updated 4/5/2010 12:28:19 PM ET 2010-04-05T16:28:19

Guest Host: Lawrence O‘Donnell

Guests: Austan Goolsbee, Robert Reich, Jay Newton-Small, Rep. Anthony Weiner, Jack Rice, Michael Frank, Tom McClusky

LAWRENCE O‘DONNELL, HOST:  Good evening from New York.

I‘m Lawrence O‘Donnell, in for Ed Schultz.

These are some of the stories we‘ll be hitting tonight.

The March jobs report shows the largest job gain in three years, but while hiring is up, confidence in the Democrats‘ handling of the economy is down—way down—since the summer. 

Forget the doomsday scenarios.  There are at least five reasons why November may not be a repeat of 1994 for the Democrats, and one of them is the one and only Michael Steele. 

And big surprise.  Senator Jim “Waterloo” DeMint is making absurd claims about the health insurance mandate.  When I show him what‘s really in the bill, I‘m sure he will never lie about health care reform again. 

But first, the ups and downs of the new jobs report.  The economy created 162,000 jobs in March, the most in three years. 

Today, the president went to North Carolina, a state he turned from red to blue in 2008, to tour a battery factory and talk to employees there, but he stopped short of taking a victory lap on the report. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  And I‘ve often had to report bad news during the course of this year as the recession wrecked havoc on people‘s lives.  But today is an encouraging day.  We learned that the economy actually produced a substantial number of jobs instead of losing a substantial number of jobs.  We are beginning to turn the corner. 

(END VIDEO CLIP)

O‘DONNELL:  But these are the numbers Republicans are talking about.  A new CNN/Opinion Research poll shows voters trust them more than Democrats on the economy. 

Forty-eight percent say congressional Republicans would do a better job dealing with the economy, 45 percent say congressional Democrats would do a better job.  That‘s a major shift from last summer, when 52 percent said they trusted Democrats, compared to 39 percent who said they trusted Republicans on the economy. 

Yes, the unemployment rate is still at 9.7 percent.  The president, himself, acknowledges that that is unacceptably high.  But the numbers do show the jobs situation is improving.  Take a look. 

In December of 2008, when President Bush, in the oval office, the economy lost 670,000 jobs.  In January of ‘09, we lost 780,000 jobs.  In August of ‘09, it was down to 212,000 jobs lost.  In November, we gained 64,000 jobs.  And last month we gained 162,000 jobs. 

Get your cell phones out.  I want to know what you think. 

Tonight‘s text survey is: What issue will determine your vote in 2010? 

Text “A” for the economy, text “B” for health care to 622639.  That‘s 622639.  I‘ll bring you the results later in the show. 

Joining me now is Austan Goolsbee, a member of the White House Council of Economic Advisers. 

Austan Goolsbee, the president went to North Carolina today and the Republicans chased him down there.  John Boehner had an op-ed piece in the local paper down there, as I‘m sure you‘ve seen, talking about all the job-killing taxes and other job-killing elements of the health care reform bill. 

What do you say to Boehner on that?  And particularly, could you address that tax provision that the large companies have already said they‘re going to have to take a large write-off on?  Boehner says that‘s the biggest job killer, it seems, in the bill. 

AUSTAN GOOLSBEE, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS:  Well, look, you have several different issues in there. 

On this one bit about the health care, this is a situation in which in the tax code now, they get a subsidy, plus they get to deduct it, and that double dipping is eliminated as part of the health care, a completely sensible thing to do.  That administers a charge to some companies that were doing this tax double dipping.  For them to say it‘s a job killer I think is a little bit goofy. 

When you look at the health plan overall, particularly in the small business sector, it‘s a massive improvement in the current circumstance.  And since small business—losses of jobs among small business and their lack of credit and inability to come back has been the biggest thing weighing down the recovery, I think the Boehner argument about the health plan is completely off base. 

O‘DONNELL:  And Austan, can I just take you back to that tax piece on the big companies for one second? 

They have said they‘re going to have to take some charges on this adjustment to the tax code, but have any of them announced that they then will have to do layoffs because of those charges? 

GOOLSBEE:  No, of course not.  It doesn‘t make—I mean, this would not be tied to your labor cost in any way. 

This would just be a one-time charge associated with you‘re not going to get to take double dipping of tax benefits.  Now you can just take it the one time.  You still get the subsidy, you just don‘t also get to deduct it from your taxes.  So that is not—that is so misleading, to try to tie that to jobs. 

And then when you look at the job report from today, with the plus-162,000, now, granted, part of that are Census workers and part is rebound from the snow last month.  But even without that, this is the beginning, hopefully of a long trend toward higher job growth. 

It wasn‘t just that when the president took office we were losing 750,000 jobs a month.  It‘s that it was epically bad and had been getting worse virtually every month since the recession began in 2007.  And it has gotten progressively better since then. 

