updated 8/19/2009 12:08:07 PM ET 2009-08-19T16:08:07

Guest: Linda Douglass, Barbara Lee, Roger Simon, Joe Klein, Earnest

Istook, Todd Webster, Ken Vogel, Paul Rinaldi

(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.

Tonight, we are clearing the air on public option.  Administration officials now insist the president has never distanced himself from the public option, despite what we‘ve been saying for the last couple of days.  Well, the communications director for the White House Office of Health Care Reform, Linda Douglass, will go head to head with me on that issue in just a moment.

Plus, the chairwoman of the Congressional Black Caucus is here.  She‘s got some sharp words for the secretary, and that is Kathleen Sebelius. 

I‘ve got a few words for her, too.

Madam Secretary, you‘re not in Kansas anymore.

“Joe the Plumber” is getting dumber by the minute.  Says he wants to beat the tar out of Nancy Pelosi?

Hey, Speaker, if the Secret Service needs some backup, just give me a call.

And at this hour, can you believe it?  Brett Favre comes out of retirement again.  The Minnesota Vikings are going to give him a one-year deal, $12 million contract.  I‘ll tell you what it means for the Vikings and those cheeseheads in Wisconsin, the Packer fans. 

That‘s all coming up in my “Playbook.”

And get your cell phones out.  We want a text survey tonight.  Here‘s the key issue—will the liberal revolt save a public option? 

Text “A” for yes and “B” for no to 622639.   

Now, we‘re going to get to my “OpEd” in just a minute.  But first, the White House‘s mixed messages on health care. 

Several White House officials are insisting nothing has changed on the public option.  Now, in my “OpEd” yesterday, I played a couple of sound clips of the president, one from last month, from a Saturday radio address, and then one from the weekend. 

You be the judge.  Here they are. 

(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:  Now, those are clearly two different positions on the public options.  But I want to let the White House have a chance here on THE ED SHOW, because I‘ve been critical of their communications, to stand up and be very explanatory on all of this. 

Joining me now is Linda Douglass, the White House communications director for the Office of Health Care Reform. 

Linda, good to have you on tonight. 

Will you tell us that you understand, or maybe you don‘t, I don‘t know, the confusion that has been out there with the conflicting sound bites that we‘ve gotten in recent days?  What about that? 

LINDA DOUGLASS, WHITE HOUSE OFFICE OF HEALTH REFORM:  I‘ve got to tell you, Ed, I don‘t think there was anything inconsistent in those two sound bites that you just played.  What the president said is that it is very, very important to have an insurance exchange. 

An insurance exchange is a marketplace for people who don‘t have health insurance, are underinsured, or may work for a small business.  Not the majority of people who have insurance from work already, but the group of people who need to have access to affordable health care options. 

And on that—and the reason we want that insurance exchange is it‘s going to lower costs, it‘s going to increase competition and choice.  Those are the goals.  That‘s the reason that the president likes the public option, because he thinks it would achieve those goals. 

Now, is that all of health reform?  No.  Health insurance reform is going to give you protections that you have whether you work for a big company, whether you‘re buying your insurance on the insurance exchange, from insurance regulations.  So, there‘s nothing inconsistent about these two things, Ed. 

SCHULTZ:  Linda, I have to challenge you on that, respectfully.  The president said that he would not sign a bill unless it had a public option.  Then he went on the stump and said that‘s just going to be a sliver of it. 

Now, is he or is he not going to demand a public option?  Because in that Saturday radio address a month ago, he said he would not sign a bill unless it had a public option.  Now, that‘s what he said. 

DOUGLASS:  Well, what he said was that he wants an insurance exchange which will have many choices available, and among those choices, a good idea is a public option for all the reasons I just explained—lowering costs and increasing choice in competition. 

SCHULTZ:  True. 

DOUGLASS:  The president—we‘re not going to negotiate with ourselves in public care. 

Ed, look, it is August.  Congress is in recess.  There‘s no legislation being written. 

What‘s happening now is a speculative conversation.  People are running around looking for tea leaves that they can examine.  But nothing has changed.  The president has always said he wants to lower costs, choice in competition.  Public option is a good way to do that. 

SCHULTZ:  Well, then why is it that the director of Health and Human Services had to backtrack on her comment?  She said over the weekend that a public option is not essential. 

This is what she said today to clarify. 

(BEGIN VIDEO CLIP)

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY:  Absolutely nothing has changed.  We continue to support the public option that will help lower costs, give American consumers more choice, and keep private insurers honest.  If people have other ideas about how to accomplish these goals, we‘ll look at those, too, but the public option is a very good way to do this. 

(END VIDEO CLIP)

SCHULTZ:  OK.  She‘s clear today, on a Tuesday.  But on Sunday, she even tried to say it was a slow news day and we were looking for something, but not essential. 

Not essential means it really doesn‘t matter whether it‘s going to be in there or not.  And it seems that the last 48 hours, the White House has been spending a lot of time trying to get the messages right.

And an NBC News poll that has come out tonight has got really the White House on the wrong side of the issue with the public.  Now, these are four real key elements here I want you to respond to. 

