updated 11/24/2009 10:43:25 AM ET 2009-11-24T15:43:25

THE ED SHOW

November 23, 2009

THIS IS A RUSH TRANSCRIPT.

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

Guests: Howard Dean, Katrina vanden Heuvel, Eliot Spitzer, Phil Wolf, Sam Stein, Michael Medved, Eric Massa, Bill Donahue, Todd Rutherford

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

The vote this past weekend in the Senate, it was a great thing, because, you see, now we can identify the cheaters. That's right, the senators who were cheating on the American public. Now the entire country that wants this public option can focus like a laser on these four Democrats and make their lives a living hell come re-election time.

Well, let's start it out with Joe Lieberman.

Twelve hours after the Democrats passed a landmark procedural health care milestone vote, here's Joe on "Meet the Press" saying the bill is not going to pass.

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN (I), CONNECTICUT: I voted last night, as 59 others did, to go ahead with the debate because I want us to begin not only debating health care reform, but doing something about health care reform. But I don't think anybody feels this bill, as Senator Reid put it down, though he made a lot of progress in blending bills together, I don't think anybody thinks that this bill will pass.

(END VIDEO CLIP)

SCHULTZ: Oh, yes. But Trader Joe is not alone.

Then there's Ben Nelson from Nebraska on ABC. A public option, he calls it-here's a bullet point for you-a Washington takeover.

(BEGIN VIDEO CLIP)

SEN. BEN NELSON (D), NEBRASKA: I am opposed to the public option of where the states have to opt out. I said I would look at a public option where states could opt in. We could negotiate a public option of some sort that I might look at, but I don't want a big-government, Washington-run operation that would undermine the 200 -- private insurance that 200 million Americans now have.

(END VIDEO CLIP)

SCHULTZ: Nobody is going to undermine anything, Senator Nelson.

Now, look at this. Here's what's happening now.

Lieberman and Nelson just couldn't wait to get to the camera to trash their own party's health care plan that is going to help millions of Americans. This is all about ego, grabbing the moment in the spotlight.

But now we've got Blanche Lincoln making filibuster threats.

(BEGIN VIDEO CLIP)

SEN. BLANCHE LINCOLN (D), ARKANSAS: I've already alerted the leader and I'm promising my colleagues that I'm prepared to vote against moving to the next stage of consideration as long as a government-run public option is included. The public option, as a part of health insurance reform, has attracted far more attention than it deserves.

(END VIDEO CLIP)

SCHULTZ: Say that to the people who can't get insurance, Senator Lincoln. In fact, Senator Lincoln, shouldn't you be fighting for the people in Arkansas so they can have the exact same insurance benefits as you have in the Senate?

Senator Lincoln also lashed out at the progressive groups who put heat on her back in her state of Arkansas.

(BEGIN VIDEO CLIP)

LINCOLN: According to the last tally, there's been more than $3.3 million worth of media-media ads that have been purchased in my home state of Arkansas by groups from outside of our state. I will not allow my decision on this vote to be dictated by pressure from my political opponents, nor the liberal interest groups from outside Arkansas that threaten me with their money and their political opposition.

(END VIDEO CLIP)

SCHULTZ: Now, what Senator Lincoln fails to mention is that these outside groups are fighting for what the people in her state actually want. Fifty-five percent of the people in Arkansas support a public option, while only 38 percent are opposed to it. That's according to a Research 2000 poll.

But I think the Senator that is most interesting in all of this is Mary Landrieu. She has been trashing the public option for months, but she was decidedly more toned down on Saturday.

(BEGIN VIDEO CLIP)

SEN. MARY LANDRIEU (D), LOUISIANA: My vote, today, to move forward on this important debate should in no way be construed by the supporters of this current framework as an indication of how I might vote as this debate comes to an end.

(END VIDEO CLIP)

SCHULTZ: OK. So the landscape here is like this-Senator Landrieu just announced over the weekend that her vote is for rent. OK, it's not a yes, but it is a start.

Here is the most compelling argument for health care reform, my friends.

Connecticut, 356,000 people are uninsured. Nebraska has almost a quarter of a million people uninsured. Arkansas, 481,000 people uninsured. Where's their voice? Louisiana, 894,000 uninsured.

Nearly two million Americans who are represented by these four senators could get covered by the current Senate health care bill, according to the health secretary, Kathleen Sebelius. These senators need to stop making threats and do what's right for their constituents.

Get your cell phones out, folks. I want to know what you think about this one tonight.

Our text survey is, with the progressive groups in this country, ask yourself the question: Are you willing to spend your money to fight Democrats who block health care reform?

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

Joining me now is former DNC chairman and Vermont governor, Dr. Howard Dean.

Dr. Dean, good to have you with us tonight.

HOWARD DEAN, FMR. DNC CHAIRMAN: Nice to be on. Always great to be on, Ed.

SCHULTZ: You bet.

Here's what I think is unfolding. And I hear it on the radio, a lot of blog traffic. There are Democrats, progressive groups, who are willing to line up against Democratic senators who don't vote correctly on this.

Is this healthy or not healthy? What do you think?

