updated 12/31/2009 11:37:52 AM ET 2009-12-31T16:37:52

Guests: Joe Sestak, Terry McAuliffe, Drew Westen, Doris Kearns Goodwin, Bill Press, Ernest Istook, Joe Madison, Sam Stein

ED SCHULTZ, HOST:  Good evening, Americans.  And welcome to THE ED SHOW tonight from Minneapolis.

The news tonight, progressives in the House are vowing to fight for real health care reform.  They just will not give up.  I love it—a public option. 

Now, in the Senate, it‘s just a matter of, I guess, letting the clock run out.  Final vote slated for the morning of Christmas Eve, 8:00 a.m.  Republicans decided to throw in the towel early. 

But House Democrats say that they won‘t rubberstamp the Senate bill.  A lot of Democrats are infuriated by the process.  A majority of the Dems in the House and Senate supported the public option because it‘s the right thing to do for the country, right thing for their constituents.  But they watched a few conservative Democrats hold reform hostage. 

They were rewarded by Democratic leadership who paid them for their votes.  Here‘s the deal. 

Mary Landrieu got $300 million for Medicaid in the state of Louisiana, while Ben Nelson, in Nebraska, the critical 60th vote, if you may, got Medicaid expansion in his state fully paid for with federal dollars.  Unlike any other state. 

The price of their votes was more government-run health care for their states?  They are the reason the public option got killed.  Isn‘t it stunningly hypocritical to criticize government-run health care while asking for more money for your own state? 

A lot of other senators got some money as well for their state, but it wasn‘t at the price of the vote.  What Landrieu and Nelson got, I guess you could say, was ransom money. 

This so-called compromise, my friends, has only rewarded, I think, what I call bad behavior.  It makes Democratic leaders look pretty weak in the 11th hear. 

But the biggest winners of all—and I‘ve said this for months—and Bernie Sanders said it on this show last night—the insurance companies.  Health insurance stocks have skyrocketed since the bill passed the preliminary vote yesterday.  And actually, they‘ve been going up in the last month when they thought the public option was dead. 

Aetna shot up 4.7 percent.  Cigna gained four percent.  They‘re moving up.  That‘s proof that this is a bad deal for the American people.  Big insurance doesn‘t have to wait until Christmas Eve, I guess you could say, or New Year‘s eve to point open the champagne. 

The only hope we have right now, really the only hope we have if you‘re a fan of the public option, is that of Nancy Pelosi, Speaker of the House.  Is she going to be as stubborn at traitor Joe Lieberman, Ben Nelson and Mary Landrieu?  And is she going to stand up and say to the White House, this is what the people wanted? 

Polls have been that way all along.  Nancy Pelosi is the key, and that‘s our only card to play at this point. 

So tell me what you think in our telephone survey tonight.  Get your phones out.  The number to dial is 1-877-ED-MSNBC. 

My question tonight is: Do you think Nancy Pelosi should demand a public option when it gets to conference committee?  Press 1 for yes, press 2 for no.  Again, the number to dial tonight is 1-877-ED-MSNBC.  We‘ll bring you the results later on in the show. 

Joining me now is Pennsylvania Congressman Joe Sestak.

Congressman, good to have you with us tonight.

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

SCHULTZ:  You bet, my friend.

Are we going to see the House roll over—I know that you have sent a letter to Nancy Pelosi and outlined what you think is wrong in the Senate bill, but is this going to be a rollover by the House, in your opinion?  What‘s going to happen here, Joe?

SESTAK:  It can‘t be a rollover.  It‘s our constitutional duty to do what‘s right for this nation. 

Look, you said it very well at the opening.  What a disappointment it was to watch the Senate as special interests influenced it. 

I can remember an administration official on TV on Sunday that said, “This is the way it‘s always been and it‘s the way it will always be.”  No, I‘m sorry. 

This president said politics as usual is going to change.  And if it‘s going to change, it has to change for the middle class. 

That public option, or call it cat/dog, something that does the same thing that affects fair competition in the insurance marketplace that is a monopoly in 94 percent of all the health insurance markets is what we have to fight for.  I want to cover everyone, but they have to be able to afford it.  And that‘s what we need. 

SCHULTZ:  Yes.  There‘s a school of thought out there by the Democrats that, you know, we just can‘t let Obama fail on this, it would be terrible for his presidency, the Democrats would be viewed as a failure, they‘d get mopped up in the midterm next year, 2010. 

Are you saying tonight that you‘re willing to put next year‘s election on the line and have the president seen as a failure on health care reform and block this because of the public option? 

SESTAK:  First, I‘m willing to put my election on the line, as you well know, for the Senate race in Pennsylvania over this bill.  But second, leadership is not about this or that as sole options. 

Leadership is being principled compromise, not compromise that‘s borne of necessity because of special interests.  No. 

This president has to be part of the negotiations in the conference.  I have confidence in this president that now is the time where he actually enters the fray, hand on the tiller, on the steering wheel, and brings about something that does the demise of the health insurance monopoly.  And I believe that he can prevail and salvage what you‘re concerned about, his presidency, at the same time. 

