updated 4/12/2011 11:57:05 AM ET 2011-04-12T15:57:05

Guests: Rep. Jerrold Nadler, Rep. Yvette Clarke, Jeffrey Sachs, Katrina

Vanden Heuvel, Chris Larson, John Nichols, Rev. Al Sharpton

ED SCHULTZ, HOST:  Good evening, Americans.  And welcome to THE ED SHOW from New York.

How do you like our new digs, huh?  Pretty cool studio.  They did this for Ed?

All right.  Tonight, Republicans are going to after every gain the middle class has made in the 20th century.  Well, I‘m going to take a look at the big picture.  Let‘s see who really has a plan to create jobs in this country.

This is THE ED SHOW.  Let‘s get to work.

(BEGIN VIDEOTAPE)

(MUSIC)

           

SCHULTZ (voice-over):  Republicans say, balance the budget on the backs of the middle class.

Tonight, new details on the president‘s plan.  Katrina Vanden Heuvel on the president‘s budget address.

The fight for Wisconsin is ratcheting up.  Tonight, the latest on the recounts, the recalls, and new word that Governor Scott Walker will get dragged in front of Congress this week.

And a stronger America, debating the black agenda.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I worry about you, brother, because you could be easily manipulated by those in the White House.

AL SHARPTON, NATIONAL ACTION NETWORK:  I‘m the one out there in the trenches at the labor rallies.

(END VIDEO CLIP)

SCHULTZ:  My co-host Al Sharpton on the discussion no American should miss.

(END VIDEOTAPE)

SCHULTZ:  And this is the story that has me fired up tonight:

You know, I love it when politicians use charts.  This guy used a chart.  Yesterday, I was sitting on the couch and watching “Meet the Press.”  And I see this Ryan guy.

I don‘t know this Ryan guy.  I mean, he‘s from Wisconsin.  I don‘t know how he voted.  So, I checked it out.

Let‘s see.  He voted for the AIG bailout.  He voted for TARP.  He voted for Medicare prescription drugs.  He even voted for the bridge to nowhere.

So, don‘t let him fool you like he‘s just this guy that isn‘t going to spend any money.  So, he shows up on “Meet the Press” with this chart.

Here‘s what he has to say about the future.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN ®, WISCONSIN:  What matters is we try to fix the country‘s problems.  Look, let me just show you.  This is the debt that the CBO says we‘re going to have.  We‘re giving our children a lower standard of living.  Our plan pays the debt off.

So, we really believe we need to own up to the fact that the country is on an unsustainable path and we‘ve got to do something to fix this.

(END VIDEO CLIP)

SCHULTZ:  You know, there‘s a lot of angles there, you know?  There‘s a few different colors in there.

Charts—don‘t you love charts?  One thing about charts.  Somebody shows up with charts, that means they‘re prepared or they‘re ready to explain exactly where they want to take the country.

Congressman, I got a bigger chart than this one.  Take a look at my chart.  It shows where private sector jobs have really come from under the Obama administration and the direction of the Democrats.  Because they haven‘t gotten any help from you.

But you know, before we go to that let‘s just play a little game here. 

Let‘s say you‘re the owner.  You own this business.  I mean, you own it. 

You started it from the ground up.  You earned it.

And then you don‘t want to run it anymore.  So, you hired someone to run it.  And this person was running it and this is—things got kind of tough.

You know, this is your business.  Some decisions were made along the way here and, holy smokes, we started losing market share.  You started losing jobs.  And it got right here, you start thinking, you know, maybe I don‘t have the right guy.  Maybe I don‘t have the right set of employees.  Maybe I better step in and make some changes.

So, you make some changes.  It‘s tough.  Change is tough.  You make the changes.  And then all of a sudden, things are still tough and you‘re wondering, well, you know, what are we going to do here?  Do I got the new guy?  Do I have the right team in place again?

And then things start to change a little bit.  And then they get better as the months go on.  And then, all of a sudden, holy smokes.  We‘re back making a dollar again.

Look—look at this.  We got 13 months of making money.  But you know what?  The back chatter in the industry, you‘re the owner and you‘re hearing this—you go to lunch and you hear other business people talking, you hear this back chatter, and you hear, you know, these people shouldn‘t have been fired.  You know, they were really wronged over here.  Their plan should have worked, but, you know, these people were really mean to them over here and said some things to the people about, you know, how they could run it better.

But, you know, these people still think they should be running the company, running your company.

Let‘s do a little refresher course on exactly how they were running the company.  Let‘s go to the guy who was running the company back in his last State of the Union address back in 2008.  What did he say?  How did he want to run the company?  Here it is.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FORMER U.S. PRESIDENT:  Most Americans think their taxes are high enough.  With all the other pressures on their finances, American families should not have to worry about their federal government taking a bigger bite out of their paychecks.  There‘s only one way to eliminate this uncertainty: make the tax relief permanent.

(END VIDEO CLIP)

SCHULTZ:  Did he say he wanted to not only run it the way he‘s been running it, but wanted to kind of put it on steroids like forever, like always stay with that plan?

Well, that was in early 2008.  Then we started shedding these jobs and the company was really in trouble and then, all of a sudden, they had to make some decisions.

