updated 1/13/2010 4:44:17 PM ET 2010-01-13T21:44:17

Guests: Chuck Todd, Harold Schaitberger, Darrell Issa, David Walker, Rep. Anthony

Weiner, Katrina Vanden Heuvel, Joan Walsh, Ernest Istook, Stephen A. Smith,

Lionel

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

These are the stories that are hitting “My Hot Buttons” tonight. 

The White House and labor going at it.  Democrats need to stop taking their base for granted.  Their majority could be in jeopardy unless they act fast. 

Wall street bonuses, another hot one tonight.  They have the middle class, I think, on the verge of revolt in this country. 

You‘ve got Congressman Darrell Issa.  He‘s got a lot to say about this issue and is demanding answers from Treasury Secretary Tim Geithner.  He will join us tonight. 

Sarah Palin.  Oh, let‘s see, she didn‘t know a whole lot about foreign policy or geography or the economy or health care or education, which is apparently enough to get you hired as an expert across the street.  Plus, McCain says he really wasn‘t that involved in the vetting process in all of this but he was ready to put country first. 

All of that coming up tonight, here on THE ED SHOW.

But first, we‘ve got to call it like we see it.  The Obama White House is at a crossroads when it comes to health care.  They are trying to figure out, let‘s see, how are we going to pay for this, who are we going to tax to pay for this health care plan? 

Now, union leaders went to the White House to explain to the Obama team what impact taxing the middle class could have on the midterm elections.  AFL-CIO president Richard Trumka had a strong warning for Democrats before he met with the president—don‘t take your base for granted. 

(BEGIN VIDEO CLIP)

RICHARD TRUMKA, AFL-CIO PRESIDENT:  We swallowed our disappointment and we worked to preserve a Democratic majority in 1994 because we knew what the alternative was, that there was no way to persuade enough working Americans to go to the polls when they couldn‘t tell the difference between the policies of the two parties.  So, politicians who think that working people have it too good, too much health care, too much Social Security, too much Medicare, too much power on the job, are actually inviting a repeat of 1994. 

(END VIDEO CLIP)

SCHULTZ:  Wow.  Couldn‘t persuade people to go to the polls.  After eight years of Bush and Cheney, do you think that we would really have that problem just two years in to change?  Pretty powerful message. 

Now, the president‘s supporters are already being asked to swallow the fact that, well, there‘s just not going to be any public option.  Single payer, heck, that wasn‘t even at the table. 

Now they‘re being asked to support a tax on so-called Cadillac plans. 

Come on.  The White House claims that this excise tax will be mostly footed

by insurance companies and businesses?  Yes, right.

Now, what sounds more likely to happen to you, that big companies will eat a tax for providing generous health plans or that they‘ll cut benefits to avoid the tax?  I think we‘ll go with the latter on that one. 

That is what the unions are really afraid of in this whole scenario that might be played out in front of our eyes.  A recent congressional analysis found the biggest portion of this tax that they‘re talking about is going to be paid by people who are earning less than $200,000 a year. 

Folks, it‘s going to hit the middle class. 

The president, now he was against this tax when he was out on the campaign trail.  But, apparently, it hurts me to say this, it sure looks like he‘s flipped on it. 

The House hates this provision.  The Senate wants it.  And, of course, the health care reform has become all about keeping a couple of obstructionist Democratic senators on board so we can get those 60 votes. 

Now, that is the biggest problem the president and the Democrats are facing in 2010.  Arguably, I think it‘s keeping the base together. 

There is a perception that all the work progressives did to get President Obama elected in 2008 really hasn‘t resulted in much change.  There‘s been a lot of roadblocks called Republicans, and the president needs to make us a believer again.  I think he needs to listen to labor leaders. 

Right now, the president is losing his base.  I said that on this program a month ago. 

Now what do you think? 

According to a brand new CBS poll out tonight, 36 percent of Americans approve of how the president is handling health care.  That is a new poll released just earlier this afternoon. 

Now, Harry Reid is going to be leaving the campaign trail.  That‘s the word tonight from Capitol Hill from reporter Kelly O‘Donnell, who says that Harry Reid is leaving the campaign trail in Nevada to come back to Washington tomorrow to have a meeting at the White House. 

So what‘s this all about?  Do you think—let‘s speculate.  Is Harry Reid coming back because he‘s been on the campaign trail in Nevada and he might come back and say, you know what, I done think I can win, Mr.  President, we better figure this thing out?  Is the president calling Harry Reid back to the White House to say I‘ve got some real problems with these labor guys, we‘ve got to figure out how to pay for this, we can‘t hint the middle class? 

It seems like they‘re rearranging the chairs here in the 11th hour. 

For more on all of this, joining me now is Harold Schaitberger.  He‘s the president of the International Association of Firefighters.  They have been staunch supporters of the Democratic platform and, of course, supporters of President Obama in the last election. 