And today we start seeing the first of the positive numbers.  But it‘s not enough.  I mean, the president made clear today more than eight million people have lost their jobs since this recession began, and we‘ve got a long way to go.  It‘s not the time to take your foot off the gas pedal, that‘s for sure. 

O‘DONNELL:  Now, Austan, what projections do you guys have in the Council for Economic Advisers for what unemployment is going to look like six months from now, when voters go to the polls in November? 

GOOLSBEE:  Well, the unemployment rate that‘s in the government forecast doesn‘t come down by a tremendous amount.  I mean, it‘s still going to be a very difficult job environment, and part of that is because, as you know, the official unemployment rate masks how bad the job market actually is when it goes up because a lot of people were forced to work part time.  A lot of people were discouraged workers and they just dropped out of the labor force, so they don‘t even count as unemployed. 

So what you saw this month is we can generate hundreds of thousands of jobs without the unemployment rate coming down.  We‘re going to have to have a sustained job growth before we‘re going to start seeing that number come down. 

O‘DONNELL:  Thanks, Austan Goolsbee.  Thank you very much for your time on this Friday afternoon. 

GOOLSBEE:  Great to see you.

O‘DONNELL:  Appreciate it. 

Joining me now is Robert Reich, former secretary of labor and a professor at UC Berkeley. 

Secretary Reich, what do you make of this 162,000 job change this month? 

ROBERT REICH, FMR. LABOR SECRETARY:  Well, it‘s certainly a step in the right direction, Lawrence.  But the pain out there is also very, very large. 

And remember, the economy needs about 150,000 new jobs per month just to keep up with population growth.  Add that to the 11 million jobs we have lost or still haven‘t created, given all of the people who want jobs, and the United States economy is still very, very much in the hole. 

O‘DONNELL:  How do you politically make the case for patience in this territory, which is what the voter needs when you‘re trying to apply all these policies that will be stimulants to jobs?  You know it isn‘t going to happen right away, and you know it really probably isn‘t going to happen before November of this year. 

How do you get a voter convinced to be patient about this? 

REICH:  Well, I think that‘s the real interesting question, and I think what the administration‘s probably going to do is say to voters, in effect, don‘t pay attention to the level of unemployment, the number of jobs that are lost.  Look at the direction the economy is heading in.  Look that we are doing better than we were doing before. 

And they‘re going to hope that most voters pay attention to the positive direction rather than to the still very high level of unemployment. 

O‘DONNELL:  What are some of the other indicators you might want to look for in the economy between now and November that might indicate something more positive than what the job numbers indicate? 

REICH:  Well, consumers are spending a little bit more, and that‘s good, because one of the biggest problems that businesses had obviously that held back their hiring was that consumers were not out there buying. 

The only problem with that, Lawrence, is that wages are absolutely stuck in the mud.  They‘ve not gone anywhere.  Because there‘s so much unemployment, the employers don‘t have any incentive to raise wages.  So you‘ve got a little bit of a catch-22 going on. 

But as long as—if consumers do have confidence—and that‘s a big, big question—if they have confidence, if they are doing better, if they‘re buying more, then the recovery will be hastened. 

O‘DONNELL:  And what realistically can government actually do about this wage stagnation that has been present prior to this almost depression that we‘ve run into?  What are the real expectations we should have of government in that area? 

REICH:  Well, government cannot do very much in the present political circumstances.  I mean, the United States is very constrained. 

It‘s possible, maybe, to have a little bit more of a short-term stimulus, maybe bail out the states which are still right now laying people off, laying teachers off, laying firefighters off, raising taxes.  The states are a huge fiscal drag on this economy, so the federal government that bailed out Wall Street, maybe it can bail out education, our teachers and our schools.

Secondly, small businesses do need help getting credit, and the federal government could provide some subsidies to banks, maybe help small banks—community banks, regional banks—that cater to small businesses get credit out to small businesses.

O‘DONNELL:  And finally, does financial regulation reform offer some opportunity for the Democrats if they were able to come up with a bill that is in some way convincing to the public as doing something real, that the public might then have some additional confidence about where the economy might be going, leaving apart—leaving the job numbers aside for a moment?

REICH:  That‘s possible, Lawrence.  But the problem is, when you talk about financial reform, it‘s all in the details—the derivatives, the credit default swaps and all of that stuff.  And people‘s eyes glaze over it.

Most Americans don‘t understand it.  They don‘t want to get into that level of detail.

And what the Democrats probably want to do, if they can do it, is make themselves the champion of the small investor and the average person on the street against Wall Street and push the Republicans into a corner, where Republicans are basically standing very strong and united against any reform at all.  And that would help the Democrats, but Republicans may be smarter than that.  They‘re already now kind of talking among themselves, maybe we want to cooperate a little bit with the Democrats on financial reform.

