updated 11/3/2009 10:35:54 AM ET 2009-11-03T15:35:54

THE ED SHOW

November 2, 2009

THIS IS A RUSH TRANSCRIPT.

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

Guests: Robert Andrews, Chrystia Freeland, Bill Press, Jack Rice, Ernest Istook, Sen. Ron Wyden

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

Ooh, big, big day tomorrow. Democrats are going to get hit by a freight train tomorrow. And I think they kind of deserve it the way things have gone.

The most important thing in tomorrow's elections is that Democrats learn a lesson that could save them next November. Look at it this way-if the Democrats had gotten health care done, the landscape for the 2009 election tomorrow would have been completely different, in my opinion. If the Democrats had stayed in Washington, gotten their bills done by August, President Obama would have had a bill signed by now; right?

Even-could you just see the first campaign commercial? It would have shown something like this-President Obama in the Oval Office with a pen in hand, surrounded by Democratic leaders, everybody smiling, and zero Republicans. The message would have been very clear: one party, the Dems, delivering on issues American families are facing and really care about.

Instead, what do we have? We have the seed of doubt that has been planted. Can they really get this thing done?

When you have the majority, you have to move on stuff. Society, we're finding out in the information age, doesn't quite move at the speed of the Senate anymore.

All this stalling is killing enthusiasm among the progressive base.

Or, should I say, they're frustrated?

Now, that's a big blow after two sweeping elections in 2006 and 2008. The Dems need a heavy turnout tomorrow night. It doesn't look like they're going to get it, but maybe things will turn around if they get the message before tomorrow.

The Democratic base is disappointed at the speed of the Obama administration and the way they're moving on things. Everyone is going crazy over this New York 23 race, but you know what really interests me? Is just across the river in New Jersey.

Here's Jon Corzine, a former senator, former Wall Streeter, trying to hold on to the governor's chair, and he's in trouble. The president's been to New Jersey five times? Does the president have coattail problems?

The job numbers aren't coming around. Health care should have been done already. The White House hasn't operated with a strong hand when you start talking about different provisions that they want in the health care bill.

So, is this paying a price? Are candidates going to have a pay a price? They've been slow in getting the money to Main Street, the job creation really hasn't been there as of yet. So, when you have the majority, you have to move. And if they had gotten those things done, I think these races would be a lot different, the polls would be a lot different.

Get your cell phones out. I want to know in you're going to check in on this tonight. I want to know what you think.

Would Democrats do better tomorrow if races-if they had gotten a health care bill done?

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

All right. Joining me now is Chuck Todd, NBC News political director and chief White House correspondent.

Chuck, good to have you with us tonight. This is, of course, right up your alley, so to speak, and it's fun stuff.

The coattails of President Obama, are they going to be tested tomorrow? I mean, to go to New Jersey five times, that's a statement you definitely want the guy to win.

CHUCK TODD, NBC CHIEF WHITE HOUSE CORRESPONDENT: Well, look, you posited an interesting theory. And, of course, if we had a computer analysis or something like that, that we could do war games like that old movie "War Games," and figure out what would be different had they had that? But, look, I think you're right. I think we are going to see a test of it.

And I'll tell you, you know, even when the president was at his most popular right after the election in December, remember what happened in that Georgia Senate runoff? The president wasn't on the ballot. And granted, he didn't go down there, he did record some calls. And we saw Democratic turnout just collapse, and that was when things were still-when Democrats were totally gung-ho about the election, on sort of a little bit of a euphoric high.

Now you go a year later, you point out all of the hand-wringing that we're seeing a little bit on the left in particular. And then some questions on can the Obama coalition of African-Americans, Hispanics, young voters, can they get motivated by Jon Corzine?

Clearly, he was struggling to motivate them. He's hoping the president does. And I'll have to say, if he comes up short, it is going to be a fair question to say, hey, maybe the president is not unpopular in New Jersey. He's not; he's got a 56 percent, 57 percent job rating. But he doesn't have coattails.

And you know what that's going to do? It's going to scare the living daylights out of Democratic incumbents in Congress who will sit there and say, jeez, you know, Corzine had everything going for him, he had money, he had a weak Republican opponent who ended up not being as good of a candidate as they thought, had the president come in, and he still couldn't pull it out. What does that mean for me? And that could actually make his job even harder, getting some of these Democrats on Capitol Hill to support him on health care and energy, et cetera.

SCHULTZ: Chuck, it would seem to me that the Republicans would view this as a huge victory if they can knock out Jon Corzine. When you look at the favorability of President Obama, this is one of the strongest, if not the strongest, portions of the country. You look at the president in the Northeast, he's got a favorability of 84 percent.

What has been, in your opinion, Jon Corzine's problem? Is he maybe at the wrong place at the wrong time? I mean, he is a little bit behind in the polls. He could win tomorrow night. But if the Republicans were to score a victory in an area of the country where the president is most popular, that, I think, would say something, would it not?

TODD: It would. And look, we do have to look. Governors' races are always almost more uniquely about local and state issues than a Senate race or a congressional race. So-and Corzine, you know, property taxes, not much that Barack Obama can do about property taxes in New Jersey.

