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Msnbc Live at 6 p.m. ET, Tuesday May 17th, 2011

Read the transcript from the Tuesday 6 p.m. hour

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Guests: Michael Isikoff, Dana Milbank, David Yepsen, E.J. Dionne, Sherry

Bebitch Jeffe, Ken Baker, Sheldon Whitehouse

CENK UYGUR, HOST:  Good evening.  I‘m Cenk Uygur, from Los Angeles here. 

Well, it looks like it was over before it even began.  It looks like Newt Gingrich is done. 

In the last 72 hours, the man who led the Republican revolution of the mid ‘90s and who hoped to be the 2012 presidential nominee has taken a terrible beating from fellow conservatives. 

This week began with his brutal assessment from George Will. 

(BEGIN VIDEO CLIP)

GEORGE WILL, JOURNALIST:  Newt Gingrich‘s problems are so far beyond just his multiple marriages and all that.  This is just not a serious candidate. 

(END VIDEO CLIP)

UYGUR:  But things really blew up when Newt dared to question Paul Ryan‘s Medicare plan.  That‘s the one that destroys Medicare.  That‘s why, of course, Republicans love it, and they did not like that kind of talk from Newt.  That‘s why they were furious at him when he called it radical. 

Now, he tried to walk that back in a panic over the next day, but it was already too late.  The damage was done and he had flip-flopped one too many times. 

In fact, flip-flopping has now almost become his trademark.  Look at all these reversals in just the last couple of months. 

(BEGIN VIDEO CLIP)

NEWT GINGRICH ®, PRESIDENTIAL CANDIDATE:  I don‘t think right-wing social engineering is any more desirable than left wing social engineering. 

(END VIDEO CLIP)

GINGRICH:  There are things you can do to improve Medicare.

DAVID GREGORY, MODERATOR, “MEET THE PRESS”:  But now what Paul Ryan is suggesting is completely changing Medicare? 

GINGRICH:  I think that that is too big a jump. 

(END VIDEO CLIP)

(BEGIN AUDIO CLIP)

GINGRICH:  I have never slammed Paul Ryan.  If you are a conservative, you better expect “gotcha” press, and they took dramatically out of context what I said. 

(END AUDIO CLIP)

(BEGIN VIDEO CLIP)

GINGRICH:  I have said consistently, we ought to have some requirement.  You either have health insurance or you post a bond, or in some way, you indicate you are going to be held accountable. 

GREGORY:  But that is the individual mandate, is it not? 

GINGRICH:  It‘s a variation on it. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GINGRICH:  I‘m against any effort to impose a federal mandate on anyone. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GINGRICH:  This is a moment to get rid of him had.  Do it.  Get it over with. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GINGRICH:  I would not have intervened.  I think there were a lot of other ways to affect Gadhafi. 

(END VIDEO CLIP)

UYGUR:  Now, I love all of that, but the craven politicking, it never actually caused any problems for Newt within the GOP.  That‘s what they do.  Come on.  Their front-runner is Mitt Romney.  Is there a greasier politician in the country or one that‘s flip-flopped more? 

No, look, it was really the heresy against the Ryan plan that led to a righteous fury against Gingrich by fellow Republicans.  He heard it on the campaign trail. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  What you just did to Paul Ryan is unforgivable. 

GINGRICH:  I didn‘t do anything to Paul Ryan. 

UNIDENTIFIED MALE:  Yes, you did.  You undercut him and his allies in the House. 

GINGRICH:  No. 

UNIDENTIFIED MALE:  You‘re an embarrassment to our party. 

GINGRICH:  I‘m sorry you feel that way. 

UNIDENTIFIED MALE:  Why don‘t you get out before you make a bigger fool of yourself? 

(END VIDEO CLIP)

UYGUR:  Wow.  That was a voter in Iowa.  The serious handshake and a serious message. 

But Newt also heard it from Rush Limbaugh. 

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST:  I am not going to justify this.  I‘m not going to explain this.  The attack on Paul Ryan, folks, don‘t ask me to explain this.  There is no explanation. 

(END VIDEO CLIP)

UYGUR:  Man, they are mad.  But perhaps worst of all, he heard it from his friends over at Fox News. 

(BEGIN VIDEO CLIP)

BRIT HUME, FOX NEWS SR. POLITICAL ANALYST:  Donald Trump and Mike Huckabee have voluntarily departed the Republican field, but Newt Gingrich appears to have taken an involuntary step in the same direction. 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  This is a big deal.  He is done.  He didn‘t have a big chance from the beginning, but now it‘s over. 

(END VIDEO CLIP)

UYGUR:  Man, if you‘re a Republican and Fox News says you‘re done, you‘re probably done. 

You ever watch “Jersey Shore,” like when Sammy (ph) says she is done with her boyfriend, and she goes, “ You‘re done.  You‘re done”?  That‘s basically what Fox News and the other Republicans are telling Newt. 

Hey, Newt, it was not so nice knowing you.  And I‘ve got to be honest with you, you wouldn‘t be missed. 

Joining us now is NBC News national investigative correspondent Michael Isikoff, who‘s done tremendous reporting on Newt‘s outreach to social conservatives.  We‘ll ask him in a minute if that worked.  Also with us, Dana Milbank, columnist for “The Washington Post.”

Welcome, both of you.  Great to have you here. 

MICHAEL ISIKOFF, NBC NEWS NATIONAL INVESTIGATIVE CORRESPONDENT:  Good to be with you. 

