updated 8/3/2010 12:17:22 PM ET 2010-08-03T16:17:22

Guests: Curtis Dubay, Debbie Stabenow, Eleanor Holmes Norton, Raul Grijalva, Bill Press, John Feehery, Steve McMahon, Eric Boehlert

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

These stories on the table and hitting “My Hot Buttons” this evening.

To quote the previous president, “Fool me once, I won‘t get fooled again.”  Really?

The Republicans think the American people are dumb enough to believe tax cuts for billionaires will lower the deficit.  My commentary on that, plus a fight with a righty in just a moment. 

Sarah Palin hits President Obama, I guess you could say, below the belt.  She wants the country to be English-only unless you‘re using Spanish to attack the president‘s manhood. 

Congressman Raul Grijalva responds at the bottom of the hour.  You won‘t want to miss it.

And right-wing blogger Andrew Breitbart, well, he‘s taken a rain check on an RNC fund-raising appearance with Michael Steele.  And I find it pretty amazing that the “party of no,” they just can‘t say no to this loser who‘s caused them all kinds of trouble. 

But this is the story that has me fired up to start off tonight.  The brain trust of the Republican Party, well they are masters of destruction, aren‘t they?  Their insistence on keeping the Bush tax cuts in place for the wealthiest Americans I find absolutely un-American and disgusting.  They‘ve already destroyed, let‘s see, the Clinton surplus, the American middle class, Iraq, and now they want to destroy the progress President Obama and his administration has made, along with the Democrats, to fix this entire mess. 

The wizard of obstruction, Senate Minority Leader Mitch McConnell, was on the attack on his home turf, “Fox News Sunday.” 

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL ®, MINORITY LEADER:  Look what they‘ve done.  They‘re running banks, insurance companies, car companies.  They‘ve nationalized the constituent loan business, taken over health care. 

We don‘t need the government taking equity positions, ownership positions in any more private sector businesses.  That‘s not the way out.  The way out is to kill this job-killing tax increase that‘s coming. 

(END VIDEO CLIP)

SCHULTZ:  Time out.  Did I hear him say take over the government? 

Mitch, do you watch the news?  UnitedHealthcare just recently announced these big profits they had in the second quarter.  Was that an Obama takeover? 

Now, do you want to give back these American jobs that were going to be lost had we not helped out the auto industry with a loan?  I mean, they just lie every program. 

Meanwhile, hell no.  House Minority Leader John Boehner has his sights set on the Speaker‘s gavel.  “The Tan Man” thinks he has the pulse of the people? 

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER ®, MINORITY LEADER:  I don‘t need to see GDP numbers or to listen to economists.  All I need to do is listen to the American people, because they‘ve been asking the question now for 18 months, where are the jobs?  And the fact is, the president‘s policies are killing job creation in America, killing our economy, and the American people know it. 

(END VIDEO CLIP)

SCHULTZ:  Time out number two. 

Mr. Boehner, I would love to attend one of your town hall meetings in Ohio, because you‘re going to have off until what, September 14th?  I‘d love to be there, and I won‘t say anything.  I‘ll just stand in the corner and you can explain to all these folks in Ohio who have lost jobs to overseas manufacturing, just explain to them that it‘s not your fault, that it‘s not the Republicans‘ fault that we‘ve will the outsourcing of jobs in this country.  Not at all.

No, no, no, no.  You see, Boehner and McConnell, they don‘t have a clue on what the American people want or need at this point.  Neither one of the official leaders of the Republican Party have offered any ideas on how to create jobs other than—what?  Extending the Bush tax cuts for the wealthiest Americans. 

The intellectual leader of the Republican Party, well, she put it like this --  

(BEGIN VIDEO CLIP)

SARAH PALIN ®, FMR. ALASKA GOVERNOR:  My palm isn‘t large enough to write—have written all my notes down on what this tax increase, what it will result in.  Let me just go through a couple of things that I want people to be aware of, because, you know, the spin coming from Gibbs and the White House, you‘re never going to get the truth out of their messaging. 

But Democrats are poised now to cause this largest tax increase in U.S. history.  It‘s a tax increase of $3.8 trillion over the next 10 years. 

CHRIS WALLACE, HOST, “FOX NEWS SUNDAY”:  Let me just ask you, what do have you written on your hand? 

PALIN:  $3.8 trillion next 10 years so I didn‘t say “3.7” and then get dinged by the liberals saying I didn‘t know what I was talking about. 

(END VIDEO CLIP)

SCHULTZ:  Did she say something about messaging and lying? 

Here‘s the problem—the Democrats don‘t have a message right now for some reason.  They need me to coach them on how to talk to the American people. 

That‘s right, I know exactly where the American people are on a lot of issues.  And sometimes I think this White House is just—they‘re just quiet because they really don‘t know what to say. 

Sarah, you and your hand thing, you know, you don‘t know what the hell you‘re talking about.  According to the Pew Economic Policy Group, an extension of all the Bush tax cuts will cost $3.1 trillion over the next 10 years. 

And let me make this as clear as I possibly can: tax cuts don‘t create jobs.  We have the Bush tax cuts right now, and we‘ve got 15 million American wage earners without a job.  A tax cut does nothing for the 1.4 million estimated 99ers that are out there who have already exhausted their benefits and have absolutely zero income. 

