updated 1/5/2010 11:24:11 AM ET 2010-01-05T16:24:11

Guests: Alan Grayson, Roger Cressey, Robert Reich, Eliot Spitzer, Maxine

Waters, Jonathan Alter, Bill Press, Ron Christie

ED SCHULTZ, HOST:  Good evening, Americans.  And welcome to THE ED SHOW tonight from New York, out of the snowstorm from the Midwest.  I think everybody was at the Minneapolis airport this morning. 

Security is on our mind tonight.  Two top stories that hit my hot button.

Of course, Dick Cheney thinks that he has unlimited license to go out and attack the president of the United States no matter what he does.  I think his security plan was this disastrous war in Iraq.  You know, I want Democrats to be aggressive in 2010 and go after this guy every time he opens his mouth. 

Health care—Ping-Pong time.  Nancy Pelosi is bypassing a formal conference committee.  And I just want to know if the progressives are really going to be represented down the stretch and fight hard against the Senate bill and get what we really need. 

And, of course, “The Drugster” is another hot button story tonight.  He got a dose of, I guess you could say, the Democratic health care plan in Hawaii, and I love it.  Got a lot more to say about this coming up in “Psycho Talk.”  

But first tonight, all right, the big story over the holidays. 

This guy gets on a United States-bound plane for Detroit, right?  He‘s got explosives in his underwear.  Now we‘re in he pat-down culture.  How far can we feel somebody up in an airport? 

Dick Cheney couldn‘t be happier about all of this for some reason.  The statements he‘s put out since that terrifying incident that can‘t be described as anything other than gloating, that‘s where Cheney is. 

Cheney claims his criticism comes from reading the national security briefs and knowing just how many threats there are out there against the United States.  What a bunch of bull. 

Here are Cheney‘s own words: “Why doesn‘t (President Obama) want to admit we‘re at war?” Cheney says.  “Because it doesn‘t fit with what seems to be a goal of his presidency—social transformation, the restructuring of American society.”

Now, think about that, social transformation, restructuring of American society. 

Now folks, you know what that is?  That is Tea Party talk, is what that is. 

Obama‘s domestic policy agenda has absolutely nothing to do with a guy going through airport security in Amsterdam.  But Cheney is, again, going after the president of the United States with his old tactics, attacking Barack Obama any way he possibly can.  But we‘re not allowed to ask Dick Cheney for any real questions on about how things went on his watch because we got hit on his watch. 

So here‘s the deal.  They want to see Obama fail at keeping this country safe. 

I‘ve said this for a long time and I believe it.  Do you agree with me now? 

Now, then there‘s “Waterloo” Senator Jim DeMint of South Carolina. 

He‘s been making the rounds echoing Cheney‘s attacks. 

(BEGIN VIDEO CLIP)

SEN. JIM DEMINT ®, SOUTH CAROLINA:  The concern that a lot of us have had over the last year is we‘ve even dropped the word “terror.”  It‘s man-caused disaster, where we hesitate to call acts “acts of terror.” 

There‘s no question that the president has downplayed the risk of terror since he took office. 

The president has downplayed the threat of terror since he took office.  He doesn‘t even use the word anymore. 

(END VIDEO CLIP)

SCHULTZ:  Senator, you need to watch the news.  We‘re going to send you a copy of THE ED SHOW.  The president spoke extensively about terrorism in his Nobel speech, his speech at West Point and a mosque in Turkey over the summer.  He also used the term this weekend, Senator. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  All of those involved in the attempted act of terrorism on Christmas must know you, too, will be held to account.  Our nation is against a far-reaching network of violence and hatred, and that we will do whatever it takes to defeat them and defend our country. 

(END VIDEO CLIP)

SCHULTZ:  Amen to that. 

DeMint is also criticizing the president for dragging his feet on the TSA nominee, Erroll Southers. 

(BEGIN VIDEO CLIP)

DEMINT:  Well, unfortunately, the president waited eight months to even nominate a head of the TSA, and then they wanted him past without a good vetting process.  They wanted—they didn‘t want any debate or a roll call vote on the floor.  And as it turns out, there are some things about Mr. Southers that need to be considered. 

(END VIDEO CLIP)

SCHULTZ:  Senator DeMint is the one that‘s keeping Southers from being confirmed because he doesn‘t like his position on unions.  See, it always comes back to the money, doesn‘t it, folks? 

I don‘t know what being a union supporter has to do with being qualified to protect America.  If DeMint cared about security, you would think that he‘d make sure that people protecting our airports are getting well paid.  Like, maybe some health care, maybe some time off, maybe they‘ll want to keep this job because it‘s a good job.

Motivated employees are very important in the work place in America.  But you see, the Republicans, they don‘t want to spend any money on security.  They want to talk their way into the championship on all of this, if I may use a sports term. 

The system failed.  We all know that.  But it was caught by some people in place.  Right?

Now, what we need to find out is, where can we fix this?  So, no matter where Obama starts, the Righties aren‘t going to like it.  So we‘ve got to live with that.  I say the Democrats have got to go on the offensive and not become the punching bag in all of this. 