The NBC News poll shows that the American people believe that illegal immigrants are going to get coverage.  Fifty-five percent believe that.  Fifty-four percent believe that abortion is going to be funded.  Fifty-four percent believe that there‘s going to be a government takeover.  And 45 percent believe that death panels are going to be there for the elderly. 

I should point out, none of those are true.  So, obviously, the White House is not connecting with the American people. 

I need you to respond to that. 

DOUGLASS:  Well, Ed, you‘re absolutely right, none of those things is true.  And the White House has made a very clear message to the country that we understand that you need protections against unfair insurance practices.  We understand you need relief from rising costs, something that the public has been waiting for the government to act upon for 16 years.  We understand that your wages haven‘t gone up because your employer is now paying you in health benefits rather than paying you in wages.

(CROSSTALK) 

SCHULTZ:  Then Linda, how can—I‘ve got to interrupt you.  How in the world can you be winning the battle against the Republicans on health care reform when more than half the country believes, on four key elements, that are lies? 

DOUGLASS:  Well, you know, first of all, this is a poll.  It‘s a snapshot.  It‘s not—it‘s a moment in time when people are being buffeted back and forth between e-mails and claims that are going around. 

You know, Ed, that there‘s a lot of misinformation and disinformation out there. 

SCHULTZ:  True. 

DOUGLASS:  Intentionally false information that is being spewed out of computers, that is racing across the Internet to people.  So people occasionally get misinformation, but they‘re seeking the facts. 

They understand they need relief from these rising costs, they need relief from these unfair insurance practices.  And when Congress comes back in September, I guarantee you that members of Congress are going to have heard from their constituents and they‘re going to realize that inaction is just not an option. 

SCHULTZ:  Well, what they‘re telling their constituents, the Republicans, anyway, fearing them about illegal immigrants, fearing them about a government takeover.  That‘s part of the bullet plan that Luntz has put out.  Abortion funding, and also death panels.  Death panels has been in the news for two weeks.

When is the White House going to admit the president maybe better consider an Oval Office address to address all of these lies and really grab the attention of the American people?  Now, that‘s strategically something I think you‘ve got to think about.  But there‘s one more thing. 

You‘ve got Senator Conrad over in the Senate who is saying, you don‘t have the votes for a public option.  How are House members supposed to respond to that?  Now you‘ve got 60 House members signing on, if it doesn‘t have public option, we‘re not voting for it. 

You‘ve got disarray here of the Democratic Party.  And I think the leadership at the White House is failing right now. 

I need you to respond to all of that. 

DOUGLASS:  Well, like I said, Ed, it‘s August.  They‘re not in session.  Congress is not in session. 

No legislation being written.  Nobody‘s voting on anything.  No amendments have come up for consideration.  Talking about counting the votes is just not something that‘s happening right now. 

Four out of five committees have passed health reform legislation that is built upon the president‘s principles of lowering costs, expanding coverage, protecting you from insurance regulations.  We have one committee left.  That‘s the Senate Finance Committee, which Senator Conrad is a member.  They‘re still grappling with how they‘re going to do their bill. 

They‘re going to come back in September.  They will produce something.  And then both houses will vote on legislation.  But we are in a process now, and the process is not moving at the moment because there‘s a recess going on. 

SCHULTZ:  But there‘s also some serious signals being sent out there by the chairman of the Senate Budget Committee, who swings a big stick in all of this, Senator Conrad.  He‘s saying you don‘t have the votes in the Senate.  I mean, he is telling liberal Democrats who fought for Barack Obama that public option is not going to pass in the Senate. 

What‘s the White House response to that?  I mean, that‘s almost like dead on arrival. 

DOUGLASS:  Well, you know, every member of Congress has a view about which of these alternatives is going to win.  But the Democrats are much more unified than the picture that you‘re painting, I think, Ed...

SCHULTZ:  I hope so. 

DOUGLASS:  ... in wanting to coalesce around these principles of, again, lowering costs, expanding coverage, assuring quality, affordable options, choices, protections from the insurance industry.  I mean, the Democrats are absolutely united on these principles. 

SCHULTZ:  They‘re not. 

DOUGLASS:  There‘s agreement...

SCHULTZ:  I‘ve got to challenge you on that.  The Democrats are not united. 

You have a major division here in the Democratic Party.  The righties aren‘t causing this.  The Democrats—and they‘re breaking off into different factions here—they‘re causing this problem.  And the president can‘t seem to get all of his people on the same page after getting a mandate and winning nine Bush states.  And you‘ve got the liberal left in this country that is seriously considering dumping support for Obama. 

DOUGLASS:  Well, you know, it‘s pretty hard to make that conclusion when Congress is not in session and the members are scattered to the winds.  They‘re all around the country. 

And also, let me just point out to you that of the bills that have passed, there is agreement already on 80 percent of the pieces inside of the legislation that has already passed.  We are actually, Ed, closer than we have ever been to enacting health reform legislation. 

SCHULTZ:  I hope so. 

Finally, quickly, is the president considering an Oval Office address to the people to address these lies? 

DOUGLASS:  Well, Ed, I‘ll tell you what.  I‘m going to pass that suggestion on from you.  I promise.

SCHULTZ:  OK.  I appreciate that.

