updated 12/9/2010 11:15:27 AM ET 2010-12-09T16:15:27

Guests: Tom Harkin, Peter Welch, Maurice Hinchey, Katrina Vanden Heuvel,

Karen Hunter, Karen Hanretty, Bill Press, Al Sharpton

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.

President Obama spent today peddling his Republican-friendly tax compromise as members of his own party are trying to rewrite the thing and, I guess you could say, destroy it.  Diehard Obama supporters are warning him, if you don‘t stand up to the righties, we will stop standing behind you. 

My commentary on that, plus reaction from the Senate HELP Committee chairman, Tom Harkin, and the progressive congressman who‘s got a plan to kill the bill. 

That‘s coming up in just a moment.

Christine O‘Donnell just said one of the most disgusting things I think I‘ve ever heard.  She‘s comparing what she calls the tragedy of extending unemployment benefits to the tragedy of Pearl Harbor and the death of Elizabeth Edwards? 

We‘ve got some opinions on that coming up in “The Playbook” tonight. 

And “The Drugster” is now accusing me of being a racist?  He says only racists would oppose the president and this tax bill.  Well, I think that he‘s just worried about keeping his own wallet pretty fat. 

The Reverend Al Sharpton is making waves on the FCC.  He‘s after Limbaugh, got folks worked up.  And he‘ll be talking about it coming up later on in the program tonight. 

But this is the story that has me fired up tonight—and the country. 

President Obama, in a sense, is in denial over how Democrats feel about this compromise with the Republicans on the tax cuts.  Now, at this hour, I think the whole package, the whole tax cut package, is really on shaky ground. 

The president defended his compromise for the third straight day this afternoon. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  It is inaccurate to characterize Democrats writ large as feeling “betrayed.”  I think Democrats are looking at this bill, and you‘ve already had a whole bunch of them who said this makes sense.  And I think the more they look at it, the more of them are going to say this makes sense. 

(END VIDEO CLIP)

SCHULTZ:  President Obama needs to break out of his bubble and listen to the people across the country who actually put him in office. 

Democrats do feel betrayed when the Republicans seem to get everything they want.  They feel betrayed when they can‘t put food on the table and millions—and millionaires never have to sacrifice.  That‘s the question that‘s being asked on talk radio in America.  Where is the sacrifice? 

There is none.  It‘s more of the same, more Bush policies. 

Now, the American people, I think they can‘t stand this Washington minutia that‘s being discussed all over the place.  They don‘t really care about the so-called experts explaining the ins and outs of writing tax policy and how it can‘t be done.  I think we put a man on the moon back in 1969.  Some of us have actually gotten refund checks from the IRS. 

Now, we can do it.  We can do whatever we want to do.  And no one is going to talk the liberal base out of not getting the correct thing done for the country. 

The American voter understands one thing.  That‘s results and leadership. 

The president warned Republicans, he‘s ready to fight.  Just not right now. 

(BEGIN VIDEO CLIP)

OBAMA:  I will be happy to see the Republicans test whether or not I‘m itching for a fight on a whole range of issues.  I suspect they will find I am. 

And I think the American people will be on my side on a whole bunch of these fights.  But right now, I want to make sure that the American people aren‘t hurt because we‘re having a political fight. 

(END VIDEO CLIP)

SCHULTZ:  Well, his base, the liberals, the want President Obama to take the fight to the Republicans on this tax issue right now.  Right now. 

They don‘t want him to kick the can down the road and have this be another issue come election time in 2012.  And we‘re going to be right where we are right now, being held hostage again by the righties whoa re saying well, we just have to keep going because we have to.  The Democrats have the majority for the next three weeks, and many of them don‘t want anything to do with this deal. 

(BEGIN VIDEO CLIP)

REP. JIM MCDERMOTT (D), WASHINGTON:  More than two-thirds of the people in this country do not believe we should extend the tax benefits for the wealthy.  They don‘t agree with the president, and he‘s agreeing with the Republicans, and he‘s just on the wrong side of that part of the issue. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I), VERMONT:  It is totally absurd that we ask our children and grandchildren to go more deeply in debt in order to provide tax breaks for people who don‘t need it. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. MARY LANDRIEU (D), Louisiana:  If I end up voting for this package, it will not be silently.  It will be being sort of dragged to that position having firmly established that I disagree strongly with some provisions. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. ANTHONY WEINER (D), NEW YORK:  The deal that was brokered was by the president of the United States.  My grievance with him is that he did not fight a vigorous enough battle for this not just in the last week, not just in the last month, in the entire last year. 

(END VIDEO CLIP)

SCHULTZ:  You don‘t have to look very far.  House and Senate Democrats seem to be itching for a fight right now.  The president doesn‘t want to risk having the tax cuts expire and leave them in the hands of John Boehner and the wrong party with the majority in the next House of Congress. 

Well, I think the American people are a little bit tougher than what the president is willing to give them credit for.

And there is support there, Mr. President.  People will sacrifice if somebody stands up and shows some leadership on this issue and actually asks them to give something up. 

Liberals like me want this president to win.  We‘re on the same page.  We just want to take a different path to get where we have to go if we‘re going to save the finances of this country. 

Every time you say “China,” it makes a lot of Americans nervous.  And borrowing $420 billion from China to make the top two percent in this country happy, it doesn‘t fly with a lot of folks.  That‘s where the majority is. 

