updated 1/28/2010 11:45:27 AM ET 2010-01-28T16:45:27

Guests: James Clyburn, Sherrod Brown, Eliot Spitzer; Katrina vanden Heuvel,

Rep. Steny Hoyer, John Feehery, Bill Press, Roy Sekoff, Tom Andrews, Ron

Christie, Sen. Ron Wyden

ED SCHULTZ, HOST:  Good evening, Americans, and welcome to THE ED SHOW, live from the nation‘s capital tonight.

It‘s like the—I guess you could say the Super Bowl of politics, isn‘t it?  Three hours from now we‘ve got the kickoff. 

President Obama is going to stand before Congress and the American people.  Huge audience tonight.  You watch.  Rating will be through the roof across the country.  And he‘s going to deliver the State of the Union speech. 

I think this is a defining moment for the president.  The Republicans, they‘ve got him right where they want him after year one.  Their political strategy of absolutely obstruction seems to be working. 

Health care is on ice, the president‘s poll numbers are dropping, the Democrats look dysfunctional, the electorate is mad out there.  The speech needs to mark, really, a new beginning, a new course correction. 

President Obama is going to be talking a lot about the economy tonight.  He needs to.  He‘ll be talking about health care.  He needs to. 

But more than anything tonight, more than anything tonight, I think the president has to show some real passion and desire.  And if you want to call that fight, that‘s fine. 

He needs to get tough on his own party.  Call them out.  His own party, that‘s right. 

You know, the Democrats just are wobbly on all of this.  And he‘s got to let them know that he‘s sick and tired of all the stalling and all the BS in Washington about not being able to get things done. 

Fifty-nine votes, a solid majority in the House.  The health care bill has passed five committee.  And we just can‘t get this thing done.  And that‘s the Democrats‘ problem.

He needs to talk to the conservative Democrats tonight.  Democratic lawmakers, they‘re going to be sitting in the audience tonight and they‘re going to be making a political calculation—do I run with this president in November or do I distance myself from him and run away from him?  He needs to speak to the party and he needs to speak to the progressive base tonight, that he‘s not going to leave them. 

There‘s been a lot of comparison drawn this week about Ronald Reagan and how it was his first State of the Union speech back in 1982 and how it launched a comeback.  But, you see, the difference is that Reagan‘s base was behind him.

President Obama‘s base is shaken.  They are frustrated, they are angry.  They don‘t think that he‘s delivered.  The American people are wondering what‘s happening here.  The job rate is bad.

So, is all hope lost?  The president has to really re-instill all of that tonight, because we haven‘t seen much change.  We‘ve seen a lot of action on Wall Street. 

I think people want to believe again.  I think people are going to be watching tonight, just rooting for this president to knock it out of the park. 

I know I want to be convinced.  I‘ll be in the Capitol tonight.  I‘ll be right there in the gallery watching the president.  And I‘m anxious to see this president go in and call out the Republicans, be aggressive.

Now, if my radio show today, if the callers are any indication, there‘s people across this country that want to see some game tonight.  I think the president is going to deliver. 

All right.  Get your cell phones out, folks.  I want to know what you think about all of this. 

I want to know—tonight‘s question, text survey is: Is bipartisanship important to you?  Text “A” for yes and “B” for no to 622639.  And I‘ll bring you the results later in the show. 

Now, this, I believe, is a great guest off the top tonight, the House majority whip, Congressman Jim Clyburn from South Carolina.

Congressman, great to have you with us tonight. 

REP. JAMES CLYBURN (D), SOUTH CAROLINA:  Well, thank you, Ed. 

SCHULTZ:  You know, the discussion that I‘ve had on my show today and the discussion that we‘ve had all week long on this show is that there‘s a lot of frustrated Democrats out there thinking that the president has done everything he can do to get Republicans on board. 

Is bipartisanship gone?  Is it gone?  Is it time to move on?

You know, there‘s a time to fish or cut bait.  Are we at that moment, in your opinion? 

CLYBURN:  I think so.  I think that what we have to do now is to say to the American people that we tried hard to get a bill that a super majority of the Senate would accept, 60 votes.  Now we have to go with what the American people understand, a simple majority, 50 percent, plus one. 

Let‘s get a bill that simple majority will vote for and let‘s go with it.  Bipartisanship requires that you buy in to filibuster rules.  Most people that I know don‘t particularly like these filibuster rules.  And so let‘s jettison the idea of passing something, trying to accommodate the filibusters, and let‘s go forward with a simple majority resolution to this health care problem. 

SCHULTZ:  Congressman, I think the president needs to really talk to the base tonight, solidify the base, because there‘s a lot of folks out there in the middle class that have seen a lot of things go to Wall Street.  Now, with that in mind, to present to the American people that the Republicans have been obstructionists, they‘re getting their backup when they hear that.

Earlier today, on Dylan Ratigan‘s show, I made a comment about just that, and it drew this response from Congressman Pence... 

(BEGIN VIDEO CLIP)

REP. MIKE PENCE ®, INDIANA:  I‘ve got to tell you, that was the one thing—and THE ED SHOW is popular.  It‘s not my cup of TV, but he‘s good radio and good TV.  But look, Ed just said the president ought to consider shutting Republicans out.

