updated 1/25/2010 11:05:01 AM ET 2010-01-25T16:05:01

Guests: John Harwood, Elizabeth Warren, Joe Sestak, Rep. Chris Van Hollen, Joe Madison, Jack Rice, Ernest Istook, Adam Green, Lizz Winstead

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

These stories hitting my hot button tonight. 

This Supreme Court ruling yesterday has still got me furious. 

Corporations are about to take control of the entire election process.  DCCC chairman Chris Van Hollen will join us to talk about that at the bottom of the hour. 

Now, grab this next one. 

The political pause button—I was just told this by someone on Capitol Hill.  The political pause button has been hit on health care. 

I can‘t tell my boss that I‘m going to hit the pause button.  I can‘t

I don‘t know how your boss works, or whatever, because in the business world, there is no pause button.  When you have a mission, you have to accomplish it. 

So how is President Obama supposed to stand there and take flack from the left and the right, from the progressives, from the conservatives, because he can‘t get health care done when the Senate tells him today, well, we‘ve kind of hit the pause button?  We‘ve hit the pause button. 

Anybody know what the pause button is?  So I thought tonight—I thought about this just before I went on the air.  This is what the pause button looks like in television. 

What do you think about that?  How‘s that for a TV show?  Huh?

How do you like this background?  That‘s kind of a nice background. 

That‘s our control room.  That gets us the pause button in television. 

This is why there are so many people in this country who are furious.  First of all, that would just love to have a job.  Secondly, are told by (sic) the American people, you know, this health care thing is just so tough, we have to hit the pause button.  And a Democrat said it, and said it really with no shame, like, gosh, you know, we just have to hit the pause button on this. 

No.  You have to work a little harder.  But, you see, there‘s another pause button.  And this happened to me today. 

Do you have Post-it notes in your place of work?  Doggone it, it‘s amazing how much information you can get on a Post-it note. 

This was handed to me today at work.  My business manager, Vern Thompson (ph), who runs a little company, says we‘re getting a little increase in our health care.  I said, “You mean that the insurance company isn‘t going to hit the pause button?” 

Come on.  I did this story last year when I first came here to MSNBC. 

Well, here it is.  Wendy and I pay $936.86 for health care, and now it‘s going to go up to $1,104 a month.  So that‘s a 19.7 percent increase. 

Senator Dodd, you know why you can‘t hit the pause button?  Because the insurance companies aren‘t hitting the pause button.  This is the second year in a row that I have taken an increase of 19.7 percent. 

And so, I thought, was I really sick this year?  What was going on? 

What happened? 

I had one physical and I had one sinus infection.  And then, of course, I‘ve got to keep my blood pressure down and the cholesterol thing.  That‘s all the health care I‘ve had this year. 

They wanted to jump it up 30 percent, but by law, in the state that we do business in, they can only go 20 percent, and so they decided to go 19.7 percent.  But the Senate‘s hitting the pause button, and that really makes me feel good tonight. 

How about you?  Is there anybody else out there across the country that‘s getting these Post-in notes when one of your business associates says, whose going to give this to Ed? 

Here, Mike.  Here‘s your Post-it note tonight.  But we have to pause. 

We have to pause. 

We have to get this populist message going. 

Here‘s the bottom line.  The insurance companies, they‘re not pausing.  And we shouldn‘t pause either when it comes to putting the pressure on people, because this is how Americans are living. 

They get Post-it notes with increases like that.  So it‘s another $168 a month that we‘re going to have to come up with. 

And I want all of you to know, I may be on TV in New York City, but I‘m not a millionaire.  I‘m trying to be, but I‘m not a millionaire.  OK?

I come from middle class background and I know exactly where the middle class is in this country.  I‘ve done town hall meetings all over.  And we‘ve all talked about Post-it notes. 

All right.  I just had to get that off my chest tonight. 

What do you think?  Pretty good show? 

All right.  Maybe the White House has gotten the message.  It‘s all about jobs. 

Today, at a town hall meeting in Ohio, the president, doing what he does best, going out and talking directly to the American people. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  So long as I have the privilege of serving as your president, I will not stop fighting for you. 

But I won‘t stop fighting.  I won‘t stop fighting.  I won‘t stop fighting. 

I‘m not going to stop fighting until we have jobs for everybody.  I‘ll never stop fighting.

I‘m not going to stop fighting to give our kids the best education possible.  I won‘t stop fighting to give  every American a fair shake. 

I won‘t stop fighting.  I won‘t stop fighting.  I won‘t stop fighting.  And I‘m going to keep on fighting for real, meaningful health insurance reform. 

(END VIDEO CLIP)

SCHULTZ:  Nobody put “fighting” on that note. 

Hey, I‘m all about President Obama.  No, I‘m not giving up on him.  I think the world of this guy.  I think he‘s well intended, he knows what he wants to do.  It‘s just kind of gathering everybody to kick them where you got to kick them to get it done. 