Get your cell phones out, folks.  Want to know what you think about this narrative that is starting to develop in 2010. 

Tonight‘s text survey is: Do you think the White House should fight back harder against Dick Cheney‘s attacks?  Text “A” for yes and “B” for no to 622639.  We‘ll bring you the results later on in this program. 

Now, I want this year for the Democrats, for the liberals—in fact, I should announce tonight that I‘m planning on being a lot more liberal this year.  I wasn‘t liberal enough last year. 

I need to get more liberal.  I need to get more aggressive.  So I‘m going to do that in 2010. 

But I want folks to tell it like it is.  That‘s what this is about. 

We can‘t allow Dick Cheney to go out there and just throw it up there on the wall and let‘s see if it sticks, because that‘s basically where he‘s at.  And I do believe that there are a group of congressmen, some representatives, that are willing to take it to them.  And these are the people who are actually feared by the Republicans. 

They‘re going to be going after this guy, Alan Grayson.  They‘re going to be going after Eric Massa, who was on this program that really started this whole thing that‘s in the media right now because he went after Dick Cheney on this show and is not going to take his smoke anymore.  This is what the Democrats have to do.

Joining me now is Congressman Alan Grayson.  He‘s on the “tell it like it is” team in the Ed division.

Congressman, great to have you with us tonight. 

REP. ALAN GRAYSON (D), FLORIDA:  Thanks.  I‘m so happy to be your first guest of the year. 

SCHULTZ:  Well, there‘s a reason for that, my friend.  And it‘s great to have you with us.

All right.  I get this feeling that the Republicans have been waiting for this conversation for a long time because, in a sense, their political security is security.

What has to happen in 2010 to make sure that the Democrats and the liberals of this country really communicate their message, Congressman?  What do you think has to happen? 

GRAYSON:  They failed us when they were in charge.  Here‘s an interesting document.  This was from five weeks before September 11th.  I think that Mr. Cheney‘s familiar with it.  “FBI information indicates patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks, including recent surveillance of federal buildings in New York.” 

This is a document that the president and Vice President Cheney got five weeks before September 11th, and the president went on vacation in August.  So what does that tell you?  Who‘s issue is this, this security issue?  Is this a Republican issue or what?

SCHULTZ:  No, exactly.  And it‘s not right, it‘s not left, it‘s center.  But the Republicans have taken it upon themselves to politicize anything.  I think they have been waiting for this moment. 

GRAYSON:  They failed us.  The greatest attack of terrorism in American history happened on their watch.  We have nothing to be defensive about. 

SCHULTZ:  So, is there going to be some conversation behind closed doors amongst Democrats?  And I think supporters want to hear this, that you‘re not taking this anymore, that this has to... 

GRAYSON:  No.  I mean, look, certainly not for Cheney.

My goodness.  When Ross Perot was talking about that crazy uncle in the attic, I think he was talking about Cheney.

(LAUGHTER)

SCHULTZ:  There‘s no downside to going after him.  And the Democrats are only going to rally their base.  And the base, you know, I think at this point, a little disgruntled when it comes to health care and maybe some other issues.  But this is one that we absolutely cannot let slip away.

What would you say to Dick Cheney to his face if you had the chance? 

Because he doesn‘t present himself to anybody that speaks the truth. 

GRAYSON:  You know, honestly, I think he‘s just trying to prime his book tour, his upcoming book tour.  He got $2 million to write about his memories, and he‘s trying to stay in the public eye in order to push sales for his book.  That‘s what I think. 

I‘m wondering, though, who is doing the introduction to his book.  Is it Mephistopheles?  I don‘t know.  Maybe it‘s Satan. 

SCHULTZ:  Congressman, are you ready to be attacked by the Republicans in 2010?  What kind of re-election... 

(CROSSTALK)

GRAYSON:  I am attacked by them all the time.  But as Franklin Roosevelt said, I welcome their hatred. 

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

You are definitely on the right track. 

GRAYSON:  Thank you, Ed.

SCHULTZ:  Appreciate your time. 

For more, let me bring in NBC News terrorism analyst Roger Cressey for the serious brass tacks and nuts and bolts of all of this. 

Roger, how safe are we?  I mean, I went to the Minneapolis airport today.  It looked like everybody in the world was getting out of there and coming to New York.  The lines were long and it was tense. 

I mean, there were people that were, you know, knowing that the—I guess the intensity is really increased.  I thought the TSA definitely has been spoken to.  They all got the memo.  And it was a different atmosphere. 

Can this make a difference, in your opinion? 

ROGER CRESSEY, NBC NEWS TERRORISM ANALYST:  Well, Ed, the bottom line is we are safe.  And in the immediate aftermath of a failed attack, everyone‘s vigilance is higher, the government is going to battle station.  TSA screeners are certainly at a heightened state of awareness of what they are going to do. 

The issue is not in the immediate aftermath.  The issue is, six, 12 months down the road, have we corrected the wrongs that allowed the attempted attack to happen on Flight 253 to ensure it never can happen again?  And are people putting in new policies and procedures to be adaptive to how the enemy and the adversary is changing its approach to us? 