Ed, news flash.  House Democrats in this administration have shut Republicans out of the entire process in the House and in the Senate for the last year. 

(END VIDEO CLIP)

SCHULTZ:  I tell you, those Republicans are amazing.  I didn‘t say they should shut out the Republicans.  I just said that you should move on without them.  If they want to get in the process, that‘s fine. 

But Congressman Clyburn, he said that, “House Democrats in this administration have shut Republicans out of the entire process in the House.”

Is that true? 

CLYBURN:  That is absolutely not true.  We had these bills on the House side go through three committees, and Republicans are on all of those committees.  They participated.  They put up amendments. 

Many of those amendments were adopted.  And we came out with a bill that had a lot of their amendments in it.

Then we put it out on the Internet for 72 hours before we ever started voting on it.  How many hours did we debate it in these committees? 

It is amazing how these people can go to the floor, after going through all of that, and because they decide not to vote for it, then they say they were not consulted.  They did not have an opportunity to participate.  It is the most ridiculous thing that you could possibly say. 

Now, that‘s just the House side.  The Senate did two committees.  And you know how long they were working there. 

If you look at a big part of this bill, this high-risk pool that the Senate came forward with, go back and look at John McCain‘s campaign ad.  He campaigned on creating the high-risk pool.  That was his philosophy that we brought into this bill, and they still would not vote for it. 

But we ought not be surprised.  You just saw Republicans, seven of whom co-sponsored legislation to do something about the deficit commission (ph) on yesterday.  Then when it came time to vote, seven of the people who co-sponsored voted against the bill.  I guess they are not consulted. 

SCHULTZ:  Yes.  That‘s just how the Republicans play the game.

Congressman Clyburn, good to have you with us tonight.  Thank you so much.

CLYBURN:  Well, thank you so much for having me.

SCHULTZ:  You bet.

Joining me now is Ohio Senator Sherrod Brown, a member of the Senate HELP Committee. 

Jobs is going to be a big issue tonight for the president.  He‘s got to knock it out of the park and convince the American people that we are headed in the right direction. 

Senator, what do you want to hear President Obama say about jobs, considering in your back yard in Ohio, it‘s at 10 percent, I believe, unemployment in your state? 

SEN. SHERROD BROWN (D), OHIO:  Yes, Ed.  I want to hear the president talk specifically about—first I want him to set the context. 

A year ago, 700,000 people lost their jobs the month he was sworn in.  The banks in this country were about to implode, sending us into a depression if he hadn‘t acted. 

In the auto industry, which is so important to my state, but so important to every community in this country, frankly, auto dealers, component suppliers, manufacturers, all that, the auto industry was teetering, too.  And he righted that ship with, again, no Republican help. 

And I want to comment on something that Congressman Clyburn said.  The problem is that the Republicans, yes, they want to work with us, but they want to do it their way.  And frankly, we tried their way.  For eight years, we tried their way and it simply didn‘t work. 

And their answer to all these problems, more deregulation, more tax cut for the rich.  So, if we did it bipartisanly, they only want to work with us if we do it that way.  And that is so discredited.

So, I want them to work with us.  But not one of them in the House and only three in the Senate—and one of them switched parties—

Republicans, voted for the stimulus package.  They wanted more tax cuts back then even though we compromised and gave them some of that. 

They clearly just believe in this sort of George Bush economics that doesn‘t work for our country.  It sure as hell didn‘t work for my state. 

SCHULTZ:  So, does the president tonight strike somewhat of an aggressive tone and say, look, Republicans, we‘ve had our hand out, we‘ve had olive branches coming out of the White House left and right, and you just haven‘t gotten on board with anything, and tell the American people, as a political tactician tonight, tell the American people that one party is holding a lot of stuff up in this country and blame the Republicans?

Do you think he should go that far? 

BROWN:  I do.  I mean, I hear some of my colleagues say you‘ve got to move to the center.  One of my Senate colleagues said that we should try to do bipartisanship on health care again, give them another chance. 

I mean, that‘s what we‘ve done.  That‘s why the country has drifted.  That‘s why we don‘t have a health bill yet.  That‘s why we haven‘t had the economic growth we‘d like to have, because we couldn‘t do the stimulus—the Recovery Act the way we really should have done it.

We did it generally well, but we would have done it better if we could have done more direct spending on highways, bridges, rail, water and sewer systems, broadband, community college construction.  All of that.  Instead, we didn‘t do it quite right. 

So, I hope the president is aggressive and says to the country, here‘s what we need to do, I want to work with Republicans on this, join us.  But I‘m not going back to the George Bush tax cuts for the rich, more infrastructure, more run up the national debt. 

Don‘t forget, eight, nine years ago, we had a surplus in the country.  We had a war that wasn‘t paid for, a trillion dollars.  We had tax cuts for the rich that our grandchildren get to pay for.  We had to a giveaway to the drug and insurance companies that our great children get to pay for, and that doesn‘t work for the country. 

That‘s why we have this huge budget deficit.  It‘s not because of Barack Obama.  It‘s because of bad economic policy for eight years before last January 20th

SCHULTZ:  Senator, good to have you on tonight.  Appreciate it so much. 

BROWN:  My pleasure.  Thank you. 

SCHULTZ:  Sherrod Brown from Ohio here on THE ED SHOW tonight.