O‘DONNELL:  Robert Reich, thank you very much for your time today.

REICH:  Thanks, Lawrence.

O‘DONNELL:  Coming up, John McCain has got a new plan to kill health care—why fight to repeal it when you can refuse to pay for it?

Congressman Anthony Weiner will be here to explain whether the Dems can do anything to stop the right.

And Glenn Beck and Rush Limbaugh make a living off of bashing President Obama.  The president is finally taking a shot back.  I‘ll show you what he said at the bottom of the hour.

All that, plus the big secret about the health care bill that nobody is talking about.

You‘re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  There have been many doomsday predictions made about the Democrats‘ prospects in the midterms, but “TIME” magazine has five reasons why 2010 may not be as bad as 1994. 

Joining me now with the list is Jay Newton-Small, Washington correspondent for “TIME.”  She wrote the piece. 

Jay, let‘s talk about your five items.  They begin at the top of the list with the one and only Michael Steele. 

Now, why would Michael Steele be possibly a benefit to the Democrats? 

JAY NEWTON-SMALL, WASHINGTON CORRESPONDENT, “TIME”:  The gift that keeps on giving.  There‘s hardly a week that goes by that there‘s not some sort of scandal going on.  We‘re talking about voyeur and lesbian clubs now. 

I mean, whether there‘s money, that donors aren‘t giving any more because they‘re so upset with him.  So I mean, in weeks when the Republicans should be sort of toasting their momentum, instead all they‘re talk about is their embattled chairman.  So that‘s number one. 

O‘DONNELL:  Yes.  I think the DNC would be happy to pay Michael Steele‘s salary if the Republican Party runs out of money because they‘re spending too much at the S&M clubs they‘re going to. 

Another one you have on the list is fund-raising.  What‘s the fund-raising difference between Democrats and Republicans? 

NEWTON-SMALL:  Well, Democrats are beating Republicans still in fund-raising for the House races, by more than $16 million for Senate races, and for RNC versus DNC.  So, I mean, there‘s really—especially the House, which is the Republicans‘ best shot at taking something, you know, whether the Senate or the House.  They have a much better shot at taking over the House. 

The fact that they‘re lagging by that much money is really troubling for them, and it‘s a big gap they‘re going to have to make up.  And those candidates need the money. 

O‘DONNELL:  And the third big difference between now and 1994 you have on the list is the Tea Parties. 

How are the Tea Parties going to factor into this? 

NEWTON-SMALL:  Well, and that‘s just it.  Part of the money is going to, in fact, Tea Party candidates. 

You‘ve got candidates like Rand Paul in Kentucky who‘s raised more than $2 million; Marco Rubio in Florida, who‘s raised nearly $4 million.  These guys are drawing away money from the Republican establishment candidates.  And there‘s lots of primaries going on for Republican candidates across the country.  So it‘s dividing the party and diving a lot of the money that would go traditionally to just Republican candidates. 

O‘DONNELL:  And are the Tea Parties going to end up delivering in the end to the Republicans some untenable nominees that can‘t win a general election? 

NEWTON-SMALL:  Well, certainly that‘s what Democrats are hoping for.  I mean, in Florida, you look at the polls, and Kendrick Meek actually beats out Marco Rubio, if Rubio ends up being the candidate for Senate there.  Rand Paul is—Democrats are hoping to see him win the primary in Kentucky because they think he‘s much easier to beat than the establishment candidate, which is secretary of state Trey Grayson.  So, yes, certainly, there‘s the sort of Dede Scozzafava in New York, 23rd District, going on there where they believe that if they‘re going to divide the Republican vote, then there are Democrat candidates that are going to benefit from that. 

O‘DONNELL:  And number four on your list is there‘s no GOP leader.  In 1994, they have Newt Gingrich.  And we still ask the question every week, who is the leader or the Republican Party?  And is it a radio talk show host like Rush Limbaugh? 

You know, who is it? 

NEWTON-SMALL:  Well, certainly that‘s what Barack Obama, President Obama, keeps hoping and keeps talking about.  Even today he was saying Rush Limbaugh and Glenn Beck, these are the leaders of the parties he named.  Those are the straw men that the Democrats love to sort of break down.  But really, I mean, they need someone like a Newt Gingrich, in the House in particular, to sort of lead the charge. 

And they don‘t really have anyone who has enough gravitas right now who can spar with Obama, who can be the voice of the—you know, the clarion voice of the Republican Party and lead them to victories in November.  And that‘s something that they‘re lacking. 

O‘DONNELL:  And the fifth thing on your list is the legislative wins, that these Democrats in 2010 have a different package of legislative wins to bring to the voters in November than they did in 1994. 

