on from teaching to make it a curriculum. Better yet, it's a spiritual problem. Let's make it about recognizing you don't have to like me, but respect me. And let's have equality.

Right now, we have to deal with white men, black men, poor Latinos, poor black people, poor Asian-Americans, who are dealing with economy. We're discussing health care here. And even those conversations of race could talk about whether or not we have it or not, especially when you have some senators talking about in Texas talking seceding from the union, because they don't like something happening in our nation.

We need to make this a humane, teachable, sustainable moment, by having a curriculum of educating one in all aspects in which we're different and tolerable.

SCHULTZ: Thank you, Reverend Marcia Dyson.

DYSON: Thank you, Ed.

SCHULTZ: For more, let's bring in our panel. Carlos Watson is a political analyst and MSNBC anchor. He's also the founder and publisher of TheStimulus.com. Stephanie Miller, radio talk show host, with us tonight. and Frank Donatelli is the chairman of Go-Pac.

Frank, did the president do the right thing? What do you think?

FRANK DONATELLI, CHAIRMAN, GO-PAC: Ed, you know, he talked about all the publicity that this has engendered. But what he didn't say is that the president is the one that caused all the publicity to occur. He should have stopped when he said, I don't know the facts. He clearly misspoke when he said the police acted stupidly.

I would have thought, for him, the best course would have been simply to say-call up the officer, say, you know what? I misspoke. I'm sorry. Let's move on. And I think that would have been the end of it. I'm just not quite sure what the beer summit accomplishes.

SCHULTZ: I'm not sure, either. But it adds another round to the story, that's for sure, because now the police officer is holding a press conference tonight at 7:30, I guess a debriefing for the media. Carlos, I do believe this, that the lady that called 911 -- we would have never known who she was if the president had just said at the press conference, I don't have enough detail, don't have enough knowledge about it to make a comment.

CARLOS WATSON, MSNBC ANCHOR: I'm going to disagree with Frank, all due respect. I think the president is a moral teacher in part. The president has a lot of roles. I think this was a significant issue.

Now, do I disagree ultimately with the use of the word stupidly? I do. Because even I didn't-

SCHULTZ: But did the girl that called 911, did that woman-did she deserve to go through all of this? She's had death threats. She's had accusations. She's had media attention that she wasn't counting on.

WATSON: I don't tie that to the president.

SCHULTZ: I do, because-

WATSON: Why do you tie that to the president?

SCHULTZ: Because if the president hadn't said anything about it at the press conference, it would have never happened.

WATSON: This was already a big issue.

No, no, it was starting to die down a bit.

WATSON: Hey, listen, the president stoked the fire some, no two ways about that. It was already a big issue, though, and people were talking about it. The woman was already getting calls.

Let me say one more thing. I actually think the president doing the beer summit is a smart thing. Why? Because it did tamp down things.

SCHULTZ: It makes him look like a regular guy, and he is a regular guy. He's just trying to ease the tensions here. It's kind of neighborly thing to do. They're on such a big platform right now. And I think it also shows Americans out there, hey, look, if you ever have a confrontation in your neighborhood, heck, even the president did this. In a sense, there's leadership.

Stephanie, who gets the victory out of this?

STEPHANIE MILLER, RADIO TALK SHOW HOST: I don't know, Ed, but I was told that there was going to be beer here on the show tonight for us to even have to talk about this. So I'm right away disappointed.

Let me offer the female perspective here, Ed. If you've ever been in a bar, I don't think men having more beer tends to solve anything. I think that just stupider and stupider things get said in my experience. And I think having Joe Biden there, not a good idea. Then you know something stupid will be said.

He's probably already called Professor Gates clean and articulate. It is only going to get worse from here.

WATSON: Ed, let me jump in and say this: I will say, though, there are important racial issues. You see there's some frustration. No one knows exactly how to do it. And here's-the president, first of all, has to take care of health care and some of the other pressing issues. But as soon as he does that, there's going to be an opportunity to circle back next year, when the economy is a little bit better, when cooler heads prevail, and say, you know what, we know there's still some real issues.

You heard Reverend Dyson lay some of them out well, foreclosures and other things. And I think that's important. There's an opportunity here.

SCHULTZ: Frank, what are the attorneys and union representatives showing up for? The president just wanted to have a couple cool ones and ease the tensions here. Isn't that somewhat overboard? What do you think?

DONATELLI: Can I just ask, if beer is available, I'll have an Orange City. I'll put my request in.

SCHULTZ: At 7:01, I've been known to tip a few. But we can't do it during the show.

MILLER: Hefeweisen.