DEAN: Well, it's actually much more problematic for the Democrats in the Senate. We've just done some polling in Arkansas, the group that I consult with from time to time, Democracy for America, which showed that a very significant number of Democrats would be much less likely to vote for Senator Lincoln if they knew she was opposed to the public option or if she were to filibuster the bill.

So, people are not looking for people to filibuster the bill. It's one thing-if you happen to vote against the public option, we can disagree. But you certainly have every right to vote against the public option.

What you don't have a right to do, if you're caucusing with the Democratic Party and you're on a committee because of the Democratic Party, is vote against your majority leader as he tries to conduct the business of the Senate. That you don't have a right to do. What you don't have a right to do is to stop the American people from considering this bill or stop the Senate from considering this bill.

SCHULTZ: Governor Dean, do you think that these four senators can call themselves Democrats when it's-you know, it's written right in the party platform, universal health care for all Americans?

DEAN: Look, there's plenty of room to disagree with what's in the party platform. I don't mind. I'm sure there's some things in the party platform...

SCHULTZ: But this is a big one.

DEAN: This is a big one. I don't-my problem with these senators is not that they're not in favor of the bill, or not in favor of health care reform, or whether they take a lot of money for the insurance industry. That's not my problem.

My problem is I think it is wrong to caucus with the Democratic Party, take chairmanships and committee assignments, and then vote against your own majority leader as he tries to conduct the business of the Senate. That has nothing to do with whether you're for health care reform or against it.

It's OK to be against health care reform. We can disagree about that. I don't think it's OK to stop the Senate from considering health care reform. That is wrong.

SCHULTZ: Reconciliation, would you go for that?

DEAN: Absolutely. I've said that all along, I'd go for reconciliation.

SCHULTZ: Wouldn't this create some real procedural problems though? It would end up in the Budget Committee, and who knows where it would end up?

DEAN: No. Here's the truth, Ed. The truth is, at this point this bill is not all that much reform anyway.

SCHULTZ: OK.

DEAN: The only piece of reform left in it is really the public option. The insurance reform really doesn't do what it says it does.

SCHULTZ: What about the pre-existing condition? That's in there.

DEAN: Well, yes, but it doesn't work. And I'll tell you-you know, we did this 15 years ago in Vermont.

In our state, you have to be able to get insurance from any insurance company, but in order to make it work, you have got to have community rating. That means you can't charge a lot more.

The Senate and the House bills charge twice as much or three times as much to people who are sick or have pre-existing conditions. Well, that's not really guaranteed issue. It doesn't really get rid of pre-existing conditions, because if you can charge three times as much as other people pay, you can't afford that. So what's the point?

In our state, you can charge 20 percent more than you charge your cheapest patient. Now, that's really community rating.

SCHULTZ: So this is not reform, in your opinion?

DEAN: Well, the insurance reform really isn't going to be all that effective. But the public option is reform, because then you give Americans the choice that they don't have now.

You give Americans the opportunity to choose what they want and not have that choice be made by insurance companies, employers and politicians. That's the real reform in this bill, is giving the American people the choice.

And the American people want that choice. Even in relatively conservative states like Arkansas...

SCHULTZ: Yes, they do.

DEAN: ... I saw your poll. I saw one just done more recently that showed 60 percent of all Americans-all people in Arkansas-thought that they ought to have that choice. They wouldn't all select the choice, but they thought they ought to have the choice.

SCHULTZ: And finally, Governor Dean, draw on your experience as a former DNC chair. How should the White House manage this? The very people that put Barack Obama in office, they're now stepping up saying they're willing to work against those who fight the public option.

Manage that.

DEAN: Well, look, I mean, you've got to get a bill through and it's got to be a good bill. And that's why I have always been in favor of reconciliation. I said that months ago, because the people need to vote on this.

If you put this up to a fair vote, you would have this pass in a moment. The bill that Harry Reid-and by the way, I think Harry Reid has done a fantastic job, just an absolutely sensational job in getting a decent bill...

SCHULTZ: Well, nobody else has gotten it this far in 50 years.

DEAN: Well, he's just been fantastic. And, of course, lots of people helping him.

So, you know, the problem is because of the actions, the potential actions, I don't think these folks are all going to vote up against consideration of the bill.

SCHULTZ: Dr. Dean, great to have you with us tonight.

DEAN: Thanks very much. Thanks a lot.

SCHULTZ: Thank you so much. Got to have you back.

DEAN: All right.

SCHULTZ: For more, let me bring in Katrina vanden Heuvel, editor of "The Nation."

Katrina, nice to see you tonight. Thanks for your time.

KATRINA VANDEN HEUVEL, EDITOR, "THE NATION": Thank you, Ed.

SCHULTZ: Look, it is coming down to war with inside the party and the progressive groups. Now the next 30 days, probably legislatively the most important 30 to 40 days this country has seen in the last 50 years.

How do you see this fight matching up right now?

VANDEN HEUVEL: Well, I think you've got to get constituents in the districts of people I call "prima dumma" (ph) Democrats, these four Democrats-Lieberman, Nelson, Landrieu and Lincoln-and get those people on the phone, get them working to tell their senators that if they don't vote for a plan that has majority support in those states, they're going to get knocked out in the next election.