In that speech, by the way, he used the word “fight” or “fighting” 14 times.  And the White House is definitely trying to hit the reset button and strike a tone of urgency.  And I think he better. 

Here‘s the backstory in all of this.

Congressional members, they are very nervous.  In a recent meeting about campaign strategy, some Democratic members were actually asking consultants in the room, say, do you think we should run away from Obama in the midterm? 

Now, most Democrats feel the need to see change before they‘re going to embrace the president on the campaign trail.  Now, my sources are telling me tonight that there will be an effort by some Democrats for the president to fire Larry Summers, the director of the National Economic Council.  They want Summers out, and they want to think that that‘s going to signal change. 

The president is going to get a letter next week with a bunch of congressional names on it saying, can you get rid of this guy and show the country that you want change?  So the senators are showing opposition to confirming Ben Bernanke to another term as the Federal Reserve chairman. 

Senator Russ Feingold obviously one of them always outspoken on this issue.  And just today, Senator Barbara Boxer released a statement that she would vote against Bernanke‘s confirmation as well. 

She said, “Dr. Bernanke played a lead role in crafting the Bush administration‘s economic policies, which led to current economic crisis.  Our next Federal Reserve chairman must represent a clean break from the failed policies of the past.”

And I do believe that Senator Boxer was quoted yesterday as saying that every state is in play when it comes to the election process. 

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

The text survey is the question: Do you think President Obama should clean House and bring in a new economic team?  Clean House and bring in a new economic team? 

Text “A” for yes and “B” for no to 622639.  I‘ll bring you the results later on in the show. 

All right.  The chair of the Congressional Oversight Panel is Elizabeth Warren, and she will join me in just a moment. 

But first, I want to bring in CNBC‘s chief Washington correspondent, John Harwood.  John interviewed Larry Summers last night.

John, good to have you with us tonight. 

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  Hey, Ed. 

SCHULTZ:  Does Mr. Summers feel confident in the direction the economic team is taking to try to get this country back on financial track? 

HARWOOD:  Well, look, I think the economic team and the administration understood when they enacted the stimulus plan early last year that it was going to take a while for the employment situation to turn around.  The jobs are a lagging indicator.  It surprised everybody, I think, how quickly unemployment has risen to 12 percent, and it‘s likely to stay in double digits for at least half of this year. 

That is a difficult situation for Democrats.  It doesn‘t necessarily mean they‘ve taken an incorrect course.  And I believe, in fact, the economic team is taking the course the president wants. 

Now, this bank initiative that was unveiled yesterday was not Larry Summers‘ idea.  It was not Tim Geithner, the Treasury secretary‘s idea.  It came from Paul Volcker.

SCHULTZ:  And what does that mean.

HARWOOD:  It was ignored...

SCHULTZ:  What do you think that that means, John? 

HARWOOD:  Well, I think that Paul Volcker had this idea.  He heads an advisory board to the president.  He had been pushing this.

The economic team didn‘t feel it was necessary last year, didn‘t feel it was exactly focused on the problems they had to deal with first.  They were trying to emphasize stability.

But as the year went on, I think it became increasingly obvious that they felt—this White House felt that they needed to adopt a somewhat more combative tone in pressing for job creation, in pressing on Wall Street and the banks.  We started seeing that toward the end of last year, when the president called bankers to the White House, started talking about calling off their lobbyists and he was going to fight their lobbyists if he needed to.

And I think in that period of time, this proposal started percolating.  Eventually, Tim Geithner and Larry Summers went with that program.  And, of course, the election in Massachusetts dramatized the need to shift, and shift fairly rapidly and dramatically, and that‘s what‘s happened. 

SCHULTZ:  Now, exactly, John, how much of the stimulus package has been dished out?  And I think we need to put it in perspective that, a year ago this time, we were losing 750,000 jobs a month.  And while the job numbers certainly aren‘t on the positive side of the ledger right now, that number has turned dramatically. 

But actually how much of the stimulus package has been dished out? 

HARWOOD:  Well, I believe, Ed, that less than half of it has actually been spent.  More than that has been authorized by Congress, but we‘ve discovered the limitations of the concept of shovel-ready projects.  And you had some money that went out directly in tax cuts to individuals and some programs that went out, and money directly to state and local governments to save the jobs of police and teachers and firefighters and that sort of thing. 

But there‘s still a lot left.  That‘s actually, from the Obama team‘s point of view, one of the saving graces of the fact that money hasn‘t been spent.  So this year they‘ll get a little ore kick.

And the other thing percolating, of course, within the economic team is a new jobs bill.  You saw the House act on that.  The Senate hasn‘t acted, but you can bet that that is going to happen. 

