updated 10/22/2009 10:46:29 AM ET 2009-10-22T14:46:29

THE ED SHOW

October 21, 2009

THIS IS A RUSH TRANSCRIPT.

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

Guests: Eric Massa, Steve McMahon, Ben Cardin, Rep. Alan Grayson, Karen Hanretty, Joe Madison, A.B. Stoddard, Rep. Diana DeGette

ED SCHULTZ, HOST: Good evening, Americans. Welcome to THE ED SHOW tonight.

Let's get this straight now. First Barack Obama was Adolf Hitler.

Now they're comparing him to Richard Nixon.

I've got commentary. We're coming up with that in a bit.

Is there a media fascination with the failure of the public option?

We have waited for months for this report and we finally have a score.

The magic number is 871. That's right, $871 billion. That's the new low price for real health care reform on the House side.

The Congressional Budget Office came back with the score for the public option. This is what we've been waiting for. The House plan will also-listen up-reduce the deficit over the next 10 years.

President Obama has said that health care must cost less than $900 billion. Well, it does. And it costs way less than the two wars we were sold that we're still paying for. So, let's grab this for just a moment, if we may.

The conservative Democrats over in the House and in the Senate have been complaining. Let's see, I've got my notes here. It has to be under budget. It has to reduce the deficit. And it has to cover more people.

There you have it, folks. Where's the victory? There shouldn't be any arm-twisting at this point.

Nancy Pelosi, that's what she's got to do. She's over in the House twisting arms trying to get 218 votes for a robust public option. What's the holdup?

She's reportedly got the votes on a moderate one, but you know I don't like that one. She's told the majority whip, Jim Clyburn, start counting heads, let's find out where we're at. We're going to know a lot more later tonight.

Now, this is how you do it, folks.

Harry, you paying attention?

So, we're close to being pretty good on the House side. And they ought to be just celebrating over this CBO, even if it's a preliminary report from the CBO on the House bill.

It's under budget. It reduces the deficit in 10 years. And it covers more people. But that's still not a victory?

I've got an explanation.

Now, let's go over to the Senate side. We've got some issues over there.

Now, I've spent a lot of time talking about Max Baucus and Bill Nelson and these guys from the middle of the country who don't have their heads screwed on right. They come from red states.

But you know what? They're not as bad as Joe Lieberman. He was on the Senate floor today trashing health care reform.

Here it is.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: I'm for health care reform, but it's not the only thing I'm for.

I'm against the public option of health care insurance. Essentially, a government-owned health insurance plan.

A government-owned corporation to compete with the private sector.

Government-you know, an oil company, a government, a car company, a government company to sell automobiles, a government company to take care of roofing contracting. And I could go on and on.

(END VIDEO CLIP)

SCHULTZ: He has been going to dinner with Frank Luntz way too much.

Is that the same guy that was on the ticket with Al Gore in 2000?

Wow, has he changed.

Thanks for the favors, there, Joe.

With folks like that in the Democratic Caucus, who the hell needs Republicans?

But you know what? Here's the point, Joe. You are for a government-owned health insurance plan. I think it's Medicare. The president wants all the Democrats to get together and hold hands now on this 11th hour, and that's what he's telling his supporters right now.

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: There are going to be some disagreements and details to work out, but to the Democrats, I want to say to you, Democrats, let's make sure that we keep our eye on the prize.

Sometimes Democrats can be their own worst enemies. Democrats are an opinionated bunch.

You know, the other side, they just kind of sometimes do what they're told. Democrats, you're all thinking for yourselves. I like that in you, but it's time for us to make sure that we finish the job here. We are this close and we have got to be unified.

(END VIDEO CLIP)

SCHULTZ: Well, Mr. President, respectfully, how do we get to 60 votes with attitudes like Joe Lieberman? And I'm supposed to join hands in the progressive movement of this country, supposed to join hands and embrace Joe Lieberman?

No, no, no, no. It doesn't work that way.

Tom Harkin has it exactly right. It's 52-5 in favor of a public option in the Senate now. The five need to come where the Democratic Caucus and the Democratic Party is, and the 52 should not have to go to the five.

Think about this. This is where we are. This is historical stuff.

You've got strong majorities in the House and the Senate. You've got a president who's popular. Everybody wants a public option. It's vastly into the majority and growing every day.

You know what this is going to turn out to be? You've got no Republicans. The Republican Party, they're in the toilet. They're at 20 percent right now. They can't even buy friends.

And the people are with the president on this?

You know what we're looking at right now, folks? We are looking at one of the biggest minority victories in the history of legislation in this country. That's what we're looking at if we don't stand up to these folks. They don't deserve to win on any fronts.