That said, it is a-what it turns into is it's a psychological boost for the Republican Party. You know, here they had been written off in the Northeast, you guys can't win. Shoot, they haven't won in New Jersey since the '90s. They hadn't gotten over 50 percent of the vote in New Jersey since the '80s.

Never mind that they only have three congressional seats that they hold out of 29 in New York State. And on and on we go, the party switch of Arlen Specter in Pennsylvania. So, the psychological boost of getting a Republican governor in the Northeast could help them with candidate recruiting, help with money, and then that's how that stuff snowballs.

SCHULTZ: And, of course, the president can't do anything about local taxes and he can't do anything about eminent domain. Believe it or not, that has been one of the big issues in the state of New Jersey, eminent domain.

Now, Chuck, what about District 23 in New York? Why has this all of a sudden become somewhat of the poster child for change?

TODD: Well, I'll tell you, we're going to look-if New Jersey is about sort of testing out the Democratic base and enthusiasm, and seeing if the president can get that coalition of Democrats to show up to the polls one last time for Jon Corzine, the New York 23 race is telling us a lot about where the direction of the Republican Party. What lessons are they going to learn out of this race.

This Doug Hoffman, the conservative, now appears to be favored. He's probably going to win this race, although who knows between the Republican, Dede Scozzafava, dropping out and endorsing the Democrat, Bill Owens? I mean, it's kind of a roller-coaster up there.

But what you wonder is, what are Republicans going to learn out of this? Both here in Washington about primaries, and about trying to pick candidates that "fit the district," versus conservative grassroots, are going to say, hey, we showed we could win when the Washington smart guys said we couldn't. And we're coming after you, Charlie Crist, in Florida, or we're coming after you, Mark Kirk, in Illinois, or you, we're coming after you, Bob Bennett in Utah, places where you could see the conservative grassroots say, we're not going to listen to Washington and tell them what our Republican Party should be.

SCHULTZ: Chuck Todd, great to have you with us. We'll see you tomorrow as well. Thank you.

TODD: OK. Thank you. All right.

SCHULTZ: Health care, you know, in my opinion, should have been done 30 days ago. Remember all that talk about not going home until you get it done in August? Well, now look what happens. You've got Joe Lieberman running around threatening to filibuster.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: A public option will actually hurt the economic recovery and our long-term fiscal situation because it will end up causing the government to raise taxes.

I feel so strongly about the creation of another government health insurance entitlement, the government going into the health insurance business. I think it's such a mistake, that I would use the power I have as a single senator to stop a final vote.

(END VIDEO CLIP)

SCHULTZ: He claims we have more urgent problems than health care?

What are American families concerned about?

What is more urgent than life and death, Senator Lieberman?

The Democrats need to respond to this man. He's way out of line. He's out of touch with what people want. He's out of touch with what the people of Connecticut want.

The other people who are out of touch are the Democrats in the House.

I'm telling you, this House bill does not go far enough.

I want health care reform. We all want health care reform to succeed.

But I think there are just too many loopholes. Here's an example.

Number one, possible insurance rate increases? We're excited about that. Dennis Kucinich pointed it out on this program on Friday.

(BEGIN VIDEO CLIP)

REP. DENNIS KUCINICH (D), OHIO: What are people giving up already? They're being mandated to buy private insurance. If you read the bill, the people are going to end up paying-the insurance companies can raise rates 25 percent right off the bat, if you read the language of the bill. I'm looking at how people are penalized...

SCHULTZ: Say that again, Congressman. Congressman, hold it right there. Say that one more time. I want our audience to really consume that tonight.

KUCINICH: I have it right here, Ed. It's on page 22 of the bill, right here. It says that the rates shall be set at a level that does not exceed 125 percent of the prevailing standard rate for comparable coverage in the individual market.

(END VIDEO CLIP)

SCHULTZ: House members, you better fix page 22. That's not change.

That's same old stuff.

Now, let's go to issue number two. The pre-existing condition ban that everybody is so excited about changing, guess what? That doesn't go into effect until 2013. That means insurance companies will still be refusing coverage for three years after the bill is signed?

We need a ban on all pre-existing conditions in place immediately.

And number three, of course the issue is the uninsured. They're a top priority. But there are a lot of people in this country who are underinsured.

If you're self-employed and buy an insurance individual policy, you probably are getting gouged. You're overpriced, and it's probably lousy coverage. There's no regulation and no consumer protections in the market right now to fix that. The House bill wants to let you go out and buy a basic benefit package in the exchange only if you qualify, and it wouldn't go into effect, by the way, until 2013, which nobody can give me a good answer for.

Joining me now is Congressman Rob Andrews of New Jersey, member of the House Education and Labor Committee.

Congressman, good to have you with us.

I don't mean to throw cold water on this bill, but we need...

REP. ROB ANDREWS (D), NEW JERSEY: That's OK. That's all right.

SCHULTZ: In fairness, we need to point out what is not what the people voted for. In fairness.

How much work, in your opinion, does this House bill need?

ANDREWS: Sure, it needs some work. Can I address the couple points you mentioned a minute ago?

