updated 2/3/2010 5:37:30 PM ET 2010-02-03T22:37:30

Guests: Sherrod Brown, Jennifer Donahue, Jim Moran, Sen. John Barrasso,

Joan Walsh, Karen Hanretty, Todd Webster, Carol Marin

ED SCHULTZ, HOST:  Good evening, Americans, and welcome to “The Ed Show” tonight from New York.  Hitting my hot buttons tonight, the president goes on the road.  He‘s fired up in New Hampshire today.  He took on republicans and doubled down on health care.  I love it.  And he says, “We‘re in the Red Zone.”  I‘ll talk to Senator Sherrod Brown from Ohio and a political analyst who is on the ground, in the room, in Nashua in just a moment. 

And a group of senators is moving to block funding for the KSM trial?  If it‘s in federal court, we have all these conditions now?  So much for united we stand.  I‘ll go head-to-head with Republican Senator John Barrasso at the bottom of the hour on this issue.

And it is primary night in Illinois.  The only thing that would make the tea partiers happier than winning Ted Kennedy‘s seat would be winning Barack Obama‘s old senate seat in Illinois.  What happens tonight could be a major bellwether for November.  That‘s all coming up on the ED SHOW tonight. 

Let‘s go to the president first.  He says his economic plan, his ideas are working and the numbers support all of that.  The unemployment numbers are better than they were before.  The GDP is moving in the right direction.  But I think, he needs the country to start feeling.  It‘s hard with ten percent unemployment.  But I would like to see the white house sell us just a little bit harder.  And his administration gets out there and sells a little bit harder.  David Axelrod was asked a very simple question on “Meet the Press” on Sunday and here it is. 

(BEGIN VIDEO CLIP)

DAVID GREGORY, HOST:  Final question.  Is the country better off than it was a year ago?

DAVID AXELROD, SR. WHITE HOUSE ADVISER:  Look.  Until, I obviously, in some ways, the answer is, yes.  A year ago we were losing 700,000 jobs a month, when the president took office.  Our economy was shrinking at a rate of 6.4 percent.  Last Friday, we learned it is growing now at a rate of six percent.  The job loss is one-tenth of what it was.  But until people are working, until incomes are growing, until there is a sense of stability and economic security on the part of the middle class, we‘ve got a lot of work to do. 

(END VIDEO CLIP)

SCHULTZ:  I‘m a fan, Mr. Axelrod.  We all want the same thing.  We got to get on the same page.  Sell hard!  I think you missed an opportunity here!  Anybody that‘s asked that question, of course it‘s common, they‘re asked this question in polls all the time, they don‘t answer based on numbers.  It‘s got to come from the heart.  It‘s got to come from the soul.  Yes, we‘re a lot better off this year!  Because his name‘s Barack Obama and he‘s president of the United States and we‘re going in a different direction!  I think the Americans want to see a president who is confident and optimistic.  They want a president who is just going to grab them and say, “This is the future.  We are headed in the right direction.” 

Now this may be heresy to many of you lefties out there, but that‘s something that Ronald Reagan was pretty doggone good at.  He made the country feel really good about itself.  President Obama stopped the banks from going belly-up.  It is a good thing.  All right there.  The market a year ago was 3,500 points from where it is right now.  That‘s good.  That‘s people‘s retirement, that‘s 401(k)s, that‘s pension plans, that‘s education, that‘s a good thing.  Whether you like it or not, how Wall Street was bailed out, and all of the lack of oversight and bonuses and that stuff, we‘re still better off today than we were a year ago. 

And had Obama and his team not responded, we‘d been in a heard back, we‘d been looking at 25 percent unemployment.  OK, let‘s talk about the automobile industry.  We better off today?  You better believe it.  Here‘s the number.  Let‘s see, January sales, gm up 14 percent.  Ford, up 25 percent.  Good thing?  I think so.  He got the SCHIP done and gave millions of dollars for kids to get health care in this country and taxed the smokers.  Not good to smoke anyway.  All that in the first year in office?

And there‘s more there, too.  I think his team should be out crowing about that daily.  You know the righties would.  Today President Obama did a town hall in Nashua, New Hampshire where he talked up his plan about giving $30 billion in repaid TARP money to small businesses so they can create jobs.  It‘s a great idea but the president was still very sober when it came to the economy. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Lord knows it wasn‘t popular to prevent our financial system from collapsing.  We had thrown a lifeline to some of the very firms that had helped cause this crisis in the first place.  But it was the right thing to do, because if we hadn‘t taken those steps, the entire system could have gone down and taken our economy, and millions of families and businesses, with it.  We‘re making progress.  But it can‘t come fast enough. 

(END VIDEO CLIP)

SCHULTZ:  Is it a matter of style?  Am I just too overboard?  Democrats are just so quick to play the whipping post!  The president has absolutely nothing to apologize for when it comes to this economy.  Rome wasn‘t built in a day.  We‘re not going to rebuild this thing in a day.  We‘re headed in the right direction.  The president did show some fire when it came to health care and he let the crowd know that he doesn‘t plan on losing. 

