updated 10/30/2009 10:54:23 AM ET 2009-10-30T14:54:23

Guests: Earl Pomeroy, George Miller, Joe Sestak, Sen. Jeff Merkley, Larry Elder, Laura Flanders, A.B. Stoddard, Tom Carnahan, Rep. Alan Grayson

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

The president at this hour is getting an earful from House progressives right now.  And I really hope they‘re giving it to him, and I hope that he is intently listening to them, which he‘s very good at, I might add. 

This morning, House Speaker Nancy Pelosi, she rolled it out, the House version of the health care bill with a weakened public option. 

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER:  The bill will expand coverage, including a public option to boost choice and competition in the health insurance reform. 

None of this would be possible without the prospect of the presidential signature, so we thank President Barack Obama for the way he has weighed in on this, the intellectual contribution he has made to it. 

(APPLAUSE)

(END VIDEO CLIP)

SCHULTZ:  Lots of backslapping going on here. 

You know, I don‘t know about you, but today—and we know we‘ve worked hard for this, and now we‘re going into this crucial stage of it all.  I‘ve had a wide range of emotions today in dealing with this.  But my instincts to this are, it‘s not good, it‘s a sell-out. 

And we‘re going to be hearing just how great everybody is and how great and how hard everybody worked, and what this means, and this is going to be awesome change.  I say it‘s not enough. 

Chris Van Hollen at the DCC today, sent out an e-mail saying that this bill includes a strong public option and is a progressive victory.  I don‘t think so.  We‘re supposed to be excited about a watered-down version? 

I‘ve got to tell you the truth tonight, folks, as I always do, from my heart—and I‘ve talked to too many people across America and I know what they want.  This is not great, it does not go far enough. 

The bill is nothing but a watered-down piece of garbage written on Republican toilet paper.  That‘s how I feel at this hour.  Somebody has got to sell me on this that this is just sweeping change.  And I‘ll get to the details in a moment. 

But tonight, I have this feeling that the insurance industry is going to be going to dinner and they‘re going to be getting a real expensive bottle of wine and popping it, and tomorrow they‘re going to be going straight to the bank, because they know all these new customers are on the way.  You can‘t trust the conservative Democrats on this issue, because I believe that too many of them are bought and paid for. 

Now, look, Barack Obama came to Washington to change Washington.  And I realize that Barack Obama can‘t be responsible for those in his own party who go out and accept money from the special interests and actually have spouses working for those who are trying to kill reform.  But right now what we have seen is that the conservative Democrats, what they have done, they have made a determination. 

They‘re so eager to do it now instead of—you know, they made the determination, OK, this is just too heavy of a lift; OK?  It‘s just too heavy of a lift for them. 

President Obama, you know, never drew the line in the sand, but here‘s what gets me.  Is that, let‘s not have any legislation this year.  Do we have to pass it?  If it‘s not exactly what the progressives want that put Barack Obama in office, do we really have to pass it? 

Can‘t we suck it up for one more year and then turn to the midterms and identify the Joe Liebermans of the world and the conservative Democrats of the world who really aren‘t true to change?  And let‘s just have at it in the midterm and just go out there on the president‘s political capital and say, you know what?  You know what we‘re going to do?  We‘re going to turn it over to the voters again, because we haven‘t elected enough Democrats. 

I wish that‘s what would happen.  But right now what‘s happening is there are progressives across this country that think, number one, the president hasn‘t pushed hard enough, that thinks, number two, that they‘ve been sold out.  I heard that on the radio numerous times today.  And we‘re beyond the point of negotiating what‘s good and bad. 

Look, you‘re either with reform or you‘re not.  And I realize that there are different parts of the country that have different needs when it comes to health care. 

In rural America—and it‘s just not from where I come from—all over rural America, there are representatives and senators who are concerned about the Medicare reimbursement rates, that there is a disparity here, that it‘s not fair, that it shortchanges hospitals in rural areas and the reimbursement rate is just so different.  And that has to be addressed. 

I get that.  But why not go for the full-fledged public option, because you‘re not going to do single payer, and then say you know what?  Before it kicks in to 2012, hey, we‘re going to fix that, we‘re going to find the money somewhere?  They‘re afraid to do that.  That‘s what it appears to me, anyway. 

And the other question that I just can‘t get an answer to, and I‘ve talked to a number of elected officials down in Washington yesterday, what is this deal about 2012?  You mean to tell me that we can help the banks out overnight but we can‘t kick in health care until 2012? 

For more on this, let‘s go to Congressman Earl Pomeroy, because the winners in this are rural Democrats who are thinking that the public option is going to not do what they want it to do. 

Congressman, good to have you with us tonight.  I appreciate your time. 

REP. EARL POMEROY (D), NORTH DAKOTA:  Ed, it‘s good to be with you. 

But look, I think the winners are the American people.  We want health care reform that works all across the country, not just in the cities, but the country, too.  We‘re all in this together, and I believe that the changes in the bill preserve the public option, but will provide a reimbursement rate that doesn‘t short-sell rural America to where our hospitals are closing and our specialists are leaving. 

SCHULTZ:  So, you can vote for what the House put out today?  You can vote for what Nancy Pelosi put out there today?

POMEROY:  Sure.  The bill isn‘t perfect, it‘s a work in progress.  But I made it very clear to the Speaker that I could not support the Medicare payment base for public option.  It really shortchanged us much too much to be acceptable. 

