updated 2/1/2010 10:58:57 AM ET 2010-02-01T15:58:57

MSNBC Special: President’s Question Time

Hosted by: Keith Olbermann, Rachel Maddow and Chris Matthews

ANNOUNCER:  This is an MSNBC special presentation.

(BEGIN VIDEO CLIP)

KEITH OLBERMANN, MSNBC HOST (voice-over):  “President‘s Question Time.”  Obama‘s almost unprecedented visit inside the lions den, he addresses the Republican congressional retreat and the revolution is televised.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  You know what they say, keep your friends close, but visit the Republican caucus every few months.

(LAUGHTER)

(END VIDEO CLIP)

OLBERMANN:  Not just a speech, he takes GOP questions.  The historic give and take, asked to implement the Republicans across the board tax cuts, it‘s mostly give.

(BEGIN VIDEO CLIP)

OBAMA:  What you may consider across-the-board tax cuts, could be, for example, greater tax cuts for people who are making billion dollars.  I may not agree to a tax cut for Warren Buffett.  You may be calling for an across-the-board tax cut for the banking industry right now.  I may not agree to that.

(END VIDEO CLIP)

OLBERMANN:  To which Congressman Mike Pence would later answer: the president refused our suggestion.

No holds barred, no words minced.  Televised—live.

(BEGIN VIDEO CLIP)

OBAMA:  You‘ve given yourselves very little room to work in a bipartisan fashion because what you‘ve been telling your constituents is, this guy‘s doing all kinds of crazy stuff that‘s going to destroy America.  Frankly, how some of you went after this bill, you‘d think that this thing was some Bolshevik plot.

(END VIDEO CLIP)

OLBERMANN:  The president goes one-on-140 with the Republican Party.  Some leaders of which are now saying they made a mistake acceding to his request to keep the cameras going once the formal speech was over.

For the next two hours, we will bring you the nearly all of the 82 minutes of remarkable political dialogue—not before seen in this country in the era of television.

(BEGIN VIDEO CLIP)

OBAMA:  I‘m not a pundit.  I‘m just a president.  So, take it for what it‘s worth.  But I don‘t believe that the American people want us to focus on our job security.  They want us to focus on their job security.

(APPLAUSE)

(END VIDEO CLIP)

OLBERMANN:  This is MSNBC‘s special coverage of President Obama‘s address to the Republican policy retreat at Baltimore.

(END VIDEOTAPE)

OLBERMANN:  Arguably what could be the most compelling moment so far of the Obama presidency, at a moment that until today, only the most inside of political insiders might have ever seen.  The American president welcoming questions from some of his harshest critics in the Republican opposition.  Eighty-two minutes reminiscent of Britain‘s prime minister‘s question time, only rougher.  Unlike in parliament, the questions came only from the opposition.

Alongside Rachel Maddow here in New York with me, and, of course, Chris Matthews in Washington, I‘m Keith Olbermann.

For the next two hours, we will replay and analyze the president‘s singular afternoon at the House Republicans‘ annual meeting.  The longer excerpts coming up, we begin with the headlines.

The president today traveling to Baltimore to open a dialogue with his Republican critics two days after the State of the Union address in which he challenged lawmakers directly, that if anything were to be accomplished, the tone of their negotiations would need to change.  The first thing to change, the today‘s question and answer period would be televised.  The White House is asking last night to make that happen.

The president believing in a necessity of a real debate with an opposition, loyal or what-have-you.

(BEGIN VIDEO CLIP)

OBAMA:  Having differences of opinion, having a real debate about matters of domestic policy and national security, that‘s not something that‘s only good for our country.  It‘s absolutely essential.  It‘s only through the process of disagreement and debate that bad ideas get tossed out and good ideas get refined and made better.  That kind of vigorous back-and-forth, that imperfect, but well-founded process, messy as it is, is at the heart of our democracy.  It‘s what makes us the greatest nation in the world.

(END VIDEO CLIP)

OLBERMANN:  Wednesday night, the president said he planned to spend much of his second year focusing on job security.  He told House Republicans today that didn‘t mean their job security.

(BEGIN VIDEO CLIP)

OBAMA:  But I don‘t believe that the American people want us to focus on our job security.  They want us to focus on their job security.

(APPLAUSE)

OBAMA:  They didn‘t send us to Washington to fight each other in some sort of political steel cage match to see who comes out alive.  That‘s not what they want.  They sent us to Washington to work together, to get things done and to solve the problems that they‘re grappling with every single day.

(END VIDEO CLIP)

OLBERMANN:  If debating your adversary can seem like a game, a mean of keeping score—the president telling the opposition that was not the intent of this afternoon‘s exercise.

(BEGIN VIDEO CLIP)

OBAMA:  The differences between the two major parties on most issues is not as big as it‘s represented.  But we‘ve gotten caught up in the political game in a way that‘s not just healthy.  It‘s dividing our country in ways that preventing us meeting the challenges of the 20th century.  I‘m hopeful that the conversation we have today can help reverse that.

(END VIDEO CLIP)

OLBERMANN:  And now, the first of our dips into the analysis pool, let me start with and say good evening to Chris Matthews.

Chris, contextualize this for me.  Historically, obviously, this kind of thing has happened before in American political history, but they were never cameras there, right?

CHRIS MATTHEWS, “HARDBALL” HOST:  No.  As you said upfront, this is very much like the prime minister in England sitting at the Treasury Bench and asking and answering any question from the opposition side.  He was there, a man in the arena, if you will, taking all questions on camera.  It was a great statement of his personal intellectual confidence that he wasn‘t going to be hit with something he couldn‘t handle and everybody agrees he could handle everything today.

So, he‘s offered a challenge.  He says—I just talked to David Axelrod.  He said, what the president wants to do, he wants to put the Republicans in a situation where they either join him in trying to solve our problems or be seen walking away.  They only have two choices now: walk into the room and negotiate or walk away—both on camera.  That‘s changing things.

OLBERMANN:  Boy, it is.  Rachel, distil the meaning for this—of this for us, as if it were a point in a political science class.  What is its context in our dialogue of the moment?

RACHEL MADDOW, “THE RACHEL MADDOW SHOW” HOST:  I think the last point that Chris made is the crux here.  That, so far, the really—it‘s not rational for Republicans to vote with the president on anything in his agenda.  The cost that they pay for being seen as obstructionist is so minor compared to the cost the Democrats pay for not being able to get anything passed.

And so, this is to try to increase the cost to them of being obstructionist, him making overt pleas, “Join me.  Join me.”  But, also, honestly, just showing some political fight, being shown to be willing to be engaged with them directly, coming into their house, doing something like this, historically unprecedented, showing that he‘s not only confident, but feels like he‘s got the best argument in the room.

OLBERMANN:  All right.  Let‘s get into some of the longer tapes of those arguments.  What transformed this into an event essentially unique in American history was when the Democratic president, live on national TV, said to the assembled Republican membership of the House of Representatives, in effect, “Any questions?”

First up was Mike Pence of Indiana, the chair of the House Republican Conference, the heavy hitter in this lineup.  The former talk radio host describes himself as a Christian, a conservative, and a Republican in that order.  He supported cutting tax credits for the poor, financial support for AIDS patients and Medicaid, not in that order.

But here he is.

(BEGIN VIDEOTAPE)

REP. MIKE PENCE ®, INDIANA:  Now last year, about the time you met with us, unemployment was 7.5 percent in this country.  Your administration and your party in Congress told us that we‘d have to borrow more than $7.5 billion to pay for a so-called stimulus bill.  It was a piecemeal list of projects and boutique tax cuts.  All of which was—we were told—had to be passed or unemployment would go to 8 percent, as your administration said.

Well, unemployment is 10 percent now, as you well know, Mr. President. 

Here in Baltimore, it‘s considerably higher.

Now, Republicans offered a stimulus bill at the same time, cost half

as much as the Democratic proposal in Congress, and using your economic

analyst models, it would have created twice the jobs at half the cost.  It

essentially, it was across-the-board tax relief, Mr. President.

           

Now, we know you‘ve come to Baltimore today and you‘ve raised this tax credit which was last promoted by President Jimmy Carter.

But the first question I would pose to you very respectfully, Mr.  President, is: would you be willing to consider embracing in the name of little David Carter, Jr. and his dad, in the name of every struggling family in this country, the kind of across-the-board tax relief that Republicans have advocated, that President Kennedy advocated, that President Reagan advocated and that has always been the means of stimulating broad-based economic growth?

OBAMA:  There was a lot packed into that question there.

(LAUGHTER)

OBAMA:  First of all, let me say I already promised that I‘ll be writing back to that young man and his family.

PENCE:  Thank you.

OBAMA:  And I appreciate you passing on the letter.

Let‘s talk about just the jobs environment generally.  You‘re absolutely right that when I was sworn in, the hope was that unemployment would remain around 8 percent or in the 8 percent range.  That was just based on the estimates made by both conservative and liberal economists because at that point, not all the data had trickled in.

We lost 650,000 jobs in December.  I‘m assuming you‘re not faulting my policies for that.