You know I‘m on your side, Linda.  I‘m passionate about this.  I know you‘ve got a tough job, but clearly there are some problems in Democratic messaging right now, and we‘ll obviously be visiting with you again.

Thanks so much for your time.

DOUGLASS:  Thanks for having me.

SCHULTZ:  You bet.

Now, over on the House side, there are 60 Democrats who have signed on to a letter to Kathleen Sebelius.  OK?  The secretary of Health and Human Services.  I mean, they have drawn their line in the sand over on the House side.

And one of them who has signed it is Congresswoman Barbara Lee, and she joins us tonight here on THE ED SHOW.

Congresswoman Lee, I appreciate your time.

Do you believe that the White House has got a problem with their messaging?

REP. BARBARA LEE (D), CALIFORNIA:  Well, let me say, I believe that the White House fully supports a public health option.  When I heard the secretary‘s comments, I immediately called the White House to clarify what the position was, because of course there are many of us who are insisting that there be not only a strong public health option, but a robust public health option very similar to Medicare in any legislation that leaves the House.

And so, I‘m confident that the White House is on board, that they‘re supportive of a public health option.  And of course the dynamic of negotiations are continuing, but I believe...

(CROSSTALK)

SCHULTZ:  Now Congresswoman, how‘s this for negotiations—you‘ve got Kent Conrad saying you don‘t have the votes in the Senate for the public option so that means no public option.  I mean, that‘s basically what that is.

LEE:  Let me just say, as a member of the House, you referenced the 60 members who signed the letter saying that it would be very difficult to vote for any bill.  And I don‘t think the votes are there in the House, which is where I am.

And the House is insisting on a very strong, robust public health option, because if we don‘t have a public health option, how in the world are we going to, as we say over and over again, make sure the insurance companies are honest?  How do we lower costs?  How do we ensure that...

SCHULTZ:  You can‘t. 

LEE:  ... that there‘s coverage for those with pre-existing conditions? 

SCHULTZ:  You can‘t. 

LEE:  I mean, how do we do that?

SCHULTZ:  Well, that‘s the confusion that progressives and liberals and Democrats across the country—that‘s the confusion right there.  What in the heck did they work their tail off for Obama if this is what they‘re going to get, not a public option? 

LEE:  But let me just say...

SCHULTZ:  Would you support—Congresswoman, would you support a co-op? 

LEE:  The co-op to me does not make any sense.  I support a strong public health option very similar to Medicare. 

And let me just say, there are many who are opposed to a public option who support Medicare.  And so, I believe the confusion, because there‘s so much yelling and screaming at each other at these town meetings, that that‘s what‘s driving this. 

If people would step back and listen and have an honest discourse about what‘s in these bills, they will see that if they support Medicare, how could they not support a strong public health option?  And so, this is about 47 million people who are uninsured. 

When you look at what is taking place with people lining up, thousands of people, to get health care coverage in America, the most powerful, the wealthiest country in the world, this is unconscionable.  And so we have to do something, and we have to do it this year.  So, I think that what‘s taking place in terms of this democratic process is healthy.  It‘s good. 

SCHULTZ:  Well, it‘s healthy...

LEE:  Let me just say, Ed, trust me, there are many of us, and I don‘t think the votes are going to be there in the House if, in fact, there‘s not a strong public health option in the bill. 

SCHULTZ:  OK.  And I will tell you this, just my opinion from talking to people on the radio and blog traffic and this show and everything else, if the Democrats can‘t deliver a public option, then what the White House strategy should be is no health care reform this year.  Force the Republicans to be the obstructionists and we‘ll see you at the midterm, and let the American people decide. 

Would you go along with that?  Quickly. 

LEE:  Let me tell you, Ed, my focus and I think the focus of all of us, at least all of our Democratic colleagues, is about getting a strong health care bill passed this year. 

SCHULTZ:  Well, the Republicans aren‘t going to let you do that. 

LEE:  Ed, we‘ve got to work through this.  We‘ve got to fight through this.  Millions of people each and every day are losing their jobs.

SCHULTZ:  I know that.  That‘s why I‘m passionate about it. 

You know, I speak for those $25 donors.  I speak for those people that don‘t have any insurance.  And I see the Democrats splitting apart on a number of different issues, and they‘re telling us, oh, gosh, this is so healthy, we‘re all working so hard on this.

LEE:  Ed, we‘re not...

SCHULTZ:  You‘ve got somebody over there saying that it‘s not going to work in the Senate. 

LEE:  Ed, we‘re not splitting apart.  As a member of the House, we‘re 90 percent there, trust me. 

SCHULTZ:  OK.

LEE:  We all are going to get something done.  We want a strong public health option.  We have to work very hard to get this done because...

SCHULTZ:  All right. 

LEE:  ... the insurance industry is pumping billions of dollars into trying to defeat this.

SCHULTZ:  Yes, they are.

Congresswoman, I‘ve got to go.

Congresswoman Lee, I really appreciate your time tonight.  And I know you‘re on the correct side of the issue, and I appreciate it very much.  Thanks so much. 

LEE:  Thank you. 