I think Governor Dean made a good point about the need to consider reconciliation. What we have in the Senate right now, Ed, is a deeply dysfunctional, anti-Democratic system called the filibuster. And I think citizens need to start thinking about grassroots movement to abolish the filibuster.

I saw Senator Sheldon Whitehouse of Rhode Island on Friday. He said there's a beginning of talk in the Senate about limiting or ending the abuse, because the Republicans have obstructed and abused through use of the filibuster. We're seeing it here.

I think we're going to go into committee, as you know. They say Jay Rockefeller, who's been a liberal stalwart supporter of the real reform of public option, is going to be one of the conference negotiators. So, you know, we've got to push on him and continue to fight and support people like Bernie Sanders and Sherrod Brown.

After all, you've got 56. I think my math is correct -- 56 in the Democratic Caucus, not counting rogue maverick Joe Lieberman, who are supporting real reform. And so, we need to think hard about what that means in terms of our country and our democracy and our future.

SCHULTZ: What about the White House? You think they're still trying to get Olympia Snowe and to maybe give more credibility to the bill and use the word "bipartisanship"? And it just seems to me that it just gets more watered down when they go down that road.

What's the political up and down of President Obama just making it a Democratic bill?

VANDEN HEUVEL: You know, that's where the reconciliation process-you know, that's basically saying 51. That's Democratic majority, not this 60 votes.

And I think that we've seen, Ed, we've talked about the danger of a White House so enthralled with bipartisanship. And allowing Olympia Snowe to be in the driver's seat, listen, Franklin Roosevelt understood the value of a Democratic majority. It's still a good piece of legislation.

And with the virtual extinction of moderate Republicans, I think it's a mistake to put them in the driver's seat. And I think we need to fight hard not just for a not very robust public option.

And I respect Governor Dean, but I do think the denial-the pre-existing coverage stuff is very important. And I think we should get affordability and all kinds of things in that conference.

And Jay Rockefeller is, in many ways, carrying the mantle of Senator Kennedy. Wish we had Medicare for all. We don't. But progressives need to mobilize like they've never mobilized before, because they're going to need it heading into 2010, this White House, in light of joblessness in this country.

SCHULTZ: Katrina, thanks for your time tonight.

VANDEN HEUVEL: Thank you.

SCHULTZ: Thanks so much.

Coming up, I'm going to go head to head with the man who is responsible for this outrageous billboard. You won't want to miss it.

And Congress is getting serious about auditing the Federal Reserve.

Eliot Spitzer will tell us exactly what he thinks in just a moment.

All that, plus the governor of South Carolina gets nailed with 37 charges. And "The Beckster" has got a 100-year plan for the country.

I can't wait.

We're right back on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

Federal watchdogs may soon get unprecedented access to the Federal Reserve's books. Congressmen Ron Paul and Alan Grayson are working together to get a piece of legislation through the Congress that would let the Government Accountability Office audit the Fed. The House Financial Services Committee has already approved the measure as an amendment to a larger financial reform bill.

Joining me for more on this is former New York governor Eliot Spitzer.

Mr. Spitzer, great to have you with us tonight.

ELIOT SPITZER, FMR. NEW YORK GOVERNOR: Ed, great to be here once again. Thank you.

SCHULTZ: This would be a can of worms opened up that we've never seen before in this country. How dangerous is this-or, should I say, how important is it?

What do you think?

SPITZER: I think it is critically necessary, because the more we look at what the Fed did over the past year or two-and the AIG bailout is just merely one example of that-the more we have serious questions about what it has done with our money, what the structure is, that it is rebuilding a flawed structure of financial services. And therefore, necessarily, we should be asking questions-why, where did the money go, what was the rationale for what you did?

And this bill merely gives Congress and the GAO the opportunity to ask questions. What could be more basic or more appropriate than that?

SCHULTZ: Governor, what would be the first thing you would want to look for if you had access to the books? What would you look at?

SPITZER: The first thing I would ask-and I would put Tim Geithner down, put him under oath, and Ben Bernanke and all the others, and say, explain why you gave AIG counterparties 100 cents on the dollar. Even after that superb IG report, the inspector general report, we still don't know what Tim Geithner was thinking. He gave all this money to the major banks on Wall Street, did not ask them for anything back.

Those are the sorts of questions, the guarantee of commercial paper. When and why, who was in what trouble? What did Goldman tell them about their financial position, contrary, perhaps, to all the claims they've been making in the press?

This could lead to substantial inquiries about fundamental wrongdoing.

Tim Geithner has a lot of questions to answer.

SCHULTZ: Ron Paul, congressman from Texas, has been introducing this since the 1980s.

SPITZER: Right.

SCHULTZ: He has been characterized as out there for a long time on this issue, but now this tidal wave that came in on Wall Street, he's got bipartisan support like we've never seen before.

SPITZER: And deservedly so. Look...

SCHULTZ: Go ahead.

