updated 12/20/2010 12:05:07 PM ET 2010-12-20T17:05:07

Guests: Dennis Kucinich, Joe Madison, Ernest Istook, Mike Papantonio, Lizz Winstead, Sherrod Brown, James Clyburn, Bob Shrum

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

These stories are hitting “My Hot Buttons” at this hour.

Well, the president sold it hard and he got what he wanted.  It‘s a huge victory for the White House, depending on how you look at it, but John Boehner is already giving the president the cold shoulder. 

My commentary on that, plus reaction from House Majority Whip Jim Clyburn and Ohio Senator Sherrod Brown, coming up in the program tonight. 

Darrell Issa is planning a witch-hunt against the Obama White House, but the Democrats are ready with a counteroffensive.  There is a big development in the Democratic strategy tonight. 

Congressman Dennis Kucinich will join me to talk about it in the bottom of the hour in “The Battleground” story. 

And coming up, “Club Ed.”  Lizz Winstead finds common ground with Sarah Palin?  Plus, Michele Bachmann has just been named to the Intelligence Committee.  Lizz will have something to say about that.

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

The hostage-takers of the Republican Party got their $9 billion in ransom.  Now let‘s see if they‘re going to have the character to let the American people free on the job front. 

Now, the party of no just got everything they wanted when the president signed the tax compromise bill into law earlier today. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Both houses of Congress have now passed a package of tax relief that will protect the middle class, that will grow our economy, and will create jobs for the American people. 

The legislation I‘m about to sign is a substantial victory for middle class families across the country.  They‘re the ones hit hardest by the recession we‘ve endured.  They‘re the ones who need relief right now.  And that‘s what is at the heart of this bill. 

(END VIDEO CLIP)

SCHULTZ:  You‘ve got to hand it to the president, he worked it hard.  He managed to get an extremely controversial tax bill through a fractured Congress in less than three weeks.  Speaker Nancy Pelosi said the Republicans forced the Democrats to “pay a king‘s ransom in order to help the middle class.” 

Liberals might not be too happy with the outcome of this tax debate, but no one can argue that President Obama has—he has done absolutely everything he possibly can to jump-start this economy after eight years of Bush destruction. 

Congressman Elijah Cummings didn‘t vote for the bill, but he says he understands why the president cut this deal.  Cummings says, “He believes he‘s got to do something to create jobs as fast as he possibly can, and he realizes that there‘s only a limited amount of time to accomplish that before the next election.  I understand him, even if I don‘t agree with him.” 

That‘s the linchpin in all of this for the Democrats, especially the liberals.  Cummings, I think, is spot on. 

President Obama has been laser-focused on getting this economy moving, and the Republicans have done everything they possibly can to make him fail.  But no president has ever had to deal with as many Senate filibusters, yet President Obama hasn‘t let that get in his way. 

For the record—for the record—in the last 24 months in office, President Obama passed the largest stimulus bill in American history.  He saved the automobile industry with a loan which was on the brink of disaster.  He passed the greatest health care reform in the last 50 years in this country.  He passed over 16 measures to spur small business, and now he‘s put more money into the pockets of the middle class Americans in this country than any president ever has. 

The ledger is long, but maybe the credit isn‘t coming because this fight has been so hard. 

John Boehner, by the way, was a no-show today and reacted to the bill this morning. 

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER ®, MINORITY LEADER:  The Congress has acted to stop all of the tax hikes that were scheduled to go into effect January the 1st.  But it‘s a good first step.

But let‘s be clear.  If we actually want to help our economy get back on track and to begin creating jobs, we need to end the job-killing spending binge, we need to cut spending significantly, and we need to provide more certainty to small businesses around America. 

(END VIDEO CLIP)

SCHULTZ:  More certainty?  It‘s unbelievable.  A good first start?  I‘d hope so. 

I mean, you just gave the top two percent exactly what they wanted.  Big business got what they wanted.  Wall Street got what they wanted.  So there‘s no reason for anybody to be talking down the economy saying, well, we don‘t know if we can move forward because of all of this uncertainty that‘s out there.  We shouldn‘t ever hear that again. 

President Obama has done everything a president can possibly do to jump-start this economy and get things rolling again. 

Liberals, here‘s where I think we are tonight.  We‘ve got to keep our eye on the ball. 

It has been a long, tough fight for the left, and strong progressives are feeling bruised tonight after the last few weeks.  There‘s been disagreement.  There‘s been disappointment on the left about these tax cuts and the performance and the position of the president on this issue.  Did he cave in? 

Well, President Obama, give him credit, he took a course, he staked out a position, and despite the heat, he stayed the course.  Some call it a cave-in, some call it a big political victory.  The bottom line is the president feels like he got a lot of what he wanted. 

(BEGIN VIDEO CLIP)

OBAMA:  There are some elements of this legislation that I don‘t like.  There‘s some elements that members of my party don‘t like.  There‘s some elements that Republicans here today don‘t like. 

That‘s the nature of compromise, yielding on something each of us cares about to move forward on what all of us care about. 

(END VIDEO CLIP)

SCHULTZ:  I think we all get that.  I think that we‘re all rooting for the president.  We just don‘t like the method. 