That‘s not only counting all of the family members affected by this—husbands, wives, kids—the Rochester Unemployment Examiner estimates 5.2 to 10.4 million people are impacted by all of this.  The wealthiest Americans have enjoyed the Bush tax cuts for last 10 years.  People making record profits are not creating jobs because they‘re—well, they feel uneasy about the future.

Hold it now. 

Tim Pawlenty, did you watch the show the other night?  Because I had Mort Zuckerman on here telling me that he‘s talked to business leaders and they just—they don‘t feel good about this economy.  They don‘t feel good.  They‘re not confident. 

So, Pawlenty takes what Mort Zuckerman says and goes down to Iowa this weekend and makes his run to a few places down there and says exactly that.  This is the narrative that the righties are putting out there: Nobody feels good about the economy. 

What people don‘t feel good about is they can‘t get their mitts on any money to invest in jobs.  The super rich in America haven‘t been asked to sacrifice anything.  Now it‘s time for the people with the money to show economic patriotism and create some jobs.  And if they can‘t do it, they don‘t deserve those tax cuts. 

The most twisted part about all of this is Democrats like Kent Conrad, chairman of the Senate Budget Committee, Evan Bayh, are more afraid of Sarah Palin‘s hand than they are of the Democratic base.  “I have it written on the hand.” 

Both of those senators want to extend the Bush tax cuts when we need revenue in the Treasury to reduce the deficit and we need small business loans to create jobs.  You know, if you want to say the Democratic ideals that have worked for generations like Social Security and Medicare, this is a real important midterm. 

House members are back in their home districts for the August recess. 

Democrats, don‘t get hoodwinked by all of this Tea Party garbage like you did last August.  The message needs to be crystal clear: Democrats are about jobs and Republicans are about tax cuts for the super rich. 

That‘s it.  It‘s an easy message.  It‘s an easy story to tell America. 

But it‘s about one other thing.  It‘s about guts.  Who has the guts to stand up and say, top two percent, wealthiest Americans, rich Americans, you need to pay more?  And if you don‘t pay more, we‘re going to be hurt bad (ph). 

And also, the bottom line is for the last 30 years, who‘s gotten all the breaks in this country?  Has it been the working folks who have been outsourced? 

Yes, Mr. Boehner, I realize you‘re not going to take me up on the offer to meet me in Ohio so we can kind of do a town hall meeting together, because I want to hear those people tell you that you have the right policies for America. 

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

Tonight‘s text survey question is: Do you think it the Republican Party is destroying America‘s middle class? 

Text “A” for yes, text “B” for no to 622639.  We‘ll bring you the results later on in the show. 

Joining us now is Curtis Dubay, senior policy analyst at the Heritage Foundation. 

Curtis and I obviously don‘t see eye to eye to this. 

The Obama administration does not want to get rid of all of the tax reform bill.  Is that correct? 

CURTIS DUBAY, SR. POLICY ANALYST, HERITAGE FOUNDATION:  Exactly, yes.  They want to extend all the 2001, 2003 tax cuts for everyone making under $250,000. 

SCHULTZ:  OK.  All right. 

They do want to roll it back the way they had it before, this law, for the top two percent.  Correct? 

DUBAY:  Yes. 

SCHULTZ:  OK. 

Now, Curtis, can you guarantee with any kind of study out there that the folks at the top two percent will definitely take that money from 35 to 39 percent, if that gap is still—if we keep it at 35, that they‘re going to take that money and go out and create jobs? 

DUBAY:  Absolutely.  Without a doubt. 

SCHULTZ:  Really?  Well, then where are they now? 

DUBAY:  They‘re out there.  I mean, there‘s a lot of capital on the sidelines right now because of the uncertainty that Washington is putting out there. 

Their taxes could be going up on January 1st.  They don‘t know what‘s going to happen with the Obamacare bill.  They don‘t know how their health care costs are going to change.  They don‘t know whether they‘re going to pay higher—

(CROSSTALK)

SCHULTZ:  OK.  So you‘re saying that the Bush tax cuts for the top two percent aren‘t working right now because that crowd—and I‘m in it—we‘re just nervous about the economy, we just don‘t feel good.  Is that it? 

DUBAY:  That‘s not what I said.  What I said is that they‘re concerned those taxes are going to be up in just a few short months. 

SCHULTZ:  So they‘re hanging on to their money and not creating jobs. 

This is about job creation, because the conservatives, Mr. Boehner, is out there saying that this is a job-killing measure.  Well, if it‘s a job-killing measure, how can you guarantee it will create jobs if we keep it? 

DUBAY:  It is absolutely a job-creating measure, because once they have that certainty that their taxes will be lower, they will go out and invest, they will go out and create jobs.  Small businesses who don‘t know what they‘re taxes are going to look like next year will start adding jobs. 

SCHULTZ:  OK.  So you‘re guaranteeing the audience tonight that if the Obama administration just leaves the Bush tax cuts the way they are, that we‘re going to create jobs, and it‘s just a feeling that is really causing all of this. 

DUBAY:  You have my 100 percent guarantee. 

SCHULTZ:  That is just—we should be doing the “C (ph) Block” with you tonight.  That is “Psycho Talk.”  

There is no way that any economist can come up here and say—or yourself—and say we‘re definitely going to have jobs created if President Obama comes out tonight and says we‘re going to leave it the way it is.  That is hogwash. 

Go ahead. 

