updated 9/21/2009 12:26:13 PM ET 2009-09-21T16:26:13

Guests: Elijah Cummings, Ron Christie, Tony Perkins, E.J. Dionne, Michael Medved, Laura Flanders, Liz Winstead

ED SCHULTZ, MSNBC NEWS ANCHOR:  Good evening, Americans.  I‘m Ed Schultz and this is THE ED SHOW from Minneapolis tonight.

Hateful rhetoric is at a fever pitch in this country.  First topic off the top tonight, I think Republicans have sunk to a new low.  This is where they‘re going.  They‘re going to attack Nancy Pelosi.  The House Speaker showed some emotion about the health care antis and related it to a terrible time in this country‘s history.

Here it is.

(BEGIN VIDEO CLIP)

NANCY PELOSI, HOUSE SPEAKER:  I have concerns about some of the language that is being used because I saw—I saw this myself in the late ‘70s in San Francisco, this kind of rhetoric was very frightening and it gave—it created a climate in which we—violence took place.

Our country is great because people can say what they think and they believe, but I also think that they have to take responsibility for any incitement that they may cause.

(END VIDEO CLIP)

SCHULTZ:  So let me tell you something.  That was real emotion coming from a woman who‘s witnessed hatred firsthand in a city of change decades ago.

Republican Congressman from Texas, Pete Sessions, had the nerve to issue this paper statement response to Speaker Pelosi.  And here‘s the quote.  “The Speaker is now liking genuine opposition to assassination.  Such insulting rhetoric not only undermines the credibility of her office but it underscores the desperate attempt by her party to divert attention away from a failing agenda.  During one of the most important policy debates of our time, the American people have been completely abandoned by those elected representatives under her control.  Voters are justifiably frustrated with Washington.  And the Speaker‘s verbal assault on voters accomplishes nothing other than furthering her reputation for being widely out of touch with the American people.”

Congressman, give me a break.  Mr. Sessions, you sit there on your high horse in Texas with insulting rhetoric while your party, your people, have done nothing positive throughout this entire debate about reform.  It‘s your party, your people, who have been inciting dangerous behavior across this country.

Now you have the nerve to question the intention of Nancy Pelosi?  I thought she was the bleeding heart liberal from San Francisco for you conservatives.

Now, political talk, political rhetoric, that‘s grandstanding at an all-time high.  It makes you look like a Texas fool.

Americans, this is not media manufactured.  These are actions out there on the trail.  And let me give you a little reminder of what‘s going on from the right.  Look at this disgusting image that TEA Partiers are pushing.  The president depicted as a witch doctor.  His name associated with a hammer and sickle.

Congressman Sessions, you say Nancy Pelosi‘s verbally assaulting voters?  This image, my friend, is assault.  This image is insulting rhetoric.

Now, there are people out there with the Obama as Hitler signs.  I suppose they‘re upstanding citizens.  There are people carrying loaded guns to town hall meetings.  There are people making threats like, “I came unarmed this time.”

There are people probably holding signs that read—what is this all about—“bury Obama Care with Kennedy?”  Congressman Sessions, you know, I haven‘t heard you or anyone from your party, for that matter, denounce these despicable acts.  Instead, what do you do, you go after Nancy Pelosi and her truthful display of human emotion and concern for what‘s going on out there.

This is really an exemplification of how ruthless the Republicans are in the debate.  They have ice in their veins.  They don‘t care, they scourge to their own policy.

Republicans, it‘s your responsibility to stand up to the hate merchants in your own party.  It infuriates me.  This is what really gets me.

Well, the people that love to broad brush it.  Well, there‘s a few bad apples out there and there‘s these rallies going on and you know, they‘re over on the right but the lefties have them, too.  That, my friends, is psycho talk.

There is no liberal out there peddling this hate.  Not one.  Give me a name.  Give me a statement.  Give me a statement like this, anybody on the left serving up this kind of talk?  Remember this?

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS ANCHOR:  This president, I think, has exposed himself as a guy over and over and over again who has a deep-seated hatred for white people or the white culture.  I don‘t know what it is.

(END VIDEO CLIP)

SCHULTZ:  Here‘s another name for you.  How about the drugster, Rush Limbaugh?  After a bunch of black kids beat up a white kid on a school bus, here‘s how the head of the Republican Party put it into perspective.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK HOST:  Obama‘s America is it not?  Obama‘s America, white kids are getting beat up on school buses now.  You put your kids on a school bus, you expect safety.  But in Obama‘s America, the white kids now get beat up with the black kids cheering, “Yes, right on, right on, right on.”

(END VIDEO CLIP)

SCHULTZ:  Folks, there are zero liberals out there talking like that across this country.  The truth is liberals are carrying the positive banner.  We‘re trying to do something for people.  We‘re trying to make things better for the middle class.  Is that sinful?

Nancy Pelosi‘s genuine concerns about the direction the antis are taking this entire debate in this country.  The right wing can twist words any way they want.  It‘s a disgusting exercise to attack her.

Well, I want to know what you think.  Get your cell phones out.  I want to know how you feel about this.  Our text survey tonight, is do you believe the rhetoric about health care will lead to violence?  Text “a” for yes and “b” for no to 622639.  We‘ll bring you the results later on in the program tonight.

Joining me now is Democratic Congressman, Elijah Cummings.  Congressman good to have you with us tonight.  I know that you have seen a lot of change in your lifetime.

REP. ELIJAH CUMMINGS, (D) CONGRESSIONAL BLACK CAUCUS:  Yes I have.

SCHULTZ:  And you‘ve seen and been exposed.  You have.  And you have been exposed to some rhetoric.

Tell our audience tonight, Congressman, from your experience, when does the rhetoric become dangerous?

CUMMINGS:  I think that when you have situations where, for example, you are comparing a president to Hitler.  And when you‘ve got a Frank Kratovil, a moderate Democrat from Maryland, being hung in effigy because he supports certain legislation with regard to health care, public option.  And you have people coming to rallies with guns and saying all of these negative things.  I think that you can cross the line.

Now, but Ed, I think we need to be very careful because this also can be distracting from what we are trying to do.  And let me be real clear.  Anybody who attacks Nancy Pelosi, particularly with the statement that she made trying to bring the country together, saying let‘s calm down, let‘s move forward.  To have been treated the way she was treated by Representative Sessions I think it should upset all Americans.

And so basically...

SCHULTZ:  No doubt.

Congressman, where do you draw the line, Congressman?  Freedom of speech and then paying attention to it.  I have wrestled with this about, you know, how much coverage we should give this kind of rhetoric.  But personally, I think it‘s an instinctive feeling.

I went to a black high school.  I can tell you about forced bussing for racial equality.  That‘s 30 some years ago.  And we‘re still having this kind of rhetoric out here in this country.  When is it the responsibility in your opinion of the media to step up and address this kind of stuff?

CUMMINGS:  I think we are at that point right now for the media to do just that.  Because I think, again, as I moved throughout my district, so many people are very concerned, particularly when they see people wearing guns and they see the various signs that they‘ve seen and these negative signs at these rallies.  So the media, right now, I think has that responsibility.  Because I think we are already there.

But the fact is that we are going to pass health care no matter what.  And I think that a lot of this, it could be distracting.  But one thing that I must say, Ed, is that I‘m glad the president is handling this thing the way he‘s handling it.

For him to get out there and talk about race right now and blame folks

and say things that has anything to do with race I think would be a

mistake, because he has to stay focused.  And I think that‘s basically what

·         as a matter of fact, I know that‘s what Nancy Pelosi, House Speaker, has consistently said.  We‘ve got to be focused.  We cannot be distracted because this health issue is a life and death situation.

We‘ve got people literally 18,000, Ed, as you well know, who are dying...

SCHULTZ:  Yes.

CUMMINGS:  ...because they have no health insurance.  That‘s every year, every year, Ed.

SCHULTZ:  That‘s what I—that‘s what I don‘t get about it.  I mean, how can any average-thinking American not have some kind of pulse and compassion for what this country‘s going through for those who were being left behind?  And that‘s why I just can‘t believe the rhetoric that‘s going on out there.

Congressman great to have you with us tonight; I appreciate your time. 

Congressman Elijah Cummings, with us here on THE ED SHOW.

CUMMINGS:  Thank you.

SCHULTZ:  I want to turn to...

CUMMINGS:  Thank you.

SCHULTZ:  You bet.  I want to turn to Republican strategist and former assistant to President Bush, Ron Christie.

Ron, what‘s the next move for the Democratic leadership and the Republican leadership?  Is it too much to ask, seeing that we‘re divided on everything in this country?  Could they come together and make a collective statement saying, can we knock off all of this hatred?  Can we knock off all of this rhetoric?  Can we come together as a country and have a real debate?

Because I will challenge you, Ron, it is coming from the Republican Party.  It is the seeds of the Republican Party that‘s causing all of this stuff.  I‘ll let you respond to that.

RON CHRISTIE, REPUBLICAN STRATEGIST:  Well, Ed I don‘t think that the actions of a couple of fringe individuals speak for the Republican Party.  I think the Republicans who have been elected across this country speak for the party.

I do agree with you.  I would love to see the elected leadership in the House and the Senate to sit down and to come out with a unified statement and say that we as the leadership of the House and the United States Senate do not tolerate racism, we don‘t tolerate insensitivity.

We need to have a constructive debate.  We can agree to disagree.  But there is no place for violence in this health care reform debate.  It‘s just despicable to me.

SCHULTZ:  Would you call on Dick Armey to say that?  This is a man who had a leadership position in the Congress for many years.  He‘s heading up this group that‘s perpetrating all of these signs that are out there.

And the thing that bothers me, Ron, it‘s just not a few signs.  It‘s now common accepted behavior at any rally by hundreds and thousands of people that are doing this stuff.

CHRISTIE:  Well Ed, I‘d turn it around the other way.  Obviously the media is trying to portray this that the Republican Party is out of control.  But I challenge you on one very specific case where violence took place over rhetoric.