Coming up, House Majority Leader Steny Hoyer is going to tell me what he needs to hear from the president tonight in his first State of the Union Address.

Plus, Treasury Secretary Tim Geithner got drilled on the Hill today.  And Fed Chairman Ben Bernanke‘s fate, well, it rests in the hands of the Senate.

Former New York governor and attorney general Eliot Spitzer will tell us if either one of them should still have a job.

All that, plus Senator Ron Wyden will be here to tell us what he wants to hear tonight from the president.

And can health care be resuscitated?

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

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW, and thanks for watching tonight.

Big night, State of the Union.  The economy is going to be a big focus the president is going to have to talk about tonight in the State of the Union.  He‘s got to, I think, really prove to the country that he is committed to getting Main Street back on its feet and get the jobs issues taken care of. 

Meanwhile, the president‘s treasury secretary, Tim Geithner, came under fire today on Capitol Hill.  Members of the House Oversight Committee railed against Geithner for his role in the bailout of AIG and its taxpayer-funded payout to Goldman Sachs. 

(BEGIN VIDEO CLIP)

REP. DENNIS KUCINICH (D), OHIO:  The government gave Goldman Sachs more than Goldman Sachs had any right to expect, while, at the same time, giving no financial relief whatever to millions of Americans facing a foreclosure crisis. 

REP. JOHN MICA ®, FLORIDA:  We‘re getting a lame story in a monumental back-door decision of bailout for which the American taxpayers will stay on the hook for huge amounts of money. 

REP. STEPHEN LYNCH (D), MASSACHUSETTS:  You had every opportunity, every opportunity to weigh in on behalf of the American people. 

I think the commitment to Goldman Sachs trumped the responsibility that our officials had to the American people. 

(END VIDEO CLIP)

SCHULTZ:  Well, that‘s the level of frustration that the president is facing. 

And for more on this, let‘s bring in former New York governor Eliot Spitzer tonight. 

Governor, your impression of that hearing today?  And we‘re going to play a sound cut of Mr. Geithner in just a moment.  But your thoughts on that? 

ELIOT SPITZER (D), FMR. NEW YORK GOVERNOR:  Well, it‘s nice to see bipartisanship.  Democrats and Republicans agree Tim Geithner did a lousy job.  And I‘ve been very clear.

I think Tim failed as president of the New York Fed.  He has not been a successful treasury secretary.  He should go. 

It‘s not because he isn‘t ethical.  It‘s not because he isn‘t smart. 

It‘s not because he isn‘t a good person.

That has nothing to do with it.  He‘s simply been wrong—the wrong values, the wrong priorities, the wrong policies.  We need somebody there who understands what we need to do to get this economy running.  Tim Geithner is not that person. 

SCHULTZ:  So, Eliot, on the heels of that kind of a hearing today, what should the president say about this situation tonight?  When he‘s on record, he‘s very strongly supporting both Summers and Geithner. 

What should he say tonight?

SPITZER:  Well, here‘s what happened, Ed.  The primary fallacy in what they did is that everybody knew we needed to get money into the banking system, but Geithner and Summers absolutely totally failed to get anything back for the American people. 

We shoveled money as fast as they could push it to Goldman Sachs, to all the counterparties, something many of us have been complaining about since the first moment, and they did not go to the banks and say here‘s what we need back from you, either structural reform, lending to the part of the economy that will generate jobs, changed policies, stop gambling with our money.  None of the rational policies that could have been and should have been put in place.

Geithner and Summers see the world through the prism of Wall Street.  He needs different advisers—a Paul Krugman, a Joe Stiglitz, a Rob Johnson.  There are people out there who could fill those positions—Paul Volcker, who is the great, wise man who has done so much, so many people.  The president is being led by those who simply have failed at every turn. 

SCHULTZ:  This is Geithner‘s response to the government bailing out AIG, what would have happened if we hadn‘t done that. 

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY:  Thousands of more factories would have closed their doors.  Millions more Americans would have lost their jobs.  The value of Americans‘ houses and savings would have fallen even further than they did at that time. 

People would have rushed to take their money out of banks.  It would have brought about utter collapse. 

You cannot help an economy recover.  You can‘t create jobs, you can‘t preserve the value of people‘s savings without a functioning financial system. 

(END VIDEO CLIP)

SCHULTZ:  And the treasury secretary went on to say that he wasn‘t involved in the New York Fed decision not to disclose what was going on. 

Do you buy that? 

SPITZER:  Look, I don‘t know who was involved with it.  The disclosure issue is ugly enough, but the fundamental policy here was wrong. 

No question we needed to preserve the stability of the financial system.  But paying 100 cents on the dollar to the counterparties, we gave Goldman Sachs a check of $12.9 billion, which is almost identical to their profit for last year, which then got turned around into bonus payments, got nothing back in terms of stock or anything else from Goldman.

They then used that money for proprietary trading.  This had nothing to do with preserving savings, housing values.  They have done nothing that is sufficient on mortgage and foreclosure issues, nothing in terms of middle market banks.  And this is symptomatic of what their policies have been.

It‘s time for the president to say we‘re changing direction, we‘re going to take care of those who worked so hard.  The line I used years ago, when I wasn‘t in politics, “Never have so many done so much for so few who need so little.” 

