updated 3/31/2011 12:39:16 PM ET 2011-03-31T16:39:16

Guests: Col. Jack Jacobs, Jeremy Scahill, Nina Turner, Chris Hayes, Robert Reich, Sen. Bernie Sanders

ED SCHULTZ, HOST:  Good evening, Americans.  And welcome to THE ED SHOW tonight.

This is what‘s on the table tonight:

The plot thickens.  Here we go with the secret order signed by the president, authorizing covert U.S. government operations to support the rebels in Libya?  That‘s our lead story with commentary tonight.

We are headed towards a government shutdown to satisfy the Tea Party.  That may be where Speaker John Boehner is willing to go.

And Congressman Darrell Issa, “Mr. Investigation Dude,” says the president is corrupt.  Issa says earmarks are bad.  But guess who supported earmarks that benefited himself?  That‘s “The Takedown” coming up tonight.

But, this is the story we start with, that has me fired up tonight. 

It wasn‘t supposed to go like this, but this is how it‘s unfolding. 

“Reuters” reporting there are American boots on the ground in Libya.

“President Obama has signed a secret order authorizing covert U.S.  government support for rebel forces in Libya, officials tell Reuters.”

The order was signed within the past two or three weeks.  Tonight, “The New York Times” is reporting the Central Intelligence Agency has inserted clandestine operatives into Libya to gather intelligence for military airstrikes and make contacts with rebels battling Gadhafi‘s forces, according to American officials.

And the “National Journal” reporting more than a dozen CIA operatives were sent to Libya.

When the president announced the United States military engagement in Libya, he was emphatic.  There would be no troops, no boots on the ground.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  We will not—I repeat—we will not deploy any U.S. troops on the ground.

(END VIDEO CLIP)

SCHULTZ:  In fact, U.N. resolution 1973 excludes, quote, “a foreign occupation force of any form on any part of Libyan territory.”

Of any form?  What‘s that mean?  NBC sources are telling NBC that the revelation of CIA operatives in Libya is pro forma.  Still, the White House knows this kind of revelation—this kind of headline could change the dynamic on the ground in Libya, and support for the president at home could also shift.

The big question tonight that remains: will the United States or its allies arm these Libyan freedom fighters?  “Reuters” also reports today U.S. officials have said that Saudi Arabia and Qatar, whose leaders despise Gadhafi, have indicated a willingness to supply Libyan rebels—I call them freedom fighters—with weapons.

Now, remember yesterday, the president told Brian Williams that the operation of arming Libyan rebels wasn‘t off the table.  He also said the following to ABC News.

(BEGIN VIDEO CLIP)

OBAMA:  It‘s fair to say that if we wanted to get weapons into Libya, we probably could.  We‘re looking at all our options at this point.

(END VIDEO CLIP)

SCHULTZ:  Senior European diplomat says the coalition of nations involved in Libya, considered arming rebels a serious option and that the coalition is considering that option now.

Reports from the front lines are that anti-Gadhafi forces, they are in retreat.  It was not a good day for them.  And they are poorly armed.

(BEGIN VIDEO CLIP)

REPORTER:  The momentum has changed very quickly in this war.  And on the front line, Libya‘s revolution is being held together with sticky tape.

Show me what you‘re armed with.  What‘s your weapon?  Only that?

UNIDENTIFIED MALE:  Only that.

(END VIDEO CLIP)

SCHULTZ:  So, we have stopped Gadhafi from slaughtering his people in Benghazi.  Our airstrikes have allowed the rebels to advance.  But now, they‘re retreating.

After all that, does the world community stand by and watch the freedom fighters get crushed?

The president pledged that there would be no U.S. troops on the ground in Libya.  Today, we learned that CIA operatives are on the ground.  What does that all mean?

Still, it looks like the freedom fighters‘ only shot for survival at this point is a real injection of military hardware that they say they desperately need.

Secretary of State Hillary Clinton today said that there was still no decision on arming the rebels.

Nobody wants another situation like the mujahedeen in Afghanistan in 1980s.  Whether or not we arm rebels, freedom fighters, whatever you want to call them, is a very hard decision.

But I think we have to do it.  It is a moral decision at this point.

You just saw that piece of videotape, that young kid, we have a state in the United States of America, New Hampshire, live free or die.  What do you think that Libyan freedom fighter wants?  What is his choice?

He‘s made what‘s on the license plates in New Hampshire, live free or die.  That‘s where he is.  And where does the United States stand tonight?

Look, I am a liberal.  I am a progressive.  But that means that we need to stand behind people who want freedom.

This isn‘t Bush talk.  This is totally different from Iraq.  It‘s totally different from any other situation in my opinion.

This is a situation where we have got a coalition that has come together and realized that Gadhafi is a terrorist.  The president has gone on record saying that Libyan agents have killed Americans.  That‘s all as an American I need to hear.

Let‘s get it done.  Let‘s arm these rebels.  Let‘s give them a chance to fight.  At least if they‘re going to die, they‘re going to have some hardware in their hands to defend themselves.

There was a sound bite in Richard Engel‘s piece last night, a gentleman says they‘re pulling women out of houses.  They‘re lining people up and assassinating them.  They‘ve got shooters up on top of the roofs to picking people off.

