updated 1/22/2010 11:51:59 AM ET 2010-01-22T16:51:59

Guests: John Harwood, Robert Gibbs, Dennis Kucinich, Sen. Sherrod Brown, Wendell Potter,

Laura Flanders, John Feehery

ED SCHULTZ, MSNBC HOST:  Good evening, Americans.  And welcome to THE ED SHOW from New York tonight.  These stories are hitting my hot buttons this evening. 

White House Press Secretary Robert Gibbs and I had a heated discussion on this program last night.  He‘s back for round two tonight.  That‘s coming up in just a moment. 

House Speaker Nancy Pelosi says she doesn‘t have the votes to pass the Senate version of the health bill.  Now the Democrats have to figure out how to get a bill through the Senate with only 59 votes. 

And former senator and presidential candidate John Edwards finally fesses up that he‘s the daddy.  We‘ll have more on that.  NBC‘s Lisa Myers will have more on that for us tonight. 

And it is official in broadcast, Air America Radio announced late this afternoon that they are officially out of business.  More on that later. 

But first, America changed today and I don‘t think it‘s for the better.  This morning, on a vote, 5-4, the Supreme Court ruled to allow corporate money to flow directly to the political arena.  This opens the floodgates for more control in hands of big business.  This ruling takes the dollar limit off donations. 

Think about that.  It‘s going to be unlimited.  Now there used to be limits at the federal and state level.  That‘s gone.  This means that those corporations can go out, gouge the public, charge whatever they want, funnel the money to advocacy commercials for or against candidates. 

How can this be a good thing? 

President Obama released a statement on the ruling.  He said, quote, “With its ruling today, the Supreme Court has given a green light to a new stampede of special interest money in politics and it is a major victory for big oil, Wall Street banks, insurance companies,” especially health insurance companies, “and other powerful interests that marshal their power every day in Washington to drown out the voices of every day Americans.” 

When President Obama ran for president in 2008, $6 billion was spent on the federal campaigns in this country.  And of that $1 billion came from corporate PACs and unions.  Well, after today, that $1 billion could flat-out go through the roof for the next election cycle. 

Corporations can now write the checks without limits.  So much for the little guy.  This is what you get when you‘ve got two conservatives appointed to the Supreme Court under the Bush administration. 

Now last night on the show, White House Press Secretary Robert Gibbs and I got into somewhat of a heated discussion about different things that the administration is doing when it comes to health care. 

We ran out of time so, Mr. Gibbs said he would come back and continue our conversation. 

Mr. Gibbs, it‘s good to have you back on THE ED SHOW tonight.  You‘re a standup guy for coming back for round two and I certainly appreciate it and I know our audience does, too. 

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  Happy to be here, Ed. 

SCHULTZ:  And there‘s a lot of news out there today.  I want to start with the Supreme Court decision, 5-4, the decision by the Supreme Court to allow corporations to spend unlimited money to influence federal elections. 

Does this set a new course for the White House and set a new priority? 

GIBBS:  Well, it sets a new priority for us and I hope members of Congress that are interested in not allowing the special interests to not just control our legislative process but to take even fuller control of our electoral process. 

The president is quite alarmed by what the Supreme Court has done.  I think there are members of Congress that won‘t let this stand either.  We have got to get a solution that prevents, as you said, unregulated, unchecked, unfettered campaign access through our political system by unlimited corporate contributions. 

SCHULTZ:  Yes.  Well, when this ruling came down today the first thing I thought about was big oil.  And I know this administration wants to do something about the environment. 

Does this make it a heavier lift?  Do you think they will really turn on the juice now and fight any kind of environmental change effort that the White House is thinking about? 

GIBBS:  Well, look, I think the result of today‘s decision, Ed, what we fear and I think what others around the country fear, is that if you want to try to create a clean energy economy that reduces our dependence on foreign oil, that big oil is going to make that heard. 

If we want to get health care reform done in this country, it is going to be harder because the insurance companies will be able to give unlimited donations. 

I think this was a big setback for the American people.  It was a big win for the special interests and I certainly hope that before the November elections, we can figure out a solution to ensure that a blank check from corporate donations doesn‘t affect the outcome of the fall elections. 

SCHULTZ:  All right.  Let‘s go to health care.  Today, House Speaker Nancy Pelosi says that she does not have the votes in the House for the Senate bill.  Is this the first nail in the coffin?  Is this a big setback?  Or is this just something you anticipated?  Where does the White House go with health care reform on the heels of that comment? 

GIBBS:  Well, Ed, the president has—has spoken with Speaker Pelosi and has spoken with Majority Leader Reid, even as they speak to their caucuses about the best way forward. 

You know, Ed, we were passionate about getting health care reform done before the Massachusetts election and we are passionate about getting it done now because the problem hasn‘t gotten better since Tuesday for people that are losing their health care or watching it get more expensive. 

It‘s only going to get worse.  And if we don‘t do anything about it that will just continue.  We‘ve got to figure out what the best way forward is.  We‘ve got to figure out how to get legislation through the House and the Senate.  We‘ve got a bill through the House, a bill through the Senate. 

And there are some differences.  But we‘re working with Senator Reid and Speaker Pelosi on the best way forward. 