DANA MILBANK, COLUMNIST, “THE WASHINGTON POST”:  Thanks, Cenk.

UYGUR:  All right.

Dana, let me start with you, actually. 

I‘ve got a quote here from “The Wall Street Journal,” and it ain‘t good.  They say, “Mr. Gingrich chose to throw his former allies in the GOP House not so much under the bus as off the Grand Canyon rim.  He wants to appear to be more moderate than he has sounded over the last, oh, 20 years by suddenly triangulating against the GOP House he once led.”

Now “The Wall Street Journal” also attacking him. 

Does he have any allies left, and is he basically done in the Republican Party? 

MILBANK:  Well, I will be his ally, Cenk, because he is very good for people in my line of work who enjoy making fun of politicians.  So I hope he‘s not kicked out of the race just yet. 

But I think what‘s fascinating here is that, contrary to what The Journal is saying, Newt hasn‘t changed at all.  He was articulating a position he has held since 1994, at least. 

What‘s happened is the Republican Party changed around him, and suddenly, he looks like he is radically, to use his own word, out of step with the party.  And he is, not because he has done anything, but because the party has moved so far beyond what we consider to be a pretty serious conservatism of the time, but now looks like this era of moderation. 

UYGUR:  Now, Dana, I think you are 100 percent right.  I mean, “MORNING JOE,” just the other day, I think Scarborough and Buchanan were calling him the mushy middle.  And his position on this actually hasn‘t changed. 

I mean, it‘s flip-flopped about eight times in between, but in the—it‘s the same position it was in ‘94.  And now, it‘s seen as, oh, just not nearly radical enough.  And so it‘s a fascinating, I think, indictment of the Republican Party.  Maybe they think it‘s a wonderful thing.

But, you know, Michael, I want to go for you for a second, because you did the whole story about him reaching out to social conservatives.  Now, has he flushed that away here, or does he still have some bridges he can work with in that realm? 

ISIKOFF:  Well, look, he has still got huge problems in that regard, and a lot of that does relate to his personal history.  But I‘ve got to say, what‘s sort of odd about this current controversy, if this is the thing that people are saying is driving him out of the race, look, he was challenging the Ryan—some of the premises of the Ryan plan. 

Isn‘t that what primaries are for, for people to debate these issues?  Just because he is not marching in lockstep with what Paul Ryan has proposed seems to me to be something that, you know, Republicans ought to welcome as an opportunity to debate these issues.  That‘s what—you know, that‘s what primary contests are all about. 

So it does seem odd that this is the one, this is the thing that seems to be creating this tremendous backlash when, as George Will and others have pointed out, there are so many issues to take—to go after Newt Gingrich on. 

UYGUR:  Right.

Now, look, he is in a panic today.  I mean, he knows the kind of trouble he is in.  So he did yet another flip-flop, depending on how you‘re counting all this at home. 

He said today, to “The Daily Caller,” apparently, “I am reaching out to Paul Ryan.  My hope is to find a way to work with the House Republicans.”  Right?  Saying, backpedal, backpedal, backpedal, I‘ve got to go get Ryan. 

But, Dana, to Michael‘s point though, all right, this is how you hash things out in the primary, and he tried to hash it out, and he got hashed over the head with it.  And so now he is running backwards. 

Isn‘t that also normal politics? 

MILBANK:  Yes.  I mean, there‘s not a whole lot of diversity that‘s going to be tolerated in this primary because of the way it‘s structured. 

But what‘s interesting here is, you know, last week, we had almost the same thing going on with Mitt Romney.  Now, people aren‘t saying he is finished.  They are saying he may be fatally flawed in the end.  Of course, he has the ability to the raise $10 million in a single day, so people will continue to take him seriously.

But Newt was hung up very much on the same issue of the individual mandate that Romney was defending last week.  It‘s just that Newt doesn‘t really have the solid credentials.  People didn‘t really think he had a chance in the first place. 

UYGUR:  Right. 

Michael, I want to go back to the social conservative issue, because he did reach out to those guys, and I want to know what the state of that relationship is.  How did he reach out to them, and what‘s their current situation, as best you can tell? 

ISIKOFF:  Yes.  Look, he was more than reaching out.  What he was doing was funneling a lot of money to sort of win them over to—and appease them for his—to make up for his personal failings. 

I mean, what he did in Iowa was direct $150,000 to the campaign to oust the Iowa state judges who had voted to approve same-sex marriages, and directing them to the sort of social conservative activists in the state who are most likely to give him problems over his personal failings.  And he created a sort of web of organizations out of this arm of Newt Inc. that was sort of set up specifically for this purpose.  And, you know, an uncharitable way to put it is he was trying to buy off social conservatives, which, you know, it does look a little unseemly, or can look a little unseemly.

I don‘t think he has fully succeeded.  I think the ones who got the money, who were taking the money, most of them have sort of said, you know, reasonable things about Newt, but not all of them did.  And even some of those who did say they have problems. 

One of them who I quoted in the piece last week, who went on camera, said Newt‘s personal failings were a showstopper for him.  So, I think he still has a—still would have a huge uphill battle on that front even if these other issues hadn‘t arisen. 

UYGUR:  Yes.  You know, by the way, while he was paying off the social conservatives, apparently he forgot to pay off Tiffany‘s.  Politico is reporting today that he owes $1 million to Tiffany‘s. 

Jeez, how much jewelry can you buy for your third wife?  But we‘ll see if he winds up paying that bill off, too. 