Now, a lot of people have said, Ed, ,that the system is broke and that‘s why we nearly lost Flight 253.  It‘s not that the system is broke.  It‘s that the system did not adapt to how the enemy has been adapting.  So we need to be more nimble and more proactive, and I think that‘s the biggest lesson learned from this failed attack.

SCHULTZ:  Is it hard to bring all of this information together and run it up the flagpole to make sure that it‘s acted on?  Is this a bridge too far or is this just a matter of being brilliant on the basics? 

What about that? 

CRESSEY:  Well, I think, Ed, you put your finger on a big problem. 

When I was at the White House doing counterterrorism, the amount of information we had then pales in comparison to the sheer volume of data that now the government is bringing in on counterterrorism issues.  So, you were constantly sifting through, separating the wheat from the chaff and trying to determine what really matters.

What people are doing on a daily basis at the CIA and at the White House and elsewhere is triage.  They‘re looking at this threat data.  They‘re looking at other pieces of intelligence and saying, all right, what is the most important, what is the most immediate?  How do we handle it?

And still, nine years after 9/11, there are still problems.  There are both human error problems, some which we‘ll never fix, and then there are technological issues, which is how do we ensure better technology is used by the community to improve information sharing and minimize the chances of human error over the course of analyzing threats? 

SCHULTZ:  And finally, Yemen.  If it wasn‘t on the radar screen of every American, it is now.

What are we doing different in dealing with Yemen that maybe we weren‘t doing during the Bush administration?  What is the Obama administration doing, and is there a greater focus there than what maybe has been given credit?

CRESSEY:  Well, I think the Obama administration came in and saw Yemen as one of the top three concerns regarding al Qaeda‘s potential.  And what we‘ve seen over the past 12 months is greater cooperation. 

We‘ve seen joint military operations.  We‘ve seen aid provided.  And we‘ve seen senior level consultations with President Salih in Yemen and with people in Washington. 

What they understand I think quite well is there‘s an urgency to dealing with Yemen.  But the problem though, Ed, is that as we‘ve talked about before, with all the issues regarding Pakistan and al Qaeda, you see similar problems in dealing with Yemen. 

What this means is there‘s no simple solution to Yemen.  It require a long, well thought out process, and dealing with a threat that‘s getting much bigger there.

SCHULTZ:  Roger Cressey, always a pleasure.

NBC News terrorism analyst.

Thank you so much for your time tonight.

CRESSEY:  Thank you.

SCHULTZ:  You bet.

Coming up, in 2009 your tax dollars helped Wall Street grow by almost 20 percent.  Eliot Spitzer will be here to tell us just how we can squeeze some of that money out of these fat cats in 2010.

And “The Drugster,” of course, gets admitted for observation.  That puts him in “Psycho Talk,” obviously.

And Robert Reich and Maxine Water, they‘re in the house tonight.

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

(COMMERCIAL BREAK)

SCHULTZ:  And in my “Playbook” tonight, so how is the economy out there?  How are we doing? 

We‘ve been through the first 10 years of this 21st century.  Well, it was one of the worst for the American economy since the Great Depression.

You know, I‘ve often wondered what it would be like if we had the poor people doing the news.  I‘m not poor.  I‘ve got a good job.  Life is pretty good. 

And I come to this job and I think about, OK, what would it be like for the average Joe who doesn‘t make six figures and, you know, has a family of four and is struggling to get there?  What would the reporting have been like on health care, on anything?

Here‘s the bottom line.  There was zero net job creation over the last decade.  Got that?  Zero. 

Let‘s see, we had two recessions.  Economic output rose at its slowest rate since the 1930s.  Those Republicans, did us right, didn‘t they? 

But there is some optimism for the new year.  And I want you to be optimistic. 

Now, these numbers might not mean much to you, but the fact is, the Federal Reserve is forecasting an average domestic gross product growth of 2.5 percent to 3.5 percent in 2010, GDP.  And they predict the unemployment rate will dip below 10 percent.  Who wouldn‘t take that?

But “New York Times” columnist Paul Krugman warns that 2010 may not bring the economic recovery that everybody is talking about.  And he writes, “The odds are that any good economic news you hear in the near future will be a blip.  Not an indication that we‘re on our way to sustained recovery.”

“Will the Fed realize before it‘s too late that the job of fighting the slump isn‘t finished?  Will Congress will do the same?  If they don‘t, 2010 will be a year that began in false economic hope and ended grief.”

If I may add to that—and I‘m writing a book on this that‘s going to be released later this year, the late, great middle class.  Don‘t have the title down totally now. 

If we cannot, as a country, revitalize the middle class in this country, so to speak, if the average Joe is feeling good, with some disposable income, it‘s over.  It will be over as we know America, unless we do something to rebuild the middle class in this country.

People that can go out and buy a washing machine with cash.  OK?  And not credit card.

People that can go out and actually pay their bills and have a little bit left over the way my mom and dad had it to do something for the five kids, if you know what I mean. 

So how is this—this is Obama‘s heavy lift in 2010, and the Democrats, for that matter.  The Progressive Caucus, I believe, is where the steroids have got to come from, for lack of a better term. 

