updated 11/5/2009 10:31:46 AM ET 2009-11-05T15:31:46

THE ED SHOW

November 4, 2009

THIS IS A RUSH TRANSCRIPT.

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

Guests: Jay Rockefeller, Roy Sekoff, Peter Morici, Rep. George Miller, Karen Hanretty, Todd Webster, Rep. Carolyn Maloney, Eliot Spitzer

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

We've got breaking news off the top tonight. The Senate has just voted 98-0 unanimously to extend the unemployment benefits. After the Republicans have been blocking and stalling it, they have all voted in favor of it.

Moving on, you know, I find it interesting. They see a little slip in

the strength of the Democrats last night with losing a couple of, you know,

gubernatorial seats in Virginia and in New Jersey, so they quickly turn

around and say, maybe we better get with the people. They vote 98-0, all

Republicans on board-of course, the Democrats have been there all along

to extend the unemployment benefits.

All right. Now let's talk a little about last night.

I don't like losing. Really hate it. And I think that it was a tough night at the office because, you know, we like winning over here on the good side.

Democrats took a beating last night in two big races, I think.

President Obama couldn't save unpopular Governor Jon Corzine in New Jersey. In Virginia, Democrat Creigh Deeds just not a very good candidate. Terry McAuliffe would have been a lot better. He lost by double digits.

They lost because angry voters-this isn't about right, it's not about left. It's about results at this point.

The Obama army did not engage last night. They stayed home. The turnout was totally disastrous.

The base isn't excited. They don't have anything to get excited about right now. The Democrats aren't getting done what they said they were going to get done. Not to say that they're not working on it, but it's about results.

Health care, still being stalled. You know, again.

Unemployment numbers are where they are. We've got some new numbers coming out on Friday. It could hit 10 percent. That's not going to be good.

In the midst of all of this, what did President Obama today? Now, this is tough love. I'm an Obama guy, a big supporter. But I've got to call it like I see it.

He flies to Madison, Wisconsin, today to talk about education. Who the hell's talking about education right now?

I'm a fan. And I believe in change. But right now the president looks a little bit weak. Nobody's talking about education.

We're talking about health care. We're talking an creating jobs.

Americans want to see some leadership on that.

Remember this?

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm confident that both the House and the Senate are going to produce a bill before the August recess.

But I really want to get it done by the August recess.

The urgency for both the House and Senate to finish their critical work on health reform before the August recess...

(END VIDEO CLIP)

SCHULTZ: OK, Mr. President. That calculation is wrong. We're all human, we make mistakes.

But you ought to be going down the street today, instead of going to the capitol in Madison, you ought to be going down to the Capitol in your own town and start kicking some ass and taking some names on health care. That's right, now's the time.

The Senate is talking about pushing this thing into next year, 2010. What do you say we give the Republicans a little bit more time to be obstructionists?

No. Set a date. Get it done. Hold them accountable. Be like LBJ and get after it.

Speaking of that, I'm glad I'm not the only one standing on this alone here. Even Doris Kearns Goodwin, presidential historian, said that last night on this program.

(BEGIN VIDEO CLIP)

DORIS KEARNS GOODWIN, PRESIDENTIAL HISTORIAN: I think we've seen he's steady and calm, we've seen he's poised. We've seen that when he gets to make a decision, he has information that he brings in, and he has strong voices that can compete with him.

The real question is, have we seen an ease with the Congress? I mean, so far we could use a little more LBJ, I think, with Mr. Obama, threatening, cajoling. LBJ used to say you've got to court those congressmen as much as you court your wife. Start calling them at 6:00 a.m. in the morning, call them at 2:00 a.m. in the morning. And I think that's something he's going to have to learn some more of.

(END VIDEO CLIP)

SCHULTZ: We have to admit that the obstructionist tactics are working as of late. This thing called political exhaustion, I think, is starting to set in with some folks. People are starting to think that the Democrats are as corrupt as the Republicans. That might be in their minds, saying, you know, we're just never going to get this thing called change.

They keep talking about change but we're not there yet. All these delays. They told us, well, we'll get it done back in July. Well, let's back it up.

I mean, the frustration of the Democrats kept them home last night. And the delays and the inability to run over the Republicans and instead of just saying, look, we're going to do it our way, I think has frustrated a lot of Independents and shaken their confidence.

Now, there were some bright spots last night. We added two Democratic seats in the House. OK? The right wing zealots in New York's district 23 didn't happen.

Sarah Palin deemed herself insignificant. The far right, the Tea Party fringe, they pretty much wrecked it. The Palins of the world wrecked it. That thinking doesn't work.

The cost-the Republicans, it cost them a seat in the Congress because of all of their actions. If they had just kept their mouth shut, they would have won that seat.

Democrat-elected Bill Owens says he supports the House health care reform bill. Another victory is in Nebraska.

