updated 10/2/2009 12:26:28 PM ET 2009-10-02T16:26:28

Guests: Alan Grayson, John Nichols, Jonathan Alter, Stephen A. Smith, Sen. Maria Cantwell, John Feehery, A.B. Stoddard, Jamal Simmons, Barry Scheck, Rep. Brian Bilbray

ED SCHULTZ, HOST:  Good evening, Americans.  Welcome to THE ED SHOW here on MSNBC.  We got a Democrat with some guts.  I‘m a big fan of Congressman Alan Grayson, as in “no gray area.”  He‘ll join us in just a moment for a conversation.  But isn‘t it interesting how the Republicans are just so offended.  They‘re kicking up dust over Grayson‘s comments.

Grayson said the Republican health care plan is, “don‘t get sick, and if you do get sick, die quickly.”  He‘s relating to a lot of people.  Now, when asked to apologize - this is a classic - this is how you apologize to the Righties.

(BEGIN VIDEO CLIP)

REP. ALAN GRAYSON (D), FLORIDA:  Several Republicans asked me to apologize.  Well, I would like to apologize.  I would like to apologize to the dead, and here‘s why.  According to this study, health insurance and mortality in US adults which was published two weeks ago, 44,789 Americans die every year because they have no health insurance.

That is more than 10 times the number of Americans who died in the war in Iraq.  It‘s more than 10 times the number of Americans who died in 9/11.  I apologize to the dead and their families that we haven‘t voted sooner to end this holocaust in America.

(END VIDEO CLIP)

SCHULTZ:  You see, when you throw facts to conservatives, they really don‘t know how to handle it.  I want to thank the Congressman from Florida for reminding us that this debate is not about cost curves and projections.  It‘s about life or death.  That‘s what it is.  It‘s life or death.  If you‘re the person who just got a pink slip and a cancer diagnosis - that was the story told to Minority Leader Eric Cantor, for which he had no answer.  Let‘s not forget that.

The Republicans predictably have jumped on this because you see they really don‘t want to talk about health care reform.  They want to talk about just how the Democrats are so mean all the time.  Frankly, I think it‘s mean spirited for the Republican leader to say to a person who‘s got cancer, “Hey, go beg for charity.”  I can‘t let him off the hook on that.

The Congressman spoke from his heart.  This wasn‘t some outburst.  This wasn‘t an emotional set-up or anything like this.  This wasn‘t flippant.  He just took it to them by the rules - and he doesn‘t have to apologize to anybody for anything.  And you know what?  There‘s a lot of lefties around this country that are in their living rooms tonight saying, “Yes!  This is how you got to handle these folks!” 

The Republicans are demanding apologies for the same reason they‘re offering amendments about czars.  They have nothing to offer into the health care debate.  Well, joining us tonight is Congressman Alan Grayson, the new hero on the lefty block.  Congressman, good to have you with us tonight. 

GRAYSON:  Thanks, Ed and I‘m a big fan of yours as well.  I listen to you on satellite radio all the time.  That‘s a free plug.

SCHULTZ:  It is.  I appreciate that.  That would be channel 167, all right (ph)?

GRAYSON:  Let‘s be specific.

SCHULTZ:  All right.  Congressman, do you take anything back?  I mean, are we going to see more of this?

GRAYSON:  Absolutely not.  The people who should be apologizing are the Republicans.  They‘re the ones who should apologize for - for dragging us all through the mud here while we‘re just trying to improve health care in America.  That‘s all we‘re trying to do.

SCHULTZ:  Now, the thing I liked about it is that you had charts.  I mean, this was planned out.  You must have known that this was going to kick up a lot of dust.  Did you fire and fire for effect?

GRAYSON:  Listen, Ed, we‘ve got to get past this point where everything is stalled, where the Republicans are winning just through inertia.  We have a majority, we have to use it.  We have to change America.  That‘s the promise that President Obama made.  We have to keep it.

SCHULTZ:  I agree with you on that.  Congressman, I‘m sure you‘re aware of how they‘re pushing back on you.  The National Republican Campaign said this about you.  They‘re going after your character, and they‘re - I think they‘re trumping up a bunch of stuff.

But here is it.  “This is an unstable man who has come unhinged.  The depths of which Alan Grayson will sink to defend his indefensible comments know no bounds.  This is an individual who has established a pathological pattern of unstable behavior.”  What is your response to that, Congressman?  I mean, this is character assassination.  What - what‘s your response to that?

GRAYSON:  You know, my response is - whatever.  America is sick of you, Republican Party.  You are a lie factory.  That‘s all you ever do.  Why don‘t you work together with the Democrats to solve America‘s problems instead of making stuff up?

SCHULTZ:  Well, they are making it up.  Now, not to offend you in any way, but we did go back and check your background and we did find out that you are a Harvard grad, correct?

GRAYSON:  That‘s right.

SCHULTZ:  OK.  And you also worked with Judge Antonin Scalia, correct?

GRAYSON:  Among others, yes.

SCHULTZ:  Along with Robert Bork, correct?

GRAYSON:  Yes, and Judge (INAUDIBLE) who‘s the president‘s council and also Justice Ginsburg, and when I finished working with Justice Ginsburg, I went to work for her husband‘s law firm.