(BEGIN VIDEO CLIP)

OBAMA:  Another foundation stone is fixing a health insurance system that works better for insurance industry than it does for the American people.  I do not quit.  We are going to get that done. 

(END VIDEO CLIP)

SCHULTZ:  He got a standing ovation on that one.  People like a fighter, even in a swing state like New Hampshire.  And he took on republicans in the most direct fashion since the campaign. 

(BEGIN VIDEO CLIP)

OBAMA:  At the Republican caucus, they held up, they say, “We‘ve got a plan.  It is going to provide everybody coverage at no cost.”  And I said, “Well, if that were true, why wouldn‘t I take it?”  My wife, Michelle, thinks I‘m stubborn sometimes, but I‘m not that stubborn.  OK, let me think.  I could have everybody get health care coverage that‘s high-quality, and it‘s free, which I‘ll bet‘s really popular.  But I‘m not going to do that.  I‘m going to go through the pain of really working through this hard process in Congress getting yelled at and called a socialist, because, you know, I just, that‘s how I roll.  I‘m a glutton for punishment.  No.  Look, if this were easy and simple, first of all, somebody would have done it before.  Seven presidents have failed at this.  Seven congresses have failed at this.  If this was simple, it would have already been done. 

(END VIDEO CLIP)

SCHULTZ:  That president, Barack Obama, has got such unbelievable potential when it comes to communicating the message.  He‘s a middle class guy.  He doesn‘t come from privilege.  That‘s the message.  He‘s like us, in the middle class, and I think that is the best road around all these deficit hawks that are showing up saying, oh, you‘re just butchering the budget.  Wait a minute!  This guy is trying to do something for the middle class.  No apologies.  None!  That‘s what Massachusetts was all about.  People went to the polls saying, hey, what‘s in it for me?  The biggest enemy for Barack Obama right now is his own party. 

Tell me what you think, folks.  In a telephone survey tonight, the

number to dial is 1-877-ed-msnbc.  My question tonight is, do you believe -

do you believe we should spend $30 billion in leftover tarp money to create jobs in this country?  Press “1” for yes, press “2” for no.  I know I‘m voting “yes.”  Absolutely, we should use $30 billion to create jobs!  Just let me put it into context, $30 billion is less than 90 days of military operations in Iraq.  We‘ve been in Iraq since the spring of 2003.  When‘s it our turn? That‘s what the American middle class is screaming right now.  “When‘s it our turn?” Thirty billion dollars in a budget to create jobs is chump change when it comes to dealing with the Chinese, when it comes to dealing with countries that are getting our jobs, and what do the republicans want to do?  They want to outsource some more, they want a tax cut for the top two percent. 

Chris Matthews had a very telling interview last night with this

Hensarling dude who is on the Congress, on the right-hand side of the aisle

oh, he wants to privatize social security.  Bush tried that, he tried it right after re-election in 2004.  Went to Fargo, North Dakota.  That was his first stop in January of ‘05.  It was resoundingly rejected by the American people.  We didn‘t have any tea parties back then. 

Joining me now, Ohio Senator Sherrod Brown.  Senator, good to have you with us tonight.  I took some of your time there.  I hope you‘re not mad at me on this. 

SEN. SHERROD BROWN (D), OHIO:  That‘s OK.  I listen to you and I listened to you saying, it‘s just fine. 

SCHULTZ:  These are allocated funds, are they not?  Money that has already been, quote, “In the system,” budgeted for, the $30 billion, money that the Congress was willing to take from taxpayers to go use it to save Wall Street.  We have that right?

BROWN:  Yes.  This is money that when George Bush started the program and  start bailing out the banks and we knew we had to do it to make sure the economy didn‘t implode in November, December, January, February when President Obama then took office, let me tell you, one good reason why this $30 billion makes so much sense.  I, my office, right before I came over, the reason I didn‘t get here quite at 6:00 was a group of about a dozen small alternative energy manufacturing companies in Ohio, and there are people all over the country who have come in to talk with the secretary of energy, about a dozen of men in Ohio who came to see.  

These are people building wind turbines, people building solar equipments, people do an insulation lighting, people do all kinds of component manufacturing, some are having trouble with credit, some are having trouble because they can‘t scale up fast enough because they don‘t have capital and the Chinese are coming in, as you know, and doing more and more manufacture of wind turbines and all that.  We welcome Chinese investment.  I just don‘t want them to move it offshore.  But the point is there are a lot of   American companies, a lot of them in Cincinnati and Akron and Cleveland and Bedford Heights, Ohio that want to do this if they can get the capital to do it.  In this program makes perfect sense to start creating these jobs.  

SCHULTZ:  The president says, he wants to double exports.  Yet, we didn‘t get any detail on exactly what we‘re going to be exporting.   You got any idea on what we‘re   going to be doing?  That would be the manufacturing sector, I would imagine.  