But let me bring in Robert Reich, former secretary of labor under the Clinton administration, professor of public policy, University of California at Berkeley.

Mr. Reich, if I‘m wrong, please correct me on this.  Good to have you with us tonight and Happy New Year.

ROBERT REICH, FMR. LABOR SECRETARY:  Happy New Year to you, Ed.  And also, let me commend you for your New Year‘s resolution to be even more liberal and more outspoken this year.  We need that. 

(LAUGHTER)

SCHULTZ:  I think that‘s the only way we‘re going to get anything done around here. 

REICH:  I agree.

SCHULTZ:  What has to happen?  What bricks have to be laid for this whole thing to turn around, in your opinion, for the next decade, if we can look out? 

REICH:  Well, it‘s more than economic growth.  I mean, we‘ve had economic growth in the past.  The trouble is it has not trickled down to average working people.  And unless average working people, the broad middle class, has enough money in their pockets, has good jobs—not just jobs, but good jobs—they cannot turn around and spend enough to keep the economy going. 

They have to go deeper and deeper into debt, and we know what debt does.  I mean, you create these giant bubbles.  So, the major objective, the number one objective, domestically, of the administration has got to be more jobs and more good jobs.

SCHULTZ:  Well, the economic stimulus package which I obviously believed in and still do, because a lot of the money hasn‘t been spent, that‘s just a foot in the door, so to speak. 

REICH:  Ed, that‘s just the beginning.  And the stimulus really isn‘t enough to keep the recovery going because a lot of people—I mean, one out of five Americans is still unemployed or underemployed.  And beyond that, the quality of jobs that the people who are employed have continue to deteriorate.

I mean, we are saying over the last 30 years, you look at a typical male wage, a typical male worker in this society, adjust for inflation, and that typical male worker is not earning any more on an hourly basis than he earned 30 years ago.  Women are doing slightly better, but that‘s because they started way behind men, and they‘re still behind men.

Look, nobody is doing well except people at the top.  Right now Wall Street is on the brink of giving hundreds—well, at least tens of billions—somebody just reported $200 billion—of bonuses to its top traders and executives.  I mean, what kind of an economy is this? 

SCHULTZ:  Well, it‘s one for the top two percent.  And something‘s got to change here.

But what‘s different now, Mr. Reich?  You know, you helped create 22 million jobs.  Was it just the dot-com boom, or were there different things happening in the Clinton administration that maybe we‘re not paying attention to and catching on to that maybe should be done now? 

What do you think? 

REICH:  Well, there was a real emphasis, Ed, on job creation, on investing in people, not only education, but also roads and bridges, infrastructure investment, investment in research and development.  The whole notion in the 1990s was you invest in the ground, you invest in the bottom of the economy, and you grow the economy from the bottom.

You don‘t simply bail out banks.  You don‘t give rich tax breaks.  You don‘t expect that the economy is going to grow from the top.  It doesn‘t grow from the top. 

You‘ve got to get the bottom going.  You‘ve got to get the middle class with more wages and better jobs.  That was the entire emphasis. 

SCHULTZ:  Mr. Reich, great to have you on tonight.  Thanks so much. 

We‘ll do it again.

REICH:  Thanks, Ed.

SCHULTZ:  You bet. 

Coming up, the middle class finished ‘09, I guess you could say, pinching pennies, scraping them together, trying to make it all happen, while Wall Street finished up 20 percent.  Eliot Spitzer will explain just how we can get some of that money back in 2010. 

That‘s next on THE ED SHOW.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Great to have you with us tonight.  Thanks for watching.

2009 ended on a high note for Wall Street with the Dow finishing up almost 19 percent.  Good for you if you‘re in it.

Meanwhile, folks on Main Street getting burned big-time.  Last year, the government used taxpayer money to buy toxic assets from big banks.  That program was supposed to help get the economy going after, you know, some tough, tough times.  But instead, you know, some of these banks went out and bought more risky home loans.

They were allowed to go do business as usual, profiting off your tax dollars.  Lack of oversight.  And now, of course, that‘s really a bad word, “oversight.”

The former governor of New York joining us tonight, Eliot Spitzer, to tell us just how we can straighten this whole thing out.  What do we have to look forward to?

Mr. Spitzer, great to have you on tonight.  Appreciate it.

ELIOT SPITZER, FMR. NEW YORK GOVERNOR:  Ed, thank you so much and Happy New Year to you. 

SCHULTZ:  And Happy New Year to you. 

What does the middle class have to look forward to in 2010 when they see this kind of stuff in the news? 

SPITZER:  Unfortunately, more of the same.  And as you just were discussing with Robert Reich, what we are seeing is a redistribution of wealth in this country in the wrong direction.  And that‘s where those bonuses really reflects to people.

Billions and billions of dollars going to the very upper crust.  No new job creation for those in the middle class over a decade.  And wages have been stagnant, at best, for those who are working.

And so what we need to do is reconfigure this economy.  And the idea that a number of folks have had is to begin to use two levers of power that we don‘t often enough think about.