We did all that for those who got bonuses.  We got nothing, nada, back from them. 

SCHULTZ:  Mr. Spitzer, god to have you on tonight.  Thanks so much. 

SPITZER:  Thank you, Ed. 

SCHULTZ:  Coming up, the president‘s base is on the line tonight as well.  This speech will clench it for many Democrats.  They‘re going to decide whether to run with the president or away from the president in 2010. 

The Nation‘s Katrina vanden Heuvel will join us on that subject next.

Stay with us.    

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

The president‘s populist base will be listening closely to the State of the Union speech tonight.  What Obama says will determine if the members of the populist caucus are going to run with him or run away from him in 2010. 

For more on that and what he needs to do to reenergize the folks who got him elected, let‘s turn to Katrina vanden Heuvel of “The Nation” tonight.

Katrina, let‘s start with health care.  That‘s our issue on this program, has been for months.

What is the centrist position on health care?  Where does the president go tonight?  Does he go left, does he go right?  What is the center position on health care?

KATRINA VANDEN HEUVEL, “THE NATION”:  Can we talk about the same?  The same position is we need health care in this country.  We don‘t need all this talk.

Listen, no one likes deficits, but we need deficits to restore growth and jobs.  One way to reduce the deficit is to pass a good health care bill which would do more than what I fear we‘re going to hear from President Obama tonight about this three-year freeze on non-defense, non-security-related spending. 

So I think what we need is House comes up with changes to the Senate bill.  House gets those changes to the Senate.  And through the reconciliation process, in tandem, Senate bill passes and then House amendments go through, too. 

SCHULTZ:  Now, do you think the president should call it out just like this—OK, this is what I want to you do, we‘re in the final process of the sausage-making, here‘s what I want you to do, here‘s what we‘ve got to do, and lay it out like that?

VANDEN HEUVEL:  I would like to see the president tonight with passion

not anger, but passion—reclaim the debate on health care and reclaim the debate on why the Democratic Party must stand with the working people of this country with a laser-like focus on jobs creation, and not embracing a right-ring view that deficits are dangerous.  We need to reaffirm an activist government goal for the common good, and we need a jobs creation bill.

And I think the populist caucus will fight hard, because you‘ve got 43 states with increasing unemployment, one in five unemployed, underemployed, or just out of work.  Ed, you know this.

So, I think people like Senator Sherrod Brown, others who are on your program, will lead the way in that.  I think we‘re going to hear some tough talk about regulation on the banks.  We should recoup that TARP money to rebuild Main Street. 

But, you know, there‘s talk and there‘s walk.  And tonight, I worry that President Obama steps on his own good message about job creation, tougher bank regulations, with talk about how deficits are the first priority. 

We need—again, it‘s hard, because this president wanted to have a conversation with Americans.  It‘s hard with a lot of Americans, and I hope tonight he also calls out those who have obstructed his agenda, whether it‘s the Republicans or the Blue Dogs. 

SCHULTZ:  Yes.

VANDEN HEUVEL:  Call them out with facts and specificity.  But also, remember that you need to mobilize a base that helped take you to this White House.  You will need them to counter establishment forces and the money interest in Washington which aren‘t going to move with you, President Obama. 

It‘s been a year.  They have knifed you in that year.  This is a moment to take back the agenda and do it.  If you‘re cool, do it with coolness, but do it. 

SCHULTZ:  He‘s got to do it.  And I just think bipartisanship is a pipe dream.  I just don‘t believe that the Republicans are going to work with him honestly and be honest brokers in any of this.  And I think there‘s a lot of frustration in the core Democratic base.

Katrina, you and I are of the same political persuasion.  May I keep my temper down tonight.  I am so sick and tired of bipartisanship.  We had an election.  They lost. 

VANDEN HEUVEL:  I know. 

SCHULTZ:  He had olive branches galore with these folks.  It‘s time to move. 

VANDEN HEUVEL:  Or, but, you know what?  Tell them, Ed.

Call them out and say if you want bipartisanship or transpartisanship, come.  Come and work with us.

Call them out on how they claim to be siding with the working people in this country, angry people like the Tea partiers.  If they‘re not holding big banks and big business accountable, and not just out of vengeance, but because we don‘t want another crisis in this country which is going to lose jobs, lose people‘s homes.

We need to rebuild and reinvest.  I wish he would redefine fiscal responsibility tonight.  He has the talent.  He is a great educator.

Fiscal responsibility is reinvesting in this country.  He will propose the largest increase in federal funding for elementary and secondary school education.

SCHULTZ:  Well, everybody‘s for that.

VANDEN HEUVEL:  That is to be commended.  Well, that‘s to be commended because part of our real security is not spending $190,000 a minute in Afghanistan, but it‘s rebuilding, educating, housing, health in our country. 

SCHULTZ:  Katrina, great to have you on tonight. 

VANDEN HEUVEL:  Thank you. 

SCHULTZ:  Thanks so much.  It‘s going to be fun to watch and it‘s going to be so important. 

Coming up, negotiations over health care will continue right up until tonight‘s State of the Union Address.  House Majority Leader Steny Hoyer will join me next. 