The president does not believe health care, by any means. is dead.  We‘re going to get something.  We‘re going to get comprehensive reform this year. 

SCHULTZ:  What kind of compromises is the Senate willing to make off of their bill?  We have gone from it‘s going to be the Senate bill, we hope the House will take it.  The House is now saying, well, we don‘t have the votes. 

It seems that there is a lot of people, especially on the left, that are going to have to be satisfied to get any kind of reform. 

GIBBS:  Right. 

SCHULTZ:  So it would seem to me that if the president wants health care reform, he‘s got to kick it into high gear right now.  So where is the concession going to be with the Democrats? 

GIBBS:  Well, look, Ed, before—before Tuesday‘s election, the House and the Senate had spent many hours here in the White House over the past week trying to find that middle ground between what passed the Senate and what passed the House. 

So, I think we were in the process of developing an even better product that we could get through both Houses with 60 votes in the Senate. 

(CROSSTALK)

SCHULTZ:  But was today a setback? 

GIBBS:  Right. 

SCHULTZ:  Was today a setback? 

GIBBS:  Well, I think there‘s no question that the political dynamic has changed on Capitol Hill.  We certainly recognize that.  We‘re working with those leaders in Congress to figure out the best way forward to ensure that we have worked hard for eight or nine months and we don‘t want that hard work and good product to go to waste. 

SCHULTZ:  OK.  I want to pick up where we left off last night. 

GIBBS:  Sure. 

SCHULTZ:  Is the White House concerned that the base is wavering?  Does President Obama feel like he has his base with him on health care? 

GIBBS:  Well, look, Ed, this has not been a pretty process in trying to get to this point in health care.  I don‘t think we‘d be here if it weren‘t for the president‘s leadership.  Nobody is going to get—including the president, is going to get everything they want in this, but, Ed, I believe that progressives can look at legislation that‘s passed the House and the Senate and be proud of each of those products. 

They cut costs for working families.  They help our budgetary situation.  They bend that long-term cost curve.  They provide those need insurance protections.  Through the exchanges, we are going to have choice and competition. 

I think there‘s a lot to like in these bills.  I hope that if you‘re a member of our base, if you are a supporter of the president, that you will look at what‘s in these bills and work toward getting us to get them through Congress. 

SCHULTZ:  OK.  Can you tell our audience tonight, Mr. Gibbs, that this bill is not a sellout to the insurance industry?  That maybe there is some concessions that are made but you don‘t believe and the White House doesn‘t believe and the president doesn‘t believe that this is a sellout to big pharma and to big insurance? 

GIBBS:  Absolutely not.  What we‘re going to do, if this bill passes, is close that doughnut hole for millions of seniors that have a prescription drug benefit.  But if they take too many drugs each year, they end up having to pay all that for themselves because their aid runs out. 

We are going to make sure we have tough insurance reforms in this legislation so somebody can‘t discriminate against you based on a pre-existing condition or, as we‘ve heard so many times, the horrific stories of an insurance company. 

SCHULTZ:  Yes. 

GIBBS:  . setting a cap on the benefits that an insurance policy will pay out.  Look, I know there‘s been a good back and forth between—about the role of the insurance companies. 

I‘ll tell you this, Ed, and I can tell this to you and your viewers the insurance companies are fighting this tooth and nail.  They‘ve taken money.  They‘ve sent it through the Chamber of Commerce to run ads in opposition to this. 

As I said yesterday, when—during that Massachusetts election on Tuesday, when it looked like health care would be in peril. 

SCHULTZ:  Yes. 

GIBBS:  Insurance stocks went up by $4 billion.  So. 

SCHULTZ:  But if the mandate is in the bill, the insurance industry will get millions of new customers.  Can you admit that? 

GIBBS:  Well, there‘s no—well, what this bill will do will cover everybody in this country. 

SCHULTZ:  OK.  It will.  But they will get more customers via legislation? 

GIBBS:  They certainly will get more customers, but Ed, what they‘ll also do is they‘ll have to do something to get those customers. 

SCHULTZ:  OK. 

GIBBS:  They‘ll have to open up to competition.  They‘ll also have to do stuff, as I said, in terms of insurance reforms.  They won‘t be allowed to tell that mother, as we talked about yesterday. 

SCHULTZ:  Yes. 

GIBBS:  . that we don‘t cover your child because we think they have a pre-existing condition or if you‘re sick and you need a lot of health care, which what happens in a lot of these cases is the people that use the most health care obviously are those that are the most sick. 

SCHULTZ:  Sure .

GIBBS:  People bump up against these caps that they didn‘t know were there in their insurance policies. 

SCHULTZ:  OK, now. 

GIBBS:  . the insurance company will say we can‘t cover what you‘re trying to do because you‘ve hit that lifetime cap.  Those caps would disappear under this plan. 

SCHULTZ:  OK.  Now, the president is talking about a scaled-down version of health care.  What has to be in this bill?  What has to be in this bill for the White House, for the president to view this as the road map to reform, so to speak? 

GIBBS:  Right. 

SCHULTZ:  Is it the pre-existing condition?  Is it everybody getting covered?  Is it the doughnut hole?  What has to—what‘s the scaled-down bill that would be acceptable to the president? 

