updated 12/10/2010 11:32:03 AM ET 2010-12-10T16:32:03

Guests: Elijah Cummings, Adam Green, Byron Dorgan, Sherrod Brown, Bill

Press, John Feehery, Eric Boehlert, Mort Zuckerman

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

These stories are on the table and hitting “My Hot Buttons” at this hour. 

Good move by the Democrats today.  On the House side, they just staged a revolt against President Obama‘s tax plan.  It‘s going to get better.  Speaker Nancy Pelosi had the guts to refuse a vote until this thing gets fixed for the good. 

My commentary on that, plus reaction from Congressman Elijah Cummings. 

Senator Sherrod Brown will be here tonight. 

And bold progressive Adam Green, some think he‘s putting too much pressure on President Obama.  We‘ll talk about it. 

Republicans, they have redefined the word “ruthless” today.  The party of no just deliberately blocked a bill that would have helped 9/11 rescue responders who got sick from Ground Zero. 

Folks, this really tells you everything you need to know about Republican priorities.  We have got “Rapid Fire Response” to that tonight. 

And Ralph Nader is back.  Well, he just called President Obama a con man and is getting some folks worked up about a primary challenge.  We‘ll cut through all the bull and tell you what it‘s all about and what is really up Nader‘s sleeve.  That‘s tonight. 

OK.  This is the story that has me fired up tonight. 

House Democrats are itching for a fight with the party of no this morning.  The House Democratic Caucus rejected President Obama‘s heavy-handed tax compromise with the Republicans.  Democrats are furious that President Obama cut a deal without making them part of the process. 

(BEGIN VIDEO CLIP)

REP. JAY INSLEE (D), WASHINGTON:  Our caucus will not submit to hostage-taking and we will not submit to this deal. 

REP. BARBARA LEE (D), CALIFORNIA:  The overwhelming majority of members of the Congressional Black Caucus oppose this tax deal.  And so this gives us now the opportunity, thanks to these members, to put forth a rational and responsible package. 

REP. CHRIS VAN HOLLEN (D), MARYLAND:  In the form that it was negotiated, it is not acceptable to the House Democratic Caucus.  It‘s as simple as that. 

(END VIDEO CLIP)

SCHULTZ:  So many liberals feel like the White House basically circumvented the entire legislative process.  Somewhat undemocratic. 

On Wednesday, Vice President Joe Biden met with the House Democratic Caucus and reportedly described the compromise as a take-it-or-leave-it package.  A lot of folks not happy about that. 

Speaker Pelosi and members decided to leave it.  They want a chance to make the bill better, so they held a caucus vote. 

After the vote she released this statement: “We will continue discussions with the president and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote.”

This is the right move.  And a lot of Democrats out there across the country are saying, well, wait a minute, this is really being to hard on President Obama. 

This is the process.  You can‘t leave elected officials out of negotiations. 

It‘s clear, Pelosi and House Democrats, they don‘t want to roll over and accept tax cuts for millionaires without putting up a big fight and doing the right thing for the American people. 

White House Press Secretary Robert Gibbs responded to the House rejection this afternoon. 

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY:  This is a long and winding process, but I think at the end of the day, members are not going to want to be in their districts, senators are not going want to be in their districts, when their constituents find out on the first of January that their taxes have gone up.  If we don‘t get something done this year, everyone will I think rightly be blamed for not having gotten something done. 

(END VIDEO CLIP)

SCHULTZ:  Come on.  They‘re not going to be happy because they‘re taxes are going to be going up? 

Mr. Gibbs, what do you have, a little Republican ear piece in there telling you what to say?  I don‘t mean to offend you, but come on.  You‘re reading right off the right wing bullet points. 

This is about a fight.  And let‘s take and tip our hats tonight to Nancy Pelosi for setting the table for a fight. 

The White House is trying to play down the vote, but time, of course, isn‘t on their side.  Unless the House and the Senate pass the president‘s compromise in the next 22 days, the Bush tax cuts will be a thing of the past.  And a lot of people think that‘s a good thing because we can get a better deal. 

The president is going to do everything in his power to make sure that that doesn‘t happen.  Now, Republicans, more than ever, are eager to help President Obama deliver tax breaks for millionaires, aren‘t they?  So Democrats think the Republicans are trying to hoodwink the president into giving them everything they want and then pin this as and promote it as the Obama tax cut, this economy‘s your fault. 

This is Congressman Jim McDermott from my radio show earlier today. 

(BEGIN AUDIO CLIP)

REP. JIM MCDERMOTT (D), WASHINGTON:  There is a strategic memo from the Republicans that says if we can get them to pass it, it becomes Obama‘s tax cuts and not Bush‘s tax cuts. 

SCHULTZ:  Sure. 

MCDERMOTT:  So they‘re really trying to just change the name on it and slap it—and pin the tail on the president.  And I don‘t know why they don‘t understand that in the White House.  I really don‘t. 

(END AUDIO CLIP)

SCHULTZ:  Well, the president is taking a major risk by compromising with Republicans over his own party and on this issue.  The ruthlessness of the right wing is in high gear.  I mean, it is in overdrive. 

Just today, Senate Republicans blocked a bill.  They blocked this bill that would have provided health aid for 9/11 rescue workers.  But you see, it costs too much. 