SCHULTZ:  And you also have put together a very successful business before you ran for office.  So you came from the private sector to go do what you‘re doing in Washington right now.

GRAYSON:  That‘s right.  A multibillion dollar business, traded on the New York Stock Exchange.

SCHULTZ:  OK.  So what we have here is a classic example of character assassination.  We also checked your background.  You don‘t have anything in your background at all about unstable behavior, and I want the American people to know that this is how they play the game when you have the courage to come out and stick it to them with the facts.  And the fact is that people in this country are dying because they are sick and they are being excluded for coverage because of a preexisting condition.

This is a sound cut from Nancy Pelosi about this whole conversation about who ought to apologize to somebody.  Here it is.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  Apparently, Republicans are holding Democrats to a higher level than they hold their own members, because you‘ve seen the statements regularly made by the Republicans on the floor about issues that relate to death.  There‘s no more reason for Mr. Grayson to apologize than for - if anybody is going to apologize, everybody should apologize, you know?  But let‘s just - you know, the point has been made.  It‘s time for us to talk about health care.  Typically, the Republicans would like to use this as a distraction from the fact that they have no plan.

(END VIDEO CLIP)

SCHULTZ:  Congressman, I think you‘ll agree with all of that.  I just want to know from you tonight, are you going to continue to be on the offensive and not back down?  Because right now on Liberal Talk Radio across America, you‘re the guy that people have been waiting for.  I mean, we‘ve got some folks in the media that get after the Righties, but you really stuck it to them.  Is this going to continue?

GRAYSON:  Just like you do everyday on the radio.  It sure will.  These people are “No” mongers.  They‘ve got no answers for anything.  I said that two days ago, 48 hours ago.  I said there is no Republican plan, and here it is, 48 hours later, and there‘s still no Republican plan.

SCHULTZ:  And Congressman, what do you say to those who were trying to develop the narrative that - oh, this Congressman Grayson, he is really going to be in a tough reelection bid next year and he‘s doing this for attention and to get money and everything else.  What‘s your response to that?

GRAYSON:  My response is if I have to choose between my job and saving the lives of 44,000 Americans a year, I know what my decision is.

SCHULTZ:  And the response you‘ve gotten from Americans around the country has been very encouraging?  Do your office (ph).

GRAYSON:  Overwhelmingly positive and, in fact, it is true that thousands of people have already contributed to our campaign just in the last 24 hours.

SCHULTZ:  Congressman, I can‘t work every day, but would you do my radio show one day when I‘m gone?  Because I got some pheasant hunting coming up and I - I think they want to talk to you.

GRAYSON:  Listen, you are the man.  I‘d love to do your show.

SCHULTZ:  Congressman, great to have you with us.  Keep - keep up the good fight.  I love it when we get a Democrat that calls them out, because that‘s what this is all about.

GRAYSON:  We need Democrats with guts.

SCHULTZ:  No doubt about it.  Thank you, Congressman Alan Grayson, Democrat from Florida.

Now the Republicans are nothing but a bunch of hypocrites, got that?  They are out there saying that health care reform will lead to death panels and euthanizing seniors.  There‘s a guy that answered to it.  One final point, for all of the hooey and the prognostication that‘s going on out there about the midterms, “Oh, Grayson‘s doing this because he might hurt the Democrats in the midterms,” to hell with that!  This - this guy is what it‘s all about.  ]

Now, we‘re a year away from the midterms.  That‘s an eternity in politics, isn‘t it?  I want to know how you folks feel about this.  Get your cellphones out tonight, folks.  I want to know if you think will Congressman Grayson‘s comments help or hurt the Democrats when it comes to passing reform.  Text “A” for help, “B” for hurt to 622639.  I think he‘s the guy we‘ve been waiting for.  We‘ll bring you the results later on in the program.

Now, coming up with us right now, a couple of guys I really respect - John Nichols, Washington correspondent for The Nation and also Jonathan Alter, senior editor for Newsweek and author of the book “The Defining Moment, FDR‘S 100 Days and the Triumph of Hope.”

John Nichols, do the Democrats need more of this?  Are they - are they crying for this kind of approach?

JOHN NICHOLS, WASHINGTON CORRESPONDENT, THE NATION:  They need a lot more of this.  Ed, they‘ve been losing the fight on health care.  And let me tell you, there can‘t be an easier sell in America than giving people the health care they need.  So why are they losing?  It‘s because they‘ve pulled punches for the better part of eight or nine months.  Alan Grayson came on and threw a punch, and it - and it connected.

SCHULTZ:  No doubt about it.  Jonathan Alter, is - do you agree with this strategy?  He says there‘s going to be more of this.  I mean, it‘s - it‘s a “no back down” moment for the Democrats in his world.  How do you think this will play out?

JONATHAN ALTER, SENIOR EDITOR, NEWSWEEK:  I - I do agree with him.  As long as it‘s limited to, you know, your program, cable TV, speaking in his district, whatever.  I don‘t like it on the floor.  I - I agree with Nancy Pelosi.  I think everybody should apologize for, you know, blaming the other side for death, whether it‘s death panels or what Congressman Grayson said and try to keep it civil on the floor.  That‘s the way the founders wanted it and - and that‘s consistent with the traditions of - of the American Republic. 