One is as consumers.  And two is as owners of the companies that we‘re talking about.

Consumers—here‘s a very simple idea.  There‘s something called MoveYourMoney.info.  Take your savings accounts, your checking accounts, move them out of those big TARP recipient banks that are not doing the right thing with our money and move to community banks that are doing the right thing. 

They‘re lending to homeowners in a good way.  The community banks, that is, lending to small businesses.

Use your power as the consumer of banking services just the way you pick a car.  You buy the car, choose the bank you want based upon whether that bank is doing the right thing. 

Go to MoveYourMoney.info.  It‘s an amazing Web site.  It let‘s you find where there‘s a community bank right near you in your neighborhood that is doing the right thing.

It‘s like watching “It‘s a Wonderful Life” and seeing Jimmy Stewart do the right thing with his bank.  It‘s a brilliant idea. 

SCHULTZ:  Well, I think there‘s a lot of Americans out there that think, oh, me doing, this it won‘t make a difference.  But if enough Americans do respond to this, it will shift the paradigm and the discussion, and we‘ll get a lot of people‘s attention.

SPITZER:  We‘ve got to do that, Ed, because we‘re doing—frankly, we‘re doing what‘s easy, which is to blame just Wall Street and to say to Congress, fix it, or to say to the regulators, fix it.  The regulators won‘t fix it.  They never have.  They won‘t get it right. 

We as consumers can do it.  The other way is as owners.  We own these companies.  We own the shares.  Get the pensions funds, get the mutual funds, get the state controllers who control these pension funds to begin to change the pay paradigm not only on Wall Street, but also across corporate America, where we give people money for bad performance. 

SCHULTZ:  Eliot, are these banks actually a greater risk right now with some of the paper they‘ve picked up?

SPITZER:  I don‘t think we know.  The amazing thing is I speak to people on the street all the time.  They tell me there is still inadequate information to know whether or not what they have on their balance sheet is good or bad.  We just don‘t know. 

SCHULTZ:  Think about what you said there.  We have forked out billions of dollars and we really don‘t know just how they are totally operating or what complete risks we are at right now.

SPITZER:  We don‘t know what they‘re doing with the money.  In other words, are they lending it in a way that‘s good for the economy?  Are they just investing it over seas?  Or are they just involved in proprietary trading on Wall Street. 

These are the questions that should be—look, Ben Bernanke gave a fascinating speech the other day.  He said, don‘t blame us.  We are just the Fed.  We were just controlling monetary policy.  Wait a minute; the Fed, the New York Fed in particular, had people at every major bank.  They should have been examining all these things for years.

Yes, it‘s easy, as I just did, to blame the regulators.  What we have to do is come up with the creative solutions to use your power as a consumer, as an owner, to get the way these businesses do business to change. 

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

Appreciate your time.  We‘ll see you a lot in 2010.

Coming up, Shooter‘s got another thing coming if he thinks his political fear-mongering is going to go unanswered.  One of his biggest defenses, Ron Christie, landing in the hot seat tonight on THE ED SHOW. 

Plus, after giving Republicans all that they wanted in 2009, it looks like House progressives are going to be—just shout out—be shut out of the final negotiations on health care.  I‘ll ask Congresswoman Maxine Waters if she‘s going to put up with that.  You‘re watching THE ED SHOW on MSNBC.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Progressives have been hoping Nancy Pelosi would go to bat for those two tough words, public option, in conference committee.  Now it looks like there is not even going to be a conference committee.  Democratic leaders have decided to hammer out their differences in private to avoid any round—let‘s say—of Republican stall games. 

A lot of progressives are concerned about this, that this push—that this final mixing of the bill isn‘t going to be what the House members want.  A lot of concern over there.

Joining me for more on that is California Congresswoman Maxine Waters, a member of the progressive caucus.  Maxine, great to have you on tonight.  Appreciate your time, as always.

REP. MAXINE WATERS (D), CALIFORNIA:  Thank you very much, Ed. 

SCHULTZ:  You bet.  What is your number one concern that you hear, that there—I guess you could call it a watered down conference committee.  They‘re going to close the doors and shut the republicans out.  How do you feel about that?  How do you feel about the possibility that the House if just going to get pushed aside and it‘s going to be the Senate bill?

WATERS:  First of all, I just got the news early this morning, that there was not going to be a conference committee.  And I was a little taken aback by that.  I was truly looking for transparency.  And, of course, many of us have got to engage those who are involved in the process to try and get that public option back in there, to remain the House version. 

Also, there‘s something wrong with this bull structurally from the Senate side.  They want 50 different exchanges in 50 different states, where some of these states won‘t even have any competition.  They will have one or two insurance company.  They may not regulate them at all.  And they could do whatever they want to do with the increasing premiums and co-pays.

And I‘m just really concerned that we won‘t have an opportunity to put up the fight that we need to put up in order to, first of all, just straighten this thing out and make sure that we have a universal health care plan, a national health care plan with national exchanges.  That‘s the first big thing that is wrong. 

And then, of course, the public option.  You know that.  And then, of course, I‘m worried also about taxing the health plans that workers have fought very hard to get.  And calling them Cadillac plans just does not sit too well with me. 