I‘m not happy with the package.  I think the top two percent should pay more.

But you know, what folks?  We do, as liberals, have to move on and get past this.  The consequences would be too great if this man was not in office. 

This is America.  We politically fight from time to time, and our definition of fight is in the eyes of the beholder.  Only you at home tonight can wonder whether the left went too far or maybe I went too far. 

I don‘t think I did.  And I wasn‘t going to back off until the very last vote was cast. 

I‘m ready to keep that north star in sight, that star President Obama talked about last week, and keep moving forward.  It was a tough one, no doubt, but I‘m still with this president.  And I think liberals need to understand there‘s going to be a lot of fights on the horizon between now and 2012, and I think we can all predict what the argument‘s going to be all about just before the next election—these very tax cuts and, of course, the Social Security rate.  I don‘t think the Republicans are ever going to serve it up. 

And there‘s one more dynamic in all of this.  In my heart, I don‘t believe that big banks, big business want this president to succeed.  That is an intangible and that is a dynamic that I think we‘ve never seen before in this country because they are sitting on so many assets.  It‘s up to them right now to show some economic patriotism. 

Get your cell phones out.  I want to know what you think on this issue tonight.  Tonight‘s text survey question is: Do you think the Republicans owe President Obama for compromising on the tax cuts? 

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 Ohio Senator Sherrod Brown, who voted for the bill. 

Senator, good to have you with us tonight. 

SEN. SHERROD BROWN (D), OHIO:  It‘s good to be back, Ed.  Thanks. 

SCHULTZ:  I know this bill is going to help a lot of people, but how do we know it‘s going to create jobs?  And that is the key.  We must get people back on payrolls in this country. 

How do you know this is going to work? 

BROWN:  Yes, I voted for this bill because I don‘t think you can look in the eye of an unemployed worker in Shelby Ohio, or Norwalk, Ohio, and say, you know, I‘m voting against tax cuts for the rich.  It‘s my principle, sorry about your benefits.  And in the end, that‘s why so many progressives I think supported this. 

This bill, you know, I don‘t quote John Boehner very often, but he said it

you know, he talked about certainty and predictability.  This bill helps do that.  This bill partners with the business community pretty well. 

I think this bill is—this new law and the president‘s leadership, and the president‘s reaching out to CEOs is—really does send a signal that the cash reserves they‘re sitting on which, in some cases, in some big manufacturing companies whose CEOs I‘ve spoken to in the last two, three months, they‘re sitting on reserves two or three times the normal cash reserves they sit on.  The best stimulus package of all would be if they begin to invest.  And I think we‘re going to see more of that. 

I think the president‘s focus is that.  What I‘m concerned about and sort of the other part of that, Ed, is that the Republicans, the John Boehners of the world, their focus in the next month or two is going to be in this health care bill --  

SCHULTZ:  Sure. 

BROWN:  -- trying to repeal all of this stuff from—and, you know, instead of focusing on jobs.  And the president‘s focus is on jobs.  Democrats‘ focus is on jobs.  That‘s where we‘re going. 

Who knows what the Republicans are going to do?  But that doesn‘t matter. 

We‘ve got to keep our eye on that, as you suggested. 

SCHULTZ:  OK. 

Senator, what do you say to liberals in this country who feel like this bill is a sellout?  Will there be political damage?  Is there time to patch things up? 

BROWN:  Yes.  I mean, of course we‘re disappointed.  We‘re disappointed that it came out the way it did. 

The disappointment started November 2nd, and it‘s continued on this issue.  I think it could had been done differently.  It‘s always easy, just like the health care bill should have moved more quickly through the Senate.  We all knew that. 

It didn‘t.  This tax bill, if we had started earlier, particularly during the 20 --

SCHULTZ:  But I‘m talking about—Senator—

BROWN:  Yes.  I understand that. 

SCHULTZ:  -- I‘m talking about—I mean, there‘s people out there who are off the bandwagon. 

BROWN:  I understand that. 

SCHULTZ:  And what do you say to those people? 

BROWN:  Well, I don‘t know.  I mean, I know that people were disappointed there wasn‘t a public option.  We still got a good health care bill. 

There were people disappointed that the Brown/Kaufman amendment didn‘t pass so that those six banks couldn‘t dominate the banking industry the way they do, that Ted Kaufman and I worked on.  But we still got a decent bill, Wall Street reform. 

I mean, you know, it‘s—the word “compromise” is not particularly a favorite word for a lot of my fellow progressives, but I think this—again, I was not happy with in.  I voted against cloture.  I voted for the bill because I thought if we didn‘t in the end, it would be worse. 

But I think the president now is—his popularity is picking up again.  I think he knows where his base is.  He knows who got him there. 

He knows the party of ideas.  He knows the progress in this country, whether it‘s Medicare or Social Security, civil rights, the Wilderness Act, or higher, Ed, comes from progressives.  He knows that, and I think that we‘re going to see a better next year and a half that will set the stage for a re-elected president.

