updated 8/18/2009 12:16:47 PM ET 2009-08-18T16:16:47

THE ED SHOW

August 17, 2009

THIS IS A RUSH TRANSCRIPT.

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

Guests: Anthony Weiner, Ralph Neas, Ezra Klein, Joe Sestak, Carolyn

Maloney, Nancy Giles, Sam Stein, Ron Christie

(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.

Caving in? A lot of people are thinking that. The White House makes a very weak move, essentially dropping the public option on health care, then backtracks on it today. What's going on?

The president calls it just a sliver of reform? And the health and human services secretary says it's not essential?

What do you mean not essential? We've got to strengthen this out.

The chairman of the middle class caucus says when private insurance companies control costs, it's like making a pyromaniac the fire chief. He'll be here to speak to the truth of all of that in just a moment.

You know, these jokers just won't quit, will they? I mean, the credit card companies, they're rushing to jack up your rates just before the consumer protections are about to go into effect. The brains behind your Credit Cardholder Bill of Rights? Congresswoman Carolyn Maloney will be here later this evening.

And it's of course a reality check on Afghanistan, the war nobody's talking about. Secretary Gates is giving us I think some Bush talk. And our commander in chief is sending thousands more troops over to Afghanistan with no date and no end date in sight? Now, I want to know what makes them think that they can win this one.

Three-star admiral Congressman Joe Sestak joins us at the bottom of the hour to talk about it.

Plus "Psycho Talk."

And get your phones out. We've got another text survey for you tonight on all the hot issues. And, of course, the panel is coming up as well.

But first, tonight's "OpEd."

Well, we're about halfway through this recess. And I have to say that right-wing talkers and town hall crazies and Senator Chuck Grassley have pretty much hijacked health care reform in this country.

Now, the White House, I think, is dazed and confused when they're starting to communicate with people. They don't know what page they're on. I mean, they don't have a playbook.

You can't go over to the White House and say, can we have your plan for health care, and boom, there's a 200-pager right there. They don't have that. Now, that they have is a bunch of bullet points and a bunch of ideas, but the bottom line here is that the president I think needs to be more direct and start doing some arm-twisting with some folks that aren't listening to him.

The president believes in a public option. Really?

Health care coverage for everybody is part of the Democratic Party platform. They want to cover everybody. The party has made that statement. But some conservative Democrats are working against their president and their party.

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD (D), NORTH DAKOTA: Look, the fact of the matter is, there are not the votes in the United States Senate for the public option. There never have been. So, to continue to chase that rabbit I think is just a wasted effort.

(END VIDEO CLIP)

SCHULTZ: All right. Now, that comment right there has lefties across the country furious. And I know Senator Conrad's office is getting a lot of phone calls tonight. But it really creates a problem.

Here you have the chairman of the Senate Budget Committee. You have him also sitting on the Senate Finance Committee. Kent Conrad knows the numbers.

But here's the problem. No House Democrat in a red or purple district is going to go out and stick their neck out and be talking about the public option when Senator Conrad is saying that it's dead on arrival in the Senate and they don't have the votes.

The conservative Democrats on the Finance Committee I think have gone almost rogue on all of this. Chairman Max Baucus is the number one taker of the industry money. He's never supported reform.

Now, it's time for the president I think to put the hammer down.

We're getting to the 11th hour, you know, when they turn the hourglass.

Mr. President, you're acting like a senator. You're not a senator anymore. You're going to have to act like the president of the United States when you get in the Oval Office and tell these guys what you want, and then tell them to go over there and make it happen. There's too much nice stuff going on.

The right, they're just champing at the bit at the idea that President Obama's on the verge of a major failure. They say that the golden guy out there in the Oval Office has lost his magic touch.

Well, the Democrats are ready to hand the Republicans-think about that. What are we, middle of the summer here? Now we're into August, we're just a couple of weeks away from September. He hasn't even been president eight months. And the Democrats are ready to hand the Republicans a PR victory because they got shouted down at a town hall meeting, because the right wing sound machine of America has been so effective with their Frank Luntz bullet points?

This is crazy.

Now, a month ago today, the president of the United States told the American people that he would not sign a bill without a public option.

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: Any plan I sign must include an insurance exchange, a one-stop shopping marketplace where you can compare the benefits, costs, and track records of a variety of plans, including a public option to increase competition and keep insurance companies honest.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

OBAMA: The public option, whether we have it or we don't have it, is not the entirety of health care reform. This is just one sliver of it, one aspect of it.

(END VIDEO CLIP)

SCHULTZ: Same president, different answer. I don't like it.

In July, the president promised health care reform centered around a public option. Now he acts like it's just another footnote on the stump.

Linda Douglass, the White House communications director for health care reform, insists that nothing has changed. Well, you've got me, well, not confused. I'm disappointed. I'm starting to not believe what's coming out of the White House.