SPITZER: ... when I was doing my Wall Street cases years ago, people attacked me left, right and center as well. So you need to understand, now that people are beginning to understand how fundamentally flawed some of the policies were in Washington and how fundamentally flawed Wall Street has been in terms of what it's done to our economy, suddenly some of these ideas don't seem so crazy, and they're rational.

The Fed has been a black box which nobody could peer into. They claimed don't politicize us.

And let me tell you something. Alan Greenspan was one of the most political people ever to run the Fed. He did what President Bush wanted him to do-raise taxes, lower taxes. Alan Greenspan always supported the White House. He was political.

So, let's get this out in the open, ask the hard questions and have the conversation. That is what this discourse should be all about.

SCHULTZ: And Mr. Bernanke is on record saying it would hurt the independence of the Fed. Your thoughts on that?

SPITZER: I think that's just a red herring, silly argument. Come on, let's be honest about this.

There are, of course, certain things, certain pieces of information about particular companies that should not be made public. But for you as the chairman of the Fed, you need to explain what you're doing, how you're spending tax dollars, what you are asking of the companies whom you're giving billions of dollars. That is basic and fundamental to the transparency of the financial services system. And the notion that this would politicize it is simply silly.

SCHULTZ: Governor, great to have you with us tonight. Thanks so much.

SPITZER: Ed, thanks you..

SCHULTZ: You bet.

Coming up, America, brace yourself. "The Beckster" has a plan to save us all within 100 years. Too bad his 15 minutes is almost up.

He lands in "Psycho Talk" zone in a moment.

(COMMERCIAL BREAK)

SCHULTZ: And in "Psycho Talk" tonight, well, "The Beckster" has been let loose on America.

This weekend he was in Tampa, Florida, plugging his latest book and telling a group of senior citizens that he's going to save the country. Although, on his timetable, they'll be dead by then. But it's not going to happen for another 100 years.

(BEGIN VIDEO CLIP)

 

GLENN BECK, FOX NEWS: I am drafting plans now to bring us back to an America that our founders would understand. We need to start thinking like the Chinese. I'm developing a 100-year plan for America -- 100-year plan. We will plant this idea and it will sprout roots.

(END VIDEO CLIP)

(LAUGHTER)

SCHULTZ: He's developing a plan. Glenn says we should start thinking like the Chinese? Hasn't he spent the better part of the last six months going after President Obama's folks because they have supposedly been doing that?

Come on, Beckster.

Now, we don't have any details of this 100-year plan. He's still working on. You don't get the specifics of all of that unless you buy his book when it comes out in 2010. He's not gaming you.

And there's a lot of people who just can't wait for that book. You see, they call these folks "Beckerheads."

(BEGIN VIDEO CLIP)

UNIDENTIFIED GROUP: Glenn Beck! Glenn Beck! Glenn Beck!

UNIDENTIFIED FEMALE: His honesty, his truthfulness, his telling us, the American public, what is really going on in our government. We love him to death.

UNIDENTIFIED MALE: I don't want to say he's our savior, but he's pretty close.

(END VIDEO CLIP)

(LAUGHTER)

SCHULTZ: If you're going to refer to Glenn Beck as a savior, then you're going to get to follow him all the way into "Psycho Talk."

Up next, this Colorado man behind this billboard, well, he will explain why he thinks the president is on a jihad. You won't want to miss it. He'll talk to me next.

Plus, the Catholic Church has decided that a member of the most revered Catholic family, the Kennedys, can't have communion. The president of the Catholic League, Bill Donohue, will go head to head with me in my "Playbook" on that issue.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

Take a look at this shocking billboard in Colorado, just 30 minutes outside Denver, west of Denver, Colorado. At the top it says "President or jihad?" And shows a cartoon image of the president of the united states wearing a turbine. At the bottom it says, quote, "wake up, America, remember Ft. Hood."

Joining me now is a man behind this billboard, Mr. Phil Wolf. Mr.

Wolf, good to have you with us tonight. Thank you for your time.

PHIL WOLF, POSTED ANTI-OBAMA BILLBOARD: Thank you, sir.

SCHULTZ: Why did you take out this billboard?

WOLF: I think this billboard's a combination of some frustrations on questions that haven't been answered by the president.

SCHULTZ: Such as?

WOLF: Let's start with where's he from? What's his background? Who is he? Is he American? What does he stand for?

SCHULTZ: Okay. So you obviously don't think that the president of the United States is an American citizen.

WOLF: I don't.

SCHULTZ: OK. What evidence do you have that he's not an American citizen?

WOLF: Well, I think the evidence has to be shown that he would be.

That would seem to be the simplest thing to do, just to show that you are.

SCHULTZ: We missed this in the vetting process, though, all of this?

As a country, we screwed up?

WOLF: Very possible.

SCHULTZ: Possible. Jihad; what does jihad mean to you, Mr. Wolf?

WOLF: I think to me it means it's an extreme element of a struggle to overcome somebody. It can be interpreted probably some different ways. but to me it's-it's certainly not one of us. It's something other than what an American is, that I've been taught.

SCHULTZ: Jihad is religious war, is it not? The definition is religious war. You must have put that word up there for something. Do you think Barack Obama wants a religious war?

