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'The Last Word with Lawrence O'Donnell' for Thursday, June 16, 2011

Read the transcript to the Thursday show

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Guests: Alex Wagner, Maggie Haberman, Rep. Chris Van Hollen, Robert Reich, Peter

Montgomery

           

LAWRENCE O‘DONNELL, HOST:  Well, it turned out to be one press conference too many.

(BEGIN VIDEOTAPE)

(MUSIC)

TAMROM HALL, MSNBC ANCHOR:  Why is this necessary?  Why not release just a statement?  Why this last news conference in the scandal that‘s gone on way too long, according to some?

UNIDENTIFIED FEMALE:  I would hope this would be the footage people would run.

O‘DONNELL (voice-over):  And thanks to Howard Stern, they will remember it.

UNIDENTIFIED MALE:  Pervert!

UNIDENTIFIED MALE:  Were you fully erect?

UNIDENTIFIED MALE:  Are you more than seven inches?

CHUCK TODD, NBC NEWS:  He knew this was going to be a circus.

LUKE RUSSERT, NBC NEWS:  He has become a circus.

MARTIN BASHIR, MSNBC HOST:  The circus came to town early this year.

TODD:  Why go on television?

RUSSERT:  The worst media strategy.

UNIDENTIFIED FEMALE:  Like the entire saga has been surrounding Anthony Weiner, it was bizarre.

TODD:  The more porn stars that come out, the better.

UNIDENTIFIED FEMALE:  When the word is the more porn stars the better, you know it‘s time to go.

HALL:  I don‘t know who would watch that and say, that felt like a comfortable end, because it just didn‘t.

CHRIS MATTHEWS, “HARDBALL” HOST:  Twittered away.

BASHIR:  I‘m kind of all punned out at this point.

O‘DONNELL:  The Democratic leadership just wants to get back to work.

REP. NANCY PELOSI (D-CA), MINORITY LEADER:  If you‘re here to ask a question about Congressman Weiner, I won‘t be answering it.

RUSSERT:  No opportunity for Democrats to get—to perpetuate their message.

FMR. REP. ANTHONY WEINER (D), NEW YORK:  The distraction that I have created has made that impossible.

ANDREA MITCHELL, NBC NEWS:  They need to move on.

O‘DONNELL:  Congressman Chris Van Hollen is here to lead the Democrats back to work.

PELOSI:  As usual, we‘re here to talk about jobs.

TODD:  Anything other than Anthony Weiner.

UNIDENTIFIED MALE:  The House Republican plan on Medicare.

O‘DONNELL:  Republicans have their own struggle with their anti-tax pledge to Grover Norquist.

SEN. TOM COBURN ®, OKLAHOMA:  I think you al tend to overstate the influence of Grover Norquist.

O‘DONNELL (on camera):  I would love to discover I have overestimated Grover Norquist‘s power.

COBURN:  Grover is old news.

O‘DONNELL (voice-over):  You heard it here first.  The most powerful man in Republican politics, Grover Norquist, may be losing his grip.

COBURN:  He‘s old news, and we‘re going to fix the country.  And some of that is going to be revenue increases—revenue increases—revenue increases.  We have to do the principled thing.

O‘DONNELL:  And what‘s Rick Perry really running for?

GOV. RICK PERRY ®, TEXAS:  A prophet is generally not loved in their hometown.  That‘s both biblical and practical.

(END VIDEOTAPE)

O‘DONNELL:  Good evening from New York.

The tweeting scandal surrounding Congressman Anthony Weiner has come to an end with the congressman announcing he has resigned.

Nearly three weeks ago, Anthony Weiner tweeted this photo of himself in his underwear.  Five days later, he gave interviews in which he lied about tweeting that photo.  And instead, said he was hacked.

And just 10 days ago, a somber Anthony Weiner held a press conference where he admitted his lies about his explicit online communications with at least six women, but refused to resign over the matter.

Today, Anthony Weiner held another press conference.  This time, in a less controlled environment in Brooklyn, where someone made the mistake of letting in Howard Stern‘s writer Benjy Bronk, who had disrupted the congressman‘s first press conference.

(BEGIN VIDEO CLIP)

WEINER:  Good afternoon.

About 20 years ago, I stood in this very same room here at the council center and asked my neighbors for their help to take a chance on me and electing me to the city council.  Then some seven years later, I asked those same people to join with people in Queens in sending me to Congress.

There is no higher honor in a democracy than being sent by your neighbors to represent them in the United States House of Representatives.

I‘m here today to again apologize for the personal mistakes I have made and the embarrassment I have caused.  I make this apology to my neighbors and my constituents, but I make it particularly to my wife Huma.

I hoped to be able to continue the work that the citizens of my district elected me to do, to fight for the middle class and those struggling to make it.  Unfortunately, the distraction that I have created has made that impossible.

So, today, I‘m announcing my resignation from Congress.