SCHULTZ:  Remember, when Hillary Clinton warned us about Barack Obama, that you campaign in poetry but you govern in prose?  Was she right? 

Obama‘s got himself between a rock and a hard spot on the public option, and it‘s time for him to step up.  Politico‘s Roger Simon wrote a heck of an article on this.  He joins me next on THE ED SHOW.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES:  I‘m not running because I think this is somehow (INAUDIBLE), because I think it‘s my turn.  I‘m running because of what Dr. Martin Luther King called “the fierce urgency of now.”  See, I don‘t want to wake up four years from now and find out that millions of people still don‘t have health insurance because we couldn‘t take on the insurance business. 

(END VIDEO CLIP)

SCHULTZ:  Well, welcome back to THE ED SHOW.

That was President Obama on the campaign trail back in 2007 telling us why he wanted to be president, talking tough on health care.  But does he have the guts to see it through? 

I have to play devil‘s advocate.  We have to ask the tough questions. 

It seems to me he‘s losing his nerve a little bit.  He can‘t draw a line in the sand.  That troubles me. 

Now, during the primary fight last year, Hillary Clinton told us Obama didn‘t have the strength to get the tough stuff done.  Was she correct? 

Roger Simon, chief political correspondent for Politico, wrote a column about this today.  You can get it at Politico.com.  Roger joins us tonight. 

Your message clearly here is a wake-up call that we might not get health care reform this year unless the president kicks it into high gear.  Roger, at least that‘s what I took from your writing today. 

Was that your message? 

ROGER SIMON, CHIEF POLITICAL CORRESPONDENT, POLITICO.COM:  Yes, I think that‘s absolutely right, Ed.  You know, there‘s an old saying, if you don‘t stand for something, you‘ll fall for anything.  And I think the president is in danger of not really standing for what he believes in on health care. 

I think deep down he believes in the public option.  He believes that‘s the only way to contain costs and to cover all Americans.  But now he‘s got to do the unpleasant thing. 

He‘s got to show the guts to fight for it, even at the risk of lose some support, some Republican support, even some support in his own party. 

I mean, he got elected, the Democrats got elected for a reason.  They won the presidency.  They won the Senate.  They won the House. 

You know, they believe that government is not evil, that it can be used for good.  Well, now is the time to show it. 

Now, if he doesn‘t show it now, I don‘t think he‘s going to get a chance to show it in the next three years. 

SCHULTZ:  Some of these numbers in this NBC poll are pretty troubling for the White House, I think.  Half the country‘s believing four major lies. 

So, what do you think the president has to do right now, Roger? 

SIMON:  I think he has to draw his lines in the sand.  I think he has to say, look, we have listened, we have compromised, we have, as we‘ve been saying—gotten 80 percent of what we want through compromise.  But now is the time for Democrats and all those Republicans who want to go along to accept that a public option is the only way to contain costs, it‘s the only way to cover Americans, it‘s the only way to have genuine health care reform, and this is what I‘m going to pursue. 

SCHULTZ:  Reconciliation?  Do you think that‘s where the president should go?  Because he doesn‘t hive the 60, but he might have the 50.  What do you think? 

SIMON:  I think if he needs to go to the 50 he goes to the 50.  But I‘ve also got to point out something. 

Kent Conrad is not the majority whip in the Senate.  He‘s not the guy who counts votes. 

Dick Durbin is the majority whip in the Senate.  When Dick Durbin goes on TV and says there‘s not 60 votes, then I‘ll believe it. 

We don‘t know how many votes there are in the Senate today.  But if the Democrats have to do this with just 50 votes, and let Vice President Biden break the tie, then it‘s worth it.  Health care is a very big deal...

SCHULTZ:  You bet.

SIMON:  ... not just for political purposes, but for the country.  I mean, they were elected to do good things and big things.  This is their chance. 

SCHULTZ:  And there‘s no doubt if the administration, the president doesn‘t pull the trigger on reconciliation, there‘s going to be a lot of Americans that are going to suffer longer throughout all of this health care crisis. 

What happens, in your opinion, Roger, if they don‘t get something passed this year? 

SIMON:  I think if they don‘t get it passed this year, they don‘t get it passed.  Not in Obama‘s first term, anyway. 

The president may never be stronger than he is now.  I mean, right now he‘s got a 78-seat majority in the House.  He‘s got a 20-seat majority in the Senate.  He‘s got approval ratings in the low 50s.  That‘s not terrible. 

You know, if he doesn‘t use that, if he doesn‘t spend his political capital on his major campaign promise, then what is he going to spend it on? 

SCHULTZ:  You‘ve got to strike when the iron‘s hot, no doubt about it. 

SIMON:  You‘ve got to strike when the iron‘s hot, you‘ve got to stand for something.  And Americans want him to stand for something. 

SCHULTZ:  Roger Simon, good to have you with us tonight. 

Chief political correspondent for Politico.

SIMON:  Thanks, Ed.

SCHULTZ:  Great article at Politico.com. 

Next up on THE ED SHOW, Speaker Pelosi, look out.  “Joe the Plumber” says he‘d like to take you behind the woodshed.  Whatever that means. 

Hey, Joe, say that to some tough guys, not just the Speaker of the House. 