DUBAY:  What I can tell you is that if we allow the taxes to go higher, the rates to go back to where they were, we will have fewer jobs than we would have had if we keep the tax rates right where they are right now. 

SCHULTZ:  You don‘t know that.  That‘s not—can you also—

DUBAY:  I‘m 100 percent certain. 

SCHULTZ:  No, no.  You just can‘t throw it out there. 

Can you guarantee to the audience tonight that there will be no more shipping of jobs overseas if the top two percent gets to keep their tax cuts the way the law is right now?  And it‘s going to expire.  You can‘t. 

DUBAY:  Well, those two things are unrelated.  I mean, that‘s a complete non sequitur.

SCHULTZ:  No it‘s not.

DUBAY:  There‘s no connection there.

(CROSSTALK)

SCHULTZ:  By your theory, they would have more money to create jobs when all they‘ve done over the last eight years is ship them overseas. 

DUBAY:  But that has—the tax rates have—I mean, there‘s a lot of factors that go into jobs going overseas.  Tax rates are one of them.  A high corporate income tax rate is another. 

We‘re not talking about the high corporate income tax rate.  If we lowered that tax rate, I could guarantee you that more jobs would stay here. 

SCHULTZ:  Well, we‘re not talking about that.  You‘re switching the subject on us. 

I‘m talking about the top two percent.  And when this law sunsets, you‘re saying that it‘s a job-killing measure, but you can‘t guarantee me that there‘s going to be jobs.  You say you can‘t, but you don‘t have any information to back any of that up. 

It‘s all in theory, Curtis.  And you know that.  There‘s got to be some truth in budgeting and all of that. 

DUBAY:  It‘s higher taxes means fewer jobs. 

SCHULTZ:  Wrong. 

DUBAY:  If you raise taxes, we‘re going to get fewer jobs, lower wages.  That‘s straight-up economic theory. 

SCHULTZ:  All right.  That‘s right.  You said it, theory.  Thank you. 

Good to have you with us, Curtis. 

The Senate is about to vote, so let me briefly bring in Michigan Senator Debbie Stabenow, member of the Senate Budget and Finance Committee. 

Let‘s throw the voodoo economics to the sideline.  We need more money in the Treasury, but, of course, you‘ve heard the conservatives say that we‘ve got to keep these policies, these tax laws in place, Senator to, create jobs. 

Do you agree with that? 

SEN. DEBBIE STABENOW (D), MICHIGAN:  Well, Ed, you hit the nail on the head.  And first of all, let me say that Democrats strongly support permanently extending the middle class tax cuts.  That‘s who need tax cuts. 

But as you said, the Bush economic policies that have been focused on only giving the big tax cuts to the top two percent didn‘t create jobs.  I wish they had, Ed.  I wish they had.

We lost a million jobs in the last decade in Michigan.  I wish the policies that they want to keep in place actually had worked.  They didn‘t work. 

We lost jobs.  And when you couple that with the Wall Street debacle, you‘ve got eight million jobs that we‘ve lost, manufacturing jobs going overseas.  The reality is, it didn‘t work. 

And so we‘re saying, you know what?  Let‘s focus on the middle class.  That‘s what we should be doing in this country.  We‘ll extend the middle class tax cuts, but the rest of this has just blown a hole in the deficit as wide as you can imagine, and it has not created jobs. 

SCHULTZ:  Senator, isn‘t it fraudulent for the Republicans to run around this country saying that they‘re going to create jobs if they keep this tax law in place? 

STABENOW:  Well, to me, I just shake my head, because when the economy‘s down, they say the tax cut for the wealthy will solve it.  When the economy is up, the tax cut for the wealthy will solve it. 

I think in their minds a tax cut for wealthiest Americans solves every problem.  The problem is we‘re losing the middle classes in this country.  We have lost jobs.  We are having to dig our way out of a hole that they created.

And we are now focused on working people in this country, on the middle class.  That‘s who we‘re fighting for.  And those are the folks that ought to be getting a tax cut. 

SCHULTZ:  No doubt about it.

Senator, good to have you with us tonight.  I appreciate your time.

And I do want to point out one other thing that the righties keep saying that‘s going to hurt small business.  Less than two percent of tax returns reporting small business income are filed by taxpayers in the top two percent brackets.  That from “The Washington Post.”

I don‘t know if they read that over at the Heritage Foundation. 

Coming up, racial tension may soon boil over in the House.  Congresswoman Maxine Waters is now facing an ethics investigation, joining Charlie Rangel and several other members of the Congressional Black Caucus.  This has got some wondering if race has something to do with it. 

We‘ll talk about it with CBC‘s congresswoman, Eleanor Holmes Norton. 

She‘ll join me in just a moment.

And don‘t let the breakup rumors fool you.  Righty propagandist artist, pusher Andrew Breitbart and Michael Steele are—well, they‘re still into each other.  Can‘t believe that the RNC is planning on making money off this guy. 

All that, plus Speaker Nancy Pelosi is blasting on Robert Gibbs, and my favorite “Fox & Friends” lands in the “Zone.” 

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.

Some serious stuff is going down in the House, and it‘s not good for the Democrats. 

Remember back in the day when the Democrats regained the majority and Nancy Pelosi famously promised that she was going to drain the swamp?  Well, back then, the American public was disgusted by Republican corruption and cronyism. 

Well, here we are, now on the cusp of another midterm election, and it‘s the Democrats who are bogged down in the ethical swamp. 

