updated 9/10/2009 11:47:13 AM ET 2009-09-10T15:47:13

Guests: David Axelrod, Barbara Boxer, Barney Frank

RACHEL MADDOW, HOST:  Good evening, Keith.  Thank you very much for that and thank you at home for staying with us for the next hour. 

White House adviser David Axelrod will be joining us in just a moment, as will Senator Barbara Boxer.  She‘ll be joining us, as will Congressman Barney Frank, as will Chris Hayes from “The Nation.” 

I am here, as you can see by the big building behind me, I‘m here in Washington on the occasion of the president‘s big health care speech.  We are anticipating a very busy studio here.  It‘s all coming up this hour.  This is going to be a great show. 

We begin tonight with what has become almost a ritual for U.S. presidents.  A little over an hour ago, President Obama addressed a joint session of Congress and millions of Americans watching across the country to speak the words that many presidents before him have spoken in one form or another. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  We did not come here just to clean up crises.  We came here to build a future.  So. 

(APPLAUSE)

OBAMA:  So tonight I return to speak to all of you about an issue that is central to that future, and that is the issue of health care.  I am not the first president to take up this cause, but I am determined to be the last. 

(END VIDEO CLIP)

MADDOW:  The president also tonight delivered a message specifically to the left, a message that his preference for uninsured Americans to have a publicly run insurance option should not be confused with a conviction that we really need that sort of thing. 

(BEGIN VIDEO CLIP)

OBAMA:  It‘s worth noting that a strong majority of Americans still favor a public insurance option of the sort I propose tonight.  But its impact shouldn‘t be exaggerated by the left or the right or the media.  It is only one part of my plan, and shouldn‘t be used as a handy excuse for the usual Washington ideological battles. 

To my progressive friends, I would remind you that for decades the driving idea behind reform has been to end insurance company abuses and make coverage available for those without it. 

(APPLAUSE)

OBAMA:  The public option—the public option is only a means to that end. 

And we should remain open to other ideas that accomplish our ultimate goal. 

(END VIDEO CLIP)

MADDOW:  Back in 1948, it was President Harry Truman who pushed for a national health program from the same spot that was occupied by President Obama tonight.  In 1962 was John F. Kennedy.  He took his case before a crowd of 20,000 people at Madison Square Garden in New York City. 

President Clinton convened a joint session of Congress in 1993, eight months into his own presidency.  The first year of his own presidency. 

It‘s a bully pulpit.  It‘s available to U.S. presidents in a way that‘s not really available to anyone else in this country, the impassioned speech, the undivided attention of Congress and the American people. 

All of these presidents who have used that bully pulpit for health care reform have one other thing in common—none of them were successful in the end.  Not Truman, not JFK, not Clinton.  Only one president has taken on this cause and really won in the past 60 years.  Only one has had success was Lyndon Johnson, who signed Medicare into law in 1965. 

And Lyndon Johnson‘s success, the last major progress we have had on health care in this country, it isn‘t remembered for its soaring speeches.  It‘s remembered for years of hard, legislative slogging, grabbing lapels, getting into the trenches, personally leaning on senators and recalcitrant House committee chairmen until they squeaked. 

Ultimately, one by one, wrangling the votes in Congress that were needed. 

What we witnessed tonight is part of what it means to fight for health reform in this country.  And right now is, as the president said, as close as we‘ve been to getting something passed since Lyndon Johnson got Medicare passed 40 years ago. 

As the president said, four of the five committees with jurisdictions here have passed something.  The president‘s committed to reform.  His party‘s got more than 70-seat majority in the House and 60 seats in the United States Senate.  We have not been this close to health care reform in decades. 

So the question tonight, after this historic but not unprecedented speech, is what happens next? 

President Obama says he‘s determined to be the last president to have to take this on.  He is determined to fix it finally after decades of trying.  Does that mean he‘s willing to get into the trenches to cajole and wrangle and personally manhandle this through?  Not only with members of his own party but with an opposition willing to be neither truthful nor respectful when it serves them? 

(BEGIN VIDEO CLIP)

OBAMA:  There are also those who claim that our reform efforts would insure illegal immigrants.  This, too, is false.  The reform—the reform I am proposing would not apply to those who are here illegally. 

REP. JOE WILSON ®, SOUTH CAROLINA:  That‘s a lie. 

OBAMA:  You lie. 

(END VIDEO CLIP)

MADDOW:  Congressman Joe Wilson of South Carolina there, Republican congressman.  There calling the president of the United States a liar, despite the provision in Article 246 of HR 3200, the proposed health care bill from the House, which says specifically that those living in the U.S.  illegally are not covered and would not be covered by the affordability credits in the plan. 

But never let the truth get in the way of an opportunity for a good scream, right? 

Well, that‘s part of what President Obama is facing.  It‘s what he does next that will determine whether we get health reform in the next 40 days or whether we should settle in to wait another 40 years. 