That‘s coming up next in “Psycho Talk,” right here on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ:  In tonight‘s “Psycho Talk,” security, take notice.  “Joe the Plumber” gets dumber and dumber by the minute. 

He‘s not smart enough to have an intelligent political debate with anybody, so he‘s acting like a schoolyard bully, physically threatening people he disagrees with like Nancy Pelosi. 

(BEGIN VIDEO CLIP)

JOE WURZELBACHER, “JOE THE PLUMBER”:  When Pelosi and all those others talk about it being un-American and disrespectful, I tell you what, I respect nobody who lies to me and manipulates me, and takes my money, puts my children in debt.  They want me to be respectful towards them?  Please. 

(APPLAUSE)

I‘m not the most civilized person.  Those kind of people I usually took behind the woodshed and just beat the living tar out of them.  I don‘t like being lied to. 

(END VIDEO CLIP)

SCHULTZ:  Beat the living tar out of them.  That kind of talk is dangerous, especially at a time when hate speech and militia activity are on the rise in this country. 

In an interview after the speech, Joe claimed he wasn‘t advocating violence.  But then he repeated the threat. 

(BEGIN AUDIO CLIP)

WURZELBACHER:  And I don‘t advocate violence.  However, that being said, Congress has been lying to us for years.  They take advantage of us.  They manipulate us.  And years ago, people like that would have been taken behind the woodshed and slapped upside the head a couple of times. 

(END VIDEO CLIP)

SCHULTZ:  And this guy goes up on the stump with Republican candidates. 

Republicans ought to be ashamed of themselves for listening to this guy.  He has no knowledge of the issues, so he‘s resorting to cowardly threats, promoting physical violence against the Speaker of the House. 

That‘s some seriously dangerous “Psycho Talk.”  

Coming up on THE ED SHOW at the bottom of the hour, NBC News has an exclusive new poll strictly, strictly on health care.  We‘ll break it wide open and see what kind of damage the right wing town hall crazies have done. 

Plus, he‘s back.  Again? 

Brett Favre just picked up by the Minnesota Vikings.  The fans stormed the complex today and a former all-pro says that he‘ll be starting in the exhibition season by this Friday night. 

That‘s coming up in my “Playbook.”

Stay with us.  You‘re watching THE ED SHOW on MSNBC.

Oh, that‘s got to hurt!

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  What we have here is a failure to communicate.  The White House is losing the message war on health care.  At least that‘s what the numbers indicate.  Take a look at the new NBC News poll numbers: 42 percent say President Obama, his plan is a bad idea; 36 percent say it‘s a good idea; 22 percent have no opinion or aren‘t sure. 

And support for a public option has fallen.  Last month, 46 percent favored it; now 43 percent favor it; 47 percent oppose it; 10 percent aren‘t sure.  Now, I know these numbers are disheartening.  But consider this: the right has played every scare tactic they have.  They‘re talking about forced euthanasia.  But people are basically split on a public option. 

We haven‘t lost this thing yet.  There are some more bright spots out there.  I think this is a key number: 91 percent of people say they want some kind of reform; 60 percent of those people say that the reform should be major or a complete overhaul. 

That‘s a high number.  The Republicans are quick to point out that the president slipped in the polls.  Let‘s see how the campaign of obstruction is playing with voters; 62 percent, almost two-thirds of Americans, say they disapprove of how Republicans are handling the health care reform.  How about the right wing campaign to disrupt Democrat town halls on health care?  Well, 78 percent say that the town hall protesters have had no impact on their views or had the opposite effect, made them feel more positively about the Democrats‘ plan. 

For more, let me bring in “Time Magazine‘s” Joe Klein.  Mr. Klein, you‘ve been around this I think a few decades. 

JOE KLEIN, “TIME MAGAZINE”:  A few decades.

SCHULTZ:  Have you seen anything like—

KLEIN:  That‘s charitable. 

SCHULTZ:  We are charitable.  Have you seen anything like this?  I mean, it looks to me like the Republicans are making inroads with the public on lies, instead of something that they want to stand for. 

KLEIN:  One thing is clear, all the things—issues that the extremist Republicans have raised, like death panels and so on, none of that is actually in the bill.  They haven‘t raised an argument about anything that actually is in the bill.  So, I mean, this has been a classic, historic campaign of misinformation. 

And the party—the Republican party has become an almost totally negative force in this country.  It‘s the first time I think it‘s ever really happened historically.  If you look back to 1993-‘94, when I covered Clinton health care, the Republicans came up with an alternative plan, Senator John Chafee, that I thought was superior to Hillary Clinton‘s plan.  It was a universal health care plan. 

This time, they‘ve come up with nothing, zip, nada. 

SCHULTZ:  If you look back at the Clinton effort, and now the Obama effort, are there similarities when it comes to being behind at this stage of the game? 

KLEIN:  Well, the Clinton plan was pretty much dead by this point.  I mean, there was no chance of it clearing the Senate Finance Committee.  There‘s a very good chance that this plan, or something, will clear the Senate Finance Committee. 

I would say there‘s an 80 to 90 percent chance that you‘re going to have something significant, that‘s called health care reform by the end of this year.  It will be insurance company reform, so that they have to cover everybody and can‘t drop people—

SCHULTZ:  That‘s a big one right there. 

