updated 12/7/2010 6:17:42 PM ET 2010-12-07T23:17:42

Guests: Bernie Sanders, Jonathan Alter, Keith Ellison, Jonathan Alter,

Michael Medved

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

These stories are hitting “My Hot Buttons” and on the table at this hour.  And it‘s a big one. 

Breaking news tonight.  President Obama is about to make an announcement about tax cuts.  I‘m concerned that he‘s waved the white flag of compromise.  Senator Menendez of New Jersey hit the nail on the head when he said trying to cut a deal with the Republicans is almost like negotiating with terrorists. 

I‘ll bring you the president‘s speech live here on MSNBC and get reaction from Senator Bernie Sanders.  And the chairman of the Progressive Caucus, Congressman Keith Ellison, will react. 

Governor Chris Christie of New Jersey, his war on teachers, it‘s getting uglier.  He just verbally destroyed and completely humiliated another teacher in public.  Nice guy. 

I‘ll show you the shocking tape, and the top educator in New Jersey will teach him a lesson coming up later. 

And the Tea Party has got a dandy of an idea for “Caribou Barbie.”  They want our favorite northern “Psycho Talker” to take over the RNC.  It sounds like a harebrained scheme to me, but it might be brain surgery after all. 

We‘ve got that coming up in “The Playbook,” so stay with us. 

This is the story that is breaking.  It‘s the story that has me fired up tonight. 

At this hour, the presidency of Barack Obama I think is at a crossroads.  The majority of American people want tax cuts for those who are earn $250,000 a year to expire.  Now, the majority of the House, the majority of the Senate voted for bills which do just that, but once again, Mitch McConnell and the millionaire Republican obstructionists in the Senate blocked what the American people want over the weekend. 

Senator Bob Menendez hammered the Republicans for their tactics: “Do you allow yourself to be held hostage and get something done for the sake of getting something done, when in fact it might be perverse in its ultimate results?”

Well said, Senator. 

It‘s almost like the question of, do you negotiate with terrorists? 

Wow. 

Menendez, I think, is spot on.  You can‘t negotiate with terrorists or Republicans these days.  They‘ve been on an economic jihad against the middle class for decades, and they‘re determined to blow up any vote the Democrats put on the table. 

Now, the Republicans didn‘t even take this vote seriously.  Here‘s McConnell, calling the vote a waste of time on Saturday. 

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL ®, MINORITY LEADER:  Meaningless show votes and anti-business rhetoric won‘t do anything to make the situation better.  This Saturday‘s session is a total waste of the American people‘s time.  One of the votes we held today was opposed by every single Republican and many Democrats. 

(END VIDEO CLIP)

SCHULTZ:  No, it wasn‘t many Democrats.  It was a handful. 

So, think about this—capture this, folks.  It‘s a waste of time to work on a Saturday if you‘re a United States senator.  It‘s a waste of time to work on a Saturday and vote to get middle class tax cuts done. 

Now, after Saturday‘s vote, the tax cut issue is now squarely on the shoulders of President Obama.  He‘ll make an announcement here shortly. 

This is how he responded immediately after the Republicans blocked the bills on Saturday. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  We need to redouble our efforts to resolve this impasse in the next few days to give the American people the peace of mind that their taxes will not go up on January 1st.  That will require some compromise, but I‘m confident that we can get it done. 

(END VIDEO CLIP)

SCHULTZ:  Require compromise.  On what? 

Folks, this is dangerous territory, it‘s a slippery slope for the Democrats, and especially this president.  Republicans have no idea what the word “compromise” means, they only understand power. 

Jim DeMint, you know, I think actually the senator from South Carolina had it right about a year and a half ago about Waterloo.  No, no, no, no.  This tax cut issue is President Obama‘s Waterloo.  It‘s bad medicine. 

The president can‘t turn his back on the base on this issue.  Look at the numbers.  A CBS poll shows 84 percent of Democrats, 64 percent of Independents, and 52 percent of Republican voters say that we should only renew tax cuts for those making below $250,000 or let them expire altogether. 

Folks, here‘s the straight talk.  You can‘t claim to be a progressive president unless you are willing to address the income disparity in this country. 

President Obama is about to come out and speak to the American people, and he‘s about to sign on to the exact same tax policy that drove this country into the ditch.  Now, you tell me where the victory is on this. 

Extending the Bush tax rate means more financial misery and a real denial of what this country needs.  This country needs leadership, it needs tough talk and tough decisions. 

The bottom line is, we‘re just a bunch of Americans in this generation.  We don‘t want to pay for anything. 

No, we do.  The majority of the American people want to do something about these numbers, but we‘ve got elected officials who are too afraid to do it. 

Now, the reports are out there tonight.  If you‘re looking for the big deal, the president is going to be talking here in just a moment that it‘s going to be a two-year extension of the Bush tax rate.  It‘s going to be a 13-year extension of unemployment benefits, but it‘s not clear whether this is going to include the 99ers or not. 