And by the way, Michael, to finish this off, it doesn‘t speak well of his fiscal responsibility to owe that kind of money in his personal account, right? 

ISIKOFF:  No.  I should point out that the “Heard on the Hill” column in “Roll Call” reported back in 2004 that he had plunked down $300,000 at a private auction for Tiffany‘s on the Sequoia (ph) boat, at the time, yacht.  So, that seems to be where this debt comes from. 

MILBANK:  Cenk, it‘s all because he has a great passion for his country. 

UYGUR:  Oh, of course.  He was working too hard.  That‘s why he had to go to Tiffany‘s and grab that half a million dollars, which apparently he still owes. 

All right.

Michael Isikoff, thank you for your time tonight.  We really appreciate the reporting that you have done on this. 

Dana, you stay with me for one more second, because I want to talk about Romney as well. 

MILBANK:  Sure. 

UYGUR:  All right.  So, look, we‘ve got to turn our attention now to the presumptive but flawed front-runner in the GOP, which is Mitt Romney.  With Gingrich on the ropes, and Huckabee and Trump out already, Romney seems to have the clear road to the nomination. 

He made a big splash yesterday.  Dana was talking about this a little while ago.  He made a one-day call-a-thon fund-raising event in Las Vegas.  And you know how much he got?  He raised $10 million. 

You see that right there, over $10 million.  A giant take.  And it‘s a warning sign to the other Republicans that he is the one to beat. 

Now, whether all that cash will make a difference to social conservatives in Iowa and elsewhere remains to be seen.  And he has to win over, of course, Republicans, who hate that health care bill that he passed in Massachusetts.  But right now, he appears to be the clear and only front-runner. 

So, for that, more on that, let me bring in David Yepsen.   He‘s the journalist who was the authority on Iowa politics.  He is now the director of Paul Simon Public Policy Institute at Southern Illinois University.  And, of course, we still have Dana with us, and we will talk to him in a second as well. 

First question here, David, is, look, with all these guys seemingly eliminated, it seems to be Romney against the Lilliputians, doesn‘t it?  Does that mean that he has got a real shot of even winning Iowa, which previously they thought he didn‘t have a shot at? 

DAVID YEPSEN, SOUTHERN ILLINOIS UNIVERSITY:  Oh, I think so.  I mean, I think this race is still wide open, and all of this turmoil that all these campaigns have gone through in their rollout, people getting out of the race, has an unsettling effect on all caucus-goers.  I have seen this happen in both parties—somebody gets out. 

People don‘t automatically go to another candidate right away.  They stay undecided.  This is part of the normal process in these early states.  Candidates jump in at the last minute, they get out. 

Secondly, you know, money is the mother‘s milk of politics, right?  And if Mitt Romney has a good war chest, he can ride out some of these rough patches. 

I think Newt Gingrich‘s ability to raise money is pretty good.  So you can have a rough rollout, you can have a bad day in the news cycle, but you can still come back. 

And let‘s not forget that Mitt Romney has made a huge investment in Iowa four years ago.  He did not win, but he did capture a lot of support.  And I think that some of that investment can still pay dividends for him.

He is starting to pay—spend some time there.  So I don‘t dismiss his chances at all. 

UYGUR:  You know, Dana, Sarah Palin actually sent out a fund-raising letter to 400,000 of her followers today saying, “2012 can‘t come fast enough.” 

So, what do we think?  Is there a chance now that she has seen this kind of opening, she‘s thinking, well, maybe it‘s me versus Mitt, I can grab the social conservatives and make a run at this thing? 

MILBANK:  I guess so, or she saw that if even Donald Trump can get this far in the race.  I would still continue to be very surprised if Palin were to go in that direction.  But it‘s got to be tempting for all kinds of people, because there really is nobody who has got any sort of a lock on this. 

You‘ve got Romney, as you pointed out, with the money.  You have got -

maybe it‘s Michele Bachmann who has got sort of the Tea Party energy. 

You know, certain folks have business backing, establishment backing.  Nobody‘s put it all together in the way certainly that George Bush did, or even the way McCain ultimately did.  But—so it is entirely up for grabs.  I mean, Romney is the front-runner in the polls and in the fund-raising, but that‘s largely because nobody sees any alternative out there right now, not because he is so beloved by this electorate. 

UYGUR:  Yes.  I don‘t think he is beloved at all by the Republican electorate at all, necessarily.  But, I mean, right now, as you mentioned, Dana, with the polls and with the money, and with everything else going in his direction, with almost no competition, it‘s got to be Romney versus the world.  It‘s got to be at least Romney versus an anti-Romney.

And David, that goes to another thing that Dana just mentioned there, which is Michele Bachmann, right?  Now, her advisers are apparently telling CBS News, “I can now say it is very likely she will decide to run for president.”

Is there a chance that a Bachmann-like figure, as out there as she appears to be, can actually go in and do some damage in Iowa, maybe even win Iowa? 

YEPSEN:  Oh, I think so.  I think that it‘s open.  I think that there are a lot of conservatives looking around for a candidate. 

And given all this turmoil, why wouldn‘t Michele Bachmann try?  Why wouldn‘t she get in the race? 

I mean, nobody gets an automatic ticket to the White House.  You are going to have ups and downs, and you‘ve got to run. 

She could run, raise some money, do well in Iowa.  Maybe not win Iowa, but get one of the three tickets out of the state, on to New Hampshire, and build herself into a national political figure. 