If it went to negotiated rates, I would support this bill.  It has gone that route, and I believe that this is going to make possible, Ed, passage in the House of health reform, the most significant health reform in decades. 

Look, I think it‘s a little—I think we‘re getting hung up on one facet of what is a major change.  We will, through this legislation, give the American people the assurance that they will be able to get the coverage their families need.  That is a big, big win for the American people. 

SCHULTZ:  But Congressman, this is where I get hung up in the hedgerow country, if I may.  Price gouging legislation—you mean to tell me that the Congress is going to dictate to insurance companies in this country—and you‘re a former insurance commissioner, you know how this whole thing works—that the government is going to come in and dictate, OK, you can charge this rate, you can‘t go higher than that rate? 

That‘s really putting the government in the front office of the insurance business instead of giving them some direct competition and let market forces bring the price down.  And it‘s not the true competition, as I see it. 

Correct me if I‘m wrong, Congressman. 

POMEROY:  Here‘s how I see it.  A public plan ought to be in there, and it‘s going to be, providing competition.  But if you have a public plan that gets to send its people at one rate, well below what anyone else is saying, that‘s not fair competition.  You‘re rigging the deck. 

So, negotiated rates, we‘ll have the public plan operating like any other.  And by the way, in the first year of this legislation, we require 85 percent of premiums collected by private insurance companies to go back out in payment of claims. 

SCHULTZ:  That‘s good.

POMEROY:  This is a much stronger standard than ever existed before. 

SCHULTZ:  That is very positive, there‘s no question.  Thirty-six more million Americans are going to be covered on this.  There are some positive thing in this, but I‘m not convinced. 

And I have a jaded opinion about the insurance industry, that these guy are slippery.  They‘re going to find a way to get around it, and rates are still going to be going up.  I don‘t believe that the anti-gouging legislation is going to be able to stick.  I‘m not sure that the antitrust provision is going to work, Congressman.  I‘ll tell you why. 

You know it costs a lot of money in infrastructure and investment to go set up shop in rural America and say, hey, I‘m from company number X and we‘re going to do business in Nebraska.  In fact, we‘re even going to go to North Dakota. 

That takes a hell of an investment for a company to do something like that.  In your state, in North Dakota, you‘ve got 90 percent of the market is controlled by Blue Cross.  Now, if this bill doesn‘t change that dynamic, how can the consumers consider this to be a victory and how can they expect prices to come down? 

POMEROY:  You know, when I was insurance commissioner, I was trying to get other companies to come and write in North Dakota.  The insurance commission is not going to have to do that anymore because there is going to will be a public option offering a clear alternative to Blue Cross/Blue Shield.  It is going to be giving consumers the kind of choice they have not had in our part of the country, right across the country.  A big improvement in the bill moving forward.

You know, we said at the beginning...

SCHULTZ:  But, wait a minute now, Earl.  I‘ve got to challenge you on this. 

How is it going to change for Blue Cross in your state? 

And you‘re not the only state.  There‘s a number of states out there where the numbers are unbelievable. 

In fact, in your state, the CEO got run out of Blue Cross because he was living high on the hog and down in the Cayman Islands, and premiums were going up.  My premiums went up 20 percent, and you know how that all ended out.

So, tell me, how—in other words, in 2013, there‘s going to be more competition in these states? 

POMEROY:  Yes, absolutely.  Without getting in the weeds of the bill, there will be an insurance exchange.  It will offer people the ability to purchase coverage at group rates.  Even family farmers out in the rural areas are going to be able to get the kind of deal that businesses have been getting, lower premiums, better alternatives. 

But as to public option, we don‘t have public option today.  We‘ve got Blue Cross/Blue Shield and Blue Cross/Blue Shield.  We‘re going to have now a public alternative.  That‘s competition in the marketplace, and I think it‘s going to be a good thing.

The Senate even has co-ops, too.  They have—as I understand it, now they have public option and co-ops.  So we‘re going to—we‘re really trying to bring more of a competitive environment for the consumers.

SCHULTZ:  All right.  OK.  The effort is there, there‘s no question about that.

But Senator Conrad today, from your state, who‘s chairman of the Budget Committee and also on the Senate Finance Committee, made a comment that both the House and the Senate bill aren‘t going to get through the way they are right now.

So, does this mean that‘s going to have be more concessions?  And you know that this is going to infuriate the progressive base across the country.  In fact, some progressives still aren‘t on board and this could be a problem. 

POMEROY:  I think the further changes that are going to be made are going to go right to the things they‘re worrying about like we all are, and that‘s these soaring health care costs.  My gosh, why is that the health care goes up wildly above any other component of inflation in our economy? 

We‘ve got to do something to bend that cost curve, as it‘s been said so often, or we‘re going to not be able to afford this over time.  It‘s eating us alive.  It literally is.

SCHULTZ:  It is.  And I don‘t see the full-fledged public option.  We‘ll see how it plays out. 

Earl, I know you‘re a fighter and I know that you mean well, but there is a division within the Democratic Party on this, and I don‘t think it goes far enough.  That‘s just my take. 

Congressman, great to have you with us tonight. 

POMEROY:  Good to be with you, Ed.  Thank you.

SCHULTZ:  You bet.

