updated 2/5/2010 5:48:11 PM ET 2010-02-05T22:48:11

Guests: Debbie Stabenow, Sherrod Brown, Gary Peters, John Nichols, A.B.  Stoddard, Chris Donovan, John Feehery, Laura Flanders, Paul Rieckhoff

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

Hitting my hot buttons—here we go. 

The Republicans say they want bipartisanship.  They say they want to get the economy moving again.  Well, here is your chance. 

Democrats rolling out a jobs package today, and they are looking for a few good Republican votes.  We‘ll see if they get them. 

It is a one-two punch for Toyota today, but the safety concerns could make consumers want to buy American.  This could be the big break that Detroit‘s been looking for. 

Diagnosis: selfishness.  Joe Lieberman‘s state, the state of Connecticut, passed universal health care, but he‘s against it.  And I will talk to the Connecticut House Speaker about just how wrong Joe Lieberman is and the Republican governor when it comes to health care reform in that state. 

All right.  The Republicans, they say that they want to create jobs.  They are experts at that.  They want the economy to just rebound under President Obama.  And, of course, they want bipartisanship. 

Now, if you believe all of that folks, I‘ve have swamp land in Florida for you.  But the olive branches, here they go again.  They‘re out and about in Washington today.

This time, they‘re coming from the Senate Democrats, who are just gluttons for punishment.  Aren‘t they?

Democratic leaders rolled out a new jobs proposal today.  It includes good things—a tax credit for businesses for every new worker that a business would hire; tax deductions for small businesses, along with increased lending, if they can get it to work; and cash for clunkers, tax incentives for making homes and businesses more energy efficient which, of course, will create construction jobs. 

Every item I just mentioned involves one thing.  That‘s cutting taxes.  I mean, this ought to be a no-brainer for the Republicans.  They just want a vote by Monday and show the American people that Washington can actually work together. 

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), MAJORITY WHIP:  The bottom line is this—this is a good-faith offering on the Democratic side.  We are inviting our friends on the Republican side to join us.  Bring your best ideas forward.  Let‘s put these on the floor and move on them with a sense of urgency. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER:  A number of things that we have talked about here today have been talked about in the Republican Caucus they had yesterday.  So, I would hope that we can continue to move forward for a change on a bipartisan basis.  We‘re going to do that if we can. 

We say about jobs as we have said about health care, we have said about energy, we have said about everything we have worked on the past year.  We want to work with Republicans, and it appears to me on the jobs program, they want to work with us. 

(END VIDEO CLIP)

SCHULTZ:  Have you ever seen a party with 59 votes, or 57 or 55 votes, just do everything they possibly can to work with the minority party? 

Now, the Republicans don‘t have to like the package, or even vote for it, because as of an hour ago, they now have 41 votes.  Senator Scott Brown has the chance to show his independence and willingness to work cooperatively across the aisle, or he can help the Republicans filibuster and stop everyone in Congress from taking any action to create jobs. 

Well, tell me what you think on this one tonight, folks, in our telephone survey.  The number to dial is 1-877-ED-MSNBC. 

My question tonight is: Do you trust—it is about trust—do you trust that the Republicans will work with the Democrats to create jobs?  Press 1 for yes, press 2 for no.  I will bring you the results later on in the program tonight. 

Joining me now, where unemployment is high, in the state of Michigan, Senator Debbie Stabenow joins us tonight. 

Senator, good to have you with us. 

SEN. DEBBIE STABENOW (D), MICHIGAN:  Thanks.  It‘s always good to be with you. 

SCHULTZ:  You know, I was at this free health care clinic yesterday in Connecticut, and talked to a lot of people in Hartford.  They basically feel that the Congress has struck out on health care reform. 

If the Congress strikes out on job creation, who is going to pay the political price here?  What do you think? 

STABENOW:  Well, Ed, first of all, let me say, I don‘t believe that we‘re going to strike out on health care.  We can‘t afford to do that, because it is about jobs.

We are losing jobs because of the cost of health care.  We‘re losing jobs overseas because of it.  And as you saw yesterday at the clinic, the problems that people are having aren‘t going away. 

So, I‘m still also very focused on doing everything we can, whatever mechanism it is, to get something done on health care.  And we have got to address jobs in the same way. 

I mean, jobs are connected to everything we do.  And we did, by the way, do the Recovery Act last February, which did begin to slow down, has dramatically slowed down the job loss. 

Now, that is not good enough, but I can tell you in Michigan, that that advanced battery manufacturing, the efforts we have put into retooling loans, causing Ford to bring jobs back from Mexico to Michigan—and we are seeing some job growth that is very important.  But today, what we are talking about is moving forward to help small business, which is absolutely critical. 

SCHULTZ:  Senator, do you really think the Republicans are going to work with the Democrats on this or...

STABENOW:  You know, I don‘t know. 

SCHULTZ:  Isn‘t it wishful thinking at this point?  Do you really think that they want to see Barack Obama going out on the campaign trail saying that we have turned the job numbers around and we‘ve presented a plan forward?  The president would get credit for that. 