So, I guess at this point, I think if you want to be president, you‘ve got to run for president, you‘ve got get in the arena.  You get scuffed up some, but I think she would be—it would be good for her if she did run, even if she didn‘t make it this time.  She would certainly be a more viable candidate on into the future.  Who knows, she might be a good ticket balancer. 

UYGUR:  Well, I want to ask both of you guys real quickly what your thoughts are on who is the best candidate for the anti-Romney position.  Right? 

And it might be based on, you know, social conservatives who aren‘t happy with Romney, which person are they going to go to in Iowa, South Carolina, et cetera.  But for whatever reason.

David, you‘re in Iowa.  Specifically there, who do you think has got the best chance of beating Romney there? 

YEPSEN:  I don‘t think that‘s been decided yet.  I think that that‘s still an open question.  I mean, Mitch Daniels—the race isn‘t settled.  And so, if Mitch Daniels gets in this thing, he could be a real factor in a state like Iowa. 

UYGUR:  And Dana, what do you think?  Who is the best anti-Romney candidate out there among the Republicans, or the one that has the best chance? 

MILBANK:  On paper, it‘s Tim Pawlenty, who has the establishment support, has real social conservative credentials.  But he has just yet to catch on fire there.  And as David knows better than anybody in the world, the Republican electorate there in—the actual caucus-goers, the number is so small, that it really can be distorted by a candidate that isn‘t necessarily the one with all the millions. 

UYGUR:  All right.  I will pull a McLaughlin.  Wrong.  It‘s definitely not Pawlenty. 

(LAUGHTER)

MILBANK:  I tried.

UYGUR:  I don‘t think that guy could terrify (ph) anyone. 

But, all right.  David Yepsen and Dana Milbank, thanks so much for joining us.  We really appreciate it. 

MILBANK:  Thanks, Cenk. 

UYGUR:  All right.

Now, it‘s the story everyone‘s talking about, Arnold Schwarzenegger‘s love child bombshell.  Now, what happens to his political career and when did he really tell his wife?  That‘s coming up. 

And Paul Ryan tries to reboot and resell the radical Medicare plan that no one seems to want, but now it seems like it‘s ripping apart the Republican Party.  We‘ll show you how they might actually lose their first seat because of the bone-headed plan. 

(COMMERCIAL BREAK)

UYGUR:  Medicare is turning out to be the Republicans‘ Waterloo.  The House is out of session and Republicans are back in their districts.  Once again, they are pushing that same old budget plan that would end Medicare as we know it. 

Apparently, they never learn.  And just like they got hammered at all those town halls, they are getting hammered again. 

Paul Ryan, the so-called architect, gave a big speech in Chicago Monday.  Protesters in the streets chanted “Hands off our Medicare,” and others the GOP are also getting clobbered. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Tonight, here at the Fellowship Church in Anthem, Congressman Quayle took a lot of heat from some of his constituents, especially on the issue of proposed Medicare changes. 

UNIDENTIFIED FEMALE:  And you‘re still putting forth this crap. 

UNIDENTIFIED MALE:  Not everyone agreed with Wes‘ (ph) ideas on how to fix our nation‘s problem.  Some people in the audience chose to remain silent while others were more vocal about their opinions. 

(END VIDEO CLIP)

UYGUR:  Now, similar scenes played out at other town hall meetings as well.  Seniors are refusing to let Republicans forget they voted for Ryan‘s budget plan. 

And next Tuesday, a special election in Upstate New York could send shock waves through the GOP.  The race is for Congressman Chris Lee‘s old seat. 

Lee, of course, resigned after this notorious photo appeared on Craigslist as he was looking to cheat on his wife.  Can‘t get enough of that picture of family values Chris Lee. 

Anyway, New York‘s 26th District is supposed to be Republican, period.  The party has dominated the area since the Civil War.  The district has 30,000 more registered Republicans than Democrats. 

Now, instead, polls show Democratic candidate Kathy Hochul is within striking distance of Republican Jane Corwin.  Tea Partier Jack Davis is a little bit further back. 

And today, one prominent election forecaster switched his prediction from lean Republican to tossup lean Democrat.  As my grandmother would say, “Whoa.”  It‘s very surprising.  I‘m quoting my grandma a lot lately. 

Look, Republicans are getting killed out there over Medicare, and now they are in absolute panic mode.  Believe it or not, Republican Jane Corwin is actually making the absurd argument that Kathy Hochul, the Democrat, is the one trying to destroy Medicare. 

(BEGIN VIDEO CLIP)

NARRATOR:  The truth is, it‘s Hochul who says she would cut Medicare and Social Security. 

UNIDENTIFIED FEMALE:  Everything should be on the table—entitlements, defense spending, but also revenues. 

(END VIDEO CLIP)

UYGUR:  The claim that Hochul would cut Social Security or Medicare lies somewhere between a lie and a damned lie.  Factcheck.org said that claim was “bogus,” but you know how bad the Republicans are hurting on this issue when they pretended they‘re on the other side.  Corwin is so wrong on Medicare, the only way she thinks that she can get out of it is by pretending her Democratic opponent actually holds a position that she holds.  That‘s pretty pathetic.

With me now is “Washington Post” columnist E.J. Dionne.  He writes today that Republicans are now petrified Ryan‘s budget plan is going to cost them the seat in Upstate New York. 

E.J., great to have you here. 

E.J. DIONNE, COLUMNIST, “THE WASHINGTON POST”:  Good to be with you. 