And then, John Boehner shows up, minority leader in the House, and says doggone it, what do you say we spend some money?  What do you say we do the TARP program?

Here‘s what he had to say.  Let‘s not forget.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER ®, OHIO:  Think about the jobs that will be lost.  If I didn‘t think we were on the brink of an economic disaster, it would be the easiest thing in the world for me to say no to this.  But I believe the risk in not acting is much higher than the risk in acting.  This Congress has to do its job.

(END VIDEO CLIP)

SCHULTZ:  OK.  Game over.  Now, let‘s get to the real politics.

We have a new president.  He takes over in January of 2009 and look what he inherited.  A company that was shedding employees, a company that was losing money, a company where record deficit, record debt, record foreign debt, jobs going overseas, nobody‘s got any health care.

This crowd didn‘t do anything about health care for a long time, for eight years.  And they‘re gone now.

Here comes the new guy.  His name is Barack Obama.  He‘s the new president.

He says, you know what?  We got to stimulate the economy.  We got to spend some money the same way they spent money back here on Wall Street.  What do you say we do something for the employees?  And John Boehner says, no.  I don‘t want to do that.  He wanted TARP, but he didn‘t want this.  Here‘s what he said on the House floor.

(BEGIN VIDEO CLIP)

BOEHNER:  Not one member has read this.  What happened to the promise we‘re going to let the American people see what‘s in this bill for 48 hours?  But, no, we don‘t have time to do that.

(END VIDEO CLIP)

SCHULTZ:  No.  You know what de?  He just took millions of jobs and threw them right on the floor because he didn‘t believe American workers could do it.  Oh, yeas.  Workers, investing in workers here in America.

Remember, the folks that were running this company, they didn‘t want to do it.  They were against the auto loan.  It was not a bailout.  It was a loan and it‘s being paid back.  They didn‘t believe in American workers.

In fact, one of their leaders in the Republican Party said this in the midst of this recovery.  Here it is.

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR ®, VIRGINIA:  For the government to now go in, we‘re going to have $70 billion of exposure from the taxpayers‘ standpoint put into this car company.  Nobody in Washington knows how to run a car company.

(END VIDEO CLIP)

SCHULTZ:  Nobody knows how to run a car company because they‘re union people.  United Autoworkers, we don‘t want to do anything for them.  Hell, let‘s ship the jobs overseas.

But, all of a sudden, things started to turn.  And the car industry starts to turn around and we‘re actually selling trucks again in America and we‘re actually getting new some innovation when it comes to transportation in America.

And look where these jobs are going now.  Now, we‘re into the positive ledger, aren‘t we?  Now, we‘re seeing job creation.  This is—folks, this is the stimulus package working is what it is.

This is investment in American workers.  This is not shipping the jobs overseas.  This is believing in what we can do at home.

But you know what this crowd over here is still saying?  They want to run it.  And not one time has this crowd over here, the red team, not one time have they ever said, you know what?  As a country, you can‘t deny the fact that we‘re headed in the right direction.  They just can‘t bring themselves to the truth, can they?  But they got their charts.

Folks, let me tell you something.  I was watching Rachel‘s show the other night and she sent her, one of her guys out on the street to start asking some questions to people about who‘s in Congress and what their names are, and it was amazing to me how little people on the street knew.

Let me just tell you one thing.  This is the only chart you need to know come next election.  This is the only chart you need to watch.  This is the only chart that matters to American families.  Are we headed in the right direction?

And sometimes we get lost in the 24-hour news cycle and we don‘t see the progress the country is making.  Here‘s the progress right here.  Here‘s where the Democrats took over.  Here‘s the plan right there.  We never saw that during the Bush years.

So, get your cell phones out, I want to know what you think.  Tonight‘s question: Who do you trust to create private-sector jobs?  Text “A” for Democrats, text “B” for the Republicans, 622639.  And, of course, you can always go to our new blog at Ed.MSNBC.com and we‘ll bring you the results later on in the show.

Joining me now are three folks who know something about charts.  Jeffrey Sachs, economist and director of the Earth Institute at Columbia University, and a couple congressional members from New York: Yvette Clarke and also Congressman Jerrold Nadler.

Great to have you with us tonight.

UNIDENTIFIED MALE:  Good to be here.

SCHULTZ:  I want you to know—I didn‘t make that chart up, Jerry.  I didn‘t make that chart up.  What do you think of that chart?

REP. JERROLD NADLER (D), NEW YORK:  Well, we‘ve seen that chart before.  It is actually completely true.  It shows the job losses under the Bush administration month by month.  We were losing 750,000 to 800,000 jobs a month when the Obama administration took office.  It took a little time to turn it around, but every month we lost fewer jobs until eventually we went into the positive jobs and we‘re gaining jobs.  Now, we‘re not gaining jobs nearly fast enough.

SCHULTZ:  We‘re never gaining jobs fast enough.

NADLER:  But we‘re gaining jobs as opposed to the other thing.

SCHULTZ:  Is it safe to say we‘re never gaining jobs fast enough?  I mean, the culture of the media, the culture of the political divide in the country, you could be adding 200,000 jobs a month, and they‘d say, well, you didn‘t do a quarter million, you didn‘t do a half million.

