updated 7/13/2011 12:20:15 PM ET 2011-07-13T16:20:15

Guests: Sen. Sheldon Whitehouse, Rep. Donna Edwards, Sam Stein, John

Becker, David Cay Johnston, John Nichols, Mike Papantonio

           

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

Breaking news out of Wisconsin: Results are coming in for the recall election primaries being held in six districts.  The Senate seats are currently held by Republicans, and the state‘s GOP has admitted to putting fake Democrats to challenge the real ones.

At this hour, we report that all real Democrats are leading the fake Democrats.  In district two, real Democrat Nancy Nusbaum has defeated the bogus Democrat Otto Junkermann.

We‘ll keep you up-to-date throughout the show on the Republican attempt to thwart democracy in the Badger State.

But, first, the debt ceiling negotiations, Republicans have caved.  The big three could be saved, but the president is still pushing for his grand bargain.

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

(BEGIN VIDEOTAPE)

(MUSIC)

           

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER:  I would advocate that we pass legislation giving the president the authority—the authority to request of us an increase in the debt ceiling.

SCHULTZ (voice-over):  Republicans have caved, thanks to pressure from fat cat donors.

Will the president seize on the opportunity?  Reaction from Congresswoman Donna Edwards and Senator Sheldon Whitehouse.

BILL O‘REILLY, FOX NEWS:  Raising tax is not, is not a smart idea in the current economic climate.

SCHULTZ:  Rupert Murdoch‘s media outlet pushed the Republican line against taxes.  Today, reports that News Corp has actually made billions on taxes over the past four years.

And it‘s the undercover video that everybody is talking about.  We have the guy who shot it inside the Bachmann clinics, attempts to cure gay people.  It‘s an ED SHOW exclusive.

(END VIDEOTAPE)

SCHULTZ:  Good to have you with us tonight, folks.

Mitch McConnell and John Boehner are getting hammered by the Tea Party for buckling on the debt ceiling debate.  Senate Minority Leader Mitch McConnell has proposed a deal which would allow the debt ceiling to go up and take cuts to the big three off the table.

McConnell late today put out his last chance plan.

(BEGIN VIDEO CLIP)

MCCONNELL:  I would advocate that we pass legislation giving the president the authority—the authority to request of us an increase in the debt ceiling that would take us past the end of his term.  That is what he has said.  He said he will not sign a debt ceiling that does not take us past the end of his term.

(END VIDEO CLIP)

SCHULTZ:  So, McConnell‘s plan would allow Republicans to vote against the debt increase, but it would allow the president to increase the debt.

The downside for the righties?  Cuts to the big three would be off the table.  That‘s been their mission all along.

The Tea Party immediately jumped all over McConnell.  Right wing blogger Erick Erickson put it out like this, “Mitch McConnell right now is making a historic capitulation.  Consider sending McConnell a weasel as testament to his treachery.”

John Boehner, he‘s on board with the Senate Leader McConnell.  He ran over to FOX News and did some major CYA.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE:  I think everybody believe there needs to be a backup plan if we are unable to come to an agreement.  And, frankly, I think Mitch has done good work.

(END VIDEO CLIP)

SCHULTZ:  Backup plan?

At the very same time, Boehner was whining on FOX, Judson Phillips, founder of the Tea Party Nation was taking it to him on MSNBC.

(BEGIN VIDEO CLIP)

JUDSON PHILLIPS, TEA PARTY NATION:  John Boehner should step down and let a real conservative step up there, because all he wants to do is haul up his freshly laundered white flag of surrender.  He wants to do it early and he wants to do it often.

(END VIDEO CLIP)

SCHULTZ:  That was Reverend Al Sharpton earlier tonight.

Boehner and McConnell proved they don‘t care about the Tea Party. 

Republicans only take their marching orders from who?  Wall Street.

Today, the president and all members of Congress received a letter from 470 U.S. business leaders, including nearly 400 CEOs of leading American companies.  The letter said, “It is critical that the United States government not default in any way on its fiscal obligations.”

Even Tom Donohue of the Chamber of Commerce is leaning on Republicans to take the deal.

Boehner and McConnell have been outmaneuvered and ripped by their fat cat supporters.  They have no other choice but to lay down their arms at it this point.

And the president is also feeling the heat to take the deal.

Scott Pelley of CBS News asked the president about the consequences of default earlier tonight.