Congressman Charlie Rangel and now Congresswoman Maxine Waters are both facing serious ethics allegations.  And the Republicans, well, they are definitely seizing on it. 

Rangel has been trying to hang on, but his support has evaporated. 

Now President Obama is saying it‘s time for him to give it up. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  But these allegations are very troubling.  And, you know, he‘s somebody who‘s at the end of his career, 80 years old.  I‘m sure that what he wants is to be able to end his career with dignity, and my hope is that that happens. 

(END VIDEO CLIP)

SCHULTZ:  Rangel and Waters are two of several Congressional Black Caucus members who are facing investigation. 

Joining me now is Congresswoman Eleanor Holmes Norton, who represents the District of Columbia.  She is also a member of the Congressional Black Caucus. 

Congresswoman, appreciate your time. 

How did you feel about President Obama‘s response to that?  Is he throwing Charlie Rangel under the bus? 

REP. ELEANOR HOLMES NORTON (D), DISTRICT OF COLUMBIA:  I doubt it.  I hope that the president‘s doing what most Americans do, looked at what has come out.  And it‘s called a statement of allegations.  And if you believe that allegations should run their course for the average person, I guess you ought to believe that for the average member of Congress, as well. 

SCHULTZ:  Do you think Charles Rangel should step aside and not go through this trial? 

NORTON:  You just heard what I said.  These are allegations.  I‘m not telling any member or his constituents what to do.  That‘s not what we do in the House of Representatives. 

SCHULTZ:  Do you think the Congressional Black Caucus is being targeted? 

NORTON:  Oh, I don‘t have any—I don‘t have any notion that our own members of our own caucus are after us.  So, no, I‘m not into that camp.  I don‘t think that‘s the problem, nor do I know that there is an ethical problem here. 

I hope there is not.  All I know is that there are a statement of allegations.  The allegations have to be proved, and I think we ought to let that run its course. 

SCHULTZ:  Well, the investigation is taking it further than allegations.  These are charges. 

NORTON:  Well, these are charges, and charges are allegations, I‘ll remind you.  I‘m too much of a lawyer to regard charges as a conviction.  And I don‘t see how anyone can say anything more than that. 

SCHULTZ:  Politically, how damaging is this, in your opinion? 

NORTON:  I don‘t think this is going to have anything to do with us and keeping the House for three reasons.  Our members have protected themselves. 

We‘ve raised twice as much money—we, in the House of Representatives—as the Republicans have.  And if you put the House and the Senate together, they‘re still 30 percent behind us. 

Our members—for example, close to Washington, there are four really endangered Democrats if you look at them, except they‘ve all raised upwards of $1.3 million.  Their opponents—each of these four Democrats have opponents with less than $300,000 in the bank. 

But there‘s another reason why I think they‘re not going to lose their seats.  Many of them have protected themselves. 

Progressive Democrat, though I am, I understood why they voted against all the controversial issues.  They voted against health care, stimulus, TARP, you name it.  So they protected themselves. 

So, I say to their constituents, hey, what‘s to vote against? 

And the third reason is that the House is an imminently district-by-district place.  That‘s why so many of us get re-elected.  People pay attention to their districts, and that seems do it for us 99 percent of the time. 

SCHULTZ:  OK.  District by district, certainly that is the case.  But after the Speaker has gone on record about draining the swamp, and then now two of the most visible people in the Congress are facing ethics allegations, how can that not affect the election in some areas when you know the Republicans are going to be using it back home? 

NORTON:  Yes, and we‘re going to be fighting back. 

Look, I‘ve got to ask you, just what is it, 10 days after the Shirley Sherrod debacle?  You want to judge these members before this has run its course?  If we didn‘t learn anything from Shirley Sherrod, a terrible, terrible experience, it‘s that don‘t go around judging people until you hear what the evidence is. 

SCHULTZ:  Well, Congresswoman, if I may respectfully respond to that, personally, I think there‘s a hell of a difference between Andrew Breitbart and an ethics investigation in the Congress, because if the Ethics Committee is at the level of an Andrew Breitbart, we‘ve got serious problems in the Congress. 

NORTON:  The word is “if,” and the “if” is if these allegations prove to be true, then you ought to ask me the question you just asked me, not before. 

SCHULTZ:  Well, no, I think I can ask it because I think that Charlie Rangel -- 

NORTON:  No.  You‘re asking me to judge him before -- 

SCHULTZ:  -- Congresswoman Waters, they‘ve been around long enough to know right and wrong. 

Can we agree on that? 

NORTON:  No.  I don‘t know that right or wrong is involved here.  These are accusations.  And don‘t try to get me to tell these member who have been accused but not, in fact, convicted what they ought to do. 

If you are accused, I want you to know whether I get on television and tell you, you ought to therefore—you‘ve been convicted, which is what you‘re doing to them.  Look, I‘m a lawyer, a civil liberties lawyer, and I‘m not going to drop that when members of Congress are accused just as everyone else are. 

SCHULTZ:  Congresswoman, I think you‘ve given us a good sense on how strong the fight back is on behalf of these two public servants.  I appreciate your time tonight.  Thanks so much. 

NORTON:  Certainly. 

SCHULTZ:  Coming up, Fox “Psycho Talker” Steve Doocy says he wants to know if the Obama administration cares more about midterms than the victims of 9/11. 

Wow.  Really? 