GIBBS:  Well, Ed, I talked to the president about this issue today, and he‘s told me and he‘s told all of us here at the White House, we are not giving up on complete and comprehensive health care reform. 

SCHULTZ:  OK. 

GIBBS:  Obviously there are going to be discussions about the best path forward and how to get that done, but the president‘s view is still that narrow reforms don‘t solve all the problems that he thinks he was elected to address and that the people of this country want us to address. 

SCHULTZ:  And. 

GIBBS:  We‘ve got to do something about accessibility and afford ability and cost and insurance reforms and the doughnut hole and we‘ve got a plan to do that. 

SCHULTZ:  Doesn‘t sound scaled down to me.  It sounds like you still want to try to get a lot done. 

All right, now the president. 

GIBBS:  I think we can do that. 

SCHULTZ:  All right.  The president made the comment in an interview yesterday that he feels like the White House has lost touch with the American people in a sense.  Do you—how serious is he about that and what changes would he make to turn that around?  What‘s he going to do? 

GIBBS:  Well, look, I tell you, Ed, I think what he said in that interview is much of the anger and frustration that we saw manifest itself in that election on Tuesday is the same anger that we saw and frustration manifest itself in that 2008 election. 

People were upset about the direction of their country.  People were upset that Washington wasn‘t solving the problems that they were having every day. 

(CROSSTALK)

SCHULTZ:  Is he going to talk more to the American people?  What is he going to do different? 

GIBBS:  Absolutely.  The president is going to spend more time talking directly to the American people, ensuring that the special interests don‘t have undue sway over what people learn about this legislation. 

Look, I‘ll admit to a failing on this, Ed.  We haven‘t done as good a job in ensuring that the American people know what‘s in this bill that‘s good for them.  That‘s the fault of those that are hired by the president to help him communicate and we certainly take that responsibility. 

SCHULTZ:  Mr. Gibbs, good to have on THE ED SHOW tonight.  I appreciate it. 

We‘ll do it again. 

GIBBS:  Ed, thanks for having me. 

SCHULTZ:  All right.  White House Press Secretary Robert Gibbs here with us tonight. 

And saying in that interview that they know the political dynamic on Capitol Hill has changed, message from Massachusetts sent, message at the White House has been received. 

Coming up, are we going to look back at today as the day that health care died?  Nancy Pelosi says she can‘t get the votes to back the Senate bill.  My reaction to all of that in a moment. 

And I‘m not the only one asking tough questions about the president‘s leadership.  Congressman Dennis Kucinich.  He‘ll be here to tell it like it is in just a moment. 

All that plus Edwards drops a bomb and then heads to Haiti. 

And I‘m putting a lefty in “Psychotalk” tonight.  I think he really deserves it.  You won‘t want to miss it.  It‘s coming up in THE ED SHOW.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  And we‘d like you to tell us what you think tonight in our telephone survey.  The number to dial is 1-877-ED-MSNBC. 

My question tonight is, do you think President Obama has lost touch with the American people? 

Press 1 for yes, press 2 for no.  We‘ll bring you the results later in the show.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW the American people elected Democrats, put them in the majority in 2008 to change the country for the better.  It‘s been tough sledding with the Republicans, hasn‘t it? 

So far, not much has happened.  Wall Street continues its hand out loads of taxpayer dollars and also goes to bonuses.  Health care insurance companies are still raking in huge profits while Americans struggle to find insurance. 

My next guest thinks that we need to take a step back and do a serious assessment of the situation. 

Joining me now is Congressman Dennis Kucinich of Ohio. 

Congressman, good to have you on tonight. 

REP. DENNIS KUCINICH (D), OHIO:  Thank you, Ed.  Good to be here. 

SCHULTZ:  In a generic sense, can you tell me and tell our viewers tonight where the Democratic base is in general? 

KUCINICH:  In general, it‘s where every other base in America is, and that people want jobs.  They want to make sure their homes are secure, their house—that they‘re not going to lose their homes, foreclosure.  They want health care.  They want retirement security.  They want investments to be secure. 

I mean economics, what it‘s about.  And frankly, the disconnect between the government and the people today, I think, is on the economic issues.  And if we can start to close the gap, have a little bit more communication with the people, such as we have in Massachusetts, I think that the Democrats will recover and that we‘ll continue to be of service to the American people. 

SCHULTZ:  Are you going to have to pass health care to recover?  Because Nancy Pelosi is saying that over in the House, she doesn‘t have the votes to pass the Senate bill.  Your thoughts? 

KUCINICH:  Well, she‘s right.  And the truth is, though, that there‘s nothing that stops us from passing a bill that stops—that would stop insurance companies from denying care to people with pre-existing conditions. 

There‘s nothing that stops us from passing a bill that would cause the insurance companies to be subject to antitrust laws.  Nothing stops us from repealing the Medicare part D giveaway to the pharmaceutical companies of a few years ago. 

So there are things that we can do that can directly address concerns that the American people have.  I‘m all for it. 

SCHULTZ:  What has gone wrong here, Congressman?  Has the White House blown it on health care? 

KUCINICH:  Look, you know, we don‘t need to—I‘m not going to pile on the president.  I will say that the White House needs a slightly different perspective than Mr. Geithner and Mr. Summers are offering on the economy. 