It seems like we've got this shell game going on. The president goes out on the stump and says one thing, but inside the beltway they're saying something else, and it confuses everybody in the House who are holding all these town hall meetings. And, of course, over on the Senate side, no public option.

What is going on here?

One final point. Some of these conservative Democrats seem like they're willing, almost eager, to oppose the president.

And you need to know this, folks. If the president gets tagged as a failure, the entire Democratic Party is going to go down with the ship.

Do you remember HillaryCare? That was 15 years ago. When you start talking about health care reform, you think about those days and how it didn't work. That's the last thing we need to have happen here.

Get out your cell phones. I want to know what you think. Will no public option mean loss of support for President Obama?

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

Now, joining me now is Congressman Anthony Weiner of New York.

Congressman, mixed messages. OK?

We've got the health and human services director saying one thing. We've got the White House communication office saying one thing. We've got two different sound bites from President Obama.

Hey, I'm on the team, but I want to be on the A team, not the B team or the C team. What's happening here?

REP. ANTHONY WEINER (D), NEW YORK: Well, you and me both. I mean, look, most of President Obama's message has been right. I will be glad to follow him up this mountain, because this is an important thing we have to solve, health care.

The problem is, I'm getting the distinct impression that the White House doesn't know for sure what it wants. I believe, and I think I've heard you say this, too, we need a simple plan, a single payer for all, Medicare for all Americans, simple, easy to understand. But we have to have some form of public plan to provide competitive pressure on these pharmaceutical and insurance companies.

Right now it sounds like what's coming out of the White House is, if we just go the way we're going, the health insurance companies will wake up one day and say, OK, we'll hold down prices on our own. That ain't going to happen.

SCHULTZ: All right. Let's talk-not to switch gears, but I think there's a parallel here. Let's talk cap and trade.

A lot of you guys over in the House did a very courageous thing with your votes on cap and trade, only to find out later there weren't enough votes in the Senate. OK? So, I think that there's a real possibility that you're going to lose some seats in the House over that cap and trade thing because it is a tax increase.

So, here we are with health care. We've got the House over there wanting a public option, but yet you've got Senator Conrad saying, well, we don't have the votes over here in the Senate.

Are you guys going to stick your neck out again? And what good is it going to do and what message does it send to the American people?

WEINER: Well, you know, never mind the inside politics, which seems to be they think they can get a vote or two in the Senate and then give up a hundred votes in the House by doing the switch that happened today. Let's just look at the policy of it.

President Obama was right when he said all those weeks that the reason you need to fight so hard for a public plan is because if you have another private industry plan, they're going to keep rates going up and up and keep more and more people losing their insurance. But look, I think that what we need to make very clear, those of us who believe in national health care, believe in lowering our tax burden, is that President Obama, if he's not going to support a public plan, he's not probably going to get a bill. That's unfortunately the case.

SCHULTZ: OK. If he doesn't, then he's flip-flopping. Let's be very clear about that. And If he backs off on public option, that's not the guy that liberals elected.

And I can tell you from my radio show, there's a lot of people that are very upset. They feel like they're being thrown under the bus. A lot of people who supported this president to get elected now all of a sudden are saying, what the heck is going on here?

You can't have reform unless you have a public option. You can't challenge the insurance industry unless you have a government-run plan. And now we're kicking around this thing about co-ops.

The Senate's not going to go with a public option. How would a co-op fly with you?

WEINER: Well, a co-op wouldn't achieve anything. It would be a very nice idea that-if we all wanted to get together as citizens and negotiate for lower prices, but we could have done that yesterday.

Look, that's not going to happen. I mean, the public plan is so important to those of us who care about health care reform because it's not perfect, but at least it's something. And I think today you saw the White House backing away from their backing away.

The important message here is that if the American people believe that the health insurance companies are getting too much in profits and overhead, and they need competition, they're not going to get it with a co-op, they will get it with a public plan.

SCHULTZ: Backing away from backing away.

Folks, let me tell you something. One person that is not backing away, and that is Nancy Pelosi.

With tremendous clarity, she is out there with a statement today about the public option. There's going to be a public option coming out of the House.

"We agree with the president that a public option will keep insurance companies honest and increase competition. A public option is the best option to lower costs, improve quality of health care, and ensure choice of expanded coverage."

Now, OK, we know where the Speaker is. But the Senate-and the Senate has to have their arm twisted by the president.

Why isn't President Obama playing hardball with the Senate Finance Committee?

WEINER: You know, and I have the greatest respect for the president and for my friend Rahm Emanuel. You know, they're trying to get a bipartisan deal.

Bipartisanship is a means, not an end. You know, they used to say that the Senate was the cooling saucer of our democracy. Well, they're going to be the icebox before this is done, because we're not going to get anything.