SCHULTZ:  Congresswoman, when you take a look at this, what you just described is that the House of Representatives stands the real chance of being marginalized here, after a long, hard, drawn out fight.  A lot of people campaigned on change.  A lot of people in districts across America won seats because of health care.  And now it seems like it‘s up to Nancy Pelosi.  Do you trust Nancy Pelosi? 

WATERS:  I trust Nancy Pelosi.  What I don‘t know and what I don‘t understand is what the conservative element would do, both in the Democratic party—and, of course, I know the Republicans are out to kill anything. 

SCHULTZ:  Yeah. 

WATERS:  I know that they are out to tie up the system.  And there are many ways that they could do this.  They could go to debate on three items before they even get to a conference committee.  And they could just tie up the whole system.  I know that‘s a problem. 

But here is what I also know: I know that to the degree that we are able to put up a fight and put up a struggle, we may be able to get this thing back on the right track.  Right now, I don‘t know how we are going to do it.

SCHULTZ:  Congresswoman, great to have you with us tonight.  Thanks so much for joining us. 

WATERS:  You‘re so welcome.  Thank you, Ed.

SCHULTZ:  You bet.  Congresswoman Maxine Waters from California.  For more, let‘s bring in our panel tonight.  Nationally syndicated radio talk show host Bill Press is with us.  And also Jonathan Alter, senior editor, columnist of “Newsweek” and an NBC News analyst.

Gentlemen, it looks like it‘s going to get politically messy for the Democrats.  You‘re take, Bill?  Is this dirty water for the Democrats to go down this road?

BILL PRESS, RADIO TALK SHOW HOST:  I don‘t think there‘s any choice.  Yes, but I don‘t think there‘s any choice, because, as Maxine pointed out right there at the very end, the Republicans in the Senate could bottle this thing up for months.  So this idea of what they are calling ping pong, which is avoiding the regular conference committee, and negotiating back and forth, I think, makes sense, if—and here‘s the key, Ed—who is going to be appointed to do the negotiating? 

If you‘ve got Henry Waxman, you‘ve got Maxine Waters, you‘ve got Nancy involved in this House, we‘re in good shape.  If you have Chuck Schumer, you have Chris Dodd, Tom Harkin involved in the Senate, we‘re in good shape.  On the other hand, you give it to Max Baucus, we‘re screwed.  So I think that‘s what the key is.

The other thing is the role that Barack Obama plays, and how actively involved the president is willing to be. 

SCHULTZ:  Jonathan Alter, I feel like I‘ve just read a press release that the Senate‘s in charge and everybody else get out of the way.  Your take? 

JONATHAN ALTER, “NEWSWEEK”:  I don‘t think that is true at all, actually.  This is the time for both the House and the Senate to press hard, for the president to press really hard, to inject himself into the process.  He‘s going to, from all indications.

Maxine Waters is absolutely right that 50 different state exchanges would be a disaster.  It‘s essential that there would be one national exchange.  Because Olympia Snow, who the president has been courting, is on record supporting a trigger public option, there‘s a possibility of getting that back into the process. 

As far as the Cadillac plans go versus—cutting them, which is what the Senate does, versus taxing the wealthy, over 500,000 folks, which is what the House does to pay for this, they need to split the difference on this and have both revenue streams.  And actually if they did both of those things, maybe they could implement this earlier, Ed, because one of the big problems with the bill right now is it phases in a few years from now for cost purposes.  So one of the ways that they should try to fix it now is to raise more money up front, so that we can get this done for the American people before 2013, 2014.

SCHULTZ:  OK.  So, Jonathan, to follow up, you seem to have been over

recent months projecting the fact, from your opinion, that this is a great

achievement for President Obama, that this really is a heck of a lot better

-- 

ALTER:  Yes. 

SCHULTZ:  -- than what maybe some progressives out there are spelling it to be. 

ALTER:  Way better. 

SCHULTZ:  OK, Bill, go ahead. 

PRESS:  I want to say, I‘m not sure of that.  I don‘t think we know yet.  and I come back, Ed—you and I have talked about this—to the role that the president has to play right here.  As Jonathan says, it looks like there is a chance he will be very actively involved.  Here‘s what I would like to see: I want to see him hold these meetings at the White House.  I want to see him lead these negotiations and then do what he promised us during the campaign, put it on C-Span, so we can see exactly what deals are being made.  If we do that, I think we can get a strong bill that Obama and all of the rest of us can be proud of. 

SCHULTZ:  Jonathan, explain to our viewers tonight what you think presidential involvement is.  You think the president actually is going to sit down for hours on end and go through the details.  OK, this what the American people want.  This is what we have.  We have to strengthen this.  Do you think he‘s going to get into the minutiae of the whole thing? 

ALTER:  I do.  Actually, he‘s already been quite into the minutiae in his private meetings.  He‘s had many of them, dozens, many of them one on one.

SCHULTZ:  Then I got to ask, where‘s the public option.