DONATELLI: Can't you appreciate the fact that the president said on television that a police officer acted stupidly? He gets all these threats, innuendoes, everything like that. Is it an overreach to have your union rep? Maybe it is. But again I just repeat, what would have been so wrong with the president just calling him up and saying, you know, I misspoke; I'm sorry. That would have been the end of it.

SCHULTZ: I think we have an-

MILLER: It might have-

SCHULTZ: Go ahead, Stephanie.

MILLER: It might have been a poor choice of words, but I think the president was right. He didn't call him stupid. Let me offer the female perspective. I don't even know if this was a black and white thing. I think it was a guy thing. I think it was a whose is bigger fight? And I think-you know, it got out of control. But he should have just said, I'm sorry there's been a misunderstanding, good night, sir. He didn't have to arrest the guy.

SCHULTZ: I think here's the learning moment. This is what I take out of all of this. There's an error in judgment on the part of the owner of the house, who is an intelligent man, a professor at Harvard. There is an error in judgment on a trained professional law enforcement officer. And there's error in judgment by the president of the United States for elevating it.

So we all ought to feel good about this tonight that, you know what? We're human and we can all make mistakes. And it's great for talk television.

Folks, thanks for joining us here on this panel. We're coming right back with more stuff tonight.

Look, let's switch the subject on this. I'm not going to let Shooter start lying to Congress, OK? Washington better not let it happen, either. A senior member of the House Intelligence Committee will give us the latest on the House investigation. That's next in my playbook. Stay with us. You're watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

In my playbook tonight, remember back in the 1970's, Senator Frank Church, Democrat from Idaho, led a sweeping investigation into the abuses of the CIA during the Nixon era? The committee uncovered all kinds of stuff, abuse of power, unlawful surveillance on US citizens, secret plans to assassinate foreign dictators. I can only imagine what we would find looking into the Bush/Cheney administration.

Joining me now is Congressman Rush Holt, senior member of the House Intelligence Committee. He's called for an investigative panel, and a lot of Americans are asking, when is this going to happen? Congressman, thanks for joining us tonight.

REP. RUSH HOLT, INTELLIGENCE COMMITTEE: Good to be with us tonight.

I'm pleased to be with you when you're discussing brew-gate.

SCHULTZ: When is all the action going to start on the House Intelligence Committee? When are we going to start getting some news out of this? Several weeks ago, we heard they're collecting files. Where are we tonight?

HOLT: Well, there's been document requests, preliminary steps to have an investigation. So far, it's limited in scope. And I'm calling for something quite a bit bigger, because the questions that have really not been examined now for more than three decades, about how we conduct intelligence, get at the heart of really what it is to be America, what is the relationship between the citizen and the government. And I think we need something on the scale of what was known as the Church Committee back in the 1970s.

SCHULTZ: So this would be a lot broader than just finding out whether Cheney withheld information from the Congress in this last run with the administration, and if there were other things. Is that correct?

HOLT: Sure. The whole reason there is this discussion about what's been withheld and whether Congress was informed has to do with whether Congress can do the oversight that we're obligated to do on behalf of the citizens. So it's not just one thing.

SCHULTZ: Congressman, how do we know that wouldn't weaken our operations that we desperately need with the CIA? How do we know it wouldn't hurt morale? How do we know that wouldn't hurt our intelligence community by going too far? What's your call on that?

HOLT: Well, in fact, I don't care what your line of work is, if you're unexamined, you slip into bad habits; you don't do as good a job. You know, it is our responsibility to oversee. I mean all sorts of things; whether-whose phones, e-mails, laptops are intercepted and who authorizes it? Or whether we conduct remote assassinations or any assassinations? Or whether we engage in disruptive activities in other, maybe to bring down other governments covertly, whether that happens occasionally or never or frequently or continually?

SCHULTZ: Do you have the support of the House Intelligence Committee Chairman, Sylvester Reyes? Do you have his support on this?

HOLT: He's certainly authorized and is very supportive of the limited investigation so far. I would say, I'm busy talking about broader investigation and don't have the Congress behind this yet.

SCHULTZ: Congressman, good to have you with us tonight, Rush Holt.

Thank you so much.

HOLT: Great to be with you, Ed.

SCHULTZ: House Republicans say they have a new plan to take back power. But they're going to-back to their old playbook. Yes, you guessed it; Nancy Pelosi is the boogeyman once again. Madam speaker, you have them shaking in their boots. I think you've got them right where you want them. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Believe it or not, the House Republicans are feeling pretty confident these days. Pete Sessions, the head of the National Republican Congressional Committee, is talking about flipping 40 seats and retaking the House in a little over a year from now, in 2010? Sessions thinks they have a good shot, because, quote, "there is an entirely different feel within the Republican party. People view this as a full assault on the free enterprise system and the way of life we have in this country."