Now, this wasn't in the form of an election, but voters sent a message to Ben Nelson in the form of a New poll. They back a public option, 46 percent to 44 percent.

And get this -- 53 percent believe that the more than $2 million that Nelson in Nebraska has taken from the health and insurance lobby is going to hurt his judgment on this issue. Hmm.

Ben, I thought you and I had this conversation about two months ago. When these Democrats-we have to ask, when are they going to get their heads screwed on right? If they passed health care, we'd be talking about a clean sweep here tonight, but we're not.

President Obama has been on the sidelines long enough. He's thrown out enough olive branches. Americans have no doubt that the Democrats can deliver if they just get a little bit more intestinal fortitude on this.

The president needs to get his people in line. He should have gone to Capitol Hill today. There's too much fence-sitting going on right now.

Look, I think the president probably should have said, look, you're either with me or against me. And I know that we don't like that kind of terminology, but the fact is, progressives right now are losing their confidence because we just haven't dealt a strong hand when it comes to the most important issue in the country, and that is health care.

And health care and jobs and the economy it's all connected. It is all connected.

Text survey tonight. Want to know what you think. Get your cell phones out.

Based on the election results, should President Obama get more aggressive with his agenda?

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

Now, the insurance industry is still operating with a very strong hand in the Congress. They're trying to do everything they can to stop reform.

Joining me now is Senator Jay Rockefeller, chairman of the Commerce Committee, and also on the Senate Finance Committee.

Senator, good to have you with us tonight.

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: Thanks, Ed.

SCHULTZ: I don't want to be negative, but I am going to be critical. I think the more time we lose on health care, the more strength that the opposition is going to have. And you have been a real stalwart performer when it comes to keeping the insurance companies accountable.

What has to be done in this 11th hour, in your opinion, to make sure that we really do have reform when it comes to reeling these folks in?

ROCKEFELLER: Well, one thing that-the public option is going to be one very good mechanism for doing it, and I believe we're going to get that in one form or another. The trigger will not work. The trigger just gives health insurance companies five more years to raise premiums, which is what they are best as doing.

But there's another thing, and it's got a funny name. It's called medical loss ratio. And it has to do with how much of the money that health insurance companies take in from their premiums.

In other words, revenue to them goes out in the form of medical care for people. And they say, oh, it's a very, very high number. Well, it turns out it's not a very high number, and billions and billions and billions of dollars are being saved by the health insurance companies for their profits and for their jets and for their, you know, salaries and all the rest of it, instead of being-I mean, what do people pay premiums for?

They pay premiums to get medical care. And what's happening is they're getting less medical care as the health insurance companies make more money.

There's an amendment which I'm going to fight for on the floor and in the conference called medical loss ratio which would make them pay, let's say, 85 percent or 90 percent of all the revenues they get, which is all from premiums. It has to go to medical care and they have to show it, they have to prove it, they have to make it transparent.

They already have that law. You mentioned Ben Nelson. They have that law in Nebraska. In Nebraska, they have to show that 91 percent of their premiums were spent on health care, and then they have to report to the insurance commissioner there.

SCHULTZ: All right. So you want some accountability.

Just to take a look at this, for every premium dollar, a third of it goes to marketing private administration expenses and two-thirds of it goes to medical care. You think that that ratio should be changed, and that's pretty much common sense, no doubt about it. But getting them to do it, and then the purging of the small businesses in this country, I'll tell you what, Senator, if you can get those two things done, along with pre-existing conditions, I'm on board that this would be some type of reform that I think progressives could live with.

ROCKEFELLER: All right. Well, then you have me back on your show four times a week and we will get this done.

It's the-you do public option, you do medical loss ratio. In other words, spend your money on taking care of people, not taking care of yourselves, the insurance companies, and we'll get it done, Ed.

But, look, I'm a progressive, as you call it. I'm not discouraged.

I'm not discouraged.

I'm not discouraged by the elections last night. I'm not discouraging

by the timing question.

We are dealing with unbelievably complicated issues. And the problem is-I think the real problem is they aren't the issues. Health care comes closest, health care and climate change, which people don't associate to their daily lives.

They associate, where's my job? I got paid more last year. What's my future? And that is what we are not talking about enough because we are stuck, in a sense, on health care, which is complicated and where there's real contention between Democrats and Republicans and all of that.

SCHULTZ: But the people, Senator, have spoken. I mean, the polls are very clear that the American people want reform. And I can't help but think that last night's results were because we haven't had any results when it comes to the big issues-number one, creating jobs; we'll get to that later-but the health care.

I mean, it would seem to me that if the senators on the Democratic side were to step up and say, I'm going to support the public option even though it's a small part of the bill, it does open it up to other things later on, they're poll numbers would go up. They wouldn't...

ROCKEFELLER: And they do.

SCHULTZ: Yes.

ROCKEFELLER: The Democrats, they do support it. Harry Reid's laid it down. It's in the mark. It's part of the deal. They do.