And, of course, there‘s going to be another bone thrown in there, a two percent payroll tax credit.  That, of course, is reportedly going to cost another $120 billion. 

And, oh, let‘s not forget the estate tax.  The Republicans are hot on the trail of that.  Well, the cap is up to $5 million on this deal.  It‘s a two-year deal, and the rate stay is going to be at 35 percent. 

And, of course, there‘s going to be a $1,000 child tax credit.  They got that bone thrown back in there.  And 100 percent write-off on outdated equipment in the construction industry. 

Are there some good things here?  Sure.  Absolutely. 

Is it nice that you‘re going to see a little bit more money in your check with this payroll tax credit?  OK.  But are the numbers going to go this way or are they going to go this way? 

Are we going to make our treasury healthier because of this?  No. 

We‘re not. 

What we‘re going to do is capitulate to the right wing in this country, and we‘re going to make unemployed people in this country a bargaining chip.  So if you‘re unemployed at home tonight, and you‘re unemployed, you know, you‘re wondering, what the heck‘s going to happen?  How does it feel to be a bargaining chip?  How does it feel to know that you are part of a discussion that insurance that you paid into is now a bargaining chip so rich people in this country can get the tax cut that they are so thirsty for? 

Just Keep one thing in mind.  If you take nothing out of this broadcast tonight, just know this—if we allow the Bush tax cuts to expire, billionaires are still going to be billionaires.  Millionaires are still going to be millionaires.  The economy is only going to go into the tank if we want it to go in the tank. 

This does nothing to address the private credit markets that‘s holding back business in this country.  And I can tell you this right now, folks, this is a slippery slope, a real slippery slope for President Obama. 

Joining me now is the firebrand Independent, Senator Bernie Sanders. 

Senator, sketchy details on what they have agreed to.  You heard what I said. 

Is this a deal with the devil financially?  What do you think? 

SEN. BERNIE SANDERS (I), VERMONT:  I think it is an absolute disaster and an insult to the vast majority of the American people to be talking about giving huge tax breaks to the wealthiest people in this country, driving up our deficit, and increasing the growing gap between the very rich and everybody else.  Millionaires and billionaires do not need huge tax deductions.  That‘s the simple truth. 

And the fact of the matter is, despite Republican rhetoric, if we‘re serious about creating jobs in this country, which should be our main priority, that‘s one of the worst ways to do it.  Much better to take that money, invest in our roads, bridges, railroad systems, infrastructure.  You create jobs doing that.

SCHULTZ:  Senator, how do you feel about the unemployed in this country being held hostage in these negotiations?  Because that‘s exactly what it was.  We‘ve got to call it for what it is.  It was a bargaining chip on the table after Americans have played into unemployment insurance.

SANDERS:  Ed, this is the issue—our Republican friends have got to be held accountable.  This issue is the insult, the outrage that they want tax breaks for billionaires, but they can‘t in their heart come up with extending unemployment compensation so that millions of families in this country will have a modicum of security.  That‘s an outrage.

I believe politically we can rally the American people around that cause.  We‘re right.  We‘re talking about social justice.  They‘re talking about more tax breaks for billionaires who don‘t need it. 

SCHULTZ:  This is against the will of the American people.  All the polling that‘s out there, this is against the majority votes in the House, this is against the majority of votes in the Senate.  There were 53 votes on the Senate floor on Saturday. 

Is President Obama playing with the future of his presidency, in your opinion? 

SANDERS:  Not only is this bad public policy, driving up the deficit, increasing the growing gap between the rich and everybody else, I think it is bad politics.  It‘s bad politics in the sense of who is going to believe the president or anybody who votes for this in the future when you campaign for years against Bush‘s economic policy and then you say, oh, by the way, that‘s what I‘m voting for?  I‘m voting for tax breaks for the rich. 

And, by the way, if it turns out in this deal to be two years, you can bet that that‘s just the beginning.  It will be extended beyond that. 

So I think for a Democratic president, Democratic House, Democratic Senate to be following the Bush economic philosophy of tax breaks to millionaires and billionaires is absolutely wrong public policy, absolutely wrong politically.  And I have got to tell you, I will do whatever I can to see that 60 votes are not acquired to pass this piece of legislation. 

SCHULTZ:  Will you filibuster this? 

SANDERS:  I will do whatever I can on this.  This is a very, very bad agreement.

SCHULTZ:  So the two-year extension of the Bush tax cuts, the 13 months of unemployment, that‘s the reported meat of the deal.  You‘re telling us tonight that you will do everything you can to stop this deal?

SANDERS:  I will.

SCHULTZ:  And this, of course, would push it into the next session of the Congress and we would go back to the old right.  That‘s what you would take right now, Senator?

SANDERS:  I believe, Ed, that we have the vast majority of the American people on our side.  I think we‘ve got to hold tough on this, hold firm on this, and not concede to Republicans, who, as you indicated, have absolutely no inclination for compromise.  They want it all for their rich friends.

SCHULTZ:  Senator, good to have you with us tonight.  Thanks for speaking up.