I think they are out of touch.  I don‘t think that they have any clue what it means for the American family struggling to survive, because if they did they would demand that the banks loan money to companies, to create jobs.  They‘d demand that Wall Street creates jobs. 

They wouldn‘t be saying as efficient there is a certain amount of unemployment that‘s sufficient for the proper functioning of the economy.  They would be about jobs, jobs, jobs. 

SCHULTZ:  Yes. 

KUCINICH:  We get America moving again.  And you know what?  They‘re not in that—that‘s not where they‘re from.  And that‘s too bad. 

SCHULTZ:  All right. 

KUCINICH:  They‘re doing a disservice to the president. 

SCHULTZ:  All right.  So the president today pretty much went against his treasury secretary and also his economic adviser, Mr. Summers, and he put the hammer down on the banks.  Did he go far enough, really, in the risk in explaining what he wants to do? 

KUCINICH:  Well, I think it‘s important for the president to take a strong stand on behalf of consumers.  And these banking bonuses are a serious issue.  I mean they use access to free money.  They‘re didn‘t earn this money.  They got free money and they‘re paying themselves bonuses. 

This country is disintegrating while bankers are getting over $100 billion in bonuses.  And when you take that Supreme Court decision today, Ed, now they‘re in a position where they get free money from the government, they put it into bonuses, they can also contribute unlimited money to campaigns, so they can keep getting free money from a government that is their government. 

You know, we have to save our democracy here.  And—make no mistake about it, our democracy is on the line.  I hope our president will continue to stand up to the banks.  I hope he will stand up to the insurance companies.  I hope he‘ll let the people know that if we‘re going to have government of the people, then we‘ve got to challenge the hold which these corporations have on our government. 

SCHULTZ:  And Congressman, how tough will it be for the legislative branch to challenge that Supreme Court ruling today, which I think clearly opens up the floodgates for the special interests to line the pockets of politicians and buy another House or Senate seat? 

I mean this is not, in my opinion, good for the people.  I think that you probably share the same opinion on that.  But what legislatively can be done and how fast? 

KUCINICH:  Well, one of the things I‘d like to see done is repeal corporate personhood.  They get corporations in America a free ride.  They‘re able to escape taxes.  They don‘t have the same responsibilities that real people have.  We need to challenge corporations, hold the political process, repeal corporate personhood. 

We also need to look at what we can do to go around the Buckley v Vallejo rule or this other ruling to put strong controls on campaign spending.  And in addition to that we have to—I think have public financing of congressional race. 

If you don‘t—it‘s either private financing of the races and then the government‘s owned by private interests or it‘s public financing and then it‘s government in the public interest.  That‘s really going to be the choice we have because of the Supreme Court ruling. 

SCHULTZ:  And, Congressman, let me get back to health care just one more time here for a moment.  Why won‘t the progressives in the House just go ahead and rubber stamp the Senate bill so President Obama can get a legislative victory and then come back later on and introduce some other legislation that might tweak the bill down the road? 

Why not do that? 

KUCINICH:  We wouldn‘t be doing President Obama or the American people any favors if we rubber stamped a bill that would cause workers to have to give back money out of their paychecks so they could pay a tax that would then be recycled into profits of insurance companies. 

SCHULTZ:  So you think it is a sellout to the insurance industry? 

KUCINICH:  Well, yes, I mean, that‘s a mild way of putting it. 

SCHULTZ:  OK. 

KUCINICH:  I think that we don‘t do the president any favors, we stand up for the people and we say, look, let‘s go back to the drawing board.  We can support our president, but we can support him by having specific health care initiatives that we can rally the American people on, that we can get Democrats and Republicans to agree on, and then we can move forward, but this bill, not a chance. 

SCHULTZ:  Congressman, great tough with us. 

KUCINICH:  Thanks, Ed. 

SCHULTZ:  Dennis Kucinich from Ohio here on THE ED SHOW tonight. 

Coming up, you‘re not going to believe this, but in a minute, I‘m going to rise to the defense of the beckster, the drugster and slanthead?  A lefty lands in “Psycho Talk.”  We‘re right back. 

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, well, I knew it had to happen sooner or later, we‘re going to do something a little different tonight, we have a lefty, a left hook.  That‘s right. 

We‘ve got radio talk show host Mike Malloy.  Now the righties have baggage like Pat Robertson out there that‘s really embarrassing them from time to time.  Mike Malloy is guy carrying that torch for the lefties. 

Listen to what this guy said on his radio talk show this week. 

(BEGIN VIDEO CLIP)

MIKE MALLOY, RADIO TALK SHOW HOST:  You right-wingers, do you not understand that the people you hold up as heroes bombed your (EXPLETIVE DELETED) country? 

Do you not understand that Glenn Beck and Sean Hannity and Rush Limbaugh and Bill O‘Reilly are as complicit of the September 11th, 2001 terror attack as anyone of those dumb (EXPLETIVE DELETED) 15 that came from Saudi Arabia? 

Don‘t you get that? 

(END VIDEO CLIP)

SCHULTZ:  Wow.  You know, I have not too much respect for any of the wingnuts that he mentioned in that tirade, there‘s no question about that, that they‘re bad for America in my opinion, but saying that they actually bombed this country is way out of line. 