I think we, as Democrats, were elected to lead. That's what we should be doing in this case. We can't wait for some Republican to wake up-and I have to tell you, with all of this negotiating that's going on, I don't see any Republican standing up and saying, OK, now I'll support it.

Right now the White House is making concessions. I don't even know who we're making a deal with at this point.

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

WEINER: My pleasure. Thanks.

SCHULTZ: Thanks so much.

For more, let me bring in a friend of mine, Ralph Neas, who is the CEO of the National Coalition on Health Care and formerly the president of PFAW, People for the American Way.

Ralph, good to have you on tonight.

RALPH NEAS, CEO, NATIONAL COALITION ON HEALTH CARE: Great to be back.

SCHULTZ: I want to talk about-how politically risky is this for President Obama not to have his health and human services secretary on the same page, or at least creating some confusion, and at this point in the game, the communication people having to come out and clarify and remind all of us where the president is? What's the political fallout here if they don't get on the same page?

NEAS: Ed, I think that the White House and all of the senior officials do have to get on the same page. But I've got to tell you, they've made an extraordinary amount of progress in the last six or seven months.

If you were to ask me, Ralph Neas, and the National Coalition on Health Care on January 20th, would we be out of four committees and about to be out of a fifth by Labor Day, by mid-September? I would have been ecstatic.

We've made a lot of progress. And you and I have talked about this. We have got to make sure we address quality, cover everybody in the United States, and we must make sure that we cut the rate of increase in health care costs. That's the bottom line.

I think the public plan is the way to do it.

SCHULTZ: But Ralph, the only way that's going to happen is if you have a true public option, a government entity competing with the private sector. A co-op isn't going to do that. And we'll talk more about that later in the show.

But would you go along with a co-op?

NEAS: I would go along hopefully with the public plan, blended with the private insurance. However, our bottom line at the coalition is accomplishing our criteria objectives. If there is another way to do this, which could be a variation of the current public plan-I'm not saying it's the cooperative, but some kind of variation and it accomplishes our goals, the president's goals, that could do it.

Now, I do think you made a good point about the president and communicating in a better and more effective way. He's done well, but he's going to have to exercise even more leadership. But it's just not the president.

What we are hearing is not just from Kent Conrad, but Dick Durbin, the Senate majority whip, who says, I'm pounding but I can't get to 60. If we're going to get to 60, if we're going to get a public plan, then the community, the proponents of health care reform, have to be a much better job. We've got to deliver the 60.

SCHULTZ: And Ralph, if we don't get a public option, if we don't get a public plan, what do you think Democrats who helped Obama get in the White House-I mean, there's going to be hell to pay, I think. What do you think?

NEAS: I think that if the president gets something to the House/Senate conference, and we get something that we believe accomplishes all of our goals-and I think the best way to do that is with the public plan, to make sure we're keeping the insurance companies and the pharmaceuticals honest-but if we get coverage for everyone, if we control the rate of increase in health care costs, if we get enhanced quality, I think that's where the Americans, including the liberals, at the bottom-line moment are going to be. But we can get all of those objectives and we can get a public option, along with the other parts of this bill, if we organize better, if we communicate better, if we educate better. But the president has to get 60 votes at some time or another in the Senate.

SCHULTZ: Well, if they do reconciliation.

Ralph, we're out of time on this tonight. I appreciate your time very much. We'll come back with you, and you come back with us, and we'll talk more about it on another day, because this is going to be around for a while.

NEAS: Sure will.

SCHULTZ: Coming up, a lot of Americans I think are dazed and confused with all this co-op talk, and conservative Democrats are dishing this out and a lot of people don't know what the heck it is. Well, I'm going to fork out some details on it in just a minute.

Stay here, right on THE ED SHOW, on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

Right now it looks like conservative Democrats are winning the health care fight, no public option. The Senate Finance Committee wants to kill that provision and replace it with a health care co-op. And the White House seems more than willing to just let that happen.

(BEGIN VIDEO CLIP)

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: They have been more focused on a co-op, a not-for-profit co-op as a competitor, as opposed to a straight government-run program. And I think what's important is choice and competition. And I'm convinced at the end of the day the plan will have both of those, but that is not the essential element.

(END VIDEO CLIP)

SCHULTZ: Not the essential element. Now, let's hold it right here for a second.

The public option would do what? It would address the pre-existing condition that many Americans have who can't get any kind of coverage right now. That's very, very essential.

You and I know that. We've been talking about this for months. But let me explain just a couple of things about the co-op proposal.

People can join a co-op. You and I can join a co-op. It's member-based. It's nonprofit. It's run for the benefit of you and me, the members.

We pay dues, we pay premiums. The more members, the more financial stability and strength that it has to go out and do some other things.

Now, this is a key point that I think is going to need some clarification when we get the devil in the details. Are they going to be able to diversify? Are they going to be able to go out and buy companies that are going to be able to create some profit to put into the pool? Big point there, because a lot of companies do that when it comes to diversification.