SANDERS:  Thank you.

SCHULTZ:  For more, let‘s bring in Jonathan Alter, national affairs columnist for “Newsweek” and an MSNBC political analyst.  He‘s also author of the book “The Promise: President Obama, Year One.”

Jonathan—

JONATHAN ALTER, MSNBC POLITICAL ANALYST:  Hi, Ed.

SCHULTZ:  -- this extension, why would the president do this?

ALTER:  You know, it‘s the political reality that he thinks he‘s facing.  I basically agree with Bernie Sanders on this.  I think it‘s crazy and really, really bad politics and bad policy.

But you could argue that the politics on this were conditioned by this election, that the American people were given a chance to speak, and whatever the polls are saying—and the polls show people feel that extending the tax cuts for the wealthy is a bad idea—they had an opportunity to send a message in November, and they didn‘t send it, Ed.  So it puts the president in a really hard position.

So the question then becomes, well, what should progressives do?  Should they shake their fist at the president?  OK.  Fine.  I can understand why people are frustrated and want to do this, but what they really need to do is organize politically in the states they live in and let their elected representatives of both parties know how they feel about this and begin to make them feel the heat. 

This is a political struggle.  It‘s not a question of, oh, we want to see the president land a punch.  That‘s all just jabbering.  This is about politics, organizing politically. 

SCHULTZ:  I don‘t disagree with you on that.  But this is not jabbering.  This is bigger than the stimulus package. 

This is unbelievably—I mean, the Republicans have gone around the country blaming the stimulus package on the Obama administration, saying that he has signatured all these record deficits, and now they come back—

ALTER:  Which is totally untrue.  Totally untrue.

SCHULTZ:  It is untrue, because it was before he was in.  But this is the narrative they created, said that he wasn‘t concerned about the national debt and foreign debt and crisis and all that. 

And so now they come back and usher in their tax cuts.  And look what it‘s going to do.  This is going to ad $700 billion and beyond. 

I mean, this—I can‘t believe that the president would not go with -

stand up and say, this is what the American people want and I‘m going to draw my line in the sand. 

ALTER:  Here‘s the problem, why he didn‘t do this, Ed, is that if all of the tax cuts expire, which the Republicans have the votes to make happen, have a brinkmanship situation, then the vast majority of Americans, 98 percent, get a tax increase after January 1st.  And they don‘t have an extension of unemployment benefits.  So he has to look not just to the politics of this, but who‘s going to get hurt if there‘s a stalemate? 

SCHULTZ:  The country‘s going to get hurt. 

ALTER:  No, no, no.  But forget about the long-term question of, you know, the country getting hurt by these ridiculous tax cuts.  In the short term, who‘s going to get hurt?  People who are unemployed, if they don‘t extend the unemployment benefits, which the Republicans shamelessly don‘t want to do, and everybody else?  Ninety-eight percent if the middle class tax cuts also expire on January 1st

SCHULTZ:  I have to say, if this is going to hurt so many people—

ALTER:  Right. 

SCHULTZ:  -- then the Democrats ought to be able to go back and make the case that it‘s hurting people and have it stand on its own merits. 

ALTER:  No, no, but what‘s going to hurt them is if there‘s a—the immediate political problem is what‘s going to hurt them is if there‘s a stalemate, and we get past January 1st, then everybody gets a tax increase.  That‘s why the pressure is on right now to try to do something about this. 

SCHULTZ:  Jonathan, I‘ve got to run.  I got you.  Thanks, Jonathan. 

Good to have you with us tonight.  Thanks so much. 

ALTER:  Yes.  Thanks, Ed.

SCHULTZ:  Coming up, the big bully Chris Christie in New Jersey, well, he‘s back at it again.  He just got caught on tape humiliating a hardworking American.  I‘m not going to let him get away with it. 

The New Jersey Teacher of the Year is going to rip into this one at the bottom of the hour.  You won‘t want to miss it. 

Michael Steele better watch his back.  The Tea Party is plotting an attack, and Sarah Palin‘s the weapon of choice.  Sounds ugly, doesn‘t it? 

Plus, Newt Gingrich.  Well, he goes off on the rails.  “The Maverick” gets called a weasel.  And Shooter‘s daughter lands in “The Zone” tonight. 

And we‘re waiting for President Obama‘s statement on tax cuts.  We‘ll bring it to you as soon as it happens live, right here on MSNBC. 

You‘re watching THE ED SHOW on the place for politics, MSNBC.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW, and thanks for watching tonight.

President Obama went behind closed doors, and it looks like he‘s about to emerge with a compromise of the Bush tax cuts.  And Reuters is reporting that Democrats have told the president that they‘ll go along with it.

Joining us now is Congressman from Minnesota Keith Ellison.  He is the co-chair of the Progressive Caucus. 

Congressman, good to have you with us tonight.  What, if anything, can

--

REP. KEITH ELLISON (D), CO-CHAIRMAN, PROGRESSIVE CAUCUS:  Good to be here. 