BROWN:  That‘s mostly manufacturing, yes.  I mean, yes, Germany, few years ago, Germany set a national policy that they were going to be a leading alternative energy, the leading alternative energy country in the world.  Over in college, 20 miles from my house has a solar building built ten years ago, the largest fully powered solar building than any campus in America all built from solar panels from Germany and Japan   because they had a government that looked to the future. 

SCHULTZ:  They are.

BROWN:  That‘s what we didn‘t do for a decade.  That‘s what we‘re doing now.

SCHULTZ:  All right.  

BROWN:  That‘s why it‘s so important we do this stuff.  

SCHULTZ:  And Senator Sherrod Brown of Ohio with us, I want to know, why Democrats would stop this project of $30 billion to create jobs because it is TARP money?  What‘s the big deal?  Will they take the TARP money to Wall Street, but, oh, by the way, when we got to do it for small businesses, we get it through community banks, all of a sudden we‘ve got to start counting pennies?  I think, any Democrat that stands in the way of TARP money going to community banks to help businesses is trying to sabotage this president.  Your response.  

BROWN:  Well, I don‘t know of any Democrats that oppose an idea.  Maybe there are some.  If there are, maybe they ought to speak up and we need to talk to them.  But there are still too much—I mean, too many Democrats as you‘ve said in your opening, are too apologetic.  I mean, this economy was going to hell a year ago.  The auto industry was about to collapse.  That just didn‘t mean auto worker lost jobs.  It mentions pension, health care and all that.  You know, all of those things were happening.  We shouldn‘t be apologizing.  It took George Bush a decade or took him eight years to create these problems.  We‘ve started cleaning it up in a year.  It is going to take a little longer, but we got to be way more gutsy on the Democratic side in say to the Republicans, we need you onboard.  If you‘re not onboard, we‘re moving forward on job creation on health care and all these things.  

SCHULTZ:  Exactly.  Senator, great to have you with us tonight. 

BROWN: Thank you as always.

SCHULTZ:  Thanks so much for speaking up.  You‘re a guy who‘s got the   middle class in mind.  

BROWN:  That‘s what I think about every day.  Thanks.  

SCHULTZ:  And I can‘t say enough good things about you.  Thanks for joining us.  

BROWN:  Thanks, Ed, for that.

SCHULTZ:  Jennifer Donahue here is a New Hampshire Political Analyst.  She was at the president‘s town hall in Nashua today.  Jennifer, thanks for your time tonight.   How did the president do?  Did the message connect? 

JENNIFER DONAHUE, N.H. POLITICAL ANALYST:  The message connected.  I think it was really a focus group of people who are pretty enthusiastic.  They definitely like the small business proposal.  They like the idea of the TARP money going to it.  I talked to many, many people in the room.  There was enthusiasm.  But this is a crowd that‘s been battered a bit.  And this was a president who clearly had been battered by the Massachusetts election.  He said as much.  He said so during the town hall meeting.  And I think it really shows, it‘s taken a toll on him.  

SCHULTZ:  Jennifer, you know, Massachusetts or should I say, New Hampshire,   kind of like Massachusetts, there are lots of independent voters up there.  There are lots of free thinkers up there.  There are lots of people that will go with the issue and go with the candidate.  How does President Obama—he didn‘t win New Hampshire but how does he play at this point after the first year, you think? 

DONAHUE:  Well, that‘s a really good question.  Four out of ten voters in New Hampshire are independent.  And that‘s a lot of voters who are independent.  That greatly outnumbers either party‘s registration.  I think he‘s playing moderate to strong.  You‘re right, he said he‘s got the ball in the red zone.  He said on health care we‘re in overtime and his party is trying to push it through.  He said he‘s looking for ideas from republicans, that Daschle, Dole and Howard Baker, none of them could get a similar plan through.   He was playing both sides of the aisle, and he was playing to the middle.  But this is a crowd that‘s been burned many times before.  And this is a president, who‘s been burned, as you said, very aptly, by the left of his own party.  Even harder by the left than by the right is this president suffering.  

SCHULTZ:  Jennifer, good to have you on tonight.  Thanks so much for that insight.  I appreciate your time.

DONAHUE:  My pleasure.  Thanks to you Ed.  

SCHULTZ:  You bet.

President Obama promised, he promised to end “Don‘t ask, Don‘t tell” but John McCain, he is standing in the way again.  

Congressman Jim Moran reminds us who won the election.  Next.

And Sean Hannity teams up with an alleged felon in psycho talk.  

All that plus, it‘s Groundhog Day.  The republican saw their shadow in turn tail on national security.  They sure, they did.  I‘ll take on Senator John Barrasso at the bottom of the hour.  Stay with us, you‘re watching the ED SHOW on MSNBC.  The place for politics. 

(COMMERCIAL BREAK)

SCHULTZ:  The national association of free clinics will be in Hartford, Connecticut tomorrow, Wednesday, February 3rd, free health care will be provided to   anyone who is uninsured.  We‘re teaming up with “Countdown” with Keith Olbermann and I‘ll be broadcasting live from the clinic all day tomorrow.  Here‘s how you can help.   And we want you to—there is a need for doctors, volunteers and donations.  To volunteer, make an appointment or a contribution.  Go to FreeClinics.u.s., or ed.msnbc.com.  Stay with us.  We‘ve got so much more coming up for you tonight, including shocking details from the investigation into what caused the tragic plane crash over Buffalo.  