Here‘s some free Big Eddie counseling tonight.  Let the Bush tax cuts expire.  Let this package go away.  Let the package—and then you step forward and give more tax breaks to the middle class the next session of Congress, and make Boehner and the rest of these Republicans justify borrowing this $400 billion from China to line their pockets for the top two percent. 

Make them make that case.  Ask them if they‘re actually going to borrow money from China to do this.  I think America wants this conversation. 

And then step two would be use the State of the Union to lay out the Obama tax cuts for the middle class.  Turn around and point if finger at the Republicans during the State of the Union and tell the American people these folks over here have said no for 24 months, and that guy Boehner, he‘s been the problem.  Make them say no to that. 

If the president rolls over on this tax issue right now, I predict that he will hemorrhage support in the polls.  And 2012 will become a political bloodbath for the Democrats because there doesn‘t seem to be much fight right now, and the Republicans will cruise to a majority in the Senate, and then we‘ll see not only the Bush tax cuts, but even more, as I‘ve predicted.

And oh, by the way, this estate tax deal that‘s in this package, what do you say we make that for a decade, too?  You know how much that would be, folks?  A hundred billion dollars to the treasury. 

Are we ready for that?  That‘s where the party of no wants to take this country.  They‘re already trying to raise money off the president‘s capitulation. 

Now, wait a minute, Eddie.  Did you say that?  The Republicans are trying to raise money off of this? 

Of course they are.  You see, they‘re not the honest brokers everybody thinks they are.  The chairman of the National Republican Senate Campaign, John Cornyn, sent out a fund-raising letter the day after President Obama announced this framework for a compromise.  It basically said the Republicans flexed their muscles and made President Obama buckle. 

So much for getting along. 

Cornyn and the Republicans are sticking it to the president as much they can.  They know how to fight. 

Mr. President, liberals don‘t want you to sit back and take this kind of garbage from these folks anymore who only want to run you out of office.  There are so many millions of Americans who are behind you on this fight.  You don‘t need to give tax cuts to millionaires to save two million unemployed people.  We can fight that in the next few months. 

Four and a half million Americans, unemployed Americans, 99ers is what they‘re called, they‘ve got nothing.  So, are we going to throw 4.5 million to the side of the road just to save another couple of million so it‘s politically nice? 

I don‘t—tell me, what economist has been spot on about this entire economic mess?  None of them. 

Nobody‘s been 100 percent correct.  There‘s no guarantee that the economy is going to go down in the ditch even further if we say the top two percent has to pay their fair share. 

And I understand the $3,000 about the middle class.  Ask the American people.  Ask them to make the sacrifice. 

Liberals want the president to push for a comprehensive unemployment package that takes it a hell of a lot further than this deal.  The best way to pay for it is to first off, deny $700 billion in tax breaks for the rich.  That‘s a hell of a start. 

It‘s time for the top two percent to start learning how to spell the word “sacrifice” like the rest of Americans have.  What do you mean we can‘t do it? 

You know, during the campaign, we had this big discussion—I think John McCain was saying, country first.  Is this country first or is this the top two percent first? 

You know, back in the ‘40s, they asked women to work on assembly lines, and they were so good at it even though they had never done it before, they ended up calling her Rosie the Riveter.  You mean to tell me we don‘t have people like that anymore in this country, that we think that the middle class is nothing but a bunch of wussies that won‘t sacrifice a little bit? 

I think Americans want to go to the mat for this fight.  I think they want this fight.  I think they know that what‘s at stake is either we fix this or we start teaching our kids in elementary school how to speak Chinese. 

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

Tonight‘s text survey question is: Do you have faith President Obama‘s tax compromise will be good for America in the long run? 

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

Joining me now is Iowa Senator Tom Harkin, chairman of the Senate HELP Committee. 

Senator, did you make any progress in the Senate today on this bill? 

SEN. TOM HARKIN (D-IA), CHAIRMAN, HELP COMMITTEE:  Well, Ed, it‘s interesting.  The Republicans seem to know what‘s in it, and the White House seems to knows what‘s in it, but we Democrats in the Senate are kept in the dark.  We still haven‘t gotten it yet. 

SCHULTZ:  How do you feel about that? 

HARKIN:  Well, This is not the way to do business up here.  I mean, we don‘t really know—as I understand it, it‘s being changed all the time.  Some new things are being added.  We really don‘t know what. 

We‘re supposed to get it up here tomorrow.  At least that‘s what I hear.  But, you know, this is not the way to do things around here. 

You know, the president‘s going to need us and we‘re going to need him.  We‘re in this together. 

And by the way, Ed, there‘s one thing I really want to say.  I was watching your introduction, and when President Obama said that he wasn‘t interested in conducting a political fight, this is not a political fight.  This is a fight about the future of our country. 

SCHULTZ:  No doubt. 

HARKIN:  It‘s a fight about what‘s right and what‘s just and what‘s fair.  That‘s what the fight is about.  It‘s not political fight.  It‘s about what we‘re going to do as a country going forward. 

SCHULTZ:  Well, do the Senate Democrats feel like they‘re being locked out of this?  And is there angst about it beyond yourself? 

HARKIN:  Oh, yes.  Very much so. 