SCHULTZ: But what about Ben Nelson? What about Blanche Lincoln?

What about Max Baucus? I mean, we've got to get 60 votes on this.

ROCKEFELLER: That is part of what the president should be doing.

SCHULTZ: OK. So you agree with me that maybe not going to Madison and going to Capitol Hill and engaging is probably a pretty good strategy?

ROCKEFELLER: Indeed, I do, although I think education is kind of an important subject. But right now, the day afterwards, no. Here, and using stronger-arm tactics.

SCHULTZ: What is the White House doing wrong? What should they do right now?

I mean, if our base is not telling them what we want, how are they going to know? I mean, it would seem to me that the president this morning should have had a breakfast with leadership and said, all right, look, the people have spoken, we've to get this health care thing done. You're talking next year. Let's get it-what do we have to do? Who do we have to tip over on this?

It would seem to me that would have been the call today.

ROCKEFELLER: I agree with you, but it's not the way it worked out.

SCHULTZ: Yes.

ROCKEFELLER: So, he's in Wisconsin, he probably gave a good speech. My people back in West Virginia, they care about jobs, they're terrified of climate change. Maybe unnecessarily so.

But here I am talking to you, which I'm delighted to do. I'm not back in West Virginia. And I probably ought to be back in West Virginia talking to them about their day-to-day problems, most of which has to do with having enough money to eat, taking care of a sick child, or holding on to a job, or getting a job they once had.

SCHULTZ: Yes. Senator, great to have you with us tonight.

ROCKEFELLER: Thanks, Ed.

SCHULTZ: Thank you so much.

Senator Jay Rockefeller with us from West Virginia.

A late development tonight over on the House bill. The House will vote at 6:00 on Saturday on health care reform.

George Miller is going to join me in a moment talking about that.

Single payer, by the way, on the ropes. An amendment has been offered to allow states to choose to go to a single payer opt-out system.

OK?

Now, leadership has decided that they're not going to allow any hearings on in. Instead, they will put it up to a straight up-or-down vote. In essence, that's a death sentence.

I think it's about respect. Single payer is a progressive issue. Universal health care is a benchmark issue and a platform issue for the Democratic Party. And I think it's a huge mistake and a slap in the face not to allow the single payer voices to be heard in all of that. It is not a good setup.

For more on all of this, let's go to Roy Sekoff, founding editor of "The Huffington Post."

What happened last night, and what does it mean, Roy? What do you think?

ROY SEKOFF, FOUNDING EDITOR, "HUFFINGTON POST": Well, Ed, you know, it was definitely a wake-up call for the Democrats and Obama, but it wasn't a clanging alarm clock like they're trying to tell us.

It was like when your wife wakes you up, firmly but gently shakes you, and whispers in your ear and says, "It's still the economy, stupid." That's what the numbers were telling us, Ed.

Eighty-nine percent of voters in New Jersey said that they were worried about the economy. Eighty-five percent of the voters in Virginia said that they were worried about the economy.

SCHULTZ: Is that what moved the Independents, Roy? Because if you look at this graphic, you've got in New Jersey the GOP-of the Independent votes, 60 percent of them went to the Republicans. In Virginia, 66 percent of these Independents ended up with the GOP.

Is it the economy? Is it results-based?

SEKOFF: Well, it's a combination of the two, Ed. There's absolutely no question that there is no excitement and passion from the progressive and the Democratic base. That's why you saw those numbers. And any time that you have this kind of economic numbers, the incumbents are in trouble.

And that's why Obama-I agree with what Doris Goodwin said about him having to tap into his inner LBJ. But he actually needs to tap into his inner candidate Obama. Looking back at what Obama was saying-we're having this one-year anniversary, the great documentary last night on HBO, and you saw what he said, he said that he had gotten into the race to fight special interests and because-these are his words-the people were getting hosed.

SCHULTZ: Well, he's got a lot of special interest folks over at the White House.

SEKOFF: Well, that's what I'm saying.

SCHULTZ: And it's been a cozy relationship for the first 10 months with the special interests, it seems to me. And this president just fails, in my opinion, to hit the floorboard and go running. He just can't throw the Republicans overboard on this.

SEKOFF: Ed, it's about atmospherics. And you're right about the message.

The message has been the Wall Street kingpins have been treated like kings. The average person, not so much.

You know, prime seat at the table for the insurance companies, for the drug companies. The average guy, not so much. And I think people are saying, well, wait a minute, this kind of feels like business as usual. This doesn't feel like change.

SCHULTZ: Roy, good to have you with us. Always a pleasure. Thanks so much.

SEKOFF: All right, Ed.

SCHULTZ: You tell it like it is.

You know when they say, well, they saved the economy? What does that mean to somebody who doesn't have a job? I mean, it is about creating jobs.