SCHULTZ: Sure.

ANDREWS: First of all, in this 25 percent rate increase, let me say this with respect to my friend Dennis Kucinich, who is working very hard to avoid any rate increases. That section of the bill that he read applies only to a very narrow group of people, a very narrow group, for whom the pre-existing condition ban which does take effect when the bill is signed by the president, that there's a small group of people that are accepted from that immediate impact.

That small group is able to go into a national high-risk pool and get coverage. The coverage can exceed 25 percent more than they'd otherwise pay in their region. That's a very tiny group of people. For most people, the pre-existing condition ban goes into effect right away.

SCHULTZ: Congressman, if it's so small, why don't you take it out? If it's so small and it doesn't affect many people, why don't you just take it out? That's a concession to the insurance industry.

ANDREWS: No, it's not. It's a practical matter of setting up the pools in such a way you don't have skyrocketing premium increases for everybody else. The idea behind this is to make sure that working families and middle class families don't get hit with rate shock because of that.

Let me come back to the other rate shock point that you made.

SCHULTZ: No, no. I want to stay on this, because this is a real key point.

ANDREWS: Sure.

SCHULTZ: There are Americans out there who think that the insurance companies are going to be able to jack the rates 25 percent on this. I mean, that's how the bill reads. I read it. It's on page 22. And to come back and tell me, well, this just deals with a small number of people...

ANDREWS: It isn't what page 22 says. Page 22 says that if you're in that handful of people for whom the pre-existing condition ban does not go into effect, that you can buy your insurance through this national risk pool, and the maximum you can pay is 25 percent more than people who are otherwise situated. And the reason for that...

SCHULTZ: Well, OK. All right. Let's talk about that.

I don't like a 20 percent increase. I don't like a 19 percent increase. I mean, this is a sellout to the insurance-OK.

ANDREWS: No. No it's not.

SCHULTZ: I want to ask you about this. Well, you and I disagree on it, and I'm using up time on this.

What about six million people? The CBO scores this House bill to cover six million people in the public option. Is that enough in your opinion?

ANDREWS: No, it's not. And I think it will be much more than that, frankly.

They're estimating that the public option won't operate as efficiently as I think it will. And when it does and it's non-for-profit and consumer-friendly, I think many, many more people will join it. I just think they're wrong about that.

SCHULTZ: OK.

Congressman, this is Virginia Foxx on the House floor describing what it's like...

ANDREWS: Oh, dear.

SCHULTZ: Yes-describing what it's going to be like if we pass this health care reform bill.

Here it is.

ANDREWS: OK.

(BEGIN VIDEO CLIP)

REP. VIRGINIA FOXX ®, NORTH CAROLINA: I believe that the greatest fear that we all should have to our freedom comes from this room, this very room, and what may happen later this week in terms of a tax increase bill masquerading as a health care bill. I believe we have more to fear from the potential of that bill passing than we do from any terrorist right now in any country.

(END VIDEO CLIP)

SCHULTZ: I don't know how you deal with that mentality.

Has House leadership, in your opinion, given up on the fact they might get any Republicans on this?

ANDREWS: I doubt that we will. But let me say that I think Ms. Foxx is right.

I think there are some Americans who should be fearful if this bill is passed. If you're the CEO of a health insurance company that's gouging the American public, you should be concerned about this bill. If you're a insurance company that's been denying someone coverage because they had cancer or diabetes, you should be concerned about this bill.

SCHULTZ: Not until 2013.

ANDREWS: That's not so.

SCHULTZ: Come on. Now, you've got to go out and change this stuff, but the way it's written right now, it's not a homerun.

ANDREWS: I'm going to show you-homerun is a very sore subject with me because of the World Series. But I will-I will show you-I will send you about the bill, why I think I'm right.

But listen, I think when people like Ms. Foxx talk like that, they show just how far over the line these other folks are.

Can I come back to New Jersey just one second? Because I'm there.

I'm campaigning for the governor. I heard your first segment.

I was with 6,500 enthusiastic Democrats and the president in my district yesterday. Tomorrow morning at 9:00 a.m. I'm going to be with 1,500 building trade union members who are going to work all day to get out the vote for Jon Corzine, and he's going to win. So, I think you're going to be telling a very different story tomorrow night about...

(CROSSTALK)

SCHULTZ: I'm not telling any story. I want Corzine to win. I'm a lefty. Of course I want to him to win.

But I think there's a level of frustration right now across America, everywhere, that health care-you know, we're stalling waiting to see if we can get acceptance by Republicans.

ANDREWS: That's not so.

SCHULTZ: There's still a lot of stuff that has to be done on this.

And I think there's a frustration out there, and I hope Corzine wins.

ANDREWS: Yes, there is. He is going to win.

SCHULTZ: But the fact is he's in trouble right now, and we'll see how it plays out. You have to go out and save a Democrat tomorrow night, is what you've got to do.

ANDREWS: I would say this respectfully. I think that Governor Corzine would be in a lot more trouble if it weren't for President Obama...

SCHULTZ: Well, we'll find out.