Taken at his word, this president does appear to be determined. 

(BEGIN VIDEO CLIP)

OBAMA:  The time for bickering is over.  The time for games has passed.  Now is the season for action.  Now is when we must bring the best ideas of both parties together and show the American people that we can still do what we were sent here to do.  Now is the time to deliver on health care. 

(END VIDEO CLIP)

MADDOW:  Joining us now from the U.S. Capitol is White House senior adviser David Axelrod. 

Mr. Axelrod, I know it‘s been a very busy night for you.  Thanks for taking time to join us. 

DAVID AXELROD, SENIOR ADVISER TO PRESIDENT OBAMA:  Good to be here, Rachel. 

Thanks for having me. 

MADDOW:  Let me first ask you about something I would never have expected to be asking you about.  Unexpected moment in the speech tonight when the AP says it was Republican congressman Joe Wilson of South Carolina who interrupted the president‘s speech to scream, “You lie,” at him. 

Was that an unanticipated microcosm of the character of the health care debate so far? 

AXELROD:  Well, it was certainly unexpected moment, and, you know, I‘ll let Congressman Wilson describe what he had in mind there.  I had never seen it before in a presidential address.  And it was unfortunate. 

But I think the president soldiered on.  He was undeterred by that.  And I think most people in the room got the fact of what he was saying is that they have a mutual responsibility to deal with a very significant problem that is crushing families and businesses and government itself, and that has to be dealt with. 

And at long last, we have the opportunity to do it and people ought to join in here and step up.  I thought the ending of that speech was particularly moving in that regard.  So, apparently, didn‘t imbue Congressman Wilson with the spirit of cooperation but perhaps others were moved. 

MADDOW:  The president moved on tonight from describing the need for health care reform, which is something he has spoken about quite a bit in the past, to specifically talking about what kind of health care reform he wants. 

And he defended the public health insurance option.  But then he criticized who he described as his progressive friends for investing the public option with too much importance. 

As we look ahead to what happens next, does that sort of dual message on the public option tonight from the president tonight mean that he is going to fight for the public option to be in the bill, or does he see it as expendable? 

AXELROD:  Well, he believes in the public option, Rachel, and he thinks it should be in the bill and he will fight to put it in the bill because he wants competition and choice in markets where there are none.  He feels that competition and choice is the best answer to these huge leaps in prices, to the abuse of patients and customers within the insurance system. 

So he‘s going to fight for it.  And I think his point is this, though, if we can pass a bill that brings long awaited insurance reforms to people who need them, most of the people in the country have insurance.  This would help them greatly.  And help those who can‘t—who don‘t have insurance today get it at a price they can afford, and also reduce the overall cost of the system. 

That would be a historic achievement.  That is our goal.  That is what we‘re pointing to.  And we ought not to make one individual element of that entire program so important that it dwarfs this greater goal. 

MADDOW:  I think part of the reason that progressives have imbued the idea of the public option with so much importance is because of the fear that there will be a mandate without serious reform, that attempts to regulate the insurance industry won‘t be effective. 

And when the president moves from his position during the campaign, which is that he was against individual mandates, to being for individual mandates now, I think there is concern that regulations of the insurance industry won‘t make insurance less junkie, less resented as it is now, and that we‘ll all be forced to buy something that actually isn‘t very good, that‘ll just pad the insurance companies‘ pockets. 

Is there sequencing there?  Is there a guarantee that the reforms work before individuals are forced to buy coverage? 

AXELROD:  Well, there—no individual is going to be forced to buy coverage.  There‘s going to be—in the sense that there‘s going to be a hardship exemption, if they don‘t want to buy coverage.  It‘s also a fact that when people don‘t buy coverage and then get sick or seriously injured, then it is the burden for the rest of us. 

So what he said is everybody has to have a responsibility.  But our goal is to make sure that the insurance system works better for everybody, people who have it and people who don‘t have it and will have it.  And we believe that these insurance reforms can and will work. 

And I think there‘s a broad consensus that they can and will work, but, Rachel, we will—this whole system is going to be phased in over a period of time, and obviously, if things are not working for consumers, then we‘re going to make adjustments. 

The whole goal here is to bring security and stability to people and they don‘t have it today.  They can be dumped if they get sick.  That happens all the time.  If they have a pre-existing condition, they don‘t get insurance.  That‘s standard policy of the insurance industry. 

Out-of-pocket costs, you know, the largest single cause of bankruptcy, personal bankruptcy, are health related issues.  So if you tap out-of-pocket costs, you can stop that.  And there is an incentive for the insurance industry to go along and not try and fight these reforms, and that is that there‘s going to be a larger insurance market. 

And they have to make that calculation but we‘re prepared to do it easy or do it hard.  We want to make it work for consumers. 

MADDOW:  Earlier today, including on MSNBC, you said that the public option should be expected to pass in some forms, some form of the public option could survive in final legislation. 