Remember all these pictures?  Remember all these Republicans running around with the FDNY hats on saying that they‘re the best and the brightest, and they‘re the greatest Americans we can find?  They were back on that day, but today they weren‘t for the Republicans. 

This is how ruthless they are.  The $7.4 billion 9/11 health bill passed the House way back in September, one of the 240 bills they passed.  But, of course, Republicans, they have held every bill hostage until they get exactly what they want, and that‘s tax cuts for the top two percent. 

Now, let‘s hold it and recognize this moment here.  There are 42 senators on the Republican side who have signed on to saying, we‘re not doing anything unless we get our tax cuts. 

So where are we?  Well, this bill‘s been sitting around since September to help out the 9/11 first responders.  You know, the people that got sick, that lost their lives, that were breathing in all of this stuff. 

Republicans, they don‘t want to help them.  No. 

This really infuriates me.  This has gone too far. 

Harry Reid pounced on the Republicans for their shameless greed.  After the vote, he released this statement: “Republicans denied adequate health care to the heroes who developed illnesses from rushing into burning buildings on 9/11, yet they will stop at nothing to give tax breaks to millionaires and CEOs.  That tells you everything you need to know about their priorities.”

Folks, do you see how it all ties in?  Reid knows he can‘t get anything passed until the tax issue reaches a conclusion in the Senate. 

So we have a priority list that‘s just a hell of a lot different, don‘t we?  A vote could happen in the upper chamber as early as Saturday.  Liberals want Harry Reid to follow Nancy Pelosi‘s lead and stop the tax compromise dead in its tracks. 

Well, there‘s still time to make this bill better and force the Republicans‘ hand to do a little compromising of their own.  The Republicans don‘t deserve to drive the agenda on any issue right now, and because of this vote today, I‘ll just say I think they‘re flat-out rotten.

They are rotten to the core.  They are ruthless.  They are mean.  They will stop at nothing to get these tax cuts.  And they want to rope President Obama right down into the financial ditch with them, and then pin it right on him and say these are the Obama tax cuts. 

It‘s a fight.  It‘s a generational fight that we have to have. 

Tell me what you think in our telephone survey.  The number to dial tonight is 1-877-ED-MSNBC. 

My question tonight is: Did House Democrats do the right thing by rejecting President Obama‘s tax compromise?  Press the number 1 for yes, press the number 2 for no.  We‘ll bring you the results later on in the show. 

Joining me now is Congressman Elijah Cummings of Maryland, a member of the Joint Economic Committee. 

Congressman, why the pushback at this point?  Is it because of the way it was handled?  Has this really infuriated a lot of Democrats? 

REP. ELIJAH CUMMINGS (D), JOINT ECONOMIC COMMITTEE:  It‘s partly the way it was handled, but it‘s the deal in and of itself. 

We have two objectives and we seem to be forgetting them.  One is the creation of jobs, and the other is trying to address our long-term deficit.

And the issues that you talked about, the estate tax and the reductions of taxes for the richest of the rich, from the way we see it, that has nothing to do with job production, nor does it have to do very much with deficit reduction.  As a matter of fact, it increases the deficit. 

And so we‘re concerned about those issues, and I think the—and we did feel left out—I mean, because we looked at the estate tax negotiations and our representative, Chris Van Hollen, wasn‘t even in the room for that.  And that was sprung on us. 

So we feel a bit concerned.  We want this—no matter what, Ed, we want the president to be successful and we want to work with him.  And we will. 

SCHULTZ:  Yes.  This is all part of the process, and I think a lot of liberals in this country are misinterpreting the conversation, misinterpreting the push to make this better. 

And you know, the rocks go at the farm.  He‘s the president.  He‘s going to take a little heat if people don‘t like the way this is coming down. 

But what about what Jim McDermott said, that the Republicans are really trying to get the majority right now to vote on this, to pin this on the president if the economy doesn‘t turn around?  What about that? 

CUMMINGS:  I agree with Jim, but there‘s another part to that, too.  I have absolutely no doubt that in a few months, we will hear the Republicans saying—calling the deficit, which will be going up as a result of giving these tax cuts to the rich—

SCHULTZ:  Sure. 

CUMMINGS:  -- they‘ll be saying the Obama deficit.  And you see, Ed, when they begin to do that, their next step is to say that we have now got to reduce spending of social programs, Social Security, Medicare, and other programs. 

So we believe what we‘re doing is in effort to make the agreement better and to help the president, because we know what‘s coming down the pike. 

SCHULTZ:  Congressman, thanks for joining us tonight.  There‘s going to be a lot happening in the next 48 hours as well.  I appreciate your time. 

CUMMINGS:  Thank you, Ed. 

SCHULTZ:  The PCCC is running a brutal ad in the state of Indiana, the state where President Obama once told voters the Bush tax cuts for the wealthy personally offended him. 

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), ILLINOIS:  So he‘s promising four more years of tax cuts for CEOs, tax cuts that he once voted against because he said they offended his conscience. 

Well, they may have stopped offending John McCain‘s conscience somewhere along the road to the White House, but George Bush‘s economic policies still offend my conscience, and they still offend yours. 