SCHULTZ:  Yes. 

You know, Congressman, I‘m not trying to paint you or anybody else into an ideological box, because I don‘t think it‘s a leftist view towards health care for every American. 

SESTAK:  Absolutely right.

SCHULTZ:  I‘m very proud of that.  I think many people in the House and Senate are very proud of that, that the public option would offer up a vehicle to give real competition.  But Rahm Emanuel has been quoted as saying, you know, “Don‘t worry about the left,” meaning, take the deal. 

How do you feel about that? 

SESTAK:  I don‘t agree with Rahm.  This is not Rahm.  He‘s been appointed to a position.  We have been elected to a position, and we work for them. 

Look, you said it very well just now.  This isn‘t a left or right position.  The U.S. military, everybody had health care, and the dividends to this nation from healthy warriors whose families were protected as they were focused on the mission was immense.

If we don‘t achieve that same affordable coverage of everyone—I stress, “affordable coverage with everyone”—we won‘t prevail in our economy in the future.  So I don‘t agree with Rahm, just take it. 

That is just exactly opposite of what this president stood for and what I‘m into this for.  There is a better way to get a principled compromise on this that affects fair competition.  And that‘s what we have to have. 

SCHULTZ:  Congressman, I think progressives are doing a headcount right now, and you might be one of them here.  Are you willing to say tonight—and you‘ve told us that this isn‘t going to be a rubberstamp, you‘re going to fight for this thing. 

SESTAK:  Absolutely.

SCHULTZ:  Does that mean we‘re a long way from over?  I mean, does that mean that there is still a lot of dog in the fight for getting a lot more than what‘s on the table right now? 

SESTAK:  Absolutely.  Remember those words of John F. Kennedy, “The hour is late but the agenda is long.” 

This agenda is not over—yet—to take care of the middle class, the working family, the lower income who want to be part of our economic growth as healthy individuals.  So, no, I‘ll be in there slugging every day, Ed. 

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

SESTAK:  Thanks for having me, Ed.

SCHULTZ:  You bet.  Have a great holiday season. 

SESTAK:  Same to you.

SCHULTZ:  You bet.

I want to bring in now Terry McAuliffe, former DNC chair, a friend of mine and a guy who knows how to keep it in a fair way, a pretty level-headed dude. 

(LAUGHTER)

SCHULTZ:  All right, Terry.  You know, you went through this fight in ‘94. 

TERRY MCAULIFFE, FMR. DNC CHAIR:  Yes.

SCHULTZ:  Should the Democrats just take the deal, take what‘s being served up right now, and get to the next issue?  What do you think? 

MCAULIFFE:  Listen, I think the way you look at it is the process is now moving forward.  I‘m glad we got it through the Senate.  We have a lot of negotiating.  We have got to go to reconciliation. 

Listen, Ed, you and I have talked about this for a long time.  I‘m a huge supporter of the public option.  For me, how do we cover all these people?  How do we make sure the insurance companies are held accountable?  How do we get the prescription drug prices down?  Things that people care about and they need. 

So, let‘s keep the process going.  But we‘ve got a long way to go. 

The deal we see today is not the deal we‘re going to ultimately vote on probably some time in January.  So, let‘s keep this pushing along, let‘s keep the process moving. 

I don‘t believe we should have stopped it in the Senate, because if we didn‘t do it, Ed, I will tell you, it will be 15 years, having lived through 1993 and ‘94, lived through this one.  We are as close as we‘ve ever been. 

I commend President Obama for his leadership.  He‘s been in office 11 months.  He has pushed this, as he said he would do. 

Let‘s keep it going, and hopefully we get where we all want to be at the end of the day.  But let‘s keep this moving. 

SCHULTZ:  All right, you said reconciliation.  You believe that that should be entertained and that we should go down that road and make some of thieves conservative Democrats in the Senate side insignificant in the final gun? 

MCAULIFFE:  I don‘t --  you know, and I agree with Joe Sestak.  Let‘s not make this a left/right.  This is about covering all these people. 

I think we all have a very similar goal who worked hard to help President Obama get elected.  We know where we need to be at the end of the day, keep the process going.  It‘s going to be some battles and reconciliation, but this is the closest we have ever been, Ed, to covering all these people all over the country.  Thirty million people will be covered—yes. 

SCHULTZ:  Yes.  Terry, how would you handle progressives out there who are getting disenfranchised, disappointed?  I mean, I feel like we‘re kind of like into a sports culture right now.  We were favored by four touchdowns and we only beat them 16-13, so we‘re really not that good. 

MCAULIFFE:  Yes.  Listen, the game‘s not over.  And never give up. 

But, you know, don‘t get angry, don‘t get mad.  We‘ve got a long way to go.

SCHULTZ:  Yes.

MCAULIFFE:  Stay positive.  It‘s not about a lot of us.

Listen, Ed, you and I have got the greatest health care in the world.  It‘s not about you and me.  It‘s about those millions of people who have a pre-existing condition, who can‘t afford any insurance at all.