We had lost—it turns out -- 700,000 jobs in January.  The month I was sworn in.  I‘m assuming it wasn‘t my administration policies that accounted for that.

We lost another 650,000 jobs the subsequent month, before any of my policies had gone into affect.  So, I‘m assuming that wasn‘t as a consequence of our policies; that doesn‘t reflect the failure of the Recovery Act.

The point being that what ended up happening was that the job losses from this recession prove to be much more severe in the first quarter of last year going into the second quarter of last year, than anybody anticipated.  So, I mean, I think we—we can score political points on the basis of the fact that we underestimated how severe the job losses were going to be.  But those job losses took place before any stimulus, whether it was the ones you guys proposed or the ones we‘d proposed, could ever have taken into effect.

And that‘s just the fact, Mike.  And I think anybody would dispute that.  I—you could not find an economist who would dispute that.

Now, at the same time, as I mentioned, most economists, Republican and Democrat, liberal and conservative, would say that had it not been for the stimulus package that we passed, things would be much worse.  Now, they didn‘t fill a 7 million hole in the unemployment—in the number of people who were unemployed.  They probably account for about 2 million, which means we still have 5 million folks in there that we‘ve still got to deal with.  That‘s a—that‘s a lot of people.

The package that we put together at the beginning of the year—the truth is—should have reflected.  And I believe reflected what most of you would say are common sense things.  This notion that this was a radical package is just not true.

(END VIDEOTAPE)

OLBERMANN:  We‘ll pick up the second part of the Obama-Pence exchange in a moment.

First, back to Chris Matthews in Washington.

You interviewed Congressman Pence live tonight on “HARDBALL” at 5:00.

MATTHEWS:  Right.

OLBERMANN:  And I gathered from listening to that interview that his takeaway on this was, the president would not go along with our across-the-board tax cut.

MATTHEWS:  Yes.

OLBERMANN:  Are we—is that sort of code for saying, when we want the president to accept our ideas, we want him to accept our ideas and dismiss his own?

MATTHEWS:  Well, I think the idea was: can you reach a compromise with the president?  Yes, if he‘s willing to sign on to Reagan economic policies, we‘ve got a deal.

He said to me, quote, “I asked if he‘d consider across-the-board tax cuts and he said he would as long as they weren‘t across-the-board.”

Well, of course, tax cuts proposal, let‘s talk about how to do it in compromise between those very specific kinds of tax cutting that you might call, you know, industrial policy.  And I understand why the Republicans wouldn‘t go along with that.  It‘s too specific.  There‘s a lot of range between that kind of specific neo-liberal tax cutting and Reagan tax cutting.  That‘s a compromise somewhere between the two.

He‘s saying, if you don‘t buy our Republican solution, you‘re not—you‘re not enjoying our company.  I thought it was interesting.  He said, “People like tax cuts.”

Now, there‘s a profile in courage.  The first thing you do is throw one of these medicine balls at the president and hit him at the stomach and say, “Let‘s chat.”  I mean, I think it wasn‘t a fair exchange right upfront.

I don‘t think anybody thinks, with a $1.4 trillion deficit, right now, it‘s time for a huge, across-the-board tax cut for the rich.  I mean, that wouldn‘t be reasonable or responsible.  And I think Mike Pence knows it.  I think he knows it.

OLBERMANN:  Rachel, there was still that policy of throwing the medicine ball, as Chris suggested, continued.  It almost felt like watching the stories of John L. Sullivan, the 19th century boxer would volunteer to fight anybody and everybody in the house and knock them all out.  I don‘t mean to be too partisan on this, but whatever the strategy was in the Republicans in this event, it didn‘t really work.

MADDOW:  Well, and you could—it was—I think it was really important that this was the first question, because I think at this moment, Mike Pence says, I‘m the chairman of this conference, I‘m going to reserve the right to make a comment and ask the first question and he comes out with this list of bumper stickers, this so-called stimulus bill, which gets a big smile out of President Obama.

A piecemeal list of projects, boutique tax cuts.  Jimmy Carter proposed things like this.

I mean, he comes out with this, just hitting him from, you know, really, far-right talking points right off the bat.  And that‘s the sort of moment where we‘re going to—where we realize, depending on how the president responds to this, this is either going to be huge day or this is going to be really boring in an exchange of talking points and Obama comes back with this edge, “I‘m assuming you‘re not blaming me for these things that happened before I got there.  Go ahead if you want to score political points.  That‘s just a fact, Mike.”  And I think at that point, that‘s when we all realized, “Oh, get the popcorn.”

OLBERMANN:  Yes.  See if you can find an economist who disagrees.  He didn‘t say a Republican one or a Democratic one.

MADDOW:  Yes.

OLBERMANN:  All right.  Chris and Rachel, stand by.  More of President Obama‘s answer to Congressman Pence, that‘s just the start of this game of one-on-about-140.  Asked about not putting the entire health care debate on C-SPAN, the president saying he took responsibility that some moments weren‘t televised, but reminding the Republicans that nearly all of them were because they were in the committee hearings in which the Republicans themselves participated.  Next.

(COMMERCIAL BREAK)

OLBERMANN:  Returning to our MSNBC special coverage of President Obama‘s address to Republican policy retreat in Baltimore.

And we were looking at the president‘s answer to Congressman Mike Pence of Indiana.  We pick up the president‘s response right where we left off.  It‘s about four minutes long, this segment.  The president making the point that the stimulus bill was not a radical package.  He then addresses whether he would consider an across-the-board tax cut.

(BEGIN VIDEOTAPE)

OBAMA:  This notion that this was a radical package is just not true, that this was a radical package.  A third of them were tax cuts.  And they weren‘t—when you say they are boutique tax cuts, Mike, 95 percent of working Americans got tax cuts.  Small businesses got tax cuts.  Large businesses got help in terms of their depreciation schedules.  I mean, it was a pretty conventional list of tax cuts.

A third of it was stabilizing state budgets.  There is not a single person in here who had it not been for what was in the stimulus package wouldn‘t be going home to more teachers laid off, more firefighters laid off, more cops laid off.  A big chunk of it was unemployment insurance and COBRA, just making sure that people had some floor beneath them.  And by the way, making sure that there was enough money in their pockets that businesses had some customers.

You take those two things out, that accounts for the majority of the stimulus package.  Are there people in this room who would think that was a bad idea?  A portion of it was dealing with the AMT, right?  The alternative minimum tax—not a proposal of mine.  That‘s not a consequence of my policies that we have a tax system where we keep on putting off potential tax hike that is embedded in the budget that we have to fix each year.  That costs about $70 billion.

And then the last portion of it was infrastructure which, as I said, a lot of you have gone to appear at ribbon cuttings for the same projects that you voted against.  Now, I say all this not to re-litigate the past, but it‘s simply to state that—the component parts of the Recovery Act are consistent with what many of you say are important things to do: rebuilding our infrastructure, tax cuts for families and businesses, and making sure that we were providing states and individuals some support when the roof was caving in.

And the notion that I would somehow resist doing something that costs half as much, but would produce twice as many jobs, why would I resist that?  I wouldn‘t.  I mean, that‘s my point, is that—I am not an ideologue.  I‘m not.  It doesn‘t make sense if somebody could tell me, you could do this cheaper and get increased results that I wouldn‘t say, great.

The problem is, I couldn‘t find creditable economists who would back up the claims that you just made.  What you may consider across-the-board tax cuts could be, for example, greater tax cuts for people who are making billion dollars.  I may not agree to a tax cut for Warren Buffett.

You may be calling for a across-the-board tax cut for the banking industry right now.  I may not agree to that.

So, you know, I think that we‘ve got to look at what specific proposals you‘re putting forward and—this is the last point I‘ll make—if you‘re calling for just across-the-board tax cuts and then on the other hand saying they were somehow going to balance our budget, I‘m going to want to take a look at your math and see how that—how that works, because the issue of deficit and debt is another area where there has been a tendency for some inconsistent statements.

How‘s that?  All right?

(END VIDEOTAPE)

OLBERMANN:  Apart from the sort of stage craft, Rachel, of the, “how‘s that,” that “all right” part, the little one-liners that really have no room for a response, you were at all these ribbon-cutting ceremonies for things that you are opposing still after they‘ve happened.

MADDOW:  Yes.  And that‘s something that he mentioned in his speech at the beginning, he mentioned that in this—in this part of the back-and-forth, again, and that‘s one of these things that Republicans have sort of been able to get away with.  Again, it‘s about increasing the cost for things that Republicans are doing that are theoretically going to politically cost them but so far, haven‘t.  But putting a presidential spotlight on them, he‘s hoping that he can.

Phil Gingrey, for example—I think we‘ve got a photo of this.  Phil Gingrey, Georgia congressman, here he is, at one of these ribbon-cutting ceremonies.  This is a $625,000 check to city commission of Cedar Township in Georgia for a streetscape beautifying project and then Gingrey, of course, envying against the stimulus project that made this money possible.