NEWTON-SMALL:  Yes.  I mean, look, one of the things that was such a problem in 1994 for Democrats was that President Clinton lost the BTU tax vote—well, he passed it in the House, but lost it in the Senate, which became a dangerous vote for those vulnerable new members in the House.  He also just lost Hillarycare in September of ‘94, right before the elections.  And so these were really hobbling, you know, failures that he had going into the elections. 

And by—you know, conversely, Obama has actually passed health care.  He‘s passed the stimulus.  And so, in that sense, he doesn‘t have the sort of same kind of trip-ups that President Clinton had in his first two years in office that Republicans can capitalize on. 

O‘DONNELL:  There does seem to be a troubling similarity, though, between 1994, when the House passed the BTU tax, which was considered an environmental tax, get control of emissions and that sort of thing, and the fact that this House, this year, has passed the cap and trade bill, which obviously at this point seems dead in the Senate.  That seems to be troublingly similar to 1994, doesn‘t it? 

NEWTON-SMALL:  It is, absolutely.  And I think you see lot of Republicans running on that in the districts where Democrats voted for it. 

It‘s certainly one of the biggest hammering points.  They said they voted for a cap and tax, a tax increase.  But the Democratic response to that though is that you have got Republicans in the Senate such as Lindsey Graham, Republican from South Carolina, who are still negotiating on this bill, who are still talking about this bill.  And there‘s a lot of aspects of the bill that Republicans do actually quite like. 

So, it‘s not as bad as the BTU tax, but it‘s still pretty—you know, it is probably the worst vote that House members had to take this year so far. 

O‘DONNELL:  Jay, you have got a very smart list here that a lot of us hadn‘t thought of.  And I want to thank you for joining us this afternoon. 

Jay Newton-Small, Washington correspondent for “TIME.”

NEWTON-SMALL:  Thanks for having me on, Lawrence. 

O‘DONNELL:  Up next, Senator Jim “Waterloo” DeMint wants you to believe the IRS is hiring thousands and thousands of new agents to chase after you.  I‘ll show you how wrong he is. 

You‘re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to THE ED SHOW.  I‘m Lawrence O‘Donnell. 

The Republican Party is still up in arms about health care reform.  South Carolina Senator Jim DeMint warning the new health care bill will require hiring 16,000 new IRS agents. 

DeMint told Politico, “There are going to be tens of thousands, maybe hundreds of thousands, before this is all over.  We are going to be looking for the real truth of what this means.  Just on something as simple as having 16,000 IRS agents chasing them around, that is going to open a lot of eyes.”

The truth is, there is no authorization to hire any new IRS agents in the bill.  DeMint says we‘re going to hire 16,000 additional agents?  That is exactly how many IRS agents we have right now. 

So DeMint is thinking that adding one small tax credit to the tax code will require us to double the number of IRS agents to enforce that provision.  He says we may have to hire “hundreds of thousands” before this is all over. 

There are currently 93,337 people working at the IRS, including janitors, everybody working there.  Only 16,000 are endorsement agents.  DeMint thinks we may need to triple the entire IRS workforce to deal with this one tiny tax credit. 

In 2002, a Republican president signed into law a health insurance tax credit for workers who lose their jobs to international trade.  The IRS actually set up a separate unit to administer that new provision.  There are exactly 10 people working in that unit on the health insurance tax credit, and all of them were employed by the IRS before the tax credit became law. 

In 2008, the last year that the Bush administration controlled the IRS, they hired over 10,000 seasonal employees to help chase you down and force you to pay your taxes, and not a single Republican, including Jim DeMint, objected to hiring one of those 10,000 extra IRS workers. 

Now, what is actually in the bill and why they won‘t have to hire a single IRS agent to enforce it? 

As you know, the individual mandate in the bill contains a tax penalty for anyone who does not purchase health insurance.  Let me now read to you from the bill how that penalty is enforced. 

1:  “In general, the penalty provided by this section shall be paid upon notice and demand by the secretary.  And except as provided in paragraph two, shall be assessed and collected in the same manner as an assessable penalty under Subchapter B of Chapter 68.”

2:  “Special rules—notwithstanding any other provision of law—a waiver of criminal penalties in the case of any failure by a taxpayer to timely pay.  Any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure.” 

B:  “Limitations on liens and levies.  The secretary shall not file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section or levy on any such property with respect to such failure.” 

What that beautiful legislative language means is something we don‘t see anywhere else in the tax code.  It is that the penalty for not paying the tax penalty is nothing. 

So the trick question becomes, how many IRS agents do you need to enforce an unenforceable provision of the tax code?  And the answer is obviously none. 

What this also means is that there isn‘t a real individual mandate in this bill because there isn‘t a real penalty for violating an individual mandate.  The Democrats had stronger penalties written into earlier versions of the bills in committees, but under increasing political pressure they kept softening those penalties all the way down to the point where they are now nonexistent.