I mean, you saw some of the responses there.  And there‘s even more at our caucus.  A lot of people are really upset that the compromise was made when it was. 

Now, look, Ed, we all have to compromise.  I understand that.  I‘ve been the chairman of committees here.  I know what it means to compromise.  But there‘s on old saying about lawyers.  You know, a good lawyer compromises on the courthouse steps. 

SCHULTZ:  So you‘re being dictated to in a sense? 

HARKIN:  Well, we‘re kind of being dictated to, but we‘re not seeing the president really negotiate from a position of strength.  The one thing that you haven‘t talked about, and a lot of people aren‘t talking about, the president has the veto pen.  No one‘s talking about that, Ed. 

Now, you know, he says, well, some people say, well, next year, when those Republicans take over the House and we have fewer people in the Senate, they‘ll send that thing over to the Senate, that bad stuff, and we‘ll have enough Democrats that will pass it and send it to the president.  Well, the president can veto it, and we‘ll still have enough Democrats to uphold the veto.  That‘s how you make the fight, because if the president were to stay in it that long, the American people will rally to his side. 

SCHULTZ:  Senator, go get them. 

HARKIN:  We are.

SCHULTZ:  I appreciate you going after it.  You‘re on the right side of this fight, and I appreciate it so much. 

HARKIN:  Thanks, Ed.

SCHULTZ:  Senator Tom Harkin of Iowa with us.

One progressive House member is circulating a letter calling the deal grossly unfair and urging Democrats to oppose it.  The list of Democrats signing on is growing at a breakneck pace. 

For more, let‘s bring in the Democrat leading the charge from Vermont, Congress Peter Welch. 

Congressman, good to have you on tonight. 

How many signatures do you have at this hour? 

REP. PETER WELCH (D), VERMONT:  We‘re just on a threshold of 50, Ed. 

It‘s a lot of discontent about this deal, absolutely. 

SCHULTZ:  OK.  Where‘s the Speaker on this as she sees these names mount on this letter? 

WELCH:  Well, the Speaker‘s been good.  You know, she‘s wanting to let the caucus express its will. 

So she sent out a neutral statement.  And we just had a meeting with Vice President Biden, and several members came forward and expressed their dismay that we‘re entering into a deal that is going to require us to borrow money in order to tax—in order to pay tax breaks for millionaires and billionaires. 

SCHULTZ:  You‘re making a great case, Congressman.  You have, and I‘ve talked to you before.  But the bottom line is, are you willing to go to the mat and watch taxes go up on the American people if the Republicans stand their ground? 

WELCH:  You know, I don‘t think—I think that‘s kind of a dead end for us, because I voted for, along with most of my colleagues, to extend the tax cuts for the middle class.  And the thing that‘s really a problem and causing a lot of heartburn for us is President Obama supported that.  That was a central tenet of his philosophy.

We passed the bill in the House.  Fifty-three senators voted for it in the Senate, including Tom Harkin.  And then, instead of holding tight on that and having that fight that you‘re talking about, where we would make Senator McConnell and those others vote again and again and again, we let that slide.  And that‘s—

(CROSSTALK)

SCHULTZ:  So you‘re not trying to kill it.  You‘re trying to make it better. 

WELCH:  Listen, the goal here is to start having economic policies that respect working men and women of this country --  

SCHULTZ:  Well, this one doesn‘t. 

WELCH:  -- the middle class of this country.  And that means that we can‘t just exceed to the continuation of these Bush transfer of the wealth policies that have been very effective. 

(CROSSTALK)

SCHULTZ:  That‘s what it is. 

Congressman, we‘ve got to run.  Great to have you with us tonight. 

WELCH:  OK.

SCHULTZ:  You‘re leading the charge.  A lot of Americans appreciate it. 

WELCH:  Thanks, Ed. 

SCHULTZ:  Thanks so much.

Coming up, bat crazy Michele Bachmann is as heartless as they come. 

She‘s opposed to the tax deal because it helps the unemployed. 

I‘ve got a message for Michele in “The Playbook.”

“The Drugster” lashed out at me.  He thinks I‘m a racist?  I think he‘s turning the tables because he‘s feeling some big-time heat. 

Reverend Al Sharpton is here to set him straight later in the show.

Plus, Darrell Issa climbs under the broomstick; “Shooter” is a wanted man overseas” and Mark Sanford sees the sunny side of infidelity.  There‘s the guy to follow. 

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

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to the ED SHOW.  Thanks for watching tonight.  Joining us now is New York Congressman Maurice Hinchey, a member of the Progressive Caucus.

Congressman, a lot of Americans want to know how much teeth this letter has.  Have you signed on to it?  And will this stop the bill?

REP. MAURICE HINCHEY (D), NEW YORK:  No, I haven‘t signed on to it, but I don‘t know whether or not it‘s going to stop the bill.  The whole thing now is still uncertain.  There is a lot of aspects of this provision, however, that are not really positive in a way that they should be, not really going to stimulate the economy properly, but instead are going to continue to increase the national debt, which is the worst thing that we‘re experiencing right now. 

SCHULTZ:  How much trouble is this for the president on the Hill, in your opinion? 