Now, here's my text poll tonight. And it cuts right to the fabric of all of this.

And Harry Reid, I hope you're listening, because I know you're in a tight race, and this is going to cost you if you don't get a done on a public option. All right?

Here's the text question. I want to know, progressives, do you think the Democrats should just kick Joe Lieberman the hell out of the caucus?

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

Now, I want to explain the dynamics of this before we go to our guest tonight. I've gotten a lot of e-mail on the radio show and here at MSNBC about people want to know, what's with these Midwestern representatives and senators, Ed?

Well, you've got Montana. You've got North Dakota, South Dakota, Nebraska and Arkansas. Ever try to raise money in those states? Ever run for office in those states?

I can tell you, in rural America, if you go to a potluck and somebody gives you $100, holy smokes, that's a heck of a good contribution to the campaign.

Now, what are the biggest industries in the states that I just named?

Insurance and medical.

These guys are worried about getting taken out in their own back yard. That's what this whole thing is about for these guys. They have no excuses, because you have got a House bill right now that comes under budget, that reduces the deficit over 10 years, and also covers more people, and they're still not going along with it!

Joining me now is New York Congressman Eric Massa. And we chose him tonight to open up the show because he does tell it like it is. He's for single payer. This is one of the true Democrats that isn't beholden to anybody that tells it like it is.

Mr. Massa, the CBO score is in. What's wrong with these conservative Democrats? If it meets the criteria, why does Nancy Pelosi have to twist anybody's arm at this point?

REP. ERIC MASSA (D), NEW YORK: Well, you know, I heard-and good evening. It's good to be with you.

I listened to Senator Lieberman and I heard him talk about everything you said at the top of the hour. And I wanted to remind him that there is not a single private flood insurance policy in this nation. It's all federally endorsed and federally backed. So, if you're really afraid of true competition in the marketplace, let's just do away with all flood insurance, which is frankly the backbone of so many urban areas to even allow us to own houses.

The CBO is in. Now, we're going to get the details of this. And remember, many of us, myself included, signed a letter twice and said we demand a robust public option that allows access to the American people and true competition against the private for-profit health insurance industry.

I agree with the president. We're in the final lap, but, by golly, I've seen a lot of races be lost in that final lap. And that's where we stand as of this evening.

SCHULTZ: Congressman, what about this talk about antitrust? There's some things happening on the House side and the Senate side.

Is this something that could realistically be implemented to really reel in the insurance companies when it comes to, you know, price fixing and competition, and also just actually who's going to be operating in your back yard when it comes to offering up insurance plans? Is this the way to go?

MASSA: Absolutely.

SCHULTZ: You think this will work?

MASSA: Well, let's level the playing field and make sure that everybody understands that the insurance industry has been exempt-exempt from antitrust laws. That means that they can legally create monopolies that slice up market share.

And so, when people talk about, well, we need to leave insurance to the open market, well, that's nonsense, because there is no market for insurance. And there hasn't been since the 1930s.

SCHULTZ: So, what is-what leg are these conservative Democrats standing on right now? Why don't they go along if it meets the criteria?

Medicare reimbursement rates can be worked on. Hell, that's just money. We can get that done next year.

Are these-in your opinion, are these conservative Democrats in the Midwest, are they afraid of being taken out by the industry in the next election cycle?

MASSA: No. I can't speak for them. And, in fact, I have met with many who have different opinions than I do and I respect their opinions. So, I'm not here to throw darts at fellow Democrats. Frankly, we do that very, very well ourselves.

Let's go after the Republicans, who will say anything and do anything no matter how outlandish it is, and every day come up with a completely different set of falsehoods with malice aforethought. They've been doing this as a theatrical industry for months now. And frankly, I like to call them on the carpet because the spears they throw at me change almost every day.

SCHULTZ: You're a class act, Congressman. I view this a little bit differently, there's no doubt.

We don't need the Republicans. What we need right now is some Democrats to stand up to be Democrats.

And Congressman, you're a single payer guy. They didn't even let you at the table.

MASSA: They wouldn't let me at the table, and I get called every name in the book, you know, at the top of the list. And this after serving in the military almost all my life. They love to call me a socialist, which is almost laughable.

SCHULTZ: All right. One quick question before we go.

MASSA: Sure.

SCHULTZ: Have you had some military personnel, former military personnel, or any of your constituents, tell you that they're going to join the military so they can get health care?

MASSA: Absolutely. In fact, I have a whole caseload file of exactly that, and it breaks my heart.

Ed, let me tell you, if I end up not supporting this, you and everyone watching this needs to know it's because we have given everything away to the private health insurance industry. And that's something I'm not willing to do.