You‘re watching “The Ed Show” on MSNBC.  Stay with us.      

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to “The Ed Show.”  The Obama administration is   finally following up on the president‘s campaign promise to repeal the military‘s “Don‘t ask, Don‘t tell” policy.  Defense Secretary Robert Gates and Chairman of the Joint Chiefs of Staff Admiral Mullen appeared before the Senate Armed Services Committee today and voiced their support for getting rid of the policy, but some republicans stuck with the same old arguments from 1993 when “Don‘t ask, Don‘t tell” was enacted.  

(BEGIN VIDEO CLIP)

SENATOR JOHN MCCAIN, ARIZONA:  The essence of military capability is good order and unit cohesion and that any practice which puts those goals in unacceptable risks can be restricted.  

SENATOR SAXBY CHAMBLISS ®, GEORGIA:  The presence in the armed forces of persons who demonstrate a propensity or intent to engage in homosexual acts would very likely create an unacceptable risk to those high standards of morale, good order—and effective unit cohesion and effectiveness.  

(END VIDEO CLIP)

SCHULTZ:  For more, let me bring in Democratic Congressman Jim Moran

of   Virginia who has been a staunch supporter of repealing, “Don‘t ask,

Don‘t tell.”  Congressman, respond to that less sound bite about morale,

about efficiency, proficiency, all of the things that the strong man

arguments that are being placed up in front of it right now, what do you

think? 

REP. JIM MORAN (D), VIRGINIA:  I think that the most important

characteristic of our military‘s morale is integrity.  And this childish

policy does not allow gay men and women to show the kind of integrity that

they want to show as professionals.  It is a wrong policy.  It is not

serving the interests of our country.  We have about 66,000 gay men and

women in the military.  They want to serve their   country.  They want to

be honest about who they are.  And as Barry Goldwater who also   was the

senator from Arizona said, you don‘t have to be straight to shoot straight. 

These people are people we need in the military.  And it defies common sense that during the time when we‘ve had this policy the number of waivers granted to people for violent felonies like rape, violent sexual assault, manslaughter, we‘ve even waived people who were convicted of bomb threats.  We let them in because they‘re straight and we exclude people who for no other reason than because of their sexual orientation.  It is a policy that needs to change and I really admire Secretary Gates and Admiral Mullen and in fact I thought Chairman Levin did a hell of a job today.  

SCHULTZ:  Well, let me ask you.  What do we need to study?  What is there to study?  Gates announced this year-long study on how it is going to be implemented.  Is that necessary in your opinion? 

MORAN:  No.  We have a Rand study that was done back in 1993.  And they concluded after extensive research that this was not a threat to the morale.  This is part—there are some people in the military and outside the military who aren‘t comfortable with this because it‘s different, it‘s threatening and they can explain why they‘re so threatened themselves.  But another thing we need to be aware of I think, Ed, that hasn‘t been discussed in this context is that women who represent 15 percent of the military   represent 50 percent of the people who are being discharged because of the “Don‘t ask, Don‘t tell” rule.  

I think it‘s a way that some male officers are dealing with something they never wanted to accept which are women in the military.  These things need to change.  The next generation doesn‘t care about this issue.  They know it‘s not a substantive reason to exclude somebody when you need them in the military.  But there are some just holdovers that simply ought not to be directing our policy.  

SCHULTZ:  And are you convinced that we have a weaker military because we have discharged over 10,000 men and women for sexual preference? 

MORAN:  There‘s no question in my mind.  Number one, we have to waive   people who shouldn‘t be waived into the military to make up for that.  And secondly, we have discharged more than 800 mission-critical specialists.  We already discharged 68 people who are fluent in Arabic and Farsi, languages we desperately need.  We‘ve discharged hundreds of intelligence specialists, doctors—these people we need, and we‘re discharging them? 

SCHULTZ:  Congressman, does it matter that other countries allow gays to serve in the military in.   

MORAN:  Well, I think we should recognize the fact that Europe, Canada, Israel, all let gays in the military.  You know the countries that don‘t?  Russia, China, Iran and North Korea.  And we‘re going to follow their lead? 

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

MORAN:  Thank you. 

SCHULTZ:  Coming up, Sean Hannity has found a way to compare those   accused of trying to tap a senator‘s phone to a TV show, “To Catch a Predator”?  Yes, that makes “Psycho Talk” for sure.               

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, let me ask you to take a seat.  James O‘Keefe is joining Sean Hannity in the zone tonight.  O‘Keefe is the guy accused of   trying to interfere with the telephone lines of Senator Mary Landrieu‘s office in New Orleans.  He went on Hannity‘s show last night to defend himself.  He couldn‘t go into much detail because of the ongoing investigation that could land him in jail for the next ten years.  But he did manage to compare his alleged felony to legitimate investigative journalism and Hannity egged him on.  