I mean, come on, America.  When do we fight?  Does it have to be absolutely perfect and we have to have an absolute end game, and, you know, dot all the I‘s and cross all  the T‘s?  Hell no.

This is about freedom, is it not?  This is about people who want to get rid of a dictator—a guy who has brutalized them for 40 years and we stand here tonight as if we‘re not free.  We stand here tonight as if—well, I don‘t know about this, I don‘t know about that.

The military equation here I understand is very, very complicated.  They not trained freedom fighters.  But they have in their heart, they have in their soul the same things, and the same qualities and the same spirit that the people who founded this country had in their hearts and their minds centuries ago.

Look, this is a tough call.  There‘s no doubt.  It‘s a tough call for not only the president, and for people who support the president, who really have had enough of war.

We don‘t have a stomach for this, I know that.

Just listen to the people on talk radio across America.  They‘re using this as a tool to take down our president, because they politically hate him.  They have made it their goal over on the right to make sure that President Obama does not get reelected.  So they‘re playing the political games with the lives and the heart and the spirit and the soul of the Libyan people who all they want is a fighting chance to take down a dictator who has killed Americans.

Liberals, we are better than this.  Give them a chance.  Arm them.

And, of course, we may not be the only ones with a say in this.  We‘re just one voice.  There‘s nine other countries who are going to have something to say about this.  So, it‘s not a slam-dunk.

But that‘s where I stand tonight.  That‘s what I believe in.  I believe those people that I have seen on these reports from our network NBC, they deserve a fighting chance.  They‘ve earned that much.

Get your cell phones out.  I want to know what you think.  Tonight‘s text question: Should the United States arm the Libyan rebels?  Should the United States arm the Libyan rebels?  Text “A” for yes, text “B” for no, to 622639.  You can go to our new blog Ed.MSNBC.com.  We‘ll bring you the results later on in the show.

Joining me now is NBC military analyst and Medal of Honor recipient, Colonel Jack Jacobs.

Colonel, take us through the military equations here.  Is there a chance that if we were to arm, if the coalition were to give the hardware to these freedom fighters, and that‘s what I call them, would they have a chance?

COL. JACK JACOBS, NBC NEWS MILITARY ANALYST:  Well, they‘d have a chance, but they‘ve got to go through a lot of training so they can use the weapons that they‘re given.  First of all, they‘re not going to be American weapons, they‘re going to have to be Soviet style, Chinese style weapons, the ones that they‘re used to.  Second, the large majority of these people do not have any military training at all.

And typically it‘s going to take between eight and 16 weeks to take your average young fellow like you saw in that tape, from just being able to handle a knife, to being able to use any kind of small arm or automatic weapon, to be able to understand the difference between laying down a base of fire and maneuvering to close with and capture or kill the enemy.  All that stuff, it takes us between eight and 16 weeks.  So, weapons alone, ammunition alone is not going to do it.  They‘re going to need training.

SCHULTZ:  Colonel, what about the CIA boots on the ground?  Is this standard operating procedure before we get involved in some kind of military operation?

JACOBS:  Oh, sure.  We‘ll always have people on the ground in order to gather intelligence.  And in this particular case, in order to make some sort of connection between us and the people evidently running the rebel operation.  Without that, it doesn‘t make any sense to support anybody.

There also has to be liaison between the people who are on the ground, the Libyans who are fighting and the Egyptians to the east.  Don‘t forget Benghazi‘s got 700,000 people.  And when Gadhafi‘s people came up close to it, it started to scare those people away towards Egypt.

So, there‘s got to be—we have to have some Americans on the ground to do coordination.

SCHULTZ:  OK.  Is it legal for this coalition to arm these freedom fighters?

JACOBS:  Oh, sure.  I mean, it‘s—look, the president was a bit disingenuous.  There was a lot of politics involved.  And him saying that we are not going to have boots on the ground, we always have boots on the ground.  Not many, and not conventional boots on the ground.

But surely, we have folks on the ground to do coordination, that paint targets that have to be taken out.  If we don‘t do that, we‘re not going to be able to guarantee to take out the bad guys.

SCHULTZ:  Colonel Jack Jacobs, thanks for your time tonight. 

Appreciate it so much.

JACOBS:  You‘re welcome.

SCHULTZ:  For the politics of all of this, let‘s turn to “The Nation‘s” Jeremy Scahill.  His cover story this week is: “The Dangerous U.S. Game in Yemen.”

Jeremy, good to have you with us tonight.

JEREMY SCAHILL, THE NATION:  Thanks, Ed.

SCHULTZ:  Does this headline—how damaging is it to the president?  The headline reads, that the president sends CIA into Libya.  What do you think?

SCAHILL:  Well, you know, the CIA operatives on the ground there are sort of engaged in an eharmony.com, or sort of, you know, dating service relationship with the rebels for the clandestine world.  I mean, this is, as Colonel Jacobs said, standard fare.