WOLF: I think it's definitely anti-Christian. Yes, I do.

SCHULTZ: Anti-Christian? We're a country that allows all types of faiths, do we not?

WOLF: We allow them, providing they abide by the same laws we all abide by, the Constitution, the Bill of Rights, everything this country was found on when they put the republic together.

SCHULTZ: You're presenting the question that you're not sure if the president-you say president or jihad? Jihad is religious war. I mean, you're suggesting that the president of the united states wants a religious war on our soil?

WOLF: My statement up there on the sign has got a question mark behind it. And the question is-needs to be answered. When I see the cavalier attitude that's handled with Ft. Hood, when I see how someone who he holds close to him-you know, when he runs around the country and apologizes for who I am as an American, that disturbs me, sir.

SCHULTZ: Who did he apologize to?

WOLF: Well, same speeches you've been listening to. Every country he goes in to, Mr. Obama is telling the world we should be more tolerant, we should be more like them, in other words.

SCHULTZ: Does that make us weaker in your opinion?

WOLF: Yes, it does.

SCHULTZ: So if we're tolerant of other cultures, that makes us weaker as a country? Is that your belief?

WOLF: I believe that it is.

SCHULTZ: Let's talk about Ft. Hood. Why didn't the Bush administration catch this guy? Because there were plenty of signals long before President Obama took over the oval office.

WOLF: That's really a good question. I agree with you 100 percent.

SCHULTZ: How come you don't take a billboard out on that?

WOLF: You know what? It's just culminated with this issue on this particular president.

SCHULTZ: It's-what did you want President Obama to do about Ft.

Hood? What should he do right now? There's people dead, people wounded.

Throw all Muslims out of the military?

WOLF: Well, you know what? I think there's got to be some background checks with people that are in positions of leadership and authority. I don't see that that's being done. I know that in my businesses or in my family, if I have people that are involved that I think are harmful to me, I'm certainly going to do an investigation of that.

SCHULTZ: How did this guy slip through the cracks?

WOLF: That's not my question to answer. It's posed on the billboard

--

SCHULTZ: You take it out on the president of the United States?

WOLF: Everything runs down hill, sir, and he's the top man.

SCHULTZ: Mr. Wolf, are you a racist?

WOLF: Absolutely not.

SCHULTZ: OK. So you think President Obama-his actions so far have brought you to the point where you think that he wants to commit religious war from the Oval Office? I mean, I find that amazing. And, you know, freedom of speech, America's a great country. What kind of response have you gotten to this?

WOLF: You know, other than the few dissenters that have threatened to fire bomb us and threaten to kill us, the overwhelming support has been-probably eight out of ten have been overwhelming. I think it's been pretty consistent with the local polls I've seen in Denver and around the country. Seven to eight out of ten have been very supportive of the same questions.

SCHULTZ: OK. You say you've been threatened? Your business has been threatened?

WOLF: The business has been threatened to be fire bombed. We have employees that left on Friday. Death threats.

SCHULTZ: Has law enforcement followed up on those?

WOLF: The city has been outstanding and they've been very helpful.

Yes, they have everything that we've been given.

SCHULTZ: OK. So law enforcement is working on these threats that you've taken?

WOLF: We've given them everything we've had.

SCHULTZ: OK. You're paying for this billboard, correct?

WOLF: Yes, I did.

SCHULTZ: What do you do for a living? What is your business?

WOLF: This is a car dealership. This is what I do. We sell cars.

SCHULTZ: OK. Sales up because of this billboard?

WOLF: Yes. It's been very positive.

SCHULTZ: You've got people coming in buying cars based on what they've seen on the highway?

WOLF: What they have-what they have told us, to sum it up, is I will put off buying a car anywhere if I can go there and buy a car from you, because I appreciate that you stand for something. You ask the same questions that we've been asking around the water cooler. And now it's out on main street. I don't think the question has been answered.

SCHULTZ: What do you think we should do about Afghanistan?

WOLF: You know, I wish we weren't there.

SCHULTZ: Well, we are. Do you want the president to get out or put more troops in?

WOLF: Well, if they elect me, I'll deal with it. I'm not elected right now.

SCHULTZ: You don't-you have an opinion on the president about jihad but don't know what to do about Afghanistan?

WOLF: You probably wouldn't want to hear that opinion either.

SCHULTZ: I do want to hear it. I think we've had a good conversation. I mean, I'm curious as to how folks like you think in the middle of the country. What has Barack Obama done to you?

WOLF: Barack Obama, personally, hasn't done anything to me, but every time there's an event, whether it's George Bush or Barack Obama or Bill Clinton, it just seems like every president takes the failures or the deceptiveness of the previous one and they push it a little further. I think for me what Barack Obama has done for me is it's just-it's going down the drain as far as addressing what the common guy, the little guy, is all about. Nobody, you know, wants to answer these questions. I think they think the American people are stupid.

SCHULTZ: Mr. Wolf, thanks for your time tonight. You're going to take out more billboards? Quickly.

WOLF: You never know.

SCHULTZ: All right. Thank you for joining us.

WOLF: You bet.