Let‘s keep working in a positive way.  We will make tremendous changes that relates to health care and cover on those people who are counting on us to move forward, move the agenda.

We still have millions of Americans without jobs.  We‘ve got to create, Ed, 150,000 jobs per month, every month for the next four years, just to get unemployment under 10 percent.

We have big challenges we‘re dealing with.  People are counting on us to fight for them.

SCHULTZ:  Yes. 

What would be your advice to President Obama throughout these final stages of the health care effort?  Because, you know, you‘ve got Congressman Cummings, who has come out and said that he thinks that President Obama should be involved.  Well, he said, day-by-day, hour-by-hour basis, because it‘s going to be on his watch, his legacy?

Should the president get that involved?

MCAULIFFE:  Couldn‘t agree more.  Every day, every hour, every second. 

We are now toward getting down to the end zone.  This is when it‘s going to matter.  And now President Obama has to get in to the day-to-day negotiations. 

You know, I lived through those eight years of—you know, and I lived through President Clinton‘ years and the fights that we had.  I remember the Deficit Reduction Act that we did in the early 1990s.  Not one Republican voted for it, and they said that our economy would ruin.  It ended up being the greatest economic expansion in our nation‘s history. 

So, I‘ve seen this process before.  President Obama has to get in and do it.  His heart is in the right place.  He‘s the people behind him, but the battle has really just begun. 

And let‘s keep the process moving.  Let‘s not end it and let‘s stay positive. 

We are—millions of people are getting out of bed every day counting on us to fight for them.  Let‘s do it and let‘s make sure we get as many people included in the process of health care. 

SCHULTZ:  Terry McAuliffe, no bogeys allowed.  Great to see you.  Good to have you on the program.

MCAULIFFE:  No pars and birdies, man.  You and me.  Just don‘t bring your son.  He‘s too good for us. 

SCHULTZ:  Good to have you with us, my friend.

MCAULIFFE:  Thanks, Ed.

SCHULTZ:  All right.  That‘s a great attitude to have right now.  We‘ve just got to stay focused.  It‘s never over until it‘s over.  And let‘s just keep charging. 

Coming up though, my next guest says the president has done more to demoralize progressives.  He‘s accusing him of souring the entire young generation from the political process?  Wow. 

And Rudy Giuliani has decided not to run for Senate.  I‘m going to have comment on that.  Says he wants to go south of the border. 

That‘s all coming up. 

Plus, we‘re going to be talking about “Psycho Talk.”  You‘re not going to want to miss it. 

It‘s all coming up on THE ED SHOW on MSNBC.  Stay with us. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. MICHAEL BENNET (D), COLORADO:  I‘m not happy that the public option was held hostage by people in our own party.  I do not support rewarding delay with special deals.

I‘m not naive about politics, but I expected more.  I will vote for health care reform because it‘s a step in the right direction.  But I will not go home and defend the actions of a Washington that‘s out of touch. 

(END VIDEO CLIP)

SCHULTZ:  That was freshman Senator Michael Bennet of Colorado telling it like it is on the Senate floor recently.  He summed up exactly how a lot of Democrats are feeling right now.  We just expected more. 

Health care reform‘s been gutted to win over Joe Lieberman.  Now we find out that the White House didn‘t even try to push him to the public option. 

This blog on “Huffington Post” really caught a lot of people‘s attention, including mine.  “Obama, like so many Democrats in Congress, have fallen prey to the conventional Democratic strategic wisdom that the way to win the center is to tack to the center.  But it doesn‘t work that way.”

“You want to win the center?  Emanate strength, emanate conviction, lead like you know where you‘re going.” 

Drew Westen is a professor of psychology and psychiatry at Emory University.  He‘s also a political consultant and author of “The Political Brain: The Role of Emotion in Deciding the Fate of the Nation.”

Professor, nice to see you again.  Good to have you on the program tonight. 

You seem to have somewhat of a dismal view right now of where this Obama movement and Democratic Party is.  If you could explain your position a little more. 

DREW WESTEN, PROFESSOR OF PSYCHOLOGY AND PSYCHIATRY, EMORY UNIVERSITY: 

Well, this is what I guess you might call friendly fire.  I think the mistake a lot of people are making is seeing this as demoralization just of the left, that the demoralization‘s actually right in the center as well. 

The biggest drop in the president‘s support has been from people in the center.  And those are the people who expected different. 

They expected that when the president said we‘re going to have—that the rate of foreclosures was going to go down, it was going to go down, it wasn‘t going to be a record year for bankers.  And when he said credit card rates, we‘re not going to let those credit cards rip you off anymore, they didn‘t expect to see their credit card interest rates triple.  That‘s the kind of stuff...

(CROSSTALK)

SCHULTZ:  But you say emanate strength, emanate conviction.  Do you think the president doesn‘t have either one of those? 