What I think is of more concern is the fact that there are certainly U.S. Special Operations forces units that are deployed already secretly inside of Libya that are painting targets for the airstrikes.  But I have to say that the scenario you‘re laying out, when you talk about arming the, quote-unquote, “freedom fighters,” it really evokes of the disastrous dirty wars of the 1980s.  I mean, the United States getting involved in what is effectively a Libyan civil war, 1,000 or so rebels that don‘t have much military training.

I mean, what you‘re advocating, Ed, is that Americans are going to have to be totally invested in one side of a civil war.  The president stuck his neck out very far when he said Gadhafi has to go.  If the United States sends troops in there, and they would have to, as Colonel Jacobs said if they‘re arming it, then we have a third full-on war in addition to the covert wars that the president is waging in Yemen, in Somalia and also in the Horn of Africa.  I think a lot of military folks see mission creep in the big way here, Ed.

SCHULTZ:  Well, we have got a coalition put together.  No question about it.  We have got a willing coalition put together.  Timing is everything.  The circumstances surrounding this right now present us an opportunity to do justice on a man who the president says his agents have killed Americans.

SCAHILL:  There is no question that Moammar Gadhafi—I‘m sure most of the entire world wants to see Moammar Gadhafi gone.  But the fact is that Ali Abdullah Saleh, the president of Yemen, is a murderous thug who has been sniper shooting nonviolent protesters and he remains a close friend of the Obama administration—the dictatorship, the Khalifa family in Bahrain, these are corrupt monarchy and the only thing that we get out of them is hosting the 5th Fleet there.  So, don‘t say anything about their violence—the message we‘re sending to the world here is—

(CROSSTALK)

SCHULTZ:  But the U.N. Security Council has not rendered judgment on the country that you‘re talking about.

SCAHILL:  Well, the fact of the matter is, Ed, that that U.N.  Security Council resolution was a result of blackmail and cajoling on the part of the Obama administration.  A majority of the world‘s people represented on the Security Council, Brazil, China, Russia, India—they abstained because they didn‘t want anything to do with taking sides in a civil war.

SCHULTZ:  And that‘s their call.  That‘s their call.

SCAHILL:  That‘s the majority of the world‘s citizens represented there.

SCHULTZ:  But they didn‘t stop it.

SCAHILL:  There‘s no NATO -- 

(CROSSTALK)

SCHULTZ:  China could have stepped up.  The Russians could have stepped up.  They could have blocked this action in Libya, no question about it.

Every situation is different.  And Secretary Hillary Clinton said just that, and the president‘s been very clear on it.  We have a situation now to bring justice on a terrorist who has killed Americans.  That‘s why I support this policy.  That‘s why I support this move.

SCAHILL:  Well, Ed, this sounds a lot to me like Ollie North and the Iran Contra where you take a 1,000 people—

SCHULTZ:  You make any judgment you want.  Jeremy, you can paint me any way you want -- 

SCAHILL:  You‘re backing 1,000 people, Ed, inside of a very large country, and you‘re taking sides in a civil war.  What you‘re advocating is going to lead to more American deaths—

SCHULTZ:  You don‘t know that.

SCAHILL:  -- and hundreds of millions of dollars.  Well, it‘s already cost us $400 million.

SCHULTZ:  I take President Obama‘s word for it, that troops will not be engaged on the ground.  I take his word for it.  Now, if he wants to hang me and my opinion out to dry as an American, that‘s fine.

SCAHILL:  Well, you know what?  Your President Obama has done, whose word you‘re taking—

SCHULTZ:  My President Obama?

SCAHILL:  He didn‘t call

SCHULTZ:  My President Obama?  Is it your president, too?  Jeremy, is he—wait a minute now.  You‘re not going to beat to the water‘s edge.  Is he your president, too?

SCAHILL:  Of course.  I‘m an American.

SCHULTZ:  OK.

SCAHILL:  I said the words—you‘re saying you take his word for it, Ed.

SCHULTZ:  I do take his word for it.

SCAHILL:  He didn‘t close Guantanamo.  He‘s doubled down on some of the worst policies of the Bush administration.  I just got back from Afghanistan where we‘re killing mid-level Taliban people.

(CROSSTALK)

SCHULTZ:  He didn‘t put universal health care at the table.  I haven‘t been totally happy with President Obama on every issue.  I‘ve been very clear on that.

But the fact is that we have the resources and the position to take out a man who has killed Americans.  And I think that we have a moral obligation to the families in this country who lost people on that Pan Am 103.  This is our time to do just this.  We can do it without boots on the ground.

SCAHILL:  Do you think we should take out Ali Abdullah Saleh, the president of Yemen, who double deals with al Qaeda all the time -- 

SCHULTZ:  You got to the U.N.  No, that‘s Bush talk.  No, Jeremy, Bush talk.  No, no, no—

(CROSSTALK)

SCAHILL:  Bill Clinton didn‘t go to the U.N. for Kosovo.

(CROSSTALK)

SCAHILL:  It‘s bipartisan.

SCHULTZ:  This is exactly what‘s wrong with this debate from the standpoint of what we can do and when we can do it.  The president has gone through the U.N. to get this done.

SCAHILL:  We‘re bombing Yemen.  When did the president go to the U.N. to launch Tomahawk cruise missiles in Yemen?

SCHULTZ:  You and I disagree.  You and I disagree.