            *

O‘DONNELL:  -- but under increasing political pressure, they kept softening those penalties all the way down to the point where they are now non-existent.  The Democrats are never going to come out and tell you this, because they really do want you to buy health insurance.  They want you to think there really is an individual mandate.  But the truth of it is, nothing in law is ever, ever going to really force you to buy health insurance.  And the Republicans are never going to tell you this because they really like scaring you.

Coming up, threats of violence over health care reform have left some congressional Democrats ducking for cover.  New York Congressman Anthony Weiner will be here to tell us what he‘s facing at home in just a moment. 

And the Pope is accused of turning a blind eye to sexual abuse within the church.  The Vatican insists he‘s the victim of a smear campaign.  We‘ll get the latest from Rome on this Good Friday evening.  You‘re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back.  I‘m Lawrence O‘Donnell, in for Ed Schultz.  Democratic lawmakers are home for the Easter recess, and some of them are getting an earful from constituents about health care reform.  “The Hill” reports some Democrats who voted yes are cutting back on town hall meetings because they don‘t want to face angry mobs of protesters like last Summer, or because of actual threats they‘ve received. 

For more, let‘s bring in New York Congressman Anthony Weiner.  Congressman Weiner, you received some white powder that turned out to be benign.  But is that a first for you?  This kind of angry and threatening reaction over legislation? 

REP. ANTHONY WEINER (D), NEW YORK:  I must confess, it is.  I kind of, as you know, have led with my chin in this debate.  And I‘ve probably attracted more mail and calls and craziness than a lot of other members of Congress.  It hasn‘t slowed me down much.  For the most part, the overwhelming majority of people writing are passionate, and have taken a side that‘s sometimes philosophical in this debate.  They don‘t believe that health care should be something the government should be wading in on. 

But it hasn‘t slowed me down much.  I‘m using this Passover/Easter break to have town hall meetings.  We‘re going to have a telephone meeting.  I‘m doing meetings around my district and around the city.  For the most part, people just want to know some of the facts that are in it.  Your last segment is a classic example.  There has been an orchestrated lye machine going on around this bill ever since it was first launched.  And it still, to some degree, goes on today. 

O‘DONNELL:  Before you guys broke for recess, was there a collective strategy developed about how to go into this particular recess, given especially what you saw last year in the August recess, in the kind of public demonstrations of rage against the health care reform bill? 

WEINER:  You know, there‘s no mother ship making of big plan.  Members of Congress have to decide what works best in their district, what meetings they should have, where they should do them.  But I think there was a general sense among Republican and Democrats alike that we were going to go into this new period where we were going to talk about the actual bill, not the fantasies that some people have painted around it, not some of the demagoguery. 

I think a lot of members of Congress are on much more comfortable footing now, talking about a bill that actually exists, than the hypotheticals that might or might not be in it.  So I do think there‘s a greater comfort level.  But people are still very animated by it.  This is a debate like I haven‘t seen in my 12 years in Congress.  And it still goes on today. 

O‘DONNELL:  John McCain and others are talking about repealing the tax pieces of the bill, you know, working on repeal on a piece by piece basis, the tax stuff they think being the most vulnerable.  What do you think the prospects of that would be in the next Congress, if there are more Republicans in the next Congress? 

WEINER:  If my Republican colleagues want to keep litigating this and keep fighting about it and trying to repeal it, I say bring it on, chicky.  We‘re ready to have that fight.  There are so many good things in this bill that they‘re going to have to argue that they want to take away.

John McCain is a good man.  He‘s a friend of mine.  He‘s stuck in this primary where he has to show he‘s even further out there than his opponent.  That‘s the way they‘re doing it.  I anticipate this is going to fade pretty quickly.  When they have to explain what they mean by unfund the bill, meaning take away the coverage of Donut Hole, take away the coverage for new workers, take away the coverage for the uninsured younger workers, I think they‘re going to realize that‘s a pretty hollow political strategy. 

O‘DONNELL:  On one item that they would get some Democratic support, and including—there‘s two liberal members of the New York City congressional delegation have said on this network that they would be in favor of repealing the tax on health care benefits that kicks in two years after the eighth year of the Obama presidency, which might make it the most theoretical of the taxes in there.  Do you think that‘s something you would join and try to replace it with some other form of funding? 

WEINER:  I think there is this general philosophical argument being made by some Republicans, saying repeal and replace.  I think Democrats are going to be in this place of implement and prove.  At the same time some people might be pushing to scale it back, people like me are immediately starting the effort to improve it.  Things like the public option may have the shortest death in history, as we now I think are going to start immediately working to have that added to it. 

This is not going to be a be all and end all, what we‘ve done here.  I think people who want to scale it back are going to find that they‘re running against the political current.  And we have to let this bill work.  And the more it does, I think the more it‘s going to be seen as a clear success for Democrats.  The only question is, is that going to happen soon enough for the November elections? 