Now, a state could go out and run a co-op. Several states could get together and run this thing called a co-op, and they could organize.

You could have the southern states co-op, the Northern Plains co-op, the West Coast co-op. And the federal government would lay out about $6 billion to $10 billion to start up this process, but would have no control in the operation and no oversight at all.

And here is the key. Co-ops still have to work with insurance companies. The co-ops might, oh, outsource some of the coverage, depending on their limitations and their ability to pay claims. So, insurance companies could charge, yes, confiscatory rates on co-ops, making it extremely tough for them to function effectively.

Believe me, the insurance industry does not want co-ops. They may say that, but they don't.

Now, this opens the door for what? Collusion.

On the other hand, if members of the co-ops have fewer claims, then over time, you know, it strengthens the financial stability of the co-op, thus theoretically bringing the rates down. Maybe. Kind of. Hopefully.

Come on. We need a public option. You and I know this.

Medicare works. The only people that say it doesn't work are the righties. Have you seen any Republicans show up saying, I don't want Medicare?

They're not giving it back. Where's the march on that?

For more, let me bring in Ezra Klein, reporter for "The Washington Post."

Mr. Klein, good to have you with us tonight here on THE ED SHOW.

What are we seeing from the public when it comes to the acceptance of a co-op? This is really in the infant stages, is it not? There's a lot of Americans who just don't know the details of this.

EZRA KLEIN, REPORTER, "THE WASHINGTON POST": I don't think anybody in America knows what the co-op is. I don't think there's even really been much polling on it. I think the co-op is a solution to or a proposed solution to a political problem.

When Ken Conrad began this whole search for the co-op, he told me that what had happened was on June 1st, Max Baucus came to him and said, listen, I need you to find a compromise between the public option supporters and those who oppose it. And he sort of came up with this with his staff over a weekend.

And it has never sort of migrated out of the-out of Congress; right? It's not been sold in the country. There are no organizations behind it. It's not been sold by the president or explained in a major speech.

So, I think it sort of sits right here, and the question is whether it will solve the political problem. But I don't think it's a particular solution to a policy problem, and it hasn't been put forward as such.

SCHULTZ: How soon could they implement a co-op? You're talking about administration that has to be set up. You're talking about communication centers that are going to have to be set up. I mean, I don't envision that happening before the next presidential election.

KLEIN: Well, you know, I think the health care plans we're seeing don't start until 2013 anyway. So, I presume we actually could do it by then.

SCHULTZ: Well, the thing that really sticks in my craw is, why would Max Baucus go to Kent Conrad and say, hey, no public option, you've got to find a compromise here? In the meantime, the date that you mentioned, back then, 72 percent of the American people wanted the public option.

Now as this thing has drug out over the months and this recess has taken place, and these town halls, and the bullet point culture has come upon us, now we've got a mess on our hands. What does-and this creates a new problem for the president because, Ezra, it appears to me that a lot of liberals are backing off the president, they're frustrated right now.

KLEIN: Max Baucus has been incredibly dedicated to getting Chuck Grassley on board with this. And Chuck Grassley would never have supported a public option. And thus, Baucus needed to go in this direction.

I mean, one thing I'd gently press you on, Ed, is I think you're putting a lot of this on the president.

SCHULTZ: I am.

KLEIN: And the '08 election didn't abolish Congress, right? He's sort of, as Clinton was before him and as all the presidents who have tried to help reform have been, he's really subject to the whims of the committee chairmen here. And I don't think anybody wanted Max Baucus to retreat in with the Gang of 6, but it happened.

I mean, the president really fought on this August deadline and lost. So, I think we're really seeing, actually, at this moment a sort of diminishment of the executive on this.

You know, this really is in the hands of Congress now. And I think everybody's sort of outside of the process. No matter how much power they seemed to have a couple of months ago, has been a bit sidelined by Max Baucus' ability to sort of do what he wants.

SCHULTZ: But you know, I have to throw this in, Ezra. You know, when Lyndon Johnson was president, he wanted Medicare. Damn it, he went across to the Hill and he made sure that he got what he wanted and he twisted some arms. Now, I'm not saying that's the only way it can get done. And somehow, President Bush, he found Ben Nelson to vote for his tax cuts.

I don't see President Obama really using the bully pulpit, other than going out and telling everybody in the country he's for public option, but then he's allowing the Senate Finance Committee to gut what the people want. I don't get that.

KLEIN: Sure. But I think, you know, you look at Bush, and he got beaten back pretty hard on privatization. And Johnson didn't do total health care reform because he thought he couldn't pass it.

I mean, I agree with you, broadly speaking, and I don't know how hard they've got Rahm out there pounding people's heads into the walls. Maybe it's very hard and maybe it's very soft. But it does seem to me that they've been pretty clear on what they've wanted, and you're watching the process get away from them a bit.