But in terms of stopping acting like pansies, which too many Democrats have for a long time, I think it‘s great and it‘s great for him to speak out.

SCHULTZ:  Now, do you think he was not civil on the floor, Jonathan? 

I mean, do you - do you think he went over the top?

ALTER:  I do.  Yes.  On the floor, I think he went over the top where he‘s basically accusing the Republicans of favoring, you know, the deaths of people.  The statistics are right.  It‘s that extra, you know, twist that - that lays the dead bodies at their feet, that takes you into the realm of, you know, what you could call uncivil dialogue, and that just rubs all the wounds raw.

We can get health insurance, we can be tough without engaging in that kind of language.  But there‘s no reason for him to apologize, because, you know, the - the Republicans, as he‘s pointed out, have done much, much worse on the floor over many, many years.  And it‘s also true the reason that, you know, that - that Wilson had to apologize is because it was very personal about the President of the United States who was in the chamber at the time.  So for them to compare this to Joe Wilson is completely preposterous.

SCHULTZ:  All right.  (INAUDIBLE) on that, but - but the key here is he was calling them out on a policy, he was calling them out on the lack of a plan.  And so I‘m thinking he was.

ALTER:  That‘s fine (ph).

SCHULTZ:  You know, I think he was in bounds because Americans are dying.  John, what do you think?

NICHOLS:  Well, let me remind Jonathan Alter as regards to the founders, that the third vice president of the United States was in a duel and shot the Secretary of the Treasury.

SCHULTZ:  That wasn‘t good.

NICHOLS:  So, the founder were not - It wasn‘t good, Jonathan, but the founders were not that into civility, and the fact of the matter is there‘s not only no need for apology, I think this is what you take to the floor.  The American people see this health care debate as so vague, so empty right now, they need some real facts and some real passion.

SCHULTZ:  What about the character assassination on this man, the response by the National Republican Committee on this?

NICHOLS:  I think if there is a need for an apology at this point, this is - this is the place.  If they cannot back that up and say, yes, here‘s our evidence of unstable behavior on the part of this congressman, then yes, there should be an apology.

SCHULTZ:  And Jonathan Alter, I‘ll ask you about this.  Is this a new low for the Republicans or any time anybody challenges them on - on any kind of policy or having a plan they start saying, well, this guy is unstable?  There is nothing, I might add, in this - the congressman‘s background that would lead anybody in the medical profession to believe that he has got a pathological pattern of unstable behavior.

ALTER:  It is not a new low because they‘ve been awfully low before.  But it‘s - it‘s, you know, definitely below the belt.  But what happens is, it just escalates, and that‘s why - I  just have to disagree with John Nichols on this.  Yes, Alexander Hamilton and Aaron Burr had a duel, but why do we have these traditions?  My distinguished colleague from South Carolina, the esteemed gentlemen from Pennsylvania.

SCHULTZ:  We‘ve got too many friends.

ALTER:  Why - why were those put in?  Why do we have those for 200 years?  Because democracy does demand when you‘re in the congress, in our sacred halls, a certain level of civility.  Cable TV does not demand that.  Getting up and giving a speech.

SCHULTZ:  Well, neither does talk radio.  (INAUDIBLE). 

ALTER:  . does not demand it.

SCHULTZ:  (INAUDIBLE) control that one for years.  That‘s their domain and essentially people are trying to take their microphones away. 

ALTER:  I think it‘s great for the Democrats to come back real muscular on talk radio and talk this way, just not in Congress.

SCHULTZ:  Final comment, John. 

NICHOLS:  Let me just tell you that Senator Bernie Sanders says the real opposition to the health care reform right now is coming from right wing talk radio because the Democrats have not been muscular enough.  There was nothing uncivil about saying that people who are denied health care die.

SCHULTZ:  Yes.  If I might add - John Nichols, Jonathan Alter, thanks for joining us tonight.  If I could just add, I loved the charts, because that means it was planned.  He knew exactly what he was going to say, he knew exactly how he was going to say it.  He‘s a successful attorney.  He‘s a great presenter.  We need more of that guy on the floor.

All right.  Thanks, fellows.

Moving on, the Republicans want the speaker to reign in people like Grayson.  Well, Congressman Brian Bilbray of California, he and I will go head-to-head with the rhetoric (ph) and the main event later in the show. 

Plus, the president leaves tonight for Copenhagen to make the pitch for the Olympics in Chicago.  A very American thing, I might add.  Righties say that the trip‘s an unnecessary distraction.  I call it a brilliant - a brilliant battle plan to jumpstart the economy for that region and the country.  Stephen A. Smith joins me in a moment on that.

And the drugster says he‘s never met a - he‘s never met a happy liberal?  That‘s because he lives in a compound.  Anyway, he says we‘re angry, deranged lunatics.  No, no, no.  Rush, you‘re looking in the mirror.  We got you in Psycho Talk tonight. 

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

(COMMERCIAL BREAK)   

SCHULTZ:  The Republicans think the false outrage can keep the attention off health care reform?  No, no, no.  Republican Congressman Brian Bilbray is going to be here to debate me on that issue and others tonight.