Isn‘t their whole mission to stop Barack Obama and not help him? 

STABENOW:  Well, there is no question, that has been their mission.  With the new senator, who says he comes in representing the people in Massachusetts who are hurting and says he is Independent, we‘ll see. 

But from my perspective, Ed, I‘m willing to support whatever mechanism, whatever tools we have to get things done.  That‘s our job.  And we are going to do everything we can to get things done. 

We passed the Recovery Act last year when we had 58 votes.  We‘ve passed children‘s health insurance, a whole range of things—mortgage help, credit card help, and so on.  So we‘re going to proceed. 

They can choose to be with us and govern or they can choose to continue.  We‘re at 107 objections now, higher than any other time in our history.  So they can choose to do that. 

SCHULTZ:  Yes.  We have talked about filibusters.  You have talked about it in the past. 

STABENOW:  Right.  Right. 

SCHULTZ:  I don‘t see—this sea change, all of a sudden, the Republicans changing their attitude, I just don‘t see it happening, because to create jobs, Obama‘s going to get—the president‘s going to get an awful lot of credit for it. 

STABENOW:  Right. 

SCHULTZ:  But when you take a look at the obstruction numbers, what is different about a jobs package that would turn Republicans around in their thinking? 

STABENOW:  Well, you know, Ed, we don‘t know what‘s going to turn them around.  And maybe nothing will. 

Maybe it‘s a matter of exposing them, which we intend to do.  If they choose to vote against efforts to give community banks more capital for small business, or to strengthen other efforts to help small business, then they have to be accountable for that.  If they choose to vote against a jobs credit, or manufacturing efforts, or efforts to put people to work rebuilding America, then they will have to be accountable for that. 

From my perspective, we have got 59 votes and we need to use everything possible that we can to get things done.  People are hurting. 

SCHULTZ:  Yes. 

STABENOW:  It‘s not change because of Massachusetts, as you know.  And so, we‘re going to do everything we can.  We‘re going to put forward ideas and they are going to have to decide whose side they are on. 

SCHULTZ:  Yes. 

STABENOW:  Are they going to be on the side of the people who are hurting, or are they going to be continuing to fight for the past, where we lost over six million manufacturing jobs under President Bush? 

SCHULTZ:  Senator Stabenow of Michigan, great to have you with us tonight on THE ED SHOW.

Thanks so much.

STABENOW:  Good to be with you.  Thanks.

SCHULTZ:  I just personally don‘t see the Republicans all of a sudden shifting sails and saying, hey, let‘s go sail with Obama and see if we can help him create some jobs.  They are going to vilify this agenda all the way to next November. 

They are going to do everything they possibly can to keep these numbers down.  And the Democrats are just a glutton for punishment. 

Here comes Harry Reid, throwing out olive branches, saying we really want to work, really want to work.  The Republicans aren‘t going to be coming around on anything.  Mark my words. 

Ohio Senator Sherrod Brown with us tonight, here on THE ED SHOW.

Senator, why is this jobs package the hot ticket?  What do you think? 

SEN. SHERROD BROWN (D), OHIO:  Well, it‘s something we have to do. 

And, I mean, I want the Republicans on board, as you do, but I think if we

put good legislation on the floor, and we keep doing it and keep doing it

and keep doing it, eventually public—if they keep filibustering and keep

we can‘t get 60 votes, then eventually public pressure pushes them to do it. 

For instance, we ought to do this bank tax levied at the big banks that, frankly, got all kinds of benefits from something we had to do, the bank bailout, and use that—those tax revenues into the big banks for a jobs program.  We keep putting that on the floor.  They keep saying we have to have 60 votes. 

We keep trying to.  We keep trying.  Eventually, they are embarrassed into passing, in my view. 

SCHULTZ:  Yes.

BROWN:  And we‘ve got to show, whose side are you on?  And the public

you know this Massachusetts—polling out of the Massachusetts race, the voters saw government is more on the side of Wall Street than Main Street. 

SCHULTZ:  Yes. 

BROWN:  And that can‘t be with the Democrats in power.  We have got to show whose side we are on. 

SCHULTZ:  Senator, the folks that I ran into yesterday in Hartford, Connecticut, they think Washington is broken.  They like Obama, they want him to succeed, but they don‘t believe that this Congress is ever going to get together and work together on anything, and they feel like they are being left behind.  And there is a real, no offense, throw the bums out attitude out there. 

BROWN:  I get that.  I get that. 

SCHULTZ:  And I know you get it. 

So, considering that, if it‘s about getting something done, have the Democrats in caucus talked about reconciliation on everything?  Reconciliation on everything? 

They haven‘t come your way in over a year.  What‘s going to change this? 

You have to create jobs.  If they don‘t want to do it, the hell with them.  You‘ve got go reconciliation on this as well, don‘t you? 

BROWN:  Yes.  As much as we can pass with the majority vote, we do. 