Folks, get your cell phones out.  I want to know what you think about this. 

Our question is about the president tonight.  I heard a lot of there on talk radio tonight.  Has President Obama sold out his base on health care reform? 

Text “A” for yes and “B” for no to 622639.  We‘ll bring you the results later on. 

One man who was very integral in all of this, Congressman George Miller.  He, of course, has been on the front line with the House Speaker and Steny Hoyer, putting this whole thing together. 

I‘m just amazed that this is government involvement.  This is the Congress going to the front office of the businesses saying, OK, you can charge this rate, you can charge this rate, you can charge this rate.  I don‘t think that‘s the right way to go. 

I think that just hands the gun to the righties and the conservative talkers of America, who are going to come back and say government involvement.  If you just have a clean public option, a single entity that will compete and not regulate the industry, then I think you‘re going to see a much better bill. 

Joining me now is Congressman George Miller, chairman of the House Education and Labor Committee. 

Congressman, good to have you with us. 

REP. GEORGE MILLER (D), CHAIRMAN, HOUSE EDUCATION AND LABOR COMMITTEE: 

Thank you, Ed. 

SCHULTZ:  Are the progressives, are the hard lefties in the Congress going to be a problem on this for the House bill? 

MILLER:  I don‘t think so.  I think what we understand is we have fought for and I think we‘re on the brink of achieving, a public option.  And that public option is going to create competition where there is none today.  It‘s going to be a test of this administration, how tough of negotiators they are, how tough the health commissioner is in negotiating, and how tough the Health and Human Services secretary is. 

But that option, without doubt, is going to put a downward pressure on prices when the American families go to the exchange to get their insurance.  And I believe it‘s going to create competition unlike we‘ve ever seen in the insurance markets of this country. 

SCHULTZ:  Congressman, I asked the question tonight in my opening remarks.  Why is it that we can do the banks almost instantly but we‘ve got to wait until 2013 to do health care reform?  Why the holdup?  I just can‘t get a solid answer on that.

MILLER:  Ed, we‘re going to take 37 million people—we‘ve got to create a system to put them in, in the health care exchange, and it‘s going to take time.  With all due respect, I would rather have a little bit of time and do it right. 

We‘re going to do a whole series of things that benefit people in terms of insurance costs, in terms of pre-existing conditions, in terms of caps on insurance and closing the doughnut hole so seniors will pay less.  The government is going to go in the business of negotiating pharmaceuticals for Medicare recipients.  Immediately, that‘s going to help drive down the costs.

There‘s a lot of things going on between now and 2013.  But to take 37 million people who have never been in the insurance system and dump them into a system like it‘s going to work on the first day, I don‘t think we can do that.  I don‘t think it‘s fair to those individuals.

SCHULTZ:  Well, we‘ve got Medicare.  We could just expand Medicare.  I mean, we‘ve got the infrastructure to do that.

MILLER:  But if you expanded Medicare, you would be expanding it five years every year.  You would go from 65 to 60, to 55.  You can‘t take 100 million people and dump them into the system on day one and say go.  That‘s just not fair to those people. 

SCHULTZ:  All right.  But this is not the bill you wanted, this is the way it ended up.  You got some good things...

MILLER:  No, I‘m very proud of this bill. 

SCHULTZ:  OK.

MILLER:  You know what?  In my district, 58,000 people have lost their jobs and they don‘t have any insurance.  I don‘t know when we get out of this economic cycle, but the next time we‘re in a downturn, those 58,000 people in my district will lose their job but they will not lose their health insurance. 

Never again will an American family be without health insurance.  That, to me, is worth everything, because I meet those people every weekend.

SCHULTZ:  Oh, I know.

MILLER:  They get the trifecta.  They lost their job, they lost their health insurance, and they‘re losing their house.  This is going to make a huge difference for those families who find themselves on unemployment insurance, and they will have secure health insurance. 

SCHULTZ:  I have to ask you, Congressman, what do you say to Dennis Kucinich—and there are some liberals that have been very critical—saying that this doesn‘t go far enough? 

MILLER:  I understand that there‘s always people who it doesn‘t go far enough.  But you know, tell that to 37 million people who don‘t have insurance. 

SCHULTZ:  Well, I would rather tell it to 47 million.  I would rather tell it to every American. 

MILLER:  Well, we‘re on the edge of getting something that everybody dreamed about for the last 50 years.  And now it‘s not good enough and it‘s not far enough. 

I just don‘t buy that argument.  I just don‘t—people—go out and talk to the unemployed, talk to the families that we meet with every week.  And you‘ll find out—when I talk to people on the calls and the town halls, you know what they say to me?  “God bless you.  This is going to be so different for my family.  This is going to help my daughter.” 

SCHULTZ:  So you think they‘re going to stay “God bless you” for this bill? 

It‘s that good?

MILLER:  No, I don‘t expect that. 

SCHULTZ:  OK.

MILLER:  Ed, I‘ve been doing this for 35 -- they don‘t say God bless you. 

Why would they ever say God bless me?

SCHULTZ:  Well, I‘m just—I mean, I think that this is not what we really envisioned, but it‘s something that...

MILLER:  You think back when you talk—you had these conversations, Ed. 

This is what you envisioned.  This is what you envisioned.

SCHULTZ:  Well, no.  I envisioned a robust public option, a federal mandate...