NADLER:  It is true that during the Clinton administration when we added 22 million jobs, which was a heck of a job, the Bush people—the Republicans are saying not good enough.

SCHULTZ:  Congresswoman Clarke, you are on a hunger strike because of this radical Ryan budget that‘s out there.  Why are you doing this?

REP. YVETTE CLARKE (D), NEW YORK:  Well, actually it‘s a fast, and it‘s because I believe that we have to get some clarity here.  That we have to get the American people focused on what‘s real and what is being proposed by the Republicans, the reckless Republicans in Washington right now is fictitious.  Their agenda is one of destruction.  It‘s clear to me.

And I know those terms sound a bit drastic but when you look at the cuts that have been done to the budget, the continuing resolution, and what is being proposed and the Ryan budget, that‘s our families.  That‘s our communities.  That‘s destruction as we know it.

SCHULTZ:  Mr. Sachs, take a look at the Ryan budget from what you know of it.  He says he wants to save Medicare and Medicaid.  Will it do that?

JEFFREY SACHS, ECONOMIST. COLUMBIA UNIVERSITY:  Well, it goes right out to destroy Medicaid within the next few years, slashing it drastically.  And then on Medicare, he delays for 10 years, and then he goes out to destroy it, to make sure that elderly people will not have a guaranteed access to health care.  They will be getting some premium under his plan but they‘re going to have to put a lot of money out of pocket.

I think the problem though is that we have actually, in both parties and in the White House, we got a serious problem.  We‘re already cutting some programs that people absolutely depend on though we don‘t even hear what they are right now.  Everything is kept secret three days after a so-called historic agreement was reached.  We don‘t even know what‘s in it.

And, unfortunately, the president just keeps on caving to these pressures from the Republican side.  So I don‘t know exactly where we are.  It‘s not one side versus the other.  It‘s a mess in Washington.

SCHULTZ:  Is the president caving, Congresswoman?

CLARKE:  I think he is trying to do the best he can under the circumstances.  You know, the pressure has to come I believe from the American people, who recognize just how critical it is for us to keep our social compact.

SCHULTZ:  Well, American people are saying, shared sacrifice?  There is no shared sacrifice in what Ryan is doing.

CLARKE:  There‘s no shared sacrifice.

SCHULTZ:  And, Congressman, the president is now—the word is he‘s going to put some tax increases on the table with his budget.  I think it‘s long overdue.

NADLER:  I agree.

SCHULTZ:  I don‘t think the Bush tax cuts should have been extended. 

They haven‘t created any jobs.

NADLER:  The basic problem right now is that the Republicans keep saying, their mantra is, the country is broke.  We have to cut services.  We have to cut Medicare and eliminate Medicare programs.  We have to cut Medicaid, cut everything.

We don‘t hear anybody saying and the president has not been saying what he should have been saying, which is the country is not broke.  We‘re simply not taxing big corporations enough.  G.E. paid no taxes on $14 billion in profits.  We‘re not taxing the millionaires and billionaires enough.

The total revenue going to the government as a percentage of the GDP is lower than any time since 1930.

SCHULTZ:  Mr. Sachs, if we do reinstate the Bush tax—or wipe them out and go back to the top 2 percent, go back to the old rate from 35 percent to 39.5 percent, what would that do?  Would that turn it around?

SACHS:  That wouldn‘t turn around everything but it‘s absolutely vital that we do that.  That‘s why it was unforgivable for the White House and the Republicans at Congress to agree to that disastrous deal last December.  And, unfortunately, that put us a trillion dollars into the hole for this year and next year, and now, we‘re responding to that deeper hole by cutting programs for the poor.  This made absolutely no sense.

NADLER:  We‘re forgetting history here.  Under Bill Clinton, he took office when there was a big deficit.  We increased taxes and cut some expenditures, but basically increased taxes with not a single Republican vote back in 1993.  The Republicans said the economy will collapse.  Joblessness will go up.  We gained 22 million jobs.

SCHULTZ:  Everything is in theory.  Every—there‘s this big theory out there by the Republicans that, you know what?  If we give the richest people in the country more money, they‘re going to go out and create jobs as if they know how the social engineering is going to be taking place in this country.

NADLER:  Theory is well and good, but now we have history.

CLARKE:  That‘s right.

NADLER:  When Bush was elected, if you remember the campaign debate in 2000, it was what should we do with the $5.6 trillion surplus we‘re going to have in the next 10 years?

SCHULTZ:  Yes.  And, Yvette, I want to ask you—the comment from Paul Ryan is that they‘re going to save Medicare and Medicaid.  Your response to that?

CLARKE:  They are obliterating it.  Clearly, you know, they‘re going after it.  They want to privatize health care in America.  That has been their ongoing mission, is to privatize.  And they want to make sure that our grandparents are the ones who suffer the consequences.

SCHULTZ:  So, it sounds to me like they want to put the government or the private insurance company in between the doctor and the patient for the elderly people.  It sounds to me like this could be the new version of their death panels.

NADLER:  Absolutely.