And there is—one of the problems with this system is, as you know as well as anybody, Ed, is that the special interest money here and the power of the insurance companies and the drug companies and the oil industry, that‘s why that Supreme Court decision was so awful that basically said to America‘s largest corporations, domestic and foreign, you can pour unlimited money into these campaigns.  Drug companies, come on in.  The insurance companies, come on in.  And the only way to beat that back is the kind of grassroots efforts that your viewers know how to do.

I have a petition on my Web site.  It‘s SherrodBrown.com.  I encourage people to sign that petition, work with a lot of my colleagues to basically say to the court, you know, your corporate leanings time and time again aren‘t going to stand.  We are going to fix a lot of this, and we can do it.

So I encourage people. 

SCHULTZ:  Senator, I agree with you on that, and I agree that the grassroots can do an awful lot between now and November.  But the American people are expecting the Democrats in power to do something.  Reconciliation has to be a real line in the sand, I think, for everything at this point. 

BROWN:  I agree. 

SCHULTZ:  When does the negotiation stop and when do we start moving forward? 

BROWN:  Well, sooner rather than later.  A lot of us are urging our leadership to do that.

You know, it‘s—I don‘t think we can do it on everything, because there are a lot of Senate rules.  But we can do it more often than we are.  And the public wants us to get something done and they want to know who is on their side. 

And frankly, the Democrats aren‘t making that clear.  We‘ve got to pass health care that way and we‘ve got to move forward on jobs and health care.  Those are the two things that matter, and people‘s lives are not getting better, and we‘re in charge and we‘ve got to make sure they do. 

SCHULTZ:  No doubt.

And quickly, the Citizen‘s‘ Right to Know Act, this is something that you have introduced.  This deals with the Supreme Court, the ruling where corporations are going to start giving money. 

They also have to serve up some information as well, do they not? 

BROWN:  Yes.  We‘re saying on our bill that people have to disclose, the CEO of the company has to get on and look in the camera and say their company paid for the ad.  It‘s a ban on foreign corporations giving money, and it‘s got to be a stockholder vote. 

If you support that bill and you want to help our efforts, as I said, go on my Web site, SherrodBrown.com, and sign our petition.  The more grassroots efforts we have, the more we can push this through to help preserve our democracy.  There is already way too much corporate influence in this town, and we don‘t want more. 

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

BROWN:  Thanks, Ed.  Good to be with you again. 

SCHULTZ:  It is a good bill, no doubt. 

Coming up, Toyota is having a tough time, and there may be trouble with the Prius.  We‘ll talk to a Michigan congressman who will tell you why it‘s time to buy American-made. 

And White House Chief of Staff Rahm Emanuel, a tough guy who knows how to drop the F-bomb, says the R-word, and it got him into some—a heap of trouble.  I will tell you why I‘m bothered about the apology in the “Playbook.”

All that, plus Hannity returns to the zone. 

You‘re watching THE ED SHOW on MSNBC. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

More problems for Toyota today.  The United States Department of Transportation has launched an investigation into reports of faulty brakes on the 2010 Prius cars. 

Just two weeks ago, Toyota recalled millions of cars and trucks because of accelerator problems, causing the company‘s stock to plunge.  And Transportation Secretary Ray LaHood made matters worse at a budget hearing yesterday. 

(BEGIN VIDEO CLIP)

RAY LAHOOD, TRANSPORTATION SECRETARY:  My advice is, if anybody owns one of these vehicles, stop driving it, take to the Toyota dealer, because they believe they have the fix for it. 

(END VIDEO CLIP)

SCHULTZ:  Well, that comment had major repercussions.  Toyota‘s stock dropped almost six percent yesterday, and LaHood was forced to backtrack. 

(BEGIN VIDEO CLIP)

LAHOOD:  What I meant to say and what I thought I said was, if you own one of these cars or if you are in doubt, take it to the dealer and they are going to fix it. 

(END VIDEO CLIP)

SCHULTZ:  As bad as the situation may be for Toyota, I think there‘s a real opportunity here for American car manufacturers. 

Let me bring in Democratic Congressman Gary Peters of Michigan. 

It would seem to me that if I were a car dealer anywhere in America, I might take out a pretty aggressive commercial, Congressman, saying, you know, you should have been buying American all along.  Or is that over the top for these politically correct times? 

What do you think? 

REP. GARY PETERS (D), MICHIGAN:  Well, I think it‘s very important for American car buyers to know that our domestic auto industry are making some great cars.  You know, JD Power consistently ranks both Chrysler and General Motors and Ford at the very top when it comes to customer satisfaction.  The Insurance Institute of Highway Safety has ranked all of the big three cars at the top of the list when it comes to highway safety. 

And you‘ve got the “Motor Trend Car of the Year,” both the Dodge Ram Truck, as well as the Ford Taurus as Car of the Year.  So there‘s great products, so we‘re certainly hoping as people are thinking about buying a car, that they are going to those domestic showrooms. 