SCHULTZ:  Well, hope so.  I hope so, and I hope all this goodwill shows up for the Republicans in the next couple of days, because there‘s going to be votes on “Don‘t Ask, Don‘t Tell” and the START treaty.  So I hope they come as honest brokers into your chamber. 

Senator, good to have you with us tonight. 

BROWN:  Thanks, Ed.  Always.  Always.  Thanks.

SCHULTZ:  I appreciate your time.  You bet. 

Congressman Jim Clyburn now joins us, the House majority whip. 

Congressman, good to have you with us tonight. 

REP. JAMES CLYBURN (D), MAJORITY WHIP:  Thank you. 

SCHULTZ:  You bet. 

Big labor met with the president today at the White House.  Some of them didn‘t even show up, they‘re so upset about this bill. 

Is there some patchwork that has to be done moving forward, in your opinion? 

CLYBURN:  Well, thank you so much for having me, Ed. 

But, look, this bill has some great things in it.  If I were only voting on the president‘s side of the ledger, I would be for this bill enthusiastically. 

My big problem with the bill was I thought that $25 billion being added to the deficit in order to give 6,600 families a big tax break was a bridge too far for me to travel upon.  So I, in the end, did not vote for it. 

But I like the tax cuts for middle income people.  I like the extension of unemployment compensation.  I like the investments being made on tax credits for renewables. 

Those things are great.  And I really believe that now that the bill is here, signed by the president, all of us ought to get behind this bill, do what we can to get this economy sped up. 

We know that we‘re exactly on the right track.  We‘re just not traveling fast enough. 

And so we need to work together, stop smarting over what‘s already behind us.  And let‘s look to the future with the kind of anticipation that all of us bring to our jobs.  So I would say to my friend—

SCHULTZ:  You know, Congressman --  

CLYBURN:  Yes? 

SCHULTZ:  -- I think a lot of Americans agree with you that.  But today, when John Boehner doesn‘t show up, what sign does that send about future compromise and working together after the president and the Democrats gave the top two percent everything they wanted, plus an estate tax that they are—really weren‘t even asking for, and a reduction in the Social Security rate? 

I mean, it looks on the surface, yes, there‘s a lot of good stuff here, but here‘s Boehner not even showing respect to show up.  What does that signal? 

CLYBURN:  Well, if that‘s the case, that‘s not a good signal.  He may have had a conflict. 

To his credit, Boehner did say weeks ago that if he had no other alternative, he would have voted for the middle income tax cut alone.  So I give him credit for that.  And I do believe that he supports this bill.  He may not have liked all of it the way I don‘t like all of it, but I would hope that his not showing up for the signing today was anything other than him having some conflict with his schedule. 

SCHULTZ:  And finally tonight, Congressman, all your experience, are you convinced in your heart that this is going to work, that this is going to create jobs, that we can go this far in the hole and still get out of? 

CLYBURN:  Well, you know, Ed, I‘m the consummate South Carolinian. 

SCHULTZ:  Yes, you are.

CLYBURN:  The motto we live by as South Carolinians is, “While I breathe, I hope.”  It is my hope that this is the right medicine for what ails our economy today.  And I‘m doing everything I can to help make it successful, irrespective of what I felt about the total package. 

SCHULTZ:  Congressman, great to have you with us tonight.  I appreciate your time.  Thanks so much. 

CLYBURN:  Well, thank you so much for having me. 

SCHULTZ:  You bet. 

Coming up, President Obama is the new comeback kid.  At least that‘s what some conservatives are saying.  I‘ll ask Bob Shrum if the Republicans got it right, and are they running scared for 2012 now that the president has some mojo back? 

Democrats absolutely destroyed the Republicans on the Senate floor for their hypocrisy on earmarks.  I‘ll show you the tape.  You‘re going to want to see it. 

Plus, Sarah Palin flops in her latest interview; Orrin Hatch gets thrown into “The Zone” for not understanding the 99ers; and Lizz Winstead takes on Larry King, Bill Clinton, “zipper club” in “Club Ed.” You won‘t want to miss it.

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. 

A week ago, it looked like President Obama‘s deal on this tax issue was on the verge of collapse.  Now some are calling him the “comeback kid.” 

The president wanted a bipartisan solution.  Well, he got it.  Some consider it a huge victory for the president and some conservatives are willing to admit it. 

Here‘s Charles Krauthammer of “The Washington Post.”  “With his stunning tax deal, Obama is back, holding no high cards.  He‘s nonetheless managed to resurface suddenly not just as a player, but as an orchestrator, dealmaker and central actor in a high $1 trillion drama.  Obama pulled this off at his lowest political ebb.” 

Joining me now is Democratic strategist Bob Shrum.  He‘s also a professor at New York University. 

Bob, you and I were opposites on this, but the deal‘s done, we‘ve got to move forward.  I‘m all about that. 

But I‘m curious—the two gentlemen that I just interviewed, Senator Brown and Congressman Clyburn, they cannot tell me for sure or our audience tonight that this will create jobs.  They hope it will. 

Isn‘t this a real leap of faith to give the Republicans what they want, and a political hot potato?  Because if we don‘t create the jobs, it‘s going to be awfully tough on the president.

Your take?