WESTEN:  You know, I think it‘s really hard to know where he stands on just about anything at this point.  I think, you know, apparently, when he went to the Senate a couple weeks ago and exhorted the senators, vote for health care, you‘ve got to vote for health care reform, there were two issues that were on the table that were really the ones that were stopping people.

And one was abortion, and that awful abortion provision that was put in to basically take away people‘s right to make decisions about their own families, when to start their own families based on somebody else‘s faith and values.  And the other one was the question of, do we give people an option other than one that was created by the insurance companies? 

Those are the two big questions.  The president never mentioned either one of them.  He just exhorted, he just said, vote. 

That‘s not leadership.  Leadership is when you get in the middle of the fray and you say this is where I stand.

SCHULTZ:  So how does Obama, the president of the United States, bring his party back to the positive side of the ledger when it comes to just thinking like we can get something done if so many people feel somewhat disenfranchised, depressed?  It‘s a tough December, it seems like.  How does he turn that around, in your opinion? 

WESTEN:  Well, you know, I think there‘s two ways to do it. 

One of them is that he really needs to step up, now that the bill‘s going to pass—has passed the Senate—it‘s going to pass the Senate, a bill is.  And we‘ve got a bill in the House.  It‘s time now that they have to reconcile those two bills. 

This is the time for him to stand up and say, under an Obama administration, we are not taking away abortion rights that have been there for the last 40 years, 30 years -- 35 years.  We‘re not going to make things up. 

And just a second thing, Ed, is that he needs to step in with jobs and simply say, you know, we‘ve lost over six million jobs since this recession started.  It‘s time to put people back to work.  And that‘s what the American people want to hear. 

(CROSSTALK)

SCHULTZ:  Well, he‘s trying to do that.  I mean—I think he‘s trying to do that. 

He had the stimulus package.  It‘s slow to implement.  It‘s going to take at least a couple of years.  He was up front about that. 

He‘s working with—he met today with community bankers.  He‘s trying to get the purse strings loosened up to small businesses. 

I think the president‘s doing that, but I think that right now, a lot of Democrats are falling prey to the mindset that, you know, maybe this isn‘t the guy and I‘m going to give up and throw in the towel.  And I‘m hearing you say that. 

Now, before we go to break, I want to play this sound bite of President Obama back in September talking about the public option, and if it‘s not over, why would we expect anything less? 

Here it is.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I‘m not going to back down from the basic principle that if Americans can‘t find affordable coverage, we‘re going to provide you a choice. 

(APPLAUSE)

And I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the coverage that you need.  That‘s a promise that I will make. 

(END VIDEO CLIP)

SCHULTZ:  Professor, what makes you think that that president won‘t show up at the negotiating table and maybe get his own way of getting this through?  And you heard Terry McAuliffe say earlier, reconciliation is still a possibility. 

What do you think? 

WESTEN:  I sure hope he does show up.  The problem is that he hasn‘t shown up yet.  And this is pretty late in the game, and the public is now actually tipping away against health reform.  And you don‘t want to lose your message that way.  You don‘t want the message to get away from you. 

And the Republicans that did a great job over the summer of making this all about a government takeover, bureaucrats between you and your doctor, death panels, and the White House just didn‘t do its job of staying on message and reminding people we have death panels right now.  They‘re called insurance companies.  And that‘s what he needed to do. 

SCHULTZ:  Yes.

Professor Westen, good to have you on tonight.  Thanks so much.

WESTEN:  It‘s great to see you.

SCHULTZ:  You bet.

Coming up, Rudy Giuliani is so busy giving Tiger Woods advice and making deals in Rio, that he doesn‘t have time to serve the people.  So we‘re going to get to the bottom of that in just a moment. 

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

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

And in case you missed it, it looks like former New York City mayor Rudy Giuliani would rather line up deals in Rio and give advice to Tiger Woods than get a real job.  It was speculated that he would run against incumbent New York Senator Kirsten Gillibrand next year, and the scary thing is that he was actually leading in the most recent polls by almost 10 points. 

But a source close to Rudy says that he‘ll be pursuing other business opportunities in the private sector, or, as one of his friends told “The New York Daily News,” simply enjoying his life. 

Now, that sounds like a good idea to me, considering the fact that Giuliani isn‘t too great at running for national office.  He was quite possibly the worst presidential candidate in modern history.  It cost him $59 million to get the vote of exactly one GOP delegate. 

That hurts. 

Well, Rudy, good luck in the private sector.  You‘ll get her done.  I hope this works out for you a heck of a lot better than your presidential campaign did. 

Coming up, if you think your day job is really bad, wait until you hear what Bill Press has just signed up to do.  He‘s Bernie Sanders‘ newest intern. 

He‘ll explain it in just a minute. 

Plus, the Senate has become just a full-blown fight club these days.  And historically speaking, really, this is nothing.  Doris Kearns Goodwin is going to have a lot of stories about loaded guns and spinal injuries from chambers of the past.

You‘re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. TOM COBURN ®, OKLAHOMA:  What the American people ought to pray is that somebody can‘t make the vote tonight. 