ANDREWS: ... who's invested his-I think he's going to have a winning night tomorrow night.

SCHULTZ: I hope so. Congressman, good to have you with us. I appreciate your time.

ANDREWS: Thanks, Ed.

SCHULTZ: Coming up, Senator Ron Wyden has a plan to make the public option based on your income be better. He'll tell us about that in "The Main Event" later on tonight.

And somebody call a doctor. "Shooter's" got amnesia. He can't even remember anything when it comes to the CIA and outing an agent.

Plus, Michele Bachmann, she crash-lands in "Psycho Talk."

And Sarah Palin making robo calls, hitting the "Playbook" tonight.

It's all coming up on THE ED SHOW.

Stay with us.

This is MSNBC, the place for politics.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY ®, FMR. PRESIDENTIAL CANDIDATE: The stimulus that the president and Congress passed is not what's helped this economy. The right answer is to stop the stimulus that they've put in place, reform it or scrap it, because it is not what's creating jobs in this country. Instead, it's the private sector. Look, any time you try and stimulate government, you're not going to get the kind of private sector jobs you'd get if you instead stimulated the economy.

(END VIDEO CLIP)

SCHULTZ: Obviously, the White House has got a different story. Where are the American people on this?

Joining me now is Chrystia Freeland, U.S. managing editor for "The Financial Times."

This is really a sticking point for the Obama administration. They don't have the hard numbers out there. They say they saved jobs. And what is that definition, of a saved job? What does that mean to people, do you think?

CHRYSTIA FREELAND, U.S. MANAGING EDITOR, "THE FINANCIAL TIMES": Well, I do think they're having a hard time making the case, and I struggle a little bit to understand why, because I think this argument that we hear from people like Mitt Romney, that the stimulus isn't working because unemployment is so high, is really a fairly ridiculous one.

I was struggling for a folksy metaphor, and the closest I could come up with is, last night I had a busy Sunday with my kids, and I fed them supper. And at the end they said, "We're still hungry, mom." Did that mean it was a mistake for me to feed them supper in the first place, or did I just have to feed them a little bit more?

I think that's what's happened with jobs. You know, yes, the stimulus did save jobs, and I think the best example is with teachers. There are a lot of teachers across America who would have been laid off because of the caps on state spending who were not laid off because the federal government gave the states money.

SCHULTZ: Law enforcement, firefighters, a lot of infrastructure jobs in communities, that's what I consider to be a saved job. But the job numbers, when are they going to start turning around, in your opinion? Do we see enough positive sounds, GDP and stuff like that? You know, the market much stronger an Wall Street. And we're seeing this TARP money going into community banks.

When are we going to see the jobs, in your opinion?

FREELAND: Well, there was one really important positive indicator today that surprised people, which is reports from purchasing managers at manufacturers were much more positive and suggested that factories, at least, have stopped laying people off. That's really good news. I think a really important psychological point is going to be this Friday, when we get the next unemployment figures, and if that number hits 10 percent in the U.S., I think that's going to be bad news for the White House.

SCHULTZ: OK.

Chrystia, thanks for joining us tonight.

FREELAND: A pleasure.

SCHULTZ: Chrystia Freeland with us here on THE ED SHOW.

Coming up, Michele Bachmann says the health care bill is the crown jewel of socialism? I'll crown her the queen of crazy talk next in "Psycho Talk."

(COMMERCIAL BREAK)

SCHULTZ: And it's "Psycho Talk" time here on THE ED SHOW.

It's been a while, but I knew she'd make it back into the zone.

Michele Bachmann, congresswoman out of Minnesota, she went on the slant-headed show on Friday night with some classic righty fear mongering about socialized medicine.

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN ®, MINNESOTA: This is cradle to grave government takeover of the Pelosi health care nightmare known as this bill. I think people have no idea what's coming down the pike. This is the crown jewel of socialism, this bill.

(END VIDEO CLIP)

SCHULTZ: No, Michele, the crown jewel of socialism is having everybody get covered, which I would love. Neither the House nor the Senate bill does any of that.

Of course, I wouldn't expect Michele Bachmann to actually know anything about it. She hasn't even bothered, herself, to go read the bill.

It's much easier just to say no, and she's not going it alone, either.

She's rallying her Tea Party fan base to help out.

(BEGIN VIDEO CLIP)

BACHMANN: I'm asking people to come to Washington, D.C., by the carload so that we can go up and down through the halls, find members of Congress, look at the whites of their eyes...

SEAN HANNITY, FOX NEWS: They'll be hiding. They'll be hiding.

BACHMANN: Don't take away my health care.

(END VIDEO CLIP)

SCHULTZ: Harass congressmen. OK.

And in case you need more evidence that the entire GOP is shamelessly playing to the crazy fringe of their party, House Minority Leader Boehner and Minority Whip Cantor both support Bachmann's wacky rallying cry.

However, there is a crown jewel in this story. It's Michele Bachmann, herself. She is really the crown jewel of "Psycho Talk."

Coming up, the cloud of suspicion over Dick Cheney seems to have fogged his memory a little bit in his ability to figure out just what the heck happened. David Shuster will refresh his memory in just a moment.