SCHULTZ:  You bet.  What, if anything, can you tell us about this reported deal that‘s been made, a two-year extension on the Bush tax cuts, 13 months unemployment insurance extended, two percent payroll tax credit?  What do you know? 

ELLISON:  Well, you know, Ed, we‘re all waiting for the information to come out as has been reported in the press.  Not every Democrat was in that meeting.  I wasn‘t in there. 

But I can tell you this, that, you know, the fact is that if the Republicans want to stand in the way of a middle class tax cut, if they want to hold it hostage so that the richest Americans can get a tax cut, I mean, I think that‘s something we should stand up and fight for.  I mean, we‘ve got to stand and fight for the middle class. 

Look, $700 billion this is going to add to the deficit is an expense Americans should not have to bear, particularly when, you know, $700 billion could probably send every kid to college for the year.  Seven hundred billion dollars could probably pay for universal preschool education.  Seven hundred billion dollars could do a lot of infrastructure work and put Americans back to work. 

Why are we giving it to the most privileged Americans and why aren‘t we asking everybody to do their fair share in this economy? 

SCHULTZ:  Congressman, do you think this weakens President Obama and the Democrats?  I mean, I have been inundated with e-mail today and phone calls from folks around the country who think that this is total capitulation, that the very tax policy that took us into this ditch is exactly what President Obama and the Democrats are ready to sign on to. 

ELLISON:  Well, let me say this—you know, it is the Republicans who caused this situation.  You could say that the Democrats could have played it better, but if you beat on the Democratic president long enough, you‘re going to end up with a Republican president.  And then you‘re going to see real pain. 

So that‘s what I say to my progressive friends out there, that we have to encourage the president to stand up for the values we stand up for.  And that means—

SCHULTZ:  But he‘s not standing up.  That‘s just the whole thing of it.  There‘s a lot of Americans out there that think that President Obama has caved in on this.  And the Republicans, on paper, as it‘s been reported, are getting everything they want.  They‘re not giving up anything. 

ELLISON:  Well you know, what they should be giving up a whole lot of things.  And I believe that the fact is we have got to stand and fight. 

But, Ed, I‘m not going to be the one to help Republicans get rid of Barack Obama, OK?  We have got to be the ones—we have got to remember that the fact is, is that it is the Republicans who stood in the way of middle-class tax cuts.  That‘s who did that. 

It‘s the Republicans who demanded that something like unemployment insurance have to be paid for while $700 billion in tax cuts for the rich would not be paid for.  That‘s where the blame lies.  That‘s where I‘m going to pin it. 

And so we have got to understand something, that, look, you know, when Democrats fight and don‘t win, the fact is, is that it‘s Republicans who are trying to impose a lot of pain on the middle class.  And I‘m not going to stand by and act like it‘s the Democrats‘ fault. 

I‘m going to encourage them to stick and to stay, to stand up and to keep on fighting back.  I‘d like to see the number—the people who want to stand—I‘d like to see the people who want to send calls out to Obama also send them to Republicans as well.  Send them to Mitch McConnell, send them out to John Boehner, send them out to the people who are saying that unless the very rich get a lot, the middle class get absolutely nothing. 

SCHULTZ:  Congressman—

ELLISON:  Keep the focus on where it lies. 

SCHULTZ:  Congressman Keith Ellison of Minnesota. 

Good to have you with us tonight.  I appreciate you spending time with us. 

ELLISON:  Any time.

SCHULTZ:  You bet.

We‘re awaiting the president of the United States.  He‘s going to be speaking on the proposed and reported deal that has been cut.  And we‘ll take those statements live here on MSNBC. 

That‘s coming up. 

Coming up on THE ED SHOW, “Shooter Jr.” proves the apple doesn‘t fall very far from the tree when it comes to bashing President Obama.  I‘ll help her get her facts straight in “The Zone.” 

And we‘re waiting for President Obama‘s statement on tax cuts.  We‘ll bring it to you as soon as it happens. 

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

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, one of my favorites.  We have more proof Liz Cheney just doesn‘t know what the heck she‘s talking about. 

On “Fox News Sunday,” “Shooter Jr.” had this to say about the way President Obama has handled the war in Afghanistan --  

(BEGIN VIDEO CLIP)

LIZ CHENEY, DICK CHENEY‘S DAUGHTER:  You know, what I‘d like to see, because I do believe that setting a 2011 deadline did cause significant damage to the effort in terms of convincing people that we‘re committed to be there to win, I‘d like to see the president repudiate it.  I‘d like to see him say, just let‘s be clear, we are going to make our decisions based on conditions on the ground, not based on dates we set back here in Washington. 

(END VIDEO CLIP)

SCHULTZ:  Uh, Liz, hello?  I recommend that you get out of that Fox News bubble and actually listen to the president every now and then.  If you did, you would know that President Obama and General Petraeus have both repeatedly said decisions in Afghanistan will be based on conditions on the ground. 