SEN. HARRY REID (D-NV), MAJORITY LEADER:  Feelings are high and that‘s fine.  Everybody has very strong concerns about everything we have done and have to do.  As I‘ve said to a number of people, Rodney King, let‘s just all try to get along. 

(END VIDEO CLIP)

SCHULTZ:  Majority Leader Harry Reid making an appeal for some civility in the final hours of the Senate health care debate, especially after that outrageous prayer request from Oklahoma Senator Tom Coburn.  But it‘s not just the Democrats feeling slighted.  Conservatives are up in arms as well about Democratic Senator Sheldon Whitehouse‘s floor speech not too long ago about the opposition. 

(BEGIN VIDEO CLIP)

SEN. SHELDON WHITEHOUSE (D), RHODE ISLAND:  They are desperate to break this president.  They have ardent supporters who are nearly hysterical at the very election of President Barack Obama: the birthers, the fanatics, the people running around in right wing militias and Aryan support groups.  It is unbearable to them that President Barack Obama should exist.

(END VIDEO CLIP)

SCHULTZ:  Joining me now is presidential historian Doris Kearns Goodwin.  Doris, nice to see you tonight.  Great to have you on. 

DORIS KEARNS GOODWIN, PRESIDENTIAL HISTORIAN:  Thank you. 

SCHULTZ:  You bet.  I think a lot of Americans are wondering if maybe we need a reminder that we‘ve been down this road before, maybe even worse.  What about that? 

GOODWIN:  Yes, there is no question, I think, that in recent memory the offense of language and the poisonous atmosphere seems worse than we can remember.  But way back in the 19th century, I can tell you a couple stories. 

First of all there was a congressman from South Carolina in the midst of the slavery debate that came on to the Senate floor, where Senator Sumner of Massachusetts was sitting at his seat.  He took a heavy cane, hit him on the head so hard that his brain was injured.  He had spinal cord injuries.  It took him three years to get back to the Senate.  That‘s one story. 

There‘s another story where one senator called another senator a coward.  And the guy who was called a coward then took out his pistol and aimed it at the other senator, only to be restrained by his fellow senators. 

Yet another time, fist fights broke out when one senator said, “you‘re lying,” and then the fist fights occurred.  So physical violence was much more. 

But the interesting thing, Ed, was offensive language was considered, you shouldn‘t do that.  You can go around fist fighting, drawing guns.  But they had something called unparliamentary language, and people were formally censured for saying “X” has lied, or “Y” is a malicious liar.  Those kind of things are now routinely said on the floor and are not getting censured. 

SCHULTZ:  OK.  Doris, let‘s talk about where the country was a year ago, and where the mind set of the country is right now.  If I were a political professor, policy-sci professor some where, I might write a book on, so to speak, the rise and fall of the Barack Obama phenomenon.  I mean, this guy beat the Clinton machine.  He energized a whole group of young liberals in this country, the 20-somethings that showed up. 

Where are they now?  How would you explain that?  I find it very interesting that on this one issue of health care, you look at every progressive blog, every progressive website today, you see all the talk about sell-out, who bought what.  There is a mind set now that the Democrats now are no different from the Republicans.  How does Obama—how does he overcome all that?  And how has this year been for him in that regard? 

GOODWIN:  You know, when you think about it, people in the country did assume we had a transformative election, which meant that the country was going to be mobilized to push in at the Congress.  I mean, the times when we‘ve had transforming times in our history, the progressive movement at the turn of the 20th Century, the New Deal, the Great Society, were the times when you had an activist citizenry.  The campaign seemed to promise that.

I think what happened is, when Obama got in office, the Congress was still the Congress of the past.  There wasn‘t a transformative mood in the Congress.  It‘s partly because of the way the institution is working these days.  They‘re not friendly across party lines.  They don‘t stay in Washington on the weekends.  They go home.  The staffs are so large that they don‘t know one another as friends.

So it got much harder for him to push that Congress.  Then the country seems to have fallen back into a more passive majority than we thought would have been there with the election.  So it‘s been a problem with him, which I think is the reason why he‘s got to have some success to mobilize that country, and then go strong after financial reform, for example, get those bankers if he can get the health care through as a first beginning. 

SCHULTZ:  So it will be a heavy lift and it will be a remarkable feat if the president can turn this feeling around between now and the midterm.  Is that safe to say? 

GOODWIN:  You know what?  I was looking at what happened to JFK at the end of his first year.  It was interesting, he came in as a cocky young guy, and said, this isn‘t going to be so hard.  A year later, oh, my god, it was so much harder than he thought.  The Cuban problem, the Bay of pigs.  He had a difficult summit in Vienna.  Yet he turned it around in the Cuban Missile Crisis right before the midterm elections. 

It is a long way between now and the midterms.  We‘ve seen that happen with other presidents before.  So we take it every day as if this thing is falling apart.  But I think Obama has a sense of process and a sense of movement.  If the health care thing gets through, I still believe it is a pretty important measure, even as it is, even as disappointing as it is to many of us. 