And that kind of talk puts you right down in the gutter with the drugsters of the world.  You know?  It‘s completely distorted your credibility, Mike.  You‘re an embarrassment to the left to talk like that.  That‘s not the truth and you know it isn‘t. 

That‘s why you are our very first lefty to land in “Psycho Talk.” 

Coming up, we‘re going to talk to Senator Brown, the good one, Sherrod Brown, not Scotty, the one from Massachusetts.  He thinks that Democrats were too slow to the punch on health care and that‘s why we‘re getting beat in this election cycle. 

And former insurance industry executive responds to Robert Gibbs‘ theory that the insurance companies hate this bill. 

All that, plus John Edwards makes a run forward to Haiti.  We‘ll be right back on THE ED SHOW. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW, and thanks for watching tonight.  When it‘s all said and done, the question is are we going to look back on this day and say that this is the day that health care died?  Well, Nancy Pelosi said today that the Senate version of the bill won‘t pass in the House. 

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER:  Unease would be a gentle word in terms of the attitude of my colleagues toward certain provisions of the Senate bill.  In its present form, without any change, I don‘t think it‘s possible to pass the Senate bill in the House.  I don‘t see the votes for it at this time. 

(END VIDEO CLIP)

SCHULTZ:  Well, that means the Democrats are going to have to figure out how to get a bill through the Senate with only 59 votes.  President Obama has completely lost control of this situation, in my opinion.  He has got to act and act fast.  He has lost touch with the folks who put him in the White House, his base.  And the president admitted as much last night. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  If there‘s one—one thing that I regret this year is that we were so busy just getting stuff done and dealing with the immediate crises that were in front of us that I think we lost some of that sense of—of, you know, speaking directly to the American people about what their core values are. 

(END VIDEO CLIP)

SCHULTZ:  Got to respect the president for that.  But if there was ever a president—you know, I didn‘t think that this one would lose touch with the American people.  I didn‘t think it would be Barack Obama.  That admission has got to be tough for him.  And for the president to admit that it speaks volumes about where we are when it comes to health care. 

Not so much about Obama, himself, the president, but about the folks he has surrounded himself with.  And that‘s something that I think has to change.  This is a turning point for President Obama.  We got to get this done.  He needs to get some new blood in the White House.  He has to realize that it‘s not about just having your best friends around.  It‘s about getting the job done and some real strong advice. 

He needs, I believe, to surround himself with unvarnished opinions, folks who will tell it like it is when the banks are doing what they are doing.  And he should find the most experienced and the most useful folks out there that can help him out and get them on board, like maybe John Podesta or David Gergen or Dave Cracker, former admiral in the Navy.  He is a guy who will tell it like it is. 

These are guys that can come in and give some fresh advice, unvarnished and experienced.  The bottom line here is President Obama, as much as there is so much talk about the sea change going on, I think he has to get back to his base.  When you run around for two years promising hope and change, when you vow to pass real health care reform with a public option, and you campaign on that—a lot of talk about, well, he didn‘t campaign on it—oh, yes, did he.  And that‘s what people expect him to do, deliver. 

If you don‘t have the votes, you got to exhaust every effort and go reconciliation.  I haven‘t heard enough of that word since what happened the other night in Massachusetts.  If President Obama doesn‘t start listening to the American people, his base, the people that put him in there, there‘s going to be a real political price to pay.  I believe I gave this commentary back in August. 

Scott Brown‘s victory in Massachusetts showed Democrats really no seat is safe at this point.  Even Senator Barbara Boxer of California, who was re-elected in 2004 by 58 percent of the vote said, quote, “every state is now in play.”  Senator Kent Conrad of North Dakota blamed the situation on an overly ambitious agenda.  I don‘t buy that at all. 

I think this president has done quite a bit for the first year.  But the big potato on the table that needs to be sliced up is health care.  Senator Sherrod Brown of Ohio says the Democrats are in trouble because they didn‘t push hard enough.  I have said that before.  He also said that the health care bill should have passed back in September. 

Senator Brown of Ohio joins us here THE ED SHOW.  Senator, I want this to pass.  Millions of Americans want this to pass.  But there‘s a feeling at this time that the wheels have come off the wagon.  I want your assessment at this hour. 

SEN. SHERROD BROWN (D), OHIO:  Well, they haven‘t come off the wagon.  This makes it a much bigger challenge.  Listen, the president—the president has tried bipartisanship.  He went to Republican caucus meetings in the House and Senate.  He brought Republicans to the White House.  He offered to work with them on the stimulus package.  The only Republican answer was more tax cuts for the rich and more deregulation.  That‘s what got us into this situation during the Bush years. 

Then there was a member of the gang of six, when three Republican senators met with three Democratic senators—they had no intent—with the exception of Olympia Snowe, they had no intent to really work on legislation with us.  The president‘s tried that.  The president understands that now.  Ultimately, it‘s whose side are you on? 

SCHULTZ:  So, senator, what is the course correction here?  I think you have laid it out perfectly, but what is the course correction? 