Mr. Schaitberger, not to overstate where labor is right now, I was told by one labor leader today yesterday at the White House it was not a negotiating session, but it was a very intense meeting and a message to the White House and the advisers and the president himself, this is not going where they want it to go. 

Can you confirm that and can you tell us that this is going on the wrong track for labor in this country when it comes to health care reform? 

HAROLD SCHAITBERGER, INTERNATIONAL ASSOCIATION OF FIREFIGHTERS:  Well, I can tell you that the leadership AFL-CIO and a number of the unions who met with the president yesterday made it very clear to the president and his staff and the White House that this excise tax is a bad policy and it‘s also bad politics.  I know that a number of issues were discussed.  And I want to make it clear, Ed, up front that I really commend the president for his commitment to pushing for health care and to cover the millions and millions of Americans who don‘t have such coverage.  But the real bottom line is that on this particular provision in the Senate bill, the excise tax, this is simply a tax that will be passed on to the middle class. 

To suggest that somehow this is going to be just tax to the insurance companies, I think, anyone who‘s fair minded would understand that tax, if it incurs, is going to simply going to be passed on to the consumer, middle class workers. 

SCHULTZ:  Mr. Schaitberger, what is the White House thinking, in your opinion?  This is a 180.  It pains me to say it, but it‘s a 180.  And I think you know that. 

What are they thinking? 

SCHAITBERGER:  Well, I think the president is really trying to find a way to push through historic health care reform.  And I know he has a lot of economists and a lot of advisers and those that have suggested that this excise tax will somehow bend the cost curve of which we take issue with. 

We don‘t believe it will really bend the cost curve.  And we don‘t believe it‘s the right way to help to pay for reform.  We believe the House of Representatives has it right, and to place a surcharge on those making $500,000 and families over $1 million who have really benefited at the trough of the Bush tax cuts these last seven or eight years, that‘s where this could be paid for. 

SCHULTZ:  OK.  Going to hit the top two percent, no doubt about that. 

But nobody thought it was going to be hitting the middle class. 

I keep hearing labor leaders say, including yourself, that you‘re going to hold the majority accountable, going to hold President Obama accountable.  What does that mean? 

Does that mean that you might not show up in 2010 and we might have a repeat of 1994?  And that, of course, is what Mr. Trumka said in his speech to the National Press Club.

What about that? 

SCHAITBERGER:  Well, I can speak for my union.  I am very concerned that this could be an unfortunate repeat of 1994. 

The fact of the matter is that we have a majority that‘s going to need to continue to depend on their base.  And certainly the members of our unions and my unions have been loyal and strong supporters of the Democratic majority in this Congress.  And I believe this issue has the potential to make it very difficult for our members to want to mobilize, to want to show up at the polls, and to try and explain how a provision is going to be taxing the working class, the middle class when there was a promise not to do so. 

SCHULTZ:  Mr. Schaitberger, good to have you with us tonight. 

Appreciate your time.

SCHAITBERGER:  Thank you, Ed. 

SCHULTZ:  For more on this, let me bring in Chuck Todd, NBC‘s chief White House correspondent and political director. 

Chuck, these are almost fighting words, but before we get to this situation with the unions and health care, I want your take on the report tonight that Harry Reid is coming off the campaign trail, cutting his visit to Nevada short, and coming back to Washington to meet at the White House. 

What do you make of that? 

CHUCK TODD, NBC POLITICAL DIRECTOR:  Well, I think it‘s easy to maybe overread—no pun intended—the situation about him coming back.  But let‘s look at this realistically. 

You know, State of the Union is coming in probably in the next 15 to 20 days.  Health care‘s got to get done.  They‘ve got to get some things in place in the next couple of weeks. 

You have this situation in Massachusetts which, frankly, is becoming of a huge concern to a lot of top Senate Democrats and a lot of Washington Democrats.  So there‘s a lot of reasons for Harry Reid to be getting back to Washington right now and minding his majority leader business and worrying about the Nevada political situation, which while a very poor issue for him right now, he doesn‘t have time to deal with that when he‘s got all this mess here in Washington. 

SCHULTZ:  OK.  It was not a negotiating session.  That‘s what I was told today...

TODD:  Yes, we heard similar. 

SCHULTZ:  ... when the president—yes, when the president met with labor leaders.  But it was a very stern message. 

How is this being received?  Is this a misread by the White House or are they just testing the waters?  What do you think? 

TODD:  Well, we‘ll see.  You know, it‘s interesting to listen to Harold Schaitberger.  And he‘s got one of—he‘s got his political ear to the ground in a way that a lot of other labor union leaders don‘t sometimes, Ed.  So, I do take his advice here on what‘s going on pretty seriously.

I think there is nervousness at the White House when you talk about going with the House version of the health care surtax.  The nervousness in the White House is that group of folks is going to get hit with a tax increase two years in a row.  Not just this time, but then those Bush tax cuts expire the following year.  And I think they are concerned about this idea that it‘s a one-two punch on that group of folks, not just hitting them once, but they‘re going to feel the perception that it hits them twice, and I think that is one of the reasons why they favor going.