ALTER:  He‘s dealing with political reality.  Again, Ed, you and I have talked about this a lot.  Just because he‘s president doesn‘t mean—it‘s like herding cats.  That‘s the way it is with these senators.  But now he‘s in a stronger position because they kept this bill on track and got it through both the House and the Senate.  It now has a tremendous amount of momentum.  And that gives a tremendous ability to knock heads a little bit. 

SCHULTZ:  Can they do anything about the date?  Gentlemen, final question for both of you, can they do anything about the date?  This pre-existing condition thing, they are going to have to come up with other legislation that will fast track that to affect a lot of the Americans.  That, I think, would be a big political—what about the dates?

ALTER:  I certainly think it would be very important for them to implement at least some of this sooner.  And to do that, they have to raise more revenue, which means that both the people who don‘t like the taxing the rich and the labor unions that don‘t want to have to pay some taxes on the Cadillac plans, they are going to have to compromise and give something up in order to get it implemented quicker. 

PRESS:  Ed, very quickly, they got to have this whole thing kick in a lot sooner than they are.  Here‘s the one thing I want to see—We know what the deal breaker was for Ben Nelson and Joe Lieberman.  I want to know what it is for Barack Obama.  I think the world wants to know, the American people want to know.  Now is the time. 

SCHULTZ:  Gentlemen, always enjoy the discussion.  Good to have you with us. 

ALTER:  All right.  Thanks. 

SCHULTZ:  Coming up, if you‘re a millionaire, you have a big mansion.  you have a G-5 jet, you should probably think twice before saying that you didn‘t get any special treatment.  El-Rushbo in Psycho Talk when we come back.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And in Psycho Talk tonight—well, you knew we had to—got to start off with our old buddy, Rush here, 2010.  It‘s a new year.  You may have heard that Rush was admitted to a hospital with chest pains.  He was on vacation in Hawaii.  Hold it right there.  When this story first broke, it was serious condition. 

Well, it turns out, he is just fine.  By the way, I really do think he needs to get his head examined because, shortly after he was released from the hospital, the Drugster used his health scare to imply that we don‘t need health care reform. 

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  Based on what happened to me here, I don‘t think there‘s one thing wrong with the American health care system.  It is working just fine, just dandy. 

I‘ve got nothing special.  I‘ve got no special treatment other than what anybody else who would have called 911 and been brought in with the same kinds of symptoms.

(END VIDEO CLIP)

SCHULTZ:  Rush, don‘t pay your bill, because there‘s a lot of people in this country that can‘t pay their bill.  And see how you get treated then.  Of course, the health care system for you, it‘s just dandy.  You can afford the best insurance out there on the market.  There‘s no doubt about it.  The debate isn‘t about getting better doctors.  It‘s about giving everyone access to those doctors and being able to pay for it.

And by the way, the Hawaiian health care system you speak so highly of is the closest thing in America to the Democratic reform plan.  And by the way, it works.  Hawaii‘s health insurance premiums are among the lowest in the country.  And just 6.7 percent of Hawaiians were uninsured in 2008.  Compare that with about 15.8 percent nationwide. 

Rushbo, you‘re right.  You probably did get the best treatment in the world.  But implying that it makes health care unnecessary, my friend, is ill-informed psycho talk.

Coming up, the former vice president wants you to think that we are less safe under Obama‘s watch.  And I think the administration needs to return fire big time.  I‘m putting former special assistant to Dick Cheney, Ron Christie, in the hot seat.  We‘re going back and forth on this issue next on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK) 

(BEGIN VIDEO CLIP)

JOHN BRENNAN, DEPUTY NATIONAL SECURITY ADVISER:  I‘m neither a Republican or Democrat.  I‘ve worked for the past five administrations.  And either the vice president is willfully mischaracterizing this president‘s position, both in terms of language that he uses and the actions he‘s taken, Or he‘s ignorant of the facts.  And in either case, it doesn‘t speak well of what the vice president is doing. 

(END VIDEO CLIP)

SCHULTZ:  Willfully mischaracterizing or ignorant.  That‘s the verdict on Dick Cheney‘s criticism from a career CIA officer, President Obama‘s top counter-terrorism advisor, John Brennan.  One of the former vice president‘s biggest defenders joins me now in the hot seat tonight.  That‘s Republican strategist Ron Christie, and former special assistant to Vice President Cheney. 

Ron, great to have you on tonight. 

RON CHRISTIE, REPUBLICAN STRATEGIST:  Happy new year, Ed.

SCHULTZ:  You bet.  Happy new year to you.  I want to make sure I‘m not missing anything here.  Dick Cheney is not a talk show host.  He‘s not on anybody‘s payroll.  He is the former vice president of the United States.  Ron, is it reckless for him to go out and say some of the things he‘s saying?  What good does it do, in your opinion? 

CHRISTIE:  I think it‘s very important for the American people to have a man of Dick Cheney‘s stature and his experience on foreign affairs and military matters to weigh in to very important issues when America is confronting a very significant and serious war on terrorism. 

When you look at the former vice president‘s comments about the president either pretending that we‘re not at war or not taking the threat seriously enough, he has strong merits for his accusations.  For one, Ed, for goodness sakes, how in the world would we allow terrorists, people who try to kill innocent American people, to be brought to the United States, steps away from the World Trade Center, where they can make a mockery of the American justice system. 