(CROSSTALK)

MILLER:  Ed, when you started talking about public health care, we never knew the word “public option.” 

SCHULTZ:  Yes, we did.  We used “universal health care.”  You know, OK...

MILLER:  No, no, no.  I‘m a single payer, Ed.  I‘m a single payer.

SCHULTZ:  George, let me put it this way.  And I‘m a fan.  Look, I know you guys have worked hard on this, but the fact is, this strays away from the platform of the Democratic Party, which is universal health care.  It strays away.  It does not deliver. 

MILLER:  It may stray away.  It takes us so far into helping millions of Americans who are without insurance and will be without insurance in the future. 

SCHULTZ:  OK.

Congressman George Miller, great to have you with us.

MILLER:  Don‘t ever say that to me. 

SCHULTZ:  OK.  I know, you‘re in the people‘s House.  I love your passion.

Thank you, George.  Appreciate it.

And I should mention tonight that Harry Reid is asking the progressive base to contact their representatives and senators on this whole thing.  It‘s far from over. 

Coming up, Sarah Palin, she‘s got a shooting match coming up in Texas with “Shooter.”  It‘s all coming up. 

We‘ve got a lot more on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

Late last night, President Obama took his first trip to Dover Air Force Base to honor the return of 18 Americans who were killed in Afghanistan this week, witnessing the real cost of the war as he weighs a very tough strategic decision and options coming up to him.  To help with his decision, the president has asked for an analysis of each province in Afghanistan to determine where local leaders are effective and where they need more help. 

Meanwhile, the White House officials say the president is considering a narrower version of General McChrystal‘s proposal that would involve deploying 40,000 more troops. 

Let me bring in former admiral and now Congressman Joe Sestak of Pennsylvania. 

Congressman, good to have you with us tonight. 

REP. JOE SESTAK (D), PENNSYLVANIA:  Good, Ed, to be here. 

SCHULTZ:  Was it good for the president to do what he did last night?  And how much of an impact do you think it had on him? 

SESTAK:  I think this was extremely important, for him to have gone there.  There are so many great young and women that raise their hand and say, here am I, send me.  And a number of them come home like they did the other evening.  No, I think it shows a due recognition that he understands the challenges and the responsibility he has in this decision he has to make. 

I‘m also taken, however, that he is now looking not at the central government as the partner we need.  They are too corrupt, even with a change in election, to be dependent upon him.  That he is looking rightfully at those local power structures, even tribal warlords, to see...

SCHULTZ:  Do you think that‘s the right thing to do?

SESTAK:  Without any question.  And actually, as you go through the McChrystal report, the classified version, it is riff (ph) throughout that, that we don‘t really know how to deal with the corrupt government there.

And we are not trying to nation-build any longer, Ed.  We were not.  We just want to leave behind an inhospitable condition for al Qaeda to ever come back.  And buying off warlords is probably the way they have to go. 

SCHULTZ:  OK.  So, it sounds like the president is thinking about compartmentalizing the country and going where they need help, and depending on the Afghans for maybe some security and peace where they have made some other progress. 

Now, with that, are you—does this mean that the president is very close to a decision here?  And how many troops would it take to do that?  What does the word “militarily” mean narrower?  What does that mean? 

SESTAK:  I believe that what you‘re going to see is that he is very close, and I think he needs to be actually, Ed, to a decision.  I think he‘s taken great deliberation, rightfully so, in doing this, because he has to judge, is Pakistan going to do their job on the other end of the border?  What about our Army that is in such a dire state of poor readiness, that it can‘t respond elsewhere in the world?

He has to consider all those factors.  But now I do believe, as I have said on your show, that he will look at a measured increase. 

It may not necessarily have to be the whole 40,000.  His responsibilities is to judge all those factors, and I think he‘s got it spot-on.  He‘s looking at what local leadership can pick up responsibility that won‘t welcome al Qaeda back later. 

SCHULTZ:  And finally, Congressman, Secretary of State Hillary Clinton made a comment to Pakistan that she couldn‘t believe that the Pakistani government doesn‘t know where al Qaeda is in Pakistan.  This is a pretty heavy comment. 

Would you side with her on that?  I mean, are we getting the full scoop from Pakistan on al Qaeda? 

SESTAK:  You know, I—you know I‘m a very big supporter of Mrs. Clinton.  But no.  Let me tell you, if the United States doesn‘t know, I‘m not sure that the—I don‘t think the Pakistani government knows. 

Maybe there would be some individuals in their intelligence service how knows.  Yes.  But that doesn‘t mean that those at the top know. 

Now, I honestly believe that the value to getting—of us to getting al Qaeda is too great for that government not to do it.  Both to us and to them.  I honestly believe they don‘t. 

SCHULTZ:  Congressman Joe Sestak, appreciate your time tonight.  Thanks so much.

SESTAK:  Thank you for having me, Ed. 

SCHULTZ:  Coming up, Republican Congressman Steve King, he goes to “Psycho Talk.”  You won‘t believe what he said during a very serious hearing. 

That‘s next on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, let‘s see, we just have a couple of days until we get to Halloween. 

Tonight, we have a colossal ape from Iowa, “Congressman Steve King Kong.”

Yesterday, the House Judiciary Committee held a hearing about football head injuries, pretty serious stuff.  Well, Stevie (ph) must have got knocked on the head before he went to the meeting. 