He‘s in the “Zone.”  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, Fox & Friends‘ Steve Doocy.

Well, he‘s made the leap from goofy morning show sidekick to card-carrying Fox News nut job. 

Today, while attacking the Obama administration, he pulled out the 9/11 card. 

(BEGIN VIDEO CLIP)

STEVE DOOCY, “FOX & FRIENDS”:  The White House continues to delay a decision about the Gitmo five trial.  Where is it going to be?  So, does the administration care more about the midterms than the victims of September the 11th

(END VIDEO CLIP)

SCHULTZ:  That is gross.  Interesting that a Fox News guy is slamming the Democrats for worrying too much about the midterms when the Republicans have been putting the 2010 election ahead of the American people since before Obama was sworn in. 

And if the Obama administration had made a decision about where to hold the trial, you can bet that the kids at “Fox & Friends” would be throwing tantrums about that, as well.  Doocy‘s fixation on the midterms surfaced again when he was talking about immigration. 

(BEGIN VIDEO CLIP)

STEVE DOOCY, FOX NEWS ANCHOR:  The administration has promised 1200 National Guard troops would be at the border by August 1st, yesterday.  But only a small number have shown up.  The administration says, they need more time.  But will they wait until November just in time for those midterm elections.

(END VIDEO CLIP)

SCHULTZ:  Oh, it‘s all in preparation, isn‘t it?  Doocy should try reading his own company‘s website every once in awhile because a few weeks ago, foxnews.com, quote, “accurately reported the 1200 National Guard troops pledged weeks ago by President Obama will deploy to  the southwest border starting on August 1st.  And you just heard Doocy say a small number of troops have been deployed to the border.  So really the Obama administration is right on schedule.  But Doocy doesn‘t let facts get in the way of his unfair, unbalanced psycho talk. 

Coming up, the border battle has gone from hot to potentially deadly.  A gunshot fired through Arizona Congressman Raul Grijalva‘s office has got everybody on edge.  He‘ll join me in just a moment.  All that, plus FOX News might be linked to the Texas rangers and a republican congressman got busted for speeding and blamed Nancy Pelosi.  I‘ll write him up in the Playbook.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  The Battleground story tonight, Sarah Palin is hitting President Obama below the belt on immigration.  The same Sarah Palin who claimed to be a victim of sexism during the 2008 campaign has no problem making sexist remarks about the President of the United States.  Here she is at home on FOX News Sunday. 

(BEGIN VIDEO CLIP)

SARAH PALIN, POLITICAL NEWS COMMENTATOR:  Jan Brewer has the cojones that our president does not have to look out for all Americans, not just Arizonans but all-Americans in this desire of  ours to secure our borders and allow legal immigration to help build this country as was the purpose of immigration laws. 

(END VIDEO CLIP)

SCHULTZ:  Meanwhile, Arizona Senator Jon Kyl is not letting up on his hate baiting of immigrants.  Kyl was on CBS suggesting that maybe we need to change the constitution and strip the American babies of their citizenship. 

(BEGIN VIDEO CLIP)

SEN. JON KYL, ARIZONA:  Well, actually, there is a constitutional provision in the 14th amendment that has been interpreted to provide that if you are born in the United States, you are a citizen no matter what.  There are limitations on that, for example, for the children of diplomats and so on.  And so, the question is, if both parents are here illegally, should there be a reward for their illegal behavior?  And what I suggested my colleague Lindsey Graham from South Carolina suggested that we pursue that. 

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Arizona Congressman Raul Grijalva, a member of the Hispanic caucus.  Congressman, I‘d like you to respond to Senator Kyl‘s comments about rewarding illegal behavior and dealing with the 14th amendment.  

REP. RAUL GRIJALVA (D), ARIZONA:  Well, it‘s the same pattern, Ed.  It‘s the same pattern in Arizona.  Senator Kyl, Jan Brewer, Russell Pearce, Arpaio, McCain.  The whipping boy in their election in Arizona and they‘re trying to make it the whipping boy across the country are immigrants, irrespective of status, irrespective of condition, irrespective of anything else.  And so, as they escalate the fight, it becomes—they think it‘s to their advantage to make this the issue in the midterms and make it as ugly, as punitive, and as divisive as possible.  And because people are not reacting in the way they should to their diatribes, they think they have impunity to continue to say what they‘re saying.  

SCHULTZ:  Yes.  Aside from the fact that Sarah Palin referred to the president‘s anatomy about him not having I guess the guts to beef up the border and do what were supposed to do when it comes to defending the laws of this country, you‘re from Arizona.  You know this issue better than anyone on the face of the earth, in my opinion.  Has the Obama administration done more than the last administration when it comes to border security?

GRIJALVA:  Well, if you look at the tension, if you look at the amount of money, if you look at the amount of personnel, if you look at the $700 million that was just approved by Congress to assure that the National Guard was there and an additional number of border patrol agents, if you look at all that whole pattern, not only has he done more, he‘s done it into the regret of some people and not dealing with the whole issue of immigration reform.  But in terms of enforcement, in terms of concentration on the border, there‘s no question.  So people will continue to falsify the fact that he hasn‘t done anything but he has a lot.  

SCHULTZ:  Falsify the fact.  That‘s a key phrase because that‘s exactly what the republicans are doing right now.  They‘re making it sound like President Obama has no clue what‘s going on along the border.  Yet, he has thrown more resources at it in his 18 months as president than what President Bush did in his last four years of office.  Is that fair and correct statement, in your opinion?