The Senate—I‘ll tell you, the Senate guys are just going to—I think they don‘t have 60 votes to get the health care surtax, bottom line. 

SCHULTZ:  No, I think you‘re spot-on.  I don‘t think they do.  And I think that the president is really in an untenable position right now, Chuck...

TODD:  He is.

SCHULTZ:  ... because if he taxes the middle class, if he goes along with the Senate bill, he is going to have to go out and do some serious talking and selling to his base that is going to be really sour-mouthed over this.  I mean, this is really a shift by the president to say—in fact, they ran commercials against John McCain saying that they would raise taxes for health care, and now here‘s the president just doing it. 

I mean, the president must believe, Chuck, that he has got some pretty strong political clout to be able to pull this one through and still manage through the 2010 election.  What do you think? 

TODD:  Well, it‘s funny.  Is it clout or is it at this point, is everybody‘s exhausted? 

I think there is pure exhaustion inside the White House and inside those caucus rooms on both sides of Capitol Hill, the Senate Democrats and House Democrats.  And I think that exhaustion is why I don‘t know if the House Democrats are going to put up the fight now over this issue that maybe they could have put up three months ago, because I think it‘s exhaustion. 

There‘s this feeling at this point, look, come too far.  I think that pitch is working.  You‘re going to have Bill Clinton going up to the House Democratic Caucus making that pitch as well.  And they‘re going to make that case and get out of this thing, and hope they have something to sell, an improvement on health care, that they hope some of it shows up in time for November 2010. 

You know, that‘s another big test here, Ed, is, do they have something tangible to show the American people in October of 2010 on health care that will make the base, at least, feel as if, OK, it was worth it? 

SCHULTZ:  OK.

Chuck Todd, always a pleasure.  Great to have you on.  Love your new show, by the way. 

TODD:  Thanks, Ed.  Appreciate it.

SCHULTZ:  You bet.

All right.  Chuck hit on a word that has always really motivated me. 

And that is “exhaustion.” 

I think there is political exhaustion in this country right now when it comes to Democrats.  There‘s a lot of frustrated people in the base right now. 

But if I can address that straight to the White House tonight, time for a Big Eddie locker room pep talk.

Do not leave your base!  Mr. President, I am begging you tonight, don‘t leave your base. 

Those folks that went to see you yesterday at the White House, sir, were there to tell you something very vital, that your presidency could be in jeopardy.  If you raise taxes on the middle class, Mr. President—and all you advisers that know what‘s going on, you‘ve got to pay attention to this because I know what I‘m talking about.  I‘ve been out there doing the town hall meetings—this will haunt you in 2012. 

You are handing the Republicans all the material they‘re ever going to need.  See that?  Can‘t trust the Democrats.  They left their base.

Go after the top two percent.  If you want to pay for health care, that‘s where you‘ve got to go to pay for this thing.  Don‘t pick on the middle class. 

The middle class has been picked on enough in this country, and these are the folks that came to the polls that got you elected, Mr. President.  Stay with your base.  Listen to the labor leaders.  And let‘s fight them in the midterms. 

That‘s the solution to this. 

Coming up, the House Oversight Committee is closing in on Treasury Secretary Tim Geithner.  They want some answers for his role with AIG.  Congressman Darrell Issa‘s leading the charge and he joins me in just a moment. 

And it looks like Elizabeth Edwards was playing Russian roulette with the Democratic Party even more that be her adulterous husband was.  We‘ll get to the bottom of all of that at the bottom of the hour. 

All that, plus, “The Drugster.”  He‘s at rock bottom in the psycho zone.

That‘s coming up.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

Members of Congress want answers from Treasury Secretary Tim Geithner.  He was the head of the New York Federal Reserve when the bank urged insurance giant AIG to hide the fact that they were overpaying big Wall Street banks with taxpayer money. 

Today, the House Oversight Committee issued a subpoena—the New York Fed documents that they think will shed more light on exactly what happened.  The committee is also calling for Secretary Geithner to testify. 

Joining me now is the ranking member of the House Oversight and Government Reform Committee dealing with this, Republican Congressman Darrell Issa of California. 

Congressman Issa, how important is it going to be to get Mr. Geithner up there to raise his right hand, in your opinion? 

REP. DARRELL ISSA ®, CALIFORNIA:  Well, it‘s extremely important.  We already know that Secretary Geithner was at the center of deciding to pay 100 cents on the dollar when the going rate was 40 cents on the dollar. 

Our bigger challenge now though is, why was there a cover-up, why did it need to be a cover-up, and why is it so important for the Fed to tell us that Geithner, who was supposed to be at the center of everything, suddenly this didn‘t rise to his decision level?  The decision to cover up, perhaps in violation of SEC regulations, is something that rises to the highest level. 

SCHULTZ:  Congressman, I haven‘t heard that word used anywhere else, “cover-up.” That‘s a strong word at this point. 