How many different forms does it come in?  What exactly do you mean by that?  And I ask because I think that a lot of the president‘s supporters are trying to decide how strongly they‘re going to get behind what he‘s pushing for and whether it really does embody the real transformative change, the real challenge to the insurance companies that we hope we‘ve been promised. 

AXELROD:  Well, I think this—there are a number of aspects of this that represent a direct challenge to the hegemony of the insurance companies and those who reduce it to simply this issue I think have not—did not listen to the president closely and aren‘t paying enough attention. 

We all share a goal, and the goal is to make this system work for the American people, not just the insurance companies.  And that‘s what we‘re going to do.  What I said is I believe that they‘ll be some sort of public option in the final legislation, whether it comes with a trigger or not, I don‘t know.  There are some who are pushing that.  Others not.  We‘ll see. 

But what the president said tonight and I agree with him, is this cannot be the sum total of the debate.  We have to get the insurance reforms, we have to create the exchange, we have to do a series of things that are going to make things bet are for—for consumers.  And if we have the chance to do that and get to the point where we‘re covering virtually everyone in this country, that is an advance worth making. 

MADDOW:  I know that we are just about out of time.  I just have to ask you briefly if we should expect that the president is going to do things in terms of working with Congress from this point forward that he hasn‘t done yet.  Is he going to be more in the trenches, more involved in what actually gets moved through Congress? 

AXELROD:  Well, I think we‘re in the final phases here, Rachel.  And obviously, that he is going to—he‘s going to be aggressive in offering direction where direction is needed.  He‘s also going to be out on the (INAUDIBLE) talking about this and enlisting the American people as we move along. 

But I think we‘ve made enormous progress.  As he mentioned tonight, four or five committees have passed it.  Now a fifth said they‘re going to go next week.  That will allow these bills to go to the floors of the respective chambers and, you know, we are headed towards genuine and substantial health insurance reform.  We just have to keep at it.  And that‘s what he intends to do. 

MADDOW:  White House senior adviser, David Axelrod, at the end of a very long night.  Thanks so much for your time today, Mr. Axelrod.  I really appreciate it. 

AXELROD:  Always good to be with you.  Thank you. 

MADDOW:  Thanks. 

AXELROD:  Thank you. 

MADDOW:  The place where the convincing needs to happen, where the arms need to be twisted, where the Lyndon Johnson of it all needs to happen is the United States Senate, of course. 

California senator Barbara Boxer joins us here next. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  So don‘t pay attention to those scary stories about how your benefits will be cut.  Especially since some of the same folks who are spreading these tall tales have fought against Medicare in the past.  And just this year supported a budget that would essentially have turned Medicare into a privatized voucher program.  That will not happen on my watch.  I will protect Medicare.

(END VIDEO CLIP)

RACHEL MADDOW, MSNBC ANCHOR:  President Obama tonight firing a bit of a shot across the bow at Republicans whose party stood against a now very popular government health care program before they started trying to portray themselves as standing for it.

Following Senator Ted Kennedy‘s death two weeks ago, in Washington the decision was made today about who will chair the Senate Health Committee as Senator Kennedy‘s successor.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  And if Ted Kennedy were here today, he‘d applaud wildly the fact that Tom Harkin is going to lead his committee.

(END VIDEO CLIP)

MADDOW:  Iowa Senator Tom Harkin will be leading the Senate Health Committee, a friend of the public option and a self-identified progressive populist.  He‘s a senator and the sponsor of the Americans with Disabilities Act.  He introduced the senate version of the Employee Free Choice Act.  When he ran for president nearly 20 years ago, he made universal health care part of his presidential announcement.

SEN. TOM HARKIN, (D) IOWA:  I see an America where health care is available and affordable to all.

(END VIDEO CLIP)

MADDOW:  If there is health care reform in this country this year, it will be because it finds a way through the United States Senate.  And if it finds its way through the United States Senate, it will be in part because conservative Democrats have not found a way to block the president‘s agenda, even if Republicans couldn‘t, as well as the agenda of the rest of their party.

So how are those prospects then?

Joining us now is Democratic Senator Barbara Boxer of California.  Senator Boxer thanks for joining us tonight.

SEN. BARBARA BOXER, (D) CALIFORNIA:  Thank you for inviting me.

MADDOW:  Thank you for making your way over from there to here.

BOXER:  Yes.  Isn‘t that a beautiful sight?

MADDOW:  This is a terrific spot from which to watch it.  What was your reaction to the speech tonight?

BOXER:  I was touched.  I was moved.  I was so happy with the president tonight.  Because he showed—I think a fierce determination to get this done.  And he spoke to our strength I think as Americans, all of us, that we have this problem and it‘s a moral issue and we can‘t turn away from it.

And we all have to do our part.  And boy, am I ever ready to go.  I am so ready.  As a matter of fact I bumped into the president, just so lucky I was on my way back to my little office and there he came.  And a Congressman was asking him and to do some autographs.