SCHULTZ: Congressman, good to have you on with us tonight. I appreciate it so much.

MASSA: Good to see you tonight.

SCHULTZ: You bet.

Congressman Massa from New York, here on THE ED SHOW.

For more, let's talk strategy. Let's bring in Democratic strategist Steve McMahon.

Steve, good to have you with us tonight.

STEVE MCMAHON, DEMOCRATIC STRATEGIST: Thanks, Ed. Good to be here.

SCHULTZ: The mission for Harry Reid right now-you know, I went to one of these management seminars one time, and I implemented it at a station that I was managing once, and I wrote it down again tonight. Leadership: Getting people to do something they don't want to do and making them feel good about doing it.

Isn't that where Harry Reid is right now? You've got the public. You've got it under budget. You've got all the things that we talked about. And now they're tippy toeing around here in the Senate about a public option.

What's Reid's mission at this point from a strategic standpoint?

MCMAHON: Well, I think his mission is the same as Barack Obama's mission, to get a health care reform bill passed. And he's as good at counting votes as anybody, and he can count to 60 as well as anyone. And I think he's looking at his caucus and he's saying, there's not 60 votes right now for the public option.

And, you know, most of what Congressman Massa just said everybody agrees with. What people want is competition in the industry. What they want is the same health insurance options that members of Congress and the federal congressional staff has. And there are a lot of ways to get there.

Competition is the thing that they're after, whether it comes through a public option, a robust exchange. You know, the federal insurance system isn't a public option. It's five or six or eight insurance companies competing for the federal employees' business. And as long as there's competition, Ed, and as long as people are covered, as long as costs are brought under control, I think most Americans will be happy, even if not every member of our party will be absolutely happy.

SCHULTZ: But politically, the dynamics of this playing out is that there is a weakness in leadership, and these conservative Democrats keep looking for cover even when you come back with a CBO score. And I'm not going to let them off the hook.

Take a look at this poll right here. What do voters want? Fifty-one percent want a public option, 37 percent want Republican support. Two-thirds of the American people don't give a damn what the Republicans think on this.

You're not going to get Joe Lieberman. So, did Lieberman just tell us tonight with that sound bite, Harry, you've got to go reconciliation or this isn't going to work?

MCMAHON: Well, first of all, Ed, I think reconciliation is, frankly -

I hate to say it, it's a fantasy, because it only applies to a final vote. And I hate to get all policy wonkish, but reconciliation is for budget and finance issues. Most of the insurance reforms that people like so much are not budget and finance. It also applies only to final passage, not to all the stuff that goes into the sausage making.

Here's the real problem. There are 48 members of the Democratic Caucus in the House who are from districts that John McCain carried. John McCain beat Barack Obama in the districts of 48 members.

SCHULTZ: But they want health care. But Steve, they want health care.

MCMAHON: I know they do.

(CROSSTALK)

SCHULTZ: They want health care and they want reform. And they are cowards, is what they are. They're political cowards.

MCMAHON: Most of those people want health care reform, but they don't want a public option. They don't want it for philosophical reasons. And the philosophical reason is, I'll get beat if I vote for a public option.

SCHULTZ: It's not about them. I don't mean to interrupt you. I've got more time here.

That's exactly what I'm talking about. They think it's about them and their job. It's about the American people. And we're down into the 11th hour here, and you've got a bunch of grandiose elected officials who are saying, well, I might not get re-elected if I don't do this.

MCMAHON: You know what though, Ed? You know what? There are a lot of people who don't think health care reform is all about the public option.

There are a lot of people who think having a Democratic majority so you can do climate, so you can do a whole range of issues, so you can do financial regulatory reform. It's more important to have a Democratic majority than it is to have a public option. Ed, it's more important to have a Democratic majority.

SCHULTZ: No. The president has said-Steve, you're a great friend, but the president has said that the key to economic reform in this country and our middle class coming back is doing health care reform.

MCMAHON: That's right.

SCHULTZ: And I will admit there's one Republican telling the truth, and that's Orrin Hatch. And that is this is the first step to single payer. I admit that. And we have got to have this portion of the bill in there.

Well...

MCMAHON: Listen, there are public option options that are being discussed now. They're limited and they're narrow and they don't, frankly, run afoul of some of the things that the more conservative and moderate Democrats object to. My understanding, by the way, is that Speaker Pelosi right now doesn't have the votes to get health care reform...

SCHULTZ: She's got 210.

MCMAHON: ... through with the public option in there. So, it's not just these moderates in the Senate. There are a lot of moderates in the House who are concerned, too. And they're concerned for a good reason, Ed. A Democratic majority is more important than a public option.

SCHULTZ: No. No.

MCMAHON: Yes. Yes.