Plus, Senator Lindsey Graham says birthers are crazy.  Welcome back to the real world, senator from South Carolina.  It‘s coming up at the bottom of the hour on THE ED SHOW.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  President Obama is about to leave for Copenhagen to help Chicago win the 2016 Olympics.  I think it‘s great that the president is showing his patriotism in pushing to bring the Olympics back to the United States, but proving that they can find a negative in absolutely everything, the Republicans are still jumping all over the president for his 18-hour trip to Denmark.

For more, let me bring in commentator and journalist Stephen A. Smith on this one tonight.  Stephen A., good to have you with us.

STEPHEN A. SMITH, COMMENTATOR AND JOURNALIST:  Always.

SCHULTZ:  Is - do you think the American people are OK with the president getting involved in this and trying to seal the deal for his hometown?

SMITH:  Of course they are.  I don‘t think there‘s any question about it.  Obviously you‘re going to have a few million people that have a problem with it, but that‘s only because they have a problem with him.  Remember of the 69 million votes that he got to win the presidency of the United States, there were 59 million people who voted for John McCain, so you‘re going to have a lot of people out there that are willing to find any excuse whatsoever to have a problem with our president, and that‘s just the way it goes.

SCHULTZ:  Well, to underscore that, this is - whatever you want to call him, Glenn Beck.  This is his argument why Chicago should not get the Olympics.

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS HOST:  I‘m - I‘m trying to figure this one out.  Vancouver lost - how much was it?  They lost a billion dollars when they had the - when they had the Olympics.

(END VIDEO CLIP)

SCHULTZ:  Well, actually the Olympics there aren‘t until 2010.  So they - they didn‘t lose a billion.  This is going to be an economic development shot in the arm, but it continues from the hard right.  This is House Leader John Boehner ripping into the president for this move as well.  Here it is. 

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER ®, HOUSE MINORITY LEADER:  While the president is in Copenhagen tomorrow, the American people are going to wake up and find out that hundreds of thousands more Americans have lost their job.  The administration‘s trillion dollar stimulus plan clearly is not working.

(END VIDEO CLIP)

SCHULTZ:  Why are the Republicans going so hard on this, Stephen A.?

SMITH:  To some degree, it‘s a little bit of desperation.  Let‘s get some of the facts out of the way first.  In 1984, they made money from the Olympics in Los Angeles.  In 1996, they made money from the Olympics in Atlanta, Georgia.  In 2002, they made money from the Winter Olympics in Salt Lake City.  So, certainly - and when you consider the fact that it‘s expected to be a $13.7 billion benefit to the City of Chicago, particularly the State of Illinois as well if the Olympics are there.  There‘s no question that you make this move because you‘ve got to go for it.

But in terms of the Republicans and being direct with your question, the reality is, again, it shows a little bit of desperation because there are so many things that you can point to, whether you agree or disagree with the President of the United States, the fact is there‘s a lot of issues - cap and trade, universal health care, the war in Afghanistan, et cetera, et cetera. 

There are a lot of substantive things that they could stick to and stick to their guns and go in that direction, but one of the reasons that the Republicans tend to have problems sometimes is because they engage in pettiness on far too many occasions.  That‘s not to say all of them are that way, but the ones who are end up being seen (ph) as individuals who speak for the party and that‘s a problem.

SCHULTZ:  And they‘re short on memory, my friend.  George Bush spent all 490 days in Crawford - all or part of 487 - (INAUDIBLE) 487 (ph) days at Camp David.

SMITH:  But Ed, if the Olympics were - if Texas was bidding for the Olympics, you best believe the Bush family would have something to say about that.

SCHULTZ:  They certainly would.  Stephen A. Smith with us tonight here on THE ED SHOW.  Good to see you, my man.

SMITH:  Always, my ticket (ph).

SCHULTZ:  All right.  Up next, Rush Limbaugh takes Psycho Talk to another level tonight.  He says the Democrats are obsessed with death.  I say it‘s about time for a straitjacket for the drugster.  It‘s all coming up in Psycho Talk next.  

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Psycho Talk tonight, a regular

·         the drugster‘s back.  This guy spews more garbage in under a minute than most of us do in a lifetime.  Listen to this.

(BEGIN AUDIO CLIP)

RUSH LIMBAUGH, TALK SHOW HOST:  I don‘t believe anybody in this country is dying because of a lack of health insurance, and the Democratic Party is obsessed with death.  Life?  No.  Abortion, euthanasia.  Liberty?  No.  Slavery, subordination to government.  Pursuit of happiness?  Not possible.  I‘ve yet to meet a happy liberal.  They‘re angry, deranged lunatics.  They don‘t want to enjoy life.

(END AUDIO CLIP)

SCHULTZ:  Hold it right there, now.  OK.  This is exactly why we have this segment on this show, Psycho Talk.  So much to talk about here.  Let‘s take it one section at a time.  Here it is.

(BEGIN AUDIO CLIP)

LIMBAUGH:  I don‘t believe anybody in this country is dying because of a lack of health insurance.

(END AUDIO CLIP)

SCHULTZ:  OK, drugster - flat out wrong.  The American Journal of Public Health released a study just last month that found that lack of health insurance leads to 45,000 deaths a year in this country, the United States.  That‘s one unnecessary death every 12 minutes. 

All right, the next part.  Here it is.

(BEGIN AUDIO CLIP)

LIMBAUGH:  The Democratic Party is obsessed with death.