(END VIDEO CLIP)

SCHULTZ:  That was April of 2008.  Senator Obama went on to win Indiana and eight other states that had gone to George W. Bush by running against the very tax proposal that he is now in favor of. 

Joining me now is Adam Green, the co-founder of the Progressive Change Campaign Committee. 

Some people think you‘re going too far on President Obama, and I‘ve gotten the same criticism as well. 

Does that ad really enhance the environment? 

ADAM GREEN, CO-FOUNDER, PCCC:  Look, it‘s particularly ironic if people get offended by that ad.  Literally, the entire ad was President Obama saying an amazingly inspirational thing during 2008, and it was in a red state, in a crowd full of red state voters who were cheering for the Democratic argument on tax cuts. 

So what we‘re really trying to do, progressives are trying to show Democratic politicians how to fight.  And what we need is more politicians being willing to take their message to the red states, hold Republicans accountable, and put them on defense for a change. 

SCHULTZ:  How do you think the White House sell job is going over?  I mean, they are really, Adam, doing a lot of the same grassroots stuff that you do with your organization.  They‘re fighting back, saying that this is a great package. 

GREEN:  Yes.  I wouldn‘t give them too much credit for the grassroots part.  They‘re definitely fighting back.  They‘re echoing, as you said, Republican talking points. 

But look, I said it before, I guess I‘ll have to say it again.  Robert Gibbs, at that White House podium, has a loser mentality, meaning he is taking the posture of a team that plans on losing. 

Now, where was he before this deal was cut saying, you know what, Republicans?  At the end of the year you don‘t want to be back home in your districts when 98 percent of families have taxes go up, so you better agree to our plan.  Where was the going on offense there?  There was none. 

He‘s only whipping out this new language to pressure Democrats to cave and take a popular position and flush it down the toilet.  It‘s absurd.  We need a better sell job and we need really for him to go on offense against the Republicans for a change. 

SCHULTZ:  What would make a good package in your opinion?  How far do you want Nancy Pelosi and the House to go? 

GREEN:  That‘s a great question.  I really hope that they don‘t kind of get a Pyrrhic victory by having a small add-on, on to this bill, and have the kind of end message of this be, hey, White House, before you sell out, include us in the selling out.  That‘s not a good message. 

We need them to insist that the White House scrap this current bill, put the Republicans on offense, go to Maine, go to Massachusetts, go to Mitch McConnell‘s home state of Kentucky, rally voters, and pass the clean version of the Obama tax promise from his 2008 campaign.  That‘s what Americans want.  That‘s what they voted for. 

It‘s a winning strategy.  Robert Gibbs can have a winning mentality from the White House podium.  It would work if they just did it.  So the House shouldn‘t sell themselves short.  They should keep fighting until they win. 

SCHULTZ:  Adam Green, good to have you with us.  Thanks so much.

GREEN:  Good to be here. 

SCHULTZ:  Coming up, Christine O‘Donnell refuses to apologize for comparing the extension of unemployment benefits to the death of Elizabeth Edwards.  It‘s appalling.  I‘ll get “Rapid Fire Response” on that. 

And I‘ve got the smoking gun proving Fox News is out to defeat President Obama and the Democratic agenda.  I‘m revealing their shocking internal e-mails in “The Playbook” tonight. 

Plus, a Major League Baseball player is pinch-hitting for team birther. 

And I‘ll show you the video of cops deliberately blowing up a house filled with rafters with a massive bomb collection. 

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

(COMMERCIAL BREAK)

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

I want to take a moment to honor a man who has been a great statesman for the United States of America and will be a tremendous loss for American workers. 

Senator Byron Dorgan is retiring after 40 long, tough years of public service.  He was a fighter to the very end. 

And today, standing up for American workers is exactly the same man that stood up years ago when he came into the Congress.  He had the guts to take on the recklessness on Wall Street. 

Today, he said his farewell speech on the floor. 

(BEGIN VIDEO CLIP)

SEN. BYRON DORGAN (D), NORTH DAKOTA:  Every generation has asked the same question that John Adams asked: “Where will the leadership come from for this country?”  Who will be the leaders?  And the answer to that question now is here in this room. 

The Senate is often called the most exclusive club in the world, but I wonder really if it‘s so exclusive if someone from a town of 300 people and a high school senior class of nine students can travel from a desk in that small school to a desk on the floor of the United States Senate. 

I was thinking about the late Ted Kennedy.  Ted Kennedy, full of passion.  And on certain days when he was agitated and full-throated, you could hear him out on the street fighting and shouting for the things he knew were important for America. 

And I feel unbelievably proud to have been able to serve here with these men and women for so long.  I thank my colleagues. 

(APPLAUSE)

(END VIDEO CLIP)

SCHULTZ:  From Regent, North Dakota, Senator Byron Dorgan. 

And Senator, I don‘t think we‘re going to be making any news here tonight, but I‘m going to take this opportunity to tell THE ED SHOW audience and many who have listened on the radio for years that I have taken my political lead from you for a long time, and you are a dear friend, you are an honest man, you are fair, and you have never given up on the American worker. 

I honor you.  I admire you.  And the Senate is losing a treasure.  And I‘m proud to say that you are my friend. 