ISSA:  Well, there is no question, the e-mails indicate that they were being told not to disclose.  Now, not to disclose something which is unseemly and unsatisfactory to the taxpayers, and that if it had been known would have led to a whole different series of questions during Tim Geithner‘s confirmation, to me is a cover-up. 

SCHULTZ:  OK. 

This is Mr. Gibbs at a press briefing on Friday in an exchange that he had with a reporter.  Here‘s their response.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  Secretary Geithner was not involved in any of these e-mails.  These decisions did not raise to his level at the Fed.  These are e-mails and decisions made by officials at an independent regulatory agency. 

ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT:  How do you know that he wasn‘t involved?  He was the leader of the New York Fed. 

GIBBS:  Right, but he wasn‘t on the e-mails that have been talked about and wasn‘t party to the decision that was being made. 

(END VIDEO CLIP)

SCHULTZ:  One of two things, Congressman.  Either Tim Geithner runs a loose ship or there‘s something funny going on here. 

What do you think? 

ISSA:  Well, you‘re absolutely right that those really are the only two choices.  And certainly, Gibbs is carefully parsing his words to say he wasn‘t on the e-mails.  And Thomas Baxter, an attorney over there, said, well, it didn‘t rise to his level, and he‘s parroting that. 

SCHULTZ:  But he said in that sound bite, “was not involved.”  That‘s what he said, “was not involved,” and it was handled by officials at an independent regulatory agency.

You believe that? 

ISSA:  Well, what I believe is that the Fed doesn‘t want any scrutiny before, during or after this.  And it‘s exactly what we have to make sure, is that the Fed is going to commit and spend permanently large amounts of your dollars.  We have to make sure that they comply not only with their disclosure requirements, but they not encourage another company to fail to disclose. 

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

ISSA:  Thank you.  We‘ll stay on it.

SCHULTZ:  For more on holding Wall Street accountable for the economic mess they helped create, let me bring in former comptroller general of the United States, David Walker.  Mr. Walker is the author of a new book, “Come back America: Turning the Country Around and Restoring Fiscal Responsibility.”

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

DAVID WALKER, FMR. COMPTROLLER GENERAL OF THE UNITED STATES:  Good to be back with you, Ed. 

SCHULTZ:  You bet. 

JPMorgan CEO Jamie Dimon says he‘s tired of employees being vilified over bonuses.  He says, “I‘m a little tired of the constant vilification of these people.  This is not a casino.”

What‘s your response to that? 

WALKER:  Well, obviously, there is a lot of concern among the public with regard to very large bonuses being received by Wall Street, especially with regard to some concerns that ended up taking taxpayer assistance.  In some cases, they paid it back, but they didn‘t seem to learn much of a lesson. 

But as you know, Ed, my book‘s not about the current problems with regard to Wall Street, it‘s about the federal government‘s in worst shape than Wall Street and we‘re not doing anything about it. 

SCHULTZ:  Well, still, I want to get your take on this.  This is Mr.  Feinberg today, the pay czar, talking about these bonuses that are being paid out.  I want to get your response to this.  Here it is.

(BEGIN VIDEO CLIP)

KENNETH FEINBERG, PAY CZAR:  The gap between Wall Street and Main Street remains huge.  And you would think that these banks that are now free from the restrictions of my office would have a little bit more sensitivity to what is going on, on Main Street. 

(END VIDEO CLIP)

SCHULTZ:  Wall Street and the government, Mr. Walker, is pretty well connected.  It would seem to me that there‘s a culture of “we can do whatever we want to do” and what has happened on Wall Street plays into the government, what happens in the government plays into Wall Street.  I mean, that‘s how Main Streeters, I think, and middle class folks are viewing this whole thing. 

What do you think?

WALKER:  Well, they‘re clearly very close together.  And quite frankly, executive compensation and compensation for high-level people within Wall Street is out of control.  It doesn‘t pass the straight-face test. 

We need to make sure that we‘ve got a system that pays people reasonably for adding value but also adjusts for risk.  We‘ve had too many situations where tails, people win—pardon me, heads, people win, and tails, the taxpayer loses.  That‘s not appropriate.  We also need to be concerned with having more oversight for shareholders irrespective of whether the government is involved or not. 

SCHULTZ:  Would you describe your book as a tough roadmap back to fiscal sanity and to get us in order in this country? 

WALKER:  It offers specific solutions on the policy front, the operational front and the political front on what we need to do to create a better future for this country.  The federal government‘s finances are worse than many of the Wall Street entities, and nobody‘s going to bail us out. 

We need to make tough choices and, quite frankly, President Obama‘s going to have to follow the lead of President Clinton and President Bush 41, break some campaign promises, re-impose some tough budgetary controls, and start constraining spending, restructuring social insurance and raising revenues. 

SCHULTZ:  Mr. Walker, great to have you with us tonight. 

WALKER:  Good to be with you, Ed.

SCHULTZ:  You bet.  Thanks so much.

WALKER:  Bye-bye. 