And Larry Summers, even though he came to office, Ed, with a reputation as a centrist, a Clinton sort of deficit hawk, he is pushing internally, I‘m told by sources inside and outside the administration, ,for a more aggressive spending plan for new jobs that some others like Tim Geithner are for.

SCHULTZ:  Yes.  And some of the poll numbers that are out there are showing that‘s exactly what the American people are a little—showing some angst about.  And that is we‘re spending just too much money.  Interesting.

HARWOOD:  That‘s a contradiction.  They want action on jobs, but they don‘t want spending.  And those two things collide with each other.

SCHULTZ:  They sure do.

John, thanks so much.

HARRIS:  You bet.

SCHULTZ:  John Harwood with us tonight, here on THE ED SHOW.

The chairwoman of the Congressional Oversight Panel and professor at Harvard Law School, Elizabeth Warren, joins us tonight.

Ms. Warren, thank you for your time tonight.

The president moved yesterday to regulate the banks.  And we‘ve seen the market in the last two days react to that.  It‘s gone down about 400 points in the last couple of days.

Is this—just this kind of conversation about power and oversight and regulation, is this really what we need if we want the market to flourish, in your opinion?

ELIZABETH WARREN, CONGRESSIONAL OVERSIGHT PANEL:  You know, I‘m sorry, but I don‘t think it‘s really about the market flourishing.  I think it‘s about the economy flourishing.

And the best example I can give of that right now is the consequence of implicit guarantees.  You know, we‘re winding out a TARP, but what stays in the air after TARP is the notion that the government will throw as many taxpayers under the bus as necessary to save large financial institutions.  That‘s the “too big to fail.” 

And an example of that is Citibank.  Just a few months ago, Standard & Poor‘s said, you know, we‘re giving Citi an A rating.  But, in fact, based on their financials, they‘d have a BBB except for the implicit guarantee.

Now, the implicit guarantee has to go away.  Our economy cannot work with it in place.  And when the president starts talking about ways to get out of “too big to fail,” and that means that the market goes down some, I think that means that we are being a little more realistic and start to talk about rebuilding on a little firmer foundation. 

SCHULTZ:  And on another front...

WARREN:  It doesn‘t hurt.

SCHULTZ:  Yes.  A consumer protection agency which is now somewhat being shoved aside by some in the Senate, why do we need this?  And it‘s a basic question, but many Americans are wondering, what would it do, how would it function, and how would it make their lives better if there was a consumer protection agency out there that would—would it regulate in on the bank fees and the bonuses and such stuff as that?  And what would it mean to me? 

WARREN:  OK.  So what it‘s really about is that the whole consumer credit industry—we‘re talking about credit cards, home mortgages, car loans, overdrafts on checking accounts—that whole business model has changed over the last 20 years or so. 

SCHULTZ:  Gouging. 

WARREN:  It used to be—well, it used to be.  Let‘s put a nicer word. 

They used to see, well, you know, do you have the right credit rating? 

We‘ll lend you some money at a pretty reasonable interest rate. 

Now the game has shifted over to, we‘ll tell you we‘re lending you money on one amount.  Oh, it‘s 7.9 percent or 3.9 percent, or zero percent financing.  But we‘re going to make all our money on tricks and traps back in the fine print.  You know, that‘s why a credit card agreement has grown from one page in 1980 to more than 30 pages today, so that they can have lots of fees, lots of tricks, lots of penalties, and that‘s where they are making their real money. 

What this agency is about is to say, wait a minute, that‘s not a game.  That‘s not how you build a real business model, and it‘s not fair to your customers. 

What we would have with this agency—let‘s talk about a one-page credit card agreement.  It makes the interest rate clear, the penalty rate clear when you‘re stuck with a penalty.  Then you can lay credit card agreements out in front of you. 

You could compare four of them in under four minutes, pick the one that‘s the cheapest, identify the one that has the most risk, and now the market starts to work.  It starts to work for the customer. 

Ultimately, people are going to have to be responsible.  You borrow money, you‘re supposed to pay it back.  But you borrow it on terms that you can understand...

SCHULTZ:  Very popular.

WARREN:  ... and make decisions that are good for you.

SCHULTZ:  Yes.  It means something to middle class families, it will cut out the gouging.  For the life of—well, of course the influence of the lobbyists.  But it‘s such common sense to have a consumer protection agency, and I can‘t believe that the Democrats are shying away from it. 

Professor Warren, appreciate your time tonight.  Thanks so much. 

WARREN:  Thank you. 

SCHULTZ:  Coming up, it must be freaky Friday.  Now, last night I defended “The Drugster” in “Psycho Talk.”  And now I‘m taking Michele Bachmann‘s side on something? 

I‘ll tell you about that next. 

And I‘ve got another candygram, as I said, from Blue Cross/Blue Shield.  The Supreme Court has just given them a great way to spend my money in the next election cycle.  DCCC Chairman Chris Van Hollen will join me to talk about that. 