I said I don‘t want an autograph.  I just want to tell you something and I leaned over and gave him a kiss on the cheek and said, “You hit it out of the ballpark, Mr. President.”

And you know what he said?  He said, “Now, let‘s get it done.”  And he said that loud.  Everyone heard it.

MADDOW:  Wow.

BOXER:  Now, let‘s get it done.  Somebody else might have said thank you, you know, I really am glad.  Did you really think it was good?

MADDOW:  Right.

BOXER:  He‘s my friend.  He could have said that.  He said, now, let‘s get it done.  And then he was—he‘s got a look of determination on his face I haven‘t seen in a while.

So I think this was the moment we were waiting for.  I think he did this and I really hope now that we have the guts to finish this job.

And I thought when he talked about Ted Kennedy and he talked about the fact

that Ted had written him and said, “Read this later, you know, after I‘m

not here anymore.”  And Ted explained why this is so important, it really -

there was not a sound in that chamber.

And the fact that Vicki was there and the children were there, you know, sometimes in this world we don‘t let ourselves get touched.  We feel oh, there‘s something wrong with us if we feel something.  I felt a lot tonight and it certainly is making me stronger than ever to get this job done.

I have to do it.  It‘s something I promised my constituents I‘d do and they need it, because in California, Rachel, listen to this, a nonpartisan study says that by the year 2016 if we don‘t do anything about this, the average family in California will be paying 41 percent of its income -- 41 percent of its income—for health care premiums.

That‘s impossible.  The whole system will crumble.

MADDOW:  Senator Cornyn on the Republican side tonight and Charles Boustany, the official Republican respondent tonight from the House, said it‘s back to the drawing board.  “What the American people want is for us to start all over, that this—essentially making the case that the health care reform thus far this year since President Obama has been in office has been wrong-footed and needs to be started all over again.”

What‘s your response to that?

BOXER:  Well, I don‘t know what their idea is.  As far as I can tell it‘s more of the status quo and more tax cuts to people who have already gotten it seriously.  I don‘t see where they‘re coming from now.

The president, as strong and tough as he was, he still reached his hand out.  He said look, we‘re here.  But if you‘re just about the status quo, then I don‘t have time.  He was—I don‘t have time.  But if you‘re serious, let‘s work together.

So he still wants them to come forward and we all want them to come forward but there‘s no reason to start all over again.

We know what‘s plaguing our people.  The fact that their insecure that their health care will be there when they need it, the fact that 14,000 Americans every day lose their insurance, the fact that the costs are going out of control.  We know what‘s going on.  And there‘s no reason to start all over again.  We need to finish the job that has been begun.

MADDOW:  Does the job, when it‘s finished, include a public option?  David Axelrod just told me in an interview that the president will fight for it.

BOXER:  Good.

MADDOW:  The president tonight also called out progressives, just called out his progressive friends essentially for wanting it so much, for prioritizing it so much in the fight.  Do you think it ends up in the final bill?

BOXER:  That‘s my goal.

MADDOW:  Yes.

BOXER:  That‘s my goal.

And the president was very clear on why it‘s important, Rachel.  He made the case that—the estimates are only about five percent of the American people actually buy into it.  But it would be there as a safe haven.  It would be there to make sure there‘s competition, so the insurance companies are kept honest.

It makes eminent sense and the president is going to fight for it.  A lot of us are going to fight for it.

MADDOW:  Do you vote no if it‘s not there in the bill?

BOXER:  I never will negotiate on television.

Barney Frank is waiting to come on.  That‘s his line.  He said he turned to a reporter and he said, “You don‘t have a vote.  I‘m not negotiating with you.”

Barney, I‘m sorry, I stole your line.

MADDOW:  But it‘s important enough to fight for.  And it is your goal that it be there but you won‘t predict whether or not it‘s going to be.

BOXER:  And I will fight for it.  And let me tell you one of the things I‘m going to do, I‘m going to say to my colleagues who don‘t want to vote for this, whatever party they‘re in.

If you don‘t vote for this thing, give up your health insurance.  Because your health insurance is run by the public, it‘s a government-run plan.  And if you don‘t think it‘s good enough for you then drop it and then don‘t offer it.

But if you‘re going to keep it, you better give other people a chance.  The president alluded to that tonight.  And boy, I was happy, you know.  I was glad because how can you say “Oh, this is a terrible thing and then keep the public option yourself.”

MADDOW:  Yes.  Senator Barbara Boxer...

BOXER:  Thank you.

MADDOW:  Democrat from California, it always great to have you on the show. 

Thank you.

BOXER:  It‘s good to see you.

MADDOW:  If tonight‘s official Republican response to the president‘s speech wasn‘t a big enough response for you, well, the Family Research Council is countering the president‘s address with a big anti-health care Webcast-palooza (ph) tomorrow night.

Congressman Barney Frank will join us in just a moment to discuss this.