(BEGIN VIDEO CLIP)

SCOTT PELLEY, CBS NEWS ANCHOR:  Can you tell the folks at home that no matter what happens, the Social Security checks are going to go out on August the 3rd?  There are about $20 billion worth of Social Security checks that have to go out the day after the government is supposedly going to go into default.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Well, this is not just a matter of Social Security checks.  These are veterans‘ checks.  These are folks on disability and their checks.  There are about 70 million checks that go out each month.

PELLEY:  Can you guarantee as president those checks will go out on August the 3rd?

OBAMA:  I cannot guarantee those checks go out on August 3rd if we haven‘t resolved this issue, because there may simply not be in the coffers to do it.

(END VIDEO CLIP)

SCHULTZ:  Social Security has never been in more danger.  But it‘s obvious McConnell has no interest in working with President Obama on anything anymore.

(BEGIN VIDEO CLIP)

MCCONNELL:  I hope the economists are wrong, and that our economy will continue to grow over the next year and a half to buy us time to tackle the problems we face.  But after years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is probably unattainable.

(END VIDEO CLIP)

SCHULTZ:  Pelley asked the president to respond to McConnell‘s statement from the floor.

(BEGIN VIDEO CLIP)

OBAMA:  Mr. McConnell said the day I was elected that his job was to try to see me beaten.  I think what the American people are looking for is not that kind of partisan politics, and what I‘m offering is a way for us to finally solve this debt and deficit problem in a serious way, with substantial cuts in discretionary spending, substantial cuts in defense spending, substantial changes to entitlements like Medicare and Social Security, that would stabilize those programs and make them available for the next generation.  And what I‘m asking in return from the Republicans is that people like myself, who can afford it, put a little bit of revenue in so that we don‘t end up having to put the entire burden of dealing with this debt on the backs of middle class families and seniors and students and poor kids.

(END VIDEO CLIP)

SCHULTZ:  And the question for liberals tonight is, is that a fair deal?

Democrats on Capitol Hill are still pretty furious with the president putting $4 trillion worth of cuts on the table.

Earlier tonight, Congressman Keith Ellison told me that 77 House Democrats have signed onto a letter promising not to vote for any cuts to Social Security, Medicare and Medicaid.  The president has made a calculated risk basically using the American people as a bargaining chip, and he has won this round.  There‘s no doubt about that.

And at this hour, there‘s really no indication he‘s going to take the McConnell deal.

Mr. President, don‘t take it, not yet.  Let them implode.  We are now seeing the real divide between the Republican Party between those that kind of have their heads screwed on right.  And those Tea Partiers, we‘re going to find out how politically revolutionary they want to be.  So, wait them out a little bit.  Let them divide even further down the road.

Cantor and Boehner, they don‘t get along.  They‘re off-script big time when it comes to where we should go with all of this.  So, let them wallow in this a little bit.

And in the other camp, the Democrats, was it political theater that President Obama really wanted $4 trillion worth of cuts and that‘s the only deal he would take?  That would hurt a lot of people, a lot of people on fixed incomes.  That in my opinion was a bridge too far, especially for just getting a measly tax increase down the road by Republicans.

Get your cell phones out, I want to know what you think.  Tonight‘s question: should President Obama accept Mitch McConnell cave-in?  Text A for yes, text B for no, to 622639, and you can always go to our blog and comment at Ed.MSNBC.com.  We‘ve got the results coming up later in the show.

Joining us tonight:  Senator Sheldon Whitehouse of Rhode Island, also joining us is Congresswoman Donna Edwards of Maryland.

Great to have you both tonight.

Senator Whitehouse, you‘ve introduced a resolution to take cuts to Social Security and Medicare and Medicaid—those been fits benefits off the table.  So, basically, as we know it tonight, from what stands in front of us—do you think that the president should take McConnell‘s offer at this point?  What do you think?

SEN. SHELDON WHITEHOUSE (D), RHODE ISLAND:  I think it‘s too early to tell.  The devil is going to be in the details of that offer.  Any offer that comes from a minority leader who‘s avowed primary purpose is not to solve the deficit problem, not to deal with the war in Afghanistan, not to bring jobs back to the American economy, but to cause the president of the United States not to be re-elected, any proposal from somebody in that mode is something that‘s going to take a little bit of close scrutiny before you want to sign onto it.

SCHULTZ:  So, McConnell has lost credibility with you?

WHITEHOUSE:  Well, it‘s a question of what his priorities are, and if that‘s his priority, then thing that is he proposes need close scrutiny.  I don‘t want to kick the idea to the curb.  It could be a solution to this, but we really need to see the details.  And I think—

SCHULTZ:  Congresswoman Edwards, $4 trillion is a heck of a lot of money.  Are you one of the 77 that signed off to this letter that Keith Ellison told me about today?