Instead of staying on topic in a serious atmosphere, he decided to go after NFL Commissioner Roger Goodell for opposing Rush Limbaugh‘s bid to buy the St. Louis Rams?  He also went after a couple of celebrity owners of the Miami Dolphins. 

(BEGIN VIDEO CLIP)

REP. STEVE KING ®, IOWA:  I don‘t think that anything that Rush Limbaugh said was offensive.  But with Fergie and with J.Lo, they have, between the two of them, alleged that the CIA are terrorists and liars; they‘ve promoted sexual abuse of women; they‘ve used the N-word; verbal pornography; recreational drug use; et cetera.  And they are owners of the Dolphins. 

Mr. Goodell, then I would ask you, are you prepared to level the same charges against Fergie and J.Lo, or are you prepared to apologize to Rush Limbaugh today? 

(END VIDEO CLIP)

SCHULTZ:  Congressman King, way to stay on topic at a very serious hearing about head injuries in the NFL. 

Of course Goodell stood his ground.  There was no apology.  But King now has some company on this. 

You see, fellow Psycho Talker “Bozo” Brent Bozell issued a statement today saying that the demand for an apology was quite “exactly what we have been calling on the media to do.” For what? 

Once again, we have the righties playing the fringe in jumping to the Drugster‘s defense, straying from a very serious topic and a serious hearing, to defend a racist, pill popping radio guy.  That‘s psycho talk.

Coming up, Sarah Barracuda and Darth Vader are on opposite sides of a Texas showdown.  I‘ll explain that coming up in the playbook.

Plus, I just don‘t think that the health care bill in the House goes far enough.  I think it‘s watered down.  That‘s right, it doesn‘t go far enough.  I‘ll get reaction from Senator Jeff Merkley of Oregon and also Congressman Alan Grayson, who has been the center of some controversy as of late.  It‘s all coming up on THE ED SHOW.  Stay with us. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN (I), CONNECTICUT:  Just take this government created, government run health insurance company that will cost the taxpayers, premium payers and the debt a lot of money—take it off the table.  We can come back in three or four years if the reforms—the other reforms we adopt are not working. 

But I think they will.  And so that‘s my position.  And I‘m sticking to it, because I think it‘s best for our country and my constituents. 

(END VIDEO CLIP)

SCHULTZ:  Yes, it‘s just such a funny matter when we have people dying all over the country.  Joe, you are done; 68 percent of the people in Connecticut want a public option, and you are taking money from an industry that is fighting reform.  That‘s who you‘re representing. 

There‘s no doubt about that.  We have senators like Lieberman that are trying to hijack health care reform in this country.  It‘s petty.  It‘s selfish.  And it‘s all to get attention. 

Majority Leader Harry Reid made a courageous move when he listened to the base by putting the public option, of some sorts, in the Senate bill.  Now you have Lieberman out there running out spouting off right wing bullet points, and threatening to filibuster.  What a team player. 

Strip him of his chairmanship now, Harry.  He is not a fair player.  He‘s a turn coat.  And now you have the Democratic caucus out there, who is out there helping, you know, the Republicans kill health care reform.  You know what that is?  That‘s being a traitor.  That is selling out to the special interest and not representing the people, and laughing about we‘ve got so many people dying in America because they don‘t have insurance. 

You know, even with what we have right now, it‘s going to help a lot of Americans, who would die if they didn‘t get health insurance through the public option? 

Joining me now is Senator Jeff Merkley, a member of the Help Committee.  Senator, I‘ll take a moment to separate you from that commentary, because I know he‘s one of your colleagues.  Are we going far enough for the progressives in this country?  It is part of the base Democratic party platform, universal health care.  We‘re not anywhere near there, are we? 

SEN. JEFF MERKLEY (D), HELP COMMITTEE:  What‘s tremendously exciting is that it‘s just a couple months ago that folks were saying that the public option is dead; it‘s gone; it‘s toast; it‘s over.  And a group of us kept saying no way, this is critical to controlling costs in health care, and we‘re going to keep fighting for this and we‘re going to win this. 

Now we‘re much, much closer.  We might end up with an opt out, where parts of the country say no thank you.  But in a few years, when they see that their health rates are much higher than their neighbors, we‘re going to be back on track. 

So I‘m just celebrating the resurrection and the success.  And I applaud Harry Reid for putting that public option in the bill he‘s sending to the floor. 

SCHULTZ:  What kind of message do you take from the House today when they came out with a watered down public option? 

MERKLEY:  What they did—and I think you‘re referring to that they‘re not going to tie it to Medicare rates.  Is that the point?

SCHULTZ:  Exactly.  Exactly.  They‘re not going to do that.  This is watered down.  And you have conservative Democrats out there across the country who got their wish, because Medicare reimbursement rates weren‘t what they want them.  So this doesn‘t go far enough, in my opinion. 

MERKLEY:  I‘ll tell you, there was a very real policy problem with tying it to Medicare.  It goes back to the fact that states are compensated in Medicare at different levels.  Oregon and Iowa and a host of other states are very low on Medicare compensation.  The result is doctors are not taking Medicare patients, and even sending them letters saying, I‘m sorry, I‘ve been—

SCHULTZ:  So you pass a public option and you go back and get the money, because this isn‘t going to start until 2013 any way. 