UNIDENTIFIED MALE:  Goodbye, pervert!

WEINER:  So my colleagues can get back to work, my neighbors can

choose a new representative, and more importantly, that my wife and I can

continue

UNIDENTIFIED MALE:  -- the people demand to know.

WEINER:  -- to heal from the damage I have caused.

(END VIDEO CLIP)

O‘DONNELL:  On his Sirius satellite radio show tomorrow, Howard Stern will no doubt be guessing at the answers to the questions you just heard his writer, Benjy Bronk, shouting at Anthony Weiner.

With minutes left in his congressional career, Anthony Weiner tried to thank many people for their support over the years.  But Benjy Bronk was still in the room.

(BEGIN VIDEO CLIP)

(BEGIN VIDEO CLIP)

WEINER:  I want to thank my colleagues in the House of Representatives, Democrats and Republicans alike.  They come from different places around the country, but fundamentally, we all agree.  They are all patriots and I will miss them all.

UNIDENTIFIED MALE:  Are you more than seven inches?

(CROSSTALK)

WEINER:  Thank you.

I also want to express my gratitude to members of my staff.  They are young people who are not paid very much.  They are people who work very hard and very long hours.  Ultimately, those people define the notion of service.

I want to thank, of course, the many people who have helped me, the people who have volunteered, the people who have given my advice.  The many of my constituents who have offered me good ideas.

And, of course, I want to express my gratitude to my family.  To my mother and father who instilled in me the values that carried me this far, to my brother Jason and, of course, to my wife Huma who has stood with me through this entire difficult period and to whom I owe so very much.

(END VIDEO CLIP)

O‘DONNELL:  And so, after a painful to watch 3 ½ minutes, Anthony Weiner tried to end on a serious note.

(BEGIN VIDEO CLIP)

WEINER:  I got into politics to help give voice to the many who simply did not have one.  Now, I‘ll be looking for other ways to contribute my talents, to make sure that we live up to that most New York and American of ideals—the idea that leaving a family, a community and, ultimately, a country is the one thing that all unites us, the one thing we‘re all focused on.

With God‘s help and with hard work, we will all be successful.  Thank you and good afternoon.

(END VIDEO CLIP)

O‘DONNELL:  Reaction to the Weiner resignation came immediately.

House Democratic leader Nancy Pelosi, who called for the congressman‘s resignation on said, said, “Congressman Weiner exercised poor judgment in his actions and poor judgment in his reaction to the revelations.  Today, he made the right decision in resigning.  I pray for him and his family and wish him well.”

Democratic Congressional Campaign Committee chairman, Congressman Steve Israel, said, “Anthony‘s decision to resign is right for him and his family, our party, and our country because we have serious work to do in Congress.  Last week, Republican leaders introduced a bill to privatize Social Security, and the American people deserve an undistracted debate on it, Medicare, jobs and other important issues.”

And Andrew Breitbart, whose Web site BigGovernment.com broke the original story said this.

(BEGIN VIDEO CLIP)

ANDREW BREITBART, BIGGOVERNMENT.COM (via telephone):  This could have ended two weeks ago by admitting it.  Instead, he went down a path of evasion and blaming others for his mistake.  So, I don‘t look at this as a sexting scandal.  I look at it as a cover-up of this and showing that this man‘s metal is not particularly great.  He is not a truth teller.  And I think that the lies are what brought him down.

(END VIDEO CLIP)

O‘DONNELL:  Joining me now are Maggie Haberman, senior political reporter for “Politico,” and Alex Wagner of “The Huffington Post” and MSNBC political analyst—thank you both for joining me.

Maggie, your memoirs become enriched in the last couple of weeks.  You‘ve been at both historic Anthony Weiner press conferences, including what we now believe to be the final Anthony Weiner press conference.

MAGGIE HABERMAN, POLITICO:  Here‘s hoping.

O‘DONNELL:  What happened today?

HABERMAN:  Well, you captured it very well with that video before.  It was a total circus.  I have never seen that much media -- 

O‘DONNELL:  And we thought we had seen a circus before in his last press conference.

HABERMAN:  Oh, yes.  And I think that‘s why there was so much press there today.  People were looking for a repeat.  People were hoping questions, like the last one, when it dragged on for half an hour.

This was a five-minute statement.  But there were about 40 cameras.  There were 100 people-plus in this room.  When the Howard Stern writer started screaming, and it just sort of became a free for all.  I think people watching it on TV heard better than we did in the room.

I do not think this made sense for him.  He could have just put out a statement.

O‘DONNELL:  That point was made by Tamron Hall, who‘s anchoring our 2:00 p.m. hour when the press conference started.  And as we were leading into that press conference, she kept asking, why is he doing this?  Why is he doing this?

It didn‘t seem like a good idea to her.  And once you were a minute in, you could see how right that was.  This should have been a piece of paper.