(BEGIN VIDEO CLIP)

OBAMA:  Just as we have done in Iraq, we will execute this transition responsibly, taking into account conditions on the ground. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEN. DAVID PETRAEUS, COMMANDER, U.S. FORCES, AFGHANISTAN:  This is not a date when the United States races for the exits and turns off the light switch.  It is a date at which a process begins that is based on conditions. 

A responsible drawdown of the U.S. surge forces with a pace of both the transition of tasks and the drawdown of forces to be based on conditions on the ground. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

OBAMA:  The pace of our troop reductions will be determined by conditions on the ground. 

(END VIDEO CLIP)

SCHULTZ:  Well, of course, Liz is on the correct network when it comes to lying about President Obama.  Chris Wallace didn‘t bother to mention that she was wrong, but I‘m not going to let her get away with it. 

She was way off base.  Attacking President Obama like this is seriously uninformed “Psycho Talk.”  

Coming up, New Jersey Governor Chris Christie is on another power trip.  We caught him bullying a hardworking teacher. 

This guy‘s arrogance is beyond reproach.  It makes my blood boil.  New Jersey‘s Teacher of the Year is going to hammer Christie in “The Battleground” story tonight. 

“The Maverick” ought to be ashamed of himself, too.  He just turned his back on a 9/11 first responder, and we‘re not going to get him get away with it.  “Rapid Fire Response” is coming up on that. 

Plus, “The Huckster” is feeling lonely; “Caribou Barbie” may have a new gig; and Tiger gets burned in sudden death. 

And President Obama is just moments away from a statement on tax cuts. 

We‘ll bring it to you as soon as it happens. 

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

(COMMERCIAL BREAK)

(JOINED IN PROGRESS)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  . and they are profound.  Ever since I started running for this office I said that we should only extend the tax cuts for the middle class.  These are the Americans who have taken the biggest hit, not only from this recession, but from nearly a decade of costs that have gone up while their paychecks have not.  It would be a grave injustice to let taxes increase for these Americans right now.  It would deal a serious blow to our economic recovery.  Now, the Republicans have a different view.  They believe that we should also make permanent the tax cuts for the wealthiest two percent of Americans. 

I completely disagree with this.  A permanent extension of these tax cuts would cost us $700 billion at a time when we need to start focusing on bringing down our deficit.  And economists from all across the political spectrum agree that giving tax cuts to millionaires and billionaires does very little to actually grow our economy.  This is where the debate has stood for the last couple of weeks, and what is abundantly clear to everyone in this town is that Republicans will block a permanent tax cut for the middle class unless they also get a permanent tax cut for the wealthiest Americans regardless of the cost or impact on the deficit.  We saw that in two different votes in the Senate that were taken this weekend, and without a willingness to give on both sides, there‘s no reason to believe that this stalemate won‘t continue well into next year. 

This would be a chilling prospect for the American people whose taxes are currently scheduled to go up on January 1st because of arrangements that were made back in 2001 and 2003 under the Bush tax cuts.  I am not willing to let that happen.  I know there‘s some people in my own party, and in the other party, who would rather prolong this battle even if we can‘t reach a compromise, but I‘m not willing to let working families across this country become collateral damage for political warfare here in Washington.  And I‘m not willing to let our economy slip backwards just as we‘re pulling ourselves out of this devastating recession. 

I‘m not willing to see two million Americans who stand to lose their unemployment insurance at the end of this month be put in a situation where they might lose their home or their car or suffer some additional economic catastrophe.  As sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do.  The American people didn‘t send us here to wage symbolic battles or win symbolic victories.  They would much rather have the comfort of knowing when they open their first paycheck on January of 2011, it won‘t be smaller than it was before all because Washington decided they preferred to have a fight and failed to act. 

Make no mistake, allowing taxes to go up on all Americans would have raised taxes by $3,000 for a typical American family.  And that could cost our economy well over million jobs.  At the same time, I‘m not about to add $700 billion to our deficit by allowing a permanent extension of the tax cuts for the wealthiest Americans.  And I won‘t allow any extension of these tax cuts for the wealthy, even a temporary one, without also extending unemployment insurance for Americans who lost their jobs or additional tax cuts for working  families and small businesses.  Because if republicans truly believe we shouldn‘t raise taxes on anyone while our economy is still recovering from the recession, then surely we shouldn‘t cut taxes for wealthy people while letting them rise on parents and students and small businesses. 

As a result, we have arrived at a framework for a bipartisan agreement.  For the next two years, every American family will keep their tax cuts, not just the Bush tax cuts, but those that have been put in place over the last couple of years that are helping parents and students and other folks manage their bills.  In exchange for a temporary extension of the tax cuts for the wealthiest Americans, we will be able to protect key tax cuts for working families.  The earned income tax credit that helps families climb out of poverty, the child tax credit that makes sure families don‘t see their taxes jump up to $1,000 for every child.  And the American opportunity tax credit that ensures over eight million students and their families, they won‘t suddenly see the cost of college shooting up.  These are the tax cuts for some of the folks that have been hit hardest by this recession.  And it would be simply unacceptable if their taxes went up while everybody else‘s stayed the same. 