OLBERMANN:  Chris, what objectively did the Republicans expect was going to happen today, especially when they made the decision to let them televise the question and answer session?  Do you know?

MATTHEWS:  Well, I don‘t think they expected this much.  Can I just add to what Rachel said?

OLBERMANN:  Please.

MATTHEWS:  This is the kind of politics I love.  When you bring back politics to people in a clear way—back in the old days when I worked with Tip O‘Neill, the Republican leader was screaming about this stupid Democratic jobs bill.  I called the chief engineer in Peoria, Bob Michel‘s engineer in his home state, home district.  I got the list of all the bridges below safety code.

I gave them to the speaker.  He went on the floor and listed all the bridges that Bob Michel, the Republican leader‘s district that were below safety code.  So, if a school bus went over it, there‘d be a problem.  He went on the list of them.  Bob Michel‘s face turned red.  He went running to the back of the House chamber looking for his press secretary in high damage control.

The more you do this, if you‘re a Democratic president or a leader and show the real life implications of this Republican obstructionism, the more you‘re going to seem like a real leader.

The trouble so far with the president and you know this, Rachel and Keith, is that so much of this arguing over the stimulus bill has been like Harvey.  I‘ve got this thing called the stimulus bill.  You can‘t see it.  But it‘s really great.

You‘ve got to bring it home to people, in real life local situation.  It‘s like—like Rachel just did with that picture and show that they are involved in real life job creation.  If you can do that you can win this argument.

OLBERMANN:  Bob Michel‘s engineer, imagine what you could do now, Chris, if you‘d had Google then.  Representative Paul Ryan...

(CROSSTALK)

MATTHEWS:  ...what we did (ph) and I got it (INAUDIBLE) had nailed the guy.  He didn‘t know what you‘re up to.  We had a Democratic chief engineer in Peoria.  We got him from behind.

OLBERMANN:  Representative Paul Ryan questioned Mr. Obama about conservative worries about runaway spending.  The two men went back-and-forth for five minutes.  That exchange in its entirety when Rachel, Chris and I rejoin you next.

(COMMERCIAL BREAK)

OLBERMANN:  Continuing our special coverage of the president and the Republican congressman.  The last thing President Obama said before question from Wisconsin Republican Paul Ryan today was that the issue of deficit and debt is an area where, quote, “there has been a tendency for some inconsistent statements.”  Congressman Ryan has operated in that area, willing to push even his own party and then President Bush, to exhibit some fiscal discipline when it came to spending.  But not shy about advocating massive tax cuts, even saying that the Bush tax cuts, which even John McCain had balked at, should be extended.  Here is his entire change with President Obama. 

(BEGIN VIDEO CLIP)

REP. PAUL RYAN ®, WISCONSIN:  Mr. President, first of all, thanks for agreeing to accept our invitation here.  It is a real pleasure and honor to have you with us here today. 

OBAMA:  Is this your crew right here? 

RYAN:  This is my daughter, Liza, my son, Charlie and Sam, and my wife, Jane. 

OBAMA:  Hey, guys.  how are you.

RYAN:  Say hi.  I serve as a ranking member of the budget committee.  so I want to talk budget, if you don‘t mind.  The spending bills that you‘ve signed into the law, the domestic discretionary spending has been increased by 84 percent.  You now want a free spending at this elevated level beginning next year.  This means that total spending would grow at .03 of a percent than otherwise.  

I would simply submit that we could do more and start now. 

You‘ve always said you want to take a scalpel to the budget and go through it line by line.  We want to give you that scalpel.  I have a proposal with my home state Senator Russ Feingold, bipartisan proposal, to create a Constitutional version of the line item veto. 

Problem is, we can‘t get a vote on the proposal.  Why not start freezing spending now?  And would you support a line item veto and helping us get a vote on it in the House? 

OBAMA:  Let me respond to the two specific questions, but I want to push back a little bit on the underlying premise about us increasing spending by 84 percent. 

Now, look, I talked to Peter Orszag right before I came here, because I expected I‘d be hearing this argument.  The fact of the matter is that most of the increases in this year‘s budget—this past year‘s budget—were not as a consequence of policies that we initiated, but instead were built in as a consequence of the automatic stabilizers that kick in because of this enormous recession. 

So, the increase in the budget for this past year was actually

predicted before I was even sworn into office and had initiated any

policies.  Whoever was in there, Paul—I don‘t think you‘ll dispute that

whoever was in there would have seen those same increases because of, on the one hand, huge drops in revenue, but, at the same time, people were hurting and needed help.  A lot of these things happened automatically.

Now, the reason that I‘m not proposing the discretionary freeze taking into effect this year—we prepared a budget for 2010 that‘s now going forward.  Again --  is, again, I am just listening to the consensus among the people who know the economy best.  What they will say is that if you either increase taxes or significantly lower spending when the economy remains somewhat fragile, that that would have a de-stimulative effect and potentially, you‘d see a lot of folks losing business, more folks potentially losing jobs.  That would be a mistake when the economy has not fully taken off.  That‘s why I proposed to do it for the next fiscal year. 

So that‘s point number two. 

With respect to the line item veto; I actually, I think there‘s not a president out there that wouldn‘t love to have it.  And you know, I think that this is an area where we can have a serious conversation.  It is a bipartisan proposal by you and Russ Feingold.  I don‘t like being held up with big bills that have stuff in them that are wasteful, but I‘ve got to sign because it‘s a defense authorization bill and I‘ve got to make sure that our troops are getting the funding they need. 

I will tell you, I would love for Congress itself to show discipline on both sides of the aisle.  I think one thing that you have to acknowledge, Paul, because you study this stuff and take it pretty seriously, the earmarks problems is not unique to one party, and you end up getting a lot of push-back when you start going after specific projects of any one of you in your districts. 

Because wasteful spending is usually spent somehow out of your district.  Have you noticed that?  The spending in your district tends to seem pretty sensible.  So I would love to see more restraint within Congress.  I‘d like to work on the earmarks reform that I mentioned, in terms of putting earmarks online, because I think sunshine is the best disinfectant.  But I‘m willing to have a serious conversation on the line item veto issue. 

RYAN:  I‘d like to walk you through it, because we have a version we think is Constitutional. 

OBAMA:  Let me take a look at it.

RYAN:  I would simply say that automatic stabilizer spending is mandatory spending.  The discretionary spending, the bills that Congress signs, that you sign into law, that has increased 84 percent. 

OBAMA:  We‘ll have a longer debate on the budget numbers then.  All right? 

(END VIDEO CLIP)

OLBERMANN:  Rachel, you and I in October, and Chris more recently, have had this experience that I think people—certainly Republicans did today, and I think people watching are getting.  This is what it is like to be in the room with the president of the United States.  You pick your topic, and are left wondering whether or not you know as much about it as he does. 

MADDOW:  So much for the he always needs a teleprompter attack.  This is unscripted, no notes, no teleprompter, no nothing.  You‘ve brought a pet issue here, congressman, who is the ranking member of the Budget Committee, let me tell you 400,000 things about it, and invite you to continue the discussion with me later.  This is actually very Clintonian, I thought. 

OLBERMANN:  Chris, it begs the question, why does the president ever give a speech?  Why doesn‘t he just say maybe a minutes worth of opening remarks, and then say, any questions.  A lot of people can give good speeches, but this thing that we see on almost any topic you can throw at this man, is singular at least this year or the last few years, I think. 

MATTHEWS:  Keith, Bill Clinton was awful good at this.  Even when he ran in ‘92, we‘d watch him up in New Hampshire, in the round—theatrically in the round, even when he was being challenged on things like his draft letter, incredibly personal stuff.  He was equally good at this. 

I think this president‘s sort of mix of charm, poetry and prose is pretty impressive, because he can be witty.  I don‘t think Bill Clinton was witty.  So, he can be witty, smart, informed, poetic, and also very smart about the numbers at the same time. 

However, on that point, I think he just pulled a fast one on Ryan, because Ryan was talking about that part of the budget which is controllable, and the president switched over to the part that‘s not controllable, the unemployment statistic, unemployment benefits and things like that.  I think he pulled a fast one on that guy, and he‘s trying to challenge him.

So there you have a president using some showmanship, rather than exactly addressing the point.  I think that guy, Ryan, is pretty smart.  I think he did ask a good question.  Why has spending gone up on your watch and now you‘re freezing it?

Of course the smart answer is, this is the time to spend more money.  We‘re in a deep recession right now.  Next year, maybe the time begins to show some restraint. 

By the way, there‘s a real contradiction in what Mr. Pence said just a few moments ago on this tape.  When he came out for a big stimulating tax cut, cut taxes to stimulate the economy, and then he came out for a freeze now on spending, he was going for depressing fiscal policy.  What does he want?  Does he want to stimulate the economy or depress it?  It seems like he wants to do whatever sounds good politically in the moment, because if you want a tax cut, you want to stimulate.  If you want to spend money, you want to stimulate.  If you want to freeze spending, you want to shut it down. 