Coming up, voters made one thing crystal clear last night-it's the economy. And that's got them rattled. I'll talk to a top economist who says that, look, this is a wake-up call to the president and Nancy Pelosi and leadership.

Plus, banks and credit card companies just keep rigging ways to rip you off. Congresswoman Carolyn Maloney is cracking the whip on that when it comes to interest rates and sneaky overdraft fees. They've got a plan. That's in the "Playbook" tonight.

All that, plus Eliot Spitzer. He's in the house tonight.

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

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

As much as the Republicans would like to believe last night's election was all about President Obama, it's just not true. It's about the economy, it's about jobs, it's about rising unemployment and some numbers coming out Friday that could be shaky.

Exit polls showed-look at this -- 85 percent of Virginians were worried about the economy over the next year. In New Jersey, that number was 89 percent.

What the election did tell us about President Obama is that he needs to chalk up economic wins that can be felt on Main Street. And this is the one thing that I've been saying all along.

Oh, he saved the economy. That's what the White House is saying. What does that mean to somebody that doesn't have a job, or can't find a job, or is waiting for unemployment benefits and sees all the bad news out there?

Let me bring in Peter Morici. He's a professor at the University of Maryland's Smith School of Business and former chief economist of the U.S. International Trade Commission.

Mr. Morici, Professor, is this a fundamental problem with the way we're approaching this, or is it just voter fatigue last night, the results?

What do you think?

PETER MORICI, ECONOMIST: Oh, I think there's a fundamental problem in the way that the Obama administration is approaching creating jobs. What got us into this mess was the banking crisis and the huge trade deficit, especially with China.

During the campaign he talked about fixing those things. Even Pelosi talked about fixing the banks.

But now we see most of the largesse has gone to Wall Street. One percent of GDP is going to be paid in bonuses to a couple thousand people. And nothing has been done much about trade.

You know, the stimulus package could only do so much. It's a temporary fix. When the money's gone, it's gone.

At the end of the day, the regional the banks, which are failing all over the place, and trade have to be fixed if President Obama is going to create jobs on a lasting basis.

SCHULTZ: OK. Now, the number one job creator in this country is small business, the institution of small business. And just last week, or the week before, the president ordered the TARP money, through the Treasury Department, to get to these community banks to help lending and ease up credit and such stuff as that.

Is that something that will have an effect within the next six months? And I say the next six months because if we go to the third quarter of 2010 and we're not creating jobs, it's going to be really a tough midterm for the Democrats.

MORICI: Unfortunately, that initiative, it's a good initiative, but it's going to have a very limited effect. The real problem is we have 8,000 regional banks that have a lot of bad loans on their books, commercial loans. Not just residential mortgages.

The TARP was intended to clear all that stuff out. But instead, the TARP was used to bail out General Motors, but, more importantly, to subsidize Goldman Sachs and JPMorgan, where they're paying people $500,000, $600,000, $700,000 a year on average.

SCHULTZ: It's a double standard, no doubt about it. But the fact is here, is that if we can get money to small business, and this works, if we can get risk-takers back in the market, money is cheap right now if they'll just get it to people. The jobs will come around.

Or am I simplifying it too much?

MORICI: Well, there's two parts to this. You've got to get money to small businesses, which means you've got to make a lot of that cheap money that the New York banks have available to the smaller community banks.

But the second thing is, American businesses need customers. And Chinese products are so subsidized coming into the United States from an undervalued currency and other stuff like that, which he promised to deal with when he campaigned in the Midwest and has now deserted.

My feeling is the president, he doesn't know a lot about economics, and he's not supposed to. He's being very badly advised by Tim Geithner and Larry Summers. These northeastern electorals, frankly, are not interested in Midwest manufacturing.

The good news for the president is the Republicans are clueless.

Cutting taxes, less government ain't going to get us there.

SCHULTZ: Yes.

And one final point. You use the word "arrogance" in your most recent article. Explain that.

Where has the Obama administration been arrogant when it comes to the economy?

MORICI: Well, let's look at health care. You know, if we talk on tort reform, the drug companies and the insurance in the manner that Senator Rockefeller so capably outlined, we could lower the cost of health insurance even as we covered everybody. But instead, what we're going to do is tax people indirectly by raising their premiums to extend coverage in any of the bills we have right now.

I'm all for health care reform even though I'm a conservative, because the health market is not functioning properly. But we're going to have to get in there and get at the dysfunctions so that we can make things less expensive for everybody and get everybody covered.

SCHULTZ: Professor Peter Morici, appreciate your time tonight.

Thanks so much.

MORICI: It's my pleasure.

SCHULTZ: You bet.

Coming up, look out, Michele Bachmann. She's whipping the Tea Partyers up into a frenzy. She's calling for a march on Washington, but we've got one request here, and we'll get to that.

That's coming up in "Psycho Talk." Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: And in "Psycho Talk" tonight, the darling of the conservative fringe, Congresswoman Michele Bachmann from Minnesota. I know, we just can't keep her out of this.