There was a town hall meeting last month and Congressman Russ Carnahan‘s district right outside of St. Louise, Missouri.  A young, black conservative was beaten, knocked to the ground, called racial epithet, that was caught on film Ed and these people were arrested.  Six people were arrested and you didn‘t hear one peep out of the media of a young black conservative who is peacefully handing out flags that said “Don‘t tread on me” who was beaten to the ground and were sent to the hospital.  And these six perpetrators were sent to the ...

SCHULTZ:  Well Ron, in fairness, you‘re certainly not suggesting that maybe the media overplayed the black security guard that was shot in Washington, D.C., just a few months ago.

I mean, there are acts of violence...

CHRISTIE:  No, Ed, Ed what I‘m telling to you...

SCHULTZ:  ...that are taking place that are being incited by a lot of right wing commentators in this country that have gone totally out of bounds.

CHRISTIE:  Ed, we‘re talking about health reform, we‘re talking town hall meetings.  I‘m giving you one specific example...

SCHULTZ:  But this is what it‘s evolved to, Ron.  This is what‘s it‘s evolved to and you know it‘s evolved to this.

(CROSS TALK)

CHRISTIE:  Ed, this is one example...

SCHULTZ:  And it‘s the Republican Party that is feeding off of his, the Republican Party is feeding off of this.  You know they are.

CHRISTIE:  I find it fascinating, Ed, that you will not repudiate a specific example that was caught on film at a health care town reform meeting where a young black conservative was racially assaulted, beaten to the ground, put in the hospital.  And you‘re talking about Republicans are inciting violence.  I can‘t think of one specific example.

SCHULTZ:  Well, I‘ll tell you what I‘ll do Ron.  Ron, I will admit to you that is a story that I missed and I guarantee you that I will cover it on Monday.  I am looking for fairness.  I can tell you the liberals have not brought this fever pitch to where it is in this country.

It has been the right-wing talkers, it has been the Dick Armey organizers of the world, it‘s been these conservative organizations and now, look, we got it.  And I want to show you this, Ron.  And you as a black man, can you support a cartoon or a caricature of the President of the United States, a witch doctor?

My God, Ron, how can you put up with this without denouncing this and calling on Republican leadership to totally distance themselves with this kind of garbage?

CHRISTIE:  Well Ed, that‘s totally out of bounds.  I mean, I think that sort of vitriol is just disgusting.  I think that there has to be a level of respect and not only for President Obama as an individual but you have to respect him for the office in which he holds.

The one thing that I draw distinction with you, Ed, is these are not all, quote, “Republicans.”  You can‘t say that there is a Republican conspiracy telling these people to go out there.

SCHULTZ:  I don‘t hear any of them denouncing it.  I don‘t hear any of them denouncing...

CHRISTIE:  Well, I will say.

SCHULTZ:  And when they denounce it, then I‘ll back off.  When I hear Cantor and Boehner and McConnell come out formally and make a statement, “We are distancing ourselves...”

CHRISTIE:  Actually Boehner did yesterday.

SCHULTZ:  No, they haven‘t.  No, they haven‘t.

CHRISTIE:  I watched John Boehner, he‘s a good friend of mine, he came out...

(CROSS TALK)

SCHULTZ:  And I want them to ask—I want them to ask the right wing talkers of America to back off; that this isn‘t moving the debate forward at all.  There‘s a difference between being against a policy and being a psycho talker like these guys are.  And you know that, Ron.

CHRISTIE:  And are you going to let me finish here?

SCHULTZ:  I‘ll let you finish.

CHRISTIE:  John Boehner came out yesterday, the Minority Leader and said there is no place in this debate for racial insensitivity and bigotry.  He came out and said it yesterday, he said it on film.  I don‘t know what more you want him to do.  I think it was a very good step that he took.

But Ed, I‘ll take it with your word, if you‘re going to look at this, the gentleman‘s name is Kenneth Gladny (ph), he was beaten and you look it up in “The St. Louis Post Dispatch.”  I think if you‘re going to have an honest decision here, you‘re going to talk about vitriol and violence, I want you to look into this specific case where a black conservative was beaten and due to his political thoughts at a town hall meeting.  I think it‘s just disgraceful.

SCHULTZ:  And I will do that, I will do that and it‘s unconditional. 

I‘ll do that.  I‘ll check that story out.  It‘s the one that I did not see. 

You‘ve got my honor on that.

But I would like you to do me a favor.  I would like you to get Mr.  Boehner on this program, THE ED SHOW.  And let‘s have a civil discussion about the leadership of the Republican Party and how they have not distanced themselves from the rhetoric that‘s out there with what‘s going after the President of the United States.

Ron, good to have you with us tonight.  I always appreciate the discussion.

CHRISTIE:  A pleasure Ed.

SCHULTZ:  Coming up, liberals do not think that you can support the Baucus plan.  It is a nonstarter.  It is a nonstarter.

Plus, this got so much response last night, folks.  We got to do it again.  Senator Chuck Grassley is really offended that the president called him out for supporting death panels?

(BEGIN VIDEO CLIP)

SEN. CHUCK GRASSLEY, ® IOWA:  I‘ll tell you, there‘s some things that the president has said since then that I took very personally.

(END VIDEO CLIP)

SCHULTZ:  Chuck, we think the president‘s remembering something like this...

(BEGIN VIDEO CLIP)

GRASSLEY:  We should not have a government program that determines you‘re going to pull the plug on grandma.  Going to pull the plug on grandma.  Going to pull the plug on grandma.

(END VIDEO CLIP)

SCHULTZ:  I tell you what, Senator Grassley you either need your medication or you‘re lying to the American people.  You can‘t make this stuff up.  The whole unbelievable story of that coming up in the bottom of the hour; we‘ll have discussion.

But first, the so-called values voters meet in the nation‘s capital with these values in mind.  No to a public option and yes to heckling reporters just doing their job on the scene.

One of the headliners and sponsors, the Family Research Council‘s Tony Perkins is up next.

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

(COMMERCIAL BREAK)

SCHULTZ:  Max Baucus is delayed, didn‘t get us bipartisanship.  But we Democrats are so afraid they will get Olympia Snowe on board.  They‘re applauding this mess.  They need to be listening to you, the people.  That‘s coming up at the bottom of the hour.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

The right wing Values Voters Summit is under way in Washington, D.C.  Conservative stars like Mike Huckabee, Michele Bachmann, and Jim DeMint of South Carolina are all coming out to play to the base.

If you‘re in the D.C. area and decide to head on over, here are some of the sessions that you could check out at the seminar.  There‘s the “True Tolerance: Countering the homosexual agenda in public schools,” or “The New Masculinity,” where you can learn about how feminism has wrecked havoc on society.  You can also have “Obamacare: Rationing your life away,” and, of course, let‘s not forget “Global Warming Hysteria: The new face of the pro-death agenda” where you can find out how fighting global warming will lead to forced abortions.

That‘s just a sample of the kind of talk that‘s going over there this weekend.

Let me bring in Tony Perkins, he‘s the president of Family Research Council, the organization that‘s sponsoring the Values Voters Summit.  I have to hand it to you, Tony, you‘ve definitely got some innovative titles there for the seminar.

TONY PERKINS, PRESIDENT, FAMILY RESEARCH COUNCIL:  And you have got some good graphics.  They come together well.

SCHULTZ:  What‘s the mission?  A lot of people say that the conservative movement is in disarray.  The Republican Party is not organized.  Is that wrong?  What is the mission of this conference?

PERKINS:  I have to tell you, it was to bring together value voters, social conservatives from across the country.  I‘ve been surprised.  We were expecting a much smaller crowd.  This is an off-year election.

We have a crowd that rivals last year‘s in terms of size.  But the intensity and enthusiasm is probably three or four times greater than it was last year.

SCHULTZ:  I think we saw that.  Our NBC reporter today was doing a stand-up report here on this network and this is what happened. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  I look like that—

UNIDENTIFIED FEMALE:  Your invited guest.

UNIDENTIFIED MALE:  That‘s too bad.  You‘re being rude.

UNIDENTIFIED MALE:  We‘re doing live television.

UNIDENTIFIED MALE:  You can get out of here.

UNIDENTIFIED MALE:  Please don‘t touch the microphone.  Tell us what your thought is.  

UNIDENTIFIED MALE:  My thought is that you are rude to do this in front of public.

UNIDENTIFIED MALE:  Even though we‘re a credentialed press brought here to tell your story and bring it out to the world? 

UNIDENTIFIED MALE:  All right.

(END VIDEO CLIP)

SCHULTZ:  Tony, I know you‘re a stand up guy and know you apologized for that.  But did you invite the media in?  Was this just a mix-up?  You say the intensity of the people is pretty high there.  This is not good.  What do you think?

PERKINS:  No.  Look, I used to be a reporter.  It makes for great TV.

You‘re right.  What happened here is we were expecting about 1,200 and had close to 2,000; very tight quarters.  After that happened we made an announcement to the entire audience and said, “Look, the press, they‘re our guests.  We invited them here.  We want them to be here so let‘s treat them appropriately.”

We moved chairs over and kind of scrunched people together to give the media more room.  

SCHULTZ:  All right.  What is the “True tolerance: countering the homosexual agenda in public schools?”  That‘s a new one to me.  What‘s going on in public schools?  What do you have a hard time with? 

PERKINS:  Actually, Ed, what‘s happening, those are breakout sessions.  We have numerous organizations, probably 25 different organizations that are either co-sponsors or have breakout sessions.

To be quite honest I don‘t know the exact content of that.  I think part of it is tracking the curriculum that is going into the public schools.  Stuff like Heather has two mommies and actually the promotion of the homosexual lifestyle to young kids in schools.  We think parents need to know about that.

SCHULTZ:  Ok.  And the straw poll that‘s coming up, how important do you think this is?  And who do you think is going to win it.  You have Gingrich, Huckabee, Jindal, Palin, Ron Paul, Pawlenty, (INAUDIBLE), Romney and Santorum also expected to be in this mix.  How‘s this going to turn out? 