Why do the Republicans want to shut down this recovery?  Could it be that they are not really that saddened by news of high unemployment this year? 

MADDOW:  I would say one pure politics moment here, another little peak behind the curtain.  When the president said, you know, I went and talked to Peter Orszag, my head of the Office of Management and Budget, before I came here, because I suspected I‘d be hearing it.  That gives you some window as to what kind of fight the president was expecting to have, looking to have, and the degree to which he was willing to prep for it so that he could win. 

OLBERMANN:  Your next questioner, a freshman congressman from Utah, who asked the president about what he viewed as all the promises Mr. Obama has made and not lived up to.  In reply, the president switched tacks.  First, he offered the salient fact that contradicted the premise.  Then he conceded some part of the spirit of the question was correct.  Next on our special report.

(COMMERCIAL BREAK)

OLBERMANN:  Now, a former Democrat‘s turn to question the president, and boy was this a good one.  Jason Chaffetz, representing Utah‘s third Congressional district, currently claims the title of fiscal conservative.  He challenged the president on the subject of earmarks, perhaps because Chaffetz himself did not claim any earmarks in the 2010 budget.  He also questioned the role of lobbyists in the Obama administration. 

Right out the gate, asserting the Republicans were not to blame for the health care quagmire, Mr. Chaffetz challenged candidate Obama‘s campaign proposal to put the health care debate on C-Span.  This lasts nearly six minutes. 

(BEGIN VIDEO CLIP)

REP. JASON CHAFFETZ ®, UTAH:  I‘m one of 22 House freshman.  We didn‘t create this mess, but we are here to help clean it up.  And—deficit of trust.  There‘s some things that have happened that I would appreciate your perspective on, because I can look you in the eye and tell you we have not been obstructionists.  Democrats have the House and Senate and the presidency.  When you stood up before the American people multiple times and said you would broadcast the health care debates on C-Span, you didn‘t.  I was disappointed and I think a lot of Americans were disappointed.

You said you weren‘t going to allow lobbyists in the senior most positions within your administration and yet, you did.  I applauded you when you said it and disappointed when you didn‘t.  You said you‘d go line by line through the health care debate—through the health care bill.  There were six of us, including Dr. Phil Roe, who sent you a letter and said, we would like to take you up on that offer.  We never heard a letter, got a call.  We were never involved in any of those discussion. 

And when you said in the House of Representatives that you were going to tackle earmarks—in fact, you didn‘t want to have any earmarks in any of your bills—I jumped up out of my seat and applauded you.  But it didn‘t happen. 

More importantly, I want to talk about moving forward, but if we can we could address—

OBAMA:  That was a long list.  So let me respond. 

Look, the truth of the matter is that if you look at the health care process, just over the course of the year, overwhelmingly, the majority of it actually was on C-Span because it was taking place in Congressional hearings in which you guys were participating. 

I mean, the—how many committees were there that helped to shape this bill?  Countless hearings took place.  Now, I kicked it off, by the way, with a meeting with many of you, including your key leadership. 

What is true—there‘s no doubt about it—is that once it got through the committee process and there were now a series of meetings taking place all over the Capitol trying to figure out how to get the thing together, that was a messy process.  And I take responsibility for not having structured it in a way where it was all taking place in one place that could be filmed. 

How to do that logistically would not have been as easy as that sounds, because you‘re shuttling back and forth between the House, the Senate, different offices, et cetera, different legislators.  But I think it‘s a legitimate criticism.  So on that one, I take responsibility. 

With respect to earmarks, we didn‘t have earmarks in the Recovery Act.  I—you know, we didn‘t get a lot of credit for it, but there were no earmarks in that.  I was confronted at the beginning of my term with an omnibus package that did have a lot of earmarks from Republicans and Democrats, and a lot of people in this chamber.  And the question was: was I going to have a big budget fight at a time when I was still trying to figure out whether or not the financial system was melting down, and we had to make a whole bunch of emergency decisions about the economy. 

So what I said was, let‘s keep them to a minimum, but I couldn‘t excise them all. 

Now, the challenge, I guess, I would have for you, as a freshman, is what are you doing inside your caucus to make sure that I‘m not the only guy who‘s responsible for this stuff, so that we‘re working together?  Because this is going to be a process. 

You know, when we talk about earmarks, I think all of us are willing to acknowledge that some of them are perfectly defensible, good projects.  It‘s just they haven‘t gone through the regular appropriations process in the full light of day.  So one place to start is to make sure they are at least transparent, that everybody knows what‘s there before we move forward.

In terms of lobbyists, I can stand here unequivocally and say that there has not been an administration who was tougher on making sure that lobbyists weren‘t participating in the administration than any administration that‘s come before us.  Now what we did was, if there were lobbyists who were on boards and commissions that were carryovers and their term hadn‘t completed, we didn‘t kick them off.  We simply said that, moving forward, any time a new slot opens, they‘re being replaced. 

So we‘ve actually been very consistent in making sure that we are eliminating the impact of lobbyists, day in, day out, on how this administration operates.  There have been a handful of waivers, where somebody is highly skilled.  For example, a doctor who ran Tobacco Free Kids technically is a registered lobbyist.  On the other end, has more expertise than anybody in figuring out how kids don‘t get hooked on cigarettes. 

So there have been a couple of instances on that.  But generally, we‘ve been very consistent on that front.  OK? 

(END VIDEO CLIP)

OLBERMANN:  One gets the feeling that if you asked him to, the president could recite the phone extension of everyone in the White House.  A remarkable day in Baltimore for this country‘s political discourse.  And if it sounded often like prime minister‘s question time or maybe the panel of questioners from the old school version of “Meet the Press,” for a moment, it was much more like, Barack Obama, this is your life.  A former colleague from his Illinois state house days puts him on the spot and says, he doesn‘t roll up his sleeves and solve the hard problems the way he used to.  When we continue, how Fox News reacted as this moment in American history unfolded on its air, for a while.

(COMMERCIAL BREAK)

OLBERMANN:  As we have mentioned, it was presidential history, American history, unfolding live on TV, but it was also, as even some Republicans now privately and at least one publicly, concedes, a banner day for the Democratic president himself.  How did those two factors play out in news coverage?  For obvious reasons, all three news networks went live with the exchange.  But as you can see, Fox cut away early so that Fox people could talk about the history Fox viewers were no longer seeing.  They even teased that they would have live coverage of GOP reaction to it, which was somewhat odd, given that that was the GOP reaction to it, their own live back and forth with the president.  Here‘s what you saw and didn‘t see, depending on which network you watched and whether or not they trusted you to decide. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Mr. President, a point of clarification.  What‘s in the Better Solutions book are all the legislative proposals—

OBAMA:  I understand that.  I have actually read your bills.  

:  President Obama is meeting with House Republicans in Baltimore, answering a bunch of question, everything from energy to health care.  The president at times, being a little combative and supporting—he did acknowledge a couple of mistakes along the way.  But much like he did in the State of the Union has very much held firm to the beliefs in what his administration has done. 

(END VIDEO CLIP)

OLBERMANN:  But they had to go then because Glenn Beck‘s chalk board is so much more vital to the democracy.  C-Span has offered—I imagine we would do it.  Maybe even Fox would do it.  CNN would do it—has offered to show the rematch.  Presumably, at some point, Obama versus 140 Republicans gets a little repetitive and there would, at some point, necessarily be a return match, in which it would be 140 Democrats against which Republican?  Which Republican steps into the arena the way that president did today?

MADDOW:  Nobody can.  But nobody can, just because he‘s the president, no matter who he is.  But this is how it wasn‘t like question time in Britain.  Not only is that something where both the opposition and leader‘s own party get to ask questions, but they expect it there.  Part of the reason that you rise through the ranks in the British system is because you‘re good at this.  And what we realized today was that Republicans, at least with this president, at least in this environment—granted, nobody‘s done it before—but they weren‘t good at this.  They didn‘t nail anything—nail him on anything. 

OLBERMANN:  The impact of this on the Democratic party is what? 

MADDOW:  This is energizing to Democrats.  It‘s energizing to have the president give a well-regarded State of the Union.  I would say that it is doubly energizing to see him go out in that town hall that he did yesterday in Tampa, and see him go out today, sort of doubling and tripling down on this idea that he is not only confident, but that is a fighter, that he‘s got a lot of fight in him, and that he intends to win the fights that he will pick. 

There‘s a sense among Democrats, and among liberals in particular, that the president and Democrats have their mojo back. 

OLBERMANN:  Any way to estimate how the Republicans would react to this?  We‘ve seen some answers to this as if, well, he just stuck to his script and that was it, move on, nothing to see here.  Inside those Republican circles, what would their reaction be? 

MADDOW:  You see them try to spin it today as, we got lectured today by President Obama.  If that‘s going to be the way they try to dismiss this, I think they‘re going to need a second week. 

OLBERMANN:  Well, maybe not lectured, but certainly schooled. 