SCHULTZ:  I mean, this is -- 

NADLER:  And what‘s ironic in particular is you look at Mr. Ryan‘s budget, which the Republicans are going to vote through the House this week, he cuts $4.2 trillion in expenditures and cuts $4.3 trillion in taxes.  It doesn‘t even reduce the deficit really.  He simply takes all that money from low and middle income people and elderly people and gives it to the rich people and the corporations.

CLARKE:  It‘s a wealth transfer program.

SCHULTZ:  Quickly, Congresswoman, what do you need the president to do on Wednesday?  Does he have to stand tall against—for these entitlements?

CLARKE:  And he needs to put revenues on the table.

SCHULTZ:  He does.  I agree with that.

Economist Jeffrey Sachs and also Representatives Yvette Clarke and Jerry Nadler, great to have you with us tonight.  Thanks so much for coming in.

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

Calls for a federal investigation into the Wisconsin election results. 

That story is coming up.

And, next, the president‘s budget plan.  Mr. Obama is expected to propose a tax increase on the rich.  Will it fly?

(COMMERCIAL BREAK)

SCHULTZ:  Breaking news out of Japan.  Japan‘s Nuclear Safety Agency is reportedly raising the crisis level at the Fukushima nuclear power plant from a level five to a level seven.  That‘s the highest ranking on an international scale which puts the disaster on par with Chernobyl.  The damaged facilities are still releasing a massive amount of radioactivity and remain a threat to human health and the environment.

Other stories coming up, the president is preparing to unveil his budget plan.  Wait until you hear what he‘s considering cutting.  That‘s next.

Stay with us.

(COMMERCIAL BREAK)

           

SCHULTZ:  And welcome back to THE ED SHOW.  Thanks for watching tonight.

Well, a lot of anticipation from the White House as Americans are going to see the president unveil his plan to tackle the debt.  This is coming up on Wednesday.  And much to the dismay of many Americans—this is what‘s on the table: entitlement cuts, changes to Medicare, Medicaid, and, yes, even Social Security.

Adviser David Plouffe explains.

(BEGIN VIDEO CLIP)

DAVID PLOUFFE, WHITE HOUSE SENIOR ADVISER:  On Social Security, what he said is that is not a driver right now of significant costs.  But in the process of sitting down and talking about our spending and our programs, if there can be a discussion about how to strengthen Social Security in the future, he‘s eager to have that discussion.

(END VIDEO CLIP)

SCHULTZ:  Here‘s how you strengthen Social Security in the future.  You leave it alone because it‘s worked for generations.  OK.  They borrowed against it.  Maybe they raided the fund a little bit.  But this is a program that has worked for millions of Americans.

Now, also, on the chopping block finally is military spending.

And rolling back the Bush tax cuts on the rich?  What a concept.

(BEGIN VIDEO CLIP)

PLOUFFE:  He believes taxes on the higher income, people over $250,000, should eventually go up.

(END VIDEO CLIP)

SCHULTZ:  Does that mean we‘re not going to see an extension of the Bush tax cuts?  Mr. Obama will call on Congress for input.  However, news of the plan caught members of both parties by surprise.  Republican Senator Saxby Chambliss, who‘s been working on a separate bipartisan debt reduction package, says the president threw us a little bit of a curveball.  Really?  Meanwhile Democratic aide tells “Mother Jones” magazine Plouffe announcement did leave us scrambling.

House Democrats are working on releasing their budget proposal as well.  The White House officials expect the differences between the president‘s plan and the one devised by Congressman Ron Paul to be clear.

To be clear: the Ryan plan puts Medicare in the hands of private insurers.  Who‘s in favor of that?  And kills Medicaid as we know it.

Today, assistant minority leader, Jim Clyburn downplayed the entitlement changes and put the focus on revenues particularly from the corporations.

(BEGIN VIDEO CLIP)

REP. JAMES CLYBURN (D), SOUTH CAROLINA:  He‘s going to be talking about closing loop holes, he‘s going to be talking about getting rid of these subsidies, and put our fiscal house in order.

(END VIDEO CLIP)

SCHULTZ:  Joining me now is Katrina Vanden Heuvel, editor/publisher of “The Nation” magazine.

Welcome.  Great to have you with us.

KATRINA VANDEN HEUVEL, THE NATION:  Thank you, Ed.

SCHULTZ:  This is another defining moment where the White House is going to have to stand up.  Why is Social Security even on the table for discussion?

VANDEN HEUVEL:  You got me.  I mean, you got three pillars of middle class security under siege by Paul Ryan and his cruel Republican budget.  And now, you have a White House which is putting revenue on the table.  This is good.  They‘re talking about raising taxes on the richest, taking on the loaded defense budget.

But Social Security, Ed, is a social contract between the American people and their government.  It is not a source of the debt challenge in this country.  The only source of the debt challenge is not Medicare, Medicaid, or Social Security.  It‘s a broken health care system which can be addressed by taking on big insurance, big drug, and hospital lobbies.

SCHULTZ:  Why are the Democrats even entertaining this kind of conversation?  The American public, they‘re not crying for changes in Medicare and Medicaid—

VANDEN HEUVEL:  No, they‘re not.