DORGAN:  Oh, listen, Ed, thank you so much. 

You know, I‘m not vanishing.  You know, I‘m moving on to another chapter of my life.  But this has been a great privilege. 

And at this moment in this country, it‘s important for us to continue pushing through the finish line here.  We have got to make good decisions. 

You know, I‘ve told you before, Ed, there‘s no preordained notion that America is always going to succeed.  It requires courage and good decisions for our country. 

So thanks for what you do, by the way.  And I have cherished and treasured our friendship as well.  I think it‘s important to stand up and speak up and shout out when necessary. 

SCHULTZ:  You know, it‘s interesting you talked about Ted Kennedy today, because I don‘t think labor ever had a better friend than Ted Kennedy.  I don‘t think the American farmer ever had a better friend than Byron Dorgan.  I don‘t think the rural Americans in this country ever had a better friend than Byron Dorgan. 

And you will be remembered as a fighter and a man who back in 1999, stood up on the Senate floor and said we‘re wrong to get rid of Glass-Steagall, and that we‘re going to come back in this chamber in the United States Senate 10 years later and we‘re going to regret this.  Lo and behold, it was almost like the words coming down from the heavens. 

You were spot on.  You knew.  And you are a treasure.  And I know a lot of Americans are going to miss you. 

DORGAN:  Well, thanks a lot, Ed.  I mean, it‘s—there‘s no pleasure in being right when a catastrophe that hit this country, you know, shrunk $15 trillion away from the economy.  But, you know, we just—we need to expect in public service that there‘s somebody that‘s going to speak for workers and farmers and people that open up their small business door every morning. 

If you have just a moment, I spoke on the floor today and talked about at Franklin Delano Roosevelt‘s funeral, there was a story about a journalist who went to a working man who was standing there holding his cap as they were waiting to file through the Capitol and see the casket—or the coffin of the dead president.  A journalist asked this working man—he said, “Did you know Franklin Delano Roosevelt?”  And the working man had tears in his eyes and he said, “No, but he knew me.” 

And that‘s the question.  Who knows working people today in this country?  And who‘s standing up for them and doing the things we ought to do to make a better life for them, give them jobs and opportunity? 

SCHULTZ:  Senator Dorgan, thank you for serving this country for 40 years.  Thanks for doing what you‘ve done.  And Godspeed, my friend.  We‘ll do it again. 

DORGAN:  Hey, thanks, Ed. 

SCHULTZ:  We‘re right back on THE ED SHOW here on MSNBC. 

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, well, we have got a couple of crazy birthers.  Kind of an odd couple here tonight, Arizona Senator Russell Pearce and Baltimore Oriole designated hitter Luke Scott.  Yes, really odd. 

Pearce is the guy who wrote the racist anti-immigration bill in the state of Arizona.  And during an event yesterday, he took a shot at President Obama. 

(BEGIN VIDEO CLIP)

RUSSELL PEARCE, ARIZONA STATE SENATOR:  A little levity is OK, I hope, because I like to have fun with most things.  But I can tell you that the best thing about 1070 is that Obama may not be visiting Arizona because we actually require papers now.

(LAUGHTER)

(APPLAUSE)

(END VIDEO CLIP)

SCHULTZ:  Sure, a moment of levity. 

Here‘s the problem, Russell.  When you spew that kind of garbage, people believe you.  That‘s the problem. 

Now, on the other hand, in a recent interview with “The Atlantic,” Baltimore Orioles slugger Luke Scott had this to say about President Obama.  His quote was, “If someone accuses me of not being born here, I can within 10 minutes go to my filing cabinet and I pick up my real birth certificate.”

“Obama has dodged everything.  He dodges questions, he doesn‘t answer anything.   And why?  Because he‘s hiding something.”

“If you‘re born here, there‘s plenty of documents.  But you know what? 

There‘s no documentation of him.  No legal documentation of him.”

“There‘s been lie after lie after lie exposed, but people put it under the carpet.  Hence, the problem we have in this country.”

Well, no, Luke.  The problem we have in this country is righties like you pushing these ridiculous lies about the president years after they‘ve been completely debunked.  All this birther talk is tired, old “Psycho Talk.”  

Coming up, you know things are bad when the White House is taking a page from “The Beckster‘s” playbook to peddle their goods.  Senator Sherrod Brown, he brings the straight talk to “The Battleground” story tonight. 

Heartless Republicans just went out of their way to hurt 9/11 responders.  They‘d rather give tax breaks to millionaires than provide health care to the heroes. 

I‘m not going to let them get away with this one.  I‘ve got a commentary coming up. 

Plus, we now have proof of just how sleazy Fox really is. 

And I‘ll tell you why cops torched this house full of bombs today. 

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

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.   The “Battleground” story tonight, well, the White House is on a pr offensive to sell their republican-backed tax cut deal.  I guess you could say that they‘re in the financial locker room throwing it out for the liberals so we all understand it.  President Obama‘s talking about it every day.  Vice President Joe Biden is blasting e-mails.  And of course, the head beancounter is offering an online math class. 