She's trying to rally her army of wing nut supporters to come to Washington tomorrow and protest health care reform. And Fox News let her come on the air and do an infomercial for it.

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN ®, MINNESOTA: Come and let the members of Congress know that all of the messages that came out in August at the town halls and Tea Parties are still relevant. This is it. This is the Super Bowl of freedom this week.

(END VIDEO CLIP)

SCHULTZ: Oh, hold it right there. She's saying that denying people the freedom to choose a public option is the Super Bowl of freedom.

And what is she talking about with this Tea Party still being relevant? They were never relevant in the first place. They even screwed up the numbers of how many people showed up.

Bachmann has really been calling out all the psychos, you see. She went on radio and said this today...

(BEGIN AUDIO CLIP)

BACHMANN: The number one thing people can do is actually come, see their member of Congress, look at them in the eyes, especially with other freedom fighters in tow. This is a meetup at the steps of the United States Capitol. And then after that, we're unleashing everybody to go and find their members of Congress.

Don't bring your pitchforks. Bring your video cameras.

(END AUDIO CLIP)

SCHULTZ: And look them right in the eye.

You know who you're dealing with? These nut jobs that don't matter, that have never read the bill anyway. They don't even know it. I bet you anything, these people that would show up, health care reform would help them.

Actually, though, I think that the video cameras are a great idea. A bunch of Tea Partyers, freedom fighters unleashed on Washington, trying to stare down members of the Congress in a Super Bowl of crazy conservatives. Now, that's good TV. Of course, calling for all of them to do it at once might be tough, and it is psycho talk.

Coming up, I think the president could do a little bit more when it comes to rallying progressives. Eliot Spitzer is going to be weighing in on this.

Plus, the Senate Democrats are now pointing to the State of the Union as a realistic target to get health care reform done. Uh-oh, I don't like that. We got a lot more coming up on THE ED SHOW. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Get your calendars out;

Saturday night, 6:00 eastern, the House will vote on a health care reform bill. It's about time. I'm very glad to see the movement on this, even though I'm not quite sure that this bill goes far enough. Chairman George Miller trying to convince me the other night. He's going to do it again tonight.

He joins us here on THE ED SHOW. Congressman, good to have you with us. I'm glad you're smiling. If you're smiling, you must think this is a great bill, right?

REP. GEORGE MILLER (D), EDUCATION & LABOR COMMITTEE: What I'm excited about, for the first time in 50 years, after discussing this in national politics, the House of Representatives on Saturday is going to vote to bring national health care reform and access to affordable care for 37 million Americans, and much more health care reform for the rest of America.

SCHULTZ: OK. Now, this-

MILLER: This is the first time since you and I have been alive. It's pretty exciting.

SCHULTZ: It is, if you have the votes. My question tonight is, do any of the results last night of the election-do you think it's making the Blue Dogs maybe nervous that, hey, you know, maybe we better not go down this road? This costs a lot of money. We're not really sure if this is going to work. Do you have the votes to get this done Saturday night?

MILLER: In the only place where health care was on the ballot, in New York 23, a staunchly Republican district, health care won. Our candidate said he was going to vote for health care if he won the election. When he won the election, he said he's coming to vote for health care. Ads for run for health care.

So we're very excited about Congressman Owens coming to join us to cast that vote Saturday.

The fact of the matter is the country is starting again to get

excited, because they can see movement in the Congress on this-after so

many months, on this very important piece of legislation. Never again, Ed

never again when people lose their job will they lose their health care.

Think of what that means to millions of Americans that go through these economic cycles every ten years or so, when they lose that kind of security.

This is a big deal. It's important. It's critical to our economy.

It's critical to our families.

SCHULTZ: I think we're at a point now that Democrats are probably a little bit nervous with the results last night. So we're probably in the mood now of take what we can get. You claim this is sweeping reform. The preexisting condition, eliminating that is a big deal. There's no question about that. I wish the public option went further. We're just going to have to work on that, as this is a generational shift on what we're doing with health care.

Congressman, what happened to the independent voters last night? What are the Democrats missing on?

MILLER: Well, again, you know, in the elections where we and the Congress and the House Democrats, DCCC, our leadership were involved-we won in New York. We won in California. And we think we won because we took-both of our candidates there strongly endorsed the health care legislation. Both were outspoken on it. They took the argument to the public. I can't explain all of what happened.

SCHULTZ: I mean, it's about results. It's about results. Had you had had this House bill done-

MILLER: I don't think the American public sees the Congress yet responding in real time to the concerns they have. That's the problem. You know, we have a 60-vote problem in the Senate. You have 60 votes, you still can't get 60 votes. And they say, when is it our turn, that these people will turn their attention to us? I think health care breaks the ice on that, because they know that their families, their neighbors, their friends, their kids and others are implicated by the lousy system we have in this country, in terms of coverage for people and guarantees that they won't lose that coverage.