Plus, when "The Drugster" is not calling the president of the United States a man child, he's comparing himself to Paul Revere?

That's coming up in my "Playbook."

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

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. There are new revelations regarding Dick Cheney and the CIA leak case. The explosive question tonight, why wasn't he prosecuted? New documents show that in an interview with federal investigators in May of 2004, Shooter answered, "I don't recall" 72 times -- 72 times. He kind of did it like Olly North used to do it. You know what I mean? I can't recall.

Several of those times directly contradicted sworn testimony by his former chief of staff, Scooter Libby. Joining me now with more on this is MSNBC's David Shuster, who was as thorough as anybody on the face of the Earth covering this back when it was happening. David, you read this over the weekend. What were your impressions? How could Prosecutor Fitzgerald miss on this?

DAVID SHUSTER, MSNBC ANCHOR: Well, that's what's so shocking, Ed. It wasn't just that Cheney contradicted the sworn testimony of Scooter Libby, which was played at Scooter's trial; he also contradicted documents that Libby created. Cheney also contradicted people who were supposedly friendly witnesses to Cheney, like his Kathy Martin, who was his press secretary, who testified that she went into Cheney's office to talk about Joe Wilson with Cheney and Scooter Libby. Cheney didn't remember any of that.

Here's the most interesting Sugar Plum of all in this. Remember when Vice President Cheney would get the CIA briefings every morning? He would have someone from the CIA give him updates on events of the world. One of those briefers testified at trial. His name was Craig Shmall (ph), and he testified about a time when Cheney asked for information about the Wilsons. So Shmall writes down notations on the documents.

When Cheney was asked about this request of a CIA briefer, not only did Cheney say I don't recognize these notations; I don't know why this guy wrote this down. But Cheney then trashes the guy by saying that this document, the notations represent the CIA's attempt-and then it's redacted. In other words, it was going into Cheney making claims about the CIA somehow perhaps getting even. And prosecutors didn't feel that was-it was third party. So they didn't feel it needed to be in this report.

After all this, after being briefed by so many years by a CIA briefer, the idea that Cheney would try to throw him under the bus and say this was all part of the CIA's effort to get even with him, it's nuts.

SCHULTZ: David, I've spoken to a number of people today who have written books on Dick Cheney. One of them, John Nichols of "The Nation." He said, if there's one thing about Dick Cheney, he does have a phenomenal memory. And it's an absolute joke that 72 times in an interview he said he couldn't recall.

I'm just amazed that the federal prosecutor allowed this to slip the way it did, which I think average Americans out there are thinking this thing was cooked from the beginning, that Cheney was hands-off.

SHUSTER: That's right. There's a standard protocol within the Justice Department. It's followed by some prosecutors and not others. That is, if you're going to indict a high-profile politician, say a governor or a mayor or somebody, say, like the vice president, you have to have a very strong case. You just can't have the same standard for indicting that you have with other people.

So clearly Prosecutor Patrick Fitzgerald was following this. But, again, the irony is, when you look at the Cheney interview-and remember the Cheney interview came several months into the investigation. Essentially, Cheney had more holes in his testimony, Ed, than Scooter Libby. Remember, Scooter Libby was the one who got indicted and convicted.

So you can only presume, in talking to people who know Patrick Fitzgerald, he was extremely cautious. He was somehow hoping or maybe betting that Scooter Libby would eventually become a state's witness to avoid jail time. There was one instance when they might have been close. That is before Scooter Libby went to trial, we reported and others reported that Libby's friends had urged him cut a deal with Fitzgerald. Cut a deal, avoid the trial, say the truth about Vice President Cheney.

Libby refused. Libby went to trial. He was convicted, but then his sentence was commuted and the prosecutors lost whatever leverage they thought they might have had.

SCHULTZ: Well, it sounds like a cooked up deal at this point. You know, I guess you could say that Scooter Libby took one for the team. This is all done now, right, David? This story is going to go off into outer space, and it's all done? There's no recourse?

SCHULTZ: Yes. Other than the history books, which will look at this chapter and say Vice President Cheney couldn't recognize what his own handwriting implied in some of this, but he could remember some of the most excruciating little details about trips that he made the same day. That is what will go into history's judgment.

There is one other aspect, Ed. That is there is a civil lawsuit that an ethics watch dog group has filed. I suppose there's some potential there, in terms of civil liability. As far as a criminal investigation, it's long gone.

SCHULTZ: Personally, as a reporter, knowing what you covered and how detailed, now that you read this, how did you feel?

SHUSTER: I was surprised. I mean, it was so clear, Ed, in the Libby trial, that Scooter Libby essentially talked with Vice President Cheney a lot about what strategy to pursue. And Libby tried to make the argument, and at times it was successful-he made the argument, look, we were just pushing back at a critic.

Where Libby got tripped up was over his allegation about reporters. You can make an argument, if Cheney wanted to, hey, this guy was going after us. Of course I was talking with my chief of staff about trying to hit back and undermine him.