SCHULTZ:  Doris Kearns Goodwin, great to have you on.  Thanks so much.

GOODWIN:  You‘re welcome, Ed. 

SCHULTZ:  Thank you.  For more on the stakes that the president is facing right now, let me bring in nationally syndicated radio talk show host, my friend Bill Press.  Bill, you hear it on the radio.  You get a lot of e-mails, a lot of communication.  This has been a very depressing December.  Has it not?  Maybe we have to get out of the doldrums somehow.  Maybe I‘m over-stating it.  What do you think? 

BILL PRESS, RADIO TALK SHOW HOST:  No, I think you‘re exactly right.  You know what‘s sad?  What‘s sad is that with all of the power that Democrats have in the House and in the Senate and in the White House, that, given the power of the lobbyists and given the timidity of the White House and given the total intransigence of the Republicans, that the best we can come up with is a Senate bill which is not really worth writing home about.

But Terry said it, and you‘ve been saying it, it is not over, Ed.  We go into conference.  Nancy Pelosi is going to be there.  We have a good chance in conference of getting a stronger bill.  I think what has to happen is the president does have to get involved. 

Ed, I‘m not the sports guy, you are.  But this is the final quarter, certainly.  These are the last few seconds.  We‘re neared the touchdown zone.  The president‘s got to take us across. 

SCHULTZ:  Well, do you get a sense that maybe liberals and progressives in this country, Democrats, don‘t understand the magnitude of what‘s unfolding right here.  I might be one of them.  I‘m kind of greedy on this whole deal.  I‘ve done enough town hall meetings.  I‘ve taken enough phone calls.  I think I know where the public is.  You‘re in that same arena, too. 

And—but I just really feel that we‘ve got a disgruntled sports team on our hands right now.  We‘re not winning by enough. 

PRESS:  No, we do.  We do.  People are really disappointed, really sad.  I also think, Ed—Doris indicated to this, Ed, that people had the feeling that maybe Obama could do everything.  He was a miracle worker.  He didn‘t even need their support.  We have to keep the pressure on. 

SCHULTZ:  How does Obama win the base back?  What do you think?  You got Rahm Emanuel out there saying don‘t worry about the left.  What?  You know? 

PRESS:  I think he gets the base back by getting involved right now.  Ed, I was at the White House today.  I heard Robert Gibbs say, we would not be this far along in health care without the president‘s active involvement.  I‘m sitting there thinking, imagine where we could be today with the president‘s active involvement.  We would have a public option plan in this bill in the Senate.  And we will have one in the final bill, I think, if the president gets down there.

I don‘t know if it‘s allowed, but walk right into that conference room and be a major player.  If he does that, he‘ll get us all back. 

SCHULTZ:  I know your radio show‘s doing gang busters, doing just fine.  What‘s this deal you‘re going to be an intern for Bernie Sanders?  By the way, are you getting paid for it? 

PRESS:  No!  It‘s a non-paid endeavor.  Can you think of any better job?  Quickly, Ed, here‘s what happened.  I cover the White House.  I do my radio show.  I wanted to cover the Capitol.  I applied for a Congressional pass.  The Senate Radio TV Gallery turned me down, Ed, because I express an opinion!  You know who voted against me?  Salem News Network, Fox News and al Jazeera.  That‘s like being called ugly by a frog. 

So I went to Bernie and said, hey, there‘s more than one way to skin a cat.  How about if I become one of your interns.  Then I‘ll have Congressional access wherever I want to go.  I am now the official Bernie Sanders intern.  I‘m going to be there starting the first of the year, covering the Congress every day, and reporting to you. 

SCHULTZ:  Let‘s clear the beach here for the audience tonight.  Let‘s make sure that if you had to call them like you see them, and be a reporter, you could do it.  Let‘s not leave that behind. 

PRESS:  No, no, I‘ll call them straight.  But I might also express my opinion along the way. 

SCHULTZ:  Bill, good to see you.  Thanks.

PRESS:  Happy holidays.  Merry Christmas.

PRESS:  You bet.  You too.  For more, let‘s bring in our panel tonight, Joe Madison, XM radio talk show host, and Ernest Istook, who I don‘t think could qualify for one of those passes, but he‘s still a good guy, former Republican congressman at the Heritage Foundation.

All right, Ernest, how do you—we‘ve got a strange thing unfolding here.  We‘ve got a lot of lefties over there actually siding with every Republican saying kill this bill.  Where does that leave the White House in your opinion? 

ERNEST ISTOOK, HERITAGE FOUNDATION:  I think the left and the right both correctly see that Washington is out of control.  It‘s not about principle.  It is about politics.  The problem is people are trying to sell contradictory things. 

They say we‘re not going to cut Medicare, but we are going to cut Medicare.  We‘re going to make insurance more affordable by ordering you to buy it under penalty of law.  We‘re going to save money by spending more. 

You have all these contradictory promises, and the American people are not buying it.  That‘s the source of the problem.  People do not believe what they‘re hearing.  That‘s why the support for the Congress, for the president, and for this health care plan keeps dropping down lower and lower and lower. 