SCHULTZ:  -- dissolving it, getting rid of it.  Social Security should be under attack.  Harry Reid said on “Meet the Press” weeks ago that there‘s no serious problem with Social Security.

VANDEN HEUVEL:  Social Security and the deficit should not be in one sentence.  No, this country‘s not broke.  We‘re a rich country.

What is broke finance—what is broke and bankrupt is so much of the debate inside Washington.  You just had two good Democrats on.  They see the problems.

But until we‘ve reset the debate and President Obama must take leadership and not legitimize this Republican narrative, that government spending is tanking the economy, we need more government spending to boost job creation and we need to keep secure the pillars of middle class security.

And, you know, Ed, poll after poll shows Americans—they‘re not interested in debt reduction deficit.  They want job creation and they are even willing to see increases in taxes to support and strengthen Medicare and Medicaid.  We got a debate in this country that is completely skewed.

SCHULTZ:  I‘m just—I‘m afraid that this might take on the path of health care, that universal health care was never discussed at the table.  The public option was just a bargaining chip that was never really serious, a serious venture.  And so, here we go.  Yes.  We‘ll throw Social Security out there.

The Democratic base, sooner or later, is going to damn near revolt on this.

VANDEN HEUVEL:  It‘s more than the Democratic base.  Social Security is a program that has brought dignity and security to millions of Americans.

What is insane politically, bad politics, bad policy, Ed, is in a week where we see the attempt by the Republicans to gut—gut these programs that have made America strong, President Obama is going to muddle the message if he does trot out Social Security.  I think he could come back.  He could be the come back kid on this one and say, hey, the real problem is we need strong government price controls in our health care system and we‘re not going to touch Social Security.  We need to rebuild our social contract.  We need to tax too much of what we have, financial speculation, concentration of wealth, and we need to invest in too little of what we have—education, infrastructure, more security for the working poor, the middle class.

SCHULTZ:  He‘s got the trend with him.  It would seem to me that he could easily make the case to the American people that their economic plan is working.  The job creation is going in the right place.  And this is with the financial sector sitting on all these assets and not getting a whole heck of a lot of help.

VANDEN HEUVEL:  The last I heard, $1.9 trillion.  Ed, what I don‘t get is this man is deeply intelligent, a humane man, but he seems to want to always find—to lead by compromise and there are times when you can bring opposing sides together and then there are times when you got to take a stand.

SCHULTZ:  Very profound point.  Katrina Vanden Heuvel, great to have you with us tonight.

VANDEN HEUVEL:  Thank you.

SCHULTZ:  Thanks so much.

The heated debate about President Obama‘s supporters are demanding enough from him, Reverend Al Sharpton will join me on that issue.

And, next, the GOP leaders in the House were for raising the debt ceiling before they were against it.  Why Democrats should make the Republicans eat their own words.  “The Takedown” is next.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  It‘s time for the Takedown.  As the season changes, well, so do the policy positions of the Republicans in Congress.  After the midterm elections last fall, the soon-to-be Speaker of the House John Boehner said that he understood the serious need to raise the federal debt limit. 

This is how Boehner instructed House—fellow House Republicans, on the debt ceiling in November.  He says “I‘ve made it pretty clear to them that as we get into next year, it‘s pretty clear that Congress is going to have to deal with this as adults.  Whether we like it or not, the federal government has obligations.” 

Really?  He knew that back then?  In December, he is still convincing his own party that the debt limit must be raised, saying this: “we‘ll have to find a way to help educate members and help people understand the serious problem that would exist if we didn‘t do it.” 

Am I reading this?  Are you comprehending this?  And here he was following—the following month, speaking to Fox News anchor Chris Wallace. 

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS ANCHOR:  Do you agree with administration officials and other economists that defaulting on the full faith and credit of the United States would be a financial disaster? 

REP. JOHN BOEHNER ®, HOUSE SPAKER:  That would be a financial disaster, not only for our country but for the worldwide economy. 

(END VIDEO CLIP)

SCHULTZ:  Flippity floppity all over the place.  But after successfully holding the government hostage last week over spending cuts, Boehner changed his tune. 

(BEGIN VIDEO CLIP)

BOEHNER:  I can just tell you this.  There will not be an increase in the debt limit without something really, really big attached to it. 

(END VIDEO CLIP)

SCHULTZ:  For months, John Boehner said failure to raise the debt limit would cause a worldwide financial catastrophe.  And now he says he‘s willing to cause that catastrophe if the Republicans‘ demands aren‘t met. 

Isn‘t that kind of goofy, folks?  Maybe one of the other Republican leaders in the House can make some more sense. 

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR ®, MAJORITY LEADER:  There comes a time leverage moment here, a time at which the white house and the president will actually capitulate to what the American people want right now, whether it‘s spending caps, entitlement reforms, budget process reforms.  These are the kinds of things we‘re going to have to have in order to go along with the debt limit increase. 

(END VIDEO CLIP)

SCHULTZ:  Somebody has to remind Eric Cantor that part of the reason the debt ceiling needs to be raised is because the Republicans demanded the extension of the Bush tax cuts.  Can they add and subtract?  That‘s four trillion dollars all on the deficit. 