SCHULTZ:  Coming up, Rush Limbaugh has found a way to say something that just very few people on the face of the earth would actually say.  It involves the late Senator Ted Kennedy and it puts him in “Psycho Talk.”  

We‘re right back. 

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, “The Drugster” stealing a page out of Glenn Beck‘s playbook and taking the low-rent shots at the late Senator Ted Kennedy. 

Limbaugh was slamming former President Clinton for an insensitive comment he made to Ted Kennedy about Barack Obama during the campaign.  Then Rush decided to take aim at Teddy. 

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  I know the real reason that Teddy Kennedy was mad and offended when Bill Clinton said, hey, come on, man, you know, this guy would have been fetching us coffee a couple of years ago.  What made Teddy Kennedy was, it‘s women get him coffee, it was Negroes that brought Ted Kennedy his booze, and that‘s why he was all offended. 

(END VIDEO CLIP)

SCHULTZ:  Now, that‘s coming from a guy who had a sick fascination with that song “Barack the Magic Negro.”

Rush, Senator Kennedy was offended because what President Clinton said was demeaning.  But it wasn‘t nearly as demeaning as what you just said about Senator Kennedy. 

What if a liberal had talked that way about your old buddy Ronald Reagan?  How would that have gone over?  I don‘t think you would have been laughing about that. 

This is, folks, a classic example of how the right wing sound hate machine has absolutely no boundaries when it comes to basic decency.  And whether or not you agree with Senator Kennedy‘s politics of years ago, going after him in such a way is simply despicable psycho talk.

Coming up, President Obama, is he going to stick to to his base, the liberals, when it comes to taxing health care benefits?  Powerful union bosses are saying, hold on a minute. We‘re going to hold you accountable if you do.  Congressman Anthony Weiner will step right in on the battlefield next.  Matt Lauer tested John McCain‘s anger management skills this morning.  You‘re going to want to see this, if you missed it.

All that plus what Bubba was really up to while Hillary was running for president.  You‘re watching THE ED SHOW on MSNBC. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Thanks for watching tonight.  The House returned to work today and finishing health care reform is the top of the Democrats‘ agenda.  Nancy Pelosi and many House Democrats are furious over the proposed plan to tax generous health care plans, a tax President Obama apparently now supports. 

Joining me for more on that is New York Congressman Anthony Weiner. 

Congressman, the president wants you folks over in the House to suck it up.  He wants you to go ahead and go along with this.  And this is what he basically has said to union leaders yesterday.  How does that sit with you? 

REP. ANTHONY WEINER (D), NEW YORK:  Well, you referred to the CBS poll that came out a little earlier today.  It is interesting, across the political spectrum, people aren‘t saying we‘re not being tough enough on the health care industry; we‘re doing too much on reducing costs.  They say we aren‘t doing enough. 

Frankly, I think we have to realize what got us all elected, including President Obama.  It was the commitment to hold down costs, to provide coverage for people.  The more we step away from that on the altar of compromise, the further we get away from a winning formula, both politically and substantively. 

SCHULTZ:  Well, it seems all of the negotiations are surrounding what the Senate has put on the table.  The only way that this is going to pass and get 60 votes is if they take just about the whole thing, and undermine the work that‘s been done in the House.  There will no public option and now there is going to be new taxes.  Also the big thing in the Senate is that the state-run co-ops,  if I may, are not going to be—there‘s not going to be oversight from the federal government, not one—it is going to be run—the exchanges on a state level.  How does that sit with you? 

WEINER:  Well, I‘m going to tell you something.  I have a website called CountdownToHealthCare.com.  We‘ve been having this open debate about this very question.  About 100,000 people have weighed in.  The basic question is this: is the perfect the enemy of the good? 

Well, everyone agrees we don‘t want to let that happen.  But we also agree that we need certain basic things to be included for us to claim victory here.  If we go too far in the direction of watering down or eliminating the public option, too far in the way taxing the middle class, and too far in the way of having a Nelson plan just for Nebraska, not having it extend to the rest of the states, a lot of people think it is not even worth the paper it is written on. 

That‘s the debate we‘re having right now.  More and more people are weighing in on the side for push for more, not settle for less. 

SCHULTZ:  The middle class taxes, when it comes to the benefits, that could be a deal breaker.  Couldn‘t it be a deal breaker?  Is it a deal breaker?  Where is the line in the sand on this?  You can‘t go—I don‘t know how the president thinks he can go back to the middle class and say, hey, I got to get more money out of you to do this health care thing, after what‘s happened on Wall Street, the tax breaks the top two percent‘s gotten over the last eight years? 

WEINER:  But it is also the place where I think we can do a deal.  So long as the tax is not on a true middle class health insurance plan, like it would be if you live in a state like New York, then maybe there is some work deal that can be worked out.  Right now, what the Senate has proposed is essentially a thing that would tax health care plans in 75 percent of households that happen to have negotiated for and gotten good health care plans. 

The irony is here the people are being punished because they were able to successfully get health insurance from their employer.  That‘s the opposite message that we want to be sending when we‘re trying to encourage more people to be signing up. 