PERKINS:  I don‘t know.  That‘s kind of why we‘re doing it.  We don‘t know who is the favorite at this point; social conservatives.

As you pointed out earlier, the Republicans really have not had a visible leader.  What we‘ve seen in the last four months is that people across the country are certainly engaging, like they haven‘t in a long time even when President Bush was in office.  

SCHULTZ:  Tony, wouldn‘t this conference maybe be the place for the conservatives to denounce some of the rhetoric that is out there at some of these town hall meetings and TEA Parties and what not?  The scurrilous signs that are out there, the hateful conversation that‘s going on?  Does correcting that have a place at your conference?

PERKINS:  I think if you were to come over, Ed, and listen, you would probably hear that.  That what we want is—we certainly believe every American has a right to speak in this process and we encourage that.  But we also our folks to be respectful, even of those that we disagree with and that includes the President of the United States.

He is the president.  And I vehemently disagree with many of his proposals and policies but I don‘t want to tear down the office of the president and we should be respectful.  I refer to him as President Obama.

We encourage our folks to make this dialogue—I mean, it‘s going to be tense.  I mean, I watch—I was a little concerned about you in that previous segment.  You were getting a little too excited.  We want to keep it down.

SCHULTZ:  No, I‘m not—I‘m excited and I‘m disappointed that that‘s what the Republican Party is promoting right now, Tony.  You can‘t learn from that...

PERKINS:  You know, I don‘t think...

SCHULTZ:  Dick Armey is involved in this.  Dick Armey is involved in this.  

PERKINS:  I‘m not here to defend the Republican Party.  We‘re non-partisan.  I will tell you that we more times than not do line up with conservative Republican candidates.

I don‘t think a lot of this is coming from the party.  I don think there are some out there in America that have some twisted ideas.  We disagree with those and we won‘t encourage... 

SCHULTZ:  Tony, I got to run.

PERKINS:  Look for you next time Ed.

SCHULTZ:  You bet.  I appreciate you coming on.  Tony Perkins, president of the Family Research Council.  We‘ll visit again.  Thanks so much.

PERKINS:  All right.

SCHULTZ:  Up next, the insurance companies are going to value this. 

Michele Bachmann has the solution to health care reform?  No regulations? 

“Psycho Talk” coming up next on THE ED SHOW; stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Oh, in Psycho Talk tonight, you‘ve got it, Michele Bachmann.  Today at the Values Voter Summit in Washington—you put her in a room with several thousand other right wingers and she‘s bound to say something cooky, right?  All right.  She seems to think that fewer regulations on insurance companies would mean more competition. 

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN ®, MINNESOTA:  If we would remove this federal law that creates these private monopolies, then states would be competing with each other.  Some states may decide to have zero mandates, so you can sell whatever insurance policy you want. 

(END VIDEO CLIP)

SCHULTZ:  Really?  Zero regulations on the insurance industry?  Now, if that happened, companies would have free reign to deny coverage for any pre-existing condition, no matter how ridiculous.  They could cancel policies at any time for any reason.  Bottom line, insurance executives would continue to take home obscene paychecks, while our premiums would be going out of control. 

Michele Bachmann‘s playing right into the hands of the insurance industry.  We‘ve had Michele Bachmann in Psycho Talk quite a bit lately.  I‘m not the only one who sees great entertainment potential from the Minnesota congresswoman.  Here‘s a clip from “Saturday Night Live,” news Thursday night show. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Yes, Representative Bachmann?

UNIDENTIFIED FEMALE:  How about we yell: you lie, you freedom hating, secret half Muslim? 

UNIDENTIFIED MALE:  You know, I think just “you lie.” 

(END VIDEO CLIP)

SCHULTZ:  Seems like everyone‘s realized that Michele Bachmann is a never-ending source of Psycho Talk.

Coming up, don‘t get too comfortable with this Baucus plan.  This is not the path to health care reform.  This is the path to losing the middle class.  E.J. Dionne joins me next. 

Plus, this weekend, it‘s the president‘s chance to make news on health care.  Take a stand on the public option.  We‘re behind you, Mr. President.  You‘ve got to do it.  Make news.  It‘s all coming up on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  I have dubbed this the triangle of death.  Maybe not only death to you, but to your wallet.  It‘s the Baucus bill.  I‘m not wrong, folks.  This is not—this is not a reasonable starting point.  The bill lines the pockets of insurance companies and the pockets on Capitol Hill with your money. 

Middle class voters will oppose it because of the mandate.  Liberals, get this out of your head.  Push back against the Baucus triangle of death.  This is not reform.  It‘s nothing more than a gift to the big insurance industry from Senator Max Baucus.  That‘s exactly what it is. 

We‘re supposed to be grateful for it because he was working so hard. 

(BEGIN VIDEO CLIP)

SEN. MAX BAUCUS (D), MONTANA:  We debated this thing.  We have met over 100 hours -- 100 hours -- 100 hours. 

(END VIDEO CLIP)

SCHULTZ:  A hundred hours?  Can you believe that they have worked 100 hours?  A hundred hours.  Senator, you need to go out in the real world and get a real job.  Now, look, he‘s got fans out there.  But this is wrong.  Now, Senator Olympia Snowe, the White House favorite Republican, joined with a weak-kneed team of Ben Nelson, Joe Lieberman, Claire McCaskill—they‘re commending Max Baucus for his hard work to gain bipartisanship support, even though he‘s got nothing? 

Here‘s the quote: “we‘re encourage by his commitment to work with both Democrats and Republicans in the Finance Committee, and believe there is a responsibility for both sides of the aisle to work together to develop a bill that will earn strong support from the full Senate,” according to Joe Lieberman. 

Now, this is the same rhetoric, folks, that we have heard for five months.  The Republicans have had five chances to vote and get on board for health care reform.  They‘re holding us hostage.  Not one has taken the chance to move forward.  If the Baucus plan goes through, it will water down any chance for health care reform. 

It‘s only going to get worse from here.  If it goes through, reform isn‘t going to be reform.  It‘s going to be weak. 

Joining me now is E.J. Dionne, columnist for the “Washington Post.” 

E.J., great to have you with us tonight. 

E.J. DIONNE, “THE WASHINGTON POST”:  Good to be with you. 

SCHULTZ:  You know where I stand on this.  Is the White House bound and determined to go get bipartisan support on this?  Or will they do it alone?  What do you think? 

DIONNE:  You know, when you were playing that 100 hours clip, it felt like Baucus and Grassley has been negotiating for three years, this process has gone on so long.  I actually think that delay did not help health care reform.  I don‘t think the Baucus bill can pass in its current form, and I don‘t think it should pass. 

Even before you get to the public option issue, if you look at the subsidies in this plan for middle income people, especially people in the range around 60,000, 85,000 dollars a year, there‘s a mandate on the one side.  But they could end up spending up to a fifth of their income in health care costs.  They‘re not going to like that.  I don‘t think that can go through.  Senator Snowe has said that this is inadequate in terms of subsidies. 

There‘s another provision where employers would only have to pay back the government, not a mandate that employers who don‘t insure people have to pay, but just those who hire people who need a subsidy.  That‘s a recipe for not hiring poor people.  I don‘t think this bill will go through the way it is.  I don‘t think it should go through the way it is.  This raises enormous problems if it passed in the form it‘s in now. 

SCHULTZ:  Sometimes I think these senators that are on this gang of six, they don‘t get the intensity of the American people.  And the demeanor just has not been there the way it should be.  This is an interesting sound bite from Senator Baucus on exactly how these meetings have gone.  Here it is. 

(BEGIN VIDEO CLIP)

BAUCUS:  The tone is also very modest and moderate.  No fireworks, no anger, no bitterness, acrimony from any direction. 

I don‘t see major changes.  I do believe very much by the time we vote this bill it‘s going to have some Republican support.  It just takes a little time to make some adjustments, modifications. 

(END VIDEO CLIP

SCHULTZ:  I tell you, the thing that bothers me about this, E.J., it sounds like a card game over at the country club.  There‘s no anger, no bitterness, acrimony in all directions.  How are you going to get change if you don‘t have some passion that‘s in this debate by the people who are making the decisions?  Where‘s the Ted Kennedy?  Where‘s the Paul Wellstone?  Who‘s the lead dog on this?  Who‘s going to pick this up in your opinion? 

DIONNE:  You saw is last week when Senator Rockefeller of West Virginia said that he couldn‘t vote for the Baucus bill in its current form.  Senator Wyden, who is fairly moderate on these issues, has raised some of the same questions about the Baucus bill. 

I think the real problem also is this notion that somehow or another, if you wait long enough, some Republicans will come along.  I do think Senator Snowe could still end up voting for this and I think she actually is probably more progressive than some of the conservative Democrats.  Otherwise, I think the hope to get a lot of the Republicans to vote for this is gone.  They‘ve made it clear. 

I think that Senators Grassley and Enzi may have ended up playing a smart Republican game by dragging this thing out through the summer.  The net effect of that has been to weaken the position of the reformers, not strengthen it. 

SCHULTZ:  No doubt.  E.J., great to have you with us tonight.  Thanks so much.  E.J. Dionne of the “Washington Post.”

The Republican machine is unbelievable.  I showed you this yesterday.  Your response to this via e-mail was overwhelming.  I got so many e-mails about it, we have to show it to you again.  Watch this gang of deep six, Senator Chuck Grassley, blaming the president.  Here it is. 

(BEGIN VIDEO CLIP)

SEN. CHUCK GRASSLEY ®, FINANCE COMMITTEE:  I‘ll tell you, there are some things the president has said since then that I took very personally.  He gave some speeches during August in which he was associating me with efforts to make this a political document, and with efforts other people in the country will make to give extremes like on the end of life situation. 

(END VIDEO CLIP)

SCHULTZ:  The senator says the president‘s being dishonest when he‘s calling Chuck Grassley out for death panel talk? 