SCHULTZ: Will you get any Republican votes on Saturday night?

MILLER: I don't know. I really don't know. I'm inclined to think, yes, we will get a few. They will be few. They have set their sails on the course they want to see the president fail. They think if health care fails, the president will fail. It's a very strange policy to root against your country the way they're doing. That's what they're doing. I know they say they're not. When you want the president of the United States to fail, then you're making a very serious decision.

In my 35 years in politics, I never thought about the president failing. I disagreed with the president, but I didn't think he should be a failure. I didn't think our country should have a president that's a failure.

SCHULTZ: Congressman, what about the Senate? They're talking next year. How does that sit with you?

MILLER: I hope that's not accurate. I hope that's not accurate because I think part of what we saw in the election is whether or not we can respond. You know, I think that it may turn out not to be accurate. I know that they've sent their legislation to the Congressional Budget Office. We've been through that in the House now. And it's a complicated process. You have to go through it. We don't control it. It's independent. I know there are leaderships looking to get on with this.

I hope that turns out not to be true. And I think maybe it turned out it wasn't accurately reported or wasn't what it was made out to be. I hope not.

SCHULTZ: Congressman George Miller, California, chairman of the Health Education Labor Committee, thanks for your time tonight.

MILLER: Thank you.

SCHULTZ: Let's go to our panel tonight. Democratic strategist Todd Webster and also Republican strategy Karen Hanretty with us tonight. We got a duo going at it. Let's switch to the election results of last night. Karen, let me ask you, did the Republicans shoot themselves in the foot after having that seat for all the way back to the 19th century? How can you say last night, what happened in District 23 in New York, is good for the Republican party?

KAREN HANRETTY, REPUBLICAN STRATEGIST: Well, I don't think losing is ever good. That's not my spin tonight. You know, a lot of mistakes were made in that election. Just as I think Democrats would be wise to take a step back and learn a few lessons from New Jersey and Virginia, Republicans would be wise to take a step back.

They made two fatal mistakes. First of all, they settled on a candidate who was far too liberal for that district. Let's not forget, John McHugh, who vacated that seat, who held it for 17 years, was a social conservative. Somehow he's been painted into this moderate, which I don't think is really accurate.

So Scozzafava was a very-far more liberal than the man who she was replacing. Then the conservatives went and picked a guy who was probably more in line with McHugh's voting record, but he didn't live in the district.

SCHULTZ: The Glenn Beck association I don't think helped out too much. That was a little over the top.

HANRETTY: I think you're right there, Ed.

SCHULTZ: Sarah Palin didn't do anything good either.

HANRETTY: Ed, I'm going to agree with you on this. Some of the feedback we're getting is, look, people in these-especially New York, politics is really local. It's so much more local on the east coast, I find, than the West Coast, where I'm from. I don't think they liked outsider coming in, picking their candidates, telling them who they're going to vote for.

So Republicans need to learn from what happened last night.

SCHULTZ: Todd Webster, what happened to the Democratic base in Virginia? Where's the loyalty to Obama? It's gone in a year? I mean, half a million people short. What's going on?

TODD WEBSTER, DEMOCRATIC STRATEGIST: I think, again, you have local issues. You've got local candidates. You've got parochial issues. The voter turnout in Virginia was only 39 percent. So 60 percent-

SCHULTZ: Where did the young people go?

WEBSTER: Well, 60 percent of people did not turn out. Of the 40 percent who did, 60 percent of them voted for the Republicans. So that means 25 percent, 24 percent of voters actually voted for the Republican; three quarters of them did not. It's hardly a mandate for change.

I think that, you know, these were two local issues. New Jersey, you know, the incumbent had his own problems and association with a big investment bank which is not terribly popular right now. I think Democrats had their problems. They were local problems. They were parochial problems. It does not reflect badly on the-

HANRETTY: Come on, Todd.

SCHULTZ: Wait, Karen. Would Terry McAuliffe have been a better candidate?

WEBSTER: I don't know. I was working for Brian Moran, the brother of Jim Moran, very strong. I think he would have run a much more strong campaign, a much more populist campaign.

SCHULTZ: Did the primary hurt the voter fatigue in Virginia?

WEBSTER: I think that the issues-there was not a compelling message laid out. There was not a compelling-not a strong message laid out. It went to parochial issues.

I think the take away from all the elections, the top issue on people's minds was jobs and the economy; 85 and 90 percent of people said that that was their number one issue.

SCHULTZ: One thing-

WEBSTER: Let me finish this though. The one thing the Congress can do to deal with that is to pass comprehensive health care reform. The number one-hold on a second. The number one issue-driver of personal bankruptcies in this country are medical bills; 60 percent of all personal bankruptcies result from high medical bills.