On that note, to bring you as much as possible of the honest exchange we saw this afternoon, this free form format will continue for another hour with Rachel and Chris and myself.  Included in that hour, the accusations that the president is not listening to the public about the public option.  Mr. Obama also responds to the quality of the ideas and proposals the Republicans themselves have offered up.  President‘s question time continues on MSNBC.

(COMMERCIAL BREAK)

MADDOW:  Welcome back.  If you were just tuning in, we are in the midst of an MSNBC special tonight about President Obama‘s face to face question and answer session this afternoon with Republicans from the House of Representatives at their retreat in Baltimore.  It was a confrontation of the chief executive and the caucus which has almost unanimously opposed his key legislation on economic stimulus, the budget, and health reform.

Chris Matthews, Keith Olbermann and I are here to help re-witness the riveting 82-minute back-and-forth which sought American president for—we think the first time field questions from his opposition live on television.  We learned this afternoon that it was the administration who pressed for the session to be televised.  It was the Republicans who initially resisted that, but then relented.  And after it was over, you know, it was the Republicans who regretted that decision.

NBC‘s Luke Russert reporting today from the scene.

(BEGIN VIDEO CLIP)

LUKE RUSSERT, NBC NEWS:  I do believe one Republican said to me off-the-record, and saying behind closed doors, it was a mistake that we allow the cameras to roll like that.  We should not have done that.

(END VIDEO CLIP)

MADDOW:  In terms of the political impact of today‘s event, as Keith mentioned last hour, consider this metric.  During the most dramatic political dialogue since at least the presidential debates of 2008, the FOX News Channel decided to breakaway from its coverage today to bring on critics of the president instead.

So far tonight, we‘ve watched the president‘s exchanges with Congressman Mike Pence of Indiana, Paul Ryan of Wisconsin, and Jason Chaffetz of Utah.

Republican Congresswoman Marsha Blackburn of Tennessee has been in the news this week already for bailing out a pre-planned address to the national tea party convention in Nashville.  Ms. Blackburn backed out along with Minnesota Congresswoman Michele Bachmann over ethics concerns because the national tea party convention is a for-profit event.

Her question to the president started with Republican ideas on health reform, his answer address to that, and a lot more besides.

(BEGIN VIDEOTAPE)

REP. MARSHA BLACKBURN (R-TN), ENERGY & COMMERCE CMTE.:  Thank you, Mr.  President, and thank you for acknowledging that we have ideas on health care because, indeed, we do have ideas, we have plans.  We have over 50 bills.  We have lots of amendments that would bring health care ideas to the forefront.

We would—we‘ve got plans to lower cost, to change purchasing models, address medical liability, insurance accountability, chronic and preexisting conditions and access to affordable care to those with those conditions, insurance affordability, expanded access, but not doing it with creating more government, more bureaucracy and more cost for the American taxpayer.

And we look forward to sharing those ideas with you.  We want to work with you on health reform.  And making certain that we do it in an affordable, cost effective way that is going to reduce bureaucracy, reduce government interference and reduce cost to individuals and to taxpayers.

And if those good ideas aren‘t making it to you, maybe it‘s the House Democratic leadership that is an impediment.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Well.

BLACKBURN:  . instead of a conduit.  But we‘re concerned also that there are some lessons learned from public option health care plans that maybe are not being heated, and certainly, in my state of Tennessee, we were the test case for public option health care in 1994 and our Democrat government has even cautioned that maybe our experiences there would provide some lessons learned that should be heated and would provide guidance for us to go forward.

And as you said, what we should be doing is tossing old ideas out, bad ideas out, and moving forward and refining good ideas.  And certainly, we would welcome that opportunity, so my question to you is: when will we look forward to starting anew and sitting down with you to put all of these ideas on the table, to look at these lessons learned, to benefit from that experience, and to produce a product that is going to reduce government interference, reduce cost and be fair to the American taxpayer?

(LAUGHTER)

OBAMA:  Actually, I‘ve gotten many of your ideas.  I‘ve taken a look at them, even before I was handed this.

Some of the ideas, we have embraced and are in our package.  Some of them are embraced with caveats.  It‘s not that many of these ideas aren‘t workable, but we have to refine them and make sure that they don‘t just end up worsening the situation for folks rather than making it better.

Now, what I said at the State of the Union is what I still believe.  If you can show me and if I get confirmation from health care experts, people who know the system and how it works, including doctors and nurses, ways of reducing people‘s premiums, covering those who do not have insurance, making it more affordable for small businesses, having insurance reforms that insure people have insurance even when they‘ve got preexisting conditions that their coverage is not dropped just because they‘re sick, that young people right out of college, or as they‘re entering in the workforce, can still get health insurance—if those component parts are things that you care about and want to do, I‘m game.

At its core, if you look at the basic proposal we‘ve put forward that has an exchange so that businesses and the self-employed can buy into a pool and can get bargaining power the same way big companies do, the insurance reforms that I‘ve already discussed, making sure that there‘s choice in competition for those who don‘t have health insurance.  The component parts of this thing are pretty similar to what Howard Baker, Bob Dole and Tom Daschle proposed at the beginning of this debate last year.

Now, you may not agree with Bob Dole and Howard Baker and Tom—certainly you don‘t agree with Tom Daschle on much, but that‘s not a radical bunch.  But if you were to listen to the debate and frankly, how some of you went after this bill, you‘d think that this thing was some Bolshevik plot.

No, I mean, that‘s how you guys—that‘s how you guys presented it.  That—and—so, I‘m thinking to myself, well, how is it that a plan that is pretty centrist—no, look, I mean, I‘m just saying.  And I know—I know you guys disagree, but if you look at the facts of this bill, most independent observers would say this is actually what many Republicans—it is similar to what many Republicans proposed to Bill Clinton when he was doing his debate on health care.

So, all I‘m saying is: we‘ve got to close the gap a little bit between the rhetoric and the reality.  I‘m not suggesting that we‘re going to agree on everything, whether it‘s on health care or energy or what-have-you, but if the way these issues are being presented by the Republicans is that this is some wild-eyed plot to impose huge government in every aspect of our lives, what happens is: you guys then don‘t have a lot of room to negotiate with me.

I mean, the fact of the matter is that many of you, if you voted with the administration on something, are politically vulnerable in your own base, in your own party.  You‘ve given yourself very little room to work in a bipartisan fashion because what you‘ve been telling your constituents is, this guy‘s doing all kinds of crazy stuff that‘s going to destroy America.

And I would just say that we have to think about tone, it‘s not just on your side, by the way.  It‘s on our side as well.  This is part of what‘s happened in our politics where we demonize the other side so much that when it comes to actually getting things done, it becomes tough to do.

(END VIDEOTAPE)

MADDOW:  Chris Matthews in Washington, you hear the president describe his health care plan as a being derided as a Bolshevik plot.  He says that it‘s not some wild-eyed plot to impose huge government in every aspect of our lives.  What‘s he‘s getting out there with those House Republicans?

CHRIS MATTHEWS, “HARDBALL” HOST:  Well, I think I‘d like to close the gap between rhetoric and reality just for a second here, and that is that Marsha Blackburn with that list of particulars she offered never mentioned the fact that Republicans controlled both houses of Congress and the presidency for many years—in fact, most of the last decade.

During none of that time did they ever move those bills, did they ever try any of those things.  This is the great hypocrisy of the Republican Party.  They do nothing in terms of extending health care to the millions of people uninsured.  And every time the Democrats try to do it, whether it‘s Harry Truman or it‘s Bill Clinton or it‘s President Obama, they have all these criticisms and then they‘d say, why didn‘t you take the Republican approach?  They never offer the Republican approach when they have the power.

That‘s the great hypocrisy of Marsha Blackburn. She‘s been in the Congress now for eight years now.  It‘s her fourth or fifth term.  How come she didn‘t offer these many offerings that she had there in that list of hers, which I found rather pushy really because why did she offering things that she could have passed with the Republicans when they were in power?  It‘s so hypocritical.

MADDOW:  Keith, when you hear the president pivot from addressing those individual ideas, saying, hey, you know, we did actually include a lot of centrists and Republican ideas in what we did, but then he is the one—he takes the initiative to pivot to the tone, to the problems with Republicans in their base.  Why did he do that?

KEITH OLBERMANN, “COUNTDOWN” HOST:  This would be my great fear in getting into an argument with this man about almost any topic because he just—as you say—the pivot is almost invisible.  What he managed to point out, which I think is a fair criticism of the Republican stridency, leaving the policy out of it, but tone does in fact, to sort of simplifying what the president said, the construction is this: Here‘s a guy who‘s trying to destroy America.  So now, let‘s negotiate with him.

It doesn‘t hold up within their own—within their own world.  Never mind how unrealistic that world is or how critical you or I might be on a nightly basis of it.  It no longer holds up in their own world and the president called them out and kind of pierced that bubble with this little message to them.  It can‘t long-term work for you for that reason.

MADDOW:  Even while—even while saying, of course, I‘d love for you to work with me, he‘s pointing out how they‘ve made it politically impossible.

OLBERMANN:  Yes.  I haven‘t called you guys nuts lately.