(BEGIN VIDEO CLIP)

GRASSLEY:  We should not have a government program that determines you‘re going to pull the plug on grandma.  We should not have a government plan that determines you‘re going to pull the plug on grandma.  We should not have a government program that determines you‘re going to pull the plug on grandma. 

(END VIDEO CLIP)

SCHULTZ:  All right.  For more, I want to be joined by our panel tonight.  Laura Flanders, author of Blue Grit and host of GritTV.org.  Also with us tonight, Michael Medved, nationally syndicated radio talk show host.  Michael, I got to ask you, how can Mr. Grassley say something like that in Iowa, and then come back inside the Beltway and say that to Capitol Hill reporters and put it on the president?  I need some definition.  I need some clarification here from a conservative here, Michael.  Take me down this road tonight. 

MICHAEL MEDVED, RADIO TALK SHOW HOST:  Please don‘t ask me to explain the mind of Chuck Grassley.  I think he‘s a good guy.  However, remember, this is the same guy who said about the Wall Street executives, they should commit Hari Kari, they should follow the example of the Japanese and kill themselves, when it was exposed that they were taking these undue bonuses.  So Chuck Grassley sometimes has a tough time controlling his remarks. 

However, the basic point here—you were asking before, Ed.  By the way, I agree with you.  I‘m totally opposed to the Baucus bill.  The point here is that we agree, you and me, and conservatives and liberals agree on over half of what needs to be done.  The time has really come for Americans to get together and just do it, to stop the block on pre-existing conditions, to make it impossible for insurance companies to rescind coverage when people get sick, to move forward with the incremental steps that we need, and to drop this idea of some kind of sweeping, one-size-fits-all, change from the top down. 

That‘s a mistake that President Obama, in good faith, is trying to put forward. 

SCHULTZ:  Michael, I appreciate your comments.  I appreciate you coming forward on that.  But I need you to go a step further on this.  To make this real change, we have got to give the private sector some competition.  That is a big part of this or our premiums are going to continue to go up.  Laura Flanders, about Chuck Grassley, are we supposed to feel confident that this guy is the ranking Republican on the Senate Finance Committee and he makes these kinds of comments?  I mean, health care reform is in the hands of this guy. 

LAURA FLANDERS, GRITTV.ORG:  You know, the mind of Grassley is Michael‘s problem here.  I‘m more worried about the mind of Baucus.  He‘s going to sell the whole American people down the drain to try to get Olympia Snowe‘s vote.  This is a rotten deal.  Michael is making a very misleading argument in saying that there‘s no much in this bill or in this proposal that we can agree on, because there is no guarantee for everybody‘s health care under this bill.  There is no guarantee that people will be able to afford the insurance that they‘re going to be forced to buy. 

This is a deep, deep problem people are facing.  Let‘s just talk about that no pre-existing conditions.  Great.  You can‘t be denied coverage on the basis of a pre-existing condition.  You can go broke paying for it, unless we have a public option. 

SCHULTZ:  And, Michael, I want to bring this up, a fair comparison here.  If this were the Bush administration or if this were the Republican sound machine, with the 60 votes, 59 votes, the White House, the House and the Senate, would they be playing this nice? 

MEDVED:  I don‘t know.  Look, I think both sides have played pretty tough here.  The problem right now—and this is why President Obama is going on every TV show imaginable, I think, including the Shopping Channel this weekend—is that the American people have become very concerned.  They don‘t know the specifics and the details.  And people are deeply unsure about the public option or no public option. 

SCHULTZ:  That‘s because he hasn‘t placed any demands.  The president needs to come out and place some demands is what he‘s got to do.  He‘s got to get after it.  We‘ve got four out of five bills that are calling for a public option, and the president won‘t place a demand.  I hope he does that this weekend. 

Panel, we‘ll come back with you.  Go ahead, Michael, quick comment. 

MEDVED:  I was going to say, the problem is the president in his speech—I was there in the gallery and I applauded when the president said he doesn‘t want to add one dime to the national deficit.  You can‘t do that and deliver a public plan.  It‘s either one or the other. 

SCHULTZ:  Yes, you can.  We‘ve just got to raise your taxes.  Panel, stay with us.

Coming up, you can‘t miss the president this weekend.  He‘s got a full media blitz.  I think it‘s time for him to call for a public option, that line in the sand.  Make some news, Mr. President.  That‘s the playbook, next right here on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, the blitz.  The president of the United States will hit five new shows this weekend, plus David Letterman over the next few days.  Mr. President, I think this is the play.  Get tough on the race talk, get it off the table, make some news when it comes to health care. 

Let‘s bring back our panel on that, Laura Flanders and Michael Medved tonight.  Laura, I want to ask you, should the president—how many more voices of America do we have to have?  We‘ve got four out of five bills wanting a public option.  We know we‘re going to have to raise taxes on this.  Isn‘t it time for the president to draw that line in the sand and make some demands?  Or should he keep playing footsie with the Republicans trying to get people on board? 

FLANDERS:  I would like to see him make demands just like you would.  But I think we need to step back a minute and think about why it takes the president to go on this media blitz to refocus the conversation on where the American public are -- 

SCHULTZ:  Is he overexposed? 

FLANDERS:  No, what is overexposed are the hate fests that have been passed off as protests by a media that has both cooked up and boiled the antis on this.  The president is going to remind the public what they voted for a year ago, and what was in the Democratic party platform in ‘08, and that is guaranteed health care for all. 

SCHULTZ:  I don‘t disagree.  Michael Medved, here we‘ve got Michelle Obama now getting into the mix.  Is she going to have an effect?  She‘s going to, I think, have an impact on a lot of moms across this country.  I think it‘s a smart play for the White House.  What do you think? 

MEDVED:  Of course.  She‘s more popular than the president is.  I will tell you what the president could do in his blitz that would unite Americans.  Attack Jimmy Carter.  What Jimmy Carted has contributed to this debate has undermined the president‘s position.  It has created this entire distraction this week. 

Ed, you know it.  You talked to people.  Everybody‘s talking.  Was Carter right?  Is it about race?  Is it not about race?  It‘s a disaster for the Democrats. 

FLANDERS:  Luckily I don‘t think Barack Obama is taking Michael Medved‘s advice on media strategy. 

SCHULTZ:  Michael, I admit, the former president, Jimmy Carter, his timing is terrible.  But when is a good time to talk about some of the things that are going on right now?  These are things that are happening.  There‘s a lot of people in this country that are nervous that something terrible could happen.  Who knows if just a horrific fight breaks out at one of these Tea Parties or somebody is carrying a gun.  Somebody has to reel this stuff in. 

If we don‘t speak truth to these issues, when are we going to do it? 

The timing is not the best, but it has to be addressed, Michael. 

MEDVED:  I don‘t think it has to be addressed to suggest that people who are opposed to President Obama‘s policies on health care are all racist.  Are there some crazy racists out there?  Yes.  Jimmy Carter—

(CROSS TALK)

MEDVED:  Jimmy Carter said the overwhelming portion of animosity to the president of the United States is based upon—overwhelming portion was his language. 

FLANDERS:  Portion? 

MEDVED:  Yes. 

FLANDERS:  Portion? 

MEDVED:  The overwhelming portion.  That means majority.  That‘s wrong.  That‘s slander of a lot of patriotic and decent Americans who disagree with the president on health care. 

FLANDERS:  You‘re going to say—

SCHULTZ:  Laura Flanders, finally—Laura, I want to know if Michelle Obama‘s going to have an effect in all of this. 

FLANDERS:  Of course she is.  Michelle Obama has 70 percent approval rating.  She again reflects what people‘s hopes and dreams were when they voted last year.  The conversation needs to go back right there. 

MEDVED:  It‘s certainly better for Democrats to hear from Michelle Obama than Jimmy Carter. 

SCHULTZ:  Great to have you with us.  Thank you, panel. 

You can see the interview with the president of the United States on “Meet the Press” with David Gregory this Sunday on NBC.  Check your local listings.

Coming up, Value Voters bring in a dandy.  Her answer to a pageant question made her a conservative hero. 

(BEGIN VIDEO CLIP)

CARRIE PREJEAN, FMR. MISS CALIFORNIA:  I am disgusted at the way some people can be so intolerant.  It disgusts me. 

(END VIDEO CLIP)

SCHULTZ:  The only one who made me more disgusted is our own deposed beauty queen, Liz Winstead.  She‘s in Club Ed.  You‘re watching THE ED SHOW on MSNBC.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  It‘s Friday.  That means it‘s time for Club Ed, with Liz Winstead, co-creator of “The Daily Show” and brains behind “Wake-Up World.”  Good to see you tonight. 

LIZ WINSTEAD, “WAKE UP WORLD”:  Hi, Ed. 

SCHULTZ:  You‘ve got to help me, Liz.  This Baucus bill is killing me. 

What do you think of this thing? 

WINSTEAD:  I think it is one of the most amazing pieces of legislation, showing all of the heart and soul of progressive democracy that we can cook up.  Seriously, what great nation wouldn‘t want to say, here‘s what we‘re going to do for our citizens.  We‘re going to have a tax-payer funded, for-profit health care plan for some. 

My heart is actually beating.  I‘m so excited.  Thank you, Max Baucus. 

Thank you. 

SCHULTZ:  What do you make of the Values Voters little cotillion they‘re having there in D.C. this weekend? 

WINSTEAD:  It‘s kind of exciting for them because this is—I don‘t know if you know this, but the Values Voters cotillion, as you call it, is like the Olympics, where people bid to have it.  Glenn-Beck-istan won this year.  Coming in second was the Malkin Islands.  They went with Glenn-Beck-istan this year.  They‘ve very excited.  

SCHULTZ:  They‘re also excited to have Tim Pawlenty there.  He‘s kind of a moderate now, isn‘t he?  How do you think he plays? 

WINSTEAD:  Yes, you know what I think happens?  I kind of am starting to think that moderate Republicans—it‘s kind of the gateway drug to crazy.  The moderates—the crazies start hanging around the moderate Republicans, and sucking them in.  It‘s kind of like crack dealers at a school.  We‘ll give you a little money if you want to really move forward.  You‘ve got to come closer to the edge, and closer to the edge.  And before you know it, the moderates are like crazy extremists.  You can‘t get out. 