SCHULTZ: I respect you. I do not buy that for a moment.

MCMAHON: Speaker Pelosi wouldn't be Speaker. She won't be Speaker.

Eric Cantor will be speaker if 84 members go down on their sword.

SCHULTZ: No. No. All right. You've got to come back tomorrow night. We've got to end-Steve, no, I don't believe that.

Great to have you with us, my friend. I've got to run. I'm up against the clock here.

MCMAHON: Great to be here. Thank you.

SCHULTZ: All right.

Coming up, Wall Street is rebounding, but the backbone of the country, small business remains broken. The president went to Senator Ben Cardin's back yard today and offered a plan I've been talking about. The senator will be for his reaction in just a moment.

Plus, a corporate crackdown is coming. The Obama administration is dropping the payroll axe on executives that took the bailout bucks. Some top-earned salaries will be slashed by 90 percent.

That's still to come.

You're watching THE ED SHOW. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Over the past decade and a half, America's small businesses have created 65 percent of all new jobs in the country. And more than half of all Americans working in the private sector are either employed by a small business or own one. More than half.

These companies are the engine of job growth in America. They fuel our prosperity. And that's why they have to be at the forefront of our recovery.

(END VIDEO CLIP)

SCHULTZ: Welcome back to THE ED SHOW.

President Obama took a quick trip up to Maryland this afternoon to announce a new plan to help create jobs on Main Street. His proposal involves redirecting-redirecting some of the $700 billion in TARP funds away from Wall Street to smaller banks to help businesses.

The president also called on Congress to increase the size of small business loans and then also make them more accessible. And he wants to provide money to smaller banks at low rates as long as they agree to increase lending.

Joining me now is Democratic Senator from Maryland Ben Cardin, who sits on the Small Business Committee.

Senator, good to have you with us tonight.

Do you think that this is the correct formula to stimulate the economy in the second half to create jobs? I mean, we're talking about TARP money to community banks at a lower rate.

Will it work?

SEN. BEN CARDIN (D), MARYLAND: Ed, I think the president has it exactly right. To give money to banks, we don't know where that money ends up in creating jobs. Put the money in the hands of small businesses through the community banks, we're going to create jobs. We're going to advance innovation.

It's not only job growth, but much of the innovation in America's workplace comes from small businesses. This is what we need to do. This will really help us create jobs in our community.

SCHULTZ: Was this planned all along, or is the Obama White House winging it based on market conditions and the job growth not coming around as quick as they thought it would?

CARDIN: Since the beginning of the Obama administration, we've been working with them closely to say, look, we've got to put the priority in getting money out in our community to the small businesses. And they've been working on it.

I think this effort now of working with the community banks to help small businesses makes a great deal of sense. Increasing the caps on small business loans will help.

Already in the Recovery Act, we eliminated a lot of the fees and we made it a little bit easier for small businesses to get loans. We have got to do more, and the Obama administration has been working on this since day one.

SCHULTZ: Senator, I have a request. You sit on the Small Business Committee. And me being a small business guy, let me throw this out.

Small community banks could now borrow at three percent. I'd like to get 3.5 percent money. Is that possible, or are these banks going to come back and charge me seven, eight, nine percent because I don't meet some kind of criteria?

There's a lot of Americans out there tonight that are wondering, OK, they're going to get the TARP money at three percent. What are we going to get it at?

CARDIN: Well, that's a great question. There's two points here.

First, we want to make sure they can get loans, small businesses.

Many small businesses can't get loans.

Secondly, we want do make sure the rates are competitive and are fair. And I think you raise a very good point on that, and that's something that's going to be part of this program to make sure that the rates are fair.

SCHULTZ: Well, I just want to point out that Wall Street got what they asked for. And if the government can back it up at a small rate, if you can get 3.5 percent money, where is it written that taxpayers have to make sure that banks make money?

I mean, if we can get 3.5 percent money across this country, they're still going to make a half a percent. If you're talking about billions of dollars doing this, the banks will make their money. The cheap money is where the business is going to grow.

That's my opinion. I had to take time to say that to you tonight, Ben.

CARDIN: No, Ed, I don't disagree with you. I don't disagree with you.

We want to get the money in the hands of the businesses that are going to create jobs. Small businesses are going to create jobs, and we want to make sure it's at the right rate. We're not interested in subsidizing banks, we're interested in creating jobs with small businesses.

SCHULTZ: Senator, good to have you with us tonight. I appreciate it very much.

CARDIN: Thank you.

SCHULTZ: I think this is going in the right direction to create jobs.

I commend the Obama administration on that, and I know they're watching.

Up next, Glenn Beck. When he hears the word "progressives," he thinks of tyrants and slave owners. When I hear the word "Beck" I think "Psycho Talk."