ALEX WAGNER, MSNBC POLITICAL ANALYST:  Yes.  Well, it was almost a stump speech.  It had notes of almost a launching of a kind of campaign for Anthony Weiner‘s life.  He even had a moment where it was a LeBron James-ish, “I‘m going to take my talents to South Beach,” you know?

There is definitely a second act for Anthony Weiner.  And what it is is very much TV (ph).  But I think he needed to have a sort of graceful exit.  Whether he got it, you know -- 

O‘DONNELL:  And what would be a 21st century resignation be without a follow-up statement from a porn star.  I read you the words of Ginger Lee, who released this statement today.

“I am glad that he has resigned.  After the past three weeks and everything that transpired before that, I think that he is making the wisest decision for himself, for his family, for everyone else drawn into this scandal—including Ginger Lee—and for the Democratic Party.  I wish him the best and hope that the treatment that he is receiving will help him to control his impulses and make better judgments.”

Alex, I have wanted to ask you this for a long time.  Do you agree with Ginger Lee?

WAGNER:  The only thing that Ginger Lee is upset about -- 

O‘DONNELL:  About this, I mean.

WAGNER:  About this—Ginger Lee is a moral compass for a lot of us.  But I think her greatest regret is that she entered the fray so late in the game.  There are no commemorative team Ginger t-shirts on the sidewalks of New York.

But this became a free for all, a feeding frenzy, and I think that‘s one of the problems for Anthony Weiner, is that it just not only did he deny it, which lengthened the media story, but also, there are these dribs and drabs, and every day, there was someone else in another sex message and another TwitPic, and that prolong the story.  And the agony I think of Anthony Weiner.

O‘DONNELL:  Maggie, we have gone somewhere beyond surreal when the porn star‘s statement is more dignified than the resigning congressman‘s statement.

HABERMAN:  Yes.

O‘DONNELL:  But to Andrew Breitbart‘s point, his final line in his thing he said today.  I think it was the lies that brought him down.  Breitbart said, I think he could have survived tweeting some of these pictures.  But I think it was the lies that brought him down.

Is that the conventional wisdom?  Is that the truth?  Is that what we think this really is?

HABERMAN:  It‘s certainly a part of it.  I think he would have had more of a fighting chance.  Those pictures are pretty damning, the ones that have come out.

The fact that he was sending these out and as Alex said, it was drip, drip, drip, one after another—but I think if he had come out in the beginning and said, look, I did this.  Here‘s what you‘re going to see in the coming weeks.  Here‘s what might emerged.  I‘m embarrassed.  My wife is standing by me.  We are going to work on this together.

I think he might have had a fighting chance.  I think it was the lies, and the aggressive lying, and the insisting he was a victim of a cover up, almost immediately tweeting out something that night, saying he had been hacked.  And this went on for days.

I think that made is impossible to take anything he said seriously going forward, for a long time.

O‘DONNELL:  But if you live through the Clinton era, and if you watched Bill Clinton lie about sex, and get caught committing perjury about sex, and have his party defend him for having done so—

WAGNER:  Right.

O‘DONNELL:  -- why would you think you couldn‘t just lie about this?

HABERMAN:  Because people liked Bill Clinton.

(CROSSTALK)

O‘DONNELL:  There‘s a difference.

WAGNER:  Anthony Weiner was an island unto himself.  His Democratic Caucus was not on his side.  Someone made the illusion that Congress is like prison and you give a sieve in the back unless you have a gang.

HABERMAN:  That‘s right.

WAGNER:  And Anthony Weiner did not have a gang, and he was out there in the prison yard by himself.

I mean, I think there‘s a loss of faith.  Those that did defend him in Congress had to defend themselves when they went to bat for him and he had lied.  That did not increase the goodwill, as they say.

O‘DONNELL:  Maggie, you‘ve now been at two press conferences with Howard Stern‘s intrepid political reporter, Benjy Bronk.  Does he have a future in this business?  Can you now imagine a congressional press conference without Benjy Bronk?  You‘ll be falling at sleep without him.

HABERMAN:  Oh, absolutely.  We needed him, because it was getting dull otherwise.  But I certainly suspect that the rate New York is going, there will be some other scandal in the next few months, and we will see him there, front and center.

O‘DONNELL:  Alex, can the Democrats get this behind him?  This feels over to me.  It does—on this show tonight, you will see the transition back to Medicare, jobs, and that discussion.  It feels to me like this is over.

WAGNER:  Reality may be around the corner.  Fingers crossed.  I think so.  I think so, Lawrence.  We have had such a saturation.  I think people are ready to move past this.

O‘DONNELL:  All right.  I‘m going to do my best to prove it.

Alex Wagner of “The Huffington Post,” and Maggie Haberman, senior political reporter at “Politico”—thank you both for joining me tonight.

WAGNER:  Thanks, Lawrence.