SCHULTZ:  It looks like we‘ve got good economic news.  Quickly, the recession, is it over? 

WINSTEAD:  It‘s not over.  I will believe the recession is over when the iPhone has a jobs ap. 

SCHULTZ:  Liz, great to have you with us on this Friday edition. 

WINSTEAD:  Thanks, Ed.

SCHULTZ:  Check out her podcast.  It‘s called “The Broadcast With Liz Winstead and Darby Whirly” (ph).  You can also find Liz on Twitter at Twitter.com/LizWinstead.  Early, I asked you what you thought about this, the rhetoric about health care.  Will it lead to violence?  Ninety percent of you said yes.  Ten percent of you said no.

That‘s THE ED SHOW.  “HARDBALL is next.  We‘ll see you Monday at 6:00 right here on MSNBC.

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Guests: John Harwood, Bernie Sanders, Joe Sestak, Wendell Potter, Rep. George Miller, Karen Hanretty, Jack Rice, Todd Webster, Jonathan Alter

ED SCHULTZ, MSNBC NEWS ANCHOR:  Good evening, Americans.  Welcome to THE ED SHOW on MSNBC.

Tonight, here is the magic number, it‘s 51.  It‘s time for the Democrats to start making some demands.  And if they‘re not met, just go to reconciliation.  That‘s what the people want.

Now, there are five health care bills of reform, real simple; three in the House, two in the Senate.  They have exactly zero Republican votes.  Got that?  That means nobody from the Republican Party is on board.  After all this discussion, what are we waiting for?

They‘re supposed to be helping the president solve the country‘s most urgent issue.  And 80 percent of the bills now have a public option; four out of five want a public option.  How can the president deny that?

There is one glaring exception.  It is the Baucus plan or what I like to call the triangle of death.  Not your death, the death of your wallet because here‘s how it‘s going to work.

The Baucus plan calls for the government to give subsidies to consumers, then consumers they‘ve got run over because they‘re mandated to buy insurance from the industry.  Then in return, all the new business they got from big insurance is going to help them line the pockets of those politicians in Washington and that is the vicious triangle of the Baucus Bill.  That‘s it in a nutshell.

Folks, that is not reform, because right here I‘ll tell you big insurance, they will still be calling the shots.  Those folks in big medical, they are the ones who are lobbying the Congress and controlling this whole thing.  But we got a chance here if we got guts.

The Republicans, you see, they‘ve got a new strategy.  Just pretend like they would have voted for reform, if only President Obama hadn‘t been so mean.  Here‘s what Chuck Grassley unloaded on today.

(BEGIN VIDEO CLIP)

SEN. CHUCK GRASSLEY, RANKING MEMBER, FINANCE COMMITTEE:  I‘ll tell you, there‘s some things that the president has said since then that I took very personally.  He gave some speeches during August in which he was associating me with efforts to make this a political document and with efforts other people in the country will make to give extremes like on the end of life situation.

(END VIDEO CLIP)

SCHULTZ:  Hold, hold, hold it.  I‘m sorry, senator.  Are you telling us that it would be dishonest to associate you with death panel talk?

(BEGIN VIDEO CLIP)

GRASSLEY:  We should not have a government program that determines you‘re going to pull the plug on grandma.  We should not have a government programs that determines you‘re going to pull the plug on grandma.  We should not have a government programs that determines you‘re going to pull the plug on grandma.

(END VIDEO CLIP)

SCHULTZ:  Everybody got that?  That was Senator Grassley at home in Iowa.  But the first sound cut was today.  Will the real Senator Grassley please stand up?  The Republican rhetoric about the president and the insurance reform has been absolutely disgusting.

Now, the suggestion that the president‘s tone has been anything like that is absolutely absurd.  But Grassley was honest about one thing...

(BEGIN VIDEO CLIP)

GRASSLEY:  I‘ve been very candid with the President of the United States, face-to-face.  Like when he asked me would I support a bill, a bill if there was three Republicans and 58 Democrats and I said that‘s not a bipartisan bill.

(END VIDEO CLIP)

SCHULTZ:  Well, there it is, that‘s the bottom line.  There‘s no way the party of Waterloo will vote for any reform to help this president succeed.  Chuck Grassley just put the nail and the call for the bipartisanship.  Democrats, wake up.  When are you going to get the message with these guys?

Today, the president once again offered tough talk about his critics.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I‘ve heard a lot of Republicans say they want to kill Obama care.  Some may even raise money off it.  But when you ask these folks what exactly my plan does, they‘ve got it all wrong.  When you ask them what their solution is, it amounts to the same old, same old.

I will not accept the status quo as a solution.  Not this time, not now.  The time for bickering is over; the time for games is past.  Now is the season for action.  Now is the time to deliver on health care reform for the American people.

(END VIDEO CLIP)

SCHULTZ:  I‘m all about it.  Let‘s hold it right there.  Now the president is going to be going out and talking to all the talking heads this Sunday, right?  And the White House doesn‘t want to talk about race and they don‘t want to answer those questions about what Jimmy Carter was saying and everything else.

Well, Mr. President, make some news, demand the public option, because in the five bills, four of them call for a public option, plus the health care providers are with you and 75 percent of the doctors.  Plus the American people are with you.  Enough with the speeches, you‘ve done all you can do.  The president said it himself.

Now is the time for action.  Let‘s see if he goes through with it.  Forget about Grassley and the Republicans.  The president, he didn‘t kill bipartisanship, they did.  It‘s time for the Democrats to say we are the party of change, we won the House and the Senate and the House, forget all the niceties, forget about the governance of what might happen over the next six or seven years.

It‘s what the people expect, the people elected the Democrats to implement change.  Now is our time.

But what‘s going to happen?  Chuck Grassley and 39 of his friends are trying to kill reform and scare the hell out of the American people.  And if the Democrats fall for this and don‘t show some guts and go reconciliation, the joke‘s on us.

The time for talk is over.  I want him to draw a line just like this.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, SPEAKER OF THE HOUSE:  I fully support the public option; a public option will be in the bill that has the half of the representatives.

(END VIDEO CLIP)

SCHULTZ:  Nancy Pelosi, can you send that script over to President Obama?  Because that‘s what the talking heads need to hear this weekend.  We need to get it on.

Get you cell phone out folks.  I want to know what you think.

Do Senate Democrats have the guts to use reconciliation to get the public option?  Text a for yes, b for no to 622639.  We‘ll bring you the results later on in the show.

Now, joining me now is Senator Bernie Sanders, a minute member of the Senate HELP Committee.  And Senator, we‘re now at the defining hour of who wants to stand up for reform and I know you want single payer.  That‘s not going to happen, but we might get something similar to it.

Senator, do you think the White House has the guts to tell the Senate leadership go reconciliation?

SEN. BERNIE SANDERS, (I) HELP COMMITTEE:  Well, I hope that the White House is going to work with the Senate leadership to make sure that we have real health care reform that all of us can be proud of and that absolutely must include a public option for all the reasons that you have been giving.

Without that public option, the private insurance companies will be able to raise their rates and raise their rates.  There will be no competition and the American people will not be able to have the choice that they need.

So I agree that a public option is absolutely necessary.  My hope is, and I‘ve been saying this for months, that you‘re going to have with Massachusetts‘ new senator that we hope, you‘re going to have 60 votes within the Democratic caucus and they have got to be firm and say to the Republicans, “Sorry, our health care system is disintegrating.  You just can‘t say no and no and no.  We‘re going to stand united.  We‘re going to pass strong health care.”

SCHULTZ:  All right, Senator Sanders, I don‘t have a telestrator here right now, but if I was in the broadcast booth doing a game, this is what I would draw up.  Here we have the government at the top, then the consumers down here on the left and big insurance over on the right and a back up to the government.  It‘s this triangle—it‘s this triangle of death.

SANDERS:  Yes.  Absolutely.

SCHULTZ:  You‘ve got the subsidies going to the consumers, you‘re forcing them to buy big insurance policies that gets a lot more people in the market and they‘re going to line the pockets of government.  Is that not the Baucus Bill in a nutshell?

SANDERS:  Well, in fairness to the Baucus Bill, there are some good things in it, too.  Like...

SCHULTZ:  There are good things in it.  But this is the workings of that bill.

SANDERS:  But here‘s the problem and I think you put your finger right on it.  What we are looking at is the possibility of funnelling billions and billions of dollars into the insurance companies who can then raise their rates over a period of years to any level that they want and the federal government is going to be bailing them out and subsidizing them big-time.

SCHULTZ:  That you‘re saying that the gouge, the grip is still going to be on.  It won‘t be true competition, but we‘re back to this.  Why are the Democrats so stuck on 60 votes?  Because right now if you have to go get Republican votes, it‘s going to get watered down so bad...

SANDERS:  (INAUDIBLE)

SCHULTZ:  ...the base of the Democratic Party is going to turn on the president.

SANDERS:  Ed, let me just say this, as somebody who as you indicated believes that a Medicare for all single payer system, a very, very strong public option.  The issue of reconciliation is you‘re dealing with a very complicated procedural process in the senate.  There are things you can do with it and there are things we must do.

But it doesn‘t give you the opportunity to do all that you or I want.  Reconciliation does not simply mean that we can do everything we want with 51 votes.  That‘s the problem.  But if we have to do that, there is a lot that we can do and that‘s what we should do.

SCHULTZ:  Well, it all surrounds the budget.  You have to pay for it, correct?  That you have to pay for it in a shorter period...

SANDERS:  You have to pay for it, that‘s correct.

SCHULTZ:  ...period of time, which means you have to raise taxes.

SANDERS:  And there are procedural problems with it as well.  You can do things with it.  It is an option.  The better option is back with me to get 60 votes to say no to the Republicans and go forward in a more comprehensive way.