(END AUDIO CLIP)

SCHULTZ:  No, we‘re not.  Members of your party, drugster, have been just freaking hollering about fictional death panels for months.  But the Democrats are obsessed with death?  I don‘t think so.

Come on.  One last part here.  Here it is.

(BEGIN AUDIO CLIP)

LIMBAUGH:  I‘ve yet to meet a happy liberal.  They‘re angry, deranged lunatics.  They don‘t want to enjoy life.

(END VIDEO CLIP)

SCHULTZ:  Angry.  Rush, I want to report to you tonight and all you conservatives out there that listen to this goof ball that all of us here on Team Ed at MSNBC, we‘re happy.  We like what we do.  In fact, I‘m going pheasant hunting next weekend. 

Rush, we all enjoy life, but, you see, we‘re liberals.  We want people to enjoy the same opportunities, and for that to happen, the first thing they have to have is quality health insurance so they can afford to go out and enjoy themselves and not spend their money on, you know, trying to fix themselves up medically, which your party doesn‘t want to have happen.

Now, I‘m going to keep fighting for the good health care bill until Congress gets it done, and if you think that makes me angry, deranged, a lunatic, or any of us on the left who are trying to make change in this country, we don‘t care.  I want to improve the lives of fellow Americans, and so do all liberals.

Rush, this is serious Psycho Talk.

Coming up, the Senate Finance Committee will vote on Max Baucus‘ poor health care bill tomorrow.  Senator Maria Cantwell is going to tell us how that‘s all going to come down in just a moment.  Will any Republicans vote for it?

Plus, an innocent man - serious here - an innocent man may have been executed in Texas, and now Governor Rick Perry, who allowed that execution to go forward, has removed three people from the panel investigating the case.  Legendary Lawyer Barry Scheck is on the case and he joins me in my Playbook.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  We got some breaking news tonight dealing with health care.  Welcome back to THE ED SHOW on MSNBC.  Big headline just posted on “Huffington Post.”  The Senate Finance Committee narrowly passed an amendment moments ago from Senator Maria Cantwell from Washington that moves the conservative panel as close as it likely will get to the public health insurance option.  It creates a federally funded plan to compete with the private insurance companies.  It got the support of Chairman Max Baucus and also the chairman of the Senate Budget Committee, who is on the Senate Finance Committee, Senator Kent Conrad, and passed the committee by only one vote. 

Senator Maria Cantwell of Washington joins us now here on THE ED SHOW. 

Great to have you with us. 

SEN. MARIA CANTWELL (D), WASHINGTON:  Thank you, Ed. 

SCHULTZ:  You know, give us the detail of this.  What was in this amendment that moved Max Baucus and Kent Conrad? 

CANTWELL:  Well, I think, Ed, we hit the sweet spot.  That is to say that we are going to provide leverage by giving states the opportunities to opt in.  And they are going to do it by negotiating with private insurers.  So really you‘re taking the best of practices that exist today to drive down insurance prices. 

When we put that on the table, people saw that that is really what has happened in my state, and what we can deliver for Americans. 

SCHULTZ:  Give us an example.  What is happening in your state?  Is there one company that has the bulk of the business, is that what it is? 

CANTWELL:  No, really what happens is someone—right now, if you think about it, individuals try to go and negotiate with insurers, they‘re not getting anywhere.  So when you come in with a big population, as we have done in Washington State, and say the state is going to negotiate—and you want access to this 100,000 people, you better give us the best price.  That kind of negotiations have driven down the price 30 to 40 percent. 

So we want to see that same type of leverage used against insurance companies in other parts of the country. 

SCHULTZ:  So this means we‘re going to have 50 different scenarios that play out.  States could get in or out of this option, is that right? 

CANTWELL:  That‘s right.  I would like something that‘s even more robust, but this is what we could get passed.  I think what‘s going to happen is you‘re going to have both Democrat and Republican governors facing their constituency, saying, you aren‘t going to negotiate to drive down my insurance cost?  I think governors are going to say, my god, if I can drive down the cost of insurance for my state, I‘m going to do it. 

SCHULTZ:  So all politics is local.  In a sense, the Senate Finance Committee wants to put it back to the state legislatures and the governors to duke it out in their own backyard, to bring these rates down.  Am I reading that correctly?  

CANTWELL:  Well, I can say this, that we have efficient health care and we‘ve driven down the cost.  So I would like us to be more aggressive at the federal level.  At a minimum, I want somebody in that ring fighting on behalf of the consumers to drive down costs.  And I think that what we‘ll see is many states moving towards this model, and being successful at implementing what is a public plan, with competitive rates, and will drive prices down. 

SCHULTZ:  Now, is each state going to be given some federal money to start this program?  And who is going to administer each one of these? 

CANTWELL:  The state administers the program.  And we are giving federal dollars to do it.  What I don‘t like about the underlying bill right now is we were going to give a subsidy to—say to you or your neighbor or my neighbor in Seattle.  And they were going to take that check as a subsidy to an insurer and say, how much can I get for this and how much will you drop my rate? 

They aren‘t going to get anywhere with the insurance companies with their individual check.  But now that population bands together, as we do in the state of Washington, and says, you want access to my population, what‘s the best price?  And that is what really is going to help us.  We have seen, instead of paying 5,000 or 6,000 dollars for premiums, we‘ve seen individuals only paying 3,000 dollars. 