Now, under this agreement, unemployment insurance will also be extended for another 13 months which will be welcome relief for two million Americans who are facing the prospect of having this lifeline yanked away from them right in the middle of the holiday season.  This agreement would also mean a two percent employee payroll tax cut for workers next year, a tax cut that economists across the political spectrum agree as one of the most powerful things we can do to create jobs and boost economic growth.  And we will prevent—we will provide incentives for businesses to invest and create jobs by allowing them to completely write off their investments next year. 

This is something identified back in September as a way to help American businesses create jobs.  And thanks to this compromise, it‘s finally going to get done.  In exchange, the Republicans have asked for more generous treatment of the estate tax that I think is wise or warranted, but we have insisted that that will be temporary.  I have no doubt that everyone will find something in this compromise that they don‘t like, in fact, there are things in here that I don‘t like.  Namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates.  But these tax cuts will expire in two years and I‘m confident that as we make tough choices about bringing our deficit down, as I engage in a conversation with the American people about the hard choices we‘re going to have to make to secure our future and our children‘s future and our grandchildren‘s future, it will become apparent we cannot afford to extend those tax cuts any longer. 

As for now, I believe this bipartisan plan is the right thing to do.  It‘s the right thing to do for jobs, it‘s the right thing to do for the middle class, it is the right thing to do for business and it‘s the right thing to do for our economy.  It offers us an opportunity that we need to seize.  It‘s not perfect, but this compromise is an essential step on the road to recovery.  It will stop middle class taxes from going up.  It will spur our private sector to create millions of new jobs and add momentum that our economy badly needs.  Building on that momentum is what I‘m focused on.  It‘s what members of Congress should be focused on.  I‘m looking forward to working with members of both parties in the coming days to see to it that we get this done before everyone leaves town for the holiday season.  We cannot allow this moment to pass.  And let me just end with this.

There‘s been a lot of debate in Washington about how this would ultimately get resolved.  I just want everybody to remember over the course of the coming days, both Democrats and Republicans, that these are not abstract fights for the families that are impacted.  Two million people will lose their unemployment insurance at the end of this month if we don‘t get this resolved.  Millions more of Americans will see their taxes go up at a time when they can least afford it.  And my singular focus over the next year is going to be on how do we continue the momentum of the recovery, how do we make sure that we grow this economy and we create more jobs?  So we cannot play politics at a time when the American people are looking for us to solve problems.  And so I look forward to engaging the House and the Senate, members of both parties, as well as the media in this debate, but I‘m confident that this needs to get done and I‘m confident ultimately Congress is going to do the right thing. 

Thank you very much, everybody. 

SCHULTZ:  President Barack Obama speaking live at the White House tonight.  He says it‘s a framework for a deal, it‘s not perfect, but he says it is essential.  He does not want to see taxes go up on the middle class and so the framework of a deal has been put together.  The current tax package, Americans will keep it.  A two-year extension of the Bush tax cuts.  Thirteen month of unemployment insurance will impact two million Americans and a payroll tax of two percent payroll tax for working Americans will go into effect right away as well. 

For more on all of this, joining me now is Congressman Keith Ellison, co-chairman of the progressive caucus.  Congressman, from what you heard the president say, what‘s your first reaction?

ELLISON:  My first reaction is that it is horrible that the Republicans would put these kinds of demands on the table.  It‘s absolutely unconscionable that they would allow unemployment insurance to run out as they already have.  And have two million people during the holidays be absolutely without and it‘s unconscionable by February there would be two million more who would be without and would not have any source of income and unemployment insurance is fundamentally insurance, it‘s something hardworking people pay into and expect to get particularly when we‘re in an economic crisis.  I mean, the fact is, the fact that the Republicans would make these kinds of demands and force this kind of compromise really lets me know that they think that poor people have too much money and rich people don‘t have enough money and I wish that poor people would vote their interests when they get the next chance to. 

SCHULTZ:  Congressman, you are the co-chairman of the Progressive Caucus in the House. 

ELLISON:  Yes.

SCHULTZ:  Is the Progressive Caucus in your opinion going to go along with what they heard tonight? Do you think that the president will have any trouble in the House or Senate on this deal?

ELLISON:  Well, you know, certainly people are going to raise a lot of questions.  And we have yet to handle on this.  You know, he just made the announcement. 

SCHULTZ:  Yes.

ELLISON:  But I can tell you that the Progressive Caucus is about—is full of members who demand economic justice.  And we‘re going to look at this thing for what‘s best for working America, for low-income Americans and we‘re going to raise the real questions.  We‘re full of fight, but the fact is, is that I‘ m not ready to tell you how we feel about this because we haven‘t had a chance to sit down and look at it.  