The problem was, Cheney, for whatever reason-maybe he got spooked by the fact that a CIA agent was outed. He was so careful that he decided to go to the extreme, and deny, to the extent that it's almost impossible to believe-to deny that he had any involvement with guiding Scooter Libby, that he could remember anything, that any of the documents were his own.

He went to an extreme. Again, that's why it's so shocking, when the evidence was there that he and Scooter Libby were joined at the hip on this. It's so shocking to see the tact that Cheney had with prosecutors. And it makes it even more shocking that prosecutors didn't pursue a criminal indictment against Cheney.

SCHULTZ: David Shuster, thanks so much tonight.

SHUSTER: Thanks, Ed. Take care.

SCHULTZ: For more, let's bring in our panel tonight, Bill Press, national syndicated radio talk show host, is with us, along with Jack Rice, former CIA officer, and Ernest Istook, former Republican congressman, now a distinguished fellow at the Heritage Foundation.

Ernest, let me start with you first tonight. Where there's smoke, there's fire. Cheney did a pretty good job at putting out the fire on this one, didn't he?

ERNEST ISTOOK, FMR. CONGRESSMAN: This is the FBI report. Most of the supposed things of saying he didn't recall-for example, there's one saying, well, did you read this editorial in the "New York Times" while you were still in Wyoming, on the plane back to Washington, or after you got back to Washington? He says, I don't recall.

It's petty stuff like that that makes up the numbers they're talking about. Or, for example, he had a different briefer than normal. He doesn't recall the name of the briefer that particular day.

(CROSS TALK)

SCHULTZ: Wait a minute. I'll give you that one. What about the Craig Shmall issue that David Shuster talked about and the request about the Wilsons? He doesn't recall requesting information on the Wilsons?

 

ISTOOK: You have tons of specific things that former Vice President Cheney testified to and recalled clearly. I bet you can't recall what you had for lunch a month ago today.

SCHULTZ: No, no, Ernest, I didn't break the law.

ISTOOK: This is petty stuff they're trying to make a big deal over.

SCHULTZ: No, this isn't about me, Ernest. Nice try to pivot there. Jack Rice, if there's one thing Dick Cheney has been known for, having a great memory. He can detail the first day he went into a office on Capitol Hill and what it was like. I find this amazing. Your thoughts on this?

JACK RICE, FMR. CIA OFFICER: This is such a disaster. Any time anybody discloses not just a CIA officer, but a NOC officer in particular, it's a disaster. When we think about what it is that Dick Cheney has done here and his lack of disclosure-nobody will know just how many people died here.

The thing is, it's easy to look at this as left versus right. The thing is what this hit at the foundation of America. For this man to simply stand back now and say, no problem, I know one guy who basically was convicted, but I just don't recall. The excuse from your guest from the Heritage Foundation that two, three, four five times were about things that were irrelevant I think are foolish here. It's the bigger issues that he did remember.

Please, I don't think this is a joke at all. I think this man should have been charged. Clearly the obstruction was there. If I were prosecuting this guy, I would have gone after him.

SCHULTZ: Bill Press, what about the number of CIA agents that might have been put at risk because one was outed in Valerie Plame?

BILL PRESS, RADIO TALK SHOW HOST: We'll never know, Ed. We'll never know. That's how serious this is. There were lives all over the world put at risk because of this. As Jack says, maybe some loss of life.

You know, Ed, one thing we can conclude, if you say, you know, I don't remember 72 times, you're lying. You're lying through your teeth. I think what we see here is this was a criminal operation. Dick Cheney was the ring leader. He was keeping George Bush informed. It was a cooked deal, as you said, Ed.

Then they decided they would throw Scooter Libby under the bus. And the only thing, Bush reneged on the deal to pardon him. He just let him out of jail. The other thing I think we see is that Patrick Fitzgerald wimped out. He knew Cheney was lying, and he was afraid to go after him. Shame on him.

SCHULTZ: Well, there might have been a deal cooked there. I think Mr. Fitzgerald is a good news story now, that he could pass up something like that some 72 times in an interview. Mr. Istook-Ernest, let me ask you: do you really believe that Dick Cheney has been an honest broker throughout all of this, and he absolutely told the truth?

ISTOOK: Let's go back to the origin of this, the question of who leaked the identity of Valerie Plame, the Robert Novak column. He says it didn't come from Cheney. It came from Richard Armitage.

SCHULTZ: I'm asking you if you think Dick Cheney told the truth.

ISTOOK: I'm not the prosecutor. I'm not the judge. I'm not the jury. I don't know who made mistakes.

SCHULTZ: So You don't have curiosity at all about whether Dick Cheney told the truth or not?

ISTOOK: You're saying because somebody can't recall minor details he should be prosecuted?

SCHULTZ: It's a minor detail to ask about the Wilsons through an agent?

ISTOOK: Go back to Novak. He straightened it all out. He said it was Richard Armitage. It wasn't Scooter Libby. It wasn't Cheney.

SCHULTZ: He was also a right-wing commentator who wanted to Deep Six the left.

ISTOOK: Everybody is lying except you?

SCHULTZ: Hey, look, I didn't do the interview. Dick Cheney was the one who said he couldn't recall anything. I find it interesting that he would go so far to make that request, Jack Rice, to an agent and then not remember it.