GRIJALVA:  No.  That‘s not only fair and correct, it‘s factual. 

SCHULTZ:  OK.  Getting back to Senator Kyl for a moment, isn‘t it true, at least in my opinion it is, maybe you disagree here that the conservatives are addicted to cheap labor just like this country is addicted to oil.  And some things just aren‘t going to change.  And that they‘re really not serious about immigration reform.  It‘s a lot easier for them to attack the 14th amendment and what they call anchor babies.  What are your thoughts on that?

GRIJALVA:  Well, you saw it in the court decision in Arizona on 1070, the preliminary decision.  You‘re seeing again on the assault on the 14th amendment.  You know, as conservative as my colleagues are, I thought we had—I thought we agreed on something, and that is the sanctity of the constitution.  Obviously, for Mr. Kyl and others, the constitution is a malleable instrument.  They‘re not strict constitutionalists.  If it fits their political agenda, they‘ll go after the constitution.  

SCHULTZ:  And finally, congressman, obviously I want to ask you about the gunshot in your office.  With all the rhetoric that‘s taken place, your thoughts on that happening to your office. 

GRIJALVA:  Yes, it‘s disturbing on many levels both for security of the people that work there and the people that come to get help.  But what I find, Ed, to be very disturbing as well, I haven‘t heard a statement from Brewer, the governor, Pearce, Arpaio—Arpaio Junior in Pinal County, that sheriff.  I haven‘t heard a statement from Kyl or McCain or the rest of the republican delegation.  They don‘t have to agree with me on my position on 1070, but I wish they would agree with me that the condemnation of the acts of violence is not the way to solve this problem.  And I hope I hear from them soon.  

SCHULTZ:  Congressman, I appreciate your time tonight.  Thanks so much.  

GRIJALVA:  Thank you.  

SCHULTZ:  Now, let‘s get some rapid fire response from our panel on these stories tonight. 

President Obama needs to step up with a plan for the millions of 99ers out there, the long-term unemployed who have lost their jobless benefits and their families who are hurting.  If he doesn‘t act now, I think the democrats are going to pay a political price for it in November. 

President Obama has kept his campaign promise, after seven years, U.S.  combat operations in Iraq are coming to an end, 15,000 troops are coming home this month and all-American troops will be home at the end of next year.  

And the Chamber of Commerce has increased its spending by at least $40 million this year from 2008 in the election cycle.  It‘s throwing $75 million in the midterm elections.  A chunk of that money is going to Tea Party crazies. 

Joining us tonight, nationally syndicated radio talk show host Bill Press and also John Feehery, republican strategist.  Let‘s talk about President Obama if we can and helping out the 99ers.  Right now, Bill Press, there is nothing on the table for millions of Americans who were in this predicament.  What‘s the end game here?

BILL PRESS, NATIONALLY SYNDICATED RADIO TALK SHOW HOST:  Yes, Ed.  When you said Obama‘s got to get a plan, that‘s exactly what I was going to say.  There is no plan to help the 99ers.  And the democrats are missing the boat on this and the plan is—and you said it last week, Harry Reid has got to keep the senate in session until they pass that bill.  There is a bill to help the 99ers otherwise all during August, the early part of July, you‘re going to have 50,000 Americans more every week who are going to run out of their benefits.  I think it‘s inconsumable... 

(CROSSTALK)

SCHULTZ:  Does it hurt the democrats in the midterm, Bill?  Does it hurt the democrats in the midterm?

PRESS:  You bet.  And you know why, Ed because we‘re going to talk about the chamber later.  The democrats need the unions.  The unions cannot fire up their base if their base is unemployed.  This is jobs.  These are working Americans.  This is—the democrats have to do this.  

SCHULTZ:  John Feehery, these are a lot of Americans who are disgruntled and may sit this one out.  What do you think?

JOHN FEEHERY, REPUBLICAN STRATEGIST:  Well, imagine, a lot of them will vote against the Obama administration, Ed.  I‘ve been on the show many times, I‘ve said for the last several months that jobs is the number one issue, jobs of the 99ers.  There‘s up close of 20 percent of the American people are underemployed.  They don‘t have—they‘re not working as hard as they want.  They want more time, they want more pay.  And this economy is just not going anywhere.  

SCHULTZ:  John, I‘m going to counter you on this.  It‘s your party.  

FEEHERY:  My party is not in control of anything.  

SCHULTZ:  The Republican Party and you are a republican, come on now.  

FEEHERY:  Of course I‘m a republican.  

SCHULTZ:  OK.  But the Republican Party has said, no to the jobs bill and just last week they said, no to the small business help that would go to these community banks under assets under $10 billion.  

PRESS:  And the unemployment benefits extension.  

FEEHERY:  Ed and Bill, let me say to both of you, the republicans don‘t have any power in the Congress.  This is why we need a Republican Party.

(CROSSTALK)

SCHULTZ:  But they have power to obstruct. 

PRESS:  They can block, they can block votes, John, they can block votes and they have.  

FEEHERY:  These are jobs, we need jobs!

SCHULTZ:  No, I‘m not disagreeing with you on jobs.  I‘m not at all but you‘ve got to have access to capital.  The fact is that the republicans do have.  

FEEHERY:  We need a pro growth agenda.  

(CROSSTALK)

SCHULTZ:  They have power to obstruct and they‘ve done a hell of job of it.  