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

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Thanks for watching tonight.  House Speaker Nancy Pelosi said today Failure is not an option on health care.  She said Democrats will get something done.  Well, tonight, President Obama will reportedly strike a healing tone, calling for Democrats to unite to get health care done.  I think Democrats need to see toughness from their president as well, and I think his base needs to see that has the conviction to fight for what he wants.

Joining me now is House Majority Leader, Congressman Steny Hoyer.  Congressman, great to have you on tonight.  I appreciate your time.  If you can update us, was there any movement at all today, before the speech tonight?

REP. STENY HOYER (D), HOUSE MAJORITY LEADER:  Actually, there was no movement.  We‘re waiting to hear what the president has to say.  I think there‘s a lot of fight, though, I will tell you, in the Democratic ranks, fight to get something done for the American people. 

And, very frankly, we not only hope we will unite Democrats, but we will hope we get some Republicans to recognize that the spiraling cost of health care for families and individuals and small businesses is something that we‘ve got to get a handle on.  We got to make sure that every American has access to affordable health care.  So we‘re going to be working towards that end.

But today, Ed, was a day where the Senate, as you know, is working on

the debt limit and a fiscal responsibility package.  And we are waiting for

to hear what the president has to say and we‘ll be working the balance of the week. 

SCHULTZ:  Congressman Hoyer, I want to play a piece of tape from earlier today the Dylan Ratigan‘s show.  I had made the comment that the Republicans have been obstructionists through this whole process.  Mike Pence took exception to that.  Here it is.   

(BEGIN VIDEO CLIP)

REP MIKE PENCE ®, INDIANA:  I got to tell you, that was one thing, Ed—you know, THE ED SHOW is popular.  It‘s not my cup of tea, but he is good radio and good TV.  But look, Ed just said the president ought to consider shutting Republicans out.  Ed, news flash, House Democrats and this administration have shut Republicans in the House and the Senate for the last year. 

(END VIDEO CLIP)

SCHULTZ:  I didn‘t say shut them out.  I said move on.  Have the Democrats in the House—you‘re the majority leader.  Have you shut out Republicans through this health care debate?  They are trying to play it like the wounded soldier here, like poor me and everything else.  What about that? 

HOYER:  Well, I think, very frankly, they were invited to the table and they refused to come to the table.  That‘s been the course of the last year. 

SCHULTZ:  Did you shut them out? 

HOYER:  No, we didn‘t shut them out.  They have chosen not to play.  They have chosen not to participate.  Very frankly, I sat down with a number of their leaders and said, OK, what do you want?  As you recall, one of their members gave a speech in which he said there was 80 agreement.  I invited that member into my office and said, OK, where is the 80 percent?  We‘re prepared to work on that and we‘ll talk about the other 20 percent.

Very frankly, at that point in time, we didn‘t get very specific, unfortunately.  And since that time, we haven‘t really had substantive proposals and didn‘t have a substantive proposal when the bill presented on the floor from the Republicans.  So I think it‘s unfortunate we haven‘t worked together.  But it hasn‘t been because we weren‘t unwilling to do so. 

SCHULTZ:  How aggressive do you want the president to be tonight?  Does he have to reignite the base?  Does he have to really connect with Democrats tonight?  How aggressive should he be? 

HOYER:  Ed, very frankly, I think what he needs to do is connect with the American people, not just the base of our party but independents and Republicans, who understand that we have to address these problems.  What the Congress is is a represented body.  And what they are hearing from the country is they are not sure of exactly where they want to go. 

I think that there clearly is a lot of discomfort in the country about where we are in the country, the deep recession, the great recession, as it‘s called, that we‘ve falling into.  And they want to be sure that we‘re going in the right direction. 

I think the president needs to give him that confidence.  I think they can give him that confidence.  And, yes, he does need to energize our base to understand that we are fighting for this objective, but the way we‘re going to win this objective is to convince our fellow citizens that it‘s the right place to go. 

SCHULTZ:  House Majority Leader Steny Hoyer, thanks for your time tonight. 

HOYER:  You bet, Ed.  Thank you. 

SCHULTZ:  You bet.  For more, let‘s bring in our panel tonight, Bill Press, nationally syndicated radio talk show host, and John Feehery, Republican strategist. 

Gentlemen, let‘s pose it from this direction.  Should the president tonight acknowledge to the country that he believes that the Republicans have been obstructionists?  Bill, you and I were in front of a heck of a crowd on Saturday night in Minneapolis, 1,500 people.  They are not angry.  They are eager.  They want this president to go. 

Should he call them out for their obstructionist tactics that we‘ve seen this year? 

BILL PRESS, RADIO TALK SHOW HOST:  Boy, I said that this morning, Ed, and I really believe that.  First of all, that crowd Saturday night out in Minnesota, Blue State Bash, you‘re right.  They were frustrated.  They were disappointed.  But most of all, they are eager.  They want to see the old Obama.  They want to see the fight.  They want to see the fire. 

And I would love to see him today point the fingers at the Republicans and say, I have come three-quarters of the way and you have refused to come that extra quarter of a step towards me.  I‘ve reached out to you.  You‘ve stabbed me in the back every time.  Let‘s stop playing games and let‘s work together for the American people and start with health care. 

I think the American people would love to see that.  They want a strong leader, Ed.  That‘s what we‘re lacking now. 