But I want to underline the point that you made a moment ago.  With a disintegrating health care system, with a million people this year going bankrupt, with 18,000 people dying because they don‘t have health insurance and can‘t get to the doctor on time, it really is quite amazing that not one Republican has come forward to say, “Yes, I‘m going to support strong health care reform.”  That really is quite amazing.

SCHULTZ:  That is, it is amazing, on five different proposals and bills, not one, not one.  Senator Sanders, it‘s great to have you with us tonight.  Thanks so much.

SANDERS:  It‘s good to be with you.  Thank you.

SCHULTZ:  For more, let me bring in John Harwood tonight, CNBC Chief Washington correspondent and political writer for “The New York Times,” who had an exclusive interview one-on-one with Senator Olympia Snowe today who could be a Republican that could come over.

John did you get any encouragement that she‘s willing to move and negotiate at this point?

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  Well, she said

some positive things about President Obama to start with.  I asked if she considered like many of her Republican colleagues do, Barack Obama a big government liberal.  She said, “No, he‘s more of a moderate than a liberal, I think he‘s been reasonable on this.”

She said the cost controls were adequate in the Baucus Bill, she wants some changes in the bill and interestingly, Ed, she agrees with liberal Democrats like Jay Rockefeller.  To some degree, she wants more subsidies to let low income people buy health insurance.  Then the question is how you pay for it.

And I think the most encouraging signal of all, is Ed, that if Democrats as Bernie Sanders was just suggesting decide to go for 60 votes to have the unrestricted ability to pass a bill, once they get past a filibuster, they‘re going to need Olympia Snowe at least if they do that anytime soon.  And what she told me was the Republican Party has drifted away from her.

She said, “I‘ve always held traditional Republican principles, I haven‘t changed, my party has.”  That tells she me that she‘s not necessarily going to bound by party identity when it comes to that big party vote on filibuster.

SCHULTZ:  Well, that‘s interesting, because as Senator Sanders said, there‘s a lot of Americans who are hurting that could use a break and it cuts to the core of what these senators are all about.  Are they going to get hung up on what their party is all about and what‘s right for the people and you asked her something about that today in the interview.  Here it is.

(BEGIN VIDEO CLIP)

SEN. OLYMPIA SNOWE, ® FINANCE COMMITTEE:  I‘ve always been a Republican for the traditional principles that have been associated with the Republican Party since I became a Republican, when I registered to vote.  And that is limited government, individual opportunities, fiscal responsibility, and a strong national defense.

So I think that those principles have always been a part of the Republican Party heritage.  And I believe that I reflect those views and I haven‘t changed as a Republican.  I think more that my party has changed.

(END VIDEO CLIP)

SCHULTZ:  John, not one Republican has locked on to any of these bills at this point.  Are they trying to make a political point to keep their base together and they‘re going to break late in the game to get health care reform or do you really think they‘re this rigid?

HARWOOD:  Well, I think most of them are determined to oppose what President Obama is doing.  But I don‘t think you can put Olympia Snowe in that category.  She‘s been working closely with the White House.  She said she talked to the president last Friday.  She‘s had a very vigorous back and forth with senior members of the White House staff.

So I think Democrats have reason to be optimistic that what Olympia Snowe is doing is using the leverage she has as somebody that they need who might be with him to get the most changes that she wants.  And by the way, that Baucus Bill, as you know, has a co-op provision...

SCHULTZ:  Yes it does.

HARWOOD:  ...which many Democrats consider meaningless.  She supports a triggered public option.  I know you want a full public option.

SCHULTZ:  Yes.

HARWOOD:  But I think she‘s closer to your position than some Democrats are.

SCHULTZ:  Well, the only thing about the trigger is who‘s going to determine when it‘s not working and what‘s the time frame there?  And that would be kind of tough to watch with a lot of people still struggling in their lives when it comes to health insurance.

HARWOOD:  Yes.

SCHULTZ:  One final point I want to make with you, John, because you‘ve interviewed the president on numerous occasions.  Is he out to make news this weekend on the talking heads with all these interviews that he‘s going to be doing because of what Jimmy Carter said, to get that out of the news?  Maybe it‘s time to break and draw that line in the sand and the president be very definitive about what he wants in a bill.  What do you think?

HARWOOD:  I would expect Ed, that the president is going to do everything he can to deflect talk of race.  With all of the fights that he‘s taking on politically and there are a lot of them and they‘re big fights, I don‘t think he wants to get in a protracted race discussion.

SCHULTZ:  Yes.

HARWOOD:  I think he made most of the news he‘s going to make on health care in that speech last week, but who knows?  David Gregory may be able to get something out of him on “Meet the Press.”

SCHULTZ:  John, thanks so much, I appreciate your time tonight.

HARWOOD:  You bet.

SCHULTZ:  Great interview with Senator Olympia Snowe.

And by the way folks you can watch that entire interview tomorrow on the New York Times special edition it starts at 2:00 p.m. Eastern Time right here on MSNBC.

Coming up: the president‘s decision to shelve Bush‘s missile defense system and has enraged war mongers like John McCain and Joe Lieberman.  I‘ll ask the highest ranking military officer ever elected in Congress what he thinks in just a moment.

And new legislation means students will no long have to mortgage their future to get an education.  Righties call this another government take over.  House Education Chairman, George Miller is going to set the record straight in “Playbook” tonight.

Plus, whining tea baggers go off the rails in Washington.  I‘m calling them out in “Psycho Talk.”  Boy is there hypocrisy on the way.  Stay with us.

(COMMERCIAL BREAK)

SCHULT:  Up next, President Obama just deep-sixed Bush‘s missile defense plan.  Republicans say this empowers those we can‘t trust like Russia and Iran.  Now I don‘t trust them either, but I do trust the president.

Three-star admiral, Congressman Joe Sestak will give us his intel take on this when we come back.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

Another Bush administration policy bites the dust.  It‘s getting criticism.  President Obama announced today that he is scrapping Bush‘s plans for a long-range missile defense system in Poland and the Czech Republic.  Instead, Obama is shifting his attention to more urgent threats of short-range missiles from Iran.

Let me bring in Congressman Joseph Sestak of Pennsylvania.  He‘s a 3-Star Admiral in the Navy and the highest ranking former military officer ever elected to the Congress.

Joe, I want you to listen to this sound bite.  This is the president this morning explaining his reasoning for making this move.  Here it is.

(BEGIN VIDEO CLIP)

OBAMA:  This new Ballistic Missile Defense Program will best address the threat posed by Iran‘s ongoing ballistic missile defense program.  We will retain the flexibility to adjust and enhance our defenses as the threat and technology continue to evolve.

To put it simply, our new missile defense architecture in Europe will provide stronger, smarter and swifter defenses of American forces and America‘s allies.

(END VIDEO CLIP)

REP. JOE SESTAK, (D) PENNYSLVANIA:  He should have added just one more word, “and at less cost, more capability at less cost.”  The NIE, National Intelligence Estimate, that came out in June actually said it‘s not the long-range missile threat it‘s the short and medium range threat that threaten our troops in the Middle East, that threaten Israel and southeast Europe including Turkey.

The system President Bush was going to build, which would be in place in 2017, would protect none of that against those shorter or medium range threats.  By 2011, in only two years, we will have Aegis ships out there, upwards of 80 then we can move around like pucks on a hockey rink around the world to protect our troops and other nations from short or medium range threat.

Then by 2017 and ‘18, there is a four-step phase to have almost identical capability, long-range up against ICBMs, intercontinental ballistic missiles to protect America.  What a good move by this president.

SCHULTZ:  So Congressman, you‘re saying not only is it a good strategic move, but it‘s also a budget move as well?

SESTAK:  Absolutely.

SESTAK:  About over $4 billion is what we would have put into the system in the Czech Republic and Poland.  I would imagine it‘s easily less than a billion dollars that is going to have this upgrade of Aegis ships that already have a missile defense system on them and improvement (ph).

And second, if I could, this system that we were putting in there, which is going to have the same capability almost on the outside for long range, permits us to deal with Russia, to have Russia then pivot and put pressure economically by sanctions as well as diplomatically on Iran with a hope they‘ll stop building their nuclear weapon efforts.

SCHULTZ:  Joe, the conservatives are saying we‘re caving to the Russians.  That this is a weak move; that this isn‘t a strategic move at all and this is the weak side of the Obama administration.  What about that?

SESTAK:  Absolutely not.  They often said that when President Nixon and Kissinger actually dealt with the SALT talks, Strategic Arm Limitation Talks.  This is once more going back to a political military move where this president has retained the same capability, in fact enhanced it to protect Israel and our troops out there in the Middle East.

And at the same time, has a probability of now, with Russia, placing pressure on Iran, that if it doesn‘t pursue a nuclear weapon, we gain.  No, this is an act of strength.

SCHULTZ:  And quickly, one final thing.  You were talking about these ships that will be able to move around, more mobility.  Do you think this will force the Russians, maybe, to change their strategy on the open seas?  What do you think? 

SESTAK:  Absolutely not.  There is no Russian navy of any worth today.  By the way, these ships we have are already there today.  The president is just taking advantage of an already-built infrastructure with slight software upgrade and additional number of missiles.  That‘s it.  What a wonderful move by this president to enhance our security at less cost and protect an ally, Israel, that wouldn‘t have been protected otherwise. 

SCHULTZ:  Congressman, good to have you on tonight.

SESTAK:  Good to be here.  Thank you.

SCHULTZ:  Thanks so much for drawing on your experience as an admiral here on THE ED SHOW.  I appreciate it very much.

Coming up, those nut-job tea partiers are whining out of both sides of their mouth, again.  They want to cut government spending but they‘re mad that the government didn‘t spend enough on them for the D.C. protests.  They ride on the “Psycho Talk” express next on THE ED SHOW.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  We got a dandy in “Psycho Talk” tonight.  A little hypocrisy out there; you remember these TEA partiers that were in Washington, D.C.  last weekend, the 1.7 million?  Remember what they were hollering about?  Here it is. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  He‘s raising the taxes like crazy and we need freedom. 