MADDOW:  All right.  Keith and Chris, both stand by.

Ahead, President Obama takes on Congressman Tom Price‘s claim that Republicans have a virtually cost-free plan for health reform.

And still ahead: one Republican congressman actually compliments the president for reaching across the aisle, but of course, there‘s a catch.

Stay with us.  Our special coverage of the president‘s historic televised with the opposition today continues.

(COMMERCIAL BREAK)

MADDOW:  Welcome back to our special coverage of the president‘s extraordinary Q&A with House Republicans today.

Congressman Tom Price of Georgia had probably the most sarcastic question of the day today, but his challenge to the president started with a critique of the State of the Union address.

Here‘s part of their exchange.

(BEGIN VIDEOTAPE)

REP. TOM PRICE ®, GEORGIA:  I want to stick on the general topic of health care, but ask a very specific question.  You have repeatedly said most recently at the State of the Union, that Republicans have offered no ideas and no solutions.  In spite of the fact.

OBAMA:  I don‘t think I said that.  What I said was—in the context of health care, I remember that speech pretty well.  It was only two days ago.  I said I welcome ideas that you might provide.  I didn‘t say you haven‘t provided ideas.  I said I welcome those ideas that you‘ll provide.

PRICE:  Mr.  President, multiple times, from your administration, there have come statements that Republicans have no ideas and no solutions.  In spite of the fact we‘ve offered as—demonstrated today—positive solutions all of the challenges we face, including energy and the economy and health care.

Specifically in the area of health care, this bill, H.R. 3500, that has more cosponsors that any health care bill in the House, is a bill that would provide health coverage for all Americans, would correct the significant insurance challenges of affordability and preexisting, would solve the lawsuit abuse issue, which isn‘t addressed significantly in the other proposals that went through the House and the Senate, would write into law that medical decisions are made between patients and families and doctors, and does all of that without raising taxes by a penny.

But my specific question is: what should we tell our constituents who know that Republicans have offered positive solutions to the challenges that Americans face and yet continue to hear out of the administration that we‘ve offered nothing?

OBAMA:  Tom, look, I have to say that on the—let‘s just take the health care debate.  And it‘s probably not constructive for us to try to debate a particular bill.  This isn‘t the venue to do it.  But if you say, we can offer coverage for all Americans and it won‘t cost a penny, that‘s just not true.  You can‘t structure a bill where suddenly 30 million people have coverage and it costs nothing.  If.

PRICE:  Mr. President—I understand we‘re not debating this bill, what should—what should we tell our constituents who know that we‘ve offered these solutions and yet hear from the administration that we have offered nothing?

OBAMA:  Let me—I‘m using this as a specific example.  So, let me answer your question.  You asked a question, I want to answer it.

It‘s not enough if you say, for example, that we‘ve offered a health care plan and I look up—this is just under the section that you just provided me—or the book that you just provided me.  Summary of GOP health care reform bill—the GOP plan will lower health care premiums for American families and small businesses, addressing America‘s number one priority for health reform.

I mean, that‘s an idea that we all embrace.  But specifically, it‘s got to work.  I mean, there‘s got to be a mechanism in these plans that I can go to an independent health care expert and say, “Is this something that will actually work or is it boilerplate?”  But it can‘t just be political assertions that aren‘t substantiated when it comes to the actual details of policy because—because otherwise, we‘re going to be selling the American people a bill of goods.

I mean, I—the easiest thing for me to do on the health care debate would have been to tell people that what you‘re going to get is guaranteed health insurance, lower your costs—all the insurance reforms.  We‘re going to lower the cost of Medicare and Medicaid, and it won‘t cost anybody anything.

That‘s great politics.  It‘s just not true.

So, there‘s got to be some test of realism in any of these proposals, mine included.  I‘ve got to hold myself accountable.  I guarantee the American people will hold themselves—will hold me accountable if what I‘m selling doesn‘t actually deliver.

REP. MIKE PENCE ®, INDIANA:  Mr. President, a point of clarification.  What‘s in the book are all the legislative proposals that were authored.

OBAMA:  I understand that.  I‘ve actually read your bills.

PENCE:  . throughout 2009.

OBAMA:  I understand.

PENCE:  And so, rest assured, the summary document you received is backed up by precisely the kind of detailed legislation that Speaker Pelosi and your administration have been busy ignoring for 12 months.

OBAMA:  Mike, wait—hold on.  Hold on.

PENCE:  But it‘s just.

OBAMA:  No, no, no, no.  Hold on a second, yes.

(APPLAUSE)

OBAMA:  You know, mike—I‘ve read your legislation.  I mean, I take a look at this stuff.  And the good ideas, we take.

But here‘s—here‘s the thing—here‘s the thing I guess that all of us have to be mindful of: it can‘t be all or nothing, one way or the other.  Right?  You—and what I mean by that is this: if we put together a stimulus package in which a third of it are tax cuts that normally, you guys would support and support for states and the unemployed and helping people stay on COBRA, that your governors certainly would support, Democrat or Republican.

And then you‘ve got some infrastructure and maybe there‘s some things in there that you don‘t like in terms of infrastructure, or you think the bill should have been $500 billion instead of $700 billion.  Or there‘s this provision or that provision that you don‘t like.

If there‘s uniform opposition because the Republican Caucus doesn‘t get 100 percent, or 80 percent of what you want, then it‘s going to be hard to get a deal done.  That‘s because—that‘s not how democracy works.

So, my hope would be that we can look at some of these component parts of what we‘re doing and maybe we‘d break some of them up on different policy issues.  So, if the good congressman from Utah has a particular issue on lobbying reform that he wants to work with us on, we may not be able to agree on a comprehensive package on everything, but there may be some component parts that we can work on.

You may not support our overall jobs package, but if you look at the tax credit that we‘re proposing for small businesses right now, it is consistent with a lot of what you guys have said in the past.  And just the fact that it‘s my administration that‘s proposing it shouldn‘t prevent you from supporting it.

(END VIDEOTAPE)

MADDOW:  Keith, we‘re seeing in that exchange, the president pivoting from Tom Price to Mike Pence who, again, is chairing this event.  I think you described him as sort of a heavy-hitter in the room.  I think that‘s accurate.  He has—somebody said—presidential aspirations of his own.

OLBERMANN:  And a radio background.

MADDOW:  And a radio background as well.  Also, is the person who I think making—I think has been making the most overtly partisan charged remarks for the president here.  The president seems to respond sort of with equal fire, does he not?

OLBERMANN:  Oh, clearly.  And the—this is one of the things that I don‘t—this was something of a reality check I would imagine if you‘re in that room and you‘re a member of the Republican Party and you have been reading too many of your own blogs, too many of your own favorable clippings.  It affects Democrats, too.  It affects actors, news broadcasters, whoever.

If you read only your good clippings, you‘re going to be in trouble in reality.  And I‘m reminded of that Lindsey Graham town hall from last summer in which the crowd in his own constituency asked him why he was collaborating with Democrats.  And he had to slowly explain to them because they were in the majority.

And it did, in fact, seem—this point the president was making, you don‘t want 40 percent, which might be proportional in the Congress, you don‘t want 50 percent, which would be a generous cut of by truly bipartisan measure.  You‘re looking for 80 percent or 90 percent of your measures to supplant ours.  And that‘s something that must be very difficult to assimilate if you‘re sitting in that audience today.

MADDOW:  Well, Chris, is that what his—is that what the president is trying to do in terms of creating a political liability for the Republicans in something that‘s otherwise been working rather well for them in terms of their own electorate and energizing their own base?

MATTHEWS:  Yes.  Again, Axelrod told me right before we started tonight that the president‘s strategy, and it is strategic tonight, it‘s not all—you know, this is not, you know, what do you call it—something nice—nice bouquet to throw to the Republicans to show up at their meeting, the goal here is to trap them in a choice.  Either you participate in some sort of realistic compromise on the bills that the country needs or you be seen not doing so.  You can‘t just slither away into the night and issue press releases about how the Republicans haven‘t had their ideas accepted.

So, I think he‘s forcing them into the daylight.  And you talk about having things on television as one of the members did there.  We ought to have more transparency.  Well, clearly, today was transparent.

And I think you saw—you know, people like Jason Chaffetz.  I‘ve got to bring him up because he got raised some free shots at the president today.  This is the fellow who last June pushed through a clearly popular measure to basically get rid of those full body image scans at the airports.  And he got it passed 310-118.

Now, if the president wanted to play hardball tonight, he would have said, “Oh, Jason, weren‘t you the one that well before the Christmas bombing attempt were the ones that wanted to rob us of those machines which are the only thing that could stop this guy.  And by the way, shouldn‘t you pay a political price for that like being defeated in the next election?  They‘re not playing very tough with this guy.

There‘s a guy.  He came off as wet behind the ears, Mr. Innocent, calling for lobbying reform and all these brand new things, saying how he‘s the new kid on the block, he pushed through this during—by the way, with the help of Michele Bachmann and Joe Wilson, a couple of real winners on his side, pushed through this measure which basically played ball with something that the country really needed for security.