SCAHILL:  What I‘ve said are facts.

SCHULTZ:  OK.  Well, look, I support the president and the United States to do what they can to help these freedom fighters.  That‘s where I‘m at.  You want to call me Ollie North, you go ahead.

SCAHILL:  I think it‘s a wrong-headed policy that could lead to American deaths and a further disaster in Libya.

SCHULTZ:  OK.  That‘s your calculation.  That‘s what you feel based on what has happened with the mujahedeen in the 1980s.  I understand that.  But every situation—

SCAHILL:  -- double dealing with the president of Yemen because he supports al Qaeda one day and us the next day.  We‘re involved with a very dangerous game throughout the Middle East.

SCHULTZ:  There‘s no doubt we are.  Got to run.  Jeremy Scahill, I appreciate the conversation from “The Nation.”

SCAHILL:  Thank you, Ed.

SCHULTZ:  I respect your work.  Thank you for joining us tonight.

Remember to answer tonight‘s question there at the bottom of the screen.  I want to know what you think.

(BEGIN VIDEOTAPE)

SCHULTZ (voice-over):  Tonight‘s “Takedown”—

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA ®, CALIFORNIA:  An earmark is tantamount to a bribe.

(END VIDEO CLIP)

SCHULTZ:  So, Congressman Issa, those earmarks you requested to help businesses you own, you were just trying to bribe yourself, right?

Budget cuts or else?  The Republican threat to shut down the federal government, vowing to Tea Party pressure even though the numbers don‘t add up.

And Senator Bernie Sanders‘ solution to the budget deficit.  Making these corporations pay their fair share of taxes.  He‘ll be here to explain.

(END VIDEOTAPE)

(COMMERCIAL BREASK)

SCHULTZ:  Be sure to check out our new blog at Ed.MSNBC.com.  There, you‘re going to find links to my radio Web site at WeGotEd.com, hook up with us at Twitter and Facebook.  We love to have you part of the whole team.

Next: breaking news out of Ohio.  A new law that would severely restrict collective bargaining.

Stay with us.  We‘ll be right back.

(COMMERCIAL BREAK)

(VIDEO CLIP PLAYS)

SCHULTZ:  Those were protesters at the Ohio statehouse earlier today after the Republican controlled-House voted to dramatically cut collective bargaining rights for 350,000 public workers.

And just in, in the past hour, the bill passed the Ohio Senate 17 to 16.  It will now be sent to Republican Governor John Kasich for him to sign.  The bill will destroy nearly 30 years of workers‘ rights in Ohio, affecting health care, pension and sick time.

The former FOX News host was asked earlier about his so-called change agenda.

(BEGIN VIDEO CLIP)

GOV. JOHN KASICH ®, OHIO:  Change is hard.  You know, you notice my new sort of haircut that I‘m getting (ph) since the election, you know, when my wife said I need a new barber, it made me very nervous.  That‘s a barber, cutting my hair.  When you‘re dealing with real change, and when the headlines every day are about change, it unsettles people.

(END VIDEO CLIP)

SCHULTZ:  Well, Governor Kasich makes light of the situation.  Here‘s how his kind of real change will affect one firefighter in Columbus, Ohio.

(BEGIN VIDEO LCIP)

UNIDENTIFIED MALE:  I think it‘s going to tear my family apart.  I didn‘t know when John Kasich said he was creating jobs in Ohio, he meant I was going to be (INAUDIBLE).

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Ohio State Senator Nina Turner.

Welcome to the problem again time, Senator.  The bill passed the Senate by one vote.  Were you expecting that outcome?

STATE SEN. NINA TURNER (D), OHIO:  Yes, Ed, unfortunately.  And thank you for having me.  I hate that we have to keep meeting this way.

It‘s absolutely a shame.  I am really glad that the same 16 who voted against this bill the first time held.  And it‘s ironic, Ed, for all the rhetoric that this bill is going to create jobs and create big opportunities, no one who sponsor the bill on the side of the folks who support this bill got up to say a mumbling word.  It is absolutely unconscionable, full-out all-out assault on middle class Ohioans.

SCHULTZ:  Senator Turner, look at this videotape, if you can.  I mean, the people of Ohio are absolutely outraged by this.  Their passion, their emotion, what are the ramifications here?  What are they going to do?  How are they going to deal with this?

TURNER:  Well, they should be outraged, Ed.  All Americans should be outraged, all Ohioans.  This isn‘t a collective bargaining bill.  This is a collective begging bill.

We have resigned ourselves in the state of Ohio to take this to the people, to the citizens of the state who overwhelmingly, even in the latest poll have said that Ohio workers should have the right to collectively bargain.

SCHULTZ:  So, what about a referendum?  How does it work in Ohio? 

Can you reverse this?

TURNER:  Yes.  The people can.  We are going to put a referendum on the ballot.  We need over 230,000 votes across a minimum of 44 counties in this state.

And we are going to get this done.  And make sure that we restore middle class rights.  You know, collective bargaining means two people can come to the table as equals.  This bill is nothing more than a sham and an assault against working class men and women in this state, both public and private sector.  We will take this to the people.