SCHULTZ:  The president said right now, fighting this would be the wrong thing to do, that it‘s not perfect but it‘s essential and he is convinced that it will affect a million jobs and middle class families with a hit with the $3,000 tax increase, he says, the economy would slip backwards and he‘s not willing to allow that.  Did the Republicans win on this negotiation?

ELLISON:  Well, you know what?  I don‘t think that they won.  What they wanted to do was have permanent tax cuts for the richest Americans.  I don‘t think that they won, but the fact of the matter is, is that, look, sometimes in legislating you sometimes have to make compromises.  The question is, was this the right one?  I have to dig into it and the Progressive Caucus has to dig into it before we‘re going to say, we‘re thumbs up or down on it.  So I would ask that we get a moment to just really review what‘s written on the page. 

But I can tell, you ask me what my gut level reaction is and the gut level reaction I have is anger that such a compromise was ever even necessary because why are we adding $700 billion to the deficit when at a time when people are talking about decreasing the deficit?  These folks want to take $700 billion and not spend it on pre-school education or reducing the cost of college education.  They want to just put it in the pockets of their benefactors and their donors and I think that‘s absolutely disgusting.  

SCHULTZ:  Yes.  Congressman Keith Ellison, great to have you with us tonight.  Thanks for your reaction here on THE ED SHOW on MSNBC.  Stay with us, more reaction on the president‘s announcement is coming up.  I‘ll talk to “Newsweek‘s” Jonathan Alter and Michael Medved, conservative nationally syndicated talk show host.  That‘s coming up next, stay with us.     

(COMMERCIAL BREAK)

SCHULTZ:  The president says it would be a grave injustice to raise taxes right now, so he is compromising with the Republicans.  He says it‘s not perfect, but it‘s essential.  We‘ll bring you more details and discussion right here on THE ED SHOW on MSNBC.  Stay with us.                             

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Just moments ago, President Obama announced a bipartisan tax cut deal.  It would extend all the Bush tax cuts for two years and extend unemployment benefits for 13 months.  The president said everyone would find something not to like in the compromise, but that Washington has a responsibility to act for Americans hurting in this economy. 

For more, let‘s go to “Newsweek‘s” Jonathan Alter and MSNBC political analyst.  And Michael Medved, nationally syndicated radio talk show host.  Jonathan, does this set a tough political table for the president in 2012?  Are we going to be back re-visiting this issue with the same discussion in a presidential election cycle?

JONATHAN ALTER, MSNBC POLITICAL ANALYST:  Well, we would if it was a one-year extension instead of a two, or 18 months extension would be perfect to put right in the middle of the 2012 campaign.  And what you want is all of these guys on record, the Republicans on record voting straight up or  straight down on extending tax cuts for very wealthy individuals and adding $700 billion to the deficit.  That‘s the vote you want.  So, my big problem with this right now obviously is a lot I‘m not happy about with the extension at all and with the state tax business.  But my big problem with the framework that you just outlined, it should be a one year or 18 month extension, not two years so that the vote on the extension takes place before the election.  That is critical. 

SCHULTZ:  Yes.  I think there was a tremendous amount of anguish on the look of President Obama doing this tonight.  Michael Medved, is this a big victory for the Republicans?  This is exactly what Republicans wanted, of course, they didn‘t get the permanent but they got the two year extension that takes them into 2012.  What do you think?  

MICHAEL MEDVED, RADIO TALK SHOW HOST:  I‘m one republican who doesn‘t want these tax cuts permanent.  I‘m glad that they did it this way and I think it‘s tremendous victory for our party.  And I‘ll tell you why.  We need sweeping tax reform along the lines that the president‘s own deficit commission called for where you simplify the tax system, you reduce the number of brackets, you reduce the number of different tax rates, you get rid of lots loopholes, you actually increase revenue while lowering tax rates for everybody.  And I think that‘s what the Republicans were taking over the House of Representatives are going to focus on which is not keeping these tax—there‘s nothing sacred about these tax rates.

SCHULTZ:  But the Republicans, Michael, the Republicans would not budge on middle class tax cuts unless the rich people got what they wanted.  And the president said he was not willing to allow that because he‘s bought into the line that he thinks that the economy would slip backwards.  Is this capitulation, Jonathan?

ALTER:  No, look, he‘s dealing with the hand that‘s dealt him.  You make it sound like it‘s a theory.  This is, as he called it, it is true collateral damage.  You have lots and lots of people who are going to get thrown off unemployment insurance.  So you know, when somebody‘s holding that kind of gun to your head and you‘re talking about real people‘s lives, as the president says, it‘s not an abstraction.  

SCHULTZ:  So the Democrats. 

(CROSSTALK)

ALTER:  Increase next year, you would create a lot more unemployment. 

So if I. 

MEDVED:  If I can jump in here.  This has been a ticking time bomb throughout Obama‘s two-year presidency.  I mean, the big, big mistake that the president made right now, if he really wanted to make the tax cuts permanent for the middle class and have a tax increase for more wealthy people, why not go to this issue before the lame duck session?

ALTER:  I agree.  Absolutely.  