BOB SHRUM, DEMOCRATIC STRATEGIST:  Oh, if we don‘t create the jobs, it‘s going to be very tough on the president.   But if you believe the principles of Keynesian economics, of Economics 101, then you have to believe that a good deal of this bill is going to stimulate domestic demand, it‘s going to help to create jobs, it‘s going to unlock that corporate investment you‘re talking about. 

Look, Charles Krauthammer is someone I respect.  I never agree with him ideologically, but I think his analysis here is quite right. 

What the president did was take a difficult, if almost impossible, situation and produce a bill—and I know that it‘s controversial when I say this—that I thought on balance was progressive.  Number one, because it helped the unemployed.  Number two, because it extended the child tax credit and the working families tax credit.  And number three, because it‘s the best chance we have to get a second economic recovery package and get this economy moving again. 

Will it work?  I think all the principles—

SCHULTZ:  And Bob, what is—yes, what is the measure of success of this bill, lowering the unemployment rate by maybe two percentage points, when Ben Bernanke has been out there the last couple of weeks saying we‘re going to have high unemployment, around nine or 10 percent for the next, maybe four or five years?

What about that?   

SHRUM:  Yes, there‘s some estimates by the end of next year this bill could bring the unemployment rate down to a little over 8 percent, and that the trend might then continue. 

If that happens, I think Obama‘s going to be in strong shape. 

But one thing I will tell you for sure, if there had been deadlock, and if nothing here had passed, not only would middle class families had been hit hard, not only would you have seen the unemployed in terrible trouble, but we know for sure that unemployment would have gone up probably by .6 of a percentage point to one percentage point. 

SCHULTZ:  OK.  So the political insight on this—I guess the political question here is, will middle class families in this country recognize what President Obama and the Congress just did for them if it‘s that severe? 

SHRUM:  I think they‘ll recognize that the president moved ahead, that their taxes weren‘t increased.  But, you know, just getting the knot of this right doesn‘t work. 

I mean, President Obama prevented us from having a depression.  We didn‘t have a depression.  People don‘t reward you for that. 

What they want is economic recovery.  What they want is job creation.  And the president will be judged in 2012 by the direction of the economy. 

You know, Ronald Reagan, when he got re-elected and said that was morning in America, had an unemployment rate that was about where it was when he got inaugurated four years earlier.  But in the meantime it had gone to 10.8 percent, then it started coming down, and kept going down in a steady way.  That‘s what President Obama needs. 

And by the way, this isn‘t just a political necessity.  Tens of millions of American families now have their standard of living at stake.  And that‘s why I think the president made the best deal he possibly could have in a difficult situation, and now it‘s just possible this Congress is going to move on in its waning days, pass “Don‘t Ask, Don‘t Tell,” pass—ratify the START treaty.  And, you know, if you look across that, Ed, what you were saying earlier in your commentary, that‘s going to be two years of extraordinary achievement. 

SCHULTZ:  Yes.  Oh, there‘s no doubt about it.  I hope it all works. 

Bob Shrum, always a pleasure.  Great to have you with us tonight. 

SHRUM:  Great.  Thanks, Ed. 

SCHULTZ:  Thanks so much. 

SHRUM:  Thank you. 

SCHULTZ:  Coming up, longtime Senator Orrin Hatch proves he doesn‘t know the first thing about his job or unemployment benefits.  Senator Clueless strikes out in “The Zone” next. 

(COMMERCIAL BREAK)

SCHULTZ:  And in “Psycho Talk” tonight, I can‘t believe this one.  This guy wanted to be president once. 

Senator Orrin Hatch of Utah, he is completely ignorant when it comes to unemployment benefits.  I mean, folks, this guy‘s been in the Senate since 1977, and he still has no idea how it works? 

Here he is on Fox complaining about the extension of unemployment benefits in the tax compromise bill President Obama signed today. 

(BEGIN VIDEO CLIP)

SEN. ORRIN HATCH ®, UTAH:  I would have preferred the unemployment insurance to be paid for, naturally, and they weren‘t going to pay for it.  But let‘s be honest about it, the Democrats have always won on unemployment insurance and extending it.

Now, it‘s well over a hundred weeks now.  There‘s no question that there are people who are suffering.  I don‘t want them to suffer. 

On the other hand, we also know there are people who could be working who won‘t work because they‘ve got unemployment insurance, and they just keep - - don‘t go out and start looking for jobs. 

(END VIDEO CLIP)

SCHULTZ:  A swing and a miss on all three, old Orrin. 

Strike one, complaining about spending $57 billion in the unemployment benefits when you demanded $830 billion in tax cuts for the rich. 

Strike two, saying the deal extends unemployment benefits well over a hundred weeks, when anyone who pays attention to the news knows that 99 weeks is the longest anyone can get benefits.  Clearly, the 99ers don‘t mean anything to Hatch at this point. 

And strike three, saying people on unemployment don‘t look for jobs.  This is a constant Republican talking point.  It‘s offensive, and studies have shown that it is flat-out not true. 

Orrin Hatch‘s garbage on unemployment benefits is just a bunch of old, ignorant, out-of-touch “Psycho Talk.”