And your grandmother was a very shrewd woman—woo. 

UYGUR:  Well, that‘s what Republicans across the country have to be saying now. 

You know, do you think they‘re at the point or ready where they totally regret that vote in backing Ryan‘s plan on Medicare?

DIONNE:  I think an awful lot of those members do regret that vote, especially the one sitting in Democratic-leaning districts.  There are over 60 of them who sit under districts, at least under the current lines, that were carried by Barack Obama in 2008. 

And this ad I think shows that, at least for now, Republicans know they have lost the argument over Medicare, so they are just trying to hold on to this seat.  And when you accuse the other side of holding the position that you actually hold yourself, and say this is a terrible thing, it just show it‘s a sign of weakness. 

And the question is, in a race where the Medicare issue is really getting a lot of coverage in the local media, can an ad like this really confuse people that much? 

UYGUR:  Yes, that is the question.  And look, that‘s how Republicans win.  They just outspend people, right?  And they try to confuse the electorate because, obviously, their opinions and their policy positions are deeply unpopular. 

Here, look in this district.  What do we have, 59 percent of the people in this district are opposed to these Medicare cuts?  That it‘s not going to play well. 

I‘m sorry, opposed to the Social Security cuts, and 62 percent want to raise taxes on the wealthy.  So, all of those are against the Republican positions.  And this is supposed to be a heavily Republican district.

But to your point on ads, E.J., I actually want to run you one of Corwin‘s ads where she tries to link Hochul and the Tea Party candidate to Nancy Pelosi.  Let‘s watch that. 

(BEGIN VIDEO CLIP)

NARRATOR:  Meet Jack Davis.  He claims he had a hand in creating Nancy

Pelosi‘s Democrat majority.  And meet Kathy Hochul, who said about Pelosi -

-

UNIDENTIFIED FEMALE:  She has done great job for this country. 

NARRATOR:  Jack and Kathy can‘t fight for us.  They come with strings attached. 

(END VIDEO CLIP)

UYGUR:  Is this in any way credible, to say that a Tea Party guy is backing Pelosi?  And is this like—it seem so old to me.  Really, is this going to work?  Are people still going to be talking about Nancy Pelosi in this election? 

DIONNE:  Right.  It feels like so six months ago.  I mean, Davis was a Democrat. 

It‘s funny you have Hochul‘s ads trying to make Davis look more conservative, and you have Corwin‘s ads trying to make him look more liberal.  Right now, he has taken more votes from the Republican than the Democrat.

But I think it‘s very hard to turn Nancy Pelosi into, I guess could you say a bogeywoman, when she is not even Speaker and when Hochul‘s vote is not going to make her Speaker.  But, you know, I think there is a tendency for a side that wins the last campaign to figure, well, whatever worked back then can probably work again.  But I think you‘re feeling a kind of protest vote here very much like you had in the Scott Brown race in Massachusetts. 

By the way, the other clever thing Hochul is doing, Corwin is a state assemblywoman.  Albany has not been a particularly popular place, the capital of New York.  So Hochul is also trying to tie her to Albany.  So it‘s sort of Washington versus Albany. 

UYGUR:  Right.  E.J., one last quick thing here. 

The Tea Party guy, Davis is a really interesting character.  And I wonder if there‘s lessons to be learned there, because the Republicans are trying to discredit him in every way possible, but he keeps holding on to a significant chunk of the voters by being populist, by saying we‘ve got to keep jobs here.  He is against free trade, he says that he‘s—and he‘s right, right?

And he says the company that he runs, he is going to actually give to his 75 employees once he (INAUDIBLE).  Which is amazing, right?

Is he on to something that can grow as a phenomenon later? 

DIONNE:  Well, I think that economic nationalism has a lot of power, particularly in the Midwest, where manufacturing has been hammered.  And I think early on in the race, Republicans were hoping that Davis, with that kind of populist message, would take more out of Hochul.  But that just doesn‘t seem to be what‘s happening. 

I think you‘re going to see Sherrod Brown in Ohio, for example, very much run on manufacturing and standing up for American workers.

UYGUR:  That‘s going to catch on with somebody.  I don‘t know if it‘s going to be the Democrats, which is the natural place for it to go, or for a Republican who is going to pretend to be populist and grab that mantle.  But to be fair to Davis, I don‘t think he is pretending.  He is an interesting, iconoclastic guy that is on his own there, but he‘s doing well.

DIONNE:  I think that is his position.  I think you‘re right. 

UYGUR:  Right.  Yes. 

All right.  E.J. Dionne, of “The Washington Post.”

Thanks so much for your insights today.  We really appreciate it. 

DIONNE:  Good to be with you. 

UYGUR:  All right.

Now, when we come back, Ohio Governor John Kasich wants to cut money from children‘s hospitals so his gambling consultants can get millions.  His reasoning for it is our “Con Job of the Day.” 

(COMMERCIAL BREAK)

UYGUR:  In our con job of the day, a republican governor who seems to have plenty of cash for casinos but not so much for schools or hospitals.  Ohio‘s John Kasich has approved shell outing millions to two gambling consulting companies, even as he pushes a budget to slash funding for schools and health care.  Think Progress reports, Kasich‘s administration has agreed to pay a California consulting from called Moelis $200,000 a month to advise the state on ways to make more money off of its casinos.  Moelis also could also get up to $13 million in incentive fees.  