In the past, some people drove right by them.  Now is the time to go in there, kick the tires, and you‘re going to find that it‘s a first-class quality product. 

SCHULTZ:  You know, in business, Congressman, sometimes you‘ve just got to go for the jugular, don‘t you?  I mean, isn‘t this the moment?

I mean, you look at Ford‘s sales in January, up 25 percent.  GM sales in January was up 14 percent. 

Now is the time.  And it would seem to me that for the American worker, for the American economy, this—it would seem to me that everybody would be standing on top of the highest hill they can find and say, see that?  Buy American, American workers, and just capitalize on this. 

I guess...

PETERS:  Well, you are right, ed.  Yes, you are right, Ed.  There is no question. 

As we have talked about on this program, and you have said it you have said it many, many times, Ed, the best way to get the American economy going is to have folks buy American-made cars, American workers, American steel and glass.  And if there was any perception in the past that American cars may not have had the same quality as some of our foreign competition, I think that‘s been laid to rest. 

We have got great cars, American-made cars.  People need to be going into those showrooms.  They are going to get a first-class, quality car, ,and they are going to be helping the American economy, American workers, and American businesses all at the same time. 

SCHULTZ:  All right.  I want to talk about the TARP money that‘s going to be used for small businesses. 

You‘re in favor of that, I take it? 

PETERS:  I am.  In fact, it‘s probably—the number one impediment right now for job creation is the lack of lending to our small businesses.  As you know, those big money center banks, those big Wall Street banks that received a lot of TARP money, they are not lending to small businesses. 

SCHULTZ:  No. 

PETERS:  They are not out there doing that, and so we need to be helping the folks who I know will be helping them, which is our smaller, community banks.  That‘s the case in Michigan. 

We have got these large Wall Street banks that take our deposits, but they lend the money somewhere else.  We have got to help those community banks that know the local business and always, disproportionately, lend to small businesses.  That‘s where the help has to go. 

SCHULTZ:  And Congressman Peters, quickly, on a scale from one to 10, what are your chances of getting the Republicans to help you on job creation? 

PETERS:  Well, so far, they have been not willing to be helpful on anything.  We have got to continue to press the case that this is just absolutely critical. 

We need bipartisan solutions.  We need to be coming together.  The American people are asking for it.  They deserve it.  We need to have that and get that done. 

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

PETERS:  Great to be here. 

SCHULTZ:  Coming up, “Mr. Intellectual Honesty” shanked one off the tee box while licking Bush‘s boots last night.  That lands him in the psycho zone next.

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, “Mr. Accurate,” Sean Hannity. 

Last night on his show, Hannity was arguing that George W. Bush was more in touch with the American people than Barack Obama. 

Listen to his reasoning on this one. 

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS:  George Bush, who you worked for, did not play golf while his country was at war.  He made it—he didn‘t want the families of loved ones serving or that may have lost a loved one seeing him on a golf course. 

(END VIDEO CLIP)

SCHULTZ:  Ah, so intense there. 

Hannity, I know that you‘re big on intellectual honesty, but you‘re way off base on this one, big guy.  So let me help you here. 

We went to war in Afghanistan on October 7, 2001.  Here is the president 10 months later. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FMR. PRESIDENT OF THE UNITED STATES:  We must stop the terror.  I call upon all nations to do everything they can to stop these terrorist killers. 

Thank you.  Now watch this drive. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

HANNITY:  George Bush, who you worked for, did not play golf while his country was at war. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BUSH:  Stop these terrorist killers. 

Thank you.  Now watch this drive. 

(END VIDEO CLIP)

SCHULTZ:  You know, that‘s almost as bad as showing some video of the alleged crowd at the Tea Party rally, isn‘t it? 

Hannity, I think it‘s time for you to turn in your membership card to the “Intellectual Honesty Society,” because you‘re full of “Psycho Talk,” big guy. 

Coming up, the Speaker of the House in Connecticut will tell us why Joe Lieberman is just so out of touch with his constituents.  We saw it first hand last night, and he ought to be ashamed. 

And there are reports that Tiger is coming out of sex rehab and returning to the fairway in the near future.  We‘ll talk about that in the “Playbook.”

And Rahm Emanuel‘s dirty mouth gets him in trouble, gets washed out by Sarah Palin‘s soap. 

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

(COMMERCIAL BREAK)

            *

SCHULTZ:  Welcome back to THE ED SHOW.  Thanks for watching tonight.  I spent a full day at the Free Health Care Clinic in Hartford, Connecticut, yesterday.  And it was a really profound experience.  I saw the divisions, not just between the rich and the poor and the have and have nots, but the division between Washington and a lot of Americans out there. 

Washington wants to slow down and take its time on health care reform.  There were people at that clinic who don‘t have time.  They are without care.  They may not be here a year from now.  It is that serious for a number of them. 

Washington treats health care like it‘s a fiscal problem.  Let me tell you, it‘s a moral problem, a moral failing on the part of this country to get it right.  And as I said on this broadcast last night, you know, we do a lot of things in this country the correct way, but when it comes to this issue, we have got it wrong. 