Coming up, Congressman Darrell Issa.  This guy‘s trying to take down President Obama one subpoena at a time.  The Democrats have got the man in place to stop Issa‘s witch-hunt dead in his tracks. 

Congressman Dennis Kucinich lays out the plan next and “The Battleground.”

Plus, Sarah Palin slams the president as a flip-flopper.

And the Vikings, man, they‘re trying to dig out. 

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

(COMMERCIAL BREAK)

ED SCHULTZ, MSNBC ANCHOR, THE ED SHOW:  Welcome back to THE ED SHOW. 

The “Battleground” story tonight, well, the new Republican majority is gunning for this White House.  And Democrats better be ready to rumble.  It‘s going to be a whole different world, folks, when the House reconvenes in January.  The Republicans will have the gavel and the Democrats better prepared to fight especially on the Oversight Committee.  Incoming oversight chair Darrell Issa is on a witch-hunt against the Obama White House starting with an investigation into the stimulus money. 

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA, CHAIRMAN, OVERSIGHT CMTE:  His administration received $700 billion worth of walking around money in the stimulus and used to just that way.  A great deal of it was used for political pay back.  His administration has a lot of explaining where the $7 billion went; where investigations that should have gone on particularly into ACORN an organization that he had past influence with and should be willing to do a lot to end.  I think those have to be dealt with. 

(END VIDEO CLIP)

SCHULTZ:  Folks, that is a criminal allegation.  Issa‘s not blowing smoke either.  He‘s already met with Vice President Joe Biden to get more information.  This week Democrats picked the person who will lead the counterattack against Issa.  Democrats elected Congressman Elijah Cummings to go head-to-head with Issa as the next ranking member on the committee. 

Joining me now is Congressman Dennis Kucinich, who backed Congressman Cummings for the leadership post. 

Congressman, how much of a battle is this going to be, in your opinion? How serious is Issa, and how serious do the Democrats have to take it?

REP. DENNIS KUCINICH, (D) OVERSIGHT CMTE.:  Mr. Issa‘s very serious.  And I might point out he‘s very competent.  He‘s someone who has a great skills at taking a set of facts and shaping them in a way that he would like to communicate them.  Doesn‘t necessarily have to be directly connected to the way things are. 

But with Mr. Cummings, Mr. Issa will have met his match.  Mr.  Cummings is a former defense attorney, someone who also has a background as a bond counsel.  So he‘s familiar with Wall Street.  He‘s a person who has a great amount of skill.  If you‘ve ever watched him question a witness, you‘ll know that he‘s second to none.  He‘s very powerful.  And I think that Mr. Cummings is going to lead a very strong Democratic response to any efforts to engage in innuendo or any taken approach that would be less than forthright. 

SCHULTZ:  Congressman Cummings on record saying that, we‘ll go toe-to-toe on everything and hopefully I‘ll be 10 steps ahead.  But as a whole, is the Congress mentally prepared for what could be a long, drawn out process, played out probably by the conservative media, painting the Obama administration and the White House as a bunch of crooks?  I mean there has to be some level of attack and return fire on this, don‘t you think?

KUCINICH:  The fact that the caucus saw fit to choose Elijah Cummings means that they wanted someone who is a battler, someone who is not going to sit down and see an abuse of the great power of the Oversight Committee.  And so, yes, the Democratic caucus is well aware of the challenges that are faced here.  And again, no one will underestimate Mr. Issa.  No one will sell Mr. Issa short.  Everyone understands that he‘s very serious in his intention to attack the White House.  And we know with the charges that he made already, which I saw on your show and I called him on it, it that caused me to be a candidate for a while.  I understood how important it is to fight back and to answer and not to let any unsubstantiated allegation go without a challenge. 

So I think Mr. Cummings is absolutely the person for this challenge.  He is a very broad support across the Democratic caucus.  And we‘re organized.  And we had a meeting today with individuals who are likely to be subcommittee chairs.  And Mr. Cummings is not wasting anytime getting started. 

SCHULTZ:  Congressman Dennis Kucinich, good to have you with us tonight.  I appreciate your time so much. 

KUCINICH:  And thank you, Ed.  Thank you. 

SCHULTZ:  You bet, sir.  Now let‘s get some rapid-fire response from our panel on these stories.  Is president Obama a comeback kid after his big victory on the tax cuts?  Conservatives think so.  And Claire McCaskill, senator from Missouri, absolutely destroyed the Republicans on the Senate floor for their hypocrisy on earmarks, and for playing games with the omnibus spending bill.  With us tonight Joe Madison XM Radio satellite talk show host and Ernest Istook former Republican congressman and fellow at the Heritage Foundation. 

Joe, I have to ask you, look at Ernie smiling there tonight, he got that tax cut that he was looking for.  So we‘re—what about this, Joe?  Is this a good deal for the White House?  Is this a good deal for the American people?  Who are the winners and the losers?

JOE MADISON, XM RADIO TALK SHOW HOST:  I guess Ernie should smile.  He‘s part of that—he‘s part of that 2 percent that now has—you know, a gold nugget in their Christmas sock. 