SCHULTZ:  Congressman Weiner, good to have you on tonight.  Thank you.

WEINER:  Thank you, senator.

SCHULTZ:  For more—I am not a senator and I‘m not going to run to be one, either.  Although, I am kind of wondering how does Sarah Palin get to do this thing over on Fox—that‘s another story. 

Katrina Vanden Heuvel joining us tonight, editor of “The Nation.”  Katrina, I want to talk about the political effect of this.  If the president holds on this, and goes with taxing the benefits on the middle class, on the health care plans, isn‘t this, in a sense, some form of political suicide?  What do you think? 

KATRINA VANDEN HEUVEL, “THE NATION”:  There have been too many compromises in one direction, Ed.  I‘m no big brain political strategist.  But I don‘t get how you win elections, how you come forward, and you‘re shafting those who work their heart and butt out for you, labor, progressives, young people.  The mobilization behind Barack Obama was the countervailing force to the moneyed interests who are mugging his agenda and his plans. 

So I think there is some real rethinking to go on—that needs to go on in this White House moving forward.  It is not just about the base.  It‘s about a part of this country which is on your side.  You got to mobilize them.  There‘s been too much inside the Beltway dealing.  Even though President Obama comes forward with a big agenda sometimes, the execution is so cautious and timid. 

Senator Bernie Sanders has a piece in our next issue, Ed; I mean what is this with all this bipartisanship at a time of unprecedented rhetorical and political savagery on the part of a political obstructionist party?  So there are two things, respect your base and fight with passion.  And don‘t let the right wing channel the populism and passion in this country at this moment of pain and possibility. 

SCHULTZ:  David Axelrod is saying that in 2010, he wants to make this race about the Republicans.  I don‘t know how you do that if you‘re going to turn around and tax the middle class.  You‘re making the election, the mid-terms, about you. 

VANDEN HEUVEL:  Let me just—it is a pretty simple calculus, in my view.  Are you going to pay for health care by taxing the middle class and their hard-won benefits, or the rich?  It seems to me that‘s pretty simple, clean.  But I guess it isn‘t at this point in time. 

But the White House has a chance to pivot, to get the best health care plan, to say that we have to fight to make it better, significantly better, in the fear future, and pivot on a great jobs program for millions of Americans, and for labor, not to let the Employee Free Choice Act languish, as it has.  Put some muscle behind it, so that working people in this country can organize and get their fair share in a country, sadly, in which this White House, at the moment, is perceived as being on the side of the banks, not the working people. 

SCHULTZ:  I want to ask you that quickly here, before we go, Katrina.  The Tim Geithner story, AIG, all of this; I mean it stinks.  Where there‘s smoke, there‘s fire.  Do you think that this could be a story in 2010 that could really dog the White House? 

VANDEN HEUVEL:  Yeah.  I think that, in addition, there are some real structural reforms, which Barack Obama has spoken of, but move on it.  He needs to say good-bye to a couple of people in that White House, beginning with Timothy Geithner and Larry Summers.  They look like they‘re on the sides of the banks, not the people.  And, you know what, their actions show, as stories come out like this, that they probably were, are, and will be.  So we need some change. 

SCHULTZ:  All right.  Katrina Vanden Heuvel of “the Nation,” always a pleasure.  Thanks so much. 

In another story tonight, Harry Reid‘s comments may be getting the bulk of the attention.  But the new book “Game Change” is getting a lot of attention.  It has some explosive allegations about Elizabeth Edwards and Hillary Clinton.  The book reports that Mrs. Edwards knew about her husband‘s affair with Rielle Hunter and that possibility that he was the father of her baby before the Iowa caucuses in January, 2008. 

Hillary Clinton, in this book, is painted as a ruthless candidate who was obsessed with Obama conspiracies.  According to the book, she was sure there was a tape of Michelle Obama using the term “whitie.”

For more, let‘s bring in our panel on this tonight: Joan Walsh, editor in chief of Salon.com, and also Ernest Istook, former Republican congressman, now a visiting fellow at the Heritage Foundation.

Joan, in a very—what could shape up to be a very tough midterm year for the Democrats, this Democratic mud slinging—this book may come out at the wrong time for Democrats.  Your thoughts? 

JOAN WALSH, SALON.COM:  You know what?  I couldn‘t be less interested in anything than this book, honestly, Ed.  I‘m really in the minority here.  But these are old stories.  They‘re old gossip.  It focuses heavily on—I don‘t care about the Edwards‘ marriage.  I really don‘t.  John and Elizabeth Edwards live in a world of pain.  They are irrelevant to politics in 2010 entirely.  I don‘t see why we‘re talking about them. 

SCHULTZ:  I‘ll tell you why we‘re talking about it, Joan.  You and I don‘t agree on this.  John Edwards had the support of the Service Employees International Union.  He talked about two Americas.  He was a strong voice in the Democratic party.  He spent a lot of time in Iowa. 