Meanwhile, a New Jersey firm called spectrum gaming is racking up $395 an hour to advise Ohio on new casino rules.  Now, the idea is that these consultants will help Ohio increase its revenues.  I get that, everybody gets that but think about that plan.  Let‘s pay private out-of-state companies millions of dollars to encourage more gambling while we do huge cuts to Ohio‘s local governments, schools, children‘s hospitals, nursing homes and libraries.  So, Kasich expects gamblers who, by the way, tend to be poorer and older than the general population to offset cuts the programs which serve the poor and the elderly.  

At the very least, that has got to be terribly ironic.  And would anybody argue that it‘s more moral?  Do conservatives think increasing gambling, so you can cut benefits for the poor is what Jesus would have done?  As it stands, Kasich‘s plan to direct millions to private companies and let Ohio schools and hospitals fend for themselves is our con job of the day.             

(COMMERCIAL BREAK)

UYGUR:  Exactly one week ago, Arnold Schwarzenegger and Maria Shriver announced their separation after 25 years of marriage.  Today, we learned the reason why, former California governor has admitted to fathering a child with a household staff member more than a decade ago.  That means that Schwarzenegger was aware of the child when he ran for office in 2003, but didn‘t tell voters or his wife.  And it is no wonder given other allegations he was dealing with it at the time.  Five days prior to the election, the “Los Angeles Times” published a front page story that detailed the accounts of six women who claimed that they were groped by Schwarzenegger between 1975 and 2000.  Seven other women also came forward to the “Los Angeles Times” in the following days, that‘s a lot of groping.  Schwarzenegger denied the claims but it was his wife‘s forceful defense of his character that seemed to make the difference. 

(BEGIN VIDEO CLIP)

MARIA SHRIVER, ARNOLD SCHWARZENEGGER‘S WIFE:  And you can listen to people who have never met Arnold or you can listen to me.  I advise to you listen to me. 

(END VIDEO CLIP)

UYGUR:  He went on to win by 18 points over his closest rival, so it‘s the wife that he was cheating on that wound up saving his political career.  But now that the whole world knows the truth, can Arnold ever make a comeback?  Well, he says.

(BEGIN VIDEO CLIP)

ARNOLD SCHWARZENEGGER, FORMER CALIFORNIA GOVERNOR:  I‘ll be back. 

(END VIDEO CLIP)

UYGUR:  But I don‘t really think so, I think the more likely answer is. 

(BEGIN VIDEO CLIP)

SCHWARZENEGGER:  Hasta la vista, baby. 

(END VIDEO CLIP)

UYGUR:  We try.  We try.

All right.  Joining me now is Sherry Bebitch Jeffe, she‘s a veteran California political analyst and a senior fellow at the University of Southern California, and Ken Baker.  

SHERRY BEBITCH JEFFE, SENIOR FELLOW, UNIVERSITY OF SOUTHERN

CALIFORNIA:  Hi. 

UYGUR:  Hey, how are you doing?  And Ken of course is an executive news editor for E!.  Ken, actually, let me start with you.  How long do we think his family and his children knew about this affair?  Let‘s start right there actually?

KEN BAKER, EXECUTIVE NEWS EDITOR, E!:  Well, you know, Arnold came out and he said that after he left office in January of this year, he disclosed this news to Maria and the family and I have verified that with sources actually that that is the case that his family found out.  It‘s actually, his kids found out shortly after Maria found out in early January, so it is consistent with the statement that he put out.  But I think that more shocking than the news itself for people in Hollywood at least, is the fact that it was secret for so long.  I think that people believe that with the media covering things, cable news channels, the internet, you know, twitter, Facebook, that we know everything all the time.  Well, guess what, we don‘t.  And this was just a reminder of that and this was something, this was a big secret.  This wasn‘t a little secret.  This is a really big one that he was able to keep secret and I think that even the most jaded people in Hollywood are really the most surprised by that, that we just did not know about it including his wife and the rest of his family. 

UYGUR:  Yes, you know, and I also want to ask you, Sherry, look we had this huge blowup before the  2003 election that we just talked about, you got the, you know, the six women who were alleged and then the three and then the four, you got 13 overall who alleges.  So, he had to be telling his wife, full well known that he has got another kid out there.  Hey, you know what, it‘s all OK, I‘m sorry about the groping, or it didn‘t happen or et cetera.  I‘m just amazed by his chutzpah. 

JEFFE:  Well, he does have an ego, always had an ego and he‘s always had a chutzpah.  I mean, the fact that he decided to run for governor when did he.  His role in Hollywood, all of that points to that, whether or not she knew that long ago, I don‘t know.  But getting back what Ken said, from the political side of it, A, I was somewhat surprised that it was kept below the radar for it ten years.  But I have also heard that there were several reporters who were actually working on this story.  But none of them could get it totally sourced and they decided not to go with it because they couldn‘t confirm it.  And remember, that was eight years ago, and this is a very different political environment and a very different media environment.  Those constraints don‘t seem to be quite so much of a disqualifier these days and that‘s why I think it was allowed to remain secret and that‘s why I think we know about it today.  

UYGUR:  You know, Sherry, I don‘t know if this is even a fair question to ask in regards to Maria Shriver but if reporters were working on it eight years ago, as you say, is there some chance that she knew about it or at least had an inkling of it?  I mean, and I don‘t know if that is the case because. 

JEFFE:  Who knows?

UYGUR: .she seems genuinely outraged now.  