What is killing this country, right now, is not the threat of terrorism and fear.  It is selfishness.  That is going to be our downfall as a great nation, the selfishness and the absolute corporate greed that just continues on.  That‘s what‘s tearing us apart in this country.  And that is what is creating the divide between the people in Washington. 

Some of this that is sweeping the country can be just really summed up in one word and that‘s discontent.  That‘s where the people are right now.  We just feel like Washington is not working, and all the incumbents, left, right, ought to be thrown out, until we get some people in there and get it done. 

It‘s because they see the politicians like Joe Lieberman.  Joe, you know, in his state, they have passed in the House and the Senate, universal health care.  A representative body—both bodies passed universal health care and then this guy goes to Washington and is the obstructionist, helping out the opposition.  He—he is doing in Washington—he is doing in Washington what the people of Connecticut don‘t want him to do.  So that‘s the disconnect.  People sense it and they feel it. 

I really think, no offense to dog catchers—but I think the dog catcher in Boston—he doesn‘t get much publicity—he could have run in that Senate seat in Massachusetts and won.  There is this feeling here across the country, get out of here, you have been around too long.  We want something new and different.  Believe me, a guy doing pin up, that is new.  That is different, for sure. 

For more, let‘s bring in John Nichols, Washington correspondent of “The Nation,” the author of a new book, “The Death and Life of American Journalism.”  Also with us is A.B. Stoddard, associate editor and columnist of “The Hill.” 

John Nichols, let‘s talk about some of the vernacular that is being used, the discourse, the disconnect.  It all plays in to what‘s happening in this country right now.  Where are we missing it?  Where are the American people missing it?  Is it our fault?  What do you think? 

JOHN NICHOLS, “THE NATION”:  The American people aren‘t missing anything, Ed.  In fact, they are trying very hard to send powerful messages, not merely to Washington, but, frankly, to a lot of American media itself.  What they are saying is, look, we have got sick people out here.  We have real fundamental needs.  And all that you have given us is a very narrow dysfunctional debate that suggests that the answer to health care is something more complicated, more messed up than what we already had. 

The Democrats and the Republicans have blown this debate.  The Republicans actually come out looking better because at least they just said no to something that no one understood.  But the bottom line is this: the media itself has caused a lot of the problem by, frankly, reporting on this debate, not with a humane or human perspective, but with a purely political perspective that, frankly, doesn‘t make much sense to most Americans. 

SCHULTZ:  A.B., how do we turn this attitude around?  How does the Republican or the Democrats catch the fancy of the American voter and motivate them again with this climate that has taken place in this country of tremendous and terrible discourse? 

A.B. STODDARD, “THE HILL”:  Well, I mean, Ed, I do think that the Republicans are—saying no all year has paid them great political dividends in this angry, volatile electorate, in this bad economy, in these troubled times.  And I think that they will be rewarded with many seats in the Congressional midterm elections in the fall.  The Democrats are going to take a beating.  Short of an unforeseen, absolutely miraculous recovery in the economy, that would produce jobs again, the narrative is really—it is cut in stone at this point. 

I think that you have to think long-term about the growth of the independent vote, people moving become to the middle, maybe hope for some kind of future different bipartisanship.  But, for now, the two parties are dug in and everybody is angry.  I think the people—the party in power is going to pay. 

SCHULTZ:  So A.B., I will stay with you on this.  What should President Obama do?  He has met with the Republicans.  He has met with the Democrats.  He has given a very impressive State of the Union speech.  People like this president.  He is over 50 percent in approval rating.  How does he navigate through this and basically save his party?  Because right now the Democrats are not there.  They are viewed—they have lost their personality. 

Let me—I will take some time here.  When Ted Kennedy passed away, the Democratic party lost a lot of fight, a lot of vigor, vitality, desire, passion.  It is like their personality has changed, that if someone says something about the Democrats, they say, OK, I will apologize.  If someone says, hey, you got to get tough, oh, no, we can‘t put any lines in the sand.  It is like the Democrats are afraid, A.B., to take the bull by the horns and just run with it.  Your thoughts on that? 

STODDARD:  I do think the word fight is critical here.  President Obama, to save his presidency—I don‘t know how much he can save the Democrats before this fall‘s election.  To save his own presidency, he needs to get out on the road and start talking to Americans every day, about small business tax relief, national security policies that are going to keep us safe, improving the economy, bringing back jobs, what ever he can. 

But he needs to connect face-to-face with people and make them believe that he understands them.  But the other thing is that the Democrats, Ed, as you know, throughout the ugly process of health care, have become associated with back room deals, OK.  They‘re not talking about changing the way Washington works, the way President Obama did in his campaign. 

SCHULTZ:  No, they are not.  No. 

STODDARD:  They didn‘t have a transparent process.  People are furious about what they think is a pro-industry, pro-bailout, pro-bribe majority party, legislating in the dark and back rooms.  So that—I think that narrative, as I said, is already set.  I don‘t think the Congressional Democrats can turn that around any time. 