My sense is that if they could get it back they would. But I think right now a lot of the power just sort of is in these baroque conventions of Congress. And I think you have to look at the Senate and look at the people who have tried this before and say, you know, we've got a really broken institution out there.

SCHULTZ: Ezra Klein, "Washington Post," great to have you on tonight.

Thanks so much.

KLEIN: Thank you.

SCHULTZ: Coming up, busted. A sleazy group is tricking people into appearing in their anti-health care reform ads. I'm blowing the cover off that big time next. It's right here in "Psycho Talk" on THE ED SHOW.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: In "Psycho Talk" tonight, a serious one. Right-wingers aren't letting insignificant things like facts get in the way of their assault on health care reform, like threatening us with a British health care system.

Take a look at this commercial produced the by the group Conservatives for Patients' Rights.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Before Congress rushes to overhaul health care, listen to those who already have government-run health care.

NARRATOR: In Britain, Katie Brickell (ph), denied the pap test that could have saved her from cervical cancer. Kate Spall, her mother suffered on a wait list as her renal cancer became terminal.

(END VIDEO CLIP)

SCHULTZ: Two tragic stories. Two women who must just hate Britain's health care system; right? But the two women you just saw in that ad were told they were going to be in a documentary, not an ad.

Conservatives for Patients' Rights flat-out lied to them to get them in. Kate Spall, the woman who lost her mother to kidney cancer, told "The Times of London," I feel like I was duped. What I said is what I believe, and I stand by it. But the context it has been used in is something I was not aware would happen. I would not align myself with this group at all."

Duped? Conservatives don't have any legitimate arguments so they've resorted to tricking people to get them to lie about the situation. Lying to people to support their absolutely wrong side of health care reform and argument, that is "Psycho Talk."

And coming up, President Obama says the war in Afghanistan is a war of necessity, not a war of choice? That's his first Bushie, I think. The highest ranking former military officer ever elected to Congress will join me to make the case next.

Plus credit card companies are cooking the books. Cooking up a brand new scheme on how to rip you off just days before consumer protection rules go into place. They might think they got you outsmarted but they don't. We'll show you exactly what they're doing next right here on THE ED SHOW.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: By moving forward in Iraq we're able to refocus on the war against al Qaeda and its extremist allies in Afghanistan and Pakistan.

We will plan responsibly, budget honestly, and speak candidly about the cost and consequences of our actions.

Our new strategy has a clear mission and defined goals. To disrupt, dismantle and defeat Al Qaeda and its extremist allies.

(END VIDEO CLIP)

SCHULTZ: Welcome back to THE ED SHOW. That was President Obama addressing the Veterans of Foreign Wars conference this afternoon in Arizona talking about ramping up our involvement in Afghanistan.

The war is a major drain on our nation's resources. Something I think has been overlooked as of late. It's really taken a backseat to the raging debate over how we're going to pay for health care in this country but we have 62,000 soldiers over there, another 6,000 will be on the way and be there by the end of the year.

We need to be talking about this. Joining me now is Pennsylvania congressman Joe Sestak. Three-star admiral and the highest ranking former military officer ever elected to the Congress.

Joe, good to have you on tonight. I appreciate your time.

REP. JOE SESTAK (D), PENNSYLVANIA: Good to be back, Ed.

SCHULTZ: Obviously, health care taking a big chunk of the debate in this country right now and behind the headlines is that we basically have an open-ended policy in Afghanistan.

And to my knowledge, nobody's ever won over there. From the western world. So what do we make of this? Your thoughts on exactly what the president has got us into. We're sending more people in there. What do you think?

SESTAK: Yes, without a question this president has to provide an exit strategy. That is, a series of benchmarks by which we can measure success and failure. And I actually voted for that and the amendment did not get accepted in the Defense Authorization Bill.

There's four critical elements here. And before we say this is a Vietnam I think we have to remember that when the Russians were in Afghanistan, they actually killed one million Afghanistan-Afghanistan citizens. They actually had refugees of five million. They actually, because of their brutal types of efforts, had a force against them of 250,000.

We face in Afghanistan probably at best about 20,000 Taliban fighters. It's not a large number. So this is not like Vietnam where we faced 500,000 Vietcong and Vietnamese.

SCHULTZ: Is it something we can win? I mean can we wipe out these 20,000 that you're talking about?

SESTAK: We don't need to. There's four things that need to be done. We have to recognize that we have to talk with the Taliban. Only about 30,000 are very radical, al Qaeda-ized Taliban. The lesser, generally, somewhat ideological but mostly impoverished youth who go there for a job, literally for a job.

Second, we have to recognize that our insurgency as the new general is doing has to change. It's not about seek out and kill, it's about earning trust of the local citizens.

SCHULTZ: Well, that's nation building. I mean you can't earn trust unless you're doing some nation building. And I don't know if the American people signed up for this.