(COMMERCIAL BREAK)

MADDOW:  We‘ve now heard the official Republican response to the president‘s health care address.  Republican Congressman Charles Boustany of Louisiana, relatively little-known Congressman given a big opportunity by his party, telling Americans who stuck around for his remarks, that the president secretly wants to forcibly replace the insurance coverage you currently enjoy with a government-run program.

If that four minutes and 20 something seconds wasn‘t enough for you, the real opposition response is actually coming tomorrow tonight night via Webcast, courtesy of FRC Action, that‘s the lobbying arm of the Family Research Council, a conservative advocacy group.

The Family Research Council‘s contribution to the health care debate so far is evident at its Web site and then in its action alerts which describe health care reform as, quote, “Obama‘s tax and death power grab” which will, quote, “producing a moral disaster” and quote, “enable the Washington liberals to use your taxes to turn their entire anti-life agenda from unrestricted abortion on demand to euthanasia into national health care policy.”

Yes, the very same people responsible for such rhetorical flourishes as unrestricted abortion on demands will be Web casting a star-studded Republican rebuttal to the president‘s speech tomorrow night.

Family Research Council President Tony Perkins will host the event.  Charles—excuse me, Congressman Charles Boustany, tonight‘s official Republican responder, will respond again.

But for tomorrow‘s event where he will be joined by the top Republican in the House, Minority Leader John Boehner; he‘ll also be joined by Senator Jim DeMint of South Carolina, who‘s most famous in the health care debate for urging conservatives to fight the president on health care reform not because we don‘t need reform, but because defeating a reform would hurt the president politically.  It would be, in Mr. DeMint‘s words, a chance to break President Obama.

Also participating in the group effort Republican and conservative response tomorrow is former Ohio Secretary of State Ken Blackwell, who‘s pushing the myth that health care reform will, quote, “mandate taxpayer-funded abortions”—mandated abortions.

Also, a representative from Liberty Council will be there.  You may remember Liberty Council from this press release, which suggested that the president is out to mandate free sex change surgeries.

And, of course, no anti-reform GOP tag team would be complete without a renowned ethicist on their side, which is how a man by the name of Wesley Smith is being billed for tomorrow night‘s event.  Mr. Smith is also of among others, a hard-hitting anti-PETA article titled—yes, that‘s what it says—“Veganism is Murder.”

All in all, tomorrow‘s Republican response is shaping up to be a lot more revealing about the opposition to health care reform than tonight‘s formal Republican response.  And I mean that in not at all a good way.

Joining us is Congressman Barney Frank, a Democrat of Massachusetts, he is Chair of the House Financial Services Committee.  Mr. Chairman, thanks for making time to come on the show.

REP. BARNEY FRANK, (D) MASSACHUSETTS:  Thank you and it‘s a pleasure to be with you.

MADDOW:  It‘s nice to meet you in person.

FRANK:  Thank you.

MADDOW:  Let me ask you about something that happened tonight that was unexpected and that I didn‘t expect to have to ask anybody about.

A Republican Member of Congress named Joe Wilson of South Carolina screamed, “You lie” at the president tonight, interrupting his speech.  Is this an “ignore the tantrum” moment or is that a big deal?

FRANK:  I don‘t think it‘s a big deal.  Look, I think free speech—you know, heckling is a tradition, obviously, in the British parliament.  They even have mikes that come down to hear the heckles.

I think what we should take it as—it is unusual—it‘s a sign of how effective the president was.  These guys just couldn‘t handle it.  I looked at John Boehner and he looked about as glum and as dour as—as possibly he could be.

So what Joe Wilson did was just scream out in frustration because the president was nailing it.  So we‘ve got to be very clear, Wilson lied when he said the president lied.  And he talked about illegal immigrants.  It‘s clearly excluded from the bill.

So I would say what Wilson did was a mark of their frustration.  And Barack Obama is a big boy.  I think, I must say, to any Republicans particularly like Joe Wilson who want to get into a debate with Barack Obama is tugging on Superman‘s cape and pulling the Lone Ranger‘s mask.  But if that‘s what he wants to do, free country.

MADDOW:  Were the Republicans tonight in a more so—in a more sober response are asking for everything to start over again.  They are saying let‘s go back to square one.  They say that‘s what Americans are demanding.  That everything that‘s happened so far has been wrong foot and they want a restart.

FRANK:  Well, what they really want to do is go back to square one and judge the reaction.  I mean, one thing you have to be very clear, when people said does this have to be bipartisanship?  Let‘s be very clear that since this bipartisanship really goes against the notion of democracy.

We had an election in 2008, and the Democrats won the presidency, significant majorities in the House and the Senate.  We don‘t all agree on everything but there were clear differences.  There were clear differences.

And one of the great things the president did today—and I don‘t agree with everything he said—but he articulated the philosophy of a liberal governance in a very good way about what‘s the private sector—public sector, interrelationship?