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

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

The state of health care reform in America is in critical condition.  Both chambers of the Congress have major hurdles to clear if they want to get anything done.

Speaker Pelosi needs 218 votes to pass a Senate bill, and Harry Reid will have to agree to take up reconciliation to tweak a House-passed Senate bill.

Now, I privately spoke to a United States senator who told me that the pause button has been really pushed on health care and nobody really knows what the next move is.  And that the State of the Union coming up next Wednesday is going to be pivotal for the president.

For more on that, let‘s turn to Congressman Joe Sestak of Pennsylvania.

Congressman, good to have you on tonight.

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

SCHULTZ:  You bet.

If you were a gambler in Vegas, what are your odds that health care is going to get done by March 1st?  What do you think? 

SESTAK:  Greater than 50 percent.  And I say that because the facts are out there. 

Fourteen thousand Americans lose their health care every day.  How can we not take action? 

What is needed now, Ed, is simple leadership.  Pure, compelling leadership. 

Let‘s take those things in the bill where there is an agreement—pre-existing conditions no longer denied; small businesses, take the burden off of them and let them get into, well, in this case, probably just state markets, maybe it‘s not a national market.  Let‘s make sure that our small businesses get some subsidy that help relieve the costs and women don‘t have to pay two times as much. 

There are things in there that we can do deliberately, in a way that explains to the public the goodness of this. 

SCHULTZ:  All right.  You just said some real common sense moving forward, progressive things that I think the majority of Americans would go along with. 

What we just saw in Massachusetts was basically a pushback against Washington.  And the word now, after all of this, is that we‘re going to hit the pause button and nobody knows what the next move is. 

Now, if that doesn‘t underscore Washington and how dysfunctional it is right now, maybe you should draw, Congressman, please, on your military experience.  What would the military do right now?  I mean, you can‘t hit the pause button when the people‘s business has to be done. 

SESTAK:  Washington is now doing something it has always been doing.  It‘s taking a mirror and just looking at the populous rather than putting in a mirror and looking at themselves. 

This was not a vote against health care.  It was a vote against an establishment that said it was going to go to Washington and change the way we govern. 

So, Ben Nelson grabs his Snickers bar and says, you‘ve got my vote as long as I bring my Snickers bar home. 

Look, Massachusetts has the same health care plan, the Massachusetts health care plan, that is nearly 95 percent identical to the House bill.  And polls show they like it. 

This was a vote against the lack of commonsense leadership that doesn‘t just dictate but actually explains what‘s going on.  If we just take these pieces, putting them together in a deliberate way and say, you know, if around the five counties of Philadelphia, where 42 percent of the Pennsylvanians tend to live, if 66 percent of the uninsured are actually working, this bill is for you, the working family.  And slowly, but deliberately, move forward. 

This is about leadership, accountable leadership.

SCHULTZ:  And we‘re just not getting it right now.  And the guy that‘s suffering from all of this is the guy who wants it more than anybody, and that‘s the president of the United States. 

So he‘s pivoting to jobs, he‘s in Ohio, he‘s talking about jobs, he‘s talking about the effectiveness of the stimulus package, and he‘s dealing with his own party who has a solid majority who says, you know what?  We‘ve got to take a pause. 

How do you win in that environment? 

SESTAK:  Look, sometimes you‘ve got to put your face into the prevailing wind and just keep speaking and keep explaining, this can be done.  We‘ve had tougher challenges before on this. 

Look, I want the president‘s hand, however, stronger on the tiller this time, in the Senate particularly.  I want the House of Representatives to be more transparent.  We, ourselves, are pretty opaque even when I‘m trying to find something out. 

SCHULTZ:  Good to have you on, Congressman.

SESTAK:  This is about remembering, talking and explaining what needs to be done.  Thanks, Ed. 

SCHULTZ:  Great to have you with us tonight.  Thank you. 

Coming up, somebody call a doctor.  The spin coming out of Sean Hannity‘s mouth is making me dizzy, big time. 

He‘s in the zone next.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, Fox News‘ Sean Hannity.

On his radio show today, he hit us with some unbelievable intellectual dishonesty. 

(BEGIN AUDIO CLIP)

SEAN HANNITY, RADIO TALK SHOW HOST:  Now it‘s back to the old drawing board for the Democrats on health care, which, by the way, maybe now they will be a little bipartisan.  By the way, no conservative is against health care reform. 

(END AUDIO CLIP)

SCHULTZ:  No conservative.  No conservative.  No conservative is against health care reform.

Really?  Not one?

Let‘s look at the evidence.

Last summer, conservatives have said that, well, they should kill the health care reform bill so they can break President Obama.   Health care reform will make you pull the plug on grandma.  There‘s another dandy.  And health care reform will actually cause death panels.