SCHULTZ:  But John Nichols, the Democrats have got to move on something.  They are going to have to reconcile and legislatively move on something.  I‘m not convinced the Republicans are going to help them do anything for this president.  What is the best play? 

NICHOLS:  The best play is to understand that the fundamental issue in America right now is jobs.  We have 10 percent unemployment officially, 17 percent unofficially, when you wouldn‘t count in all those people who have given up or severely underemployed.  This Democratic party has to just say, we really don‘t care about all the games; most Americans don‘t even understand what cloture is.  We are going to put our pedal to the metal and pass a jobs bill that really is about putting people to work now.

If they do that—I disagree with A.B.  I think they can turn this thing around.  But nothing short of that will do it.  And it must be a massive jobs bill, not 100 billions, as the president said. 

SCHULTZ:  John Nichols, A.B. Stoddard, great to have you with us tonight.  If they do get a jobs bill, and it is 30 billion dollars, that will definitely stimulate the economy.  There‘s no question.  Can they get it done between now and November? 

I want to go back to health care for a moment.  Chris Donovan is with us.  He is the speaker of the Connecticut House of Representatives.  They, of course, passed universal health care, both in the House and in the Senate.  The governor in that state vetoed it.  Now this universal health care package, Mr. Donovan, this was health care for every be in your state, the word universal.  Do I have that correct? 

CHRIS DONOVAN, CONNECTICUT HOUSE SPEAKER:  Well, we had two packages. 

One is a package based on what was happening in the federal government.  But we also had a package that opened up the state health care plan, for the state employees, the governor, the legislatures, to cities, towns, small businesses, non-profits and eventually, yes, everybody in the state. 

SCHULTZ:  So really it is opposite of Joe Lieberman‘s position when he goes to Washington, when it comes to representing his constituents.  Is that a fair statement? 

DONOVAN:  I would say it is fair.  I think Joe maybe doesn‘t know what is going on in his own state. 

SCHULTZ:  Well, what pressure can be brought to bear on someone that goes to Washington without the folks at home, on a state level, paying a political price?  There is this disconnect between the people that are out there that want health care—I saw them, came face-to-face with them yesterday—and the long-time senator from Connecticut, who is doing exactly the opposite of what the people want?  How do you cure that? 

DONOVAN:  I mean, Ed, I don‘t know.  You saw it.  I saw it.  I see it every day in my town, people who are losing health care, people who can‘t get coverage, people who are laid off and they‘re—because of their pre-existing condition, they cannot get health care coverage. 

This is a reality.  I‘m as frustrated as many are, in terms of we can‘t wait for a health care plan.  People need it now.  We are doing what we can here in Washington—I mean in Connecticut.  We really hope they do well in Washington.  It would have been nice if Senator Lieberman had come down and seen the people in the district.  The Democrats in Connecticut passed a universal health care plan, a public option plan here in Connecticut.  The governor, who is a Republican, vetoed it.  We came pretty darn close to overturning it. 

But we are continually fighting for the people in our state, to make sure the small businesses, the every day person has health care.  It is so important in our state. 

SCHULTZ:  I talked to so many people yesterday in your state that feel disconnected, left behind, the system doesn‘t work.  It would seem to me that you have got to go out and instill that confidence that you are there for? 

DONOVAN:  Absolutely. it‘s an on-going fight.  Heck, I have been fighting for health care for people for 10, 20, 30 years.  I am not giving up now.  A lot of other people aren‘t giving up now.  Sure, there is going to be some downturns every now and then.  But you got to keep remembering why you were elected.  That is to represent the people.  Right now, the people are in need of health care.  They are in need of jobs.  That is why we are elected. 

SCHULTZ:  Mr. Donovan, how do you get your budget in the state of Connecticut under control and deliver health care to everybody?  Your state is no different from most others.  I think there‘s only four states in the union that have got a surplus.  But your state, like many others, is looking at a lot of red ink.  How do you accomplish that? 

DONOVAN:  One of the ways is to actually open up the state health care plan.  We pay less for health care and it is good health care.  You know why?  Because we have 200,000 lives in our health care plan.  And we can put it out to bid and people who—or want to administrate that, they come in at a low bid, because they know they will get more because we are doing it in volume.  If you are a small business and I have four or five people, I‘m going to pay through the nose. 

So let‘s open up the state health care plan.  Let‘s make it a public option.  Let‘s have the small businesses come in there.  Let‘s have the non-profits come in.  Let‘s have the citizens come in a way, so they can have good health care at an affordable.  That will lower the rates for everybody in the state.  If Washington helps out with some health care plans, in terms of Medicare reimbursement, that would help us out as well. 

SCHULTZ:  Quickly, if there was an election right now in Connecticut, would we see the sea change that we saw in Massachusetts? 

DONOVAN:  Hey, that‘s Massachusetts.  We are Connecticut. 