(CROSSTALK)

PRESS:  If the republicans are for jobs, why do they vote against them?  That‘s the question.  

SCHULTZ:  Exactly.  All right.  The $40 million, the Chamber of Commerce, Bill is this just really an offshoot and obviously a product of the Supreme Court ruling?

PRESS:  You know, yes, of course.  This is citizens united come back to haunt us, Ed.  But look, I‘ve been in politics a long time and every one of the 50 states and here in the Nation‘s Capital, the Chamber of Commerce is nothing but an arm of the Republican Party.  Always has been.  So they‘re up to $75 million.  But I got to tell you, this had better wake up the democrats.  They‘re going to have to get out there and raise money and work like hell.  Otherwise, they could lose everything they gained this time around in just two years.  

SCHULTZ:  John, your thoughts.  The chamber‘s on a roll.  

FEEHERY:  Everything they‘ve gained.  We‘re talking about jobs.  How can you be—jobs could be against the Chamber of Commerce?  They create the jobs.  You know what?  I‘ll tell you what.    

PRESS:  They do not create the jobs.

FEEHERY:  That‘s not enough money.  They hope the Chamber of Commerce,

the business community raises more money because we‘ve got to get these

democrats out and get jobs in the place.  We need private sector—could

job growth  

PRESS:  Ed, you know what this is?  This is BP.  They don‘t want any more regulations.  This is Massey Energy, they don‘t want anymore coal safety.  This is Citigroup.  This is Goldman Sachs.  They want to go back to the wild days of Wall Street.  This is Aetna and Citigroup.  They want to repeal health care.  This is back to Bush and Cheney.  That‘s what this is.  

SCHULTZ:  Bill Press, John Feehery, always a pleasure.  Great to have you guys on. 

Coming up, there appears to be some bad blood between Speaker Pelosi and the administration.  She can‘t seem to bring herself to even call Robert Gibbs by name.  I‘ll show you the tape in the moment.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And it‘s not too late to let us know what you think, tonight‘s text survey question is, do you think the Republican Party is destroying America‘s middle class?  Text A for yes, text B for no to 622639.  Results coming up.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  And in my Playbook tonight.  Speaker Pelosi still isn‘t ready to make nice with White House Press Secretary Robert Gibbs over his remarks that republicans could win control of the House in November.  Yesterday, she was again asked about his comments and she couldn‘t even bring herself to say his name.  

(BEGIN VIDEO CLIP)

CHRISTIANE AMANPOUR ABC NEWS ANCHOR:  What did it make you feel then when the president‘s own spokesman said that you might lose the majority?

NANY PELOSI, SPEAKER OF THE HOUSE:  Well, you know, with all due respect.  

AMANPOUR:  How did you feel about it?  

PELOSI:  I don‘t spend a whole lot of time thinking about what the president‘s employees say about one thing or not.  We feel very confident about where we are, whether that‘s well-known to that gentleman or not.  

(END VIDEO CLIP)

SCHULTZ:  The speaker insists that she‘s not at all nervous about the midterms saying her party is in good shape heading into November. 

For more, let‘s bring in Democratic Strategist Steve McMahon.  Steve, good to have with us tonight.  Your take on this.  Is there a scrap going on between the two?  What do you think of that?

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  Well, whether that‘s known to that gentleman or not, I‘d say there‘s a little bit of a scrap going on here.  But frankly, I don‘t think that Robert Gibbs said what was characterized that he said.  He didn‘t say that the democrats would lose the House.  He said it‘s possible.  And I think what he‘s reacting to is polling data at the time and what Speaker Pelosi is talking about is 90 days to go until the election.  The democratic base is coming back in the fold.  Democratic support is firming up.  And democrats have more money and a better message than republicans.  So, I think, you know, Robert Gibbs probably was correct the day that he said that.  And the speaker is correct about what we are looking at in the next 90 days.  

SCHULTZ:  Is Speaker Pelosi in a tough spot after saying she‘s going to drain the swamp and now two very visible democrats are in question?

MCMAHON:  Yes, she is in a tough spot.  And you know, I think that it‘s made even more difficult by the fact that those two members are African-American and there‘s a congressional black caucus watching very closely what everybody, including the president says on these two members. 

SCHULTZ:  Well, the president pretty much told Charlie Rangel to go home in a very classy manner.  What do you think?  

MCMAHON:  Yes.  Well, I think the president is in a tough spot too.  I mean, the fact is Charlie Rangel has been there for a very long time.  These are very serious allegations.  But it‘s also true that everybody is entitled to a presumption of innocence even if there is an election coming up.  Look, if Charlie Rangel broke the congressional ethics rules, the trial will show that.  The punishment will reflect it and he‘ll pay the price.  And frankly, I think that 40 years in Congress is sufficient for a guy like Charlie Rangel to deserve a trial.  

SCHULTZ:  And quickly, your take on corporations especially the Chamber of Commerce just hammering everybody when it comes to raising money.  Outdistancing, what was going on in 2008 which was a record year.  What do you think?

MCMAHON:  Well, I think you‘re seeing the effect of citizens united.  You know, there aren‘t very many places anymore where you can make contributions and have those contributions spent on political campaigns without anybody knowing who made them or why. 

SCHULTZ:  Yes.