And his wife knew about this affair, according to this book, and maybe even that he had fathered a child.  But she was willing to go along with him and help him get possibly the nomination and who knows, maybe win the presidency.  And after we had been through everything with the Clinton/Lewinsky scandal, it would have been devastating to the progressive movement, and to the Democratic party if it had unfolded—I mean, I think that Elizabeth Edwards shoulders a great deal of responsibility here.  And I think it is also a lesson in how people ought to act if they decide to get on the national stage, to go for that kind of office, to represent the people of the united states.  Joan, I‘m surprised tonight that you think that this is an irrelevant book. 

WALSH:  You know, Ed, I heard your lead-in before, where you said she may even bear more blame than her husband.  That‘s insane.  He is the philanderer.  He‘s the cheater.  Now, yeah, there is some evidence that she knew.  A lot of people—even people that I trust think it‘s probably true and she was reckless and it was not a really great thing that she did. 

But again, a lot of this—there‘s so much misogyny in this book, I‘m just going to come out and say it.  Hillary‘s a shrew, Hillary this, Hillary that; Elizabeth Edwards is worse than her husband. 

It is garbage.  And it is behind us.  The Edwards‘ are irrelevant.  I supported him, too.  I‘m disappointed.  I came to terms with my hurt and my fear and my pain a long time ago.  I want to talk about health care reform.  I want to talk about jobs.  I want to talk about Barack Obama and not look back. 

And I will add, Ed, I have major questions—I‘m not denying anything in the book.  But there is a big debate going on that will bubble up in the next few days about how this book was sourced.  We‘ve got, allegedly, Bill Clinton saying something that sounds kind of racist.  It‘s not even in quotes.  It is a paraphrase.  You really got me going on this book.  I think it is gossip.  And I think it is the wrong thing to be discussing, especially on a show like this. 

SCHULTZ:  OK, thank you, Joan.  I appreciate your opinion.  I just disagree with you on this. 

WALSH:  That‘s OK. 

SCHULTZ:  I think the vetting process of people who are national candidates, if they are willing to gamble with the public‘s credibility, if they‘re willing to gamble like that, they don‘t belong in public office. 

WALSH:  I agree.  And they‘re not.  They‘re gone.  They‘re swept off the stage by history. 

SCHULTZ:  In a historical perspective—we live in a different age.  They could have been.  Ernest Istook, I want to ask you this—how do you feel about this book?  Is it being overplayed?  Do you agree with Joan? 

ERNEST ISTOOK, THE HERITAGE FOUNDATION:  Well, I do have a lot of agreement with Joan.  I haven‘t read the book.  I don‘t plan to read the book. 

But I do think what it shows is that a lot of people who are trying to say to people, oh, we are motivated by the highest principles, when, actually, to many people who seek public office, the highest principle is the pursuit of power. 

It‘s just like what we see right now.  You made I think some excellent comments earlier in the show, Ed, about President Obama flip-flopping on major campaign promises.  It is not a matter of whether you tax the middle class or who you tax, he just wants to make sure there is money in there for a new big government system, that, frankly, has support collapsing for it all over the country, because people keep hearing more and more outrageous things, and a plan that‘s so convoluted, has so many thousands of pages, that the average person can‘t understand it.  But they do understand one thing: it is not going to make health care more affordable for the vast majority of Americans.  It is mainly trying to find somebody that will be the cash cows to pay for government to enlarge its control over health care, and take from some and give to others. 

SCHULTZ:  All right, I appreciate both of you joining us tonight on this.  Joan Walsh, Ernest Istook.  I do want to say this that—do we want the best possible person we can get, whether it be Republican or Democrat, when it comes to running the country?  Thank God Barack Obama is the president of the United States and we are talking about health care, which we spent most of this show on tonight, and we‘re talking about what‘s going on on Wall Street.  It‘s a good thing he did win the election, because if John Edwards had won the election, what would we be talking about tonight? 

That‘s why running for president is serious business.  And also when you get senators and House members and political leaders in this country who are going to go out and endorse a candidate, the working folk of America, at least can we find out that they‘re not living a lie? 

Coming up, for a fear mongering hot head—like I am sometimes—at least he‘s honest.  Mr. Country-first admits that he didn‘t vet his own presidential—vice presidential candidate.  We‘ll talk about it next on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook, after ten years of denying steroid use, Mark McGwire finally fessed up to using the performance enhancing drug.  Tricky timing on the fact that the Cardinals have just hired him to be their hitting coach.  Should he even be in Major League Baseball?  He says he is sorry, but insists the drug had nothing to do with his ability to shatter Roger Maris‘ record. 

(BEGIN VIDEO CLIP)

BOB COSTAS, MAJOR LEAGUE BASEBALL:  Could you have done those things, could you have hit 70 home runs, could have you had a home run ratio greater than anything Babe Ruth did in his time, without steroids? 