O‘DONNELL:  Democrats want to forget tweeting scandals and get back to the business of saving Medicare and raising the debt ceiling.  I‘ll ask Chris Van Hollen about today‘s talks with Republicans who try to save the country from going into default, after I ask him about Anthony Weiner.

And later, Rick Perry is toying with a White House run.  But we‘ll show you who he has in his corner.  A group that believes that Hitler‘s loyalists were all gay.

(COMMERCIAL BREAK)

O‘DONNELL:  Still to come, are Democrats and Republicans getting anywhere in the talks to raise the debt ceiling and prevent a new economic nightmare?  Congressman Chris Van Hollen is in those secret negotiations.  And he joins me next.

And—is the most powerful man in Republican politics finally losing his grip on tax policy?  Anti-tax crusader Grover Norquist lost a big vote today in the Senate.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PELOSI:  As usual, we are here to talk about jobs, about protecting Medicare, and to protecting the middle class.  If you‘re here to ask a question about Congressman Weiner, I won‘t be answering any.

(END VIDEO CLIP)

O‘DONNELL:  And we‘re back to talk about what Nancy Pelosi wants to talk about, and to ask a question about Congressman Weiner.

Joining me now is Congressman Chris Van Hollen.

Congressman Van Hollen, thank you very much for joining me today.

REP. CHRIS VAN HOLLEN (D), MARYLAND:  Good to be with you, Lawrence.

O‘DONNELL:  Congressman, when you look back on this Anthony Weiner situation, was it survivable?  Do you think it was the way Congressman Weiner handled the revelations about him—was there any version of this that was survivable?  Telling the truth at the beginning?  Was there some way to manage it?

VAN HOLLEN:  Well, that‘s hard to say, because as you said, he went through a week where he misled the American people, misled others.  So, it‘s really hard to do any kind of Monday morning quarterbacking.

I just do want to say that he made the right decision today for both his family and for the country, and I‘m glad he made this decision.

O‘DONNELL:  OK, and just one more.

VAN HOLLEN:  Sure.

O‘DONNELL:  Why is there no consistency in political reactions to these kinds of scandals in either party, Democrat or Republican?  I mean, why, for example, did some Democrats, who never, ever suggested that Bill Clinton or Charlie Rangel should resign, immediately call on Anthony Weiner to resign?

VAN HOLLEN:  Well, each of these has its own sort of dynamic.  Each of them has their own sort of flavor.

Getting back to the earlier question, I do think the fact that Anthony Weiner went on national television day after day to present a wrong version of the story, you know, to tell—to try and fabricate an entire other reality only made his problems a lot worse.

O‘DONNELL:  All right, Congressman.

On 8:19 p.m. of June 16th, THE LAST WORD is officially moving on from the Anthony Weiner of the story.

I want to go to the new NBC/”Wall Street Journal” poll that shows that 22 percent believes that Congressman Paul Ryan‘s Medicare plan is a good idea, 31 percent believe that that is a very bad idea, and 45 percent have no opinion about it.  That‘s now two months ago, 22 percent thought it was a bad idea.  That‘s gone up nine points.  You are in terms of momentum anyway winning the argument over the Ryan plan.

Where do we go from here in the discussion of the future of Medicare?

VAN HOLLEN:  Well, the reality is that the Ryan plan is a bad plan, the Republican plan.  And the people who voted in the special election in New York had an opportunity to hear a lot about it, and clearly rejected the Republican budget—especially the termination of the Medicare guarantee.

Look, as you know, when we passed the affordable health care, we made some reforms in the Medicare program.  We got rid of the overpayments to the Medicare Advantage.  Those were the plans—the private plans that were overly subsidized.  We tried to create new incentives so doctors would be rewarded based on the value of care they provide rather than the volume of care and the number of tests.

There are other things we can do.  For example, when it comes to prescription drugs, many of us have always argued that Medicare should use its bargaining power and be able to bargain for price—just like we do in the Veterans Administration.

So, there are lots of things we can do.  But what we should not do is the Ryan plan, which forces as you know seniors into the private insurance market and gives them—you know, whether you call it a voucher, premium of support, the reality is they are going to face skyrocketing costs or dramatically lower benefits because private insurance companies are going to ration their care.

O‘DONNELL:  Congressman, I‘m going to waste the question and ask you what‘s going on in those Biden talks with Republicans because I know you‘ve been sworn to secrecy.  But is there any kind of Medicare cut that you could support in those bipartisan negotiations with the vice president?

VAN HOLLEN:  We made it clear we will not support any cuts to Medicare beneficiaries.  We are more than willing to look at the kind of proposal that I just mentioned, where we say that prescription drug companies that are selling drugs to Medicare beneficiaries should have to pay—you know, provide the government with greater rebates.

For example, the prescription drug industry got a windfall when the Republicans passed the prescription drug bill in 2005, because they actually got higher prices for drugs to Medicaid patients who were also Medicare patients.  And so, that was a big windfall for them.