(BEGIN VIDEO CLIP)

SEAN HANNITY, “HANNITY SHOW” HOST:  You‘ve disputed a lot of   claims in the media in your statement.  So, did you dress up as a telephone repair man or telephone repair people? 

JAMES O‘KEEFE, ACTIVIST/FILMMAKER:  Yes.  I mean as far as that‘s concerned, I mean investigative journalists have been using a lot of these tactics for years.  I mean NBC, “Dateline”. 

HANNITY:  All right, but did you dress up as a repair guy? 

O‘KEEFE:  Yes.  

HANNITY:  You did.

O‘KEEFE:  We did.  Yes.  

HANNITY:  Your attitude is, this is something that investigative

journalists will do, that they will, like in I guess “To Catch a Predator”-

-  

(END VIDEO CLIP)

SCHULTZ:  Actually, NBC “Dateline” works with law enforcement to do their job.  You guys ought to know that.  So, following Hannity‘s example trying to mess with the United States senator‘s phone lines is the same as catching pedophiles.  A quick tip for O‘Keefe here—real investigative journalists generally try to stay away from committing felonies.  Bosses kind of like that.  And trying to claim that what he does even remotely resembles journalism is “Psycho Talk.”

Coming up, righties keep screaming that because some terror suspects have been read their Miranda Rights, it makes it harder for us to get intelligence out of them!  Well, guess what?  The underwear bomber is singing like a canary at this hour.  I‘ll put this Republican Senator John Barrasso to the test on that issue in just a moment. 

And it is primary day in Illinois, so Democrats are scrambling to hold on to Barack Obama‘s former Senate seat.  I‘ll tell you why it won‘t be a Tea Party repeat in the Land of Lincoln.

All that and more coming up.  You‘re watching THE ED SHOW on MSNBC. 

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW and thanks for watching tonight.  We‘ve seen this movie before.  The Obama administration makes a bold move on terrorism, putting the 9/11 mastermind on trial for all of the world to see, in an American courtroom in lower Manhattan.  But that‘s not good enough.  It would send a message that America is not afraid, not of a couple of guys in handcuffs, and not of our own judicial system, the way we know it can work. 

But the Republicans, instead of standing with the president, have chosen to attack him with the same old line that he‘s weak on terror.  Of course, Joe Lieberman got on-board and so did some conservative Democrats, who were scared in their hometown, when it comes to elections and re-elections.  So they joined with a group of Republican senators who want to block funding for any civilian trial of alleged 9/11 terrorists. 

Wyoming Senator John Barrasso is one of them kind enough to join us tonight.  Senator, good have to you with us.  Senator, I just want to point out something from the “McClatchey Newspapers,” that they point out the Constitution Project Advocacy Group in Washington says “civilian courts have convicted more than 200 accused terrorists since the 2001 attacks, while the military commissions created by Congress have convicted only three.” 

What‘s wrong with KSM in a civilian court?  Are you afraid that we wouldn‘t get justice? 

SEN. JOHN BARRASSO ®, WYOMING:  This is wrong for a number of reasons, the cost issue, the security issue, and it‘s just not appropriate.  You talked about that large number.  Those aren‘t people that actually attacked the United States.  That‘s not al Qaeda terrorists.  Those are people who may have perjured themselves or given some—been issues of illegal immigration.  We‘re not talking about the terrorists that have come here to kill us and who have killed 3,000 people in New York City. 

The cost --  the police commissioner of New York City, Ed, said it was going to cost 200 million dollars to do this.  Nobody asked him ahead of time.  The attorney general didn‘t ask Janet Napolitano ahead of time, didn‘t ask Mayor Bloomberg ahead of time.  Now they‘re all saying we don‘t want that trial in New York.  I don‘t think that trial should be anywhere in the United States.  This is not a criminal matter.  This is a military matter.  It is a war crime and should be dealt from a war crime standpoint, with a military tribunal. 

SCHULTZ:  OK, 2,000 checkpoints, in the minds of many, is pretty much overboard.  That‘s what Ray Kelly was talking about.  You say cost and security.  New York has the best security in this country, arguably.  The cost—since when do we put a price on justice?  You have the best prosecutors, the best judges.  You have a motivated population that wants to see justice.  And wouldn‘t it showcase to the rest of the world how we do our judicial system? 

Senator, I just take issue that it just seems that the Republicans, and some Democrats who are afraid about re-election, want to play the security card and it‘s just a political hack job on the president.  Why wasn‘t this out there with the Moussaoui trial?  Why weren‘t these same arguments made for the 20th hijacker? 

BARRASSO:  Well, the president has actually called this rank politics yesterday.  But the two Democrat senators from New York said we don‘t want it here. The mayor from New York has said we don‘t want it here. 

SCHULTZ:  On a reversal. 

BARRASSO:  And the people of New York have said we don‘t want it here; we‘re worried about our own security.  This administration has not made people of America feel more secure, whether it‘s this, whether it is reading the Miranda rights for the Christmas Day bomber.  People of America need to feel safe and be safe.  Right now, they don‘t have that. 