KLEIN:  That‘s very big. 

SCHULTZ:  You mean, you think that insurance companies are going to cave and say, OK, no more pre-existing conditions? 

KLEIN:  I would like to see Republicans vote against that.  Because that—there‘s near unanimity in the public that this—that insurance companies have been running this system into the ground.  So you‘re going to get that. 

You‘re going to get these health care exchanges, which are absolutely crucial.  That gives individuals who don‘t have health care now, who just buy it by themselves, the market power that big companies have.  And it‘s going to open the door to greater changes down the road.  It will lower the price of health care for small businesses, which is very, very important. 

And the third big thing that you‘re going to have is some kind of an expansion of the number of people covered.  Maybe it will go to the parents of children who are on the state health care plans.  Whatever. 

SCHULTZ:  But you‘ve got Chuck Grassley, you‘ve got Max Baucus, and John Kyl, three big Republicans.  Now they‘re saying that—

KLEIN:  Baucus is a Democrat. 

SCHULTZ:  Well, he‘s acting like a Republican.  He‘s chairman of the Senate Finance Committee.  But he is quick to cave.  He wouldn‘t even let single payer at the table.  And of course public option, he‘s thrown that under the bus. 

KLEIN:  Single payer wasn‘t going to happen this year.

SCHULTZ:  They were never at the table.  He took that bargaining chip off the table.  That‘s what bothered me.  He started at his bottom line.

KLEIN:  The public option is peripheral to the really important stuff here. 

SCHULTZ:  It‘s not.  I respectfully disagree, because the public has been sold on this, everybody covered. 

KLEIN:  I‘ve been covering this stuff for 20 years.  You can have universal health insurance without a public option.  What does a public option do?  It gives bargaining power to the public against the insurance companies.  That is precisely what the health insurance exchanges are going to do.  You‘re going to have the market discipline of big pools of individuals and small businesses negotiating as a group against the insurance companies, which will bring prices down. 

SCHULTZ:  But Joe, here‘s what Democrats expected: they expected a government-run program that they could opt into if they wanted to.  They didn‘t have to buy it.  They still have choice—

KLEIN:  There was never—even the public option that existed was only for individuals who do not have health insurance now. 

SCHULTZ:  I can guarantee you that liberals out there that supported Barack Obama expected a public option that would be run by the government. 

KLEIN:  They were every bit as misinformed as people who think there are death panels. 

SCHULTZ:  So the co-op; you‘ve got the three senators I mentioned. 

Now they‘re wavering on the co-op. 

KLEIN:  Co-op is also peripheral.  The important thing are the exchanges.  The exchanges are like these health care super stores, where you go as an individual, you buy in, and you join all these other individuals and negotiate en masse with the insurance company.  It brings down prices. 

SCHULTZ:  So exchanges will get everybody covered, no pre-existing conditions—

KLEIN:  If they don‘t get into this bill, then the bill is a failure. 

SCHULTZ:  Finally, the line in the sand for Obama, where is it? 

KLEIN:  The line in the sand I think is insurance—insurance reform.  I think it is you—the insurance companies have to cover everybody at community rates.  I think the exchanges are absolutely crucial.  And expanding the pool.  If you get those three things, you‘re going to have the best year of health care reform since Medicare was passed. 

SCHULTZ:  I hope you‘re right.  I hope you‘re right.  Joe Klein, great to have you on tonight.  Thanks so much. 

Let‘s go to our panel.  Democratic strategist Todd Webster with us.  “Politico” reporter Ken Vogel.  And also former Congressman Earnest Istook, who is a distinguished fellow at the Heritage Foundation.

Todd, how different would it be—OK, I guess we just lost the signal to Todd Webster.  Another communication problem.  He‘s the former Democratic worker in the Daschle administration, in his office.  Ken, let me ask you tonight; White House backing—they‘re backtracking.  Or what are they doing?  I mean, are you clear that where the White House stands, and do you think their messaging has been spot-on? 

KEN VOGEL, “POLITICO”:  I don‘t think their message is has been spot-on.  I do think, however, that this floating of a trial balloon on the public option possibly taking off the table was a very purposeful effort to see how that would affect Congressional support, public support for the plan as a whole.  However, I think it‘s a bad sign that they—signal that they were willing to make this concession this early in the game. 

I think that regardless of how Secretary Sebelius tries to recast it or regardless of what Joe Klein says, many people viewed it as not just an essential part of this, but the essential part of the plan.  So the fact that they‘re willing to offer it up now I think does not bode well for them going forward. 

SCHULTZ:  Todd Webster, what about the comment that Kathleen Sebelius made about not essential, and then having to backtrack on that today?  In fact, the White House has spent the last 48 hours trying to straighten the public out on public option.  You know, you were communications director for Senator Daschle.  How big of a problem is this? 

TODD WEBSTER, DEMOCRATIC STRATEGIST:  I think the public option is essential.  I think for a messaging perspective, the question you need to ask these members of Congress who are opposed to the public option is, you‘re a member of Congress; you enjoy the public option; your health care is the public option—it‘s subsidized.  It‘s paid for by the taxpayers.  If it‘s good enough for you, why shouldn‘t it be good enough for your constituents? 