BROWN:  The course correction is figure out how to pass as much of this health care bill as we can.  We can do that.  We all have some ideas.  We are talking about that in the caucus.  But the bigger issue is immediately start talking about jobs, and which side you are on.  Look at what happened today, the Supreme Court, five to four, five Republican appointees basically said corporations can give as much money as they want; it is free speech. 

You know, corporations—George Washington and Alexander Hamilton and Thomas Jefferson, they wrote all the free speech into—the people that—not George Washington, but people that supported the Bill of Rights wrote the Bill of Rights.  They weren‘t writing the Bill of Rights to give free speech to corporation.  But that means even more special interest, more drug company money, more insurance company money. 

The president has to take these people on.  The president has to show whose side are you on?  The side of the drug companies?  Are you on the side of the insurance companies?  Are you on the side of the middle class?  I know what Ed Schultz‘s listeners think about that.  I know what not just what Democrats think about whose side are you on.  The public wants that. 

The independents -- 55 percent of the independents that came out of the polling booths in Boston and Worcester and Amherst, Massachusetts, said Wall Street has twice as many—Wall Street has more influence in our government than Main Street. 

President Obama has got to show to the American people Main Street is in the driver‘s seat, not Wall Street.  He has got to say that.  We have got to keep saying that, as people like Ben Cardin and Jeff Merkley and Al Franken and Sheldon Whitehouse and I say on the Senate floor.  That‘s what we have got to do.  That‘s what we are going to be doing in the days ahead. 

The president coming to Lorraine, Ohio, my hometown, tomorrow.  He knows that.  He knows it‘s about jobs.  He knows it‘s about which side are you on? 

SCHULTZ:  But the president, I think, has done a great job explaining to the American people that for the economy to recover, we got to pass health care legislation, because these bills are on the kitchen table of American families. 

But when should the president just cut his losses in trying to deal with the Republicans?  They have been obstructionist.  The last guy that just went to the Senate, Scott Brown, is advertised as number 41.  That‘s now his nickname on Capitol Hill.  Forget the Republicans.  Hammer this thing through.  Why doesn‘t the president do that? 

BROWN:  Well, I think you are going to see a different President Obama coming out of the gate tomorrow.  I don‘t know that.  I think that he reads what all of us read in this.  He is at least as smart as Ed Schultz and Sherrod Brown, maybe.  I think he is, certainly.  Maybe not combined.  He knows what we know on this.  He has read these poll results.  He has seen what happened in Massachusetts.  He has seen Republican recalcitrance.  And clearly, Republicans don‘t want us to do anything. 

SCHULTZ:  Anything. 

BROWN:  We start putting things on the floor and say, are you for—are you for us, for the American people, or are you against?  Are you for the drug corpse or are you for the middle class?  Are you for the insurance companies?  Listen, for the last—until—you know, Barack Obama has had one year to clean up the mess that eight Republican years gave us. 

I won my election in a swing slightly Republican state in ‘06 because I said whose side are you on?  Are you on the side of the drug companies that betrayed the middle class?  Are you on the side of the insurance companies that betrayed the middle class?  Are you on the side of the corporations that outsourced jobs to China?  Are you on the side of the middle class?

And the voters get that.  Barack Obama gets that.  He is a very smart guy.  He is going to step up.  This State of the Union speech is going to be a call to arms, in my view.  At least I‘m urging him to say that.  This is going to be a call to arms.  It‘s going to put us in a place that the public‘s going to look at 41 Republicans trying to kill everything we do. 

SCHULTZ:  Well, senator, you are on fire.  You are on point.  You‘re speaking the truth.  There‘s no doubt about it.  I just hope this White House gets the message that the obstructionists over on the right aren‘t going to give him anything.  And I think it would be great to go out on the campaign trail and say, look, we passed health care and no Republicans were  helping us.  Millions of people—I think that is great place to be. 

You know where the Republicans are tonight?  They are genuflecting on the steps of the Supreme Court.  That‘s where they are tonight. 

BROWN:  Yes. 

SCHULTZ:  They are buying this stuff.  Senator, great to have you on. 

BROWN:  One more thing, Ed.  They are—we used to accuse them of being the party of no.  They didn‘t like that.  Now they proudly wear buttons—almost buttons on the Senate floor saying, we are the party of no.  We are going to stop these things.  They created this mess.  Their solution is more of the same.  We want to take the country in a different direction.  We have got to show the public that‘s the direction we want to go. 

SCHULTZ:  Senator, got to run.  Thank you so much.  Sherrod Brown of Ohio with us tonight on THE ED SHOW.  This Congressional battle over health care reform is great for the insurance companies.  We have reached a point where I don‘t think they can lose.  If health care reform bill fails, they win.  Even if it passes, they are going to get a big break.  They are going to get a bunch of new customers. 

Health company stock prices are soaring.  The United Health Group announced today that their 2009 fourth quarter profit was up 30 percent.  For more on that, let me bring in former Cigna health insurance executive Wendell Potter.  Mr. Potter, you predicted it.  You said it would be a big number in the fourth quarter and there it is.  Did they just gouge the American people?  What‘s happening here? 

WENDELL POTTER, FMR. CIGNA HEALTH INSURANCE EXECUTIVE:  They certainly did.  What you are seeing here—United‘s always the first company to report earnings in these reporting cycles.  Their revenue was up 6.5 percent and their membership was down 6.5 percent.  The way they achieved that was jacking up the premiums and driving away business they didn‘t want, just as I have been talking about all along. 