The Republicans represent an extremely conservative faction.  The notion that those of us who won the election with a solid majority should compromise 50/50 with those who lost, well, then why not (INAUDIBLE) why do we just have to make a cover war?  Let‘s make it camp.  And it just didn‘t make any sense.

And this notion of starting from scratch—in the first place—I already had a first place.  In the second place, if they wanted to start from scratch, why didn‘t they?  They haven‘t put anything forward.

What‘s been stopping them from January of this year from coming forward with their plan?  The answer is they really don‘t have anything constructive to do.

MADDOW:  When the president was talking about—about liberalism tonight, about the idea that government has a constructive role to play, I thought that was important just—not even in terms of health care but just in terms of his presidency.

FRANK:  Yes.

MADDOWN:  Because I haven‘t heard him make that argument before.

FRANK:  No and then it would be particularly relevant to what I happen to be working on now, which is financial regulation.

MADDOW:  Yes.

FRANK:  Ronald Reagan in 1980 won, his first inaugural, my first year in Congress, said government is not the answer to our problems.  Government is the problem.  Of course, switch to the Bush administration when they were running up and down on Wall Street saying, we‘re from the government and we‘re here to help you.

But it was the absence of government not restraining the excesses of the financial sector that caused this great problem we‘re in.  And yes, the president hadn‘t done that.  And it‘s interesting that he did that at the same—and this annoyed me a little bit—it was this “oh, you on the left and you on the right.  It‘s kind of like I‘m above the battle.”

I think the president underestimated when he came to office exactly how right-winged the Republicans are and I‘m glad he asked them today to join.  I have no great hopes for it because they are in the control of the most conservative.

Knowing how right wing the Republican Party has become, my only bad moment with Barack Obama during the campaign was when he said he was going to be post partisan and I got post-partisan depression because I knew that that meant dealing with these people.

So I think he was in effect—I guess—I‘m talking too much—their extreme reactionary posture forced him to articulate what he may have previously thought we could take for granted, this liberal approach to a private sector, public sector cooperation and I agree with you, he did it very well.

MADDOW:  One of the things that I thought—I—was interesting in the sense that it was thought provoking and not at all on the surface level, obvious what he meant when he was doing that riff about the importance of governance and about the idea that liberalism is something that ought not be conflated with big government.  It should be seen as springing from a desire to help one‘s fellow man and help one‘s fellow citizens.

One of the things he said is that we will sometimes say that timidity is the only form of wisdom.  And it seemed to me that, that was the unexpected shot in the middle of that—the shot in the middle of that round.  

FRANK:  Again, I think they forced him to—to get to the basics.  I think he may have thought that they were more reasonable than they are; this collection of loons that you scrolled down there.

I got to say, those people, if anybody needs a health plan in America it‘s those people who are in severe need of mental health services; this lunacy about mandatory abortions and death.  By the way, there is a political faction in America that would have the government intervene in what should be the most private moment for people when they are dealing with the last breaths, with when death is there, and that is an intensely private thing.  And government shouldn‘t be in it.

But it was the right wing and in the Terri Schiavo case that got involved in this.  So if you do believe government should stay out of that terribly intimate decision, then the people to fear are the right wingers who drove the Schiavo bill.  

But the one thing that is very rational in their decision-making about what to do about health care reform is that they are making a ton of money off of it, that they have energized their own base, that they have sort of brought the Christian right back to life, at least in their own estimation.

They think that this is a big issue for them not necessarily because they‘re going to win but because it‘s going to stoke people up that are going to support them.

FRANK:  Coming back to life is after all a very fundamental part of Christian doctrine.  But it‘s a nice blend for them of cynicism and stupidity, some of them know better.  Some of these people talking about death panels, I think some of what Newt Gingrich said.  He‘s a smart man who‘s just being cynical.  Some are just dumb and don‘t understand it.

But I will say this, the one thing I take comfort for, when I‘m in a debate with people, if they are making cogent points against what I think is very important, I get a little nervous.  I noticed last week in “The New York Times” that the responsible conservatives are starting to complain now that the arguments against the Obama plan and against our efforts for health care are being dominated by the crazies.  That‘s their fault.

They were very happy to have the crazies getting out there doing Hitler stuff and et cetera.  I think the problem is they don‘t have good arguments.

When people make ridiculous arguments against something, it‘s because that‘s all they got.  They can‘t deny it would be good to improve health care‘s efficiency or to extend it to people who can‘t have it or to protect people against arbitrary cancellations from the private companies so they come up with death panels and mandatory abortions.  The very weakness to their argument is it‘s testimony to the strength of ours.

MADDOW:  Congressman Barney Frank, Democrat of Massachusetts, chairman of the banking committee.  It‘s really nice to have you here.  

FRANK:  Nice to have you in Washington.  Come back again.  

MADDOW:  Will do.  Thank you.

FRANK:  Ok.  