MERKLEY:  I was going to say, that would be the key.  If we tie it to Medicare, we have to bring up all those states that are getting the short end of the stick, because what would happen if we otherwise tied it to Medicare, in Oregon, is we would accelerate the number of doctors who kick all of the Medicare folks off their list.  It‘s already a big problem. 

So that‘s why in the health bill—you might recall in the health bill, it was actually progressives all agreed that under the current Medicare structure, we couldn‘t tie it, and we would have to negotiate.  So I had to plead a little bit of guilt on that one. 

SCHULTZ:  Senator Merkley, I appreciate your time tonight.  Thanks so much.

MERKLEY:  It‘s great to be with you. 

SCHULTZ:  For more, let‘s bring in our panel.  Laura Flanders is the author of “Blue Grit” and the host of GritTV.org.  A.B. Stoddard is associate editor of “The Hill.”  Larry Elder is a media commentator with us tonight.  What do you think? 

LAURA FLANDERS, “BLUE GRIT”:  I‘m with you.  I‘m really with you.  You‘re got 55 percent of the American people, 83 percent of Democrats in Joe Lieberman‘s state, wanting a robust public option.  And this option is about as robust as a Miller Lite.  People are frustrated. 

SCHULTZ:  Larry Elder, is this a win for conservatives?  You‘ve got the progressive base, in some corners, at each other‘s throat over this, saying it doesn‘t go far enough. 

LARRY ELDER, MEDIA COMMENTATOR:  Of course it‘s not a win for conservatives.  It‘s not a win for people who believe in the Constitution.  It‘s not a win for people who believe that government‘s job is not to provide health care insurance to those who don‘t have it. 

There are lots of ways of providing things for people who don‘t have it, and it‘s called competition.  In Massachusetts, much of the Romney care program has many of the elements that apparently this one has, including requiring insurance companies to enroll people with preexisting illnesses. 

What happened?  The premiums went up.  People did not enroll.  They paid the fine.  When they got sick, they enrolled, got treatment.  When they got well, then dropped the coverage. 

SCHULTZ:  Why don‘t they repeal it in Massachusetts? 

(CROSS TALK)

ELDER:  I‘ll tell you, they already are reforming it, kicking off a lot of people.  And it wouldn‘t—wait, Ed.  Wait, Ed.  It wouldn‘t work for but a cash infusion from the federal government, which means you and I are paying for health care for people in Massachusetts.  Otherwise, it wouldn‘t work. 

SCHULTZ:  Well, that‘s a very negative attitude towards it all.  The fact is more people in Massachusetts are covered now than before they started the program.  That is a fact. 

ELDER:  And the premiums have exceeded the national average.          

(CROSS TALK)

SCHULTZ:  We got to pay for it.  You got a healthier society.  A.B.  Stoddard, how do you view this?  There is going to be a public option, but it‘s not going to be as robust as the base wants. 

A.B. STODDARD, “THE HILL”:  Ed, I know I‘ve heard your comments all through the program tonight about how frustrated you are.  But the facts are, you‘ve got the Democratic party, that Americans elected, controlling the House and Senate.  And these are the votes that you have.  You don‘t have the votes for a public option tied to Medicare rates.  And you have serious questions remaining on the table about affordability and other issues that the mandate will bring. 

So until—even this package is not a guarantee. 

SCHULTZ:  Wait a minute, we haven‘t had the CBO score yet.  Before we get into the finance, we haven‘t had the CBO score of the bill in the Senate.  And this is coming out right now.  It has not been completely scored either.

STODDARD:  I understand that, Ed.  I‘m just saying this issue of Medicare reimbursement is a huge problem. 

SCHULTZ:  Sure it is. 

STODDARD:  It‘s not in the House bill.  We don‘t have the funding for it.  They can‘t figure this out, rural versus urban. 

FLANDERS:  The CBO is saying that the House bill is going to be budget neutral this decade and next.  There‘s not a whole lot of fudging going on about this. 

I think the important point, Ed, is that this isn‘t over.  Still, it is not over.  It goes back.  There will be more amendments.  And it‘s a real test for our democracy.  Are we going to have health care --  

SCHULTZ:  I want to play this piece of tape.  This is Harry Reid making a web appeal. 

He says, “I believe in the public option.  It creates fairness. 

That‘s what we‘re trying to do.” 

Do we have that sound bite?  OK, we don‘t.  Here it is. 

(BEGIN VIDEO CLIP)

REID:  I believe in a public option.  It creates a level playing field with the insurance companies, and creates fairness.  That‘s what we‘re trying to do. 

We‘re moving down the road on the process of health care reform for our country.  This is so important.  Anyone that cares about it, make sure you contact your representatives back in Washington, and push hard.  We want a health care bill that has a public option that keeps the insurance companies honest. 

(END VIDEO CLIP)

SCHULTZ:  Larry Elder, your response to that?  Harry Reid is not throwing in the towel on this. 

ELDER:  I wouldn‘t expect him to.  I would ask you to take a look at Hawaii, Obama‘s home state—

SCHULTZ:  I‘m asking you about Harry Reid.  I‘m asking you about a guy who is in trouble in the Nevada, and he is pushing hard for the public option.  Do you have a comment on what Harry Reid is doing?  Don‘t switch the subject and talk about Massachusetts and Hawaii.  This is about Harry Reid showing some leadership. 