That's next.

(COMMERCIAL BREAK)

SCHULTZ: In "Psycho Talk" tonight, for the second night in row, it's "The Beckster."

That's right. He says he's been reading up on America's founding fathers. Never did it in school. He's got the latest interest in Samuel Adams, although it's like he's been drinking Sam Adams, because what he's reading ain't jiving.

Listen to this.

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS: To progressives, individuals aren't the engine that make this country move. No, no, no. They are the problem.

They've come a long, long way, bit by bit, piece by piece. They have been chipping away at your individual freedoms.

We call them progressives now, but back in Samuel Adams' day, they used to call them tyrants. A little later, I think they were also called slave owners.

(END VIDEO CLIP)

SCHULTZ: All right, Beckster. Before you go start calling good lefties out there slave owners, I think you ought to do some research again.

Then you would learn that most of these founding fathers that you think so highly of were actually slave owners themselves, and the ones that didn't own slaves weren't exactly abolitionists. Remember the three-fifths rule, where slaves counted as three-fifths of a person? It's in Article 1, Section 2, Paragraph 3 of the United States Constitution that you so passionately defend.

Maybe you should add that to your reading list, because comparing progressives to slave owners while idolizing actual slave owners, that's "Psycho Talk."

Coming up, Republican Senator Lamar Alexander almost got in "Psycho Talk." He offered a friendly suggestion to the president of the United States today-"Don't create an enemies list."

Senator, why don't you quit acting like the enemy when it comes to health care?

Congressman Alan Grayson will weigh in on all of this.

Plus, there was not one, not two, but three calls in last night's baseball game that lit me on fire. Man, where's the instant replay? What if that had been game seven of the American League Championship Series?

It's coming up in my "Playbook." Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: They root for failure on getting the Olympics. Who's against the Olympics? What's up with that? You know, that's a sad thing, isn't it? I mean, I don't care if you're a Democrat or Republican, you know, it's the Olympics. Come on.

(END VIDEO CLIP)

SCHULTZ: President Obama keeping a sense of humor, finding his fire again last night. He's not afraid to take on the party of obstruction, even in a joking way. That was his webcast to supporters last night. He is in New Jersey campaigning for Governor Jon Corzine right now. We're keeping an eye on that. And if he says anything Earth-shaking, we'll definitely get it to you.

The president is right. The Republicans are against everything. They're lying about health care reform, blocking-they are blocking unemployment benefits. And not many people are talking about that. They're attacking volunteerism in this country. They are against volunteering. That's almost as stupid as being against the Olympics.

I think this guy had the right prescription all along.

(BEGIN VIDEO CLIP)

REP. ALAN GRAYSON (D), FLORIDA: If you're against it, then get out of the way. Just get out of the way. You can lead, you can follow, or you can get out of the way. I'm telling you now to get out of the way.

(END VIDEO CLIP)

SCHULTZ: Congressman Alan Grayson, Democrat from Florida, joining us tonight here on THE ED SHOW.

Congressman, it seems that you've gotten tremendous reaction from the way you've been handling critics. And the White House is now starting to go after critics including, Fox News. Do you think that this is a good strategy? Does this work? Does this have potential to continue to gain support?

GRAYSON: Well, sure. What you do with a bully is you confront the bully and the bully backs down. That's a good description of Fox News. People con me on the air, they insult them, as they did me. They cut off their mikes, as they did me. They shout at them and interrupt them, as they did. And they even curse at them, as they did me. Why would anybody think that Fox News is some sort of valid news organization like that?

Fox News and the "National Enquirer" are basically interchangeable.

SCHULTZ: So the president and the White House going after Fox News is a good strategy?

GRAYSON: It's either that or ignore them like America does. There's 307 million Americans in this country. Barely three million of them ever tune into Fox News. That means 99 percent of all Americans have the good sense to ignore them.

SCHULTZ: Now the public policy polling was out there. The question was, does President Obama love America? We were shocked at this; 73 percent of Republicans say no, or they're not sure. In your opinion, how have we gotten to this point in this country?

GRAYSON: Because the Republicans operate by vilifying their enemies and nothing else. All they try to do is try to distract people from issues of health care, issues of job, issues of energy independence. They've got nothing. Because of that, they're well on their way. The party of no is well on their way to being the party of nobody.

SCHULTZ: Well, in the Senate today, this is Lamar Alexander, senator from Tennessee, comparing President Obama to the crook Richard Nixon.