HINCHEY:  Oh, I think it‘s a lot of trouble.  He‘s been given these provisions, and he‘s trying to negotiate with them.  He‘s come up with a lot of positive things.  Unemployment insurance, for example, making sure that‘s in there, and tax reductions for middle-income people, those things are very, very positive.  The negative things, of course, are the tax reductions for the wealthiest people in this country, which is completely unnecessary and which is going to generate national debt even more, and which is going to concentrate the wealth of this country more and more in the hands of the wealthiest one percent of the population. 

SCHULTZ:  Yes.

Quickly, will there be a fight?  Yes or no?  Big fight? 

HINCHEY:  Well, there is a struggle right now.  There‘s somewhat of a fight.  I don‘t know if it‘s going to be a big fight because I don‘t know how many people are going to be involved in it.  We‘ll see.

SCHULTZ:  OK.  Congressman, you‘ve got to vote. 

Good to have you with us tonight.  Thanks for stopping by. 

HINCHEY:  It‘s my pleasure.  Thank you.

SCHULTZ:  Coming up, dishonorable Fox News judge Andrew Napolitano has no shame, sticking it to suffering Americans.  The verdict is in.  This guy is a total psycho.  I‘m calling him out in “The Zone.” 

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, a Fox News judge, an activist judge, in 9/11 truth (ph), Andrew Napolitano.  Well, this dude is on the warpath against unemployment benefits.  He‘s pushing again the bogus theory that unemployment benefits cause more unemployment. 

(BEGIN VIDEO CLIP)

ANDREW NAPOLITANO, SR. JUDICIAL ANALYST, FOX NEWS:  It is the height of stupidity to extend unemployment benefits.  Americans need to get back to work. 

I don‘t want to sound harsh, I don‘t want to demean or offend those who have had to suffer through losing a job, but the problem with unemployment benefits is they encourage people not to take jobs, and they take money from the productive sector and give it to the unproductive.  As I‘ve said again and again, if you subsidize something, you‘ll get more of it.  Subsidizing unemployment leads to more unemployment. 

(END VIDEO CLIP)

SCHULTZ:  Well, we better let the military just fork out their own hardware then, huh?  No subsidy there.  I suppose you could go to the farm bill, education, whatever. 

What‘s he so angry at unemployed people for?  They‘re trying to get a job. 

Saying unemployment benefits encourage people to stay unemployed is about as credible as Napolitano‘s 9/11 conspiracy theories.  The San Francisco Federal Reserve found that workers who qualify for jobless benefits only stay unemployed for about a week and a half longer than the people who aren‘t getting benefits. 

The idea of folks not looking for work because they‘re getting unemployment insurance is absolutely activist judge hogwash. 

Judge Napolitano, the verdict is, you‘re guilty of “Psycho Talk.”  

Coming up, Eric Cantor and the conservatives are freaking out over the president‘s use of the word “hostage.”  Katrina vanden Heuvel of “The Nation” will tackle this one in “The Battleground.”  Where does the left go next? 

Christine O‘Donnell just stooped to the lowest of lows.  She compared giving unemployment benefits to Pearl Harbor and the passing of Elizabeth Edwards.  We‘ll talk about that in “The Playbook,” and a lot to say. 

Plus, a repeal of “Don‘t Ask, Don‘t Tell” is on the table.  And a Fox Newser is calling for someone to be murdered? 

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

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.

“The Battleground” story tonight, well, we‘ve got a hostage situation with the Republicans.  They are now waging a war on the word “hostage.”  They don‘t like it.  I think they‘re pretty thin-skinned.  They don‘t like that Democrats have been calling them out on this tax cut deal. 

(BEGIN VIDEO CLIP)

OBAMA:  In this case, the hostage was the American people, and I was not willing to see them get harmed. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER:  The president‘s side of the ledger affects 156 million people in our country.  That, those initiatives are being held hostage. 

UNIDENTIFIED MALE:  The fact of the matter is Republicans were holding middle class taxes hostage. 

UNIDENTIFIED MALE:  The American people are outraged that the Republicans are holding hostage, two million unemployed workers. 

(END VIDEO CLIP)

SCHULTZ:  You mean they don‘t like our bullet points?  Minority Leader Eric Cantor‘s complaining, that kind of rhetoric is just not helpful.  And former Press Secretary Dana Perino told slanthead, she‘s disturbed by the tone coming out of the White House. 

(BEGIN VIDEO CLIP)

DANA PERINO, WHITE HOUSE FORMER PRESS SECRETARY:  I was disturbed, first of all, who writes these kinds of things and who actually says them.  

(END VIDEO CLIP)

SCHULTZ:  Yes.  That‘s a good question Dana, what kind of person would use a hostage analogy?

(BEGIN VIDEO CLIP)

PERINO:  Congress should reject this legislation and promptly send the president a responsible bill that provides the funding and flexibility our troops need and without holding funding for hostage to unrelated spending. 

(END VIDEO CLIP)

SCHULTZ:  Oops.  The GOP and its conservative allies continue to say that President Obama is on a canyon Marxist terrorist Jihad to destroy America.  They ran around the country saying that he wanted to pull the plug on America‘s grandmas in the health care debate for the Republicans to claim that they are offended by the word hostage is a hoodwink.  They‘re trying to change the subject.  I think it‘s absolutely ridiculous. 

For more, let‘s bring in Katrina Vanden Heuvel, editor of “The Nation.”  It‘s all about staying focus.  They‘re complaining about the word, hostage.  But of course, that is exactly what‘s happening.  Trying to get Americans off message and just focus.  The tax package as it is, Katrina.  What will the left accept?  What do you think?