(BEGIN VIDEO CLIP)

AUSTAN GOOLSBEE, WHITE HOUSE ECONOMIC ADVISER:  These things are key to the short-run recovery of the economy and getting the growth rate up.  And I will point out that these Obama tax cuts are more than twice as big as the high-income tax cuts in this short period.  Each of these is important.  They‘re targeted.  They‘re temporary.  So they have no impact on the long-run deficit facing the country.  And they add up to serious money that could help boost this recovery in the short run. 

(END VIDEO CLIP)

SCHULTZ:  All right.  Give me a break.  I don‘t think the White House is going to sell me on this plan with a lame white board video.  It‘s a good effort, you know?  I know that Austan Goolsbee is not, you know, he‘s not a TV guy.  He‘s just trying to get through this whole thing.  But what it reminded me of was this guy.  The Beckster who had the blackboard.  I mean, when I first to saw it, I just started rolling.  If the White House is going to insist that this is the only way that they have, they need to sell it, I mean, I totally disagree with extending the tax cuts for the wealthy, but there are some good things in it for the middle class, no doubt. 

All right.  Now, if you looked on the right hand side of the video, one of the things in there was the earned income tax credit.  Hmm.  First of all, let‘s be fair about this.  The earned income tax credit has been around since 1975.  Now, that‘s money that goes to working families with children.  It‘s really an incentive to go get a job and then you‘re going to get a tax credit.  Now, the Obama plan would expand that.  So, how would this play, say, from where I come from?  Well, in Fargo, North Dakota, the median income is $38,000 a year.  That‘s right.  Middle of the country, 38 grand a year.  And the average rent there is about $600 for low-income housing, affordable housing or two-bedroom apartment.  Now, a working family could conceivably get an extra rent payment under the Obama tax plan.  Well, this is real money, and it could make a world of difference for a family struggling in a tough economy.  I get all that.  But I still want to kill this bill and come back and get a better plan. 

For more on this, let‘s go to Ohio Senator Sherrod Brown.  Senator, good to have you with us tonight.  There are some good things in it.  The earned income tax credit has been around for a long time, and it‘s borderline disingenuous, I think, for the White House to list this and sell it as one of the new things that‘s out there in what they negotiated for.  How do you feel about that?  Is that sell job just stretching it a little bit?

SEN. SHERROD BROWN (D), OHIO:  Well, maybe.  I mean, I do like a lot of things in this deal, as you do, Ed.  But, you know, when we borrow $700 billion from China, charge it to our grandkids and put it on their credit card to pay off, and then give that money to millionaires and billionaires, and most importantly, we continue basically Bush economic policy, tax cuts for the rich trickle down.  It doesn‘t work for us.  There are good things.  I would never dispute that.  I appreciate the president‘s negotiating for those, but the tax cuts and the estate tax that overwhelmingly benefit the wealthy and ultimately our kids have to pay for. 

What we‘re going to see a year from now, two years from now is Republicans saying, oh, we got these huge Obama deficits, that‘s what they‘re going to call them, which have gotten a lot bigger because of the tax cuts.  But al they‘re going to say is we have these huge Obama deficits.  We have to start cutting head-start, we have to start shrinking earned income tax credit, we have to start cutting—we have to cut more education money, we have to go after Social Security and Medicare.  That‘s what they‘re going to do.  That‘s why, Ed, I have on my Web site, sherrodbrown.com, people can sign a letter that says, no deal, put the middle class over the super wealthy. 

SCHULTZ:  OK.

BROWN:  I‘m asking my people to do that.   Because we have to stay engaged as you are on this.  

SCHULTZ:  Well, I mean, it is the conversation the country is having right now and it‘s very clear that the righties want to pin this on the Democrats.  Hey, you‘re in the majority, you did the vote, this is President Obama‘s economy.  You Democrats did this, and now you‘ve just signature all these long-term deficits.  This $900 billion package.  I mean, for the politics of it all and to get the attention of the country, why isn‘t it a good strategy to just go ahead and let this legislation expire and start over, and force the Republicans back to the table?

BROWN:  I want to—I mean, the reason I‘m asking people to go to my Web site, sherrodbrown.com, is to do and to force them back to the table.  You know, you think how cynical this was.  All 42 republican senators did something I‘ve never seen or ever read about in Congress.  They basically are doing a work stoppage.  They‘re saying, they signed a letter saying, if you don‘t give me my tax cuts for the rich, I‘m not going to extend unemployment benefits, we‘re not going to extend the middle class tax cuts.  They‘re basically saying we‘re going to stop working unless you give us our tax cuts for the rich.  And we can‘t let them play the game that way. 

SCHULTZ:  Do you think you have the White House‘s attention now that Vice President Biden went up, in somewhat of a smug fashion, said take it or leave it?  And of course, there are a number of people in the Senate, I think including yourself, that don‘t like the way this came down.  How do you think the White House—the way the White House is responding is they‘re taking out a pr campaign?  I don‘t know, are they listening to you?

BROWN:  Well, I think they‘re responding, it means they have been listening because they know that this isn‘t the smooth sailing they thought it was.  Just because the president made a deal with Mitch McConnell and Jon Kyl, the republican senators, left out House Republicans, left out House Democrats, left out Senate Democrats.  And I think the fact that the president called a sanctimonious two days ago and Joe Biden is coming out talking to both caucuses, and not doing all that well as talented as he is and then what we‘re seeing with Austan Goolsbee‘s video tells me that they know that things like, you know, my Web site at sherrodbrown.com and other people, Bernie Sanders on the floor tonight basically doing—all these kinds of things for getting their attention.  We hope it works.  If it doesn‘t, we‘ve at least raised to the public what Republicans have done.  They‘ve held up everything, unemployment. 