UNIDENTIFIED MALE:  Communism, fascism, socialism. 

UNIDENTIFIED FEMALE:  Talking about less taxes, less government. 

UNIDENTIFIED MALE:  Spending a lot of money that‘s unnecessarily spent.

UNIDENTIFIED FEMALE:  We‘re tired of the spending. 

(END VIDEO CLIP)

SCHULTZ:  Is that right?  They were protesting socialism, taxation and government-run programs.

But now they‘re complaining that the Washington Metro System wasn‘t good enough for them.  That‘s right.  The Washington metro, of course, is public transit, that means it‘s run by the evil government which is exactly what these nut jobs were protesting.

Congressman Kevin Brady—here‘s the interesting twist—he‘s from Texas, he sent an angry letter to the Washington Metropolitan Transit Authority about it.  He wrote, “These individuals came all the way from southwest Texas to protest the executive spending and growing government intrusion.  These participants, whose tax dollars were used to create and maintain this public transit system, were disappointed that our nation did not make a great effort to simply provide a basic level of transit for them.”

Well, actually, this summer, Congressman, I thought you voted against a bill that would have funded the D.C. Metro System.  So these folks, who are out there complaining about government spending, are upset that the government actually didn‘t spend enough money so they could have their TEA party.  Bubba, let me tell you something, that‘s nothing but “Psycho Talk.”  Take a taxi.

Coming up, House Speaker Nancy Pelosi got all choked up today when addressing how heated the political climate is.  So she wants us to all curb our enthusiasm for the good of the country.  I‘ll show you the tape in a moment.

And you know how the Righties keep saying that the president‘s policies are bad for the economy?  Well, it turns out that they may not know what they‘re talking about again.  Home prices are up and American‘s net worth has grown by a couple of trillion dollars this year.  Some good news coming up in the “Playbook.”

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  The Baucus plan; progressives don‘t like it; Republicans, well, actually, they‘ll never like it.  In fact, the only group that seems to like the Baucus plan is the health insurance industry themselves.  How about these insurance stocks, just getting up there the last couple days, after the Baucus plan was announced?  How about that? 

Joining me now is Wendell Potter, former vice president of the insurance giant CIGNA.  He is now a senior fellow on health care for the Center for Media and Democracy.

Well, Mr. Potter, I wanted to bring you back again this week.  Don‘t mean to bother you too much.  But you did call it.  You said this was a gift to big insurance.  Is this the tip of the iceberg, what do you think? 

WENDELL POTTER, CENTER FOR MEDIA AND DEMOCRACY:  I think so.  I can‘t believe that we‘ve got a bill that gives so much a gift to the insurance industry as this is.  You‘re right, I think the only people anywhere in Washington who appreciate this bill are the people who work for America‘s Health Insurance Plan, the big trade association, and around the country illegal aliens, because they‘re the only people who can escape being forced to buy the insurance products that we would have to buy under this plan.  

SCHULTZ:  With the mandate and with people that can‘t afford to buy the insurance, they would be subsidized by the government, go over and buy the insurance policy, fatten the pockets of the big insurance companies, who would be able to line the pockets of the politicians to make sure that there‘s no more reform.  Is that too much of a stretch or is it the way it‘s going to be? 

POTTER:  Not, that‘s how the bill is—how it‘s designed, how it would be implemented.  Your tax dollars and mine would help subsidize those who don‘t have enough money to pay the money they would be required by law to buy the insurance from these private insurance companies.  That would send your tax dollars and mine, those policy holders money, straight into the pockets of investors. 

SCHULTZ:  Mr. Potter, you and I have talked a lot about how much money and how much effort and how much orchestrated attempts that they‘ve had, a game plan to fight off the public option and anything that would compete against the private sector.  Well, now we‘ve got four out of the five bills have got a government-run insurance program that would compete against the private sector. 

What can we expect down the stretch here?  I mean, is the hammer job coming?  Is this the tip of the iceberg?  What are we going to see from big insurance the rest of the way? 

POTTER:  Big insurance will try to keep making the case that the public option is dead or dying.  And that‘s why you‘ve been seeing the stock price go up.  Over the past three months, the stock price of the company I used to work for, Cigna, has gone up 50 percent.  This is part of the insurance industry strategy to try to make people think and try to discourage the advocates of the public option, just give up, it‘s not going to happen. 

You will see I think that people will start rebelling against this Baucus bill.  And I think senators like Jay Rockefeller, who has been a champion of health care reform longer than any living senator, he doesn‘t like this bill.  I think he will try to seek to amend this so that it will resemble more of the bill that came out of the Health Committee in the Senate or the House bill. 

SCHULTZ:  But these lobbyist will really be twisting arms right now, won‘t they? 

POTTER:  Absolutely.  They have focused their attention on Senator Baucus and on Senate Finance because they know that‘s where the current action is.  That‘s why the bill looks as it looks right now.  So they will be in full force, spending millions of dollars over this next stretch of time. 

SCHULTZ:  Do you think we could come to the political conclusion that if Barack Obama, the president of the United States, gets the public option, that he really will have defeated the lobbyists the way he said he was going to do or attempt to do, and get them out of the White House, get them out of the influence, as he said in the campaign? 

I mean, four out of five, 80 percent of the legislation has a public option in it.  So this is the defining moment now, is it not? 

POTTER:  It really is.  He needs to have the public option in there. 

Otherwise it will be a great flip-flop from the campaign, first of all.  But the public option is the best hope.  There‘s a new study released today out of Harvard that 45,000 Americans die every year because they lack insurance.  That doesn‘t count the people who are under-insured.  Another 25 million people are under insured. 

He said in his speech that he wants to have a plan that will ensure that no American will ever be going bankrupt because of a lack of insurance.  This bill, this Baucus bill will guarantee that more and more of us will be going bankrupt, will be joining the ranks of the under-insured. 

SCHULTZ:  Mr. Potter, good to have you with us tonight.  Thanks so much for your time.

POTTER:  Thank you very much. 

SCHULTZ:  For more, let‘s bring in our panel tonight.  Todd Webster, Democratic strategist, is with us.  Also, Jack Rice, former CIA officer and radio talk show host.  And Karen Hanretty, Republican strategist. 

Another story that‘s out there with our panel tonight that I want to bring up there is this rhetoric that is out there across the country on talk radio and, of course, at these tea parties that are going across, the hateful signs, the talk of racism.  What former President Carter has been talking about, not only last night in a speech, but in an interview with Brian Williams the other night, about how there is so much hatred towards the president. 

It has really rekindled a lot of memories of House Speaker Nancy Pelosi.  She addressed it today, the level of rhetoric and how scared she is. 

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), SPEAKER OF THE HOUSE:  I have concerns about some of the language that is being used, because I saw—I saw this myself in the late ‘70s in San Francisco, this kind of rhetoric.  It was very frightening.  And it gave—it created a climate in which we—violence took place. 

Our country is great because people can say what they think and they believe.  But I also think that they have to take responsibility for any incitement that they may cause. 

(END VIDEO CLIP)

SCHULTZ:  Karen Hanretty, I would like to get your response to this first tonight.  The White House doesn‘t want to respond to it.  So they just turned it over to Nancy Pelosi.  Is she being a little too emotional about this or this a genuine move here?  What do you think? 

KAREN HANRETTY, REPUBLICAN STRATEGIST:  No, there‘s nothing genuine about Nancy Pelosi, first of all. 

HANRETTY:  Yes, look, reporters didn‘t even know exactly what she was talking about.  So they asked more staff, was she referring to the murder of Harvey Milk, you know, and they said yes.  Harvey Milk wasn‘t murdered by a Republican who was a homophobe.  He was murdered by a guy who was disgruntled.  It had nothing to do with politics or ideology.

She‘s trying to just drag this in so they can create this narrative.  The Republicans are just a bunch of racist, homophobes.  Let‘s just throw in misogynistic while we‘re at it.  This is just a distraction. 

SCHULTZ:  Todd, your thoughts on this political move?  Is it political or is it just a genuine moment by the speaker of the House? 

TODD WEBSTER, DEMOCRATIC STRATEGIST:  Let‘s try to be objective about this.  Republicans have been running and winning campaigns on these wedge issues of race for 30 or 40 years.  It goes back to Nixon‘s southern strategy.  As recently as a few years ago, Bob Corker won a Senate race against Harold Ford tapping into racism and the fear of a black man. 

Look, there are still crackers in this country.  And it‘s unfortunate.  But it‘s what it is.  Hold on a second.  But this is the base of the Republican party.  Whether it‘s the tea baggers or the birthers or these other efforts to undermine the legitimacy of Barack Obama as president because he‘s a black man. 

Now, the vast majority of Americans I think have moved on.  And we are a tolerant and a pluralistic society.  But there are still politicians and campaigns that will try to use these wedge issues and try to drum up race to score political points. 

SCHULTZ:  OK.  Jack, your thoughts on Nancy Pelosi‘s emotion today?  But also the president is going to be doing a lot of interviews this weekend on the talking heads, hitting all the major shows.  And the issue of race is going to come up.  Do you think he should address it or brush it off and leave it where it is? 

JACK RICE, RADIO TALK SHOW HOST:  I don‘t think he can actually brush it off.  But what he does have to do is focus in on what it is the American people need. 

I mean, he‘s been very smart when it came to Jeremiah Wright, when it came to Gates, when it has come to this.  Robert Gibbs said just yesterday, you know what, he doesn‘t see this as a racial issue.  I think there is a racial component to this, without question. 

However, the president is smart to focus in and say what the American people need desperately right now is health insurance reform.  So he‘s going to focus in on that issue.  He will acknowledge that it exists.  I think he‘s essentially pushed it away in this instance. 

However, I think his focus is the appropriate one and we‘ll see what happens. 

SCHULTZ:  Karen, I‘ll give you a quick comment there. 

HANRETTY:  Those crackers that Todd referred to—a lot of those crackers were voting in the Democratic primary.  You‘ll recall that President Obama referred to Bill Clinton as being racist in some of how Hillary Clinton was running her campaign. 