So, there are some savings that can be had.  But, no, we are not going to do anything to harm Medicare beneficiaries.

O‘DONNELL:  And, Congressman, just quickly, do you consider any increase in premiums at all, any—do you consider that harming a beneficiary?

VAN HOLLEN:  Well, I certainly think that the first thing that we have to do in these discussions is make sure we have a balanced approach.  And you mentioned earlier in your program the issue of Grover Norquist.  And what I have said is until Republicans are more afraid of the deficit than they are of Grover Norquist, we‘re going to have a big problem.

And we had a breakthrough today in the Senate on the ethanol taxes.  We finally said we can get rid of the special interest provisions in the tax code for the purpose of deficit reduction.

So, what I‘m saying, Lawrence, is before we even look in the direction that you‘re talking about, we need to make sure we close a whole lot of corporate loopholes.  We need to make sure that we ask the folks at the very high end of the income ladder to go back to paying the same rates they were during the Clinton administration when the economy was doing just great.

So, let‘s prioritize how we go about deficit reduction.  We understand that cuts have to be made.  But you‘ve got to do a balanced approach that includes saying to oil companies and others, no more pork barrel subsidies.

O‘DONNELL:  It sounds to me like premiums are going to get on the table at some point in this process.

Congressman Chris Van Hollen, thank you very much for being here tonight, and thank you very much for helping us turn the corner and move forward away from the Anthony Weiner scandal.

VAN HOLLEN:  And thank you, Lawrence.

O‘DONNELL:  Some Republicans could be ready to face reality when it comes to tax policy, finally.  And that‘s bad news for the man whose tax fighting pledge has been a litmus test for conservatives.

And later, the defense secretary for President Bush and Obama has stayed on the job so long, he is now actually telling the truth.  Robert Gates in his own words in tonight‘s “Rewrite.”

(COMMERCIAL BREAK)

O‘DONNELL:  Still ahead: why are some Republicans ready to turn on the man thought to have the power to make or break their political future?  Is fiscal truth about to push Grover Norquist to the sidelines of the tax debate?  Former Clinton Labor Secretary Robert Reich is here.

Plus, as Texas Governor Rick Perry toys with jumping into the presidential race, he is planning a religious mega-rally.  Tonight, we‘ll have an exclusive People for the American Way report on the people planning that rally, and how they equate Nazis with gay people.

(COMMERCIAL BREAK)

O‘DONNELL:  In the Spotlight tonight, we have seen the first crack in the wall that Grover Norquist has built to prevent Republicans from ever setting foot in the zone of sane tax policy.  Today, the United States Senate overwhelmingly passed an amendment to end six billion dollars annually in tax credits to the ethanol industry. 

Thirty three Republicans broke the Norquist rule to never raise taxes in any form, including by eliminating tax deductions and tax credits.  And they voted yes on republican Senator Tom Coburn‘s amendment, co-sponsored this time by Democratic Senator Diane Feinstein, to end an ethanol subsidy. 

This was a devastating setback for Grover Norquist and his organization, Americans for Tax Reform.  Thirty Republican senators who had signed this pledge, the Taxpayer Protection Pledge, violated that pledge today and did the right thing. 

Those Republicans are clearly hoping there is political safety in numbers, that Grover Norquist cannot target every one of them for defeat in Republican primaries because there are simply too many of them.  The 33 Republicans joined hands and did something that no one Republican or no three Republicans would ever dare to do. 

With his power to enforce simple minded harmful tax policies shattered by 33 Republicans, Grover Norquist‘s Americans for Tax Reform, of course, issued a statement applauding the passage of the amendment.  Norquist did this in a desperate attempt to spin a devastating loss into something he could pretend was a victory. 

“Today, the Senate voted to repeal the ethanol tax credit and tariff, a necessary step to begin unwinding the ethanol tax regime.  While eliminating these two policies that buttress the ethanol industry are an encouraging first step, senators who truly wish to end the government‘s favoritism toward the ethanol industry must also vote for Senator DeMint‘s forthcoming amendment.”

Senator DeMint‘s amendment repeals another ethanol provision, but it also cuts the inheritance tax to zero.  The tax cut contained in the DeMint amendment is bigger than the tax hike that‘s been created by the Coburn/Feinstein amendment.

And so Grover Norquist says “as long as Taxpayer Protection Pledge signers that voted for the Feinstein/Coburn amendment also vote for the DeMint amendment, they will be in keeping with the pledge they made to their constituents.”

Ah, but what if they never vote on the DeMint amendment?  What if the DeMint amendment never even comes to a vote?  It is not guaranteed a vote.  There is no vote scheduled on the DeMint amendment.  So Senator Chuck Grassley, the Republican leader on tax policy, said, quote, “there is a certain inconsistency because there are two separate votes.” 

Grassley is right.  For Norquist‘s pledge to work, anyone voting for something that increases taxes must also be voting for something that cuts taxes by the same amount or more, within the same vote, within the same amendment, within the same bill, or the Norquist pledge is absolutely meaningless. 