That‘s the question that should be asked to any member of Congress, or maybe even Congressman Istook.  His former constituents in Oklahoma, whether they ought to be entitled to the same public option of health care he received for 16 years. 

SCHULTZ:  All right, Mr. Istook, I‘ll let you respond to that.  Todd Webster asking the question, go ahead. 

EARNEST ISTOOK, FORMER CONGRESSMAN:  We‘re talking about totally different things.  What he‘s calling, quote, a public option is not that case.  It‘s the Federal Employees Health Benefits plan, which is the opportunity to choose which of the private companies you want to buy your coverage through.  It‘s not an option to buy something into a plan that‘s run by the government, that‘s subsidized by the government, and that‘s controlled.  It‘s just the government gives you the opportunity to choose from a variety of different private plans.  And that‘s a pretty good option. 

SCHULTZ:  That‘s the same plans that the Congressional members have.  And if you can‘t afford it, you would be able to get a subsidy that would help you pay for that.  Would you support that?  I would think you probably wouldn‘t.  But it seems to me right now, Mr. Istook, that Republicans seem to be against everything.  They just want to see Obama fail on this.  Your thoughts? 

ISTOOK:  Actually, I think there‘s some really bad information that Joe Klein and you were putting out awhile ago, claiming that Republicans don‘t have plans.  Look at the things that have been put out by Dr. Tom Price, by Dr. Tom Coburn, by Eric Cantor.  There‘s a lot of Republican options that have been put on the table.  It‘s just they‘re not getting the attention because Republicans are not in the majority and the president is dominating the communication.  Except, of course, for the people who show up at the town hall meetings. 

SCHULTZ:  All right.  We‘ll get back to this subject in just a moment with our panel. 

Coming up, Brett Favre storms Minnesota.  The Vikings just inked him to a one-year, 12 million dollar deal.  I‘ll bring you the latest on number four up next in my playbook.  And more panel discussion.   Stay with us right here on THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ:  Who‘s to blame for the crash over the Hudson River between a small plane and a helicopter?  The National Transportation Safety Board says that an air traffic controller failed to warn the pilot of the plane that there was traffic ahead.  The Federal Aviation Administration says that the controller was on a personal call right before the accident happened. 

But the National Air Traffic Controllers Association says the crash was not the controller‘s fault.  They point to a detail that‘s in the NTSB report, the helicopter wasn‘t on Teterboro‘s radar screen until seven seconds after the plane‘s pilot was told to contact Newark Airport. 

Let me bring in Paul Rinaldi.  He‘s the executive vice president of the National Air Traffic Controllers Association.  Good to have you on tonight.  What do you take issue with in the NTSB report?  What are they wrong in stating, in your opinion? 

PAUL RINALDI, EXECUTIVE VICE PRESIDENT, NATLA:  First of all, thanks for having us on.  On behalf of the air traffic family, we‘d like to express the sorrow and grief that goes to the families that lost their loved ones in this event, in this tragic event. 

What we take offense to with the NTSB is that they made a statement that made it seem like the air traffic controller had an opportunity to prevent this from happening.  And that‘s the furthest thing from the truth. 

SCHULTZ:  Things were happening so fast that that helicopter had just gotten into the air and there was no time for communication? 

RINALDI:  There was no opportunity for this controller to alert the pilot that there was traffic, that this helicopter was ahead, and possible danger. 

SCHULTZ:  OK.  So once that air traffic controller passed that pilot of that small plane off to Newark, it was over for the Teterboro control tower; is that what you‘re saying? 

RINALDI:  That is correct.  That is correct.  And the radar data shows seven seconds.  There was a split seven-second pop-up of that helicopter.  And then unfortunately, those two collided. 

SCHULTZ:  Paul, there‘s a lot of Americans wondering why was this controller in Teterboro on a cell phone? 

RINALDI:  I don‘t think he was on a cell phone.  I think he was multi-tasking, like most controllers do, making phone calls to the airport operations, listening to his frequency over a headset, making data entries.  We multi-task all day long, and do our job very well.  And we take safety as a top priority.  It is near and dear to our hearts. 

SCHULTZ:  But it was reported that he was on a personal phone call. 

Was he doing business or was it personal? 

RINALDI:  From what I saw, I‘m pretty sure it was with an airport operations on an incident that is going on in the airport. 

SCHULTZ:  So it was not a personal phone call?    

RINALDI:  I think the dialogue could have been misconstrued as personal. 

SCHULTZ:  And it was business? 

RINALDI:  The phone call was part of business, yes.

SCHULTZ:  And is it standard, normal procedure for air traffic controllers to have cell phones in the control tower? 

RINALDI:  Well, they‘re not supposed to be in the control tower and I don‘t think he was on the cell phone, Ed.  I think he was on a recorded line, is what he was doing, talking to an airport worker about a situation that was going on. 

SCHULTZ:  OK.  And I know that you guys are over-worked.  I know that you need equipment and you need manpower.  Is this something that could have been avoided had all the things you‘ve been talking about in recent years been addressed? 