(BEGIN VIDEO CLIP)

SEN. LAMAR ALEXANDER ®, TENNESSEE: As any veteran of the Nixon White House can attest, we've been down this road before. And it won't end well. An enemies list only denigrates the presidency and the republic, itself. Now, the only reason I mention this is because I have an uneasy feeling, only ten months into this new administration, that we're beginning to see the symptoms of this same kind of animus developing in the Obama administration.

UNIDENTIFIED MALE: I think we're all concerned about the direction of this calling out, this taking-I take it the senator from Tennessee is suggesting this administration is Nixifying the White House?

(END VIDEO CLIP)

SCHULTZ: Nixifying the White House; what should be the proper response to that, Congressman?

GRAYSON: Fox News and their Republican collaborators are the enemy of America. They're the enemy of anybody who cares about health care in this country, the enemy of anybody who cares about educating their children, the enemy of everybody who wants energy independence or anything good for this country, and certainly the enemy of peace. There's no doubt about that. They are the enemy.

SCHULTZ: Congressman Alan Grayson, appreciate your time tonight.

Thanks so much for joining us here on THE ED SHOW.

GRAYSON: Thank you, Ed. Thank you very much.

SCHULTZ: Let's go to our panel tonight. For more, let's bring in Joe Madison, XM radio talk show host. A.B. Stoddard is with us tonight, associate editor for "The Hill." Karen Hanretty, Republican strategist.

Karen, we'll start with you. You want to respond to Congressman Grayson's comments about Republicans?

KAREN HANRETTY, REPUBLICAN STRATEGIST: Where to even start with Congressman Grayson. First of all, he's attacking Fox News and says, well, let's see, 99 percent of America doesn't watch Fox News. Yet, we all know they have doubled the ratings of all the other cable stations combined. So why is he on MSNBC tonight?

I mean, this is just silliness to attack a cable station that gets viewers who are not all Republican. There's lots of information to determine that, in fact, Democrats also watch Fox News. In fact, President Obama has said on multiple occasions that we're not a Republican nation, we're not a Democrat nation, we're just a nation of Americans. Why isn't he talking to all Americans?

Why has he decided to completely cut out, what is it, 3.5 million viewers on O'Reilly's show? Or, you know, he could go on Chris Wallace' show on Sunday morning. This is a very odd tactic. I think it's largely meant to throw red meat to the left, because otherwise the left is very upset. He still hasn't passed Don't Ask/Don't Tell. He still hasn't rescinded Defense of Marriage Act. He still isn't in support of same-sex marriage. A lot of things that matter to the left.

So he'll just throw out Fox News, kind of like throwing Christians into the arena.

SCHULTZ: All right. Karen, I gave you a good shot to defend why you're at 20 percent when it comes to Republican support in this country. Joe Madison, you want to respond to that?

JOE MADISON, XM RADIO SHOW HOST: I think when I hear what I just heard, what comes to mind is that the Republican party is leaderless. Look who she quoted: O'Reilly, the Limbaughs, the Glenn Becks. This is the Republican leadership. These are the people setting the agenda for the political leadership of the Republican party in this country.

Yes, you're right, people on the left are challenging their president because he made certain commitments during the campaign, and they intend to be active enough to make sure that he keeps them.

The bottom line is very simple. It's really not about Fox. It's not about MSNBC. I think it's more about people need to be critical thinkers in this country. And they need to demand the truth from both parties.

SCHULTZ: OK. A.B. Stoddard, I want to go back to the comment that President Obama made when he gave the joint-gave a speech to the joint session. He said that if you're wrong on something, we're going to call you out. Little did we know that Fox News was going to be in the lineup of being called out. Is this a good strategy for the White House to follow, in your opinion?

A.B. STODDARD, "THE HILL": I don't think so. I happen to agree with Karen that it might be a good way to try to sort of make some noise to deflect attention away from the fact that President Obama is poised, in passing health care, potentially-and I'm only saying potentially, Ed, out of respect for you-without a public option, of course, possibly surging or escalating-you know, providing a troop increase in Afghanistan, two things that will infuriate the left.

They are dispirited and disheartened over other issues, as Karen mentioned; not repealing Don't Ask/Don't Tell, putting immigration reform on the back burner, letting the unions know, in no uncertain terms, that Card Check is way off of any burner. I think that this calling out an organization and saying it's not real news, it fires up the left base. I don't think it does anything else except for really help Fox News.

I will agree with you. I will not second the comments of Congressman Grayson, but agree with you that in order to surge over 20 percent-and the Republicans are sinking in the polls in terms of approval and party identification-I think they do need to step up and start saying some positive, proactive, and productive things about their policy agenda to rehabilitate their party, in addition to saying no all the time to Obama's policies.