KATRINA VANDEN HEUVEL, EDITOR, “THE NATION”:  I think first of all, we need to break out of this silliness, these terms, hostage, all of this.  Eric Cantor and his colleagues have held this country hostage for decades.  Here‘s how.  President Obama is coming out after three decades of conservative misrule.  We now have an economy that is gilded age quality.  The rich are getting richer, the poor and middle class are getting a raw deal.  I don‘t know where it‘s going to end up, Ed.  I know that there is a winter of discontent.  The progressives, the left. 

People of conscious, the majority in this country, oppose giving tax breaks to those who don‘t need it and who won‘t stimulate an economy that is in desperate need of bringing down unemployment.  So, I think we need to bust open this discussion, I hope we can build a new economy and President Obama interestingly gave a speech under reported in North Carolina last week where he went back to the things we need to hear about a new foundation.  I think it‘s perverse taxes and have contributed to the gilded age and inequality and starved the government of resources needed for investment. 

SCHULTZ:  The hard line here Katrina, is that they are facing a deadline.  There will be another session of the Congress.  They‘ve got until the end of the year, depending on how serious they want to get about work of over the holidays.  The fact of the matter is, is that a lot of Democrats just don‘t want to see the taxes go up on the middle class, but there‘s a lot of people who supported President Obama that want to see this fight.  They want to have this fight and they don‘t want him to cave in. 

VANDEN HEUVEL:  Listen, I think this is—he spoke the other day about the perfect is the enemy, the good about compromise.  Listen, there is time for compromise and there is time to understand what is at stake here.  It‘s the future of this country and what kind of country we will be.  I think this president should fight and bring the people to his side.  Rally them and expose those who are so thuggish in their Holy Grail mission to make the rich richer.  But the president is trying to find a different path.  I think he needs to take a hard cold look at what has happened and gone down these last years. 

It hasn‘t been working for them, reaching out to these Republicans, though at the end of the day, the collateral damage of those without jobless insurance and the need to stimulate this economy, you know, I think there is real division by the way, Ed, which is not fully reflected on television in the progressive left.  There are those see this as a back door stimulus.  Who believe that this is the best you can get, but I think this president, for his sake, for the country‘s sake, for his presidency‘s sake, does need to draw lines in the sand and begin doing that.  Because he needs to show he‘s a leader and not just a negotiator who keeps getting rolled. 

SCHULTZ:  What if the Democrats decide, OK, we‘re going to let this legislation expire, which I think is a good idea because you can come back and fight for another day and deliver a better package for the middle class in this country, do a better job.  Who‘s to say that this tax policy right now is the best thing for the middle class?  Why not have that fight?

VANDEN HEUVEL:  I believe that it is in the nation‘s interest to hear real alternatives.  If this president would stop feeding some of the conservative narrative like giving a federal pay freeze at the same time as not fighting this.  Come back with a State of the Union.  I think you‘re right there, Ed, and lay out a new tax structure and expose those who would fight that and spend next year going to the country and re-mobilizing those who do want him to succeed but want to see a fighter in President Obama. 

SCHULTZ:  Yes.

VANDEN HEUVEL:  Lay it out for the country and expose those who would take us down. 

SCHULTZ:  Katrina, great to have you with us.

VANDEN HEUVEL:  Thank you.

SCHULTZ:  And let‘s keep in mind that the Democrats took a vote in the house last week.  They took two votes on Saturday in the Senate.  We know where the Republicans are.  If they want to let it expire, let it happen. 

VANDEN HEUVEL:  Expose them. 

SCHULTZ:  I just don‘t buy into this thing that the economy is going to totally collapse.  If we play hardball with them and do the right thing for America‘s future. 

VANDEN HEUVEL:  Expose them and filibuster. 

SCHULTZ:  Yes.

VANDEN HEUVEL:  Bust open that filibuster the first day of the new session.  Because our system is rigged and rigged against those who need its help the most. 

SCHULTZ:  Katrina, great to have you with us.  Thanks so much. 

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

Congressman Darrell Issa, well, he is the GOP‘s pick to head the oversight committee.  After calling stimulus money walking around money and vowing to investigate the Obama administration. 

Joe Lieberman says he‘s got 60 votes to repeal Don‘t Ask, Don‘t Tell, but Susan Collins is playing games.  Harry Reid is still negotiating with Collins, so there will be no vote tonight. 

And I think President Obama has let America down with his deal to extend the Bush tax cuts for the wealthy for two more years. 

With us tonight, Karen Hunter, journalist and publisher and also Karen Hanretty, republican strategist.  Great to have both of you with us tonight.  Let‘s talk about the tax package, first.  Karen, is this a good deal for the Republicans?

KAREN HUNTER, JOURNALIST:  Which Karen?  Me?

(LAUGHTER)

SCHULTZ:  OK.  Miss Hanretty.

KAREN HANRETTY, REPUBLICAN STRATEGIST:  You‘re going to have to call me Hanretty tonight. 

SCHULTZ:  Miss Hanretty.  Please take the floor on this. 

HANRETTY:  All right.

SCHULTZ:  Where do you stand on it?