SCHULTZ:  Well, the governor says change is tough.  He‘s going to find out, because I think your folks there in Ohio are going to turn this thing around.  It‘s going to be a story to follow.

Thank you, Senator Nina Turner.  I appreciate you joining us tonight.

John Boehner is talking about a government shutdown unless Harry Reid agrees to $60 billion in cuts.  And Republicans do think government spending can help business, when it‘s in their business.  That‘s tonight‘s “Takedown,” next.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  And in tonight‘s “Takedown”—you know, Republicans, they just absolutely hate earmarks, don‘t they?  We hear it all the time.  And they think government spending never helped anyone, correct?

Well, it turns out sometimes they really love earmarks, especially when they think government spending actually can help someone, namely themselves.

Republican Congressman Darrell Issa of California said he‘s big on ethics.  He wants to launch a number of investigations into the corruption of the Obama administration.

(BEGIN AUDIO CLIP)

ISSA:  He has been one of the most corrupt presidents in modern times.  He has ignored the very laws that he said were so vital when he was a senator.

(END AUDIO CLIP)

SCHULTZ:  Oh, yes.  Well, now you‘d think that Issa would be squeaky clean, right, with all that righteous indignation.  And when it came to fighting the health care bill, the congressman sat up on his ethical high horse and said that earmarks are bribes, and that congressmen get something of value in return.

(BEGIN VIDEO CLIP)

ISSA:  Mr. Speaker, I make the point of order that an earmark is tantamount to a bribe—an earmark to receive a vote is clearly a way to get a vote in return for something of value.

(END VIDEO CLIP)

SCHULTZ:  Strong sound bites.  Something of value, he says.

Well, the Web site “Think Progress” has turned up 2 million that Issa requested in earmarks.  Now, he only got about $800,000 of it.  But that‘s not even the good part yet.

You know how Republicans always tell us that government can‘t help us, that government spending can‘t help business?  The only thing government can do for business is get out of the way?  Well, $800,000 Issa got was for improvements to West Vista Way in Vista, California, east of Thunder Drive, like widening it.  You know, adding bus stops.  And it turns out Issa‘s family business opens a property at 2067 West Vista Way, which is right there. 

Now, let‘s take a look from street level, OK?  There‘s the street.  Now let‘s see how close 2067 is to the street.  Hmm, pretty dog gone close, isn‘t it? 

According to Think Progress, some of Issa‘s earmarks would pay for adding parking lots.  Looks to me like they already have a lot of parking available. 

But the point is, Issa‘s on record admitting that earmarks are of value, which means he‘s admitting government spending, bus stops, parking lots, will be of value to his business, just like it would be to yours, if Issa were willing to do for you what he does for himself. 

In fact, Think Progress reports that Issa‘s earmarks would improve access to two other Issa properties on that street.  How about that?  Including this one.  Gee, I wonder why Mr. Issa wants to improve access to this one. 

Maybe the fact is that Republicans think government spending only works for themselves, and the only earmarks they like are here marks.  And that‘s the Takedown.

Senator Bernie Sanders joins us later, sounding the alarm on giant corporations paying zero taxes. 

The tan man is feeling the heat from the Tea Party about a government shutdown.  It‘s all coming up in THE ED SHOW.  Stay with us. 

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Thanks for watching tonight.  The battle over the federal budget is reaching a critical point.  Whose side are you on? 

Funding for the current continuing resolution runs out in nine days. 

And Republicans, well, they want to shut down the federal government. 

That‘s what they want to do.  That‘s what they want to do. 

Republicans want to should down the federal government.  It will make it tough on President Obama.  There will be a lot of blame thrown around.  Fox News and right-wing radio, they‘re never going to tell you the truth on this story.  Conservatives are pushing myths that Democrats are to blame if there‘s a shutdown. 

Listen to the tan man. 

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER ®, HOUSE SPEAKER:  The House has passed through a bill and it‘s been nearly 40 days.  Yet we‘ve seen nothing pass the United States Senate.  It‘s time for Senate Democrats to act on the bill. 

We know reducing spending will lead to a better environment for job creators to create jobs in America.  We‘ve done our job.  Now, the Senate says we have a plan. 

Well, great.  Pass the damn thing, all right?  And send it over here and let‘s have real negotiations.  Instead of sitting over there rooting for a government shutdown. 

(END VIDEO CLIP)

SCHULTZ:  I tell you, the arrogance just drips off this guy.  Boehner and his minions in the House are under pressure from the Tea Party to pull the trigger on a shutdown.  Boehner knows it‘s political suicide, so Republicans are trying to pin it on Harry Reid. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I also got the question, will there be a government shutdown, to which I said, I don‘t know.  We have to ask Senator Harry Reid. 

UNIDENTIFIED MALE:  The House acted not ten days ago not 20 days ago, not 30 days ago, not 35, but 39 days ago.  There‘s been plenty of time for Senate Democrats to take up this responsibility, and they have completely failed. 

UNIDENTIFIED FEMALE:  We are committed to doing what is necessary to get our fiscal house in order.  Thirty days -- 39 days later, it‘s time for the Senate to do likewise. 

REP. ERIC CANTOR ®, MAJORITY LEADER:  If all else fails, and the Senate brings about a shutdown, then members should not get their pay. 