Health care legislation got through five congressional committees and went through the House and Senate floors.  It got one Republican vote.  That means out of the 218 Republicans in the Congress, 217 are against health care reform. 

Sean Hannity, full of “Psycho Talk,” buddy.

Coming up, Republicans are high-fiving over the Supreme Court decision to allow companies to spend like crazy when it comes to our election cycle. 

DCCC chairman Chris Van Hollen, he‘s the man who‘s got to find a way help the Democrats stay in the game with these new rules.  He‘ll join me in just a moment.

Plus, I‘ll dish out Big Eddie‘s championship football round picks this weekend.  OK, the Vikings are going to win big.

And, of course, Lizz Winstead will be here in “Club Ed.”

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

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Thanks for watching tonight.  Well, it‘s that time of year again.  As I mentioned at the top of the  hour, my wife and I got our candy graham in mail from our folks over at Blue Cross.  It‘s not the first time.  It was a 19.7 percent hike this year.  We‘re really happy about it.  It‘s going to be like this every year.  What‘s it going to be for my wife until we‘re 65?  That‘s still a lot of living between now and 65.  Not to let the cat out the bag, but my insurance company, Blue Cross, is getting an extra 168 dollars a month out of your old buddy Big Eddie.  It may not seem like a whole lot, but it is. 

But now the Supreme Court has removed the limits on corporate campaign contributions.  And the insurance industry can now make that profit—because, you see, they made money last year, OK?  So they can take that profit and they can  go work it against anybody that might want health care reform, and of course they can name the candidate in the commercial. 

This ruling has led to one of the darkest days of democracy that I have ever seen.  Big insurance companies are going to take that and just run with it and make it that much harder. 

How about the oil barons?  They‘re going to have some fun too with this money, aren‘t they?  Try to get some environmental regulation in or turn things around with the environment.  You‘re not going to do it because you‘ve got to fight big oil.  They‘ve got all kinds of money.

You would think that populist politicians would be happy about that.  Although, House Minority Leader Boehner, he didn‘t sound like too much of a populist when he commented on the ruling. 

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), MINORITY LEADER:  I think the Supreme Court decisions today are a big win for the First Amendment and a step in the right direction. 

(END VIDEO CLIP)

SCHULTZ:  Mr. Boehner can call it free speech all he wants.  The only thin this ruling does is guarantee that the darlings of big business, like Boehner and Sarah Palin and Scotty Brown will keep winning election after election.  Populist candidates will never have a chance unless Congress can stop this judicial activism, and that‘s exactly what it is. 

For more, let me bring in the chairman of the Democratic Congressional Campaign Committee, Maryland Congressman Chris Van Hollen. 

Congressman, where is the advantage/disadvantage here, in your opinion? 

REP. CHRIS VAN HOLLEN (D), MARYLAND:  The advantage is with all of the candidates who benefit from big special interest corporate money, and the agenda that benefits from that.  You mentioned the big insurance companies.  Imagine AIG deciding to spend money in ads trying to defeat people who opposed them getting big bonuses, or opposing candidates who support greater accountability over Wall Street. 

This is a decision that empowers big corporate special interest at the expense of the individual.  And I was shocked to hear --  maybe we shouldn‘t be shocked at anything these days when it comes to our Republican colleagues.  But I was shocked to hear from so many of them, so quickly, run to defend a court decision that clearly helps the big powerful special interest at the expense of the average Americans. 

This should be a wakeup call to everybody around the country.  Senator Schumer and I and others are looking at ways we can legislatively blunt this decision.  And we expect to introduce legislation very shortly. 

SCHULTZ:  Well, this certainly puts a shot over the bow with McCain/Feingold.  This is John McCain last night talking about it.  You got some help here.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA:  I was obviously disappointed.  It is a very complex 116 page decision.  It will allow for unlimited contributions from unions, as well as corporations.  So it does maintain some of the provisions that we had.  One conclusion you can draw is that you will see a lot more money in political campaigns in an unrestricted fashion.  Americans will judge whether that‘s god or bad. 

(END VIDEO CLIP) 

SCHULTZ:  How will Democrats move to make this an advantage?  I know unions can spend unlimited amount of money as well.  What‘s wrong with that? 

HOLLEN:  The fact of the matter, I think unrestricted funds in the political process has a corrosive influence.  I think most Americans are right when they feel that big money, special interest, of all different varieties, have an undue influence in the process. 

Obviously, when unions are spending money, they are sticking up for the men and women who work for different companies.  They‘re the working people.  But you cannot apply a law that only affects corporations and does not apply to unions.  The fact of the matter, at the end of the day, is the AIGs of the world, the big insurance companies of the world, have a lot more than the working men and women through the unions.  Therefore, they can dominate the airwaves if you allow this ruling to stand as it is, and don‘t find ways to scale it back. 

so we‘re looking at ways to try and blunt its impact.  This was a very radical and fairly expansive decision.  So we‘re looking at ways, for example, to require shareholder approval before a company can run an ad, to require that the CEO of the company get on the air and say, I‘m the CEO of X Corporation, and I approve this ad, as well as ways looking for ways to eliminate large categories of corporations, for example, those like AIG that receive a lot of tax payer dollars, certainly foreign owned subsidiaries. 