This is what the president had to say. He was asked a question about war of choice, war of necessity. Here it is.

SESTAK: Yes.

(BEGIN VIDEO CLIP)

OBAMA: There will be more difficult days ahead. The insurgency in Afghanistan didn't just happen overnight. And we won't defeat it overnight. This will not be quick nor easy. But we must never forget, this is not a war of choice. This is a war of necessity.

(END VIDEO CLIP)

SCHULTZ: You believe that, Congressman?

SESTAK: I do, and here's why. It's because this is not about Afghanistan any longer. Because we got-I was head of the Navy's (INAUDIBLE) And I was on the ground early in the war. Came back on the ground 18 months later. Because of our focus on that tragic misadventure in Iraq, General Hayden, when he's head of the CIA a year and a half ago, said al Qaeda has a safe haven in Pakistan.

Now what's safe haven mean? When I went on to the ground there early in the war, General Hayden, then head of the NSA, said to me, Joe, the problem with the safe haven is we don't have any actionable intelligence. That is, making the move so that we can pick up where they are.

And they can quietly sit there and plan against us another potential 9/11. We cannot permit a safe haven for planning against us from the al Qaeda who got us on 9/11.

SCHULTZ: OK, but.

SESTAK: So that's the real objective.

SCHULTZ: All right. So you're willing to give up American lives on an open-ended policy, and also billions of dollars, we don't know how long we're going to be there-I mean this is Iraq all over again, isn't it?

SESTAK: No, I made it very clear, when I was director of defense policy at the White House in the Clinton administration we always had an exit strategy.

SCHULTZ: OK, so.

SESTAK: Let the public know, are we succeeding or not? And our public needs it. It's why I voted for that amendment Jim McGovern submitted and it failed to pass the House of Representatives. We didn't even have enough Democrats for it.

SCHULTZ: Congressman.

SESTAK: We need a measurement of our success or failure so then we can make a decision, is it worth it? We don't have it.

SCHULTZ: Former admiral, Congressman Joe Sestak of Pennsylvania.

SESTAK: Thank you.

SCHULTZ: With us here on THE ED SHOW tonight. Thanks so much.

SESTAK: Thanks for having me, Ed.

SCHULTZ: For more on this-you bet, buddy. For more on this let's turn to our panel. Writer and commentator Nancy Giles with us tonight.

SESTAK: With a helpful thank you.

SCHULTZ: Political reporter for "The Huffington Post," Sam Stein. And also former special assistant to President George W. Bush, Ron Christie, with us tonight.

Nancy, starting with you. The patience of the American people, where is it right now on Afghanistan?

NANCY GILES, WRITER AND COMMENTATOR: Oh my. I don't think it's there. I think that as the casualties keep mounting and as the financial and human cost of the war keeps getting bigger, I think people are getting frustrated.

I keep going back to thinking, though, that it's a war that is eight years late. You know, if we had stayed in Afghanistan back in 2001-2002, when we had Osama bin Laden at Tora Bora, we could have made some progress.

Now I feel like Barack Obama inherited this mess and the timing is just extraordinarily bad. As you said earlier, we've got financial woes here. We've got health care reform.

SCHULTZ: But we don't know how much finances. That's just the thing.

GILES: Yes.

SCHULTZ: I mean Secretary Gates is saying a few more years well, that could be billions and billions of dollars.

Ron Christie, it appears to me that President Obama is rather hawkish on Afghanistan. What's your take on his position?

RON CHRISTIE, FMR. SPECIAL ASSISTANT TO PRES. BUSH: Ed, I don't think he's hawkish. I think what the president articulated today is the best way forward for victory for Americans. I can't speak for the rest of the guests here on the show tonight. I never served in the military so I'm not about to second-guess Admiral Sestak who is on just a few moments ago, or our brave men and women who are advising the president.

This is what I do know. We do know that al Qaeda attacked this country and killed 3,000 innocent Americans. We do know that there has been actionable intelligence that some al Qaeda operatives are working in the Pakistan/Afghanistan border region. We must do whatever it takes to eliminate the threat to the American people.

And you know, I hear people say, oh, the good war is in Afghanistan, the bad war is in Iraq. I'm for victory. I don't like these political terminologies being tossed around. We should support our men and women in uniform and make sure that we don't get hit again. That's the ultimate price that the American people are willing to pay for, I believe.

SCHULTZ: Sam, the latest report to come out of the Senate is, if they want some answers about this policy, they want to know how long, how much it's going to cost, the number of personnel that it's going to be taking.

Is this potentially a big problem for the president if we don't get some progress within the next year? What do you think?

SAM STEIN, HUFFINGTON POST: You'd like to think that Congress would exercise its prerogative in terms of the purse, in terms of paying for this war. From what I understand and from what I've discussed with members of Congress he does have the political latitude to actually pursue his policy.