SCHULTZ:  That‘s an opinion.  I want to focus directly on Dick Cheney here.  The point is, social transformation and also restructuring American society.  What does that have to do, Ron, with security?  It seems like Dick Cheney is on a mission to defeat Obama at every corner.  Why politicize?

I mean, if I was sitting next to you on an airplane, Ron, I think you‘re politically wrong and I think I‘m politically correct, but I don‘t want you to die.  I don‘t want to politicize the TSA or our intelligence.  And it just seems to me that Dick Cheney is operating so terribly irresponsible, almost un-American.  That‘s how I feel. 

CHRISTIE:  And I couldn‘t disagree with you more, Ed, and here is why.  I was in the White House on 9/11.  I was working for the vice president at the time.  Our entire focus shifted from looking at domestic priorities, such as education and Social Security reform, to we need to take every step at our disposal to protect the American people against future attacks.

SCHULTZ:  You don‘t think the president is doing that?

CHRISTIE:  I think when the president of the United States allows terrorists to get Miranda rights, when he refuses to treat the recent individual, the Christmas day terrorist, would be terrorist, as a criminal, rather than as an enemy combatant and a war criminal, I think that makes the United States less safe. 

SCHULTZ:  OK, in the minds of who?  That is due process.  That‘s our legal system.  That‘s the moral hype ground.  That‘s something that the Obama administration—all along the campaign trail, he said, that‘s exactly what he was going to do.  But the point of these constant cheap shots, and this side shooting that‘s taking place by Dick Cheney, from a character standpoint, it‘s almost as if it‘s hateful and it‘s personal. 

He actually thinks that President Obama doesn‘t grasp the severity of what is taking place in the world, after he puts more troops in Afghanistan, after he beefs up counter-terrorism in hot spots around the world?  Why politicize it, Ron?  What good does that do? 

CHRISTIE:  First of all, I know Dick Cheney and he‘s a man of character.  And he doesn‘t hate anybody.  And he certainly doesn‘t hate President Obama.  I think we all want our president to succeed.  We want President Obama to succeed.  I want him to succeed.

But the important thing is that the president of the United States has a constitutional responsibility to protect the American people against future attack.  And when the president takes steps that I believe—don‘t take my word for it.  Look at Joe Lieberman.  When Senator Lieberman, who is the chairman of the Senate Homeland Security Committee, says that it‘s a terrible mistake to treat this individual as a criminal, rather than a terrorist—

SCHULTZ:  That‘s about method.  But that‘s about method.  And to personally attack the president of the United States, it looks like he‘s rooting against Obama, rooting against the sitting president, who is commander in chief.  Disagreeing with him is one thing, but the personal attacks—I don‘t‘ know.  Where I grew up, freedom of speech is a responsibility.  I don‘t think former Vice President Cheney is doing the country any good by constantly going out.

Ron, you‘ve got your opinion and I‘ve got mine.  Great to have you with us. 

I want to bring back Bill Press and Jonathan Alter tonight with a quick comment on all of this.  Jonathan Alter, am I over-stating my position on this?

ALTER:  Not a bit.  We have top understand that the vice president of the United States told a big fat lie in the last week.  He said that Barack Obama has not said we‘re at war.  Obama said we‘re at war in his inaugural address.  He‘s said it consistently since.  The vice president knows that.  He‘s willfully ignoring. He‘s not telling the truth. 

Second point, the former vice president of the United States is emboldening the terrorist.  I know that‘s a serious charge, but think what he‘s doing.  He‘s saying that our president is weak, is letting down our guard.  What message does that send to terrorists?  Come attack us, if you will.  You don‘t say that about the president if you‘re the former vice president.  A talk show host, fine, say anything you want. 

SCHULTZ:  That‘s the point I was making.

ALTER:  If you‘re the former vice president, you don‘t say that.  That emboldens terrorists. 

SCHULTZ:  Bill Press, what‘s the proper move to handle this, if you‘re in the White House?  What do you do to fight this back? 

PRESS:  I think the proper move is to absolutely call Dick Cheney on every lie that he has told.  Barack Obama has done more in Pakistan, stepping up the fight against terrorism.  He‘s done more in Yemen.  Since then, he‘s doubled the support for Yemen.  And he‘s also trying to get rid of some of the unnecessary aggravation by closing down Gitmo.  The president is being irresponsible.  He cannot be allowed to get away with it. 

SCHULTZ:  Gentlemen, good to have your take on this tonight.  Appreciate your time again.  Tonight, I asked the audience, do you think the White House should fight back harder against Dick Cheney‘s attacks?  Ninety percent of you said yes; ten percent of you said no.  I guess that means you want to hear Robert Gibbs get after it at the podium.  I‘m OK with that.

That‘s THE ED SHOW.  I‘m Ed Schultz.  “HARDBALL” with Chris Matthews starts right now on the place for politics, MSNBC.  We‘ll see you back here tomorrow night, 6:00 Eastern.  Have a good one.

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

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