O‘DONNELL:  Congressman Anthony Weiner, thanks for the time.  I hope you enjoy some peaceful moments on your recess. 

WEINER:  Thank you, Lawrence.

O‘DONNELL:  I want to get some rapid response from our panel on these three stories.  In a new interview, President Obama calls out Rush Limbaugh and Glenn Beck as, quote, troublesome.

And the FBI is investigating an anti-government group that has sent letters to 36 governors urging them to resign or face some action to remove them.  The group claims its goal is peaceful change. 

And President Obama gets his lowest job approval rating yet in a new CBS News poll.  Just 44 percent say they approve, while 41 percent disapprove. 

With us tonight, former CIA officer Jack Rice and the Heritage Foundation‘s Michael Frank.  Let‘s go to that first story.  President Obama saying Glenn Beck and Rush Limbaugh are troublesome.  Jack, how obvious does it get? 

JACK RICE, RADIO TALK SHOW HOST:  Oh, please, exactly.  I mean, in the end, though, what we have here is we have a couple of trained monkeys.  You flip them a quarter and they‘re going to bang the cymbals together for the crazies in the room.  You know what?  Neither of them has ever raised their right hand, sworn and oath to the constitution, and certainly lie on a regular basis. 

So am I concerned about them?  No, I‘m not.  What I‘m concerned about are some of the crazies who are in the room, who actually listen to some of that rhetoric. 

O‘DONNELL:  Michael Frank, do you agree with the president that Limbaugh and Beck can be troublesome? 

MICHAEL FRANK, HERITAGE FOUNDATION:  I watched that CBS interview.  The question was not about Beck or Limbaugh.  The question was about the frustration and the anger across America, much broader than any talk show audience.  And the interviewer actually tried to push the president on that, but he didn‘t want to bring that up.  He wanted to focus in on the two straw men he likes to talk about.  Every time he talks about them, their ratings go up and they have more kind of leverage within the ranks of the right of center audience out there. 

I‘m not sure why he keeps doing it.  Frankly, he never answered the question that was asked to him.  Why is there so much frustration, as evidenced by the CBS poll, by a number of other polls, Gallup and others, that are showing that, if anything, the public support for the president and his agenda has dropped a little bit since the signing of the health care bill? 

O‘DONNELL:  Jack Rice, let‘s go to your professional strength on number two.  These ominous sounding threats to the governors, but a claim that these are peaceful recommendations that they simply leave their jobs.  What‘s going on here?  How to you read that? 

RICE:  I‘m really concerned about any militia group or any posse comitatus or any others that are out there making claims like this.  Obviously because of actual attacks and threatened attacks they have made against judges and others.  That‘s always a concern. 

At the same time, if these are legitimate concerns, gripes and they‘re simply saying, peacefully, we are unhappy with what you‘re doing, guess what, that‘s America.  People have the absolute right to do that.  At the same time, we have to acknowledge that some of these groups are out there and they have a history of this.  I think the FBI has to be very, very careful here, and just like we saw in Ohio, Indiana and Michigan, if there‘s a need to take them down, then they should be taken down. 

O‘DONNELL:  Michael Frank, what‘s your take on that one?  Sending letters to 36 governors asking them to resign immediately or else. 

FRANK:  You know, it‘s vague in a lot of ways, but it‘s very disturbing that it might be linked to something that could be violent.  I worked on Capitol Hill for a member who was controversial 20 years ago.  And we had all our mail sniffed.  I received death threats.  It was a very common thing.  Unfortunately, when you work or are a controversial member, you tend to put your—like Congressman Weiner said before this segment, you put your nose out there and you‘re going to be in the fray, in the cross fire. 

Hopefully that‘s just a metaphor, not the real thing.  So it‘s an unfortunate aspect of a country of 300 million people, many of whom feel very, very strongly about things the government is doing. 

O‘DONNELL:  Jack Rice, a lot of Democrats thought that President Obama would get a bounce in job approval by passing the health care bill.  We have a poll coming out here saying his number is at an all-time low.  How do you read that? 

RICE:  I‘m not concerned by that.  I think most Americans are frustrated by where the economy is right now.  If you have lost your job, this isn‘t just a recession, this is a depression.  I think a lot of Americans are frustrated by that.  It‘s directly reflected in where they are, the chance that they either have a job or the fear they may lose that job.  That hasn‘t changed for a lot of people.  They do feel that frustration. 

I think, like you regularly see, it‘s reflected in how they feel about the government in general and the president in particular. 

O‘DONNELL:  Michael Frank, here‘s the one you‘ve been waiting for; 44 percent approve, 41 percent disapprove.  How did his number get that low? 

FRANK:  The president has usually polled somewhat higher on the personal approval ratings than he has on the questions relating to how he handles various issues.  If I‘m not mistaken, the same poll found only 34 percent approved of what he‘s been doing on health care.  I forget the exact numbers on the economy and other issues. 