And do you know how Congress accounted for the Bush tax cuts while Bush was in office?  Well, what the heck?  They just raise the debt ceiling.  Let‘s do it again.  It‘s been raised ten times in the past ten years. 

Republicans had no problem whatsoever raising it under Bush.  And the Democrats didn‘t hold the economy at gun point to demand what they really wanted.  OK? 

So the Democrats need to call the Republicans‘ bluff here.  Don‘t you think?  Any time a Republican says the debt limit won‘t be raised, play that Boehner tape for them.  Just showing how dangerous it would be if they weren‘t to raise the debt limit. 

Do they really expect us to believe that they are going to put the world economy at risk?  Are they really going to jeopardize powerful global business with ties to the Republican party?  I doubt it.  Take a hard line, Democrats. 

The Republicans are bluffing.  Don‘t give in.  And that is the Takedown. 

Al Sharpton asks, where is the counter point to the Republican Paul Ryan?  That‘s not President Obama‘s job, he says. 

But next, the latest developments in Wisconsin.  The recount and the recalls, and the governor who will come to Washington this week.  How interesting.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  Thanks for watching tonight.  The mess in Wisconsin over the Supreme Court election is now bringing calls for a federal investigation.  And the recall effort in Wisconsin is heating up like never before. 

In the battle between incumbent Wisconsin Supreme Court Justice David Prosser and challenger Joanne Kloppenburg, you will remember that 14,000 votes were just suddenly found for Prosser in Waukesha county.  State Senators Tammy Baldwin and Chris Larson are calling on U.S. Attorney General Eric Holder to get involved. 

Meanwhile, Governor Scott Walker, always on the offense, is suggesting that labor is trying to steal the election. 

(BEGIN VIDEO CLIP)

GOV. SCOTT WALKER ®, WISCONSIN:  I think it‘s pretty clear the big government labor union bosses that have been fighting the reforms in Wisconsin now for the past month and a half I don‘t think are going to give up.  I think they‘re going to throw out everything here and hope that somehow they can pull off what was pulled off with Senator Franken in Minnesota. 

(END VIDEO CLIP)

SCHULTZ:  Governor Walker will testify on Capitol Hill this week.  Congressional Democrats should prepare to grill him about his attack on the middle class.  But, of course, it‘ll be a lot of cheerleading by the Republicans as well. 

Then there is the effort to recall state senators in Wisconsin.  One of the Republicans who needs to go is state Senator Dan Kapanke.  Turns out this guy is even more extreme than Governor Walker.  Kapanke has said he thinks public safety workers should be included in the ban on collective bargaining, according to “The La Crosse Tribune.”

In other words, he doesn‘t think cops and firefighters should be entitled to collective bargaining.  Now how radical is that?  But there are also members of the courageous Wisconsin 14 who are the target of recall efforts by Republicans. 

Let‘s bring in Wisconsin State Senator Chris Larson, along with our man to tell the story.  Along with him is John Nichols, Washington correspondent of “The Nation” magazine.  Gentlemen, good to have you with us tonight.  Thanks so much. 

Senator, let‘s start with you.  You want a federal investigation based on what?  Why do you want Eric Holder to get involved? 

CHRIS LARSON, WISCONSIN STATE SENATOR:  Well, I‘m backing up Representative Baldwin on this one.  I think that given the discrepancies of what happened in Waukesha, the fact that the entire state was focused on this election, we thought it was pretty close to settled—and all of a sudden, a full day later, these votes turn up.

And she doesn‘t mention it to anybody until she has this news conference.  This is the Waukesha County clerk.  So I think given that, given the fact that she used to work for David Prosser a decade before, and given that she had irregularities before that were brought up before her county board, that were never corrected, given that she had access to this computer that no one else did—I think all of these things, and the way it turned the election, putting it a percentage point away, where if there is a recount, it‘s not going to be paid for by the state; it would have to be paid for by Kloppenburg‘s campaign.

I think all of these things need to be investigated fully. 

SCHULTZ:  She had access to a computer that nobody else had any oversight with at all.  So she was solely in charge of those votes.  That is a new one on me.  I hadn‘t heard that. 

John Nichols of “The Nation,” what chance do you think we have of the attorney general getting involved in this? 

JOHN NICHOLS, “THE NATION”:  Let‘s be honest.  The Department of Justice is an extension of the White House.  The attorney general is an appointee of the president.  So in many senses, this is a gut check moment for President Obama. 

Obviously, he doesn‘t control everything that Eric Holder does, but I would hope that President Obama, who has been so hands off with so many of these state struggles, not just in Wisconsin, but Ohio, Michigan, Maine, and other places, would take a serious look at it. 

This is a time where the federal government is needed.  Whether Joanne Kloppenburg is being cheated or not, whether David Prosser won or not, the fact is that unless there is a federal investigation, unless the Department of Justice comes into Wisconsin, this election will never be seen as a credible election by hundreds of thousands, perhaps millions of Wisconsinites. 

And that‘s just inappropriate.  We need the federal intervention and the president should recognize that. 