MARK MCGWIRE, FMR. MAJOR LEAGUE BASEBALL PLAYER:  Absolutely.  I absolutely believe so.  I was given this gift by the man upstairs.  They talk about the home runs I hit in college.  I led the nation in home runs.  They still talk about the home runs he hit in the minor leagues.  I was given the gift to hit home runs. 

(END VIDEO CLIP)

SCHULTZ:  Yeah, like steroids have no affect on the body.  You know what?  If John Madden hadn‘t cut me, and I would have started at quarterback, heck, we‘d have won ten Super Bowls in a row with the Raiders.  Come on!

Let‘s go to Stephen A. Smith, political commentator and sports caster extraordinaire.  Stephen, what do you make of this? 

STEPHEN A. SMITH, “PHILADELPHIA ENQUIRER”:  I think, first of all, Mark McGwire should be checked right now to see whether he is on something as we speak, because when he denies that performance enhancing drugs in no way enhanced his ability to hit home runs, you know he must still be on something.  He‘s clearly come across as extremely weak, a weasel.  He looks very, very embarrassing right now.  Although I applaud him for sitting down with Bob Costas, I‘m disgusted that a lot of people are celebrating the fact he‘s finally come out and told the truth. 

He sat there and said he wanted to tell it in ‘05, but he did a deal with Congressmen David Waxman to avoid doing so, because he just wanted to talk about the past, because they weren‘t going to grant him immunity.  Yet it wasn‘t until a few days ago he admitted that he just told his own father, his own son, his own children, his own wife.  So I don‘t believe a single word he says. 

I don‘t believe there is a level of genuiness to any of this at all.  The fact that this man knew that he was on steroids and still used the Roger Maris family, hugging them, celebrating with them, what have you, I think he comes across as very, very duplicitous, to say the least.  That‘s really, really being kind.  We‘re over the public airways.  I could get ridiculous about it, but I can‘t do it on these airwaves. 

SCHULTZ:  What should Major League Baseball do?  This is a disservice to the man who earned the record, and that was Roger Maris. 

SMITH:  I don‘t think he should be allowed to be the hitting coach of the St. Louis Cardinals, not at this point.  I think he needs to suffer the way Barry Bonds has been suffering, with the federal government coming after him, the way Rafael Palmiero has suffered, the way Alex Rodriguez has suffered, along with a litany of others. 

Let him suffer.  He suffered because he was saying it was killing him to keep this instead.  In the same breath, he was saying how happy he was in retirement with his family.  You don‘t know what to believe with this guy right now.  I don‘t believe a word he‘s saying.  I don‘t believe he is genuine at all. 

SCHULTZ:  Stephen A. Smith, good to have you on tonight.  Thanks so much. 

On a breaking news note, I want to update you on the situation in Haiti.  President Obama is pledging help for Haiti after the country suffered a major earthquake this afternoon.  There is still a threat of a tsunami.  Stay tuned to MSNBC for updates throughout the night.  And we‘ll bring them to you.  A major earthquake today that measured seven on the Richter Scale and also the aftershock at 5.9.  Nine Million people live in Haiti.  Of course, we‘ll keep you updated on that as we move forward here on MSNBC.

Up next, we‘re talking about Sarah Palin‘s big adventure.  Stay tuned. 

You‘re watching THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Sarah Palin goes to Fox News.  Nationally syndicated radio talk show host Lionel has a thought on his, on just how deep the brain trust is now across the street.

LIONEL, RADIO TALK SHOW HOST:  Senator Schultz, first, I don‘t have a lot of time.  I have an engagement, so this can‘t be long.  OK?  Time management, think about it.

Do you know what you said about John Edwards before which made so much sense, Ed?  you said, this is about the presidency of the United States.  Had these secrets been leaked, this could have derailed the progressive platform and a variety of hopes and wishes that Americans had. 

John McCain and the Republican party allowed a woman who had to be schooled on rudimentary fifth grade American history.  We‘re not talking about nuances.  We‘re not talking about strange Federal Reserve arcane data.  We‘re talking about, this is North Korea; this is South Korea; this is World War I. 

I‘m very serious about this.  John McCain, who loves this country, was within a heartbeat away of—let‘s say, had he been elected, with this actuarial health problems being what they were, and his age, Sarah Palin could have been the president of the United States.  Does he not care enough about us, seriously, and his staff, to pick somebody who is a little more versed on—not, again, arcane ideas, but rudimentary American base core knowledge. 

Ed, if you can wrap this up, I‘m in a hurry. 

SCHULTZ:  Lionel, beyond that, he says he was really involved in the vetting process. 

LIONEL:  He was busy.  He was extremely busy.  This is a travesty. 

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

LIONEL:  Thank you, I think.

SCHULTZ:  Tonight, in our phone survey, I asked you, should Mark McGwire be stripped of his Major League Baseball records?  Eighty four percent of you said yes; 16 percent of you said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  Chris Matthews and “HARDBALL” starts right now on the place for politics, MSNBC.  We‘ll see you tomorrow night, right back here on THE ED SHOW. 

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

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