ELDER:  I‘m sorry I‘m bringing unpleasant facts to the table here, but they had a public option—they had a public option in Hawaii. 

SCHULTZ:  Harry Reid is reaching out to the base, saying, look, this is not over. 

(CROSS TALK)

SCHULTZ:  You‘re supposed to be a media commentator.  I thought I could get something out of you tonight.  Go ahead, Laura.

(CROSS TALK)

FLANDERS:  There‘s been a campaign raising money for a candidate to run against him.  They‘ve already raised 15,000 dollars in 24 hours.  Harry Reid knows the statistics out there.  He knows how the politics is running.  And he knows what people want.  And they want a robust public option that will really provide competition for the private plans. 

SCHULTZ:  All right, panel, stay with us.  We‘ll come back.  We have other things and we‘ll try to stay on topic. 

Next up, positive economic development growth numbers are on the table.  We‘ll talk about that when we come back. 

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, we‘re talking green jobs.  That‘s where the economy can grow.  President Obama has been pushing for this all along.  Just this week, he announced a 3.4 billion dollars in federal grants to mobilize the country‘s power grid.  By improving our clean energy capabilities we can create jobs and help the government. 

One of the technologies that is doing all of this is wind power.  My next guest is an industry leader, and we bring in now the CEO of Wind Capital Group, Tom Carnahan.  Mr. Carnahan, good to have you with us tonight.

TOM CARNAHAN, WIND CAPITAL GROUP CEO:  Thank you for having me, Ed. 

SCHULTZ:  Put in perspective for our viewers tonight, how far have we come in the last five years?  And what‘s the next five years going to be like?

CARNAHAN:  Wind energy has really taken off in the last few years.  Last year in 2008 -- this is a great statistic -- 42 percent of all of the new power plants that came on line were wind farms, second only to ones from natural gas.  So it has really taken off.

The big question is, what is the federal policy going to be that drives this in the future? 

SCHULTZ:  What would you like to see happen? 

CARNAHAN:  What I would like to see is a renewable energy standard.  That means a requirement that utilities have to get a certain amount of their electricity from renewable sources. 

SCHULTZ:  So a mandate on how you are going to produce the energy. 

And it has to be wind? 

CARNAHAN:  It was to be a renewable energy, any kind of renewable energy.  That is part of the discussion in the climate change bill right now that sometimes gets overlooked.  It‘s very effective.  It will drive business.  And it should be a commitment to 20 percent in the next decade.  The Chinese are already doing this. 

SCHULTZ:  Yes, they are.  I was going to ask you about that.  How do we no we are going to be able to stay ahead of the Chinese in at least something? 

CARNAHAN:  Well, right now, I don‘t know, because the biggest threat to wind energy and renewable energy taking off is the lack of a consistent federal policy.  We need to have that RES.  We‘ve been talking about this since the ‘70s.  The time to act is now. 

SCHULTZ:  OK.  So how many manufacturing jobs or how many jobs do you think the wind industry can create in this country, that would actually factor into the bottom line to turn the economy around? 

CARNAHAN:  It‘s hundreds and hundreds of thousands of jobs, even in the short term.  Let me talk about a project we‘re working on right now.  We have a 150-Megawatt project.  That‘s enough to power 50,000 homes.  Literally, as we speak, down in Greenville, South Carolina, they are putting together the turbines at the GE facility for this project. 

We buy transformers.  There‘s at least 7,000 parts in these wind turbines.  So it is a lot of manufacturing.  On top of that, we have 200 guys out working on the site every day. 

SCHULTZ:  Where is the hot bed for this?  Is it all over the country or is it areas—I know the prairie the wind blows like crazy.  California?  Florida?  Offshore? 

CARNAHAN:  Wind Capital Group is focused on the Midwest.  And I think that‘s where the growth will be.  You‘re from North Dakota.  You know there‘s a lot of winds up there.  So if we can get the transmission lines to pull that out, get the power to Chicago and Denver, you‘re going to see a lot of projects happening in your home state. 

SCHULTZ:  Mr. Carnahan, good to have you with us tonight.  Thanks so much. 

CARNAHAN:  Thank you.

SCHULTZ:  One final page in my playbook tonight; Palin‘s setting herself up for a fight with Dick Cheney down in Texas.  The two have come down on different sides of the primary face-off in the race for governor between Senator Kay Bailey Hutchinson and incumbent Governor Rick Perry, who actually wants to secede from the union. 

Hutchinson campaign announced that she‘ll have Shooter‘s support.  Palin is going on the stump for Perry.  I don‘t know which candidate has it worse, but with the two of them doing this all around Texas, it‘s going to be one heck of a primary. 

Up next, in the main event, controversial Congressman Alan Grayson.  He‘s going to be here to talk about his situation and this health care bill.  Stay with us.  We‘re right back. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MILLER:  There‘s always people who it doesn‘t go far enough.  But, you know, tell that to 37 million people who don‘t have insurance.  We‘re on the edge of getting something that everybody dreamed about for the last 50 years.  And now it‘s not good enough and it‘s not far enough.  I don‘t buy that argument. 

(END VIDEO CLIP)

SCHULTZ:  The sell job is on.  That was Chairman George Miller earlier on this program tonight.  He wants me to get on board with the House health care bill.  I‘m just not sold yet.  I don‘t think it goes far enough.  I got to check with my man on the health care to see exactly where all of this is.  And that is Congressman Alan Grayson of Florida. 