(END VIDEO CLIP)

SCHULTZ:  Well, Cantor and Boehner want Harry Reid to pass 60 billion dollars in draconian cuts to social programs.  Republicans claim it‘s the only way to create jobs. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  The American people want more.  They want to see a government that shrinks.  They want to see jobs that grow.  That‘s what Republicans are serious about. 

UNIDENTIFIED MALE:  People want more jobs and less spending.  And they know the two are connected. 

UNIDENTIFIED MALE:  Do what the American people want.  Grow the job, cut the government.  And they can sit there and do nothing and try to find out who their leader is.

(END VIDEO CLIP)

SCHULTZ:  So the Republican cut and grow agenda will cut the recovery short, and grow the unemployment lines.  That‘s what it‘s going to do.  A report by Moody‘s chief economist Mark Zandy shows Republican cuts will eliminate 700,000 American jobs by the end of next year. 

This isn‘t about the budget for the Republicans.  It‘s all politics.  Congressman Joe Wilson of South Carolina thinks the Democrats should buckle to Republican demands, because of the 2010 elections. 

(BEGIN VIDEO CLIP)

REP. JOE WILSON ®, SOUTH CAROLINA:  There should be compromise.  And we should be working together.  But the conservatives won the election last year.  The compromise should be to the conservative side.  It should not be name calling. 

(END VIDEO CLIP)

SCHULTZ:  Did you hear that?  Joe Wilson doesn‘t want there to be any name calling?  Wilson is the guy who yelled at the president of the United States during the State of the Union Address.  Remember this? 

(BEGIN VIDEO CLIP)

OBAMA:  The reforms I‘m proposing would not apply to those who are here illegally. 

WILSON:  You lie. 

(END VIDEO CLIP)

SCHULTZ:  Maybe he forgot that.  Wilson and other Republicans blaming Harry Reid for a shutdown.  They are the real liars in all of this.  Reid is doing everything he can to meet with the Republicans halfway.  Today Reid announced that the Senate will be willing to make up to 30 billion dollars in cuts.  Boehner originally wanted that number. 

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D), MAJORITY LEADER:  It‘s the number the Republicans were for before they were against it.  We got the number by relying on reality, not ideology. 

(END VIDEO CLIP)

SCHULTZ:  So Harry Reid has put the ball back in the court of the speaker.  He knows Boehner has a Tea Party problem. 

(BEGIN VIDEO CLIP)

REID:  Much of the criticism in the process has come from people who aren‘t even sitting at the negotiating table.  I am.  And so is Speaker Boehner.  I‘m glad he‘s returned to the conversation. 

It‘s obvious he has a difficult situation on his hands.  I don‘t envy him in that regard.  He‘s getting a lot of pressure from the Tea Party folks to dig in his heels, even if it hurts and destroys the recovery that we have going now. 

(END VIDEO CLIP)

SCHULTZ:  Harry Reid is spot-on.  The Tea Party has John Boehner‘s back against the wall.  Tea Party groups are planning a rally at the Capitol on Thursday to pressure Republicans to hold their ground. 

For more on the shutdown battle, we‘re joined tonight by Chris Hayes, Washington editor for “The Nation” magazine. 

Chris, good to have you with us tonight.  This evening, Vice President Biden met with Senate Democratic leaders, and they announced that they are willing to go to the number of 33 billion dollars worth of cuts.  Do you think Boehner‘s going to take that deal? 

CHRIS HAYES, “THE NATION”:  Well, it was an interesting choice, I think, by Biden to mention it, because I think the idea is to try to anchor the negotiations in the public imagination and also bind them in.  And there are Republican complaints, basically, but no denials. 

So it makes me think that they have actually worked something out. 

And he‘s trying to essentially hold them to it.

We should zoom out for a second, though, and note the fact that we‘re already having a conversation where Joe Wilson actually—it is the contours of what Joe Wilson wanted, which is the compromise is in cutting a budget while we still have nearly double-digit unemployment. 

The anchor for this conversation is so far from what the consensus among people who study macroeconomics are, people who study the history of the Great Depression are.  So we‘re already way, way, way in right field when we‘re arguing about how much we‘re going to cut, whether it‘s 60 billion or 30 billion. 

SCHULTZ:  And it really comes down to whether Boehner is going to have the guts to stand up to the Tea Party at this point.  Because the Democrats have made some substantial cuts that I think—personally I think a lot of Americans aren‘t going to like.  But they‘re going to see that the Democrats have clearly moved to compromise on this. 

But is Boehner willing compromise with the Tea Party?  Is that possible? 

HAYES:  Well, you know, Boehner has shown less control.  There‘s two sort of countervailing issues here.  One is that Boehner has shown less control of the caucus than Pelosi showed over the caucus when she was speaker of the House.  So it‘s more of an open question whether he can whip those votes around. 

On the other hand, there hasn‘t been massive open revolt in the previous CRs from the sort of Tea Party caucus, from the incoming House Republicans, which indicates that they may be willing to sort of grit their teeth and take it. 