So, I think that the president could do a little more homework in catching some of those freebooters out there that were taking shots at him today.

MADDOW:  Keith and Chris, stand by.

Next: President Obama reconnects with an old Republican friend from his days in the Illinois legislature.  Big change in tone in the back-and-forth coming up.

You‘re watching a special edition of MSNBC “President‘s Question Time” with me, Keith Olbermann and Chris Matthews, please do stay with us.  We‘ll be right back.

(COMMERCIAL BREAK)

MADDOW:  We‘re back with special coverage of President Obama‘s unprecedented televised Q and A with Republicans behind enemy lines.  Believe it or not, even though he was behind enemy lines, he seems to have found a friend there.  Listen to this one. 

(BEGIN VIDEO CLIP)

REP. PETER ROSKAM (R-IL):  Peter Roskam from the great state Of Illinois. 

OBAMA:  Oh, Peter‘s an old friend of mine. 

ROSKAM:  Hey, Mr. President.

OBAMA:  Peter and I have had many debates. 

ROSKAM:  Well, this won‘t be one.  Mr. President, I heard echoes today of the state senator that I served with in Springfield and there was an attribute and a characteristic that you had that I think served you well there.  You took on some very controversial subjects - death penalty reform.  You and I - we negotiated on that. 

OBAMA:  Yes. 

ROSKAM:  You took on ethics reform.  You took on some big things.  One of the keys was - you rolled your sleeves up, you worked with the other party and ultimately, you were able to make the deal.  Now, here‘s an observation.  Over the past year, in my view, that attribute hasn‘t been in full bloom. 

OBAMA:  Peter and I did work together effectively on a whole host of issues.  One of our former colleagues is right now running for governor on the Republican side in Illinois. 

In the Republican primary, of course, they‘re running ads of him saying nice things about me.  Poor guy.  Although that‘s one of the points that I made earlier.  I mean, we‘ve got to be careful about what we say about each other sometimes, because it boxes us in, in ways that makes it difficult for us to work together because our constituents start believing us. 

They don‘t know sometimes this is just politics what you guys - you know, or folks on my side, do sometimes.  You don‘t get a lot of credit if I say, you know, I think Paul Ryan‘s a pretty sincere guy and has a beautiful family. 

Nobody‘s going to run that in the newspapers, right?  You know - and by the way, in case he‘s going to get a Republican challenge, I didn‘t mean it.  Don‘t want to hurt you, man. 

(END VIDEO CLIP)

MADDOW:  Chris, to hear the president there talking about how our constituents might actually believe us, we have to be careful.  We know it‘s just politics.  Is he being naive there?  I mean, I feel like when I look at some of the anger, the way the Republican members of the House, in particular, addressed there, those rallies and everything - it‘s not just politics with them.  They mean it. 

MATTHEWS:  Well, the Republican Party is under assault from its far right.  I don‘t think I can remember either party being under assault by its extremes. 

I mean, there seems to be a new sort of purity test that unless you‘re far right, you‘re not a Republican, and this sort of tea party testing they‘re doing now, asking people about, you know, the birther issue and whether they think that issues like - well, social security is socialistic or Medicare, the same. 

And these questions are being asked of regular Republicans.  Glenn Beck, the inimitable one, the other day, was saying that if you‘re a regular Republican, basically, you‘re suspect.  You might well be a secret progressive.  In fact, we must assume that. 

So this party is really being tugged over to the right.  Watch John McCain‘s voting record the next year.  I think it‘s going to reflect the fact that he‘s got J.D. Hayworth out there. 

Look at somebody like Charlie Crist who was presumed to be a pretty attractive candidate, the senator from Florida.  And now, he is behind in the numbers to Marco Rubio who is a (UNINTELLIGIBLE) favorite. 

So what‘s going on out there in the Republican Party is kind of frightening, almost Cambodia reeducation camp going on in that party, where they‘re going around to people, sort of switching their minds around saying, “If you‘re not far right, you‘re not right enough.” 

And I think that it‘s really - there‘s going to be a lot of extreme language on the Republican side.  And maybe, it will be (UNINTELLIGIBLE) firing squad when this is all over. 

MADDOW:  Keith, is the president trying to sort of split Republicans from the base? 

OLBERMANN:  No, I think this is where that exchange and many others is what prompts those words like “arrogant” to be used.  Because what the president is saying is, “This is the way it should be.  These are the rules that have always been.  I‘m trying to play by them.  Why am I the only grownup in the room?” 

I think that what ultimately where the real anger towards him, however it is expressed, by the constituents who were fired up, or the representatives who were then, in turn, emboldened or frightened of their own constituents and get louder and angrier.  They suspend their own rules. 

And I think that‘s what the president was being - not naive necessarily, but to some degree, wishful thinking and to some degree saying, “I‘m going to be the referee if you‘re not being tied.” 

MADDOW:  It also sort of saying, you know, “You guys say you want to work with me.  I see why you can‘t.  Let me explain to you why you can want.  I‘m going to keep offering that you should be working with me, but we all know it‘s not going to happen.”

All right.  Keith and Chris, stand by.  And the next question, probably the most heated exchange of the day.  It‘s between the president and the Republican congressman named Jim - possibly Jeb.  It‘s complicated.

You are watching the special edition of MSNBC, “President‘s Question Time.” Please do stay with us. 

(COMMERCIAL BREAK)

MADDOW:  Welcome back to our special coverage of a truly remarkable day in American politics.  President Obama meeting face-to-face with House Republicans and jousting with them, live on television. 

Mr. Obama‘s final exchange of the day today proved to be one of the most feisty.  The president locking horns with Republican Congressman Jeb Hensarling of Texas.  Mr. Hensarling is a member of the House Budget Committee.  And he attempted to lay into President Obama over the country‘s rising national debt. 

(BEGIN VIDEO CLIP)

REP. JEB HENSARLING (R-TX), MEMBER, HOUSE BUDGET COMMITTEE:  Mr.  President, a year ago, I had an opportunity to speak to you about the national debt.  And something that you and I have in common is that we both have small children. 

OBAMA:  Absolutely.

HENSARLING:  And I left that conversation really feeling your sincere commitment to ensuring that our children, our nation‘s children, do not inherit an unconscionable debt. 

We know that under current law, that government - the cost of government is due to grow from 20 percent from our economy to 40 percent of our economy, right about the time our children are leaving college and getting that first job. 

Mr. President, shortly after that conversation a year ago, the Republicans proposed a budget that ensured that government did not grow beyond the historical standard of 20 percent of GDP.  It was a budget that actually froze immediately non-defense discretionary spending. 

It spent $5 trillion less than ultimately what was enacted into law.  And unfortunately, I believe that budget was ignored.  And since that budget was ignored, what were the old annual deficits under Republicans have now become the monthly deficits under Democrats. 

The national debt has increased 30 percent.  Now, Mr. President, I know you believe, and I understand the argument - I respect the view that the spending is necessary due to the recession.  Many of us believe, frankly, it‘s part of the problem, not part of the solution.

But I understand and respect your view.  But this is what I don‘t understand, Mr. President.  After that discussion, your administration proposed a budget that would triple the national debt over the next 10 years. 

Surely, you don‘t believe 10 years from now, we will still be mired in this recession and propose new entitlement spending and move the cost of government to almost 24.5 percent of the economy. 

Now, very soon, Mr. President, you‘re due to submit a new budget. 

And my question is -

OBAMA:  Jim(sic), I know there‘s a question in there somewhere,

because you‘re making a whole bunch of assertions, half of which I disagree

with, and I‘m having to sit here listening to them.  At some point, I know

you‘re going to let me answer.  All right -

HENSARLING:  That‘s the question.  You‘re soon to submit a new budget, Mr. President.  Will that new budget, like your old budget, triple the national debt and continue to take us down the path of increasing the cost of government almost 25 percent of our economy?  That‘s the question, Mr.  President. 

OBAMA:  Jim(sic), with all due respect, I‘ve just got to take this last question as an example of how it‘s very hard to have the kind of bipartisan work that we‘re going to do because the whole question was structured at a talking point for running a campaign. 

Now, look, let‘s talk about the budget once again, because I‘ll go through it with you, line by line.  The fact of the matter is that when we came into office, the deficit was $1.3 trillion.  $1.3 trillion.  So when you say that suddenly, I‘ve got a monthly budget that is higher than the - monthly deficit higher than a annual deficit left by the Republicans, that‘s factually just not true. 

And you know it‘s not true.  And what is true is that we came in, already with a $1.3 trillion deficit before I had passed any law.  What is true is we came in with $8 trillion worth of debt over the next decade.  Had nothing to do with anything that we had done. 

It had to do with the fact that in 2000, when there was a budget surplus of $200 billion, you had a Republican administration and a Republican Congress and we had two tax cuts that weren‘t paid for. 

You had a prescription drug plan, the biggest entitlement plan by the way, in several decades, that was passed without it being paid for.  Yet, two wars that were done through supplementals. 