SCHULTZ:  It was reported by our Justice Department correspondent Pete Williams tonight that the Christmas Day alleged bomber, who was read his Miranda Rights, is now talking with officials and serving up information that‘s very valuable.  I should also point out that on December 22nd of 2001, Richard Reid, the shoe bomber, senator, he was read his Miranda Rights.  Isn‘t this a straw man argument that the Republicans are coming up with?  Are you saying that we‘re weak because we‘re reading Miranda Rights?  Why was the shoe bomber back in 2001 read his Miranda Rights?  Was Bush wrong? 

BARRASSO:  I think they were wrong there in 2001.  That was only a couple of months after 9/11.  They were still trying to make sure they got things right.  But here we are nine years later.  I think it was absolutely wrong.  The people that questioned the Christmas Day bomber were Detroit agents and they did it for 50 minutes.  And in spite of what Pete Williams just reported, just a couple of days ago, Robert Gibbs said in 50 minutes, we got out of him everything we could have gotten.  But then he shut up for at least a month. 

Since that time, I‘ve been in the field with the men and women in Iraq and in Afghanistan.  And some information goes stale quickly.  So I do believe it is a mistake to read the Miranda Rights. 

Look at Scott Brown‘s election in Massachusetts.  What did he say?  We should spend—money should be spent to defeat the terrorists, not for lawyers to defend them.  And that resonated across the country.  I still hear about it in Wyoming.  I heard about it at a chili feed the other night by our Meals on Wheels group.  People all across the country want to make sure we are safe.  We don‘t feel it this way, with this attorney general making these decisions, Ed. 

SCHULTZ:  I give your side of the aisle tremendous credit for the way you message to your base, and how it reverberates throughout some who don‘t have all the facts.  We are just as safe or safer today under President Obama.  Miranda Rights has nothing do with security.  Michael Bloomberg did the biggest flip-flop this city has ever seen.  And New Yorkers that I talk to are not afraid about their security.  It‘s just, I guess, a measure of how we want to view it all.  Senator, good to have you on tonight. 

BARRASSO:  Thanks, Ed.

SCHULTZ:  Joining me now is Joan Walsh, who is the editor in chief of Salon.com.  Joan, what do you make of all this?  Is this just political pandering, in your opinion, the way this whole thing is coming down about Miranda Rights and security with this trial? 

JOAN WALSH, SALON.COM:  Of course.  Of course.  It is just political pandering, Ed.  To say that Barack Obama has not kept us safe, has not made us safer, what Senator Barrasso just said, it is just an outrageous charge and it‘s completely untrue.  It‘s very sad to see Republicans, and in the case of New York, some Democrats, playing politics, quite honestly, with our national security.  Now we have tried terrorists in our criminal court system.  We have convicted them.  We have imprisoned them.  They have not escaped.  And they have not gone out and done bad things.  This process works. 

Now, is it expensive?  Will it cost money?  Yeah.  But our whole justice system is expensive.  It would be very cheap to just do away with our system of protections and just throw people in jail at the first sign of—charge.  It would be actually really cheap to do away with elections.  Why bother?  You know, our system costs money and it protects us and it works.  This is just garbage to be railing about this. 

SCHULTZ:  We should point out that the conversation has been reduced, in the halls of Congress, that maybe Eric Holder isn‘t the right guy for the job.  We ought to bring him in and understand his decision process was. 

I think the point here now is should the president—I‘m asking you, Joan

should the president make a strong statement and say, it is going to be in New York; this is the decision by the attorney general and this is where we‘re going.  What‘s the up side and downside of that? 

WALSH:  I would like to see him do that.  I don‘t think he can hang his attorney general out to dry.  If there—There was a downside, there was a political side, there were risks to doing it in New York.  I support the decision.  But everything that‘s happened, Ed, was completely predictable.  It really was.  So if they didn‘t calculate that to begin with, shame on them.  But to go out and cut the legs out from under his attorney general would be a terrible thing.  It would really be a sign of weakness. 

You know, I‘m proud of the president.  He‘s speaking up.  He‘s showing his spine.  But he needs to do more of that.  He needs not cave to these guys. 

SCHULTZ:  Joan, politically, what do you make of some of the Democrats who are also siding with some of the folks like Senator Barrasso?  This is Jim Webb from Virginia talking about justice.  I want your response to this. 

(BEGIN VIDEO CLIP)

SEN JIM WEBB (D), VIRGINIA:  When the attorney general was asked about the implications of a possible acquittal of one of these individuals, he did not get—he did not give a very clear answer.  I think his answer was something to the effect, “well, we would continue to detain them.” 

So we run the risk of having very costly show trials that would benefit the international terrorist movement, and we also are not moving toward the proper sense of justice that we can get out of the process that we have now put together with these military tribunals. 

(END VIDEO CLIP)

SCHULTZ:  I am just floored by that statement, Joan.  Your response? 