Like Ron said there is an objective here, that you have to defeat al Qaeda, chief victory, however vague that notion is. Keep in mind that three-fourths of Democrats polled in a CNN poll said they were not in agreement with the president's policy.

That said, in Congress he has wide agreement. So I think he has the bandwidth to actually go forward with this. Two, three years down the road if things aren't changing then you're going to see some really great push-back on this.

SCHULTZ: I think the president's going to have to articulate his exit strategy on this.

STEIN: Oh yes, that too.

SCHULTZ: Yes, no doubt. Stay with us, we've got a lot more coming up.

Just days before watchdog rules go into effect the credit card companies are coming up with the new ways to get your money. Congresswoman Carolyn Maloney is on with us tonight to talk about how you can keep that money and to bring you up to date on exactly what they're doing. That's next on THE ED SHOW. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: All right, folks. Want to know what you think. Will no public option mean loss of support for President Obama? That's our text question tonight. Text A for yes, B for no, to 622639.

Still ahead, liberal Democrats are already planning a revolt if the public option is scrapped. I'll put that to our panel coming up for THE ED SHOW. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: In my "Playbook" tonight a sneaky play from the credit card companies. The first phase of the Credit Card Accountability Responsibility and Disclosure Act starts this Thursday which means some companies are rushing to raise rates before the law keeps them from doing it.

There are a lot of new protections for credit card holders but you can bet that the card users are going to find new ways to hit customers big-time. These could include more annual fees, variable interest rates and of course fewer reward programs.

Let me bring in the congresswoman who got it all started for the consumer, Carolyn Maloney of New York. She sponsored this act.

Did you know they were going to do this?

REP. CAROLYN MALONEY (D), NEW YORK: Well, Ed, what's new, they've been doing it forever. That's why I authored the bill is that they were raising rates any time, any reason, retroactively on balances. And following a whole host of tricks and traps to trap consumers and never-ending cycles of debt.

SCHULTZ: Now I'm hearing stories here in New York that people are going out to dinner and they think they're in great shape. And then they use the card. It comes back and they're saying, no, it's no good, you've been rejected. It's become quite a shocker for a lot of consumers out there.

What is this law going to do to protect people from an embarrassing moment in any way, shape or form?

MALONEY: Well, first of all, in answer to cancellation of your cards,

they can cancel by law for three reasons. That you haven't used your card

for over a year. Most people would not object to that. If you are not

paying your bills or have defaulted and are-have become a bad customer

by not paying your bills.

And then the third reason is that they have looked at your credit and deemed that you are risky. But they must give you notice. The flaw in the law at the present time, which I intend to change.

SCHULTZ: Yes.

MALONEY: Says they can give you 30 days' notice but they don't say they have to give to it you before they cancel your card. I'm going to put in a bill when we go back into Congress that they must give you notice beforehand that they have deemed you to be a risky customer, for whatever reason, you can then inquire why, and you can switch and go to a different card.

SCHULTZ: So right now, they're getting while the getting's good, before the legislation goes in. We're hearing, I mean, people getting nailed with 30 percent increase.

MALONEY: Well, Ed, they've been getting while the getting's good for years.

SCHULTZ: Not like this.

MALONEY: Yes, they have. The reason I authored the bill is I'd get phone called that they upped my rate 30 percent with no notice, I've always paid on time, never been late, yet they upped my rate retroactively on my balance.

I wanted my bill to go into effect in 90 days. It did not pass but I did get three provisions that will go into effect this Thursday. One is 45 days' notice before they increase your interest rate.

Secondly, a notice that you can terminate your card and not accept the increased interest rate. And certainly not retroactively on your account. And thirdly, that they must give you 21 days' notice so that you can pay your bill and not the tricks and traps of changing the due date catching you in an overdraft.

So those three provisions are going into effect. But in February, in February, they will have to be honest with you. The rate that they charge is the rate they charge. They cannot change it without notice. It will put competition. You can go to a different card.

It will stop the any time, any reason rate increases that are exorbitant and really putting tremendous stress on families during this economic downturn.

SCHULTZ: Well.

MALONEY: And so help is on the way. But in the interim, they are doing what they've always done.

SCHULTZ: Yes.

MALONEY: Jam up those rates for no reason. And not even giving you a reason of why they're increasing it. And I would suggest to your consumers that are listening that if they are raising your decide you're going to close out that card.

SCHULTZ: And move on.

MALONEY: Move on to a lower rate.

SCHULTZ: Yes.

MALONEY: There are many cards out there with lower rates. Let's put competition in the system and lower your rate.

SCHULTZ: Just like health insurance, right? Congresswoman, good to have you with us tonight.

MALONEY: That's a good law.

SCHULTZ: All right.

MALONEY: Good to see you. Great.

SCHULTZ: Thank you, it's nice to see you.