If a Republican pledge signer can be allowed to vote for provisions that increase taxation simply by promising that in the future, somewhere in the future, there are some specific tax cuts that he or she is willing to vote for, then the pledge becomes meaningless.  Republican Senator John Thune can now see right through the pledge.

“This is a tremendous amount of gymnastics to try to get the pledge to fit so they can say that this amendment is OK.  I think that‘s going to make it increasingly difficult for the pledge to have credibility going forward.  What they‘re doing here is really contortion.”

“Increasingly difficult for the pledge to have credibility going forward.”  Oh, yeah, and it gets worse.  Republican Senator Mike Johanns ridiculed—ridiculed what he is calling the Norquist exception.  “What Grover Norquist has just done is blown his pledge wide open.  It makes no sense to me whatsoever.  Once it‘s out there, no member will ever be caught in a bind, as long as you follow the Norquist exception.”

The Norquist exception is that this time Norquist made an exception, and allowed senators to vote on a tax increase, while not at the very same time voting for a tax cut of the same size.  So Republicans, who have been enslaved to Norquist, openly defying him in a vote, and then others openly ridiculing him about his inability to enforce his pledge in the face of an open revolt, this—this is the most dramatic development in Republican tax policy in the 21st century. 

Listen to what Senator Coburn said on Tuesday on this program about what this could mean for the sanity of tax policy going forward. 

(BEGIN VIDEO CLIP)

SEN. TOM COBURN ®, OKLAHOMA:  Between now and the next year, as we go to solve this problem, everybody knows there‘s going to have to be a compromise on some sort of revenue increase as we make the major cuts. 

That‘s just fact.  You can deny it.  And Grover‘s old news.  It doesn‘t matter what he says.  It doesn‘t matter what he wants.  He‘s old news. 

And we‘re going to fix the country.  And some of that is going to be revenue increases.  That‘s the only way you‘re going to build a compromise and get it signed by this president. 

Now I understand that.  And everybody else—the fact is most people

won‘t admit it.  >

(END VIDEO CLIP)

O‘DONNELL:  Joining me now is former Labor Secretary Robert Reich.  He‘s a professor of public policy at University of California at Berkeley, and the author of “Aftershock.”

Robert, I think Senator Coburn just said something that you and I have waited a long time to hear, so long that it‘s worth hearing some of that again. 

(BEGIN VIDEO CLIP)

COBURN:  We‘re going to fix the country.  And some of that is going to be revenue increases.  That‘s the only way you‘re going to build a compromise and get it signed by this president. 

I understand that and everybody else—the fact is most people won‘t admit it. 

(END VIDEO CLIP)

O‘DONNELL:  We actually just heard a conservative Republican say that we‘re going to fix the country, and some of that is going to be through revenue increases, tax increases.  Doesn‘t want to use the word “tax,” but that‘s what it is.  We‘ve got a Republican here who is talking about tax increases. 

Is this the first flicker of hope that the Republican tax cut fever might be fading? 

ROBERT REICH, FORMER LABOR SECRETARY:  Lawrence, I think that it is a big deal.  We are seeing sanity, as you put it, finally dawn on Republicans, at least Republicans in the senate.  I mean, Tom Coburn has taken on Grover Norquist.  Grover Norquist was the—really the ideological center of the no tax increase movement. 

I mean, it was ridiculous.  I mean, they were getting to the point—

Grover Norquist was getting to the point where even ending a tax loophole was defined as a tax increase.  And it was impossible for the no new tax increase pledge people in the Republican party to even get rid of corporate welfare, because of Grover Norquist. 

Now finally you have Tom Coburn and 32 other Republicans in the Senate saying enough, we‘ve got to be practical.  We‘ve got to be reasonable.  We‘ve got to deal with this budget deficit.  And maybe we‘re seeing the beginning of a willingness to raise taxes on corporations, and indeed, possibly raise taxes on the very wealthy. 

Wouldn‘t that be something? 

O‘DONNELL:  Robert, I think it‘s very important when Coburn says that everyone knows it.  I take that to mean that in his conversations in the Republican cloak room—in the Republican cloak room, everyone knows it.  That‘s something that indicates to me that we are going to see some more of these kind of votes coming. 

And I think in taxation, we always talk about rates too much.  All of these deductions, all of these credits, all these loopholes on the corporate side, also on the personal side, especially the loopholes that the top bracket can use, have a lot of money in them.  There‘s a lot of revenue there. 

REICH:  Huge. 

O‘DONNELL:  Without raising any income tax rates at all, we could pick up a tremendous amount of revenue by closing down some of these things. 

REICH:  Exactly, Lawrence.  I think that‘s where the action is going to switch to.  I wouldn‘t be surprised if Joe Biden and the senators he‘s been meeting with, Republican and Democrat, really do focus on the so-called—what they‘re called technically tax expenditures. 