SCHULTZ:  They‘ll have more influence, absolutely.

HOLLEN:  It‘s unbelievable.  If you think about a country that may reap the majority of its profits by benefiting the interests of other countries spending in American elections—I got to tell you, it‘s a wake-up call to Americans across this country that it‘s a time to get angry and get involved. 

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

HOLLEN:  Good to be with you. 

SCHULTZ:  I want to talk more about this and President Obama‘s on the road show today in Ohio.  XM satellite radio host Joe Madison with us tonight.  Let‘s pivot to the president, if we can, Joe.  He goes to Ohio to talk about jobs, pushing a populist theme.  He says he‘s fighting for the American people.  In the meantime, they are saying they put a pause on health care back in Washington.  He‘s in kind of a tough spot.  The unemployment numbers don‘t look good.  Not all the stimulus package has been dissed out.

Where is President Obama?  What do you think he‘s thinking right now? 

What‘s his next best move in this quagmire that the White House is in? 

JOE MADISON, XM RADIO HOST:  I really don‘t know what his next best move is, because I really don‘t understand many of the moves that he made from the very beginning.  I must tell you, I‘m a big fan of President Obama.  I hope he understands that. 

But when I voted for President Obama, I voted for change.  Here‘s what I would suggest to him: I would say instead of going to the Ivy League East Coast standard game players, he really ought to go to middle America and talk to some of these regional and community bankers, and find out how they‘ve been able to work and correct the situation that way. 

I think he needs to do something radical like a mortgage holiday for one year that‘s being proposed by people like Mark Hemstreet (ph).  We can‘t get a single politician to look at that proposal, Ed.  So I think he, quite honestly, has to go back to Main Street, and I mean quickly, because the issue—he has until the second quarter to turn this around and start seeing employment, or you‘re going to watch people deserting him like rats on a ship. 

SCHULTZ:  OK.  He got the stimulus package passed.  Only half of it‘s gone out.

MADISON:  But it‘s not gone out to Main Street.  That‘s the problem.

SCHULTZ:  Well, there are—a lot of states have gotten money for construction projects, and we have seen the number shifts when it comes to unemployment.  It‘s definitely the pendulum has shifted there, to the point where we‘re not creating jobs yet, but we‘re not losing 750,000 a month.  We‘re down to like under 150,000.

MADISON:  That is true.

SCHULTZ:  This is what it was going to take.  Health care is hung up in hedgerow country and now they‘re talking about a pause.  This is where the populist outrage comes in, Joe, I think. 

MADISON:  You hit it. 

SCHULTZ:  I want to know, do these guys get paid when they are on pause? 

MADISON:  Do you get paid when you‘re on pause?  Do I get paid when I‘m on pause?  The reality is this, they do get paid. 

Let me say something about this as it relates to the Supreme Court decision.  Everybody, this weekend, go rent Jimmy Stewart‘s “Mr. Smith Goes to Washington,” and you‘ll see why the Supreme Court decision is wrong. 

Secondly, let me also say, with this Supreme Court decision, elected officials might as well look like Nascar dealers, because they should have logos of corporations on their suits when they go into Congress. 

You hit it earlier.  Any conservative worth their salt should go bonkers with this because this—the founding fathers did not think about a global economy, international corporations running this country when that ruling was put in place.  And then remember what Will Rogers said, we now have the best Congress money can buy.  This ought to shake everyone up, and the health care industry loves this.

And now what do you and I do?  What do we do when we want to rally the troops to get Congress to move?  And what did they say in the front page of the “New York Times,” if you mess with us, we‘ll bury you with our cash.  That‘s what the lobbyists in this town said.  

SCHULTZ:  Joe Madison, always telling it like it is.  Great to have you with us tonight, Joe.  Thank you. 

Let‘s go more now—for more on this and other issues, former CIA officer Jack Rice with us, and former Republican Congressman and visiting fellow at the Heritage Foundation Ernest Istook.

Ernest, I‘ll ask you, what‘s going to happen on health care?  Of course, what I‘m hearing on Capitol Hill is that everyone is waiting for the State of the Union.  The president‘s going to have to hit the reset button and be strong about it in the process.  How do we get this health care bill moving from a Republican standpoint?  What has to happen to get 60 votes, and maybe to get a Republican to come over and see the light? 

ERNEST ISTOOK, FMR. CONGRESSMAN:  I think right now part of the challenge is you have Democrats, like Senator Chris Dodd of Connecticut, saying time out.  They say that we need to go back and make a dramatic rethinking.  So I think the first step is to go back to square one, start over, realize—it‘s just like when you‘re taking a long road trip, well down the road, and you realize, my goodness, we‘re going in the wrong direction.