SCHULTZ:  So you‘re convinced that this model will hold premiums in check, so to speak?  Because there‘s going to be new competition in the market.  How do you think this is going to be received by the insurance industry? 

CANTWELL:  It‘s going to hold down costs, because there‘s going to be a negotiator who is going to negotiate and demand that the price come down.  We‘ll see what the—

SCHULTZ:  I thought that‘s what insurance commissioners were supposed to do. 

SCHULTZ:  But if you want access, Ed—you know if you want access to the market, if you have buyers—how much do you drive down the price of anything if you only have two buyers or 50 buyers?  Now if you have tens of thousands of buyers, you‘re going to drive down costs. 

SCHULTZ:  Senator Cantwell, you call it a sweet spot.  This is a big break.  Could we frame it as that?  Do you think there‘s some real movement here? 

CANTWELL:  Well, Ed, I‘m a mountain climber.  This is a big mountain to climb, health care costs.  This is a very good foothold.  It‘s a start and we need to keep working. 

SCHULTZ:  Senator Maria Cantwell, Washington, with us on THE ED SHOW. 

Senator, thanks so much for joining us tonight. 

CANTWELL:  Thank you. 

SCHULTZ:  For more, let‘s bring in our panel.  Obviously, we have to get to the detail and we‘ll do that.  Democratic strategist Jamal Simmons is joining us tonight.  Also A.B. Stoddard is associate editor of “The Hill.”  And Republican strategist John Feehery.  John, we‘ll start with you tonight. 

From what you heard there—I know this, from the way it‘s all been set up, to move Max Baucus and Kent Conrad on this issue means it must be a pretty detailed amendment that is going to satisfy these conservative Democrats.  From what you heard, what do you think?  Is this new light on the situation? 

JOHN FEEHERY, REPUBLICAN STRATEGIST:  I think the senator put it right, that this is just a foothold on a very tall mountain.  We‘ll see how this looks coming out of the committee and how it looks getting to the Senate floor.  I guarantee you that this whole process is going to be evolving. 

I think, Ed, you‘re right, and she‘s right in the sense that competition is key to driving down costs.  That‘s why Republicans have always believed that you need to have associated health plans.  You need to be able to have plans across state lines, so we can have more competition.  Competition is definitely the key to driving down costs.  So that sounds like a good plan. 

You have some skepticism.  I think a lot of other people have some skepticism from the left and the right.  This is a long process.  We‘ll see what happens. 

SCHULTZ:  From an administrative stand point, I want to know how 50 different plans or 50 different states are going to be able to do this for the good of the people.  And who knows how it is going to works out? 

A.B., I want to ask you—now, the two people that came on board, and the vote was by one, Conrad and Baucus, from what you know of it, do you think that this might move any Republicans on the Senate Finance Committee?  What do you think? 

A.B. STODDARD, “THE HILL”:  I think that we‘ll have faith that Republicans can be budged when they start budging.  So far, their opposition has been so unanimous and so unbreakable that it will be—it would be an interesting provision that you could call a public option, I think, on the Senate side, with Republicans opposition we‘ve seen so far, that would actually get Republican votes. 

Again, we don‘t know exactly if this is something that can make the long haul, end up in a final bill, and end up becoming law.  It sounds hard to administer.  I think that the Democrats are looking around, conservatives alike, and saying, what if we do hand out these subsidies?  The co-op doesn‘t seem to be popular in attracting votes either.  What if we hand out all these subsidies, and we don‘t drive down costs?  So I think you‘re seeing movement, even by conservative Democrats, to try to approach the cost issue. 

SCHULTZ:  Jamal Simmons, let‘s face it, big insurance, big medical, they donate on a local level as well.  There‘s no question about that.  Are we to trust Republican legislatures and also Republican governors that they‘re going to be fair players in all of this, and really level in big business?  What do you think?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST:  Here‘s what‘s interesting about this plan, from what we know about it—and you actually made a very good point, Ed—is you‘re going to push this back on the states.  I want to hear—if this actually holds true, I want to hear the Republicans make an argument that you cannot let the states make a decision about whether or not they want to opt in to a public option. 

This might actually be something that breaks through.  I do think that

governors, who are forced with budgets that are ballooning, and having to -

·         and tax payments that are falling in a recession, are going to have a hard time saying, I‘m not going to negotiate for the best prices for our citizens. 

SCHULTZ:  Panel, let‘s switch subjects here quickly.  There‘s been a lot of talk about leadership on the Republican side.  There‘s a lot of rhetoric flying around on the airwaves in this country, a lot of accusations. 

Today in Washington on a panel, this is Senator Lindsey Graham talking about the guy across the street on Fox.  Here it is. 

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM ®, SOUTH CAROLINA:  Here‘s what the Republican party has to do—this is I think a good point.  We have to say, that‘s crazy.  So I‘m here to tell you that those who think the president was born somewhere other than Hawaii are crazy. 

He‘s not a Muslim.  He‘s a good man.  Let‘s knock this crap off and talk about the real differences we have.

But we‘re not going to be impeded by sinners and nuts.  That‘s not our problem. 