Congressman, good to have you with us tonight. 

REP. ALAN GRAYSON (D), FLORIDA:  Thanks.  Did I win the Lottery?  This is the second time I get to talk to you today. 

SCHULTZ:  You‘re the hot commodity right now.  I appreciate that you‘re the guy that will speak up.  All right, what about this House bill?  Can you sign on to this?  Are you satisfied with what it offers as far as change and reform in the health care industry and helping Americans? 

GRAYSON:  Look, you can always make good better and you can always make better best.  But the fact is, this is the only way that we can save American lives.  There‘s 44,000 Americans who die every year in this country because they have no health care, and this bill will end that.  So I have to vote for it. 

SCHULTZ:  So you have to vote for it.  Now, is this going to rile the progressive base at all?  There‘s a lot of folks out there that think this doesn‘t go far enough.  You‘re not in that camp? 

GRAYSON:  No.  Look, it saves money and it saves lives.  That‘s what really matters.  That‘s what is at stake here.  We can always make the bill better later.  And I want to see a strong public option.  I‘ve said that publicly. 

But if I voted against this bill, I would be cutting your nose to spite my face. 

SCHULTZ:  So it helps enough people?  It doesn‘t help everybody.

GRAYSON:  Yes, sure.  Right from the beginning, people are going to be getting subsidies to help to afford health care.  That‘s why we have so many people in this country who don‘t have it.  Almost 90 percent of the people in this country who have no health care make less than 35,000 dollars a year.  If you ask them why don‘t you have health insurance, in a poll, 90 percent say because they can‘t afford it.  This bill will help them to afford it. 

SCHULTZ:  But, Congressman, this strays away from what is the party platform.  That is universal health care.  Gave in on single payer.  Gave in on a robust public option.  Now we really don‘t know what we have.  We‘re being told now by progressives that this is all we can get, even though we have the White House, the House and the Senate. 

I just sense that there‘s going to be some real rumblings.  And a lot of progressives in this country and liberals are going to feel that this don‘t go far enough, that we are missing a moment.  And who knows how the midterms are going to go next year.  This can disenfranchise a lot of lefties who think we‘re not going far enough.  In to 2013, there are so many ifs in this right now.  Speak to all of that. 

GRAYSON:  Certainly.  What matters in this bill is that this is the opportunity that needs to be seized.  This bill will give universal health care to Americans, and it‘s long overdue.  That‘s what matters here. 

It‘s true that we can make the bill better.  But we need to do more than anything is pass it, because we don‘t know what next year‘s election are going to bring.  And we know for sure that the eight years that the Republicans were in power gave us nothing.  Nothing on health care, nothing on energy, nothing on anything. 

So this is our moment.  This is the moment in history.  And we have to show people what we can do for them as Democrats. 

SCHULTZ:  OK, what you can do for them as Democrats.  You consider this real change? 

GRAYSON:  Yes.

SCHULTZ:  You think this goes far enough against the insurance industry, which has just been ripping the American people off with record profits, denying coverage—this will take care of all of that?  You‘re convinced of that?

GRAYSON:  This bill, in its current form, eliminates that discrimination.  You won‘t be able to denied care or coverage anymore because of preexisting conditions, because your care costs too much money.  They won‘t be able to pull the plug on your anymore.  That‘s a tremendous advancement.  And so is the fact that the bill offers subsidies all the way up to 88,000 dollars for a family of four, to help people afford health care.  This bill is big.

SCHULTZ:  Congressman, you may be the best spokesperson for the progressives right now.  You‘re going to swing a lot of people to say, OK, I‘m OK with this, because you‘ve positioned yourself as someone who is a tell it like it is guy, and you‘ve charged against people who have been against health care reform. 

Now, the politics of this, can you go home—and do you think Democrats can go home and sell this as major reform, and bring new people to the process, because the Republicans haven‘t helped you at all throughout any of this. 

GRAYSON:  That‘s true.  But since I pointed out that this is the only way to make things better, when I did speak on the floor of the House—since I pointed out the emperor has no clothes, when it comes to the Republican party—they have nothing to offer that would save lives or save money.  This is the only show in town. 

SCHULTZ:  What do you make of Harry Reid reaching out and telling progressives and the base out there that you got to engage?  Could the public option get a heck of a lot better from where it is right now? 

GRAYSON:  Listen, in the past three weeks since I spoke up, the polls are up on health care, on the Democratic party, because people see we‘re practical people who are looking for solutions on their problems, especially the progressives. 

This is the way to deliver on that.  If we don‘t deliver, I don‘t know when the next chance is going to come.  People need life.  They need savings.  This bill saves lives and it saves money.  This is what it‘s all about, to be in Washington and represent the people of central Florida.  That‘s true for all 435 of us.

There‘s 100,000 people in my district with no health care.  This bill changes that. 

SCHULTZ:  Congressman, great to have you with us tonight.  Thank you. 

Alan Grayson from Florida here on THE ED SHOW.

Earlier, I asked you, has President Obama sold out his base on health care reform?  Sixty two percent of you said yes; 38 percent said no.  That‘s THE ED SHOW.  Chris Matthews, “HARDBALL” is next.

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

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