WALSH:  I‘m floored as well.  Although we should stop being floored, because they keep coming at us, Ed, and we‘ve got to stand up.  But seriously, Eric Holder can‘t say what the outcome is.  It is true.  It sounds like we‘ve got great evidence.  It sounds like he would be convicted.  But that‘s the essence of our justice system.  We can‘t only use it when we know it is going to give us the outcome we want.  So these people are running scared.  They‘re doing the same thing on Guantanamo.  It is politics and it is really disturbing.

SCHULTZ:  Joan Walsh, great to have you with us tonight.  Thanks so much.

Let‘s bring in our panel, Democratic strategist Todd Webster and Republican strategist Karen Hanretty.  Todd, we‘ll go to you first.  Didn‘t all the right wing bullet points go down the drain today with these Miranda Rights and now that you have this alleged terrorist singing like a bird to officials today who tried this act on Christmas Day? 

TODD WEBSTER, DEMOCRATIC STRATEGIST:  Here‘s where we are today.  There are three World Trade Center bombers, two embassy bombers, the Oklahoma City bomber, the shoe bomber, the Unabomber, and the 20th 9/11 hijacker sitting in a super max facility in Florence, Colorado, who have been prosecuted and are being detained, and are being imprisoned under the American judicial system.  In the case of Timothy McVeigh. he‘s being executed under the American judicial system. 

The American judicial system and our Constitution, which is 230 years old, and which is the beacon of hope and freedom for the rest of the world, is not something we can pick and choose and throw out the window when we choose to. 

But I think what‘s particularly sad is the party of Ronald Reagan and Morning in America has been reduced to the party of chicken little and bed-wedding.  They‘re using fear and scare tactics to try to whip up political support.  It is sad and it‘s unfortunate.   

SCHULTZ:  Karen, your response? 

KAREN HANRETTY, REPUBLICAN STRATEGIST:  Democrats in New York are calling on President Obama to move this KSM trial.  Michael Bloomberg is hardly a Republican out there with Republican talking points.  He left the Republican party.  The member of Congress who represents Manhattan wants this trial moved. 

You know, the bigger I think political picture here is that how much political capital is President Obama going to burn on this issue?  He‘s already burned through a lot of political capital in his first year.  And he has a long way to go from here to November and the end of the year to get through some sort of domestic agenda. 

(CROSS TALK)

HANRETTY:  How much is President Obama really going to stand up and fight for his attorney general?  I don‘t think he will. 

SCHULTZ:  Karen, if it‘s the wrong thing to do, then why don‘t the Republicans allow the president to fall on his sword with this decision, because the conviction rate in civilian court is far greater than what it is in front of a military commission?  Why don‘t they do that? 

HANRETTY:  Why don‘t the Democrats in New York allow him to stand up for Eric Holder?  Why doesn‘t President Obama go and meet with the Democrats from New York, who wrote this letter?  And why doesn‘t he get on the TV cameras, like he did with the Republicans, and have a debate with them? 

SCHULTZ:  We got to run.  We‘re out of time.  I‘ve got an answer for that.

HANRETTY:  I think he should.  Let‘s have some transparency here. 

SCHULTZ:  They don‘t want to run the Justice Department like this, put their finger in the air and see which way the wind is blowing. 

HANRETTY:  President Obama‘s already put his finger in the air.  He already said he‘s willing to look at moving the trial.  He already said he‘s doing it.  Robert Gibbs already said we‘re going to try and convict him, and we‘re going to fry him.  Robert Gibbs said we‘re going to fry him.  The White House has already convicted KSM. 

SCHULTZ:  That‘s what this is about.

WEBSTER:  It‘s fear mongering and scare tactics.  It‘s been going on for seven years. 

HANRETTY:  Obama already convicted KSM.  So let‘s just end the trial there. 

SCHULTZ:  Good to have you on. 

Coming up, Chicago politics is sweeping through Illinois.  Today is primary day.  Voters decide who will fill the shoes of Barack Obama in that Senate seat.  Decision 2010 is in high gear in my playbook next.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  In my playbook tonight, well, it‘s in high gear.  High noon for the Tea Party crowd in Illinois.  They have a shot at capturing President Obama‘s old Senate seat.  Not one, but two Tea Partiers are in a primary dog fight for the Republican nomination for the Senate seat in Illinois.  Tea Party nation is backing this guy, Pat Hughes, while the Tea Party Patriots are backing the other guy, Don Lowery. 

But, unfortunately for Sarah Palin, moderate Republican Congressman Mark Kirk is favored to win tonight. 

On the Democratic side, the big question, will Obama‘s home state base turnout and show the kind of enthusiasm the Democrats will need to keep this state blue in November?  The polls are close, and they close in less than two hours. 

Joining me now is Carol Marin, a political editor from WMAQ in Chicago.  Carol, how do we judge the mood of the voters in a primary?  What do you think‘s out there tonight? 

CAROL MARIN, WMAQ CHICAGO:  One way of the ways to judge it is by turnout.  It is slim to none out here.  It‘s very poor turnout, as far as we can see right now, which means the whole thing is up for grabs.  Nonetheless, on the Republican side of this, there is no one who doesn‘t expect Mark Kirk to make it out of the Republican primary.  It‘s on the Democratic side we have some questions. 