SCHULTZ:  Senator Larson, what about the recall effort?  I understand that the Republicans are pushing hard to get rid of some of the Wisconsin 14.  Where does that stand? 

LARSON:  Well, I think they have given up on quite a few of them.  They are focusing on just three of them right now.  Those are against Senator Dave Hansen up in Green Bay, very good guy, comes from a union background, State Senator Wurch (ph) down in Kenosha, again, very good salt of the Earth guy that they‘re going after, and then State Senator Halpern (ph) up in the north woods. 

They‘re going after them.  I think they‘re focusing on them not because they think they can win them, just because they don‘t want to be on defense, defending their eight Republicans.  If they‘re on defense the entire time, they‘ll lose. 

SCHULTZ:  John, in the wake of this, where is the enthusiasm? 

NICHOLS:  It is very interesting, Ed.  I think that people who aren‘t in Wisconsin often think wow, they took another hit.  They found 14,000 votes in Waukesha County.  People are going to get frustrated and give up. 

It is quite the opposite.  On election day last week, there were people at polling places all over the state collecting recall signatures.  Those signatures are piling up.  There will be more recalls filed in coming days. 

And there are now candidates stepping up.  Jennifer Schilling, a terrific state representative, who you may not remember, Ed—she actually appeared briefly on your show when you were in Wisconsin—has announced that she is going to take on Dan Kapanke.  And she is a very strong candidate. 

So far from the enthusiasm going away, there is an awful lot of evidence that people are getting into these recall races and saying, you know, look, if we‘ve got to pile up an extra 14,000 votes to ensure a victory, we‘ll do it. 

SCHULTZ:  Well, but it was a Democratic loss.  I mean, with all of the media coverage, all of the conversation, the Republicans get a victory on the state supreme court.  Has that, John—and senator, you first, has that diminished any of the enthusiasm for a recall?  What does it take to win, for the Democrats to win in Wisconsin? 

LARSON:  I think we‘re definitely on the up swing right now, Ed.  I think that if you look at where the election was during the primary, where Prosser was up by 55 percent and Kloppenburg only had 25 percent, and over that time we fought him to a standstill, where before everyone knew who Prosser was—he was an 11-year incumbent.  He was speaker of the assembly.

Where Kloppenburg was a complete unknown.  We fought him to a standstill where it was within one percent and may end up winning. 

SCHULTZ:  It should be pointed out that a number of Democrats won on the local level as well, as far as city elections and county elections.  Good to have you with us tonight. 

Wisconsin State Senator Chris Larson and John Nichols, Washington correspondent of “The Nation,” thank you. 

It‘s easy to scare people into thinking China is going to overtake the United States as the world‘s number one super power.  But there is one area in which we beat China by a long shot.  That‘s next.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW and thanks for watching.  The third rail; politicians always want to talk about that, don‘t they, the third rail of the American politics.  Last decade, of course, it was Social Security.  We have to do something. 

These days, it‘s Medicare and Medicaid.  We can‘t do that for old folks.  They got to pay their own way.  But there is one area of government spending that is untouchable. 

Let me show you what I‘m talking about.  A Swedish think tank added up all of the money spent on the military in every country in the world.  In 2010, the world spent 1.6 trillion dollars on military expenditures. 

Here you see countries with relatively equal amounts of spending:

Germany, Saudi Arabia, Russia, France.  They‘re all pretty close aren‘t they?  All between 2.5 to four percent. 

Let‘s see the next highest percentage.  Well, it‘s China at just over seven percent.  And China is the second largest spender in the world when it comes to military activity and hardware. 

And of course this section, there it is, the big one, that represents you and me, America.  We‘re number one, handing out 698 billion dollars on the military last year. 

Now don‘t start this thing oh, Ed doesn‘t support the troops.  Look, I‘m not making this up.  OK?  This is what the world sees.  We are the world‘s police officer; 42.8 percent of all the money in the world spent on military activity, it‘s us. 

All other countries spend just over 25 percent combined.  For the United States, that‘s an increase of more than 81 percent over the last decade -- 81 percent.  That‘s what we‘ve increased over the last decade.  For the past few weeks, I mean, we‘ve been hearing politicians talk about entitlement cuts, including the Democrat and Republican ideas to cut or eliminate Medicare, Medicaid, slash it, burn it.  Let‘s reform Social Security. 

We got all kinds of problems.  We‘ve seen a budget from Congressman Paul Ryan that raises taxes on the middle class, most of Americans, and takes a butcher‘s knife to social programs.  All the while, the American people have said, hey, why don‘t you try cutting military spending a little bit? 

Recent poll showed 51 percent supporting cuts to the military, while only 28 percent said that, you know, let‘s cut Medicare and Medicaid.  Only 18 percent wanted to cut Social Security, 18 percent. 

That‘s what people want.  But this graph is the reality of what the heck is going on.  Don‘t let anybody tell you that bipartisanship is dead.  When it comes to spending on the military, heck, the Democrats and the Republicans, they got no problem whatsoever spending money on military hardware and going all over the world getting in scraps. 

Well, we‘re the police officer. 