These are subsidies.  These are deductions.  They‘re tax credits.  Many of them going to corporations, many of them going to very wealthy people.  They do need to be limited.  They should be limited out of fairness. 

If you believe in how the market ought to work, if you are a true conservative, you don‘t really want a lot of this corporate welfare and a lot of these special tax expenditures for the wealthy.  That‘s where the action is going to be.

I think that Tom Coburn today said nobody wants to admit it, but he‘s going to admit it.  And 33 Republicans essentially admitted it by voting against the ethanol subsidy. 

O‘DONNELL:  We just had Chris Van Hollen talking about what‘s going on in the vice president‘s secret negotiations with the Republicans.  He maintains that the Democrats will not do anything in there that would in any way harm Medicare beneficiaries.  You and I know there are many ways to reduce costs in Medicare without touching anything that the beneficiaries experience. 

But it looks like they will probably be coming out of there with some kind of cuts in Medicare.  Will that somehow deflate the Democratic argument against the Ryan Plan, if they agree to any kind of cut? 

REICH:  It might very well.  I mean, if Democrats actually do agree to real cuts in Medicare, they‘re going to try to frame it very differently, obviously.  They are going to say, well, we aren‘t really doing that.  We are just giving more authority to this commission, the so-called independent commission, that at some date in the future is going to come forth with an up or down vote on certain restrictions in Medicare, fees. 

You know, what they really should be doing, Lawrence, is saying essentially that Medicare can, hence forth, use its bargaining leverage to lower the costs of health care by getting drug prices down and supplier prices down. 

O‘DONNELL:  Former Labor Secretary Robert Reich, thanks for joining me on this historic night in the history of the politics of taxation. 

Defense Secretary Robert Gates is not holding back as he gives Washington his exit interview.  The most blunt comments we‘ve ever heard make him tonight‘s Rewrite.

(COMMERCIAL BREAK)

O‘DONNELL:  Time for tonight‘s Rewrite.  As his confirmation hearing in 2006 to become President Bush‘s secretary of defense, Robert Gates was as boring as everyone else who has had a confirmation hearing to become secretary of defense. 

(BEGIN VIDEO CLIP)

ROBERT GATES, DEFENSE SECRETARY:  I would have to tell you I remain concerned that the law charges the director of national intelligence with the execution of the National Foreign Intelligence Program and also with other things, such as insuring that members of the intelligence community obey the law. 

But the director of national intelligence cannot personally hire or fire the heads of a single intelligence agency in the United States government.  And as somebody who has led very large organizations, without having that authority, it makes it very difficult to exercise your will, and especially if you‘re trying to change cultures. 

So I would anticipate if confirmed—

(END VIDEO CLIP)

O‘DONNELL:  OK.  Let‘s get on with this.  OK.  OK.  I told you, boring.  Four and a half years later, after being the only Bush cabinet member held over to serve in the Obama cabinet, Secretary Gates is understandably weary.  He has years of jet lag he needs to decompress from, after flying all over the globe at a moment‘s nervous, in and out of war zones.

And he is really weary of adhering to the strict and boring tone we are so used to in that same hearing room where the committee voted for his confirmation.  Here‘s what happens when members of the cabinet stay on the job about a month too long. 

They actually start to say things that are true, even when the microphone‘s on. 

(BEGIN VIDEO CLIP)

SEN. PATRICK LEAHY (D), APPROPRIATIONS COMMITTEE:  We look at Pakistan.  Just this morning, we see word that our putative ally arrested five people on the suspicion that they helped the United States to get Osama bin Laden.  After publicly saying, of course, they wanted us to get Osama bin Laden, they arrested people that helped us to get him. 

Now, we could overlook the problems in Pakistan, if the Afghan government were any better.  But we have President Karzai who can‘t seem to make up his mind if he‘s on our side or the Taliban. 

How long do we support governments that lie to us?  When do we say enough is enough?  Secretary Gates, I‘ll start with you. 

GATES:  Well, first of all, I would say, based on 27 years in the CIA and 4.5 years in this job, most governments lie to each other.  That‘s the way business gets done. . 

LEAHY:  Do they also arrest the people that help us? 

GATES:  Sometimes. 

LEAHY:  When they say they are allies? 

GATES:  Sometimes. 

LEAHY:  Not often. 

GATES:  And sometimes they send people to spy on us.  And they‘re our close allies. 

SEN. THAD CHOCHRAN ®, APPROPRIATIONS COMMITTEE:  In view of the situation in Libya, are we learning something about the ability of our allies who volunteer to try to take up the slack in situations where we are not moving forward and trying to dominate and run a military operation? 

What are we learning from their capabilities or inadequacies that give you the most concern? 

GATES:  Well, I addressed this last week in Brussels in my usual subtle form.  The reality is that as they cut their defense budgets, and have been not—have not been investing in their defense capabilities for a number of years, by default, the additional burden falls on the United States. 