Coming up, the White House is-are they playing a shell game with health care? The president saying one thing on the road and something else in Washington. Does he have street credibility problems with liberals across the country?

I'm calling him out on that next here on THE ED SHOW along with out panel. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Health care reform, you might be wondering is it really falling apart in progressive Democrats? Are they really as furious about it as they are on talk radio and the blogosphere?

Senator Kent Conrad says fighting for public option is, quote, "wasted effort"? He says that even though the Democrats have 60 senators they don't have the votes so everyone needs to get on board with a co-op plan.

Liberal Democrats are not going to take this lying down. Nancy Pelosi, Charlie Rangel, the progressive caucus, members of Senator Kennedy's committee, have all said they are not willing to give away the story on health care. They already compromised when they gave it up on single-payer.

The public option was supposed to be the compromise. Now the goal posts, I guess you could say, have been moved. So where do we go from here? I know that there's a lot of liberals in this country right now they're thinking, gosh, wait a minute, this doesn't sound like Obama, he's been such an upfront guy all along.

But this isn't Chicago politics. This seems to be like coffee shop politics where nobody gets upset with everybody and there's really no pushing going on. You know what I mean?

Nancy Giles, Sam Stein, and Ron Christie back with us tonight on our panel to talk about this.

Sam, let's talk about co-ops. You have written a piece in "The Huffington Post" about co-ops. Is there a history here that the American consumer can point to to see if this has any chance of working?

STEIN: Yes. There's a 2000 GAO study on co-ops, a variation of co-ops. And the conclusions were very sour on the idea. Essentially co-ops don't have the purchasing power to really create a systematic reform that the president has talked about since the very beginning.

They're limited in their scope. In terms of how many people they can actually get under the umbrella. They're very ineffective in terms of lowering administrative costs. And as you mentioned private insurers would be involved in the process and they're doing everything to protect their profits.

So in terms of policy ideas I'm not sure that this is much of a smart compromise for progressives or Democrats to make. In terms of politics maybe it's good to get the votes. But keep in mind the votes you need to get aren't Republican. The RNC just came out and said they oppose co-ops. So the Democrats are essentially negotiating against themselves on this.

The votes they need to get are conservative Democrats and that's where party leadership like Harry Reid and including the president himself need to put down their fists and say, listen, this is what we want and this is how we're going to get it.

SCHULTZ: I'm all about it. Ron Christie, the last time you were on this show, you identified yourself as a health care expert. Buddy, I'm all about it. I need to know if these co-ops have a life expectancy.

Do you think it has a pulse with the Republican Party? Is it a viable way to go?

CHRISTIE: I don't think it's a viable way to go. I think Sam's analysis was pretty much spot-on. I don't think that some of the versions that we've heard about co-ops are really going to have the buying power to make a significant difference.

If you want to talk about a way, Ed, that we can really have real health care reform right now, why don't we loosen those regulations that do not allow you to buy insurance across state lines. That would be one very tangible, very relatively easy thing for folks in Congress to do to allow more people to have coverage.

But this public option or a sense of a co-op I think is dead on arrival. Senator Conrad is right, they don't have the votes. The president needs to work with Congress on behalf of the American people to put something in place that will lower costs and I don't think that we've seen that thus far.

SCHULTZ: I just want to make sure that the American people don't forget this. Let's go back to November, last year, right after the election. Senator Baucus had a plan out. The Baucus plan envisions that health insurance exchange would offer new opportunity for individuals and small businesses to easily compare private coverage options and a public plan and to purchase the policy that would work best for them.

The exchange would include a new public plan option similar to Medicare.

GILES: Public plan, public plan.

SCHULTZ: What happened there?

GILES: Medicare. And I have no idea.

SCHULTZ: He caved. He caved big-time.

GILES: Well, but he's getting a lot of money from insurance companies. I mean let's be honest. We have to say really what's going on out there. And not only-I think it's important to remember, I think we have the votes in the House to push the public option. And we can't forget that.

And we also can't forget the fact that it's being talked about.

Nothing happened with health reform over the Bush two-term administration.

We are getting there. And they don't want to throw everything away.

They're-I just don't want to feel totally negative.

SCHULTZ: Well, I mean, you've got the secretary of health and human services saying that it's not an essential part. If it's not essential, what is?

GILES: I didn't hear that.

SCHULTZ: I mean, Ron, how are you going to re-warm the system if you don't have a pre-existing condition erased from the element that we're facing right now? And I'm out of time, we're going to have to answer that another time. That's the way it goes.

Earlier I asked our audience tonight what you thought. Will no public option mean a loss of support for President Obama? 88 percent of you said yes. 12 percent of you 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 our radio Web site at Wegoted.com. We'll have more with our panel tomorrow night as we do every night.

"HARDBALL WITH CHRIS MATTHEWS" starts right now here on MSNBC.

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