SCHULTZ: Todd, none of this is going to go into effect until 2013. Right now, it's about jobs. Karen, let me ask you-Karen, what would you do right now to create jobs? Forget left, right, center, green, blue, whatever. What would you do to create jobs?

HANRETTY: I've been dying for someone to ask me this. Oh, Ed, I'm so glad you asked.

WEBSTER: You'd cut taxes and get rid of gay marriage.

HANRETTY: No, no. It's regulation. I think regulation in America-

and it's not just at the federal level, it's at the state levels-is

strangling business in America. And you've also got to send a message that

no, we are not going to pass cap and trade, because if you are a business -

if you're a business owner and a job creator, part of what you do to make money is you take risk. You're looking at the future and if you think cap and trade is going to pass, then you know-

SCHULTZ: I'm not talking about cap and trade. I'm talking about creating jobs.

HANRETTY: Yes, that is-

SCHULTZ: Karen, in your answer-Karen, you said nothing about credit. You said nothing about loosening up the credit markets. You said nothing about loans to small businesses. That's where I think the Obama administration has got to go.

HANRETTY: It's not about government spending, that's where you're missing it. It's not about government spending. If you want to create jobs in America, if you want to loosen up this credit-

SCHULTZ: It's about access to capital.

HANRETTY: It's about stopping regulations that are strangling businesses in America. I'm sorry, Ed. I know you don't like that, but it is. Cap and trade is a job killer.

SCHULTZ: What regulation is holding my concrete company back in North Dakota? I don't know. I mean, I need some money. I need-

HANRETTY: Let's talk about that. Your concrete company in North Dakota is absolutely going to be effected if a cap and trade bill does pass. So they're looking at it. You know what, companies don't look at today. They look at the future and say, what are my expenses going to be out in the future? Should I take a risk? Should I take the loan? Should I try to employ more people?

The answer today is, hell no, because you don't know, with this administration and what this very liberal Congress is going to do.

SCHULTZ: Enjoy the conversation. You both were great tonight.

WEBSTER: You need help for small business.

(CROSS TALK)

SCHULTZ: Coming up, the party's almost over for credit card companies, thanks to my next guest, Congresswoman Carolyn Maloney. Just slapped a curfew on them. The credit card companies are ripping off the consumers. She's in the playbook next.

(COMMERCIAL BREAK)

SCHULTZ: In my playbook tonight, cracking down on the credit card companies. Back in May, President Obama signed a reform bill designed to protect consumers from surprise fees and sudden interest rate hikes. The problem is the rules don't go into effect until February of 2010. So credit card companies have been just taking the opportunity to jack up the rates while they still can.

This afternoon, a surprise. The House of Representatives passed a bill that moved that date up, so those rules would go into effect on December 1st.

Joining me now is co-sponsor of that bill, Democratic Congresswoman from New York, Carolyn Maloney. Carolyn, good to have you with us tonight. What does this do? How egregious were these actions by the credit card companies?

REP. CAROLYN MALONEY (D), NEW YORK: Well, they were very egregious. We got many terrible complaints from consumers across this country, where they were raising rates, retroactively, on existing balances, any time, any reason, for no reason at all. Jacking it up 18 percent, 30 percent. The Pew Report that came out last week showed that 100 percent of the issuers were using some form of unfair and deceptive practices, as defined by the Federal Reserve.

Most cards had hiked their rates by 20 percent. And 90 percent of the outstanding balances had seen an interest rate increase since the bill went into effect.

What we did on the floor is move the implementation date up to the day after Obama signs it into law, so that these abuses will stop. Just in time for the holiday shopping season.

SCHULTZ: Just in time for the holiday shopping season. Here's the deal: these are the banks that we bailed out, correct? And they're turning around and sticking it to us. How did the Congress let this slip by? The banks said they couldn't meet the organizational deadline put in front of them before. Now what?

MALONEY: Exactly. My original bill would have been implemented within 90 days. They said they needed more time in order to put their systems into place.

SCHULTZ: So they lied to us?

SCHULTZ: Yes. What we saw is that they were using it to get under the wire, to put more abusive increases in, that they will not be able to do after the bill goes into effect. So we are moving up the effective date to stop these abuses. It was a big win for consumers.

SCHULTZ: Not everybody was on board with this. I want to play this sound bite from Virginia Foxx. She's on the House floor saying this.

(BEGIN VIDEO CLIP)

REP. VIRGINIA FOXX ®, NORTH CAROLINA: The people who take out credit cards aren't having a gun held to their heads. They take out the credit cards. If they don't like the rate of interest that they're paying, they should get another credit card. But don't blame the credit card companies for extending credit to people who then are irresponsible.

(END VIDEO CLIP)

SCHULTZ: Wow. Is she in the minority. I should point out that the vote was 331-92.