SCHULTZ:  What about those points, Joe? 

JOE  MADISON, XM RADIO TALK SHOW HOST:  I don‘t think it is playing.  I don‘t know what kind of calls he‘s getting, but I can tell you people want this public option.  There‘s no ifs, ands, or buts about it.  Here‘s my argument, and this is my charge to Nancy Pelosi—and we will tell how serious she is by who she appoints to the conference committee.  If you‘ve got the likes of John Conyers and some very heavy hitters, Ed, then we know that the House is serious about the public option.

And so we‘ll have to watch who Reid appoints to the Senate side.  But I‘m going to have my eyes on who Nancy Pelosi puts on her conference committee, because that will be a signal to our side. 

SCHULTZ:  Joe, it seems like the White House, if you listen to Rahm Emanuel, is of the mind set, take the deal; don‘t worry about the left; everything‘s going to be just fine; pushing this idea we‘ve got to do what seven presidents before him couldn‘t do.  Does it hurt the president if he doesn‘t get this done?  Many think absolutely it is going to destroy his presidency. 

Is it worth it, at this point, if that be the case, to push this hard for the public option or just take what you can get and move on?  What do you think? 

MADISON:  I‘m going to say this, and it will be on Youtube somewhere:

Rahm Emanuel should resign.  It is time for him to go.  I think he has not served the president well in this argument.  He needs a new individual up there. 

Now, do they care about what I think?  No.  But that would be my voice today.  If Rahm Emanuel keeps talking like this, then he is going to limit Barack Obama to one term.  And this issue, despite what comes out—because you‘re not going to get any Republican votes, we know that.  But we cannot afford to have an inter-fight with Democrats on this.  There are enough good points, contrary to what my friend said on the right, to sell this to the American people. 

SCHULTZ:  Ernest, can you still get Waterloo for President Obama on this via the abortion issue? 

ISTOOK:  The challenge here, of course, is that, again, both left and right are mad because there is nothing that is so messed up that Congress cannot come in and make it worse.  I saw it during the 14 years that I served in Congress.  I see it continuing right now. 

The American people don‘t like this idea of selling votes.  You had an amendment offered today, unanimous consent request, by the junior senator of Nebraska, Senator Johanns, to take out all this extra money for Nebraska, for Louisiana, for Connecticut, for New York State, all the others that have piled on. 

SCHULTZ:  He knows what kind of problem that is going to be for him back in Nebraska.  Ernest and Joe, good to have you with us tonight.  Always a pleasure. 

ISTOOK:  Merry Christmas. 

MADISON:  Happy holidays and merry Christmas. 

SCHULTZ:  Absolutely. Coming up, the Christmas season may be getting to the Beckster.  He says he sees halos every time he looks at President Obama.   We‘ll check his vision next on Psycho Talk.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  In Psycho Talk tonight, Glenn Beck is once again returning to the zone.  During the Beckster‘s special “Year in Heroes and Story” show, he gave us this dandy. 

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS ANCHOR:  I‘m a big visual guy.  If you look at the way Barack Obama was imaged, he was as a savior.  He was—you look at it now, anybody notice you watch the newspaper and you watch the photos coming out of him in the White House, almost always they‘ll have a shot of him with the seal of the president.  Anybody notice that?  It almost looks like a halo.  They‘ll take a shot from the side.  He‘s standing there and it looks like a Russian icon. 

(END VIDEO CLIP)

SCHULTZ:  Now Glenn, you said you‘re a visual guy.  So this shouldn‘t be a shock to you: the reason the president is often photographed with the presidential seal nearby is because he‘s the president.  Get it? 

And, by the way, what is it about this that reminds you of the Russian icon?  And it doesn‘t seem to look like a halo to me.  Hey, Mr. Visual guy, I think it‘s time that maybe you should use your News Corp. health care plan and get your eyes checked out. 

You mistake the seal of the presidency for the Russian icon is simply cross-eyed Psycho Talk.

Coming up, the Senate Republicans have raised the white flag and now plan to make it on home in time for Christmas.  Sam Stein will tell us just what the plan is at this point when it comes to stuffing the stocking.  That‘s next on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  In my “playbook” tonight, the fight to the finish, I guess you could call it.  The Senate cleared to set a key procedural hurdle on the 871 billion dollar health care bill today.  Republicans finally gave in on their stall tactics.  The final vote that was scheduled for 7:00 pm on Christmas eve has now been moved up to 8:00 am, just in the nick of time for everybody to get home for the holidays.  And if you want my opinion on this, I‘ll give it to you. 

What happened was that somebody in Mitch McConnell‘s office said, hey, boss, the flight schedule out of Reagan National doesn‘t look very good.  We might as well just move this vote up to 8:00 am, because then you could probably get a flight out and get back to Kentucky by probably noon.  OK? 

Sam Stein, “Huffington Post.”  I‘m taking a guess at that.  But I kind of feel that‘s what happened.  Sam, good to have you on tonight.  Tell us how this all got moved up. 