MADDOW:  Louisiana senator and D.C. Madam client David Vitter sent out a fund-raising letter saying that Obama‘s health care plan is actually, all together now, a plot to kill old people.  Opposition so dishonest you will want to cushion the floor for when your jaw hits it.  “The Nation‘s” Chris Hayes joins us next.

(COMMERCIAL BREAK)

MADDOW:  Imagine you‘re standing on the top floor of a rickety wood frame house that‘s not in great repair.  You‘re holding an anvil.  You drop that anvil.  It hits the floor, and then it keeps going, dropping through the ceiling of the room below you and then through the floor of that room and then through the ceiling of the room below that and then through another floor.  That anvil, that still falling dead weight, is the political career of South Carolina Governor Mark Sanford.

For your average conservative politician who had called for other politicians to resign for having affairs, who then themselves confessed in a rambling jet-laggy press conference to his own affair, the pursuit of which had led him to lie to his own staff and abandon his state for five days.  For your average politician in that situation, that press conference itself or perhaps the expected resignation statement at the end of that press conference, would have been about as bad as it gets.  That would have been the anvil hitting bedrock.

But Mark Sanford chose not to resign, and has chosen since to keep talking about his affair and his view that he‘s an instrument of God, who understands Sarah Palin so much better now.

And so for Mark Sanford, the anvil keeps falling.  First his own Republican lieutenant governor demanded that the governor resign.  Then 60 of the 71 Republicans in the state legislature demanded that he resign.  Now the Republican speaker of the house is demanding that Mark Sanford resign.

Well, Mark Sanford apparently still thinks he‘s the man for the job.  So the anvil keeps falling.  Next stop, looks like it is probably impeachment.  Let‘s hope that‘s the basement for him.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Instead of honest debate, we‘ve seen scare tactics.  Some have dug into unyielding ideological camps that offer no hope of compromise.  But know this, I will not waste time with those who have made the calculation that it‘s better politics to kill this plan than to improve it. 

If you misrepresent what‘s in this plan, we will call you out. 

(END VIDEO CLIP)

RACHEL MADDOW, HOST, THE RACHEL MADDOW SHOW:  Hmm.  I wonder who he was talking about?  Hmm.  As the president used this address to a joint session of Congress tonight to try to rally Congress and the nation behind health care reform, constituents of Louisiana Republican Senator David Vitter were opening a mailer from their senator. 

Their senator, of course, is thus far most famous for having refused to resign after being caught in the D.C. madam prostitution scandal, even though he ran for office on the basis of his own supposedly superior family values and even though he had called for other politicians to resign because of their sexual indiscretions. 

That‘s what Senator Vitter is known for thus far.  But now maybe Senator Vitter will become famous for something else.  Here‘s what he just mailed to his constituents.

UNIDENTIFIED MALE:  “Dear friend, our nation is on the verge of taking the largest step towards socialism ever.  You know what I‘m talking about.” 

MADDOW:  Do I?  I‘m not sure that I do. 

UNIDENTIFIED MALE:  “It‘s Obama health care reform.” 

MADDOW:  Wait, that‘s the largest step towards socialism ever?  Larger than like countries that are actually socialist? 

UNIDENTIFIED MALE:  “Although conservatives have promoted reforms for decades, the only plan being voted on is one that will force 119 million Americans to lose their existing coverage.  Put a federal government bureaucracy in place to appoint your doctors.  Include coverage for 12 million illegal aliens.”

MADDOW:  Except nothing is being voted on yet and none of those things are even being considered in anything that‘s being voted on.  But don‘t let that stop you. 

UNIDENTIFIED MALE:  “Now that we know what‘s in it, you can draw your own conclusions on this critical issue.  That‘s why I‘ve enclosed a survey for you to complete and return.” 

MADDOW:  A survey.  Maybe the survey will help clarify what is heretofore confusing here.  Let‘s check out the survey. 

UNIDENTIFIED MALE:  “Are you happy with your current medical care provider, or would you prefer the government to appoint one for you?” 

MADDOW:  That is seriously one of the questions on the survey. 

UNIDENTIFIED MALE:  “The Obama plan includes free coverage for an estimated 12 million illegal aliens in the United States.  Do you support this?” 

MADDOW:  And don‘t be distracted at all by the fact that that‘s not at all true.  Senator Vitter‘s letter goes on to explain that he commissioned this very important survey in order to, and I quote, “go over the heads of the media to rally Americans against socialized medicine.” 

Mission accomplished on the whole going-over-the-heads thing.  But Senator Vitter does suggest to his constituents that in order to continue his important work of going over the heads of the media to sound the alert against stuff that has never been proposed, they should send him a check. 

He says $2,000 would be awesome but even just $25 would be great.  That part, the whole raising money by terrifying your constituents with stuff you just made up, that part I totally get.  Joining us now is Chris Hayes, Washington editor of The Nation. 

Chris, it‘s really nice to se you.  Thanks for coming in. 