SCHULTZ: Let's go to our panel tonight. Sam Stein is a political reporter for "the Huffington Post" and Michael Medved is a radio talk show host and author of the book "the Five Big Lies About American Business:

Combating Smears Against the Free Market Economy."

Michael Medved, your thought on the story tonight.

MICHAEL MEDVED, RADIO TALK SHOW HOST: First of all, congratulations to you in conducting a respectful interview. I think probably Mr. Phil Wolf is a patriot. You're a patriot. President Obama is a patriot. I really wish we could get this nonsense done with, of trying to view every kind of political difference as a sign that our opponents are trying to destroy the country.

SCHULTZ: Michael, how does that billboard help the discourse in this country?

MEDVED: It helps it not at all. By the way, it destroys the conservative movement, because it leads people to believe that those of us who have some disagreements with the president, who have valid disagreements with him, with the directions he's taking this country, that we're nuts basically, that we think he's some kind of secret agent or a secret Muslim.

And he clearly is not. When Mr. Wolf was talking about President Obama's background-we know more about his background. He has written about it in microscopic detail. We know about his childhood, about his birth, about his father. He's admitted amazing things. I mean, really some pretty racy things about his growing up. It's the first president we ever had that admitted he did drugs when he was in high school.

SCHULTZ: Sam Stein, I'm going to catch a lot of heat from people tonight because I gave this guy a platform. If I may say this to our audience tonight, this has to be exposed. This is what's happening in this country. This is the level of discourse that's going on in America. that we would suggest that the president of the United States is looking for a religious war. From a journalistic standpoint, Sam, where does this go? How do you take this story?

SAM STEIN, THE HUFFINGTON POST: I mean, editorially you have to decide whether it's worth the ink. I mean, his sign doesn't even make sense. President or jihad? Wouldn't it be president or jihadist? This guy doesn't really strike me as a credible voice of the right.

SCHULTZ: He says he's getting a lot of support.

STEIN: I think he's getting a lot of sales. And I think national cable TV appearances aren't going to hurt with the sales either. You know, you bring up a valid point. To the extent that he personifies what's being discussed on the very fringe of the right, you know, it's worthwhile exploring and confronting and dealing head on.

But let's not look at this through a political lens. There is no right or left to this issue. That is just straight-up craziness and you don't need to deal with it. It's like, that's so far out there. It's such a problem for the Republican party if it becomes more mainstream. From a journalistic standpoint, it's more of a circus show than anything else.

SCHULTZ: Michael Medved, if you saw that billboard in your community, how would you feel? I mean, you know, I mean-

MEDVED: Deeply embarrassed.

SCHULTZ: You live in a nice place in Seattle, you drive a street every day, and you see a billboard like that; what's the normal reaction to that?

MEDVED: I think the normal reaction would be offended, partially because of the sort of racial stereotypes in that cartoon.

SCHULTZ: I mean, that is as racist as it can get. What about the turbine? Now, is that a target of conservatives now? They can't respect other faiths?

MEDVED: No, that's not true. First of all, this gentleman, you will notice, he also attacked President Bush. This is like those people who thought that President bush was the mastermind behind the 9/11 attacks. We have too much of this in our politics on both sides. What I would do if this was happening in my city, I would sit down and meet with this gentleman and try to talk sense to him.

He doesn't seem like a bad guy. He's just somebody who's been terribly misinformed. What bothers me, there are people out there making money promoting this garbage, the conspiracy theories about President Obama. I think those people ought to be ashamed.

SCHULTZ: What about that, Sam?

STEIN: I totally agree. It is a marketing ploy. It's a way to sell books. It's a way to draw attention to yourself.

SCHULTZ: These people-Sam, don't these people have some political clout? I mean, we've had elections in this country being narrowly won, OK? And if these folks-he says he's getting a lot of support. We've seen it all over the blogosphere. I mean, it would seem to me that the conservative movement in this country would pay a real price for this.

STEIN: Yeah. You know, yes, I agree with that. I was going to get

to another point, actually, about the politics of it, which is, you know,

you're right to point out that he did criticize President George W. Bush in

that segment. And I think that speaks, to some respect, about how this

isn't, again, a conservative or liberal or progressive thing. This is

really an anti-government movement that sort of extends from the Obama

campaign, where change was the big theme. People are just tired of

Washington

MEDVED: Ed, if I can jump in-

SCHULTZ: Sure.

MEDVED: Even the most outspoken right wingers in this country-I mean, whether it is Glenn Beck, himself, who has condemned this whole birther thing. Sarah Palin has condemned it. You will not find any prominent voices on the right. Only Lou Dobbs.

STEIN: Tom DeLay is a birther.

SCHULTZ: That's right, Tom DeLay.

MEDVED: He has bigger problems. He's retired from politics. He didn't win "Dancing With the Stars."

SCHULTZ: He was only the majority leader in the House. Come on. He's a political figure in this country. This is what bothers me, is that the Republican party never denounces this kind of stuff.

MEDVED: Yes, we do.

SCHULTZ: Where's Michael Steele on this? Where is Michael-you can't go to the Internet without finding this story. It's all over the place.