SCHULTZ:  OK.  All right.  I just think there is an attitude out there amongst the countryside that people want to throw out the incumbent and start over.  They feel it is dysfunctional.  I hope you can get it through.  It‘s unfortunate that Joe Lieberman has represented your state on this issue in such a terrible fashion. 

DONOVAN:  We have other good Congressional people who are fighting for us and we are happy with them.  And we are going to continue the fight and get our message to the people. 

SCHULTZ:  Mr. Donovan, good to have on THE ED SHOW.  Thanks so much. 

DONOVAN:  My pleasure. 

SCHULTZ:  Coming up, who would have thought that in a battle between Sarah Palin and Rahm Emanuel, that Rahm would be the one to back down?  I will give you the details on his apology, next in the playbook.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And in my playbook tonight, who wants Rahm Emanuel gone more?  Let‘s see, liberal activist groups or Sarah Palin?  Both sides are pushing the story about Obama‘s chief of staff calling some liberal activist, quote, “retarded.”  And actually, there was an F-word before that.  Emanuel made the comment in a closed-door meeting with liberal groups back in August when they were talking health care.  But it only made its way to the public arena last week, when it was reported by “The Wall Street Journal.”

Since then, Sarah Palin has jumped on the comment.  She called for the president of the United States to fire Rahm Emanuel.  On her Facebook page, she posted, “just as we would be appalled if any public figure of Rahm‘s stature ever use the N-word or other such inappropriate language, Rahm‘s slur on all God‘s children is unacceptable and it is heartbreaking.  I would ask the president to show decency in this process by eliminating Mr.  Emanuel.” 

For more, let‘s bring in our panel tonight.  Laura Flanders is the author of “Blue Grit” and the host of GritTV.org, and John Feehery is a Republican strategist. 

Now, we are all worked up about the word retarded.  And I understand that.  It is wrong to use that.  It was a closed-door meeting, but that still doesn‘t excuse it.  Here‘s the story that no one is talking about, in my opinion.  I will have both of you respond.  If the chief of staff of the president, Rahm Emanuel, is going behind closed doors in August using that type of terminology about a health care plan that liberal groups want, such as maybe single payer or public option, and the white house response is those two words, which includes an F-word and retarded, I want to know, as a good liberal, just how hard did the White House fight for health care reform? 

That‘s the story.  Is that the attitude of the president behind closed doors, when the liberals come to the table and want health care reform?  Laura Flanders, your thought on that. 

LAURA FLANDERS, GRITTV.ORG:  Well, I‘m with you, Ed.  I don‘t know what‘s more cognitively challenged here.  It seems to me that the only thing Rahm Emanuel should have been saying to the Democratic base, particularly those activists out there on health care, was thank you.  Thank you for getting me elected.  Thank you for getting us here.  We are going to be working together.  We are going to get you real reform, the kind of reform Americans really want. 

What‘s cognitively challenged, if you like, is having any kind of quarrel with the base and, instead, rejecting what most Americans want and going for some kind of plan that most Americans don‘t want.  We don‘t want to be forced to pay more to private, for-profit companies, without any non-profit, single payer or public option.  This was the cognitively challenged health care campaign of all times.  That‘s what you should be talking about.  You‘re right. 

SCHULTZ:  John Feehery, if the Democrats didn‘t think that Sarah Palin was politically influential before, they can check that attitude at the door.  She made the White House respond.  Your thoughts? 

JOHN FEEHERY, REPUBLICAN STRATEGIST:  Well, I think the long knives are out for Rahm Emanuel.  I actually don‘t think he is going anywhere any time soon.  He is—you know, he has always been more of a moderate in the White House, pushing for more centrist positions.  And liberal activists don‘t like him.  And actually, a lot of people on Capitol Hill don‘t like him, starting with the more liberal members of the Congress. 

You know, Sarah Palin does have some juice, there is no doubt about that, with her Facebook comments.  I would say though that, you know, once this got out in the “Wall Street Journal,” he had to respond.  I‘m not sure if he‘s responding to Sarah Palin or no.  I do think that Rahm Emanuel‘s thinking about running for mayor of Chicago.  I don‘t think this comment helps him at all. 

SCHULTZ:  I‘m surprised that he apologized and didn‘t fire back on Sarah Palin, because Levi Johnston, in the article in “Vanity Fair” said this, “I couldn‘t believe it when she could would come over to us and sometimes say, playing around, no, I don‘t want the retarded baby.  I want the other one, and picked up Tripp.  That was just her.” 

Now, will the real Sarah Palin please stand up?  Laura Flanders? 

FLANDERS:  Absolutely.  The real Rahm Emanuel is no mystery.  I mean, the chief of staff is often referred to as to the chief of gaffe.  That he has a foul mouth is old news.  The story is old news.  I mean, it is kind of amazing that Sarah Palin—I don‘t think there‘s anything she has ever said that “the Wall Street Journal” hasn‘t picked up on.  Haven‘t they got better things to do? 