MALONEY: Very strong bipartisan support; 88 Republicans voted with us. We were not out to protect irresponsible card holders. We're out to protect the man and woman who's playing by the rules, paying on time, not going over their limit, and still the card companies are upping their rates retroactively on their existing balances, trapping them in never ending cycles of debt.

No one is trying to protect someone who's not paying their bills. We're trying to protect people who are playing by the rules and they're unfairly raising their rates retroactively on their balances.

SCHULTZ: Congresswoman, appreciate your time. Good work on this one.

We have a lot of responses on this as well here at MSNBC. Thank you.

MALONEY: We have to get it through the Senate now.

SCHULTZ: Well, I tell you, if they can't pass this, we have some serious problems in Washington. Thank you, Congresswoman.

MALONEY: Thank you, Ed.

SCHULTZ: Coming up in the main event, former New York Governor and Attorney General Eliot Spitzer will be here to give us some straight talk on last night's election. What does this mean for President Obama, if anything? You won't want to miss it. Stay with us. We're right back on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. I admit it, I've been a little tough on the president. I want things done. You do too, if you're a good lefty. It's called tough love.

Now I know if we can learn lessons as to what happened last night, and deliver on change, we won't be here a year from now saying, gosh, why did we do that? Look, the Republicans, they're still the Republicans. They still favor the top two percent. They still favor the corporations. They don't do anything for the wage earners. They're anti-union. You can go down the list. By the way, as far as their health care bill proposal is concerned, they still want to deal with preexisting conditions and leave that system the way it is for people who are in this country that can't get insurance? That's morally wrong.

All of that, the silver lining of last night. Joining me now is Eliot Spitzer, former New York governor and state attorney general. Great to have you with us.

ELIOT SPITZER, FMR. GOVERNOR OF NEW YORK: Ed, thank you for inviting me.

SCHULTZ: You know New York. What happened in 23?

SPITZER: Twenty three proved and established the good news that comes out of last night. Yes, the public was angry at incumbents. Jon Corzine felt that. Michael Bloomberg felt that. Everybody, regardless of party, felt that.

But we had one straight up debate last night about whose agenda do you want to embrace? The Democratic agenda or the right wing agenda of Sarah Palin? A conservative Republican district said we're going with the Democrats. This is a district that should have been perfect for Sarah Palin and the Republican party. And the voters said, no.

They said, we care about jobs. We care about our economic future. We care about credit going to small businesses. We care about being dealt with fairly. That's why we are electing a Democrat to the Congress, not the Sarah Palin, who came in thinking that she would have this opportunity to project to the nation her power on right wing agenda issues. She failed.

SCHULTZ: What about New Jersey and Virginia in connection to the White House, if there is any at all? What about that?

SPITZER: There's a lesson here, which is the public is dissatisfied. It is angry. Incumbents, at every executive level, county executives, mayors, governors felt it. The lesson for the White House is explain what we're doing and why and begin to do it quickly.

The public needs to see the ark of this story. The public needs to hear the narrative we're about to change the system. And frankly, I'm with you, Ed. I've been very tough on this White House. So far it has been continuity you can believe in when it coming to Wall Street. We have bailed out the big banks. We have not insisted that credit be extended to small and medium-sized businesses.

People are getting laid off. Goldman gets its bailout. Trades on the floor, makes money. Doesn't help the economy.

SCHULTZ: We have some numbers coming out on Friday. There's a lot of anticipation that they won't be good. What should this administration do to create jobs? What should the Republicans do to create jobs? We're all in this mess together?

SPITZER: The professor on early on the show hit it. You've been hitting on the critical issues. One, credit to small and medium-sized businesses. That will permit small businesses to borrow, which means the small and medium sized local banks, many of which have been going bust because they still have bad mortgages on the books-we haven't dealt with that issue of bad mortgages at the smaller companies. We bailed Goldman, not the small community banks.

We need to make sure we clean that up, so they can lend. And we need to deal with a foreign exchange debacle, where we have not yet looked the Chinese government in the eye and said, we're still running enormous deficits and we know you're playing games with the currency market. That can't continue.

SCHULTZ: Of course, the trade deals that are out there. That's the next big lift for the Obama administration.

SPITZER: We need to get demand back into our economy and get people buying. If you looked at the list of auto company results for the last month, Kia and Hyundai were up 40 percent; Chrysler was down 30 percent. That is not going to carry us far. We need to produce things here. That means not putting our domestic manufacturers at a disadvantage because of health care cost, which is why we need reform, and also currency valuations, which are being maintained falsely.

SCHULTZ: Eliot Spitzer, great to have you with us.

SPITZER: Thank you, Ed.

SCHULTZ: Please come back.

Earlier, I asked you, based on last night's election results, should President Obama get more aggressive with his agenda? Ninety five percent of you said yes-thank you-five percent say, no, he's doing OK.

That's THE ED SHOW. I'm Ed Schultz. "HARDBALL" is next with Chris Matthews. Starts right now on the place for politics, MSNBC.

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

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