MEDVED: You're right. Michael Steele, on my show, has denounced it.

SCHULTZ: OK.

MEDVED: Again, look, this is one of those things where could people be even more outspoken? Yes.

SCHULTZ: He denounced this billboard? All right.

MEDVED: Not this billboard. He denounced the idea that President Obama-

SCHULTZ: Gentlemen, I have to run.

STEIN: You have Senate races in California and, in some respects, in Florida where you're going to see the fissures within the Republican party around issues like this sort of personify themselves. I mean, Chuck out in California and Marco Rubio in Florida are getting a lot of their support from the fringe elements of the base.

SCHULTZ: They are. They're a political force.

MEDVED: They're not birthers.

SCHULTZ: Good to have you with us.

Coming up, head of the Appropriations says if President Obama sends more troops to Afghanistan, we should tax the rich to pay for it. Congressman Eric Massa will weigh in on that next.

(COMMERCIAL BREAK)

SCHULTZ: In my "playbook" tonight, President Obama will hold his ninth strategy session on the war in Afghanistan this evening. If he wants to send 40,000 more troops to Afghanistan, it's going to cost about 40 billion dollars a year. The chairman of the House Appropriations Committee, David Obey from Wisconsin, says the American people need to step up and take on that cost by paying a war surtax.

(BEGIN VIDEO CLIP)

REP. DAVID OBEY (D), WISCONSIN: The problem in this country with this issue is that the only people who have been asked to sacrifice are military families, and they have had to go to the well again and again and again and again. And everybody else is blithely unaffected by the war. If we don't pay for it, the costs of the Afghan war will wipe out every other initiative we have to try to rebuild our own economy.

(END VIDEO CLIP)

SCHULTZ: Joining me now, Congressman Eric Massa of New York, veteran, sits on the House Armed Services Committee. Congressman, would you go along with a war tax or a war surtax?

REP. ERIC MASSA (D), NEW YORK: We're talking about, today, in the 200

or 2.969th day of this war is the reality that we simply have not defined how we will pay for it. It's 100 million dollars a day plus. Ed, that's almost insignificant compared to the thousands of wounded and killed in action.

I agree with Chairman Obey. The American people have borne absolutely no price for this war, except for those military families and active duty service personnel who have given so much. As soon as you ask for common sacrifice, then nobody even wants to talk about the topic.

SCHULTZ: Do you think this-

MASSA: It is time to define-go ahead.

Congressman, do you think this is just a tactic to try to get the president to get support of the American people to get out of Afghanistan? Because nobody wants to pay more taxes.

MASSA: Well, here's my position-I've made it very clear on the floor of the House of Representatives when I went there on the 2,950th day. The Afghan people refuse to fight and die for what we are asking American soldiers to fight and die for. We have not defined a mission. If it is to create a national identity where there is none, if it is to as-the general on the ground, McChrystal. said at one point, his most important job that day was to secure elections , and yet we now know how grossly fraudulent that fraud was-then my answer is, come home. We have been militarily victorious. It is time to come home.

SCHULTZ: Congressman, great to have you with us tonight. Thanks so much.

MASSA: Thank you.

SCHULTZ: You bet.

Rhode Island Congressman Patrick Kennedy is saying the Pope of Providence banned him from taking communion because of his pro-choice views. Congressman Kennedy said Bishop Thomas Tobin told him to stop taking communion back in 2007, and went so far as to order priests to deny him that, something the bishop said today he never did.

(BEGIN VIDEO CLIP)

BISHOP THOMAS TOBIN, PROVIDENCE, RHODE ISLAND: He also made some comments that I think were inaccurate and misleading for people. For example, the fact that I had instructed all of our pastors not to give him holy communion, which, of course, is patently false. I have no idea where he came up with that little piece of fiction.

(END VIDEO CLIP)

SCHULTZ: Joining me now is president of the catholic league, Bill Donahue Nice to see you tonight.

BILL DONAHUE, CATHOLIC LEAGUE PRESIDENT: Thank you, Ed.

SCHULTZ: Do you think Catholics who are pro-choice-do you think they should take communion?

DONAHUE: No, I don't, particularly politicians who are out there, and someone who as obstinate as this man. His father, whatever you say about Ted Kennedy-I wasn't a fan of his, to put that on the table-at least he had the decency and the smartness to say, listen, I'm not going to seek a direct confrontation with my bishop. Patrick Kennedy is doing exactly that. He wants a public confrontation with his bishop.

Just as you had a very interesting conversation with Howard dean as to whether or not you could be considered to be a Democrat and be one of the four senators who was against the health care plan, it's legitimate to ask, is this man really in the right church? I don't think he is. I think he's in the wrong religion.

SCHULTZ: He's in the Congress and he has to represent all the people. and whether it's his personal views or religious views, doesn't he have to represent the people in his district? Isn't there a difference there?

DONAHUE: Oh, I think that he does. But I think if he were like his father, he wouldn't have chosen this avenue. For example, it was almost three years ago when he was chastised by Bishop Tobin, and Patrick Kennedy, at that point, acted responsibly, and thanked him for the spiritual guidance. Why did he play this card last month? It's because of the health care bill.