Look, I think that the president did the Solomon approach on this.  You had those on the left that were very upset about this.  Those on the far right very upset.  And he basically split this baby down the middle.  We all get a little bit of something there.  It‘s over now.  What concerns me is what this Republican Congress is going to go after come January.  And I guarantee you, they‘re going to go after Social Security, they‘re going to go after all kinds of entitlements that‘s been part of this makeup of the United States since the Roosevelt era. 

This is going to be their game plan and I hope he uses this comeback to really fight.  And I hope those of us, particularly on our side of the media, are prepared to protect our quarterback, sort to speak.  We‘ve got to fight back.  We can‘t leave him out there by himself. 

SCHULTZ:  What about that, Ernest, what do you think?

ERNEST ISTOOK, FELLOW, HERITAGE FOUNDATION:  I think that the president made a shrewd calculation that will help him politically because he‘s going to be seen as compromising.  He recognized there was a brief moment of opportunity.  I wish he had waited a couple of weeks, because then we would have had the people that have the faith and trust of the American people, those elected in the last election cycle, who I think could have made a deal that would had been better for job growth.  Especially if it had made the lower taxes permanent rather than temporary, just setting up a future battle.  But, again, I think you know if you‘re talking about from politically, I think President Obama made a shrewd calculation in moving at the time that he did.  I thought that it was very interesting. 

(CROSS TALK)

MADISON:  Ernie, just showed his hand. Ernie, just showed you exactly why they wanted to wait, a couple of weeks.

ISTOOK:  Sure, a better deal.

MADISON:  Because they wanted-

ISTOOK:  For the country.

MADISON:  Look, you want to make, you really want to help job growth?   You‘ve got these multimillionaires and billionaires sitting on top of trillions of dollars.  Now is your turn, or their turn, to start spending money, manufacturing, creating jobs, and then we‘ll all be happy, won‘t we?

ISTOOK:  If we could get I rid of the uncertainty.  I‘ve been talking

about this for months.  You are telling people-

MADISON:  What is uncertain?  The only certain thing is there is high unemployment and they have money. 

(CROSS TALK)

ISTOOK:  Ed and Joe, businesses trying to make investments that make sense for five years out, or even 10 years out.  Not just within a two-year window.  So you‘ve not removed all the uncertainty.  You certainly have not removed all of the big regulations coming down the pike from the Obama administration.

(CROSS TALK)

SCHULTZ:  You think there is still a lot of uncertainty.  I mean this president has set the table for rebirth in the economy. You think that there is still more that he can do?

ISTOOK:  Yes.  If we would have said, look, we‘re going to take the

current tax rates on income taxes, we‘re going to make them permanent, we

should also be doing something about the corporate tax.  Japan has realized

that they‘ve got to reduce their taxes-

(CROSS TALK)

MADISON:  Oh, boy.  You have corporations that are not paying a dime in taxes. 

(CROSS TALK)

ISTOOK:  United States with the highest corporate tax in the world. 

MADISON:  You have corporations that aren‘t paying a dime in taxes. 

You‘ve got corporations that aren‘t paying a dime. 

ISTOOK:  And you‘ve got corporations paying a bundle.  You have both kinds of corporations, Joe.  And you‘ve got the highest corporate tax rate in the world.  That‘s not good. 

MADISON:  Why don‘t you say to the American people what I just said, we‘ve got corporations that aren‘t paying a dime, and making billions of dollars?  Why don‘t you say to the American people. 

ISTOOK:  If you want to close loopholes to stop it that‘s fine, but don‘t say that therefore you cannot lower the overall corporate tax rate.  You cannot bring in some the jobs if going elsewhere in the world instead. 

(CROSS TALK)

SCHULTZ:  Gentlemen, let‘s go to the fight over earmarks.  This is the GOP gloating about them.  Here it is. 

(BEGIN VIDEO CLIP)

SEN. MARK KIRK, ® ILLINOIS:  As the most junior member, for those who are not understanding what just happened, did we just win?  It seems that change has come to the senate tonight with the death of this $1.1 trillion plan. 

SEN. JOHN McCAIN ® ARIZONA:  This may be a seminal moment in the history—in the recent history of the United States Senate, because for the first time since I‘ve been here, we stood up and said, enough.  Stop. 

(END VIDEO CLIP)

Now, these are the same people that had all kinds of pork that was stuffed in this thing.  Here‘s Claire McCaskill responding to this on the floor last night as well. 

(BEGIN VIDEO CLIP)

SEN. CLAIRE McCASKILL, (D) MISSOURI:  What‘s offensive to me is that we‘ve gotten into this bad habit of trying to score cheap political points.  And for senators to get on this floor and say we won and you know, do this kind of stuff.  And the irony is guess who has earmarks in there?  The minority leader, who just voted on a moratorium for earmarks 10 minutes ago.  Did he pull his earmarks out?  No.  Did he any of the Republicans that voted for a moratorium on earmarks, did they pull their earmark out before this bill came to the floor?  We could have eliminated a few pages.  So, you know, I just don‘t think the righteous indignation works. 

(END VIDEO CLIP)

SCHULTZ:  Joe, what do you think?