SCHULTZ:  Totally start over, Ernest, is that what you want to do?  Just start—throw everything out the window.  We‘ve gone through five committees, OK, got through both houses, got a House vote, a Senate vote, and you want to start over. 

ISTOOK:  Ten or eleven versions and none of them were any good. 

That‘s the problem. 

SCHULTZ:  So the election didn‘t matter.

ISTOOK:  The Massachusetts election sure did. 

SCHULTZ:  It did.  And they are responding to it.  And that‘s why they are on pause, which I don‘t like. 

ISTOOK:  That‘s why they are talking about starting over. 

SCHULTZ:  Jack Rice, the president goes to Ohio.  Is it because of what happened in Massachusetts? 

JACK RICE, FMR. CIA AGENT:  Come on, he‘s got to get out there.  I listened to what Ernest is saying.  I guess the logic here is what Jim DeMint said in the first place, was this was about a Waterloo moment.  This was about bringing this president down. 

The argument that the Democrats need to go to the center, need to go

to the right—come on, they‘ve already gone to the right.  There was no

single payer option.  There was no public option.  We take a look at any

mandatory requirement for employers to actually step up for their employees

all of the things that you‘ve seen from the Dems have driven them to the right.  If they go any further to the right, they might as well all go out together and get elephant tattoos on their rears.  Why not?  That‘s what we‘ve got now. 

SCHULTZ:  You think the president should do what, Jack?  At this point, if it‘s on pause, if health care is on pause, he‘s talking about a skinnier bill.  I don‘t know what that is.  But what should the president do?  What would be your council, to go to the left? 

RICE:  The president should go to the left.  That‘s what he ran on.  That was the expectation.  I saw him in Iowa and New Hampshire on Super Tuesday when I was covering this as a journalist.  This is what he campaigned on.  This is actually what people voted for.  Contemplate the states that this guy actually took, and this is what members of Congress were running for too.

So for the Republicans to say, oh, they are swinging to the left, what are you talking about?  If you look at what they campaigned on, they campaigned to the left.  Then they came in and they ruled to the right.  That‘s where the disaster is. 

SCHULTZ:  Ernest Istook, final point I‘m going to make with you.  One thing about the Republicans, when you guys close ranks, you do a really good job of it.

ISTOOK:  I‘m not sure what the point is there, Ed.

SCHULTZ:  The point is that you guys have obstructed this thing all along.  Then you have senators out there who say, well, we just haven‘t been part of the process.  So you should be in heaven tonight that we‘re in pause when it comes to health care.  It‘s stalled for six months.  Now you‘ve got the president going to the State of the Union Address. 

In many respects, you guys have won. 

ISTOOK:  The people realize that whatever the problem may be, Obama‘s approach is to say, oh, he‘s a victim.  He‘s a victim of big government—big business, I‘m sorry.  And his solution, therefore, is big government. 

People are seeing through that.  President Obama has had the biggest bully pulpit in the entire world.  He‘s used it with record number of interviews, record number of broadcasts and appearances and so forth.  And indeed, that is part of the problem.  It‘s not that people don‘t understand what he wants to do.  The problem is they do understand it.

SCHULTZ:  Ernest and Jack, good to have you with us tonight.  Thanks so much.  Coming up, there is evidence that the Republican centerfold Scott Brown won Ted Kennedy‘s seat for reasons that have nothing to do with the Bay State people.  People were making a statement.  They‘ve had it with Washington Democrats and big government.  That‘s next in my playbook.

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, with the current health care bill in pretty tough shape, some in Congress think the only way reform is going to be passed is if it is seriously watered down.  My next guest has his own game plan on how a real progressive health care bill can make it to President Obama‘s desk. 

Joining me now is Adam Green, co-founder of the Progressive Change Campaign Committee.  Adam, good to have you on tonight.  What‘s the best way for the progressives to get what they want out of this bill, with the situation now being that Chris Dodd is saying, maybe we should take a month or six weeks off? 

ADAM GREEN, PROGRESSIVE CHANGE CAMPAIGN CMTE.:  Well, we need to push Congress to get off pause, and very simply push the public health insurance option, which is overwhelmingly popular nationally and in states like Massachusetts, throughout the process of reconciliation, which only requires 51 votes.  Then the House can pass the original Senate bill and this new reconciliation bill together, send it to the president‘s desk, and he can sign a bill that we can actually be proud of. 

SCHULTZ:  So you think because of the polls on public option, the Congress should respond to that and throw that in, and then go reconciliation?  That‘s the best—that‘s the best move right now?