(CROSS TALK)

RICE: Can you imagine going home, Ed, and all of a sudden saying, you know what, honey, I'm sorry, I was gone for a week, but I can't recall where I was. Jack, where were you? Ed, where were you? I'm not really sure. Really? That's going to fly?

SCHULTZ: Bill Press, does the left push this? The civil lawsuit-I means, the advocacy groups are going to have to go after this. Legally there's no action here.

PRESS: No, Ed. I'm afraid this thing is gone. I hate to say that. I mean, you know, look, we know it was not just the Bush and Cheney policies that were wrong. They were breaking the law. The last time I checked, to lie to the CIA is breaking the law.

The point I want to make with Ernest Istook is take Scooter Libby. One of these guys is lying. Scooter Libby says that Cheney told him to give this report about Saddam Hussein trying to get uranium to build nuclear weapons, that phony report. He told Scooter Libby to give that to Judith Miller.

Either Cheney is lying or Scooter Libby is lying. I have a feeler that Scooter Libby got screwed.

SCHULTZ: Gentlemen, stay with us. We got a lot more coming up. Coming up, we've got Sarah Palin just went on a robo call mission and urged Virginians to vote our shared value? Whatever values is she talking about? We'll put that to the panel when we come back in the playbook. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: In my playbook tonight, Sarah Palin has dialed into the Virginia governor's race, even though the Republican candidate said he didn't want her help. Virginia voters have been getting this robo call from Sarah Barracuda. Here it is.

(BEGIN VIDEO CLIP)

SARAH PALIN, FORMER ALASKA GOVERNOR: Virginia, hello, this is Sarah Palin. I'm calling to urge you to go to the polls Tuesday and vote to share our principles. The eyes of America will be on Virginia. Make no mistake about it, every vote counts.

Don't take anything for granted. Vote your values on Tuesday. And urge your friends and family to vote too.

(END VIDEO CLIP)

SCHULTZ: Vote to share our principles? What principles is she talking about? Sarah Palin the quitter? Sarah the mother who let her teenage daughter get pregnant? Ha, ha, ha. Sarah who gets down and dirty with a very public feud with her daughter's ex-fiance? That's mature.

Or maybe we're talking about Sarah's principles from 2008 campaign, you know, when she said she disapproved of robo calls?

(BEGIN VIDEO CLIP)

PALIN: If I called all the shots and if I could wave a magic wand, I would be sitting at a kitchen table with more and more Americans talking to them about our plan to get the economy back on track and winning the war, and not having to rely on the old conventional ways of campaigning that includes those robo calls.

(END VIDEO CLIP)

SCHULTZ: Yes, I guess those old conventional ways are all she's got left, since the Virginia Republican party wants her to stay away from their guy. Let's bring back in our panel, Bill Press, Jack Rice, Ernest Istook.

Bill Press, she just isn't going to go away, especially if the elections turn out the way the polls are. She might be a player in all of this.

PRESS: I love it. Sarah's principles? Right? I'm not sure we know what Sarah's principles are, Ed. We know that hard work is not one of them. Sticking to your job is not one of them. Thrift is not one of them. Consistency is not one of them.

So what they are? Who knows. I don't want to be too tough on her.

To me, she is the dream candidate for 2012.

SCHULTZ: The Drugster got a bunch of air time yesterday on Fox.

Roger Ailes decides to hit back at the White House by putting Limbaugh on.

Here's how he describes the president of the United States.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: He's a child. I think he's got a five-minute career. He was in the Senate for 150 days. He was a community organizers in Chicago for however many number of years. He really has no experience running anything. He's very young. I think he's got an out of this world ego.

He's very narcissistic. And he's able to focus all attention on him all the time. That description is simply a way to cut through the noise and say, he's immature, inexperienced, in over his head.

(END VIDEO CLIP)

SCHULTZ: Ernest, I could have sworn rush was describing himself there. What do you think?

ISTOOK: Actually, Ed, I think you and Rush have a lot in common. You both use a lot of exaggeration, a lot of hyperbole. Some people would say it's a bizarro world type of thing.

Yes, I mean, Rush does exaggeration for effect, and you do, too.

SCHULTZ: Do you agree with Rush that the president's a man child?

He's the head of the Republican party, isn't he?

ISTOOK: Some of us-I think, to some extent, all of us want to be a man child. I never want to totally grow up and you probably don't either. Again, you have a way with words. Rush has a way with words. You just don't like him because you disagree. You use the same principles. You're good at it, Ed.

SCHULTZ: All right. Thank you, Ernest. I'm glad you think I'm good at this.

ISTOOK: I didn't say you're right. I said you're good at it.

SCHULTZ: Jack Rice, this is what the Republican party does, probably better than any political party in the history of the country, especially at this particular time, to just hit back at any way they possibly can, get personal, get down and dirty. Is it going to work? Will it have an effect?