MADISON:  Bingo, she shot them right between the eyes.  She didn‘t even blink.  She got them.  She got them.  And then the other thing is, let‘s just speak plain English.  If you took all of the earmarks and put them together, how much would that reduce the deficit, really?  This is a straw man‘s issue and they know it.  But she hit them right between the eyes.  And if you look up the word “hypocrite” in the dictionary, the minority leader‘s photograph ought to be there. 

SCHULTZ:  Ernie, you have got the final word on this one.  What do you think?

ISTOOK:  Well, thanks.  Well first of all, both sides constantly talk in terms of winning and losing.  That‘s no big deal.  You want to talk about hypocrisy on spending, it‘s there.  It‘s absolutely there.  But if you don‘t get a hold of the things that ought to be easy to fix, you‘re never going to attack the big spending that‘s tougher to fix.  So the earmark moratorium I think is abuse by Congress.

SCHULTZ:  Good to have you on, gentlemen.  Joe Madison, Ernie Istook. 

Thanks so much. 

ISTOOK:  Thanks, Ed.

SCHULTZ:  Coming up, Sarah Palin sounds like she‘s aiming for 2012 presidential run and she thinks her debating skills will take her over the top.  You won‘t able when Caribou Barbie said about President Obama this morning.  Mike Papantonio, “Ring of Fire” talk show host, he‘s after it next right here on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  It‘s not too late to let us know what you think tonight.  Tonight‘s text survey question is:  Do you think the Republicans owe President Obama for a compromising on tax cuts?  Text A for yes, text B for no, to 622639. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SARAH PALIN, FMR. GOP VICE PRESIDENTIAL CANDIDATE:  This is a case where I am very thankful that the president has flip-flopped.  He has a flip-flop in his position on taxes.  Because he was so adamant about not allowing the tax cut extension to take place for job creators, and then all of a sudden one day he was fine with it.  You can term it compromise.  I term it flip-flop. 

(END VIDEO CLIP)

SCHULTZ:  In my “Playbook” tonight Sarah Palin‘s snarky backhanded compliment of President Obama over extending the Bush tax cuts makes it look like she‘s gearing up for White House run.  But she has a lot of work to do if she wants to move to 1600 Pennsylvania Avenue in a couple of years.  A new NBC News/”Wall Street Journal” poll shows if the election were held today Sarah Palin would lose to the president by 22 points.  But Palin isn‘t worried about the numbers.  She thinks that she can overcome the deficit with her debating skills. 

(BEGIN VIDEO CLIP)

PALIN:  A poll number like that, it‘s like ugh, that doesn‘t look pretty today.  But a primary is months and months in the process.  And there are thankfully many debates and if I were to participate in that contested primary, you know, I would be in it to win it. 

(END VIDEO CLIP)

SCHULTZ:  For more let‘s bring in radio talk show host Mike Papantonio, nationally syndicated “Ring of Fire” radio host. 

Mike, here she is calling President Obama a flip-flopper on the tax cuts when everybody‘s been talking compromise.  Does she have a clue?

MIKE PAPANTONIO, RADIO SHOW HOST:  It‘s impossible, Ed, to put much faith into a person from their economics theories when it‘s an individual who changes colleges six times in four years because she couldn‘t decide whether she wanted to be an actress, whether she wanted to be a sportscaster, or whether she wanted to be a politician.  She talks about Obama flip-flopping, again changed colleges six times in four years. 

Here is what is important to me, Ed, if you listen carefully to what she talks about with her economic policy, when you listen to her almost incoherent rants what she‘s upset about is that her billionaire friends, who put her in this national position to begin with, aren‘t going to get their estate tax cuts that they wanted.  The corporations that are already paying zero, that they‘re not getting enough cuts from the Republicans and Democrats. 

Look, when big money donors like the Heritage Foundation and this council for-I think it is called council for national policy-forced Sarah Palin on John McCain to run as a candidate.  They demanded something.  They demanded that Sarah Palin be their lap dog and be their voice.  So for them it‘s a single issue.  It‘s greed.  It‘s money.  It‘s money.  It‘s money.  They don‘t want to pay any inheritance taxes at all. 

SCHULTZ:  Mike, you know, Mike, this is a nonstop media offensive.  Is she running?

PAPANTONIO:  She is absolutely running.  And the fact that she‘s 22 points, Ed, if we had a race today she has to catch up 22 points just to race with Obama.  Absolutely she‘s running.  And the same people who put her in this national scene are the same people that are still backing her.  Because you know why, Ed, it doesn‘t make any difference if she wins.  She‘s the voice for them.  She will say damn near anything they want her to say because she‘s like a sock puppet for these inheritance babies that don‘t want to pay any taxes. 

SCHULTZ:  It‘s interesting that she‘s not giving any cover whatsoever to the Republicans who voted for this tax compromise bill, the Obama tax cuts.  What do you make of that?

PAPANTONIO:  She‘s already made her choice.  She understands there‘s no place—there‘s no place for her in establishment Republican Party.  The people who backed her to begin with think that she‘s a real contender for some break-away party.  Every time she talks about her own party being a weak party, her own party not understanding economics, every time we see her attack her own party, it‘s because she really does believe she‘s going to be a serious break-away candidate and the Looney Tunes on the Tea Bagger‘s side, that had been out in the streets are going to come to her aid in the end.  The truth is, Palin has become the crazy queen.  And she can‘t change that image between now and the next election, I can promise you. 