JEFFE:  Yes, she is.  And I think that kind of leads me to believe that she was at least in denial over the years.  And you know, I have been thinking about it and this is going to sound terribly cynical, so, please bear with me.  She is a Kennedy woman.  And Kennedy women have had more than one experience with their mates having extra marital activity, and they have been solid.  Some of them were able to coped with it, some of them were not able to cope with it.  She may well have decided that she wasn‘t going to go there.

UYGUR:  Right.  No, I hear you.  And look, no matter how you slice it, it is no way, shape or form her fault, it was 100 percent his fault.  To be fair to Arnold, believe it or not, he had a decent apology where he said the same thing.  Let me read that to you, because it is a rare decent apology.  He said, “I understand and deserve the feelings of anger and disappointment among my friends and family, there are no excuses and I take full responsibility for the hurt I have caused.  I ask that the media respect my wife and children through this extremely difficult time.  While I deserve your attention and criticism, my family does not.”  So, he is right about that.  He does deserve our attention and criticism.  No question about that. 

Ken, actually, let me ask you in regards to that.  Do we have any idea who this other woman is and how could—and she stayed in the house for 20 years.  I mean, that‘s—to me, if you‘re a part of that family, that‘s got to bother you the most, that not only they not tell you, but she was continued to stay in the house the whole time. 

BAKER:  Well, right now, there is a lot of unconfirmed rumors, there was talk earlier that may have been someone who is a nanny of some sort.  I have confirmed that it was not a nanny, wasn‘t someone who actually cared for the children.  There is another unconfirmed report that it may have been someone who is a stewardess on his private jet.  Again, we don‘t know and that one looks like it may be bogus, but we are not sure.  Right now, what I‘m told is that the kids did not even know about it, they have a half-sibling out there for over ten years that they didn‘t even know.  I think it‘s just coming out now.  I think it‘s inevitable that we will know and we will find out, given the enormity of this story.  But we don‘t know the identity of this woman at all, nor do we know the identity of the child.  So, I think that that is going to be the next beat on the story, if you will, and this isn‘t going to go away for Arnold and Maria, unfortunately for them.  This is a story that people have a ravenous appetite for and we will eventually find out the identity of this woman. 

UYGUR:  Right.  And he was planning a political career after this. 

JEFFE:  I don‘t think so. 

UYGUR:  Yes.  I think he can stop planning. 

JEFFE:  I don‘t think... 

UYGUR:  That appears to be over. 

JEFFE:  I don‘t think he ever planned to run for office but I do think he planned to model his post governorship after bill Clinton‘s post presidency and use an international stage and be a world ambassador, but I don‘t think that‘s in the cards right now. 

UYGUR:  Right.  And you know what, let me just say one last thing about this, look, you know, we are tough on him because everybody‘s, you know, so sick about what happened to his family and Maria Shriver, et cetera.  At the same time, to be fair to him, he was a rare republican who did not run on family values.  

JEFFE:  Correct. 

UYGUR:  So, I mean, it is his private life and he was not a hypocrite like some of the others like Ensign have been.  So, just pointing that out. 

JEFFE:  It‘s a good point. 

UYGUR:  All right.  USC‘s Sherry Bebitch Jeffe and E!‘s Ken Baker, thank you both so much for joining us this evening. 

JEFFE:  Thank you. 

BAKER:  Thanks.

UYGUR:  All right.  Now, when we come back.  Oil company execs will finally be able to put food on the table.  That‘s right.  Republicans are on the verge of giving oil companies another $21 billion.  Finally, they will be able to eat.  Senator White house of Rhode Island joins me next. 

(COMMERCIAL BREAK)

UYGUR:  The Republicans took another $21 billion out of your pocket and gave it to their oil buddies again today.  How are we going to stop them?  That‘s the discussion we need to have and we are going to have a very real and frank conversation about that when we return.

(COMMERCIAL BREAK)

UYGUR:  Right now, the Senate is voting on a democratic bill to stop wasting billions of dollars on subsidies for wildly profitable oil companies.  Unfortunately, but not too surprisingly, it‘s not expected to pass.   Tea Party people, do you get it?  These Republicans don‘t give a damn about the budget and they don‘t give a damn about you.  They are willing to blow a huge hole in that budget just to help the oil guys.  All they want to do is deliver those big, fat payoffs to their donors.  But on the upside, Republicans are now on the record, they just voted to give away billions of your money to big oil again. 

Now, by our account, only two Republicans voted to end the subsidies, they both from Maine, Susan Collins and Olympia Snowe.  The rest, by voting against this bill today, just agreed to give $21 billion to the biggest oil companies, not just in the country but in the world.  And by the way, they are also the most profitable companies in the world.  Independents, do you see what‘s going on here?  The Republicans don‘t give a damn about the free market.  They are perfectly happy to give huge companies even bigger advantages by schooling the tax code in their favor.  They also don‘t give a damn about what real Americans actually think. 

Seventy four percent of Americans support ending these insane oil subsidies.  You think the Republicans are going to listen to them?  Of course not.  They are going to listen to their donors, the oil companies who paid them to be their representatives.  

Joining me now to talk about this very issue, Senator Sheldon Whitehouse.  Democrat from Rhode Island who sits on the Senate Budget Committee.  Senator, thank you for joining us and thank you for joining our petition on twitter, I appreciate it, the Young Turks petition, Sheldon Whitehouse, Senator Gillibrand, Senator Menendez all joined.  Thank you so much for that.  