SAM STEIN, “THE HUFFINGTON POST”:  Well, I think you‘re right.  I think there is a bit of pent-up frustration on the Hill about how this process is playing out.  I think Republicans are beginning to see the tea leaves here.  They don‘t have the votes to stop it.  Regardless of how many times Senator Coburn is praying at his bedside for something ill to happen one of the Democratic senators, they‘re not going to stop this thing.  So why delay it any further?  Let everyone go home for Christmas, and wait for this thing to come back from Congress and start another day.

So they moved it up a couple hours. 

SCHULTZ:  OK, Sam, is the White House listening to the base at all?  Are they shaken at all that maybe this isn‘t going to fly?  And the arrogance coming from Rahm Emanuel is don‘t worry about the left?  How is that playing out, you think? 

STEIN:  Surprisingly, they seem to not be concerned about it.  I pressed Robert Gibbs today about comments that Senator Lieberman had made, in which he told my colleague, Ryan Grim, that he‘d never once been asked by the administration about his position on public option.  Think about that.  Here‘s the chief critic of the public option who was never once approached by the president or anyone on his staff by his opposition?  That suggests that the White House clearly wasn‘t invested in moving the public option through the Senate.

I asked Robert Gibbs to respond.  He said, I don‘t want to rehash any of that.  Then he continued to assert that he and the president had done everything they could to get the public plan passed in the Senate. 

All this goes to tell you that the White House isn‘t concerned about progressive backlash as much as you might thing.  They, in the end, think that progressive will rally around the idea reform and that it will get scored as a victory for everyone, and that the base will come home. 

SCHULTZ:  Well, there may be some heat in the heartland, because in the state of Wisconsin, Russ Feingold is getting a lot of commercials thrown at him not to vote for this bill.  There is a real strong under-current out there that lefties are a little upset about this.  They may not be getting the memo to get in line.  How is it going to play out?

STEIN:  The thing is—what I‘m looking for is not really with health care, per se.  I think in the next legislative battles, people like Feingold, Bernie Sanders, Harkin, Brown and others, they‘re going to say, you know, we got rolled, in the end, on this.  We took a big pill and we swallowed it.  This isn‘t going to happen again.

When you look at further down the road, whether it is appropriations, whether it‘s education, expect the left, the progressive community to not compromise as much.  That could actually frustrate the Obama agenda even further.  By that point, the president‘s hoping that his popularity is rebounded to the point of pre-health care reform debate.  And maybe he won‘t need to go through all these harsh legislative compromises. 

Feingold‘s statement on Sunday night was pretty telling, where he cast blame for the failure of the public option on the president‘s shoulders.  It really takes a lot for a senator to go out there and say it that deliberately.  So maybe there is some pent-up frustration. 

SCHULTZ:  Another subject out there tonight is that the president is doing everything he can to create jobs.  I think the only way you can do it is to get the banks lending money.  He had the community bank leaders today at the White House.  I think this is a real positive move, and somehow the Obama administration‘s going to have to figure out a formula to give some back-up to these community banks, because people do want to borrow money to jump-start the economy and start hiring again. 

The president‘s got a lot on his plate.  But the fact that he‘s paying attention to what a lot of economists are saying when it comes to the involvement of the community banks I think is heading things in the right direction.  This recovery, Sam—and  we‘ve talked about it—if the jobs don‘t come around, where does that leave the Democrats in 2010? 

STEIN:  Dead in the water.  It is as simple as that.  If unemployment‘s still at 10 percent, expect huge repercussions in the polls.  The community banks angle is one that I know you‘ve been focused on.  I have as well.  I talked to one of the bankers in the meeting.  It‘s clear that they, from the very get-go, said if you give us money, we‘ll get it out the door.  That‘s what community banks do.  They lend.  They give to small businesses. 

The administration, I think, missed an opportunity when it structured its banking policy, the resuscitation of the financial community, around the big banks.  Now what you‘re seeing is a real effort to revisit that issue.  He had community bankers in today. 

You know, the Tarp is so toxic in name and in structure that a lot of these bankers simply don‘t want to take the government bailout.  They think it has too many restrictions.  They think it‘s too toxic for them to get out the door.  And it is becoming a real problem. 

SCHULTZ:  If he can get money to small businesses, this will all turn around.  Sam Stein, “Huffington Post,‘ always a pleasure. 

STEIN:  Thanks, Ed.  Sorry, let me say one thing.  It looks like a halo around your head.  I think Glenn Beck‘s on to something.  OK? 

SCHULTZ:  As long as my wife thinks there‘s a halo around my head, I‘m a happy camper.

Tonight in our phone survey, I asked do you think Nancy Pelosi should demand a public option?  We‘re talking about conference committee.  We‘re talking about a fight in the House.  Ninety two percent of you said yes; eight percent of you said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information on THE ED SHOW, go to Ed.MSNBC.com.  Check out my radio website at WeGotEd.com.  We‘re on XM167, noon to 3:00.  “HARDBALL” with Chris Matthews starts right now.

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

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