Glenn Beck is not aligned with any party, as far as I can tell.  He‘s aligned with cynicism.  And there‘s always been a market for cynicism.  But we became a great nation not because we were a nation of cynics.  We became a nation because we were a nation of believers. 

(END VIDEO CLIP)

John, your response to that? 

FEEHERY:  Well, first of all, I really like Lindsey Graham.  I think he‘s a great senator.  I think he speaks truth as he sees it.  I would also say that I think Glenn Beck himself would admit that he‘s not a Republican.  I think he is an entertainer, in a sense, and I think he‘s someone who has very high ratings, but he says things that some people don‘t like. 

Ed, I think you speak your mind.  I think Glenn Beck speaks his mind.  I don‘t think, Ed, you‘re necessarily a Democrat.  I don‘t think Glenn Beck is a Republican. 

I do think Lindsey Graham is right when he says that we have to confront some things like the birther movement.  I think that—Barack Obama is an American.  He‘s president.  We have to deal with that.  And on so many issues, on real issues, we can compete with the president, that we don‘t necessarily have to rely on all this other crap that doesn‘t matter.  We need to focus on real issues.  I really like Lindsey Graham.

SCHULTZ:  A.B., how did you take his comments?  I took it as it‘s time to stop the train and figure out and redefine who the heck we are, and cut to the chase that we‘re not associated with the crazy talk.  What do you think? 

STODDARD:  Well, Senator Graham has always been a very bold truth teller.  And after the 2008 elections, he did speak very publicly, after supporting John McCain so loyally in that election, about coming together and figuring out as a party how to attract the voters that the party lost last year, losing to a broad coalition that Obama and Democrats won. 

I think the problem here is this: until you have leaders—Senator Graham obviously is not a leader in the Republican party.  Until you have the standard bearers and the leaders, those running for president in 2012, et cetera, coming out and saying, we need to stop talking this way and calling out people who say things that are untrue about the president or something like that, Senator Graham is going to be fighting a lonely battle. 

SCHULTZ:  And finally, Jamal, can we at least say that the Republicans and Glenn Beck have one thing in common, and that is that they want Barack Obama to fail? 

SIMMONS:  It seems like all the Republicans, except for Lindsey Graham, who also said in that interview, that he wants some of Barack Obama‘s policies to fail, but he doesn‘t want his presidency to fail, because then his country fails.  That‘s the kind of rhetoric the Republicans have to figure out how to adopt. 

One thing about Lindsey Graham, although I disagree with him on a host of issues, he also stood up on torture, from long ago.  He and John McCain stood up on the issue of torture, that America shouldn‘t do it.  So I think the Republicans have got to decide that they are not in bed with these crazy whackos on the right, if they ever want hope of winning the hearts and minds of the middle people in the country. 

SCHULTZ:  We should also point out, it‘s not the guy we‘re talking about.  It‘s Limbaugh as well.  Talk radio in this country has pushed the narrative that Barack Obama is not an American, was not born—you know the birther movement and everything else.  So I think this is a big statement by the senator from South Carolina. 

Panel, thanks for joining us tonight. 

Texas Governor Rick Perry is under fire for taking people off a panel investigating if the Texas execution took place and a man was innocent that was executed.  Perry‘s—should we say legendary attorney Barry Scheck is going to be joining in the playbook to talk about this whole situation in Texas when we come back. 

(COMMERCIAL BREAK)

SCHULTZ:  Texas Governor Rick Perry may have allowed an innocent man to be executed.  Now he‘s trying to prevent an investigation into the case.  Here‘s the story: in 2004, a man named Cameron Todd Willingham was executed for setting a fire that killed his three daughters.  Last year, the Innocence Project investigated the case and concluded that his conviction was based on invalid information. 

The Texas Forensic Science Commission was supposed to hold a hearing on the case tomorrow.  It‘s looking into whether or not that arson evidence was valid.  But yesterday, Governor Rick Perry suddenly dismissed three of the commission‘s members, forcing them to cancel the meeting. 

Joining me now is Barry Scheck, co-director of the Innocence Project, for our viewers tonight.  Great to see you.  Good to have you with us tonight.  The Innocence Project is? 

BARRY SCHECK, THE INNOCENCE PROJECT:  The Innocence Project an independent non-profit corporation, but we‘re affiliated with Cardoza Law School.  And we have worked to exonerate, with post conviction DNA testing, most of the 242 people that have been exonerated in this country, and, I should add, 105 individuals who were identified really committed the crimes with the DNA test. 

SCHULTZ:  What‘s wrong with this case? 

SCHECK:  Well, this is a case where Cameron Todd Willingham was

executed for an arson murder based on invalid arson evidence, evidence that

I think any scientist now in this country would conclude was invalid

science.  Governor Perry, just before the execution, received an affidavit

from an arson expert named Gerald Hurst, who said, look, the evidence that

was used to convict Willingham is junk science

SCHULTZ:  And he denied the stay. 

SCHECK:  And he denied the stay.

SCHULTZ:  OK.  Is this—him replacing the panel, removing the panel at this time, just before they were getting ready to investigate, what would you compare that to?  Is this a bold move? 

SCHECK:  This is the Saturday night massacre all over again.  And for our younger viewers, that‘s when President Nixon fired the Special Prosecutor Archibald Cox because he was going to seek to get the Watergate tapes.  This is just Governor Perry trying to prevent this commission to actually take a report from an arson expert that the commission itself appointed to see whether or not this was valid scientific evidence. 