HANRETTY:  Look, I think this is probably about the best deal the Republicans are going to get considering that they are still in the minority and Democrats control the White House.  They‘re getting an extension of the current tax rates.  Take this as their victory.  Move on. 

SCHULTZ:  Miss Hunter?

HUNTER:  You know, I‘ve been listening to the debates on both sides and it‘s so frustrating.  You know, everyone has an opinion.  Everyone saying, you know, the president made a bad decision for the American people, but none of us are sitting in their seat every day.  None of us know what is really going on and it‘s easy to sit here and make decisions and criticize and point fingers and say, this was a great deal or good deal or bad deal, but I just say, let it wait.  Let us wait out and see what results are going to be.  I‘m going to support the president because I believe that he‘s smarter than most of us and that he knows more about what he‘s doing.  And he was so impassioned recently about why he had to do this.  Let just, let it play out and see what‘s going to happen. 

SCHULTZ:  Would that be, Karen Hunter a big victory for the Republicans, I mean, that would be the exact same policies that the Bush administration had, prolonged, more debt, more record deficit.  Where‘s the victory on that?

HUNTER:  Well, you know, the victory is with the middle class.  And if the president is telling the truth, which I believe that he is, then he had to make this compromise because they were holding—the hostage, they were holding the middle class hostage and he wasn‘t willing to do that.  So, if that‘s what he believes, and if that‘s what‘s really going on, then I think that sometimes, we have to make concessions that aren‘t actually what we really, really want to see happen.  But, you know, maybe he‘s going to work out for the best, Ed.  I‘m hopeful. 

HANRETTY:  This is not a compromise.  He acquiesced to Republicans. 

Let‘s be really clear on that. 

SCHULTZ:  I agree. 

HUNTER:  I think he made a compromise for the betterment of the majority of the people.  And that‘s what we want him to do, isn‘t it?

SCHULTZ:  Karen Hanretty, is this not confirmation that the party of no, their strategy of saying no to everything in the final now has worked?

HANRETTY:  Well, they‘re saying yes to the current tax rate, so I think that‘s a very positive thing.  Look, you and I are never going to agree on economic policy, Ed.  You know, you can‘t even get economists to agree.  However. 

SCHULTZ:  That‘s right.  I agree on American jobs.  That‘s right. 

HANRETTY:  Some of the economists that Barack Obama surrounded himself in the first year and a half of his administration actually argue in favor of not raising taxes on the wealthiest.  Because they say it hurts the GDP.  So, look, you can have these economic debates back in fourth at the end of the day, this is pure politics.  And I think Barack Obama realizes that‘s an extension of these tax rates at this particular time in this country‘s economy is probably better for him for the 2012 election and that‘s just something that you guys on the left are going to have to come to terms with. 

HUNTER:  I think he did what is best for the American people, not what‘s best for him. 

HANRETTY:  I agree, I actually happen to think that extending these rates is best for the American people. 

SCHULTZ:  I tell you what, I can‘t sell both of you tonight.  This is not good. 

HUNTER:  That‘s because we‘re Karens. 

HANRETTY:  Let‘s go to Darrell Issa. 

SCHULT:  Karen and Karen.  All right.  What about Darrell Issa?  How serious is he about going after the Obama administration, Karen Hunter?

HUNTER:  You want to talk about playing politics, this is the guy, the wealthiest guys in House, right?  I think he made his wealth on the viper alarm.  Yes, I think he‘s completely playing a political game at the expense of the American people and I think we need to call him on it.  Yes.  All this talk about, we have to investigate the White House.  Someone needs to investigate him.  And I think he‘s doing a lot of posturing because he wants face time.  I mean, look, he put his own voice on that viper commercial.  This is a guy that‘s really playing to the cameras and he‘s playing politics right now. 

HANRETTY:  Oh, Ed, I know your blood pressure is high tonight, and I don‘t want to shock you but I bet you and Darrell Issa have more in common than you think.  You know, the oversight committee, he went after five of the biggest oil executives for a sweetheart deal relationship that they had with the Minerals and Management Services.  He went after country wide for the VIP program that gave sweetheart mortgage deals to former Senator Chris Dodd.  He went after AIG bailout and all of the money that was funneled into Goldman Sachs and you know what, we‘ve got a trillion dollar stimulus.  A trillion dollar bailout and a trillion dollar Obama-care.  If you don‘t want oversight and you don‘t want transparency, then I don‘t think that you care about the best interests of the American people. 

HUNTER:  But he‘s not going after his own people.  He‘s not going after his own people, Karen.  He‘s not going after his own people and he‘s not admitting that most of the problems that we are experiencing right now came on the republican time. 

HANRETTY:  So, he went after Countrywide, he went after AIG, he went after Goldman Sachs, he went after the oil companies.  You know, people on the left always say those people belong to the Republican Party.  He went after them.  And he‘s going to insist on oversight hearings into trillions of dollars that have spent and no one should be afraid of that.

SCHULTZ:  Karen Hanretty, will he get Don‘t Ask, Don‘t Tell?  Yes or no?

HANRETTY:  I don‘t think he will.  I don‘t think he‘ll going to get it done. 

SCHULTZ:  Karen Hunter?

HUNTER:  Yes, we will. 

SCHULTZ:  From Karen to Karen and Ed.  Great to have you with us tonight.  Thanks so much. 