Some of that attrition occurred because people are losing their jobs and losing their coverage as a consequence of that.  But when you have figures like this, you are jacking up the premiums to the point that small businesses and individuals had to drop their coverage.  And that‘s what will happen if we don‘t pass reform.  We will see more and more of that. 

You‘re exactly right, the insurance companies will win.  They will make out like bandit if we don‘t have it.  But progressives need to understand this.  They need to get behind this effort to pass the Senate bill, as much as it is flawed.  Speaker Pelosi said she didn‘t see the votes at this time.  And she is probably right.  I call on progressive organizations to really start working to make sure that people don‘t miss this opportunity.  We cannot take an incremental approach.  We cannot just ban preexisting conditions and be done with it. 

SCHULTZ:  Mr. Potter, if I recall, this is the first time you‘ve been on record saying that this bill should be passed. 

POTTER:  Yes.  I have said that there are some elements of this that I don‘t like, and I continue to say that. 

SCHULTZ:  But you‘re saying the Democrats should take the deal? 

POTTER:  They should take the deal.  We don‘t have a better alternative that‘s available to us.  If this fails, we are going to being facing many, many years of not having the ability to do this.  Look, the last time we tried to do an incremental approach was after the Clinton bill failed. 

SCHULTZ:  Yes. 

POTTER:  We said then—the progressives said then that we will just change the system incrementally.  Where did that get us?  We wouldn‘t be here today if that had worked. 

SCHULTZ:  Mr. Potter, great to have you with us tonight.  I appreciate your time so much. 

POTTER:  Thank you.

SCHULTZ:  For more, let me turn to our panel tonight.  It has been a big day in news.  Host of GritTV.org, Laura Flanders, with us tonight, and Republican strategist, John Feehery. 

Folks, I want to go back to the Supreme Court ruling today.  It was five to four allowing special interest groups, corporations to throw unlimited money at campaigns.  John Feehery, is this good for the country? 

JOHN FEEHERY, REPUBLICAN STRATEGIST:  Ed, in my opinion, it is good for the country.  I believe in the freedom of speech.  I don‘t like the idea of politicians and the government dictating what‘s political speech and what‘s not.  I like the idea of everyone having as much free speech as they can.  I think it‘s a good way to go.

SCHULTZ:  Is this about free speech?  I mean, there were limits on what you could do in a federal campaign, a state campaign, and now those limits are gone.  I mean, they could—there‘s unlimited money, John.  This kills the little guy‘s voice, doesn‘t it? 

FEEHERY:  Ed, there was unlimited money in the last campaign, if you recall.  It was all unregulated outside through things like MoveOn.org.  They had all kinds of unlimited money.  They played in the campaigns big time.  Labor unions played in the campaigns big time.  This is going to even the playing field.  It is pro-free speech.  I‘m all for it. 

SCHULTZ:  Wow.  It‘s going to level the playing field?  Laura Flanders, your take on it? 

LAURA FLANDERS, GRITTV.ORG:  Is baloney.  You know, the corporations have 17 times as much money as labor will have freed up by this decision.  You know, we need to start putting the pieces together here.  Sherrod Brown talked about the insurance companies—and Wendell Potter, too—running away with our health care debate.  They are running away with our democracy. 

I want you to think.  I‘m in New York City and we have got a struggle going on in upstate around whether companies like Exxon should be allowed to use chemical fracturing to extract not-so-natural gas from the shale.  Just imagine you‘re one of those upstate legislators trying to make their best mind up about this decision, and you‘ve got Exxon running a campaign against you.  You are completely right.  It‘s not just about what voices get heard.  It is about which get silenced. 

SCHULTZ:  What is going to happen, John Feehery, is you are going to see corporation gauge the public, take that money, and throw it to the campaigns to defeat or support anything they want for the good of them, and not for the people.  How can you say that levels the playing field for the little guy? 

FEEHERY:  Let me ask one question, Ed.  Who hires and employs most of the people in this country?  It‘s corporations.  So, if you are anti-corporation—

FLANDERS:  Why not just give them the whole government?  Why not give them the whole government.  Let them vote, why don‘t you.  Then we can let Goldman Sachs just run for president? 

FEEHERY:  Listen, I don‘t like the idea of politicians telling people what is free speech.  I feel like these limits to be.

FLANDERS:  They tell us campaign after campaign after campaign, the little guy doesn‘t get a word in. 

FEEHERY:  The little guy has plenty of words in.  The little guy was the one that they mobilize.  The little guy is one that got Scott Brown elected. 

SCHULTZ:  Wait a minute.  The Chamber of Commerce floated a lot of money to that guy, and you know that.  John Feehery, Laura Flanders, great to have you with us tonight.  It is a subject we will continue to talk about here THE ED SHOW.

Coming up, John Edwards has managed to do himself—I don‘t know why where this guy is coming from.  But he admitted that he is the daddy.  So we are going to talk about that in a few moments.  Stay with us.  We are right back on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Now to the latest on Haiti.  Fourteen thousand US soldiers are now supporting relief efforts on the ground and at sea.  By Sunday evening, that number is expected to rise to around 20,000.  Just to put this into perspective for you, that is the same number of troops sent to Iraq during the 2007 surge. 