RICE: Actually, I'm thrilled to death that Rush is doing this. I'm thrilled to death that Sarah Palin is doing this. A recent poll said the Republicans represent about 20 percent to 23 percent of America. That's one in five. I think what this really highlights is they are essentially this right-wing fringe group. Conservatives are leaving them. Latinos are leaving them. Women are leaving them. African-Americans are leaving them.

You cannot win a national race if all you think you're going to get are white men. That's all they're looking at right now. If that means they take the race in northern New York, then fine; I'm actually pleased because 2010 actually looks better for Democrats than it did before.

SCHULTZ: One thing I do notice about Limbaugh when he gets interviewed, he always operates, Bill Press, in very generic terms. The guy can't get detailed. Makes me think he doesn't know the details, unless he's reading his producer's copy on it. Off the top of his head, Limbaugh does not have the details.

SCHULTZ: You know what gets me, Ed? He is accusing Barack Obama of having a massive ego? I mean, he-that is like being called ugly by a frog, isn't it?

SCHULTZ: Gentlemen, we have to run. One final page in my playbook. tonight. I got to talk about the Viking's win yesterday. Few games live up to their billing. Favre faced down the former Packers for the second time this year in Green Bay. It doesn't get-this is like a 25-year-old playing quarterback. He steps up, hangs in against the pressure. And look at this guy, Harvin. This guy doesn't even practice all week long because he has headaches. When he shows up on game day, that's the only thing that matters.

The Vikings are going to the Super Bowl. You heard it here.

Coming in the main event, we have got-turn coat Joe says we have more urgent problems than health care reform. Joe, tell me what is more urgent than life or death? Senator Ron Wyden is going to respond to all of that in a moment. He's got an idea for choice. You're watching THE ED SHOW on MSNBC. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Senator Ron Wyden of Oregon has a plan for people who can't afford insurance they already have. Think about that. You paying too much? Wyden's plan is simple. If you spend eight percent of your gross income on the insurance your employer provides, an alternative, a public option would be available to you. It's all about choice.

Senator Ron Wyden pushing for that and joins us tonight. Senator, good to have you with us.

SEN. RON WYDEN (D), OREGON: Ed, thanks for having me back. I really appreciate your hammering away on competition and choice. You know, the House of Representatives is going to their legislation this week. We saw that they've got about 30 million people going to these exchanges, the marketplace.

Then you look at United Health, the big private insurance company. Last year, they had 32 million members. That's not going to make for competition. We've got to hold these insurance companies accountable. The way you do it is with competition and choice.

SCHULTZ: All right. How much of a chance do you think this has to pass in the Senate? What this is going to do is take the number far beyond six million people to get it in the public option. Those folks who are in small business, who are paying eight percent or more of their gross income on premiums, are going to be able to opt out and go a different direction. Who would be against that?

WYDEN: I think it's hard to find anybody who will oppose it in broad daylight. Of course, we've been up for some time against the status quo caucus. It's led by the insurance lobby. They, of course, like the way things are today. We're taking them on. The reality is when you look at the key issues, for example, the public option, the Congressional Budget Office came in this week. What we're going to have is a lot of uninsured people. Those are folks who haven't had checkups, didn't get physicals, didn't get chronic care.

I think we're going to have something of a health care ghetto. What I'm going to be trying to do is open up these exchanges, so that we have more ways to hold the insurance lobby accountable. And our Free-Choice Amendment is one way to do it.

SCHULTZ: There's no doubt. I commend you for this, because there are a lot of people who are insured, but they're under-insured, and they're paying too much for their premium. And the fine print nails them every time. This is a great way I think for Americans to get an alternative to address their monthly budgets, so to speak, at the kitchen table.

Senator-

WYDEN: The other problem, of course, is that we've got millions of Americans right now in the open enrollment season. They're going to be paying more to get less. This, again, is another option for them.

SCHULTZ: This is not a good deal. The total package on the table right now has got to be massaged big time. It's not a god deal. Progressives have got to keep hammering away at representatives and senators.

Finally, senator, I want to ask you, the races tomorrow in New Jersey and Virginia and New York; how much do you think health care played into the frustration of the vote here and some of the polls we're seeing?

WYDEN: It's going to be a huge issue. It's a pocketbook question. I think voters there know that we have a long way to go. The president is committed to getting this done right. He and I have had a number of conversations in the last few weeks. The conference committee, his role in that between the House and Senate is key. We have a lot more to do to hold the insurance companies accountable.

SCHULTZ: Senator Ron Wyden, good to have you with us on THE ED SHOW.

WYDEN: Thank you.

SCHULTZ: Earlier on the show I asked you wonderful viewers, would Democrats do better in tomorrow's election if they had passed health care reform? Eighty eight percent of you say yes; 12 percent say no. I think that's the crux of this whole thing, why some of these Democrats are not polling very well going into the election tomorrow. It's that there's a frustration out there that maybe they can't get it done. If you're in the progressive movement, it would be good to move those feet and vote tomorrow.

That's THE ED SHOW. I'm Ed Schultz. For more, go to Ed.MSNBC.com or my radio website at WeGotEd.com. Chris Matthews and "HARDBALL: starts right now on MSNBC. We're back tomorrow night with full election coverage. Have a great one.

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

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