SCHULTZ:  We‘ll leave it there. 

HANRETTY:  Yes. 

WEBSTER:  Extreme progressives don‘t shoot people, OK, like you have at the Holocaust museum.

HANRETTY:  You mean like the Weather Underground that Barack Obama—one of his supporters was associated with? 

(CROSS TALK)

SCHULTZ:  Coming up in our next segment, huge news for college kids today.  Thanks to Congress, student loans will no longer be run by private banks.  Right wingers are accusing this as another government takeover.  It‘s not.  Congressman George Miller next in my playbook to explain all the advantages.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, the GOP‘s government takeover.  Play on health care riled up their base so much that they‘re using it again to target education reform.  So far, though, it‘s not working. 

Today, the House of Representatives passed a bill that would end government subsidies to private student lenders.  Instead, that money would go straight to the students.  But apparently Republicans don‘t think that would help Americans afford a college education.  Here‘s what they had to say about the bill. 

(BEGIN VIDEO CLIP)

REP. JOHN KLINE ®, MINNESOTA:  This is indeed a government takeover of an industry. 

UNIDENTIFIED MALE: This measure before us usurps even a modicum of private sector involvement. 

REP. VIRGINIA FOXX ®, NORTH CAROLINA:  This bill is another government takeover of parts of our lives.  It is an insidious intrusion into education at all levels by the federal government. 

(END VIDEO CLIP)

SCHULTZ:  Oh, sound familiar, huh?  Joining me now is the sponsor of the bill, chairman of the House Education and Labor Committee, Representative George Miller of California.  Congressman, great to have you with us tonight. 

REP. GEORGE MILLER (D), CALIFORNIA:  Thank you, Ed. 

SCHULTZ:  Doesn‘t this just cut out the middleman?  Isn‘t that all this legislation does? 

MILLER:  That‘s what this legislation does.  Right now, under the program as it currently exists, we took money from the Treasury, we gave it to the banks, we gave them the subsidy.  If there‘s any default, we guaranteed that loan. 

What we now understand is that we can take that money, save the taxpayers over the next ten years 87 billion dollars, and we could give that money to benefit students and families that are borrowing money to reduce the cost of the loans, to help the lowest income people who are qualified to go to college, and make campus based loans available to help students who run into economic trouble during the school year. 

SCHULTZ:  So Congressman, you‘re telling us that this will save money, and it will make it easier for students to get money to go to college.  I looked at the vote this afternoon, 253-171.  You only got six Republicans to vote yes on this.  What‘s their problem on that, other than the sound bites we just heard about it being a government takeover?  What‘s their problem? 

MILLER:  Well, the lobbyists from the lending institutions have been in full flight for the last couple of months, pounding on legislator‘s doors, telling them that somehow they were still entitled to a subsidy.  As these banks—as these lending institutions became some of the wealthiest and most profitable corporations in America, they insisted they were entitled to a subsidy at the same time. 

We said no; no longer are you entitled to that.  What we‘re going to do is take that money and put it out on behalf of students who have to borrow money to pay for their education, families that have to borrow money to pay for their education.  We‘re going to make it more affordable.  We‘re going to lower the interest rate.  And we‘re going to make sure that people can complete their college education. 

SCHULTZ:  OK.  Congressman, I also want to ask you about the controversial issue surrounding Acorn.  There was another vote in the House today and it was 345-75.  And that is to cut all funding to Acorn.  Your thoughts on this?  First, how did you vote?  And what do you make of this? 

MILLER:  I voted for that resolution, so we could move this bill to the conference committee with the Senate.  I‘m not going to lose the opportunity to provide America‘s students and families that this bill provides, to take those subsidies away from the bank and help them.

On Acorn, we have on-going investigations in the House.  I think the Senate voted once or twice already to strip Acorn of its funding.  We‘ll see what the results of that investigation in the House are and other investigations, and the Congress will make its mind up. 

SCHULTZ:  Yesterday, Senator Shelby said on this network he thought Acorn was corrupt pretty much across the board, that they‘ve been doing this for years, they got problems everywhere.  Do you agree with that? 

MILLER:  I don‘t agree with that at all.  I think they‘ve had some very irresponsible people working for them that made some terrible decisions.  But Acorn has been very, very important over many decades of empowering poor people, helping people register to vote, all kinds of economic activities on behalf of those who are many times disenfranchised in this society. 

But they‘ve made some horrendous mistakes.  I don‘t know whether or not they can survive it.  We‘ll see what the investigations say.

SCHULTZ:  Congressman George Miller, great to have you with us tonight.  Thank you so much. 

MILLER:  Thank you. 

SCHULTZ:  One last page of my playbook.  We got some good economic news this afternoon.  Americans‘ net worth grew by two trillion dollars in the second quarter of this year.  That‘s the first time it‘s gone up since 2007.  Home prices are up as well.  Real estate values rose 1.8 percent.  That‘s the first rise in home prices since the end of 2006.

Looks like the Republicans might have a hard time explaining this one.  And they might be arguing—having it tough to argue against President Obama‘s policies now that we‘ve got some really good economic news. 

Next up, the main event.  I have some advice for the president.  When it comes to health care reform, the time has come, lay down the law on the public option.  I have a feeling “Newsweek” Jonathan Alter isn‘t going to agree with me on that.  That‘s coming up with I guess you could say an altercation in just a moment on THE ED SHOW.  Stay with us. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PELOSI:  I fully support the public option.  A public option will be in the bill that passes the House of Representatives. 

(END VIDEO CLIP)

SCHULTZ:  Nancy Pelosi laid down the law again today.  I would like to hear the president have that kind of toughness coming up on this media tour.  I want him to say, quote, I support a public option and it must be in any bill that I sign, end quote. 

If Democrats in the Senate can‘t get 60 votes, do it with 51.  And I‘m all for reconciliation.  I don‘t think Jonathan Alter is, “Newsweek Magazine.”  What do you think? 

JONATHAN ALTER, “NEWSWEEK”:  Actually, I am too.  I think it‘s fine to split the bill in two and do part of it through reconciliation.  I‘ve got no problem with that. 

My only problem is drawing lines in the sand.  I don‘t think it‘s productive.  It doesn‘t get you closer to an end result.  You have to play your cards close when you‘re negotiating, which is the position that the president is now going into. 

But I‘m very disappointed that the Baucus bill did not have a more robust co-op plan.  If they‘re not going to do a public option, as the president said in his speech, you have to have some way to keep the insurance industry honest.  And the alternative was a co-op plan.  But it‘s a very wimpy one.  If they were going to do something other than a public option, they need to do it soon.

SCHULTZ:  You‘ve been consistent all along Jonathan about the way you want the president to play this.  No lines in the sand and everything else.  But aren‘t we at a new level?  All the bills are in.  Four out of five call for a public option.  The polls are swinging his way, despite being beaten up through the month of August. 

The public wants this.  Why can‘t the president come out and say, time for the old veto pen, got to have a public option? 

ALTER:  Because those sorts of threats don‘t get you—

ALTER:  In other words, what you want to look for is what can he do that will actually advance the cause that you and I believe in, which is a big, important, historic bill with a public option.  How do you get from here to there?  Not with going on TV, and making threats at people who don‘t want to do it your way?  My way or the highway.

That‘s politics, Ed.  Just playing to the base.  I‘m not interested in playing to the base.  I‘m interested in a bill.  OK?  Those are two different things. 

SCHULTZ:  If he gets a bad bill, that‘s going to hurt his base. 

ALTER:  The satisfaction of being able to be out there posturing for what everybody wants is in a different category than actually doing the nitty gritty negotiating to get you a bill.  Whether you‘re Lyndon Johnson negotiating Medicare, or Franklin Roosevelt negotiating Social Security, you don‘t do that.  You don‘t go out and draw lines in the sand. 

SCHULTZ:  Yes, you do. 

ALTER:  None of them did it. 

SCHULTZ:  First of all, the Democrats did draw a line in the sand on single payer.  They threw it out the door, wouldn‘t even let it at the table in the first discussion. 

Here‘s the point I want to make.  We‘re at a point now where the people that voted for Barack Obama have clearly stated that they want a public option.  Four of the five bills are in saying that.  What‘s wrong with the president moving the envelope, telling the Republicans, who have not been honest brokers, according to Jay Rockefeller on this show last night—they haven‘t negotiated in good faith—let‘s get it on.  We have to get it going. 

SCHULTZ:  I agree with that.  I think it‘s time to cut the Republicans loose.  They‘re not negotiating in good faith.  And all these concessions in the Baucus bill, the Republicans, they should get rid of all of them.  All the give-aways to the insurance industry, get rid of all of them when they mark up this bill. 

But there still are a number of Democrats in the Senate who are not sold on a public option, unfortunately. 

ALTER:  We‘ll see.  Right now, they‘re counting heads.  Before you draw lines in the sand, you better make sure you got the votes.  So give them a little leeway to negotiate.  That‘s all I‘m saying.

We‘re in agreement.  This bill, because the co-op thing is a big fraud, you got to have a public option. 

SCHULTZ:  We only have a minute left.  I got to get your take on the media tour this weekend.  He just gave a speech last week.  What‘s going on here? 

ALTER:  He‘s all in.  He is going to use whatever political capital is necessary to get there.  All that I would urge people is that they let him be a bit of an operator.  And operators need a little bit of running room.  Pressuring him, I don‘t think it gets you closer to a bill in this particular case.  It‘s not like he doesn‘t know on the merits that this should be a public option. 

SCHULTZ:  You‘re OK with this maneuvering so far?  I want him to be a little more aggressive.  Jonathan, great to have you with us. 

Earlier in the show, I asked you what you thought; do Senate Democrats have the guts to use reconciliation to get the public option?  Fifty seven percent said yes, 43 percent of you said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information on THE ED SHOW, go to Ed.MSNBC.com, or check out my radio website, WeGotEd.com.  “HARDBALL” with Chris Matthews starts right now, right here on the place for politics, MSNBC.

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