And then you had $3 trillion projected because of the loss revenue of this recession.  That‘s $8 trillion.  Now, we increased it by $1 trillion dollars, because of the spending that we had to make on the stimulus.  I am happy to have any independent fact checker out there take a look at your presentation versus mine in terms of the accuracy of what I just said. 

(END VIDEO CLIP)

MADDOW:  Pick me, pick me, pick me.  Did somebody say fact check?  Here goes.  Let‘s take President Obama‘s claims first.  His claim that he came into office already saddled with a $1.3 trillion deficit is close.  The Congressional Budget Office actually rounds it to $1.2 trillion, not $1.3 trillion, if you want a pick that nit. 

The president‘s claim that his predecessors piled up $8 trillion of debt before he even came into office, true.  Budget analysts say when you factor in the Bush tax cuts, the national debt topped $8 trillion as of last January when President Obama was sworn in. 

Now, as for the congressman, Congressman Hensarling, during his question, he accused President Obama of proposing a budget that would, quote, “triple the national debt over the next 10 years.”  According to the numbers released this week by the CBO, the national debt is projected to double over the next decade, not triple, as Mr. Hensarling twice insisted. 

The national debt was $7.5 trillion at the end of 2009.  It‘s projected to be $14.3 trillion by the end of 2019.  That would be double, not triple, so Mr. Hensarling basically got that one wrong. 

Mr. Hensarling also claimed that the House Republican budget would have prevented government spending from growing beyond 20 percent of GDP.  That was their proposal.  He said the budget would freeze non-defense discretionary spending.  That was also their proposal.

And he claimed that the Republican budget was largely ignored - also true.  It should be noted in fairness, however, that the Republican budget was proposed without any numbers in it, which frankly made it easier to ignore.  We‘ve got one final fact check here. 

(BEGIN VIDEO CLIP)

OBAMA:  Jim(sic) going to wrap things up?  I know there‘s a question

in there somewhere.  Jim(sic), with all do respect -

MADDOW:  The president is wrong.  We can report unequivocally tonight, that it‘s Jeb Hensarling, not Jim.  Jeb, not Jim. 

Much more of President Obama‘s final exchange with House Republicans when we come back.  You‘re watching a special edition of MSNBC, president‘s question time.

(COMMERCIAL BREAK)

MADDOW:  Welcome back.  As President Obama wrapped up his historic chat with House Republicans today, he made a last ditch effort to appeal to their better angels, I guess. 

He urged them, as he did during the beginning of his speech, to work with him, not against him, something liberals have been telling him to give up on, but which this president says he is still after. 

(BEGIN VIDEO CLIP)

OBAMA:  If we‘re going to frame these debates in ways that allow us to solve them, then we can‘t start off by figuring out, A, who‘s to blame, B, how can we make the American people afraid of the other side. 

And unfortunately, that‘s how our politics works right now. 

That‘s how a lot of our discussion works.  That‘s how we start off.  Every

time somebody speaks in Congress, the first thing they do, they stand up

and all the talking points -

I see Frank Luntz up here sitting in the front.  He‘s already polled it.  And he said, you know, “The way you‘re really going to - I‘ve done a focus group and, you know, the way we‘re going to really box in Obama on that one or make Pelosi look bad on that one.” 

I know - I like frank.  We‘ve had conversations between Frank and I, but that‘s how we operate.  It‘s all tactics and it‘s not solving problems.  And so the question is, at what point can we have a serious conversation about Medicare and its long-term liability or a serious question about - a serious conversation about social security or a serious conversation about budget and debt in which we‘re not simply trying to position ourselves politically. 

That‘s what I‘m committed to doing.  We won‘t agree all the time in getting it done.  But I‘m committed to doing it. 

(END VIDEO CLIP)

MADDOW:  “But I am committed to doing it.”  I‘m Rachel Maddow here with Keith Olbermann in New York.  Chris Matthews is joining us from Washington. 

Chris, big picture in terms of this remarkable event today.  Does it change anything in Washington other than making the president look good? 

MATTHEWS:  Well, let‘s start with the last part of that answer to that question.  Whenever you doubt - and I‘m sure we all do about the effectiveness of our political process, the ability to take to the top the best people in our country and to see the long primary season, the long battle for the nomination, the long battle for the general election produces the best person.

I don‘t know anyone else in the country that could have done what the president did today in simple ability terms.  To be able to do what he did in terms of temperament.  I don‘t have it.  Keith, you and me - maybe Rachel, the temperament to put up with those questions which were not really questions. 

The ability to put up with adversarial remarks, the snarkiness. 

The ability to think through and outthink everyone of your challengers.  The ability to command - that kind of information, even to the point of knowing how these wars were financed through supplemental appropriations, little of bits of knowledge he displayed tonight. 

All thrown together in this arena of a bit over an hour today showed me that we do produce probably the best candidate and best president we can in this system you can imagine in the world.  And so I think our political process has taken to the top the person that ought to be there.  And that would be my take-away after all this today. 

OLBERMANN:  Yes.  Well, you and I had this conversation when we went to the White House, that it was really one of those moments where you thought, well, maybe we do have to say the 1,000th smartest people in the country is the president of the United States.  Maybe he‘s 999.  Maybe 83 - we don‘t know. 

But that sense that you have that guy knows what he‘s talking about under almost all circumstances and almost all topics is overwhelming.  And I think this is the entree into it, to what degree it changes anything. 

I would imagine there are - we‘ve already heard from some of them. There are Republicans who are going, “What did we do that for?”  And you know, I‘m - you remember this, Chris, better than - as clearly as I would have, if not better, the story about when Rose Mary Woods was supposedly the one who erased the tapes on the White House Dictaphone or whatever it was, the 18-minute gap and for some reason, they let “Newsweek” into the White House to her desk to photograph her reaching back and having to do something physically impossible to erase the tapes.

And it looked stupid and it was just a disaster because it was towards the end of the Nixon presidency.  Leonard Garment said afterwards, “I don‘t know why we did that.”  Everything went wrong.  All we‘ve seen off the record, on the record from the Republicans after this tells you what maybe will change. 

I don‘t know that it‘s necessarily for the better.  They may be saying, “We‘re never going to get close to him again.  We have to avoid him as much as possible, and we certainly can‘t be seen trying to negotiate with him because we‘re not negotiating from strength.”  They had 140 players on the field and the other team had one guy and they lost to him. 

MADDOW:  I think the picture of what‘s - the bigger picture of what‘s been happening in politics recently, though, is things have not been going well for Obama.  And it‘s because, in part, politics isn‘t usually like what it was like here today. 

Politics isn‘t usually about substantive discussions of policies where the person who is being attacked gets a chance to answer it right then and there ...

OLBERMANN:  Exactly. 

MADDOW:  ... and challenge the substantive basis on which they‘re being attacked.  I think Obama is saying he would like politics to be more like that.  And part of the reason is because I think he thinks that would be good for the country. 

But the other part of the reason is he knows it would be great for him because he wins when politics is like this.  The way that I - if I were a Republican, what I‘d take away from this is, don‘t let politics be like this ever again. 

OLBERMANN:  Well -

MADDOW:  At least while this guy is in that -

OLBERMANN:  You know exactly what - Chris, you must think this is the case.  Their reaction is, in fact, going to be, “We don‘t know why we did this.  We‘re not going to do this again.” 

MATTHEWS:  You‘re always learning from your enemies.  You are a

teacher of your enemy at every moment.  And I must say, Arthur Schlesinger

once said something.  I heard about it (UNINTELLIGIBLE) it was so

brilliant.  He said, “Politics” - and we‘re watching it today in full bloom

“is essentially a learning profession.  You must learn every day.  It‘s like you must learn every day from your enemies how to beat them.” 

And this president has learned in terms of getting something done.  He has to find some new way to do it.  Rachel, your criticism has so far - and Keith and our criticism put together.

There is room for criticism with this president.  He has not mastered this game yet.  But I watch him learning it.  And I wouldn‘t want to be on the other side of this learning curve because I think he is going to learn.  And he‘s going to better as time goes on. 

MADDOW:  Clearly, not all news days are created equal, and this one was amazing.  The president of the United States confronting a large gathering of his most vocal opponents live on national television. 

Its impact as it happened was to compel our attention.  Its impact on the near and midterm future of American politics and governing remains to be seen.  Regrettably, we are out of time tonight to talk about that, but thankfully, Chris and Keith and I will be back in the near future to keep track. 

If you missed any of the two hours, though, please do stay tuned. 

MSNBC will re-air this program in its entirety, next. 

I‘m Rachel Maddow here in New York City with my friend Keith Olbermann.  Chris Matthews has been joining us this evening from Washington, D.C. 

OLBERMANN:  I found Jim Hensarling. 

MADDOW:  Who is it? 

OLBERMANN:  He‘s the president of the Omak stampede, a rodeo in Omak, Washington, home of the world famous suicide race.  That‘s who the president thought he was talking about - Jim. 

MADDOW:  No wonder he was so confident.  Thanks very much for watching.  Good night and have a great weekend.

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

END   

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