SCHULTZ: No doubt about it. The bishops have been very active. They've been lobbying some senators and people on the hill about what they want as far as the Stupak amendment and how they're threatening to kill health care because of the abortion angle to this. Why shouldn't-if the bishops are going to play politics, why can't Congressman Kennedy do the same thing?

DONAHUE: He went beyond that, Ed. If everything he said was the only thing that's at play here, I think you'd have a very good point. What he did, though, was to basically say, look, you have your views in the hierarchy as to what a good catholic is and I have my views. Tobin accused him of false advertising. Look, if I'm a spokesman for vegetarianism, and I said to you, Ed, I think all vegetarians should enjoy a turkey on Thanksgiving, it wouldn't be surprising if the vegetarians want to throw me out.

You don't have Jews for Jesus being invited into the American Jewish

Congress meetings. You don't have Muslims walking around saying Jesus is

divine. Patrick Kennedy knows that abortion is considered by his religion

the House rules are there-as an intrinsic evil. He wants to say, no, I don't care what you think. I'm going to do whatever I want. He sought a direct confrontation and he lost.

SCHULTZ: Do you think he should take communion? You say no to that. But what is the church's position? Is every politician-I mean, there's a lot of catholic politicians in the Congress that have the same view he does.

DONAHUE: There's a lot of episcopal autonomy. By that what I mean is that the bishops decided a couple years ago it's up to every particular bishop as to how they want to handled it. Typically the way it's done is that a bishop will invite for a private discussion somebody who is obstinately in favor of abortion rights and ask them to reconsider. They try to work it out that way. Quite frankly, Nancy Pelosi and Ted Kennedy and the others have been pretty good in trying to do that.

Patrick Kennedy, there's something bold about this man and that's why he's getting it right in the face. I hope he learns a lesson.

SCHULTZ: All right. Mr. Donahue, always a pleasure. Good to have you with us tonight.

DONAHUE: Thank you, Ed.

SCHULTZ: Thank you.

Coming up, my favorite cry baby, Governor Mark Sanford of South Carolina, better break out the new box of Kleenex tonight. He's facing charges for spending state funds to visit his Latin lover. A state senator will call for impeachment, next., right here in the main event.

Stay with us

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. South Carolina Governor Mark Sanford under fire again tonight. A new state ethics report claims Sanford used taxpayer money for personal travel, including trips to see his mistress in Argentina If found guilty, Sanford will have to pay up to 74,000 dollars in fines. But Sanford insists he's been a good governor.

Joining me now is south Carolina State Representative Todd Rutherford.

Mr. Rutherford, is this the final political nail in the coffin?

TODD RUTHERFORD, SOUTH CAROLINA STATE REPRESENTATIVE: Hopefully so, Ed. I mean, there's no doubt about it. They came out today and said there were 37 different times that have been reported thus far that Mark Sanford used his office for his own personal gain, that he repaid himself with campaign funds when he shouldn't have, that he paid for first class and business-class tickets, which was against state law. Not to mention the private plane trips, which were not reported at the time the ethics commission met, which are not in this report.

The bigger question, Ed, is not whether he should still be impeached at this point. It's why he has not been indicted by the Republican attorney general. All of these are violations of state law. The best thing his lawyer said was either technical violations. I was talking to a judge on the way over here. The question is, why has he not been indicted by the Republican attorney general? That is the bigger question.

SCHULTZ: Is that going to happen, you think?

RUTHERFORD: You know, the Republican attorney general is also running for governor. He has said he doesn't believe anything happened. Exactly. But you have a clear, clear violation, according to the ethics committee, which they're going to hold hearings on, which will match our impeachment hearings, which in South Carolina will start tomorrow at 1:00, that suggest he violated state law.

I'm not saying that I agree with the law. But very clearly what he did was violate that law by reimbursing himself and by, again, taking the state's private airplane to get a 10 dollar haircut. This is beyond the culture of corruption.

SCHULTZ: Mr. Rutherford, where do you think the people of south Carolina are, in the wake of this news tonight? I mean, enough is enough, isn't it?

RUTHERFORD: Enough has been enough. This is somebody-this is a governor that should have resigned a long time ago, that stays in office and has continued to do absolutely nothing. He has no agenda except to take advantage of us bringing businesses to south Carolina Here he is faced on the eve of 37 different charges by an ethics committee that he appointed. These are gubernatorial appointees that said that he violated the law 37 times.

And to say that these were technical violations, that's no defense.

The only defense is I didn't do it. Not that they're technical violations.

That's still illegal.

SCHULTZ: Todd Rutherford, great to have you on tonight. Thank you for your time on this.

Earlier, I ask our audience tonight, would you spend your money to fight Democrats who blocked health care reform? Ninety one of the viewers said yes; nine percent said no.

That's THE ED SHOW. I'm Ed Schultz For more information on THE ED SHOW, go to Ed.MSNBC.Com or check out my radio website at WeGotEd.Com. "HARDBALL" with Chris Matthews starts right now on MSNBC, the place for politics.

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

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