SEN. SHELDON WHITEHOUSE (D), RHODE ISLAND:  Not a bit.  Thank you for what you have done to galvanize the American people on this.  It is important, and if they haven‘t been heard yet, they can go to end big oil subsidies.com and let their voices be added to the tens of thousands who have already spoken out about these big oil subsidies.  

UYGUR:  Now, this bill, we just got the word actually Senator, just failed 52 to 48, so big oil will get to keep their subsidies. 

WHITEHOUSE:  Yes, and by the Cenk, 52 to 48, we had the 52.  It actually—in the ordinary world, won 52 to 48 consistent with what the American people want but because the Republicans demanded a filibuster-proof vote of 60, they were able to stymie the vote and protect the big oil subsidies.  

UYGUR:  That‘s a great point and it should not be understated.  The Republicans aren‘t just voting against getting rid of these oil subsidies, they are filibustering this bill to make sure under no circumstances do the oil companies pay their fair share. 

WHITEHOUSE:  Yes, a straight-up vote, we won. 

UYGUR:  That‘s right and so let‘s talk about how we can actually get it done, since they just filibustered it, right?  So, is it possible that the Democrats come into the negotiations on when you talk about balancing the budget and cutting spending and saying, look, we are not going to cut a dime until you cut here, otherwise, no deal.

WHITEHOUSE:  Look it is really important that we not walk away from this fight.  This is the first inning.  As I said, the American people are going to continue to make their voices be heard, it is ridiculous, while the Republicans are looking at getting rid of Medicare ten years from now.  At wiping out Planned Parenthood, at cutting back savagely on head start programs and saying that the reason they have to do all of  this is because the most important issue is our debt and deficit, but it‘s not as important as protecting big oil, and the totally unnecessary subsidies that they get from the American taxpayer.  That‘s an argument that we need to continue to have.  It resonates in Rhode Island, people in Rhode Island are absolutely fed up with getting clobbered at the pump and we are going to continue to bring this up over and over again. 

UYGUR:  Actually, Senator Schumer said something very similar, I want to actually play that video for you and then get your reaction.  

(BEGIN VIDEO CLIP)

SENATOR CHUCK SCHUMER (D), NEW YORK:  Our plan to cut the deficit begins with ending wasteful subsidies to big oil.  The republican plan, as embodied by the Ryan amendment, which almost every republican in the House voted for, begins with ending Medicare as we know it.  That‘s a bright line difference between our side and theirs.  

(END VIDEO CLIP)

UYGUR:  So, Senator Whitehouse, given what you said, given what Senator Schumer just said, it‘s a clear point, will you guys be running ads against the Republicans on this just to pressure them, so we can actually get that $21 billion back for the American people?

WHITEHOUSE:  Well, I‘m not in the ad running business, but I‘m going to continue to speak out on this every chance that I get.  And I‘m going to argue that we should continue to force votes on this over and over and over again.  Do you remember when they tried to filibuster Wall Street reform?  They won on the first vote, they won on the second vote, they won on the third vote but when it became clear that there was going to be a fourth vote and a fifth one after that, and a sixth and a seventh, as many as it took, they collapsed under public pressure. 

UYGUR:  Right.

WHITEHOUSE:  And I think we need to keep bringing that public pressure.  

UYGUR:  Absolutely right. 

WHITEHOUSE:  Going around Jericho, the Walls of Jericho did not come down the first time, Joshua went around that city. 

UYGUR:  Absolutely.  Senator Sheldon Whitehouse, keeping up the fight. 

Thank you so much for joining us.  We appreciate it. 

WHITEHOUSE:  Thank you, Cenk.      

(COMMERCIAL BREAK)

UYGUR:  Hundreds of demonstrators gathered outside JP Morgan Chase‘s annual shareholder meeting in Ohio today, demanding justice over what they called unfair foreclosure practices.  And look likes they might getting what they want.  Wow, that would be surprising.  We‘re finally seeing some signs of the government starting to crackdown on banks that are playing a role in this mortgage crisis.  The New York Times is reporting that New York Attorney General Eric Schneiderman has requested information from Wall Street banks in recent weeks about their mortgage securities operations during the credit boom.  He specifically requested meetings with the representatives from Bank of America, Goldman Sachs and Morgan Stanley.  

Some say, Eric Schneiderman is grandstanding.  I say, go get them, Eric.  Look, these guys knew they were packaging junk.  We saw the e-mails and they were selling them off to things like our pension funds.  If they profited off that fraud, there should be an incredibly high price to pay, civil and criminal.  Also today, the “Huffington Post” reported that a set of confidential federal audits are accusing some of the nation‘s largest mortgage companies of defrauding tax payers in their handling of foreclosures on homes purchased with government-backed loans.  

Apparently, five separate investigations were conducted by the Department of Housing and Urban Development‘s office of the inspector general.  They specifically examined Bank of America, JP Morgan Chase, Wells Fargo, Citigroup Ally Financial.  Sound familiar?  Yes, the same list of banksters.  Allegedly, the audits found that the banks effectively cheated taxpayers by presenting the federal housing administration with false claims.  Fraud, false claims and more fraud.  This isn‘t the free market.  This is the average guy getting ripped off then thrown out of his home and then the taxpayers paying the bill.  And who are the only ones making any money off of this?  Of course, the big banks who regularly engage in this fraud.  There‘s got to be an end to it. 

Well, that‘s the end of our show, thank you for watching.  “HARDBALL” starts right now.   

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