SCHULTZ:  John, what do you think? 

JOHN FEEHERY, REPUBLICAN STRATEGIST:  My own personal opinion is the more partisan he becomes, the further his ratings go down.  I think it‘s bad strategy on his part.  I think  people want a unifying leader.

SCHULTZ:  That would be too aggressive?

FEEHERY:  I think it would be too aggressive for—

SCHULTZ:  So what does he have to say to the Republicans tonight to get them on board to walk out of the chamber and say, you know what, I think he‘s genuine; I‘m going to work with President Obama?   I don‘t think one Republican will do it.  But what does he have to say?

FEEHERY:  I think what he has to say is we‘re going to go back to the drawing board.  We‘re going to come with a couple different things that we all can agree on together.  We‘re going to get this thing done by the end of the year, if we go back together and not do it in a partisan way.  I want you to come to the table.

I think, frankly, politically, that would be the best thing for him to do to get the country back together.  His problem is the country is divided, polarized.  Polls show that he‘s the most polarized president in our history.  That might not be all the Democrats fault?

SCHULTZ:  Is that his fault? 

FEEHERY:  I think it‘s the nature of the country.  I think it‘s more polarized.  And I think for him to show leadership and bring the country back together, he‘s got to open the door and invite Republicans back in.

PRESS:  Ed, I think he‘s got to rally his base.  He‘s got to remember the people that got him into office.  And they really want him to lead and deliver.  Let me put it this way: this week, the president was making calls on Ben Bernanke.  The secretary of state was making calls on Ben Bernanke.  Rahm Emanuel was making calls to save Ben Bernanke.  I think people want to see that fight for health care.  Where were they on the public plan option? 

SCHULTZ:  How does he connect with the middle class tonight?

PRESS:  He connects with the middle class, I think, talking about jobs.  He talks about we‘re really going to—Ed, I wish he would drop that spending freeze.  I mean, that‘s one way.  Because I think this is a time when he‘s going to say, we‘re going to do whatever we can from this level to get construction jobs going, get Americans back to work. 

(CROSS TALK)

FEEHERY:  Can I get my thought?

SCHULTZ:  On the spending freeze?

FEEHERY:  I think he needs to be authentic. 

SCHULTZ:  That‘s not his problem.

FEEHERY:  No, it is his problem.  He‘s got to offer things that are believable.  The problem with the spending freeze is no one believes it.  No one believes it‘s going to happen.  No one believes it‘s going to work.  The left doesn‘t believe it.  The right doesn‘t believe it.  It‘s not authentic.  He‘s got to say, in very easy terms, he‘s going to do these things that are achievable.  He‘s got to be authentic about it.  And then I think he will reconnect with the American people. 

SCHULTZ:  Does he talk security tonight?

PRESS:  He‘s going to talk national security tonight.

SCHULTZ:  I mean, make a big pitch.  Bush used to make a big pitch about it.

PRESS:  Two-thirds of the speech tonight is going to be on the economy.  It‘s going to be on the middle class.  It‘s going to be on jobs at the end.  He‘s going to talk about Iraq, Afghanistan, and Iran.  I think it‘s important we continue the fight for al Qaeda.  But the thrust is going to be on putting people back to work, rebuilding this economy.  Health care is part of that. 

SCHULTZ:  What do you make of the president meeting with the GOP on their retreat?  I think in the next couple of days he‘s going to go over there and talk to him. 

FEEHERY:  Those are the things you have to do as president.  You have to talk to everybody.  You cannot shut anybody out.  You might get a couple votes out of there, Ed.  I think these retreats—

SCHULTZ:  That would be a first, John. 

FEEHERY:  That would be a first.  You know what, on Afghanistan, he gets a lot of Republican votes.  there are issues that he gets Republican votes on.  He just doesn‘t get it on socializing health care. 

PRESS:  I just want to point out, if anybody has shut anybody out, the republicans have shut Obama out on the stimulus, on health care, on Cash for Clunkers.  They haven‘t given him one vote. 

FEEHERY:  That‘s not true on Cash for Clunkers.

SCHULTZ:  Gentlemen, good discussion. 

FEEHERY:  That‘s not true.

SCHULTZ:  I just want to go, again, on the record, for the audience of THE ED SHOW: there‘s nothing radical about health care for everybody in this country, OK? 

Coming up, there‘s a lot of pressure on the president to really rally tonight, take a stand on issues like gays in the military, education, reform, and America‘s infrastructure.  “Huffington Post” founding editor Roy Sekoff will weigh in on all of that next.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Jobs and health care may be at the top of Obama‘s agenda, but he also has a host of other issues to contend with in the State of the Union tonight.  There‘s education, infrastructure, Don‘t Ask, Don‘t Tell for the military, and We‘re still involved in two wars.  Tonight, we‘ll see how well the president fits all of that into one speech. 

For now, let me bring in Roy Sekoff tonight.  He is the founding editor of the “Huffington Post.”  Roy, we can just put you on automatic pilot tonight, because there are so many issues that are out there.  I am interested in gays in the military.  Is this an appeal to the base and why now? 

ROY SEKOFF, “THE HUFFINGTON POST”:  You know, Ed, when you look at these, all of these things that you‘ve mentioned, they are like dialogue in a porn movie.  No matter how good they are, it‘s not why people are going to tune it.  You know?