CHRIS HAYES, WASHINGTON EDITOR, THE NATION:  Welcome to our nation‘s capital. 

MADDOW:  Well, thank you.  My nation‘s capital, too.  What do you make of this heretofore secret Obama plan to make everyone not have health insurance except for illegal immigrants who will get it all for free? 

HAYES:  And mandate sex changes and abortions. 

MADDOW:  Yes, yes. 

HAYES:  . for them.  I think it‘s going to be a real political winner.  I‘m actually really curious to see the results of the survey, just to see like where people stand on that. 

MADDOW:  Well, now people can make their views clear now that they know what‘s in the plan. 

HAYES:  That‘s exactly right. 

MADDOW:  Vitter‘s letter was highlighted by Eric Kleefeld at Talking Points Memo today, give him a shot-out for having posted it.  And Kleefeld in TPM focused on the fact that one of the lies Vitter tells his constituents about health reform is the death panels lie. 

I‘m sort of wondering now, looking back at this summer, if the death panels lie was like the camel‘s nose under the tent.  Like they got way with that one, they‘re still using it, still pounding it today, and so now it‘s a free for all, say anything you want. 

HAYES:  I think that‘s actually partly true.  I think that‘s a really good point.  Like I don‘t think there was a swift response to it, partly because it was so ludicrous, it was so crazy that I think actually the White House was a little taken aback that anyone would believe it or it would get any traction. 

And all of a sudden about a week into the news cycle, we were all—all of us were talking about death panels.  We kept saying the phrase “death panels” like it was a thing, you know?

And so, yes, I think that is partly true.  But the other side of that is the fact that if you look at the public opinion data, it is essentially unchanged on reform from when Congress left Washington, D.C., to start the August recess, and as it is now.

And so it‘s unclear just how much has actually sunk in beyond the sort of fevered right wing that is already disposed to hate the plan. 

MADDOW:  Well, the Beltway wisdom right now—which I‘ve sampled since being here, it‘s very exciting.

HAYES:  Yes, smell it. 

(LAUGHTER)

MADDOW:  This Beltway common stinky wisdom is that August was a complete disaster.  Nobody saw it coming.  Oh, where did all of that conservative opposition come from?  We thought it would be “Kumbaya.” 

By calling it common wisdom and mocking it that way, you can tell I don‘t believe that.  Was real damage done in August?  Was the damage done by the conservatives to themselves, or was it done by Democrats to themselves, or did it cross the line? 

HAYES:  Well, I think damage—I think damage was done.  I mean, I would concede there was some damage done.  I don‘t think things got better over August certainly.  But I do think that the prospects for reform remain essentially unchanged in kind of a deep structural sense. 

I mean, the fact that the five bills are now out there, they‘re going to vote this bill out of the Finance Committee.  The fact that public opinion, if you look at the Gallup poll that was out recently and you ask people, do you want your congressman to vote for reform or against reform, it‘s essentially unchanged in the last month. 

I mean, I do think there‘s a way in which the extreme right can kind of capture the kind of Beltway conventional wisdom and the mainstream media in such a way that you think that it‘s all that‘s going on.  People aren‘t paying that much attention. 

MADDOW:  Yes.  And I think that the right did out itself in terms of its full-on craziness and that has got to be good for the left to a certain extent.  Chris Hayes, Washington editor of The Nation, it‘s always good to see you. 

HAYES:  Pleasure. 

MADDOW:  Cocktail in a couple of minutes? 

HAYES:  Yes. 

MADDOW:  All right.  Very good. 

What do you do if you are a Republican congressman and you call the president of the United States “a liar, you‘re a liar!” right smack in the middle of the president‘s address to a joint session of Congress and an audience of tens of millions of people on television? 

Apparently what do you in this situation is you apologize quickly and profusely.  Breaking news on that in just a moment. 

(COMMERCIAL BREAK)

MADDOW:  A brief update for you on the most surprising moment of the night.  The moment was Congressman Joe Wilson of South Carolina hollering “you lie!” at President Obama, who was then in the midst of declaring that illegal immigrants would not be covered by our reformed health care system. 

Congressman Wilson was wrong on a number of levels, not the least of which was the fact of what he was indecorously shouting about.  Between then and now Mr. Wilson has reportedly apologized to White House Chief of Staff Rahm Emanuel on the phone. 

He has also issued a written apology that reads, quote: “This evening, I let my emotions get the best of me when listening to the president‘s remarks regarding the coverage of the illegal immigrants in the health care bill.  While I disagree with the president‘s statement, my comments were inappropriate and regrettable.  I extend my sincere apologies to the president for this lack of civility.”

Apology received and quite probably accepted.  And reputation, pretty much tarnished forever.  Prepare for a special comment from Keith tomorrow for not apologizing for being wrong. 

Thank you for watching tonight.  A special edition of THE ED SHOW starts right now.  Stay with us.  Good night. 

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

END   

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