So I think that there is a genuine worry that our allies have looked to us to pick up the slack as they cut their defense budgets.  So I think this is a serious problem.  It‘s been a problem for some years.  But I think our own financial difficulties and what we‘re now going to face in looking at the American defense budget brings this issue to center stage in a way that it really has not been in the past. 

SEN. PATTY MURRAY (D), APPROPRIATIONS COMMITTEE:  Secretary Gates, Admiral Mullen, it‘s been a great pleasure to work with both of you.  And I want to thank both of you for your tremendous service to this country.  It is very much appreciated at a very challenging time. 

And Secretary Gates, I look forward to you coming home to our home state at some point and continuing our relationship.  But I know you must be looking forward to that. 

GATES:  Fifteen days. 

(END VIDEO CLIP)

O‘DONNELL:  Now he has 14 days left.  Let‘s hope he keeps talking.         

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. RICK PERRY ®, TEXAS:  The federal government was created by the states to be an agent for the states, not the other way around. 

(END VIDEO CLIP)

O‘DONNELL:  That was former Democrat Rick Perry, governor of Texas, speaking to New York Republicans Tuesday night.  Perry is publicly toying with the idea of running for president.  And in the current way too early meaningless polling, he is ahead of Tim Pawlenty, Michele Bachmann, and John Huntsman, among Republican primary voters. 

On August 6th, exactly one week before the Iowa straw poll, Governor Perry will host a free prayer rally at Houston‘s Reliant Stadium, which has a capacity of over 71,000 seats.  The event‘s website bills the rally as a nondenominational, apolitical, Christian prayer meeting. 

Perry writes on the homepage, “we must come together and call upon Jesus to guide us through unprecedented struggles, and thank him for the blessings of freedom we so richly enjoy.” 

The event will be funded by the American Family Association, which operates nearly 200 Christian radio stations across the country.  Here is a sampling of what you can hear on their flagship show hosted by Bryan Fischer. 

(BEGIN VIDEO CLIP)

BRYAN FISCHER, RADIO TALK SHOW HOST:  Hitler discovered that he could not get straight soldiers to be savage and brutal and vicious enough to carry out his orders, but that homosexual soldiers basically have no limits in the savagery and brutality they were willing to inflict on whoever Hitler sent them after. 

So he surrounded himself—virtually all of the storm troopers, the brown troops were male homosexuals. 

(END VIDEO CLIP)

O‘DONNELL:  Bryan Fischer is the subject of a new report from People For The American Way entitled “the GOP‘s Favorite Hatemongerer: How the Republican Party Came to Embrace Bryan Fischer.”

Joining me now is senior fellow for People for the American Way, Peter Montgomery.  Thanks for joining me, Peter. 

PETER MONTGOMERY, PEOPLE FOR THE AMERICAN WAY:  Happy to be back. 

O‘DONNELL:  Peter, Mike Huckabee made some real news on this Bryan Fischer show earlier in the year.  Politically, this was the place where he said that we all grew up as going to Boy Scout meetings, and of course President Obama was going to madrassas. 

Does this show encourage them to say these crazy things, all the Republicans candidates who show up on this show?  Or how does this work?  Is it part of what‘s fanning the flames?

MONTGOMERY:  I think the bigger problem with the show is that Bryan Fischer is an endless torrent of the most extreme kind of bigotry and divisiveness.  And you just gave people one small taste of that.  And the fact that his show is a regular stop for Republican presidential wannabes and members of Congress is a sad commentary on the state of the Republican party. 

It sort of suggests that there is no bigotry so extreme and there is no McCarthyism so repulsive that they will not embrace or overlook it in order to try to get the religious right voters they think are listening to Bryan Fischer‘s radio show. 

O‘DONNELL:  What is it about Republicans that let them go into arenas like this and not worry—politically worry about the association that this then leaves them with? 

MONTGOMERY:  Well, I think part of what we‘re trying to do is to give them a little reason to be worried.  We want the media and members of the public to know just how bigoted Bryan Fischer is and what his show puts out there, so that we‘ll start holding public officials accountable for going on that show and giving him exposure and credibility that he does not at all deserve. 

O‘DONNELL:  In reading your report, I think what we discover is that these perplexing weird extremist things that Republican candidates don‘t make much sense until you discover there‘s a place, a world, where they get highly rewarded for that with that audience. 

MONTGOMERY:  Yes.  And Bryan Fischer‘s world is one that‘s hard to reconcile with reality.  You know, in his world, gays are Nazis who should be prevented from holding public office in the United States.  President Obama is a fascist dictator.  The Constitution does not apply to Muslims.  They should be deported from the country. 

Native Americans deserve to be, you know, killed and thrown off their land, because they didn‘t convert to Christianity quickly enough.  People can read our report and see that this is the kind of stuff that‘s on Bryan Fischer‘s show all the time. 

END   

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