SCHULTZ:  You think this is over with, John? 

FEEHERY:  Well, I don‘t think it is over with in one sense.  I think that the long knives will be out for Rahm Emanuel from the left for quite some time. 

SCHULTZ:  Yeah. 

FEEHERY:  They strategically disagreed with where they want to put the country.  I think for Rahm Emanuel, I think he is very close to the president.  I don‘t think he is going anywhere any time soon.  But this is going to be an internal brawl that is going to continue to happen for quite some time. 

SCHULTZ:  It‘s going to be external, because if that is how he feels about health care reform from the liberal perspective, he just did not endear himself to the liberal base of the blogosphere.  Great to have both of you on tonight.  Thanks so much.

One final page in the playbook tonight, there is speculation that Tiger Woods may be getting out of sex rehab to play golf.  “Radar Online” reports that Tiger‘s wife, Elin, is waiting to take him home from the clinic in Mississippi.  The timing fueling rumors.  The Accenture Matchplay event starts February 17th in Arizona.  But there has been no official word from the PGA event coordinators or Tiger‘s people.

SCHULTZ:  Coming up, troops, US troops, fresh off the battlefield, are planning to storm Capitol Hill and really make some—what I consider to be very fair demands.  We will talk about fearless next here THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And finally tonight, President Obama has promised to end the wars in Iraq and Afghanistan and bring the troops home over time.  But the organization Iraq and Afghanistan Veterans of America says the administration also needs to focus on helping them when they come back here to the United States.  And veterans from around the country are heading to Washington this weekend to fight for reform. 

Joining me now is the executive director of the IAVA, Paul Rieckhoff.  Paul, great to have you with us tonight.  When I hear the word reform, I thought we passed a GI Bill in this country.  What‘s happening with that? 

PAUL RIECKHOFF, IRAQ AND AFGHANISTAN VETERANS OF AMERICA:  We did, Ed, but there are still major problems.  Veterans are experiencing a lot of confusion trying to utilize that GI bill.  The VA was really caught flat footed here.  They‘ve caught up now, and they‘ve worked on fixing it.  But 90 percent of the phone calls that went to the VA‘s GI bill hotline between October and December didn‘t get through. 

So the VA has to do better there, and they have to reform the way they do bureaucracy across-the-board.  We are going to be fighting for disability reform all next week, cutting through that red tape, and making sure that our veterans get the benefits they deserve. 

SCHULTZ:  Do you think it is a lack of manpower in the VA, an infrastructure within the military to deal with the influx of veterans coming home?  Is that it? 

RIECKHOFF:  Manpower is one part of it, Ed, but it‘s also about innovation.  They have really got an antiquated, outdated system at the VA right now.  It‘s not a lot different from when guys came home from Vietnam.  So if you are putting in a disability claim right now, you are probably going to wait about 161 days.  If you appeal that claim, it is going to be two years. 

So we are bringing veterans from all over the country, as you mentioned, here to Washington, to fight to change that, to push for disability reform.  If folks are watching, they can help us by going to StormTheHill.org.  They can support these young veterans who are going to be meeting with over 100 folks on the Hill next week, the White House, VA, DOD, and we‘re going to get this done this year and fix it. 

SCHULTZ:  And Paul, what about the education benefits that you are in the GI bill?  How is that working out for the GIs? 

RIECKHOFF:  They are robust and they are really solid.  You know, the president deserves a lot of credit for pushing for that GI Bill.  And Secretary Shinseki is trying to make it smoother at the VA.  I was testifying today on the House side about the new budget increase, which is the largest one in a long time.  It is about a 15 percent increase.  So the money‘s there and it is a strong sign.  We have to make sure they are doing a better job doing customer service for the veterans calling and going to the websites. 

SCHULTZ:  The number of veterans that are coming back and coming into the VA, isn‘t it proportionately much higher than it was in the past? 

RIECKHOFF:  It is a very high percentage.  You have got folks now who are doing four, five, six tours.  One of the guys on our staff here in DC just got back after his fourth tour.  So, there‘s folks coming home with complex injury, with traumatic brain injury, mental health issues.  So there are huge challenges there.  We know the folks at the VA are working are really hard.  They have got to be more efficient.  They‘ve got to be more innovative. 

SCHULTZ:  Paul Rieckhoff, you are doing great work for the veterans. 

God bless you, keep going, my man. 

RIECKHOFF:  Thank you, Ed.  We appreciate the support, man. 

SCHULTZ:  You bet. 

Tonight in our telephone survey, I asked you, do you trust that the Republicans will work with the Democrats to create jobs?  Five percent said yes; 95 percent of the folks watching this broadcast tonight do not think the Republicans will help out when it comes to creating jobs.  I‘m in the majority. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information on THE ED SHOW, go to Ed.MSNBC.com or you can check out my radio website at WeGotEd.com.  “HARDBALL” with Chris Matthews start rights now on the police for politics, MSNBC.  We‘ll see you tomorrow night.

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