I think ultimately there‘s a sort of delicate dance, because I think in the ideal universe, the Republicans want the Democrats to believe they‘re willing to go to a shutdown, but don‘t actually want the shutdown to happen.  As we‘ve seen from the press conferences they‘re giving, they‘re scared they‘re going to end up with the one‘s shouldering the blame for it. 

SCHULTZ:  And do the Democrats get the benefit of the doubt with the public?  Who wins, who loses in a shutdown, politically? 

HAYES:  Well, I think the president probably wins, institutionally, because the president can sort of stay above the fray, and kind of come in and be the vessel through which a deal emerges.  And I think Congress in general loses. 

Let‘s remember that the United States Congress is the most distrusted institution in all of American life.  Only 10 percent of people say they have a lot of confidence in it.  What happens I think in the government shutdown is—it‘s the sort of most—it‘s an abject sort of declaration of failure by the Congress.

I don‘t even necessarily think there is going to be that much of a distinction in terms of apportioning partisan blame as much as there is going to be institutional blame and sort of evenly divided blame, Americans attached to Congress on both sides of the aisle. 

SCHULTZ:  And some Democrats are getting vocal.  They want the president to get involved in this.  They want more direction from the White House.  We‘ll see how it plays out. 

Chris Hayes, Washington editor of “The Nation.” good to have you with us tonight.  Thanks so much. 

A shutdown just—it isn‘t just about government workers.  It‘s about you and me and the economy.  That‘s next.

(COMMERCIAL BREAK)

SCHULTZ:  Thanks for staying with us tonight here on THE ED SHOW on MSNBC.  If you don‘t think you have skin in the game if the Republicans shut down the government, let me tell you something, you better start thinking differently, because, you know, like, if you need a passport, can‘t get it done. 

Planning a visit to a national park or monument?  Too bad, can‘t get there.  Nine million visitors were shut out in the last shutdown, costing 14 million dollars a day in lost business.  Now, if you‘re a business that relies on those visitors, too bad. 

Now, I was wondering, are you a veteran who relies on benefit checks, GI Bill educational support, or just need someone at the VA to answer your questions?  Too bad.  They won‘t be there.  More than 400,000 had to wait for their checks in the last shutdown.  This has got real ramifications. 

Do you work for a government contractor, or work for someone who supplies them?  Well, too bad. 

Are you a state or local worker whose salary is subsidized and helped out by federal funds?  Well, you‘re going to be affected. 

Live near a toxic waste site getting cleaned up by those government workers and government money?  Now you get the picture.  Six hundred cleanups were suspended in the last shutdown. 

If you‘re applying for Social Security or Medicare, or you need treatment from the National Institutes of Health, or if you‘re perfectly healthy but you‘d like to get warnings about the spread of contagious disease from the Centers for Disease Control, too bad.  They won‘t be in business. 

If you‘re a—now, here‘s one for you.  If you‘re in real estate, or your business is tied to the housing market, this is going to be a tough one.  The last shutdown jammed up deals going through the Federal Housing Administration so badly that it was blamed for the downturn in the housing market. 

Now, if you live in the country, and you have a stake in the economy, directly or indirectly, your skin is deeply thick, big-time in this game, my friend.  And if you don‘t like that Republicans are willing to shut it down just to appease the Tea Party, well, too bad, because that looks the way it‘s going. 

Let‘s bring in a veteran of the last shutdown, former Clinton Labor Secretary Robert Reich.  He‘s now the professor of public policy at UC Berkeley‘s Goldman School of Public Policy. 

Professor, thanks for your time tonight. 

ROBERT REICH, FORMER LABOR SECRETARY:  Hello, Ed. 

SCHULTZ:  I sense that this shutdown will be much more severe than the last one.  Do you agree with that?  Tell us why.  What do you think? 

REICH:  Undoubtedly it will be more severe, Ed, because all of the areas you just mentioned people are more dependent on today.  Many of them because they don‘t have jobs, because they are dependent on social services that will be slowed down, or will not be available. 

The economy today is much worse than the economy was in 1995, in the last shutdown.  So we‘re facing, you know, not Armageddon.  But we are facing a public that is really going to be in trouble in many respects. 

SCHULTZ:  What risk does it pose to our recovery? 

REICH:  A huge risk for the recovery.  Not just the shutdown, but also just, you know, deficit cutting right now is crazy.  I mean, no economist that I know thinks that when you‘ve got so many millions of people unemployed, when you have 8.9 percent unemployment rate, when you‘ve got so many millions more who are working part-time, that cutting government spending is the right thing to do. 

I mean, you create more unemployment, fewer people have jobs, fewer people have paychecks to buy things.  This is nuts. 

This is going in exactly the wrong direction.  If you shut down the government on top of that, there are even fewer paychecks. 

SCHULTZ:  Have the Democrats given too much, in your opinion?  They agreed tonight to 33 billion dollars in cuts, to try to get Boehner to move and do a deal with the Tea Party?  What do you think? 

REICH:  I don‘t know why the Democrats are dealing at all.  I think what the Democrats ought to be saying is right now, it‘s nuts to try to cut the budget deficit.  By the way, if you want additional money, Republicans, you were the ones to extend the Bush tax cuts to the wealthy.  If you hadn‘t done that, we‘d have enough money to fund anything you want to cut. 