Joining me now is the Congressman Kevin McCarthy, who is the recruitment chair for the NRCC. Congressman, good to have you on tonight.

REP. KEVIN MCCARTHY, NRCC RECRUITMENT CHAIR: Thanks for having me.

SCHULTZ: We just had an election nine months ago. What has changed that's got everybody so confident all of a sudden that the moment will be right in 2010?

MCCARTHY: The biggest thing that's changed is the economy. You look at the job losses in America, you look at the direction of where Washington is going, from the amount of debt that has been created just in the short amount of time-the tripling of the debt, that's greater than the 43 administrations combined before us.

So it doesn't mean Republicans are going to go right out and win the majority. It means we have an opportunity. If you look at just generic polling, Republicans, even when they were in the majority, they were behind on the generic polling, back from Katrina. It wasn't until March 15th of this year that we pulled back ahead.

So I think America is re-looking at this Pelosi Congress and these Pelosi puppets on the direction they're going. I think they want to reassess it.

SCHULTZ: So you need the stimulus package to fail for the Republicans to catch fire?

MCCARTHY: No, no.

SCHULTZ: Because if the stimulus package works, the president is going to be able to say, hey, our stimulus plan worked; we're turning the economy around; the job numbers are different. There's still a lot to be played out between now and 2010.

MCCARTHY: A lot to be played out. Republicans believe in a stimulus package, a different one, one that focused on small business, where 79 percent of all jobs are created.

SCHULTZ: But that didn't pass.

MCCARTHY: But the first thing we did when we came into Congress, we invited this new president to our conference. We laid out ideas. Even the Congressional Budget Office scored it. You know what they said? It created twice as many jobs with half the money. And we handed it to the president personally, and said, this isn't crazy.

But the difficulty was Pelosi, the speaker, introduced her own bill. Then when you went to the House, it wasn't just Republicans. It was Democrats who joined with us and said no.

SCHULTZ: So the plan is to hope the economy fails and promote your own plan. And then also it sounds like-you've said it twice, Pelosi's name, is she going to be the target?

MCCARTHY: No. I don't want America to fail. We want America to succeed. This becomes-when you go into a campaign, it's the free market of ideas. We are laying out our ideas. We gave them to the president. We've put them onto the floor each and every day. The difficulty is you need to work together to get them through. Right now, the only bipartisan votes in Congress are saying no to the direction Washington is going, with more spending, government take over. And I think America is waking up to that.

SCHULTZ: I have to challenge you on that, Congressman McCarthy. Where is the government take over? I'm not quite sure I know what you're talking about. I know it's a bullet point-

MCCARTHY: You're not quite sure? Let me tell you.

SCHULTZ: Where is the takeover? Did you not want to help out Wall Street?

MCCARTHY: I did not vote to go out and bail out Wall Street. No, I wanted to help out Main Street. Tomorrow, we're sitting in Congress and they're going to try to decide what is the pay for people across America? We're sitting here debating for the last three weeks the idea of a government takeover of our health care.

SCHULTZ: No, there's no government takeover of health care, Congressman. Come on, you've got to be honest.

MCCARTHY: How can you say that?

SCHULTZ: There's a government option maybe on the way. You can keep my health care. I can keep my health care. And somebody who doesn't have health care might be able to buy it. That's not a take over.

MCCARTHY: Ed, have you read the bill?

SCHULTZ: I don't think you've read the bill. I'm not in Congress, you're in Congress, my friend. Don't tell me. Have you read the bill.

MCCARTHY: I've read the bill.

SCHULTZ: You're calling it a government takeover after you read the bill?

MCCARTHY: I wasn't the only one calling it a government takeover. I talked to numerous Democrats. If you currently have a private plan, and it passes, within five years they can't offer you another plan. You only have the option to go into the government health care.

SCHULTZ: Congressman, I'm short on time. Come on back. I've enjoyed the spirited discussion. I'm amazed you've got all this confidence. We'll hold you to it. Thank you so much.

MCCARTHY: Thanks for having me.

SCHULTZ: Earlier in the show, I offered Sarah Palin the chance to fill in on my radio show. Here's what you think about it: 44 percent of you say yes; 56 percent of you say, no, Ed, don't do that.

That's THE ED SHOW. I'm Ed Schultz. We're going to be live from Portland, Oregon with this show tomorrow night, same time, 6:00 Eastern, right here on MSNBC. For more information on THE ED SHOW, go to Ed.MSNBC.com, or check out the radio website at WeGotEd.com. Chris Matthews and "HARDBALL" is next, right here on MSNBC.

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

END

Discuss:

Discussion comments

,