But his numbers on specific policy issues are really in the tank.  I think it‘s more of an indication that the American people don‘t like the direction where he‘s trying to take the country and it‘s—he‘s going to have to do something to address that, and eventually those negatives will pull down his overall approval rating in time. 

O‘DONNELL:  All right.  We‘re going to have to leave it there. 

Thanks, Jack Rice and Michael Frank.

Coming up, for the second day in a row, the U.S. Navy took out a pirate ship in the Indian Ocean.  This comes one year after an American cargo ship captain was held hostage and beaten by AK-47 wielding Somalis.  He just told Matt Lauer what else they did to him.  That‘s next.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back.  As the Vatican commemorates Holy Week, it‘s also dealing with accusations that the pope, himself, was involved in covering up the sexual abuse of boys by members of the clergy.  Pope Benedict‘s personal preacher defended the Pontiff today, saying that the allegations reminded him of, quote, “the more shameful aspects of anti-Semitism.” 

OK.  Vatican, what are the non-shameful aspects of anti-Semitism?  Um?  Well, turns out the Vatican has already, no surprise, distanced itself from that statement.  And they have refrained from commenting on the abuse scandal.  However, Catholic leaders across Europe are speaking out.  NBC‘s Anne Thompson has more. 

(BEGIN VIDEOTAPE)

ANNE THOMPSON, NBC NEWS CORRESPONDENT:  As Pope Benedict performed the rituals of Holy Thursday, washing the feet of 12 priests as Jesus washed the feet of the Apostles at the last supper, and blessing holy oils, he made no mention of the crisis, accusations that church leaders, perhaps even the Pope, himself, did not do enough to protect children from sexually abusive priests. 

The Pope is the target of some victims‘ lawyers.  They want to question the Pontiff under oath about the alleged cover-up of predator priests.  The Vatican‘s top lawyer says, as a head of state, the Pope has immunity.  Legal experts say the attorneys would have to prove a chain of control from the Pope to the abusing priest. 

NICK CAFARDI, CIVIL & CRIMINAL ATTORNEY:  The Catholic church is not the monolith people think it is.  The Pope does not give orders to every parish priest. 

THOMPSON:  while the Pope remains silent this Holy Week, bishops around Europe are taking action.  In Germany, the church opened a hotline for abuse victims.  In Austria, Vienna‘s cardinal held a service for those abused by priests, letting them tell their stories from the altar.  And the cardinal, himself, asking for forgiveness on behalf of the church. 

Here in Rome, Vatican officials say the Pope‘s silence so far should not be interpreted as insensitivity.  They point to the letter he sent to the Irish church last month as evidence of his concern. 

FATHER FEDERICO LOMBARDI, VATICAN SPOKESMAN:  They are very, very profound and touching words for the victims, with a profound understanding of the suffering of their situations. 

THOMPSON:  For some, the Vatican‘s silence and seeming lack of action is difficult to understand. 

FATHER BOB BARRON, MUNDELEN SEMINARY, ILLINOIS:  There‘s probably this looking past each other.  They would look at us and say, there you are looking for some sound bite quickie answer.  And here we are trying to assess it very carefully.  We look at them and say, well, here‘s this crisis unfolding and you‘re not responding. 

(END VIDEOTAPE)

O‘DONNELL:  The Vatican may not be able to stay silent much longer.  Today, the chairman of the German Bishops Conference upped the pressure by stating the obvious, that the Catholic church has not done enough to help abuse victims because of, quote, “a falsely understood concern for the standing of the church.” 

Also today, the U.S. Navy destroyed its second pirate ship in two days in the Indian Ocean.  The USS Farragut tracked down and disabled a pirate skiff that had opened fire on a Sierra Leone flagged tanker. 

Just yesterday, a small group of pirates opened fire on the USS Nicholas in the same area.  And, again, the U.S. Navy took out the pirate skiff and the mother ship. 

All this action comes nearly a year to the day after the dramatic rescue of Captain Richard Phillips of the Maersk Alabama, who was being held hostage by Somali pirates.  NBC‘s Matt Lauer recently spoke to Captain Phillips about his ordeal. 

(BEGIN VIDEOTAPE)

MATT LAUER, “THE TODAY SHOW”:  so now you have the leader of the pirates under your control. 

RICHARD PHILLIPS, HELD HOSTAGE BY PIRATES:  Under the crew‘s control, not mine. 

LAUER:  But the other three pirates still have the bridge basically, and they‘re armed. 

PHILLIPS:  Yep. 

LAUER (voice-over):  On the bridge, though, the three remaining pirates were obviously getting frantic. 

UNIDENTIFIED MALE:  I‘m assuming they also believe that the navy was very close and was going to be there shortly. 