RINALDI:  Well, we appreciate when the NTSB accepts us as party status in these investigations, to determine what the root cause of these accidents are.  Unfortunately, they put out something that was erroneous, which really has created this media hype now.  We want to get down to the root cause of what happened here. 

SCHULTZ:  Sure. 

RINALDI:  So we make sure this never, ever happens again.  I mean, that is the goal of the air traffic controllers. 

SCHULTZ:  Paul Rinaldi, good to have you with us tonight.  Appreciate it so much, executive director of the National Air Traffic Controllers here on THE ED SHOW.

One last page in my playbook tonight.  Looks like Brett Favre is going to be giving football one more try.  Coming out of retirement for the second time—third time, fourth time, I‘m losing count.  Anyway, he‘s signed a big deal.  He‘s signed a two year, 25 million dollar deal with the Minnesota Vikings. 

Just three weeks ago, he said he was going to retire.  Instead, Favre back with the Vikings.  He‘s going to be in uniform this weekend.  He is going to be playing.  He arrived in St. Paul earlier and was greeted by Vikings Coach Brad Childress and a pack of pumped-up fans.  A few hours later, he was put out on the practice field. 

Now Favre had some problems lately.  He faded big-time at the end of the season.  And the Jets fans are saying, this guy can‘t play in cold weather.  So we‘ll find out what he can do with the Minnesota Vikings.  It will be very interesting. 

Here‘s what he had to say.  No sound, OK. 

Coming up, more of our NBC poll.  A shocking number of you believe the myth that health care reform is going to lead to death panels for the elderly.  Folks, you‘ve got to start considering the source and stop believing the lies.  We‘ll put it to our panel next on THE ED SHOW.  stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  We know the right wing is spreading lies about health care.  And our new NBC News poll shows the lies are sinking in.  More than half of people believe reform will cover illegal immigrants, use taxpayer money for abortion, and lead to a government takeover of health care; 45 percent believe it will lead to death panels. 

Let me bring back our panel, Todd Webster, Ken Vogel, and former Congressman Earnest Istook.  Mr. Istook, I‘ve got to follow up on what you said.  You said the Republicans had a plan.  I do believe we had eight years of President Bush.  He told us to get a health care savings account.  Now, all of a sudden, the public is supposed to believe the Republicans are genuine about health care reform?  I need you to respond to that. 

ISTOOK:  Well, don‘t spread a lie and claim that Republicans don‘t have any plans. 

SCHULTZ:  They don‘t.  Their plan is the tax cut. 

ISTOOK:  Read Senator Coburn‘s plan.  Read Representative Price‘s plan.  Read Representative Cantor‘s plan.  You may not like them—

SCHULTZ:  Where were they during the eight years of the Bush administration? 

ISTOOK:  I thought we were talking about today. 

SCHULTZ:  Where were these gentlemen during the eight years of the Bush administration? 

ISTOOK:  They‘re putting forth ideas.  For example, medical savings accounts have been a big success. 

SCHULTZ:  Oh, please. 

ISTOOK:  Obama should not be trying to do away with them. 

SCHULTZ:  Let me tell you about that premiums, Mr. Istook.  They are out of control for the middle class in this country.  We‘ve got more people without insurance than ever before. 

ISTOOK:  Spending is out of control, Ed. 

SCHULTZ:  Pardon me?

ISTOOK:  Spending is out of control.

SCHULTZ:  Well, you did that.  You invaded Iraq.  I agree with you on this.  The NBC News polls says this; immigrants, 55 percent of illegals are going to get health care.  Todd Webster, how can so many people believe a lie?  There‘s got to be a messaging problem here. 

WEBSTER:  I think you‘ve got the medical industrial complex teaming up with the Republican Astroturf groups to spread this misinformation.  They have billion dollar marketing budgets to convince Americans that feces tastes like ice cream.  This is what we ought to expect from them. 

What the Democrats need to do, what the administration needs to do is, as you‘ve said, grab hold of this, show some leadership, have a town hall meeting.  This is a campaign, an organization that mobilized millions of people, won 52 percent or 54 percent of the electorate.  They can do it again. 

SCHULTZ:  Ken Vogel, whatever the White House is doing, it isn‘t working. 

VOGEL:  What the White House clearly wanted to do, which would have prevented a lot of this misinformation from really taking hold, was to pass something through both chambers before the recess.  Once you get into the recess, you kind of lose control of it.  It gets out there.  To the extent that people are paying attention, they‘re paying attention to some of the salacious scare tactics that are being promoted successfully by some of the opponents to this plan.  And the White House is unable to counter it.  They can‘t grab the news cycle back. 

SCHULTZ:  They can‘t grab the news cycle, because they‘re not saying the same thing.  Mr. Istook, I tell you what, you‘re going to get a special invite to go one on one with me here.  I think we‘ve got some differences. 

ISTOOK:  That would be great. 

SCHULTZ:  I appreciate you gentlemen being here tonight. 

Earlier in the show, I asked you about the liberal revolt, will it save the public option; 85 percent of you yes, 15 percent say no.  We‘re back tomorrow night.  “HARDBALL” with Chris Matthews is next.  Have a great one.

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

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