Coming up, psycho talker Michele Bachmann and her fearless leader, Jim Deminted (ph) are kicking unemployed Americans when they‘re down.  We‘ll be fighting back tonight.

And outgoing Governor Mark Sanford has a heck of a way of finding a silver lining in marital infidelity.  You won‘t believe what this guy said.  It‘s all coming up next in the “Playbook.”  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 have faith President Obama‘s tax compromise will be good for America in the long run?  Text A for yes, text B for no to 622-639.  Results coming up.  Stay with us.    

(COMMERCIAL BREAK)

SCHULTZ:  And in my “Playbook” tonight, well, the Tea Partiers are still complaining about the tax deal even though President Obama totally caved to the republican demands for the top two percent.  Tea Partier ringleader Michele Bachmann released a statement, whining about extended unemployment benefits, but her complaint is based on a completeness understanding of the extension and what the extension means.  Here‘s part of her argument.  “Unemployment benefits are already at a historical length of 99 weeks.  And the president‘s request would push benefits to three years.”

Bachmann, who cares about facts?  She‘s flat out wrong.  The president‘s deal with Republicans does not extend benefits past 99 weeks.  In fact, the 99ers are completely left out of it.  But of course, she would know anything about that.  The chairman of the White House Council of Economic advisers also confirmed that last night on this show, but Bachmann‘s ignorance on unemployment benefits pales in comparison to the rhetoric of another Tea Party darling.  Listen to what Christine, another witch, O‘Donnell said yesterday at a lunch event for her brand new pack, quote, “Today, marks a lot of tragedy, tragedy comes in threes, Pearl Harbor, Elizabeth Edwards‘ passing and President Obama‘s announcement of extending the tax cuts which is good, but also  extending the unemployment benefits.” 

This is not only stupid, but it is appalling.  And if it‘s more proof you can‘t compromise with Republicans, that‘s all the proof I think all of us need.  These psycho talkers, they will never be satisfied. 

Joining me now is nationally syndicated radio talk show host Bill Press.  You know, the fact that she has got a pack now Bill, means you and I can talk about her on radio for a long time.  She is anywhere.  

BILL PRESS, RADIO TALK SHOW HOST:  OK, Ed.  I got to tell you, as a native of Delaware, I‘m embarrassed by this woman.  What do you expect of a woman who never held a job, a person who never held a job in our life, Ed?  She knows nothing about economics.  And she certainly has no heart for the poor.  Look, so what she does here is that, what are the worst things you can think of, right?  The worst things you can think of, Pearl Harbor, Elizabeth Edwards‘ passing and giving any assistance to the unemployed in this country.  I‘m surprised she didn‘t add the holocaust to that.  And then, Ed, she said, my real problem is how we‘re paying for these because we‘re just adding that money to the deficit.  So, she has no problem extending the tax cuts for the wealthiest of Americans, $70 billion, and piling that on the deficit, oh yes, but to help the poor, we can‘t afford that. 

SCHULTZ:  Explain the heartlessness of Michele Bachmann and the righties who just have no compassion whatever about kicking the 99ers to the side of the road and not being a part of the equation.  And not even understanding the unemployment benefit package.

PRESS:  You know what gets me, Ed.  Where is Tara Clark where we need her, right?  Because, now we see the tragedy of Michele Bachmann get re-elected.

SCHULTZ:  But does this give us a snapshot of what we‘re going to see in the next session of the Congress?

PRESS:  Oh, yes.  And you touched on it just a little while ago.  Number one, Ed, this shows that for compromise for guys, these righties, means 100 percent.  They don‘t want to give on anything.  They want to get all and they want to give nothing.  So they get the extension of these tax cuts for the wealthy.  President Obama agrees to break his campaign promise, do something I think which is horrible for this country, and they are not willing to give up anything for it.  You know, the real tragedy I think, Ed, I know, you‘re saying this too, is that we even connect those two together.  The idea that the only way that we can get help for the people who were hardest hit by this recession is to give Donald Trump another tax cut and people like him is morally outrageous. 

SCHULTZ:  Well, we‘re the generation of wimps.  We‘re not willing to sacrifice anything and we‘re not even being asked to sacrifice anything. 

PRESS:  And Ed, we can—before we even fought. 

(CROSSTALK)

SCHULTZ:  I‘ll tell you what the trouble is now Bill is that you‘ve got some long time senators over there on the democratic side who are being left out of these conversations that represent a lot of people.  And Tom Harkin included who was here earlier tonight, he was one of the mainstays for Barack Obama in Iowa, no question about it.  And I think the president is doing political damage. 

Bill Press, always a pleasure.  Great to have you with us.

PRESS:  All right, Ed.  Good night.  Thanks.  

SCHULTZ:  Some final pages in the “Playbook” tonight.  Bob Beckel, a democratic FOX News political contributor is calling for the murder of the Wikileaks founder.   

(BEGIN VIDEO CLIP)

BOB BECKEL, POLITICAL CONTRIBUTOR:  The way to deal with this is pretty simple.  We‘ve got special ops forces.  I mean, dead man can‘t leaks up.  This guy is a traitor, a treasonous and he has broken every law of the United States.  The guy ought to be—and I‘m not for the death penalty.  So if I‘m not for the debt penalty, so if I‘m not for the debt penalty, the only way to do it is illegally shoot the son (bleep). 