I understand it.  He‘s going to raise education.  As Katrina said,

he‘s putting four billion dollars into his signature program.  That‘s gay -

that‘s great.  We have this Don‘t Ask Don‘t Tell.  The word is that he‘s going to call for the repeal of it.  I mean, it‘s been a ridiculous law since it first came into conception.  It‘s like being a little bit pregnant.  OK, you can be gay, but don‘t tell anybody.  It‘s about time that he does that.  

I don‘t think it‘s going to make any difference, Ed.  It‘s all about the jobs.  It‘s all about letting the middle class know that this past year, which has all been about Wall Street, has been a big mistake, and he‘s going to stop that and start making them the top priority. 

SCHULTZ:  So how does the president, Roy, convince the audience tonight that he‘s got a jobs plan?  We know that he can give a great speech.  We know he can be very—he has tremendous connectivity with the audience, both in person and on television.  But how is he going to convince the American people that, hey, I‘ve got this jobs thing figured out? 

SEKOFF:  Ed, it‘s action.  Here‘s the thing, we‘ve seen what it looks like when a president really thinks something is very important.  What did we see with the bailout?  We heard all the stories over the weekend, pulling all nighters, everybody getting all hands on deck.  That‘s how it was when we rescued Wall Street.  That‘s the kind of urgency, intensity and plans—concrete plans that we need to see from the president about jobs and about the middle class. 

At the moment, from what we‘re hearing, it looks like he‘s taking the Clintonian approach, with these very small bore little things, you know, tax credits for people taking care of the elderly, extra childcare, things.  And these are all great things, but they‘re nowhere near as bold as the kind of actions that we need. 

We‘re looking at really, Ed, 19 percent unemployment when you think of the people who are unemployed, under-employed or just stopped looking. 

SCHULTZ:  How tough does he get with the Republicans?  Does he call them out?  The last time he addressed the joint session of the Congress, he said if someone was saying the wrong thing that they were going to be calling them out.  What does he do tonight? 

SEKOFF:  I think he has just got to be strong.  I think, as you said, Ed, where‘s the one vote?  Again and again and again, we have seen the attempt to placate.  What do they do?  Every time he moves in their direction, they move the goal post further.  We‘re even seeing it with this ridiculous spending freeze. 

Did he really think he was going to win any conservatives over with this spending freeze?  What happened as soon as he announced it?  They all went no, it‘s not enough.  McCain came out and said, yes, I‘m glad he did the spending freeze, but what he needs to do is vote down this jobs plan that is coming up in the Senate. 

That‘s the way they‘ve been handling it.  That‘s the way they handled health care.  They kept moving it further and further away.  And that‘s what they are going to do with this. 

SCHULTZ:  Roy, good to have you on, as always.  Thanks so much. 

SEKOFF:  All right, Ed. 

SCHULTZ:  For more, let me bring in former Democratic Congressman from Maine Tom Andrews, and former adviser to Vice President Dick Cheney, Ron Christie. 

Ron Christie, you first tonight.  What do you want to hear from the president?  What kind of tone does he have to strike to get Republicans on board to work with him? 

RON CHRISTIE, REPUBLICAN STRATEGIST:  Good evening, Ed.  I think the American people are looking for President Obama to lay out a very bold, but a very concise agenda of how he seeks to find a way to create jobs and get us out of this terrible unemployment and economic situation we are in. 

I think the American people have heard a lot of bickering from Washington.  They are tired of bickering.  They know what the State of the Union is.  They want to know what is the state of the president‘s mind.  How is he going to lead?  How is he going to be bipartisan?  And how is it going find harmony, when this has been a very acrimonious year in the nation‘s capital, to really put the nation‘s business back at the forefront, where it should be? 

SCHULTZ:  Tom Andrews, do you think the Democrats are responsible for obstruction? 

TOM ANDREWS, FORMER CONGRESSMAN FROM MAINE:  Clearly not.  You know, the president has got to take the Republicans head on.  He‘s got to take any obstructionists head on that are standing in the way of making the key investments that this government has to make in order to turn the country around. 

It‘s not about the picture that some Republicans are painting this as, big deficit spending.  We have a 2.2 trillion dollar deficit in basic infrastructure in this country.  A quarter of the bridges in this country are literally crumbling.  We‘ve got to put people to work rebuilding the strength of this country, educating our children.  That takes government investment.  That creates jobs. 

The president has to hit the nail on the head when it comes to making those connections between those dots, investment and jobs. 

SCHULTZ:  The best way to connect with the middle class tonight, Ron; would it be to be tough on Wall Street?  Or should he talk about how the market back in march of 2009 was way down, around 6,000, and now, of course, it is where it is today, 3,500 points better?  I mean, should the president say, hey, we‘ve prepared Wall Street?  Wouldn‘t that be a good thing?  Or is that not a good tone to hit tonight? 

CHRISTIE:  Not a good tone, Ed.  I think the American people do not want the populist in chief.  They don‘t want to see a very angry president.  They want to see a leader who has very decisive, bold and very specific plans to put the nation back to work.  The American people have watched a year of the acrimony.  They‘ve watched a year of the bickering.  They want to say, stop blaming people and tell us what you are for. 