SCHULTZ:  You can‘t give it to them, senator.

(CROSSTALK)

You can‘t give the top two percent the break in this one.  You got to hold the line.  I think that‘s where the American people are.  Great to have you with us tonight.  I appreciate your time. 

BROWN:  Thanks, buddy.  

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

House democratic caucus rejected the president‘s tax cut deal today.  And Nancy Pelosi has their back.  She‘s refusing to bring the deal to a vote without changes. 

Late today Senate Republicans blocked a bill to help 9/11 first responders who were sickened at Ground Zero.  This proofed just how ruthless they are. 

And Christine O‘Donnell walks back her despicable comment that extending jobless benefits is like the tragedy of Pearl Harbor and the death of Elizabeth Edwards.  But she never apologizes for the comparison. 

With us tonight, Bill Press, nationally syndicated radio talk show host.  And John Feehery, republican strategist. 

All right.  Let‘s talk about the move in the House today.  What does this really mean, Bill Press?  How far will the Democrats go with the resolution that passed today and Nancy Pelosi saying there has to be changes?  What happens?

BILL PRESS, RADIO TALK SHOW HOST:  I tell you what this means, Ed.  It means a couple of things.  Number one, it means the White House has learned a big lesson here and an embarrassing lesson.  They can‘t take Democrats for granted.  They can‘t take their base for granted, they can‘t leave them out of a room when they make a deal and just expect them to endorse anything the White House says because the president happens to be a democrat.  The other thing I think it means is, boy, we‘ve been asking for this for two years, Ed, you and I and a lot of other people. 

SCHULTZ:  Yes.

PRESS:  Let‘s see some fight in Washington among Democrats and let‘s not just keep rolling over for the Bush-like policies of the Bush policies.  And I‘ll tell you, you know, especially the estate tax.  The Democrats I‘ve talked to, that was one bridge to far as a speaker called it, and they just said we are not going to go there because the price we‘re paying to get the unemployment benefits extended is too damn high.  

SCHULTZ:  And John Feehery, now we know what you guys want to do.  You just want to pin this on President Obama and get him down in the ditch with you financially to say, you‘re here, too.  Huh?

JOHN FEEHERY, REPUBLICAN STRATEGIST:  You know, Ed, in three weeks, the Republicans take over and they can cut even better deal for themselves because John Boehner will be speaker.  I don‘t know what Nancy Pelosi is doing.  This is the best deal they‘re going to get.  I think she‘s crazy.  I think that‘s what‘s going to happen when John Boehner gets there, he is going to get a better deal on the estate tax, he‘s going to get a better deal from his perspective unemployment insurance and you know what, the Democrats are going to be scratching their heads saying, why didn‘t we pass that better deal three weeks ago?

PRESS:  Hey, Ed, you know what, republican member of the House told me, he said, on the estate tax he was stunned.  They were stunned that they got this.  They didn‘t even know $5 million was on the table. 

SCHULTZ:  Feehery says, it‘s the best deal you‘re going to get.  

(CROSSTALK)

FEEHERY:  Bill, this is the best deal you‘re going to get.  You better take it or it‘s going to get lot worse for you when John Boehner‘s speaker.  

PRESS:  You know what John?  It‘s going to get better or there will be no deal.  And no deal is better than a bad deal.  I think, Ed, you‘re right on that.  Go back and renegotiate and just focus on the people that need the help. 

SCHULTZ:  All right. 

FEEHERY:  Bill, the thing is, if taxes go up, it‘s devastating for the Democrats because they‘re going to get blamed for it.  They‘re going to get blamed terribly for it. 

(TALKING OVER EACH OTHER)

PRESS:  Blame John Boehner and Mitch McConnell.  They‘re the ones.  

SCHULTZ:  This is the crux of the whole thing.  You think that the Democrats are going to blink on this.  Look, I think the American people are willing to sacrifice.  I think they are willing to sacrifice and I think the president just has to ask them to sacrifice a little bit longer and come back and hammer a tougher deal. 

All right.  Now, both of you, quickly, give me this.  Give me the rhyme or reason of the 42 votes against helping the first responders, Bill Press, today in the Senate.  What the hell was that all about?

PRESS:  I tell you, Ed, this—nothing better shows what the Republican Party is all about.  Talk about priorities.  I mean, to say it costs too much money to help these responders who came out on 9/11 and suffer their health because of the crap that they were breathing down there.  I mean, look, we take care of when we should our veterans when they come home from Iraq and Afghanistan and are severely wounded.  We sure as hell ought to take care of those 9/11 responders.  It is unconscionable not to.  

SCHULTZ:  You know what John, this is just the response to that letter of 42.  That‘s what this is.  You‘re not going to let anything go through until you get your tax cuts.  Isn‘t this ruthless?

FEEHERY:  It‘s not ruthless.  It‘s called, listen, let‘s get this tax stuff done so jobs could be created.  This is the thing about Democrats.  They keep forgetting about jobs. 