(END VIDEO CLIP)

SCHULTZ:  Was he talking about Scooter Libby there?  No.

And finally, disgraced outgoing South Carolina Governor Mark Sanford says, his affair with an Argentine woman actually helped him do a better job.  Really?

(BEGIN VIDEO CLIP)

GOV. MARK SANFORD, SOUTH CAROLINA:  I think that a lot of people, you know, at times would push against certain things based on their fear that my political star was climbing, that if I did that, it would help me get to wherever I thought was going.  What became abundantly clear was the supposed stars on the rainbow weren‘t there.  And I think we were able to debate the issue at hand that I was less the issue and the issue was more the issue. 

(END VIDEO CLIP)

SCHULTZ:  So much more family values.  It‘s all about politics. 

Coming up, Reverend Sharpton‘s crusade against the drugsters racist rant for the radio is picking up steam.  And it‘s really getting to the drugster.  The Rev‘s calling for an intervention with the FCC.  More on that in just a moment on THE ED SHOW.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  And finally tonight, an update on Reverend Al Sharpton‘s fight against Rush Limbaugh‘s racist rants which are pretty well documented.  Rev is trying to get the FCC to step in.  And the drugster is still on the heat, on his radio show yesterday, he lashed out by trying to turn the tables and call folks like me racist. 

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  Man, oh, man, oh, man, ladies and gentlemen.  The left, what a bunch of racists.  I mean, they‘re all over MSNBC.  They are all over “The New York Times,” “The Washington Post.”  I have never seen such a collection of racists.  All these liberals criticizing Obama on this compromise on the tax bill.  I mean—well, every bit of criticism of Obama‘s always been said to be racist, hasn‘t it?

(END VIDEO CLIP)

Joining me now for an update on where this fight stands, Reverend Al Sharpton, president of the National Action Network.  Reverend, you got people, journalists in the industry who cover radio are following this.  What‘s the update?

REVEREND AL SHARPTON, PRESIDENT, NATIONAL ACTION NETWORK:  We are, as we have informed you, we‘re going to Washington this week to meet with the FCC.  We‘re also going to unveil a late petition that we‘re going to challenge members of Congress and the Senate to sign on to and release on National Action Network‘s websites who designs on, who doesn‘t or who does.  Because it‘s very important for federal officials to take a position, not necessarily just on Limbaugh, but on whether or not they agree that anything  whether you‘re doing it explicitly or implicitly against people based on race or gender should be allowed on federally regulated airwaves. 

I think we have to press those that have made Senate votes condemning people in the past, that have demagogued on this.  Now it comes down to an area that government can be called upon, and we want them on the record.  So we intend to escalate this fight.  We don‘t intend to back down at all.  And for people like Rush to talk about people like you are racist is absolutely absurd.  You compare that to people that like he‘s doing, singing “The Good Negro” song on his show and trying to insult this statue of people like the House Majority Whip, Congressman Clyburn.  This is the kind of America we cannot stand by and allow to continue that.  

SCHULTZ:  Here‘s Limbaugh today on his radio show talking about reparations. 

(BEGIN VIDEO CLIP)

LIMBAUGH:  What about reparations for the unemployed?  Social Security like retirement program for them.  All the economic stimulus there, and reparations.  It‘s not their fault.  It‘s society‘s fault that they don‘t have any job.  Just plug them in there on that Pigford lawsuit like it‘s already being done.  Give them reparations. 

(END VIDEO CLIP)

SCHULTZ:  Would that pass?

SHARPTON:  Well, I think, first of all, the absurdity of acting like people invested in their own Social Security, farmers who have worked and would not treated like everyone else is comparing this to some kind of handout shows you how ludicrous and absurd he could be.  He has the right to be absurd.  He does not have the right to be racist.  He does not have to the right to use federally regulated airwaves to blanket people based on race.  So, his statements today are absurd.  But that‘s not what we‘re going after.  What the National Action Network is going after is when he does it based on race, gender, sex.  We‘re not going to stand by and allow federally regulated airwaves to be used in that way, particularly when you have to compete for these licenses. 

SCHULTZ:  Reverend Sharpton, when you focus in on an issue, you never give up.  How determined are you on this one?

SHARPTON:  Oh, I‘m very determined because when I see how difficult it is for people to get waivers, for people to get licenses, for people to have mergers and have to go through all kinds of things, millions of dollars worth of lawyers, and then you‘re going to tell me it‘s all right to get up to buy any way you want explicit or implicit, just offend people based on their race, or their gender or their sex?  I think that we‘ve got to have a standard across the board in government how we use these airwaves, and I‘m determined to make sure we had that stand. 

SCHULTZ:  Reverend Al Sharpton, at the National Action Network, great to have you on tonight.

SHARPTON:  Thank you, Ed.

SCHULTZ:  Tonight in our text survey, I asked, do you have faith President Obama‘s tax compromise will be good for America in the long run?  Twenty nine percent of you said yes.  Seventy one percent of you said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  For more information on THE ED SHOW, you can go to ed.msnbc.com or you can blog with us right on our radio Web site at wegoted.com.  Comment right there.  And, of course, we‘re on XM 167 noon to 3:00 Monday through Friday.  “HARDBALL” with Chris Matthews starts right now.  We‘ll see you tomorrow night.   

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