SCHULTZ:  The bickering, Ron, has been over on the conservative side. 

They haven‘t done anything to work with this president. 

CHRISTIE:  Ed, I entirely disagree with that.  Let‘s just assume that‘s true, which I don‘t.  Let‘s take this day and this opportunity to step forward.  John Boehner, the Republican leader in the House, has invited the president to come to the Republican retreat this upcoming Friday in Baltimore, and the president is going to go. 

SCHULTZ:  And he is going to go. 

CHRISTIE:  That‘s what we need.  We need people to stop pointing fingers and looking backwards.  Let‘s look forward.  That‘s what the American people want to hear tonight.  How are we going to move forward together as a country. 

SCHULTZ:  Tom, what about that? 

ANDREWS:  People want to hear how this government is going to hold people accountable.  We‘re talking about all those people on Wall Street who took our money and laughed all the way to their stock portfolios.  They want accountability for those people.

They also want to see defense contractors—talk about taking on special interest.  We are hoping that the president will take on the special interest in Washington.  There are no bigger or more powerful special interests than defense contractors.  They‘re spending tens of billions of dollars that the Pentagon doesn‘t even want. 

We‘ve got to take on those interests.  We‘ve got to hold people accountable.  And that‘s exactly what people want to hear the president of the United States talk about today, because that‘s going to get this country and this economy rolling again. 

SCHULTZ:  Tom Andrews, Ron Christie, thanks so much for joining us. 

ANDREWS:  My pleasure.

CHRISTIE:  Take care, Ed.

SCHULTZ:  Coming up, I don‘t understand why the president and Democrats like Evan Bayh are more interested in bipartisanship than they are getting health care done.  I‘ll ask Senator Ron Wyden if he agrees with me on that next on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  The only chance Democrats have on passing health care reform is to use reconciliation.  Yet Senator Evan Bayh of Indiana and other centrist Democrats don‘t want to use it because it might prevent future bipartisanship?  Bayh tells the Associated Press, quote, “my concern is that if reconciliation is used, that will really destroy any prospects of bipartisan cooperation on anything else for the remainder of this year.” 

I don‘t get it.  Joining me now is Oregon Senator Ron Wyden.  Senator, good to have you with us tonight. 

SEN. RON WYDEN (D), OREGON:  Ed, thank you.  I also want to tell your viewers, since I‘m on the intelligence committee, my sources tell me it‘s your birthday.  So we want to give you a big hoorah on that tonight. 

SCHULTZ:  Thank you, senator.

WYDEN:  Your age is classified. 

SCHULTZ:  I tell you what, it is top secret, my friend.  Let‘s talk working with Republicans.  Why is there such a passion amongst Democrats to have a bipartisan bill when you really don‘t need one.  If the country wants health care reform, just do it.  What about that? 

WYDEN:  First of all, failing on health care and failing on health care reform is not an option.  We know it‘s going to be tough.  Taking on the insurance lobby is always a challenge.  But all of the options are on the table.  That includes reconciliation.  I have always said, let‘s try to work with folks.  Let‘s try to come up with a common ground.  But on this one, we must succeed. 

SCHULTZ:  But this attempt, is it not hurting the president?  Because there‘s a lot of core Democrats across this country and independents that are frustrated that health care is not getting done.  Has he wasted too much time on the Republicans?  Is it time to move forward? 

WYDEN:  The president is going to make it very clear tonight that he is going to insist on health care reform.  As you know, I think there are some core principles.  I want choice and competition.  I want to get as close as we can get to making sure that all Americans have the same kind of opportunities that members of Congress have.  Let‘s make sure that all Americans, as part of health care reform, can hold these insurers accountable and you can fire your insurance company if they don‘t give you a good deal. 

SCHULTZ:  Senator, there‘s been a lot of talk about Massachusetts, that that is really where the country is right now.  I think I should point out that in your state of Oregon yesterday, they voted to increase taxes on the wealthy.  If you‘re a couple making over 250 grand, your taxes are going up.  If you‘re a single employee and you make 125,000, your taxes are going up.  Doesn‘t that signal that there are Americans in this country that want to sacrifice for the fiscal order that needs to be restored in this country?  What message does that send?

WYDEN:  I think what we sent last night from Oregon was a message that we want economic policies that give everybody a shot at getting ahead, everybody.  And what we‘ve seen, particularly over the years before President Obama came in, were these too big to fail policies, where, basically, if you were well off, you have big lobbies, you could take on a lot of risk, you have a lot of leverage, the taxpayer would have to bail you out. 

Too big to fail means too small to succeed.  We‘re going to push economic policies—you‘ll see it tonight—that give everybody an opportunity in this country. 

SCHULTZ:  Got to run, senator.  Glad to have you on tonight.  Thanks so much.

WYDEN:  Thank you. 

SCHULTZ:  Tonight our text survey I asked you, is bipartisanship important?  Eleven percent of you said yes; 89 percent said no.  That‘s where the country is, in my opinion. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  Stay with MSNBC tonight for complete coverage of the president‘s State of the Union Address.  I‘ll be reporting live from inside the chamber.  Keith Olbermann leads off our coverage starting at 8:00 pm Eastern.  “HARDBALL” with Chris Matthews starts right now on the place for politics, MSNBC.

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

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