SCHULTZ:  No, no, no, wait a minute, we‘re talking about 9/11 responders now.  

FEEHERY:  You‘re not going to get the jobs.  Of course they sign this letter and that what‘s they‘re keeping to it.  That‘s the pledge.  

SCHULTZ:  OK.

PRESS:  John, these people were doing their job. 

FEEHERY:  Listen, I‘m for the first responders.  Absolutely.  

(CROSSTALK)

PRESS:  We ought to recognize that.

FEEHERY:  And once Republicans take control, they‘ll be taken care of. 

They‘ll be taken care of.  

SCHULTZ:  The president said yesterday, a couple days ago in his press conference that the Holy Grail for the Republicans is the tax cuts.  And damn it, they proved it today.  

FEEHERY:  The Holy Grail is to create jobs and tax cuts create jobs.  

SCHULTZ:  The tax cuts for the righties is what it is.  That‘s what it‘s all about, John.  You know that.  We know your playbook now.  But this is. 

FEEHERY:  My playbook is, let‘s create jobs.  I‘ve been focused on it for years.  

SCHULTZ:  OK.  So, sticking it to the first responders at 9/11 has a lot to do with creating jobs.  Come on. 

(CROSSTALK)

FEEHERY:  There‘s no question in my mind.  

SCHULTZ:  All right.  John Feehery, Bill Press, always a pleasure. 

Good to have you with us.  

FEEHERY:  Thanks, Ed.

PRESS:  Thank you.

SCHULTZ:  Coming up, FOX News keeps insisting that they‘re fair and balanced.  But Media Matters just caught them red handed with some shocking internal e-mails.  Eric Boehlert from Media Matters reveals it all, next in the “Playbook.”  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And it‘s not too late to let us know what you think.  The number to dial is 1-877-ed-msnbc.  Tonight‘s telephone survey question is, did House Democrats do the right thing by rejecting President Obama‘s tax compromise?  Press the number one for yes, press the number two for no.  Again, the number to dial tonight is 1-877-ed-msnbc.  We‘re right back.   

           

(COMMERCIAL BREAK)

SCHULTZ:  And in my “Playbook” tonight.  We now have more proof of FOX News deliberate attempt to push the republican agenda.  Media matters got a whole of a leaked e-mail from FOX Washington managing editor Bill Sammon, he sent to his staff during the height of the health care debate last fall.  Sammon specifically told the staff not to use the term public option.  The subject of its e-mail was, quote, “friendly reminder, let‘s not slip back into calling it the public option.” 

He continued with the following instructions, one, please use the term government-run health insurance or with brevity is the concern, government option whenever possible.  Two, when it is necessary to use the term public option, use the qualifier so-called as in the so-called public option.  Three, here‘s another way to phrase it.  The public option which is the government-run plan.  Four, when newsmakers and sources use the term public option in our stories, there‘s not a lot we can do about it since quotes are, of course, sacrosanct. 

Well, joining me now is Eric Boehlert, senior fellow at Media Matters for America.  Proved positive, my man.  Is there a mole inside FOX News?  That‘s what people want to know. 

ERIC BOEHLERT, MEDIA MATTERS FOR AMERICA:  Well, you know, we obtained it from a source.  And it hasn‘t been disputed or anything like that.  Frankly I think FOX News is getting a little nervous.  More and more people inside FOX News are talking.  Media Matters is going to continue to talk to more of them.  And if they want to contact us, they can e-mail us at whistleblower@mediamatters.org.  Bit by bit, the truth is coming out.  You know, this is another important piece of this little word games that were being played.  The key here is that public option, Republicans poll tested it.  People liked that idea, public option.  People didn‘t like the phrase government-run health plan.  Lo and behold, FOX News sends out the—key, let‘s drop public option, let‘s go with government-run health plan.  Again, I think this is, you know, it‘s another important piece to the puzzle because now we know FOX News is just as committed to defeating health care as the Republican Party was. 

SCHULTZ:  Well, they‘re an arm of the Republican Party.  

BOEHLERT:  Absolutely.  

SCHULTZ:  They‘re out there serving the American people, and what phrases works and don‘t work, I mean, how much closer to the party can you get?

BOEHLERT:  I know, right?  Exactly.  These are the talking points.  And again, I mean, this is the portrait that is being painted and it‘s being painted by people inside FOX News which I think is damning and I think as this goes on, you know, whether it‘s Rupert Murdoch writing million-dollar checks to the Republican Party, whether it‘s FOX News inviting candidates on to fund raise on the air.  You know, this portrait is being painted.  And the circle of people, I think, who see FOX News as being legitimate is shrinking by the day.  

SCHULTZ:  And your Web site again.  You‘re looking for whistleblowers. 

I love that. 

BOEHLERT:  Yes.  Absolutely. 

(LAUGHTER)

SCHULTZ:  Inside the News Corp. empire.  What is the Web site again, Eric?

BOEHLERT:  They can just e-mail us directly, whistleblower@mediamatters.org.  The most damning portrait that‘s being painted by FOX News is coming from people inside FOX News.  And that‘s the portrait Media Matters is going to help pay for in the months to come.  