That is, we would not have the kind of budget deficit we have right now.  If I were a Democrat negotiating with the Republicans right now, I would make sure that the public understood that we‘re in the problem we‘re in partly because of the giant Republican tax cuts to the very wealthy. 

SCHULTZ:  Does the president need to get in this game, Mr. Reich? 

What do you think? 

REICH:  I think the president needs to say to the public what‘s at stake, to explain to the public why these tax cuts are ill advised, ill timed, why we do want to bring down the budget deficit over the long term, but why now is exactly the wrong time, and why shutting down the government is going to make everything worse off. 

You know, this is—we are so far off the rail.  We are so far in the right wing right now that the president I think has to show some leadership and explain to the public what is actually at stake and what is going on. 

SCHULTZ:  Robert Reich, thanks for your time tonight.  Appreciate it so much. 

If giant corporations paid their fair share of taxes, don‘t you think that would help alleviate the budget deficit?  Senator Sanders says it will, and they need to pay their fair share.  Next, stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Finally tonight, let‘s talk about shared sacrifice.  All these politicians twisting themselves into knots over deficit and over how much they should cut in federal spending.  But no tax hikes?  Is that correct?  No tax hikes.  Not one. 

But it‘s worse than that.  There are giant corporations paying basically no taxes. 

Senator Bernie Sanders of Vermont, Independent, is asking these questions when no one else holding office seems to be willing to do so.  Good evening, senator.  Good to have you with us. 

SEN. BERNIE SANDERS (I), VERMONT:  Good to be with you. 

SCHULTZ:  You talked about shared sacrifice, but let‘s talk about the numbers.  Staggering profits and some of these corporations paying zero tax.  How do we change that? 

SANDERS:  Well, we change that by saying that at a time when this country has a 14 trillion dollar national debt, it is insane for Wall Street companies like Bank of America, Citigroup, bailed out by the taxpayers of this country, making huge profits—and it‘s not only that they don‘t pay anything in taxes, they got a tax rebate. 

The major oil companies, Exxon, Chevron, Valoro, huge profits, no taxes, get a rebate.  General Electric, 26 billion dollars in profits in the last five years, zero taxes, four billion dollar rebate. 

Meanwhile, what our Republican friends are doing is saying, oh, we have this huge deficit.  We‘re going to have to balance the budget.  How do we do it? 

Well, we cut Headstart.  We cut the Social Security Administration.  We cut Pell Grants for college students.  We slash the environmental protection.  We cut nutrition programs for low-income pregnant women. 

The issue here is shared sacrifice.  The rich get richer.  Corporate profits are soaring.  It is absurd that the wealthiest people in this country and the largest corporations in this country do not play a role in deficit reduction, and that we simply move toward a balanced budget on the backs of the weak and most vulnerable people in this country. 

That is morally wrong and bad economic policy as well. 

SCHULTZ:  For full disclosure, you mentioned General Electric.  I want to point out General Electric owns 49 percent of our parent company of NBC Universal. 

But I do want to point out—and I think this—cuts right to the law.  None of these companies are breaking the law.  It is the tax laws that they‘re working from within.  And the Republicans don‘t seem to have any kind of appetite to change those laws.  Where does that leave the American taxpayer? 

SANDERS:  Well, it leaves the American taxpayer on the hook.  It says that the average working stiff in this country—the average person is making 40,000 or 50,000 dollars a year in income, is paying more in taxes than a giant corporation like General Electric or Citigroup or Exxon Mobil. 

That is totally absurd.  So we need to focus on eliminating all of these loopholes that allow these very, very profitable corporations to not contribute to the Treasury at all. 

SCHULTZ:  What would it do if they were paying, say, one or two or three percent?  What would it do?  Have you run the numbers on this?  On just what kind of an impact and how it would affect—because right now, what we‘re having in this country, on a state level—and, of course, just in the last segment of the show on the federal level—we‘re going through some cuts that we‘ve never seen before, because we have not a tax problem.  We have a revenue problem. 

If we were to fix the tax code, all of that would change. 

SANDERS:  Absolutely.  Look, you know, as Bob Reich just mentioned a moment ago, it is insane to be extending tax breaks to millionaires and billionaires.  It is equally insane that large profitable corporations not only pay no taxes, but get a rebate from the IRS. 

If you address those problems, you don‘t have to cut Headstart or nutrition programs for low-income people, or the Social Security Administration.  The issue here is, yes, we have a deficit problem.  Yes, we have to address it. 

But you don‘t address it just by doing it on the backs of the weak, the sick, the elderly, and the poor.  You need the wealthy and large corporations also to play a role. 

Now, the issue, Ed, as you well know, is working folks don‘t have a lot of power on Capitol Hill.  It‘s the big lobbyists representing these corporations who write the tax laws that these companies take advantage of.  That has got to change.  The American people have got to say, enough is enough. 

SCHULTZ:  Senator, good to have you with us tonight.  Thanks so much for speaking out. 

Tonight in our survey, I asked, should the United States arm the Libyan rebels?  Seventy percent of you said yes; 30 percent of you said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.  You can go to our website at our new blog at Ed.MSNBC.com. 

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