GREEN:  Yes.  Democrats are on the verge of learning potentially the exact wrong message from the election in Massachusetts.  As you probably know, our organization, the Progressive Change Campaign Committee, along with Democracy for America and Move On, did some polling of people who voted for President Obama in 2008 and then the Republican, Scott Brown.  It was pretty amazing; 82 percent of those key swing voters support the public option; 57 percent say Democrats have not gone far enough in implementing President Obama‘s policies. 

It‘s not that they want less change.  They want more change.  They want faster change.  They want bolder change.   They want populism.  Democrats need to understand that the politically winning move in 2010 is to pass the public option through the Congress. 

SCHULTZ:  “Washington Post” poll says that frustration and the idea of big government is the reason why the turn out was what it was in Massachusetts.  Your reaction to that? 

GREEN:  That‘s pretty ridiculous.  We flat out ask people whether they thought the things like government spending or things like holding big corporations likes insurance companies and Wall Street accountable are more important.  Again, among these swing voters, by two to one, they said hold these corporations accountable.  That‘s the key to jump starting our economy.  That‘s the key to solving health care reform.

And the people who fail to see that are fundamentally misreading the polls.  I think we‘re the only ones who actually asked these swing voters.  We heard what they had to say loud and clear.  They want bold change. 

SCHULTZ:  What are progressives going to do, other than take a poll right now?

GREEN:  In the last 72 hours, 200,000 Americans have signed our petition at BoldProgressives.org saying that we need to pass to the public option through reconciliation.  Starting today, we started flooding Congress with phone calls.  That will continue Monday.  We will have an in person petition delivery going Senate office to Senate office next week.

It‘s time to really ramp up the pressure.  We need every American to step up right now.  We don‘t need to be on pause.  We need to do something and take action.

SCHULTZ:  Adam Green, good to have you on tonight.  Way to keep up the fight.

Coming up, “Daily Show” co-creator Lizz Winstead will tell us what she makes of Arlen Specter telling Michele Bachmann act like a lady.  That‘s next in Club Ed.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back.  It‘s Friday, it‘s time for Club Ed, with Lizz Winstead, co-creator of the “Daily Show” and the brains behind “Wake Up World,” which you can watch at www.WakeUpWorld.tv, or if you‘re in the DC area, check out Lizz.  She will be at the Arlington Cinema and Draft House on January 29th and 30th.  And I can tell you, I‘ve seen her in action on stage.  She‘s fantastic.  Great to have you with us.  Lizz, two words: John Edwards. 

LIZZ WINSTEAD, “WAKE UP WORLD”:  You know, the bravery.  The man is so brave.  I mean, it really—it breaks my heart that he just didn‘t become president, knowing that when things are really bad he sends out his best friend to tell the world about it. 

What a scum bag.  How do you send your friend out to tell the world that, yes, indeed, you are the father of the baby?  I mean, I guess his courage was in remission.  It‘s sickening.  How did he tell Elizabeth?  Text her?  He‘s an awful, awful man. 

SCHULTZ:  It‘s definitely a double life.  No doubt about it.  OK.  Michele Bachmann and Arlen Specter got into it on a talk radio show in Philadelphia.  The senator told Michele Bachmann to be quiet and act like a lady.  Your thoughts? 

WINSTEAD:  Well, I think that hell froze over today, because I‘m about to defend Michele Bachmann.  Any time there‘s that whole act like a lady thing that happens, it‘s horrifying.  It‘s sexist.  It‘s horrifying.  And when you have someone like Michele Bachmann, the best way to present Michele Bachmann is just to give her enough rope, and let her just blab on and on and on.  She will shoot herself in the foot.  Arlen Specter doesn‘t need to interrupt.  To say be a lady, what does that even mean anymore? 

SCHULTZ:  Different generation, no doubt.  All right, now the football game‘s coming up.  I‘m picking the Vikings and the Jets.  Both road teams are going to win this weekend.  But this new song Prince—that he‘s put out, when I heard it, I was wondering if he was really rooting for the Vikings. 

WINSTEAD:  You know, Ed, I would do anything that Prince asked me to do, basically, through any song that he sang.  And in one fell swoop, he has ruined it all for me.  I don‘t understand.  I really—it sounds like a funeral for the Vikings.  It‘s the Jehovah‘s Witness thing.  He needs to stop witnessing Jehovah and get back to grinding, because that‘s what he‘s good at. 

SCHULTZ:  Lizz, always a pleasure.  Great to have you with us.  You are great in action, no doubt. 

Tonight, in our text survey, I asked, do you think President Obama should clean house and bring in a new economic team?  Ninety percent of you watching tonight said yes; 10 percent said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  Go Vikings.  Go Vikings.  We have waited so long for this, to get back to the Superbowl and finally win one.  I feel it.  I feel it.  It‘s going to happen.  Chris Matthews is going to do “HARDBALL” next, right here on the place for politics, MSNBC.  Have a great weekend.

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

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