SCHULTZ: A.B., I do want to point out that the CBO score came out today. It's under budget. It's paid for. It reduces the deficit. It covers more people. I'm going to bet you dinner here on MSNBC, on THE ED SHOW tonight, that we get the public option.

MADISON: And I'll pay for dessert.

SCHULTZ: You know what, I bet we're going to get it. The conservative Democrats right now have no cover anymore. They can't come back to the American people and say, well, this was the criteria; now we have to move the goal post.

Karen, I want to offer this to you. I've only been on this show for six months, and I'm already beating CNN. You give me six years and I'll kick Fox's ass. I just thought I'd let you know that. All right.

MADISON: Let me bring up something-

HANRETTY: Let's talk about numbers real quick. When we're talking about Republicans at 20 percent, let's also remember another very important number, which is the generic ballot. That is, every day that Barack Obama is in office, the generic ballot gets better for Republicans. Would you vote for a Republican or Democrat? There are more competitive seats today than when he took office.

SCHULTZ: I know he's at 57 percent approval rating, and the American people have turned the tide on public option. We're going to get health care reform passed. You folks are going to be left in the dark, because you don't want to be a part of it. Joe, I'll give you the final word in this segment.

MADISON: Final word is that what I'm finding on my show, ratings or no ratings-and we've got ratings, too-the bottom line is when you explain public options to people, as my grandfather used to say, really put it where the goats can get it, people buy it, on the left, and even on the right.

SCHULTZ: Got to run, folks. Good point, Joe.

All right, my next guest is doing everything in her power to finally put a stop to health insurance price fixing. Congresswoman Diana DeGette from Colorado will join us to talk about that next in my playbook. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: In my playbook, Congress is hitting back against health insurance industries. No question about it. They're trying to block health care reform. So the fight is on. This morning, the House Judiciary Committee voted to strip insurance companies of an exemption from antitrust laws that they have enjoyed since the 1940s.

Meanwhile, Senators Leahy, Schumer and Reid announced their intention to add a similar measure over on the Senate side to the Senate Health Bills. Joining me now is Democratic Congresswoman Diana DeGette of Colorado, co-sponsor of the antitrust legislation that passed the House Judiciary Committee today.

Congresswoman, good work. It's about time.

REP. DIANA DEGETTE (D), COLORADO: Thank you. Yes, it seems like kind of a no brainer, doesn't it?

SCHULTZ: It really does. Do you think that this is going to be able to reel in the industry when it comes to price fixing and also allocation of competition in states? What do you think?

DEGETTE: The bill passed by the Judiciary Committee does just that. It says that now the Justice Department can look at whether there is price fixing and other kind of anti-competitive behavior going on. Right now, under current law, they can't do that.

SCHULTZ: I don't mean to be the fly in the ointment on this, but in the insurance industry, for an insurance company to go from one state to another state, they have to deal with state laws; they have to deal with the application process; they have to deal with the financial requirements; and there's always state politics. Do you really think that this antitrust exception is going to change competition across state lines?

DEGETTE: Well, here's the situation is-the reason insurance companies were made exempt from the federal antitrust laws is because they are mostly regulated in the states. As we're looking at putting together national health care legislation, we don't want insurance companies to engage in anti-competitive behavior.

One of the reasons health insurance is so costly right now is in most of the country, they're in a monopolistic situation. In Pueblo, Colorado, in my state, for example, one insurance company controls over 70 percent of the market. So we're hoping that our legislation will at least go part of the way toward encouraging competition, so that people don't have these monopolistic situations.

SCHULTZ: Well, the American Medical Association came out with a study, nationally. This is what it looks like: 94 percent of the top metropolitan insurance markets are anti-competitive. Also Alabama and North Dakota, in those two states 90 percent of the market is controlled by a single insurer.

Now those are not very well-populated states. Do you actually think that insurance companies are going to go into markets if they don't have the number of customers to make a profit?

DEGETTE: Well, I think-I think in the exchange people will have enough customers to make a profit. And who knows what will happen? I mean, if there's no-if there's nobody who wants to compete, then you won't be forcing people to go in there. Why should we exempt them from the anti trust laws? Why should we let them get together and say, OK, you can take this market, and you take that other market? Oh, by the way, we're going to set our prices a certain way. We don't want that type of thing to happen.

SCHULTZ: Congresswoman, good to have you with us tonight. I appreciate your time.

DEGETTE: Thank you.

SCHULTZ: One last page in my playbook. I'm not a huge baseball fan. I always watch the playoffs. Last night, there wasn't one, two, but three calls that were absolutely atrocious. Can I ask Major League Baseball, can you get contemporary and get with the program? This thing called instant reply has worked really in the National Football League. Now, I know you've got it in baseball when it comes to home runs, but what about plays like this?