SCHULTZ:  If it‘s a low voter turnout, where are the Tea Partiers?  Are they just not as organized in Illinois as they may be in other places in the country? 

MARIN:  The Tea Partiers are here.  But a lot of people want to compare Illinois to Massachusetts, and I think that there is a mistake built in to that.  I think the Tea Partiers are a little confused about what they‘re going to do, because they expect Mark Kirk to win.  They don‘t like him.  So they may be staying home for the whole thing. 

SCHULTZ:  Carol Marin, thanks for your time tonight.  Appreciate it.

Coming up, a commuter jet crashed in Buffalo nearly a year ago.  And yet nothing has been done to make sure this kind of thing doesn‘t happen again.  NBC‘s Tom Costello will share the shocking details with us next.  You‘re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ:  Finally tonight, it‘s been almost a year since that Buffalo plane crash that took place that killed 50 people.  But safety reforms that were suggested as a result of that crash still have not been implemented.  For more, let me bring in NBC‘s Tom Costello. 

Tom, the reforms that have been suggested in this issue all deals with pilot experience.  Doesn‘t it? 

TOM COSTELLO, NBC NEWS CORRESPONDENT:  Pilot experience, training, hours, pay, there is a lot that goes into this.  You may recall the regional airline Colgan Air was flying Flight 3407, but doing it for Continental Connection and flying Continental‘s logo. 

Today, the NTSB heard evidence that this crew was simply not up to the job, and it may be time for things to change. 

(BEGIN VIDEOTAPE)

COSTELLO (voice-over):  The NTSB‘s investigation into what caused Flight 3407 to crash outside of Buffalo points to a complete great breakdown in cockpit discipline and basic piloting.  First Officer Rebecca Shaw was texting from the cockpit just five minutes before takeoff, a violation of FAA rules.  During much of the hour-long flight from Newark, Shaw and Captain Marvin Renslow were talking about personal matters, not the flight. 

UNIDENTIFIED MALE:  It was as if the flight was just a means for the captain to conduct a conversation with this young first officer. 

SCHULTZ:  As the plane approached Buffalo, the crew failed to notice their air speed had dropped.  When cockpit warnings went off, Captain Renslow, who had failed multiple FAA tests and check rides, did exactly the wrong thing and pulled the nose up, causing the plane to stall and crash. 

At NTSB headquarters today, family and friends wore red in remembrance of the 50 people who died.  Among them, Kevin Johnston‘s family. 

KEVIN JOHNSTON, FAMILY DIED IN FLIGHT 3407:  The more I learn, there is a lot of anger and frustration that this has gone on, that they were so incompetent up there. 

COSTELLO:  Among the NTSB‘s findings, crew fatigue, a lack of training, a lack of professionalism and maturity, a lack of experience and basic skills all contributed to the crash. 

UNIDENTIFIED FEMALE:  And, unfortunately, it‘s taken 50 more lives for us to focus additional attention on these issues that have not been addressed. 

SCHULTZ:  Today, Colgan Air insisted the crew was trained properly, but, quote, “we cannot speculate on why they didn‘t use their training.”

But with regional airlines involved in the last six fatal accidents, a former NTSB chairman says new pilot hires should be required to have far more cockpit time. 

UNIDENTIFIED MALE:  You can get a job in the regionals with something like 250 to 300 hours.  Maybe that‘s not good enough. 

(END VIDEOTAPE)

COSTELLO:  Yeah, that seems to be the conclusion, that that isn‘t good enough.  There is a big push right now for pilots to have 1,500 hours of cockpit time.  The FAA‘s under pressure to do that.  Congress may be able to do it quicker. 

But also more training, more in-depth training for these regional pilots, more monitoring. 

Meanwhile, Ed, the NTSB is going to hold another hearing, this one looking into the relationship between these big carriers and the small regional carriers that fly these co-share flights.  Back to you.

SCHULTZ:  It‘s all about time and make and model.  Thanks, Tom. 

Appreciate your help tonight.

Tonight, in our telephone survey, I asked you: do you believe we should spend 30 billion in leftover Tarp money to create jobs?  Ninety three percent of you watching tonight and responded, said yes.  Seven percent said no.  Why doesn‘t Congress get the message that it‘s about fairness?

A reminder that the National Association of Free Clinics will be in Hartford, Connecticut tomorrow.  Health care will be provided to anyone who is uninsured.  We‘ll be broadcasting live from that clinic. 

And to volunteer, you can make an appointment or contribution, go to Ed.MSNBC.com.  Of course, we‘ll be broadcasting.  I‘ll be doing cut-ins all day long tomorrow here on MSNBC.  And I‘ll do THE ED SHOW from that facility tomorrow night at 6:00 Eastern time. 

It will be a story about Americans who haven‘t seen a doctor for years, and who could use the help of Congress. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  Chris Matthews with “HARDBALL” is next, right here on MSNBC.  We‘ll see you tomorrow night from Hartford.

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