MEDVED:  This is a huge mistake by the president of the United States.  

ALTER:  I agree, Michael.  

SCHULTZ:  Well, it looks like capitulation to the base. 

MEDVED:  You bet.

SCHULTZ:  It looks like the Republicans got damn near everything they wanted on this. 

MEDVED:  Hallelujah.  

SCHULTZ:  Because nothing‘s changed.  And the president is.

ALTER:  No, no.  That‘s not true that nothing‘s changed. 

SCHULTZ:  It is true, Jonathan.  It is.  

ALTER:  That‘s not true. 

SCHULTZ:  Well, the Republicans did not get the permanent talk into it.

ALTER:  Yes.  That‘s pretty big and also, you‘re forgetting about the other parts of this package.  A reduction in the payroll tax is a big deal.  

SCHULTZ:  That‘s another $120 billion that we‘re going to have to pay for kicking the can down the road.  

ALTER:  Ed, you know this, the biggest tax that working Americans pay is the payroll tax.  And so, if you put more money in working Americans‘ pockets, which this compromise does, and look, it‘s a bitter pill, let‘s not guild the lily here to mix a metaphor. 

MEDVED:  But that payroll review will put more money in people‘s pockets, working people, with this compromise.  And that‘s a good thing.  And don‘t lose sight of it.  

SCHULTZ:  OK.

MEDVED:  And there are lots of Republicans, by the way, who favor that kind of payroll tax reduction. 

ALTER:  We should have done that a long time ago, too. 

SCHULTZ:  All right.  Quickly, both of you, you first, Jonathan, will this be smooth sailing through the Congress?

ALTER:  I think it will be fairly smooth.  Obviously there are going to be people like Keith Ellison who are unhappy about it, but they have other fish to fry.  They have to get on with this START Treaty that‘s critical for Americans. 

SCHULTZ:  Michael, what do you think?  Smooth sailing?  Is this going to clear through, you think?

MEDVED:  I think it‘ll probably will.  It depends upon, I mean, Republicans will be united in support of this.  The question is how divided will Democrats be?

SCHULTZ:  Michael Medved, Jonathan Alter.  Great to have you with us. 

We should point out before we go, nothing in the package for the 99ers.  

Coming up, I want to get the “Huffington Post” take on this.  The founding editor Roy Sekoff is up next with response to the president‘s compromise.  Stay with us.  You‘re watching THE ED SHOW.        

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  And finally tonight, Roy Sekoff, founding editor of “Huffington Post” with us responding to President Obama‘s comments a few moments ago.  It‘s not perfect, Roy, but it‘s essential.  Who are the winners and who are the losers in this?

ROY SEKOFF, EDITOR, “HUFFINGTON POST”:  Well, Ed, completely, the Republicans got everything they wanted.  I mean, you can get the dictionary and show it to me, but this is not how I look at compromise, where you get everything you want and I get a few crumbs thrown my way.  To me, I‘m not saying it‘s capitulation but it‘s right next to it.  I mean, here‘s a perfect example.  All you got to do is say, OK, they‘ve extended the Bush tax cuts for two years, but unemployment for only 13 months.  You know, where‘s the balance there?  How come that wasn‘t two years?  You know, just to pick out that example? 

So I think that I understand the point that the president was making, but sometimes it‘s not  just a matter of, you know, you have to stand where you live.  You know?  This is—there‘s got to be some core value, you can‘t spend—over the last two months, the president over 50 times has said, you know, we can‘t afford this, we can‘t give these tax cuts to the millionaires and billionaires, that‘s the line in the sand and it just got erased. 

SCHULTZ:  What is the political conversation going to be in 2012?  We‘re going to be back where we‘ve been for the last three or four months and the Republicans are going to be here in 2012 saying what?

SEKOFF:  Ed, you know, they always say, what do you do when you have the gun pointed at your head?  But how come the Democrats are always the ones to blink?  I mean, since Bill Clinton showed down Newt Gingrich over shutting down the government it‘s been nothing but blinking, blinking and blinking.  So, when does the other side blink?

SCHULTZ:  How will the liberal base take this, Roy?

SEKOFF:  You know, I think they‘re going to take it, as you said, as Jonathan said, it‘s a bitter pill and will make faces and at the end of the day, they‘ll hold their nose and vote it, vote for it and, you know, I think that‘s what the way it‘s going to play out.  

SCHULTZ:  I think there‘s political damage here for the president.  But two years is a long time.  Roy Sekoff.  “Huffington Post,” always a pleasure.  That‘s THE ED SHOW.

Be sure to tune in for a special edition of THE ED SHOW tonight at 9:00 p.m. Eastern Time.  Rachel Maddow has the night off.  I‘ll be filling in for her.  And we‘re back with you tomorrow night.  And again, of course, that‘s tonight, 9:00 Eastern.  You won‘t want to miss it. 

A live edition of “HARDBALL” starts right now on the place for politics, MSNBC.  We‘ll see you at 9:00 tonight.

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