In a surprising move, John Edwards arrived in Haiti today with medical supplies and a team of doctors to assist in the relief effort.  Edwards trip to the disaster area comes at a very interesting time in his personal life.  Just this morning, he admitted he was the father of Quinn, the two-year-old daughter of his mistress, Rielle Hunter.

Coming up, stocks took a major nosedive after the president announced a plan to regulate risky behavior of the big banks.  CNBC‘s John Harwood will break it down for us next in our playbook.   Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And in my playbook tonight, America changed today and I don‘t think it is for the better.  The Supreme Court issued a ruling that will change the entire political landscape as we know it, by ruling to remove limits on corporations from spending their money on federal races.  Companies will now be free to spend as much advertising as they want to support or attack a potential candidate. 

CNBC‘s chief Washington correspondent John Harwood joins us tonight.  John, the nuts and bolts of this‘ there is no limits now; they can just spend as much money as they want, correct? 

JOHN HARWOOD, CNBC ANCHOR:  They can.  And look, this is a complicated subject.  Corporation and labor unions, for that matter, have had the ability legally to run so-called issue ads, independent expenditure ads that could not explicitly advocate the particular election of a member, but could pretty strongly suggest it.  so lots of viewers have seen those on their screens for some years now.

Under McCain/Feingold—this was the provision that triggered the case struck down today.  Under McCain/Feingold there had been a limitation.  In the last 60 days of a general election you couldn‘t use the name of the candidate.  And that was deemed to be against the rules, because McCain/Feingold was trying to limit the influence of the corporation.  The Supreme Court says you can‘t limit that.

Now the corporation and labor unions can run ads that look just like the candidates‘ ads, can explicitly say vote for Barack Obama, vote for John McCain.  And the question is how much are corporations now going to flood the air waves, along with the candidates, along with other special interest groups?  And we will just see how crowded those air waves get.  A lot of times there isn‘t that much more time you can buy.  We don‘t know how deeply this will be felt by the electorate watching their televisions, and also where whether congress passes a fix.  Some Democrat want them to do that, Ed. 

SCHULTZ:  Well, the reaction from the White House was swift today, and on Capitol Hill.  The chairman of the Senate Judiciary Committee, Patrick Leahy, from Vermont, says “this is a clear reason for ordinary citizens to be concerned that this divisive ruling will, in reality, allow powerful corporations to drown out the voices of everyday Americans in future campaigns.  This ruling is, no doubt, yet another victory for Wall Street at the expense of Main Street America.” 

How will advocacy groups raise money now?  It seems to me it would be right to the firewall.  I mean, to keep up with the corporations might be a tough thing to do. 

HARWOOD:  Look, I think this is going to goose everybody‘s fund raising, because the people on the other side of those large corporation, which, let‘s face it, have got a lot of money to begin with, are going to raise money like crazy to counter them.  I do have to say as a political matter, from the interests of people like you, Ed, who want White House to adopt a more combative posture, this might help them rally the troops somewhat.

You know, the White House has been looking at a Republican party that‘s very, very energized.  We saw that in Massachusetts.  We have seen now the Obama White House is trying to respond by picking fights with Wall Street, with large financial institutions.  You saw that initiative laid out by the White House today to limit the size and risky activities of the banks. 

This is of a piece with that.  You can see the president, you can see Democrats in congress say, hey, wait a minute, the corporation, the big interest special interests are coming after the interests of average people.  We are going to stand up and fight for them them.  They don‘t mind that argument at all. 

SCHULTZ:  Finally, John, the president going after the banks today, reeling in the risky behavior.  Will the Congress follow? 

HARWOOD:  A lot of this is subject to the financial regulation legislation that‘s passed the House and also the Senate.  You had a provision in the House bill that allowed regulators to place some limits.  And today, you had the White House filling in the blanks and saying, here is how we would limit—how we would use our regulatory authority to limit the banks, by limiting the amount of liabilities they could have, and say you can‘t play casino with your own money if you are benefiting from the special provisions that taxpayers give you by virtue of being a bank. 

So I do think that, again, Democrats are going to welcome making this argument.  And Republicans may think twice about opposing it, Ed.  It‘s one thing to go after health care and say to the average person that is going to raise your tax and it‘s going to hurt your coverage.  But it‘s another thing to say oh, we are standing up for the big banks. 

SCHULTZ:  John Harwood at the White House, appreciate your time tonight. 

HARWOOD:  You bet. 

SCHULTZ:  Thanks so much. 

It definitely is a road map to recovery. 

And Air America Radio announced late this afternoon that they will no longer be in business, effective on Monday.  And I want to remind our viewers and listeners it does not affect my radio show. 

Tonight, in our phone survey, I asked, do you think President Obama‘s lost touch with the American people?  Sixty three percent of you say yes;

37 percent of you say no.

And two programming notes tonight; Keith Olbermann will have a special comment on the Supreme Court decision today.  And Rachel Maddow will have an exclusive interview with former TSA nominee Errol Southers.  “HARDBALL” with Chris Matthews is next. We‘ll see you tomorrow night.

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

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