SCHULTZ:  The governor is saying he‘s working within his powers on this, that he‘s OK on this. 

SCHECK:  What you have to understand is the Forensic Science Commission was originally passed by the legislature in the state of Texas because of all these problems in the crime lab.  And the commission, after it was passed, Governor Perry dragged his feet for close to a year before appointing anybody. 

After he appointed people to the panel, he delayed another few years and tried to prevent them from getting funded.  Now that they got funded, the very first case they took up was the Willingham case, because of its importance, in that other people in the state of Texas could be behind bars because of arson, and innocent man could have been executed. 

And after the commission appointed its own independent expert, who came back with a report that clearly said that Willingham was convicted based on witchcraft, just as the hearing was supposed to happen this Friday, Perry chose to replace the head of the Forensic Science Commission and two other members, just before the hearing. 

SCHULTZ:  Now, he points out in a statement tonight from his deputy press secretary that the Parole Board never recommended clemency for Willingham. 

SCHECK:  The parole board?  That‘s one of the problems in Texas.  The Pardon and Paroles Commission never really has taken serious reviews of this evidence.  That part of the system is broken.  But there really is no excuse for Perry himself not to have looked at this affidavit from the arson expert. 

What‘s extraordinary, Ed, is there was an article in the “New Yorker” by David Graham two weeks ago that was extraordinary, that reviewed all the evidence in the Willingham case, not just the arson evidence.  But Graham was a reporter who was skeptical.  He went into it.  He spent months on the story.  He interviewed everybody.  He wrote an extremely powerful piece, headlines all over the state of Texas, editorials in the “Dallas Morning News,” the “Houston Chronicle,” big stories about the Willingham case. 

And then Perry decides to eliminate this commission—these commissioners just before the report comes out. 

SCHULTZ:  Very quickly, in all your years, have you ever seen anything like this? 

SCHECK:  Only when Nixon fired Archibald Cox. 

SCHULTZ:  Barry Scheck, great to have you with us.  Thanks so much. 

Next up, the main event.  Republicans want the speaker to reign in people like Alan Grayson, the Congressman who was so outspoken.  I say stop pointing fingers and fix health care.  Congressman Brian Bilbray will join me next to debate that, coming up on THE ED SHOW.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GRAYSON:  We have a majority.  We have to use it.  We have to change America.  That‘s the promise that President Obama made.  We have to keep it.  If I have to choose between my job and saving the lives of 44,000 Americans a year, I know what my decision is. 

(END VIDEO CLIP)

SCHULTZ:  That was Congressman Alan Grayson leading off the program tonight here on THE ED SHOW.  He‘s not backing off his comments and he‘s not apologizing for them. 

Joining me now is Republican Congressman from California, Brian Bilbray.  Congressman, if you were to go to the House floor and give your opinion and not break any rules, why would anybody expect any apology?  Where is he out of bounds on this deal? 

REP. BRIAN BILBRAY ®, CALIFORNIA:  First of all, Ed, remember, members of Congress on the floor have special protection under the Constitution.  Even the freedom of press doesn‘t protect you from litigation and slander.  But we are protected on the floor. 

With that special right comes a special responsibility.  I think, look, Alan knew he was going over the top whenever he drafted up his documents.  He knew he wanted to push the button.  And basically he got what he wanted.  He wanted to push the envelope far beyond what I know anybody would have to say that—a Congressman saying today that there‘s a Holocaust occurring in America on American soil today is going over the limit.  I think anyone would agree.  He went over that line. 

There‘s a lot of times that goes over the line, but those of us in Congress have to remember with those special rights comes some responsibility. 

SCHULTZ:  OK.  Now, saying he‘s going over the line, that clearly is a judgment call, is it not?  There‘s no rules or anything.  He didn‘t slander anybody.  He was talking about a policy.  He gave his opinion, is what he did.  So these rules are basically, hey, in the eyes of the beholder, are they not? 

BILBRAY:  There‘s a rule called common decency.  To even insult the victims of the Holocaust with an example in the United States that you say is comparable is something that I think the people around the country will be upset about, no matter your party affiliation. 

SCHULTZ:  Does he deserve—The punch back from the NRCC is they‘re saying that he‘s unstable.  Does he deserve that?  We checked his past.  There‘s nothing in his past that would even in any way, shape or form lead us to believe he‘s not a stable guy. 

BILBRAY:  Look, I don‘t think he‘s unstable.  I think, though, that if I was an attorney who had been very successfully in the business of lawsuits, I wouldn‘t be the first one to stand up and point fingers at physicians who are working on this issue and saying they don‘t care about people being alive. 

I think he‘s really carrying the wrong message for being the wrong guy at this time.  So he has to moderate it to some degree. 

SCHULTZ:  Congressman, good to have you with us tonight.  Appreciate your time.  Brian Bilbray from California. 

Earlier I asked, will Congressman Grayson‘s comments hurt or help Democrats trying to reform health care: 97 percent said help, three percent said hurt.  I knew we were right on that. 

That‘s THE ED SHOW.  “HARDBALL” is next here on MSNBC with Chris Matthews.

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

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