What if I'm an advertiser and I've spent all this money supporting this team and then they get taken out by a bad call? That's not good. Come on, baseball. Let's get with the program.

Coming up, we're going to be talking to our panel, as the president of the United States being a man on the move the past couple of days. Tonight, he's adding heat to an already gubernatorial race. Can he make an impact in New Jersey?

Also, his move on Wall Street to limit salaries. That's being put to our panel next on THE ED SHOW. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Let's be honest, this crisis came about because of the same sorts of lax regulation and trickle-down economic theories that the other guy's party has been peddling for years.

I'm telling you, these folks, they have a lot of nerve. They leave this big mess, and suddenly they're complaining about how fast we're cleaning it up.

(END VIDEO CLIP)

SCHULTZ: Get it on, Mr. President. That was the president in New Jersey just a few moments ago, stumping for Governor Jon Corzine. He's not just getting tough on Republicans. He's getting tough on Wall Street. Wall Street is expected to dish out 26 billion in bonuses the next six months, even at companies that were at the trough for the taxpayer dollars and on life support.

Now the Obama administration is getting after it, telling these bailed out firms, like Citigroup, AIG, Bank of America, GM and Chrysler, to knock it off. The administration wants 90 percent cuts in cash payouts to top executives. This is at the companies that got the most in taxpayer dollars.

That means a 50 percent cut in compensation overall to these top executives. No more getting rich on Uncle Sam's dime. No more getting rich on your money and my money.

Let's bring back our panel tonight, Joe Madison, A.B. Stoddard, and Karen Hanretty. Joe, what do you make of this?

MADISON: It's socialism, isn't it. That's exactly what it is. Every person, black, white-I don't understand hardworking middle class people in this country who can sit back and allow these people to absolutely screw us the way that they're doing, and turn around and suggest that President Obama is a socialist?

This is-I mean, all of us should be outraged. And going back to the last segment that we were on, this is where the Foxes and the other talk show hosts should be screaming, instead of having campaigns against progressive or liberal people.

It's-I'm telling you, we all need to come together over these guys on Wall Street, every last one of us.

SCHULTZ: A.B., it's the culture of Wall Street. If there's money laying around and no regulation, people are going to grab it. Doesn't the Bush administration, doesn't the Obama administration deserve some kind of diss on this? We let them do this without regulation.

STODDARD: Well, I think the Obama administration is coming to grips

with the fact that the strongest sentiment in this country is surrounding -

is anger and fear and distrust of the government, surrounding joblessness, and the direction of the economy-their strong public opinion against bailouts, for the auto industry, for Wall Street. I think they're seeing, with these announcements coming from the administration, that they're going to kind of wind down Tarp, restructure it so it's not for the large institutions. It's for responsible homeowners to stay in their home and small business.

I think they have figured out that's literally going to be what decides their political fate. And I think we will spend the next year hearing about nothing but how they're going to help small businesses.

SCHULTZ: Karen, what the president did today, extending this Tarp money to small community banks to get lending going at three percent, not five percent, can you go along with this? Is this something President Obama is doing correctly this time?

HANRETTY: I'm all for helping small businesses. In fact, I encourage people to go out there and spend money in small businesses. It's the 350 project. Go do it. Make sure these people are around.

Look, you know, I mean, if these-as long as-I don't-I plead a little ignorance here. I'm not sure if these companies, corporations that you mentioned have paid back the money that they've borrowed. If they've paid it back-

SCHULTZ: Some of it.

HANRETTY: Look, they need to pay it all back. Once they have paid it back, it's really their business what bonuses are. You don't want the government regulating what the private sector can make.

SCHULTZ: Karen, that's where we are right now. Does this set the table for regulation?

HANRETTY: I tell you what, if it does, that is not going to be supported by the American people. They still believe in capitalism. They still believe in the private sector over government.

SCHULTZ: Joe, what about it?

MADISON: It was the lack of regulations that got us in this mess to begin with.

HANRETTY: People believe in capitalism and the private sector more than they believe in the government. They just do.

(CROSS TALK)

MADISON: It's capitalism until they want a bailout from taxpayers.

HANRETTY: Forget-I'm saying, the people of America, the average Joe and Jane out on the street, do believe in-the private sector is what has made America great.

SCHULTZ: We've got to have some regulation.

(CROSS TALK)

SCHULTZ: Panel, we have to run. Time flies when we're having fun on THE ED SHOW. Thanks for joining us.

Earlier I asked the audience, should the Democrats kick Joe Lieberman out of the caucus? Ninety percent of the folks are saying yes; four percent say no. I knew I was correct on that one. That's THE ED SHOW. Chris Matthews and "HARDBALL" is next.

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

END

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