SCHULTZ:  Eric Boehlert, Media Matters.  Great to have you with us tonight.  Thank you for your time.  

Final pages in the “Playbook.”  Ralph Nader is ripping into President Obama.  Listen to what he said about him to CBS News, quote, “He‘s opportunistic, he goes for expedience like Clinton.  Some call him temperamental, temperamentally conflicted.  Adverse.  If you want to be harsher, you can say he has no principles and he‘s opportunistic.  He‘s a con man.”  Wow.  “And I have no use for him.”  This is really over the top, isn‘t it?

In a packed full of explosives, a house packed full of explosives was burned to the ground by officials in California today.  The house had the largest amount of homemade explosives ever found in a single location in the United States.  So, instead of carrying out, what the heck, let‘s just burn it down. 

Coming up, President Obama and his economic team are buying into W‘s talking points.  Say it ain‘t so.  Mort Zuckerman and I actually agree on this one.  He joins me next on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And finally tonight, President Obama is so desperate to sell his tax cut compromise, he‘s pushing a myth Republicans have been feeding us since the Bush administration.  Today the president argued extending the Bush tax cuts will create jobs?

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA (D), UNITED STATES:  This agreement would boost economic growth in the coming years and has the potential to create millions of jobs.  The average American family will start 2011 knowing that there will be more money to pay the bills each month, more money to pay for tuition, more money to raise their children, but if this framework fails the reverse is true.  Americans would see it in smaller paychecks that would have the effect of fewer jobs. 

(END VIDEO CLIP)

SCHULTZ:  Wow.  I didn‘t buy that argument when W was in the White House and I‘m not buying it now.  George W. Bush averaged a job growth rate of only 0.28 percent a year during his presidency.  The worse rate of any president since World War II. 

For more, let‘s bring in Mort Zuckerman, he‘s the chairman, editor in chief of U.S. News World Report and publisher of the New York Daily News.  Mr. Zuckerman, why shouldn‘t we extend the Bush tax cuts in your opinion?

MORT ZUCKERMAN, EDITOR IN CHIEF, U.S. NEWS WORLD REPORT :  Well, I mean, I opposed the Bush tax cuts when they were first introduced.  I do believe that we do have a serious fiscal problem in this country.  Which is going to—it‘s a dag—all these debts are the equivalent of a dagger pointed at the heart of the economy of this country.  So that‘s the main reason, but there‘s no doubt but that there is a serious issue of the economy.  I wouldn‘t even mind some tax benefits going up over the next two years if they introduce some expenditure cuts there afterwards.  But this is just a $980 billion hole in our fiscal future and I think it‘s just ridiculous.  

SCHULTZ:  What do you say to the Republicans?  They‘ve drawn the line.  They‘re not going to do any deal unless the top two percent is taken care of.  

ZUCKERMAN:  Look, I think both sides have their own political motivations.  I mean, the president wants to put in some additional kind of job stimulus because he feels that his programs to date haven‘t worked.  They put—we have had the most stimulative fiscal and monetary policy in the history of this country, and we‘re still suffering from job losses or minimal job gains, inadequate to meet even the people coming into the labor force every month.  So, I‘m not sure his rationale which he now gives which sounds very good as you say, it‘s what the Republicans said, I don‘t believe that, OK?  And the record has not been very good to establish the credibility of his claim. 

SCHULTZ:  I don‘t think any economist has gotten it right throughout this entire ordeal.  Larry Summers says, if the Democrats don‘t pass the bill in the next couple of weeks, it will materially increase the risk of the economy, that would stall out and we would have a double dip.  Do you agree with that?

ZUCKERMAN:  Well, I think there would be an increased risk.  There‘s no doubt about it because of the existence of the fact that this would in effect represent tax increases to some extent is not what you want to  do at this point.  But if you just do it this way and just introduce $980 billion, the cure may be worse than the problem.  So I don‘t happen to agree with this approach and I‘m totally opposed to it.  If the wealthy people don‘t—are not seeing to pick up their fair share of what the fiscal deficit is going to require to be cured, nobody else is going to step up to it. 

We had two commissions on fiscal policy that just came up with announcements within the last 30 or 60 days.  Both parties are ignoring it.  Obama because he wants to look as if he‘s got a program capable of implementing a program and knows that if the economy gets worse and the jobless numbers stay where they are, he‘s going to be in deep trouble in two years.  And the Republicans have another problem, they have made a commitment to this thing, it‘s an ideological and political commitment they don‘t want to walk away from.  

(CROSSTALK)

SCHULTZ:  Well, Mr. Zuckerman, quickly here.  What you‘re talking about is sacrifice.  And I think the country needs that. 

ZUCKERMAN:  That‘s right.

SCHULTZ:  You and I are on the same page with that.  Mort, great to have you with us tonight.  Thanks for speaking up.  

ZUCKERMAN:  Thank you.

SCHULTZ:  Tonight in our telephone survey I asked, did the House Democrats do the right thing by rejecting President Obama‘s tax compromise?  Eighty eight percent of you said yes, 12 percent of you said no. 

That‘s THE ED SHOW.  We‘ll see you tomorrow night from Washington, D.C.  “HARDBALL” is next with Chris Matthews.

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