An argument every good Democrat should have an opinion about.  The Reverend Al Sharpton joins me next.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Finally tonight, yesterday here on MSNBC, I hosted a two-hour program, “A Stronger America, The Black Agenda.”  I think there should be a stated black agenda.  No question about it. 

And there‘s disagreements in the black community about President Obama, whether he‘s been standing up strong enough for the African-American community.  This exchange between Reverend Al Sharpton and also Princeton Professor Cornell West.  Take a look. 

(BEGIN VIDEO CLIP)

CORNELL WEST, PRINCETON UNIVERSITY:  I worry about you, brother, because you could be easily manipulated by those in the White House who do have the interests of Wall Street oligarchs, who do have the interests of corporate plutocrats who you oppose.  And you end up being the public face of Barack Obama, being another black mascot—

(CROSS TALK)

REV. AL SHARPTON, NATIONAL ACTION NETWORK:  Which is exactly why, as you just saw on that film, that I‘m the one out there in the trenches at the labor rallies and—

When you talk about a lot of those blacks in Washington don‘t want to challenge the president because he‘s black?  Let me finish.  They were representing those same communities when they supported George Bush on the Iraq War.  And only one black woman, Barbara Lee, voted against the war. 

They were scared then and they‘re scared now.  If you‘re scared, say you‘re scared.  Don‘t blame that on Obama. 

(END VIDEO CLIP)

SCHULTZ:  Let‘s bring in the founder and president of the National Action Network, Reverend Al Sharpton.  Dr. West was unable to join us tonight, but he will in future shows.  Reverend great to have you with us. 

SHARPTON:  Good to be here. 

SCHULTZ:  Congratulations on a great conference with the National Action Network last week and, of course, that show culminated a lot of it. 

Now he says you are too close to the administration, that there is a fear there that you‘re giving cover to President Obama when he‘s not fighting hard enough for the African-American community.  What is your response to that? 

SHARPTON:  My response is that what I‘ve said is not to give cover to President Obama, but don‘t give cover to anybody.  I think you can‘t just hold President Obama accountable.  You must hold all of us accountable, members of Congress, those of us that lead civil rights organizations, faith groups. 

I think that if we put everything on President Obama, we do two things.  One, we feed into the misperception that he was elected Messiah rather than president.  And, second, that there is not responsibility for everyone.  Some of our members of Congress have been there decades before President Obama, chaired committees, and didn‘t do as much as we wanted. 

I think it‘s disingenuous to hold him accountable and not hold a lot of people accountable that everyone should have been moving forward even harder.  So it‘s not about covering him.  It‘s about not just expecting him to do it all. 

Expecting him to do his part, but everybody else must be doing theirs. 

They can‘t hide behind accusations. 

SCHULTZ:  But the Congressional Black Caucus with income disparate in this country—the Congressional Black Caucus was against going along with the Bush tax cuts extension.  The president did it.  It‘s things like that that get people thinking he‘s not going hard enough for the black community. 

SHARPTON:  And they should if they feel they disagree.  But at the same time, we‘ve seen members of the caucus, as I said, vote for a war in Afghanistan when only one voted against.  And I‘m supportive of many of the caucus members, and have campaigned for them, as I have President Obama. 

But we can‘t have different standards, Ed.  I think the good part of yesterday was having that kind of passionate debate.  I‘ve got all kind of e-mails today, people agreeing, people disagreeing, whatever. 

The fact that we are having the discussion makes not only the black community strong, but America strong because there is no easy answers to this. 

SCHULTZ:  I think about Jerry Falwell and the moral majority back in the ‘70s.  There was a stated agenda.  Why don‘t all the African-American groups in this country, the advocacy groups get together and just have a stated black agenda?  Why not? 

SHARPTON:  I think that the attempt we had this week at National Action Network and that other groups will be having is to do that.  And even when Jerry Falwell and others did it, they did it as part of a group in the white community and even the right community. 

I think when you look at National Action Network working with the Urban League and NAACP and the civil rights community, we are coming together.  Some of those who are doing other things are doing things differently. 

SCHULTZ:  And finally, do you think President Obama takes the African-American community for granted? 

SHARPTON:  No. 

SCHULTZ:  His approval rating has gone down to 85 percent.  I mean, it‘s still inordinately high.  But as low as it‘s ever been.  And there is some consternation in the community, from what I hear, as we heard on the program yesterday.  Does he take them for granted? 

SHARPTON:  No.  I think you heard also those that felt like the lady who had challenged him that he was doing a good job.  All of us think he can do more.  And he said that when he spoke at National Action Network‘s affair last Wednesday night that you were one of our hosts.  He said -- 

SCHULTZ:  Yeah. 

SHARPTON:  -- that I know I need to do more and we want to do more.  And we cannot eliminate the fact that, just like a lot of what he wants to do, whether it‘s far enough or not, is there is a resistance.  Wednesday night when he talked about taxing the wealthy, let‘s see how many will rally with him.  Let us not just put it all on him. 

SCHULTZ:  OK.  Reverend Al Sharpton, always a pleasure.  Great to have you with us tonight. 

Tonight in our text survey, I asked who do you trust to create private sector jobs?  Ninety five percent of you said Democrats; five percent said Republicans. 

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