MCMAHON:  And the chamber is one of the places left where they can do that.  And, you know, I‘m not surprised.  And I think that, you know, it‘s going to be a very, very aggressive election season.  I think democrats are going to be pretty well funded on their side.  I mean, the democratic congressional campaign committee just laid down $50 million to defend incumbents.  The republicans don‘t have anything like that.  So, it‘s going to be expensive on both sides but the chambers.

SCHULTZ:  Steve McMahon.  Great to have you.  You bet. 

MCMAHON:  Thank you.

SCHULTZ:  Thanks for being with us tonight.  

A couple of final pages in the Playbook tonight, Rupert Murdoch‘s News Corp. might buy the Texas Rangers, the Rangers formerly owned by “W.”  They‘re up for bankruptcy auction.  The big surprise there, huh?  The opening bid is starting at $307 million.  And watch out, Snooki. 

The five-foot sand shark came ashore in Seaside Park, New Jersey.  The tide carried it back out to the sea but the beach was closed for a short time.  It would get me out of the water.  It must have been trying to get in some of that Jersey Shore action, right? 

And in Rhode Island, a fisherman snag the yellow lobster.  Experts say it‘s only about one in 30 million lobsters end up being yellow.  Nobody had the catch for dinner.  It‘s going on display in Newport, Rhode Island.  Pretty cool, huh? 

And Congressman Dan Lungren of California had cut a radio interview short because he got pulled over for speeding.  Lungren was on a Sacramento radio station to talk about Megan‘s law when the police officer pulled him over.  The officer did not issue a ticket but gave him a warning.  And the righties always find a way to blame the democrats.  His campaign adviser said in a statement, “He was in a hurry to get back to the capitol to save his constituents, to serve his constituents and save his constituents, should I say, from Nancy Pelosi.”  The word is save, from Pelosi?

Finally, I‘m proud that we‘re taking THE ED SHOW on the road to help some hardworking Americans in need, this Wednesday, August 4th, I‘ll be broadcasting from a free health care clinic in Washington, D.C.  You can register for care or donate your time by going to freeclinics.us.  Also, we‘re heading down to New Orleans for a free health care clinic at the Convention Center at the end of the month.  Your donations and all kinds of volunteers are certainly needed. 

Coming up, some of us thought the RNC finally came to its senses and split from this pathetic blogger Andrew Breitbart.  But it was a false alarm.  He still has life and he‘s still the life of their party.  That‘s next.  Stay with us.    

(COMMERCIAL BREAK)

SCHULTZ:  And finally tonight, the Republican Party still wants to hang out with Andrew Breitbart even after his debacle-starring role in the Shirley Sherrod mess few weeks ago.  Breitbart was set to appear at the big RNC fund-raiser in California this month but the fundraiser has been mysteriously postponed until an unspecified date in September.  But a spokesman insists Breitbart is still invited. 

Joining me now is Eric Boehlert, senior fellow at “Media Matters.”  Eric, what do you make of this?  Are they just waiting for the dust to settle or they‘re going to use this guy?  What do you think?

ERIC BOEHLERT, “MEDIA MATTERS” SENIOR FELLOW:  I think they‘ll probably use him.  I mean, they were quite clear in their comments, they still want Andrew Breitbart aboard.  I mean, if there‘s anyone, you know, politicians should be distancing themselves these days, it‘s someone as discredited as Andrew Breitbart.  But the Republican Party is in a bind because they are attached to the hip to this, you know, discredited right wing media.  FOX News is the opposition party in this country.  We‘ve got people like Rush Limbaugh and Andrew Breitbart, you know, at the forefront, they‘re calling the shots and the Republican Party has to play catch-up, has to respond.  And there seems to be very little adult supervision of the conservative—in the conservative movement these days.  And so, they‘re left to play follow with the Andrew Breitbart.  

SCHULTZ:  So, they got to use him.  

BOEHLERT:  Yes, they are.  Because Rush Limbaugh loves him and he‘s saying, he did everything right with Shirley Sherrod and all the bloggers here in this corner and so they can‘t cut him loose.  And here it is, this incredibly discredited person and republican politicians still don‘t have the nerve to say, you know what, I don‘t want to be on the podium with that guy.  

SCHULTZ:  And how do you think FOX News will handle this guy in the future?  He‘s going to come up with more stuff.  You know that.  

BOEHLERT:  Sure.  He‘ll come up with some new gotcha, some video gotcha.  I think FOX News is going to think two or three times before they put him on primetime and before they start pedaling his stuff.  I think they‘re going to say, you know, prove it this time.  They had egg on their face, there are still embarrassed by it.  And think, like a lot of conservatives, they‘re going to say, OK, prove it this time.  But again, the Republican Party still does not have the backbone to stand up and say, we don‘t want any part of this.  And he‘s still on their invite list. 

SCHULTZ:  Eric, good to have you with us.  Great work.  Thanks so much for following these nut jobs that are out there.  You guys do it real well.

BOEHLERT:  Thanks.  

SCHULTZ:  Coming up in our text survey tonight, I asked you, do you think the Republican Party is destroying the American middle class?  Eighty three percent of you said yes, 17 percent said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information on THE ED SHOW, go to ed.msnbc.com or check out my radio website, wegoted.com.  You can listen to THE ED SHOW radio show noon to 3:00 Eastern Time, Monday through Friday on XM 167 and excellent radio stations across the country.  “HARDBALL” with Chris Matthews starts right now.  We‘ll see you tomorrow night. 

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