LAUER:  After negotiations via radio between the remaining three pirates and the crew members holding their leader, there was a deal.  The pirates would get the leader back if they got off the ship.  They‘d also get 30,000 dollars that Captain Phillips kept in the ship‘s safe. 

PHILLIPS:  They are winning in their eyes, because they were able to attack the ship.  They were able to get of the ship with some money.  And once they got off the ship I told them we would exchange hostages, but not while they‘re on the ship. 

LAUER:  The pirate skiff had drifted off and capsized.  Eventually, the Maersk Alabama‘s orange enclosed lifeboat was lowered by crew members who came out of hiding.  Then the captain and the three free pirates transferred to it.  The pirate leader was then freed and got into the lifeboat.  In exchange, the captain was supposed to be freed and get back up on the Maersk Alabama with his crew‘s assistance. 

(on camera):  So the moment comes.  Now the transfer is going to be made.  Your crew brings the leader, the pirate leader.  He gets on the lifeboat and you‘re supposed to get off.  It‘s like, you know, OK—

PHILLIPS:  I‘m actually driving the lifeboat.  They don‘t know how to drive. 

LAUER:  Right.  Then what happened? 

PHILLIPS:  Then he came into the boat.  And then he wanted to learn how to run the boat.  So I basically gave him little instructions, and then he started steering off the ship and then I said, OK, we‘re going back.  He said, nope, that‘s when I learned never trust a pirate. 

(END VIDEOTAPE)

O‘DONNELL:  I had the pleasure of meeting Captain Phillips and his wife about a year ago.  I can tell you, like every other brave person I‘ve ever met, he had no idea that anything he was doing was extraordinary, brave or heroic. 

Coming up on THE ED SHOW, the fate of Michael Steele as leader of the RNC.  You‘re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back.  It was a very bad week for Michael Steele and the RNC.  But a lot of Republicans are standing by the embattled chairman.  Just this morning, Minnesota Governor Tim Pawlenty voiced his support, despite the strip club incident. 

(BEGIN VIDEO CLIP)

GOV. TIM PAWLENTY ®, MINNESOTA:  Something that should not have happened.  It‘s on Michael‘s watch.  But he‘s taken responsibility for it.  Hopefully he can improve and continue on, or they can improve and continue on from here.  I believe they will. 

UNIDENTIFIED MALE:  He still has your support? 

PAWLENTY:  Yeah, he does. 

(END VIDEO CLIP)

O‘DONNELL:  Earlier this week, Tony Perkins, head of the Family Research Council, sent a letter to supporters telling them not to give directly to the RNC.  For more, let‘s bring in senior vice president of the Family Research Council, Tom McClusky.  What do you make of Republicans like Tim Pawlenty saying, it‘s OK with me, I have no problem with what happened there? 

TOM MCCLUSKY, FAMILY RESEARCH COUNCIL:  I mean, he‘s thinking of running for president one day.  Of course he‘s going to stay loyal to the party and the committee that he hopes one day to take over, if he were to become president. 

The problem with the strip club incident goes beyond the strip club incident.  It‘s emblematic of the two things that supporters of the Republican party want to see.  That‘s fiscal responsibility and moral responsibility.  And it just shows how the RNC has just failed under Michael Steele‘s leadership to provide either of those. 

O‘DONNELL:  Tom McClusky, why can‘t you accept it as this is just one mistake that one person working there made, and that mistake‘s never going to be made again? 

MCCLUSKY:  Well, because if you look at the FEC reports, if you look at all the spending that‘s been happening, especially over the last couple of years, you have airplanes, you have limo rides, you have advisers being paid hundreds of thousands of dollars to tell them things they should probably already know.  And they‘re not bringing in the money to replace all that money that‘s going out. 

This is—as I said, there‘s a pattern here.  It‘s not good for the RNC.  And it‘s certainly not good for people who give to the RNC, if they actually want to see conservatives win in this coming election. 

O‘DONNELL:  And quickly, Tom, before we go, if Michael Steele was forced out or resigned, would you change your attitude about contributing to the Republican party? 

MCCLUSKY:  I don‘t think they can fix the in-grown problems at the RNC until November.  I think people should donate to individual PACs that they believe hold up their values and also to individual candidates that they should support. 

O‘DONNELL:  Tom McClusky of the Family Research Council, thank you very much for joining us tonight. 

Tonight in our text survey, I asked, what individual issue will determine your vote in 2010?  Sixty one percent say the economy; 39 percent say health care.  That‘s going to be THE ED SHOW.  I‘m Lawrence O‘Donnell.  “HARDBALL” starts right now.

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

END   

Copyright 2010 Roll Call, Inc.  All materials herein are protected by

United States copyright law and may not be reproduced, distributed,

transmitted, displayed, published or broadcast without the prior written

permission of Roll Call. You may not alter or remove any trademark,

copyright or other notice from copies of the content.>

transcript

Discuss:

Discussion comments

,