SCHULTZ:  Mike Papantonio, always a pleasure.  Great to have you with us tonight.  Thanks so much. 

Couple of final pages in the “Playbook” tonight:  Hundreds of workers have shown up to help shovel out TCF stadium for the Vikings‘ 55th anniversary game against the Chicago Bears on Monday night.  It is going to be the first time in 29 years that the Vikings are hosting a home football game outdoors. 

The game time forecast is calling for a beautiful evening with the temps in the mid-teens and a wind chill below zero and since the game is being hosted at the University of Minnesota, they will not be serving any beer, which is going to be tough on a lot of Viking fans.  A lot tougher than shoveling. 

And finally the “Daily Mail” is reporting that President Obama will not be invited to Prince William‘s wedding since the prince is not yet heir to the throne the wedding is not classified as a state occasion, so there‘s no obligation to invite heads of state. 

Coming up, Jon Kyl is worried he won‘t be home for the holidays.  Not in time for Christmas, well, Liz Winstead plans to sneak down his chimney and give him a lump of coal next on THE ED SHOW.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  If it‘s Friday it‘s time for “Club Ed.” with “Daily Show” co-creator Lizz Winstead. 

Lizz, great to have you with us tonight. 

LIZZ WINSTEAD, DAILY SHOW, CO-CREATOR:  Hey, Ed. 

Larry King-Larry King said good-bye last night and it was his last show on “Larry King Live.”  One of the visitors to the program was President Clinton and here‘s how it came down.  Here it is. 

(BEGIN VIDEO CLIP)

LARRY KING, CNN HOST, LARRY KING LIVE:  We‘re both in the zipper club. 

By the way, you look very good last weekend in the briefing room and by the way the suits wanted me to remind you of what the zipper club is, if you have had open heart surgery they had to zipper it up.  I thought that everyone in the world knew it, but apparently. 

UNIDENTIFIED MALE:  Bill and I looked confused. 

(CROSS TALK)

KING:  I‘m sure that you did. 

Ryan do you have any question for the president?

BILL CLINTON, FMR. PRESIDENT OF THE UNITED STATES:  I‘m glad clarified that. 

(END VIDEO CLIP)

SCHULTZ:  Well, Lizz, what do you think of that one?  What were they talking about. 

WINSTEAD:  Clearly open-heart surgery.  I mean, Larry King does not disappoint.  Every time he‘s on he was the gift that keeps on giving.  I‘m so sad that he‘s going away.  Because I just—he always just knows how to say something and poor Bill Clinton was just sitting there like, yeah, the zipper club.  And the thought of Larry King being in any kind of Zipper Club makes me never want to have sex again, quite frankly.  I can‘t—I don‘t want to—no.  No, no, no. 

SCHULTZ:  All right, as a country now, are we going to be a lot safer now that Congresswoman Michele Bachmann is going to be on the House Intelligence Committee?

WINSTEAD:  Well, you know it‘s funny, Ed, because you were talking about the Dome and the no drinking at the game on Sunday.  And the reason that there is no liquor at the game is because they took a vote and Minnesotans said that we need to save our alcoholic consumption.  We‘d rather drink while Michele Bachmann is on the Intelligence Committee and forfeit drinking at the game, because the reality is just that stark. 

SCHULTZ:  Speaking of the Dome, they‘re not going to be playing at the Dome.  They‘ve got to go over and play at the University of Minnesota stadium.  What about?  Man, look at this, kind of a freaky deal, isn‘t it?

WINSTEAD:  It‘s so crazy.  Being in Minnesota you can‘t even believe it, Ed, all of the stuff that‘s gone on down since I‘ve been here.  And this massive collapse at the Dome, I don‘t know if you know this or not, the Minneapolis City Council is thinking of renaming it because of the collapse and the cave-in.  They want to rename it the Obama Dome. 

SCHULTZ:  Oh, OK.  And what about Sarah Palin, she says that the GOP is impotent and weak, what do you think?

WINSTEAD:  Well, you know what, I think I finally agree with Sarah Palin.  Because you know when I look at John McCain and I look at Jon Kyl and I look at Boehner, and I see them getting absolutely nothing done.  I am convinced that just permeates the rest of their lives.  And I would not be surprised to find out that each day, these gentlemen woke up, they woke up with morning wouldn‘t.  That‘s what I think, Ed. 

SCHULTZ:  Lizz Winstead, check out Lizz‘s annual year-end review show at the parkway theater in Minneapolis.  Tickets and information are at LizzWinstead.com. 

Tonight‘s text survey question is, I asked, do you think the Republicans owe President Obama for compromising on tax cuts?  86 percent of you said yes; 14 percent said no.  

That is THE ED SHOW.  I‘m Ed Schultz.  HARDBALL with Chris Mathews is next.  Have a great weekend.  I‘m going up north to shovel some snow.  We‘ll see you Monday.

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

END   

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