REP. DONNA EDWARDS (D), MARYLAND:  I have.  And, of course, my principal concern has been protecting against cuts to Medicare and Social Security benefits.  I‘ve made that very clear, sent a letter actually last week to the president to that effect.

What I want to be clear about, though, is that we aren‘t going to do anything that constrains the president‘s hands.  So, I‘m actually looking forward to hear—hearing from him about his response to the McConnell proposal.

What I will say is Republicans are all over the map.  I think in fairness to the president, he doesn‘t know with whom to negotiate.  Does he negotiate with Boehner, who seems to not control his conference?

SCHULTZ:  Sure.

EDWARDS:  Does he negotiate with McConnell, who only carries a little minority in the Senate?

SCHULTZ:  So, would your advice to the president right now be patient on this offer?

EDWARDS:  I think this time requires a lot of patience.  I think what we do know is that those of us who have already voted for a clean debt ceiling that doesn‘t constrain the president and that carries us forward over this next couple of years, year and a half period is the way to go.

And we‘ve done that.  And so, I‘d like to see the Republicans put on the table a clean debt ceiling vote, because that‘s the responsible thing to do.

SCHULTZ:  John Boehner said the debt limit is the president‘s problem. 

Here‘s that sound bite.  I want your reaction.

(BEGIN VIDEO CLIP)

BOEHNER:  Where‘s the president‘s plan?  When is he going to lay his cards on the table?  This debt limit increase is his problem, and I think it‘s time for him to leave by putting his plan on the table, something that the Congress can pass.

(END VIDEO CLIP)

SCHULTZ:  Senator, what‘s your reaction to that?

WHITEHOUSE:  Well, we‘ve tried plan after plan.  The most recent one has been the Democratic Senate budget, which actually provides more deficit reduction than even the House Republican plan, which does it fairly.  Even-steven between revenues and spending cuts, and which importantly protects Social Security and protects from any Medicare benefit cuts.

So, there‘s a way to do it.  It‘s not hard to do.  The problem has not been a lack of initiative by the president.  The problem has been this absolute, extreme intransigent on the Republican side.

SCHULTZ:  Yes.

WHITEHOUSE:  And as Representative Edwards said, their inability to get their own house in order and their own interest groups speaking to the same tune.

SCHULTZ:  The other day, Senator, the White House made the statement that they thought that they were on the high ground right now.  Does that appear apparent to you tonight?

WHITEHOUSE:  Well, I think if they keep Social Security protected, that will leave the high ground.  I think there‘s a real danger of slipping on Social Security, and I would urge that there is a Web site nosocialsecuritycuts.com.  And anybody who wants to become a citizen co-sponsor of a resolution against cutting Social Security benefits can just go to nosocialsecuritycuts.com and make their own voices heard in this debate.

SCHULTZ:  And, Congresswoman, what is your response to Mr. Boehner saying that the debt problem, that‘s the president‘s problem?

EDWARDS:  Well, it‘s very disappointing.  I mean, the problem of raising the debt ceiling to meet the full faith and credit obligations in the United States as the president has acknowledged is an American problem and it requires all of our leaders on the same page about doing that.  And so, I think it‘s really irresponsible, and it may show a little bit of bad faith in approaching this and now coming up with, you know, some secret deal contingency plan.

We need leaders of good faith on the line for the American people.  Raise the debt ceiling and meet the obligations and protect Medicare and Social Security benefits.

SCHULTZ:  Do you have more faith in the president tonight than a few nights ago, Congresswoman Edwards?

(CROSSTALK)

SCHULTZ:  Do you feel like he‘s not throwing the Black Caucus and the Progressive Caucus under the bus?

EDWARDS:  I think the president has had and rightly so a strong message and unified message from the Democrats in the House of Representatives about our desire to protect Medicare, Social Security, and Medicaid from benefits cuts, especially while the 2 percenters are getting away with having the rest of us bear the burden.

And so, I think the president has a strong hand right now.  And he understands that this is actually not about politics.  It‘s about our obligations.

SCHULTZ:  Four trillion dollars is a heck of a lot of money.  If the Republicans ever took at that deal, that would hurt a lot of folks.

Congresswoman Edwards, Senator Whitehouse—great to have you with us tonight.  I appreciate your time.

Now, let‘s turn to “Huffington Post” political editor Sam Stein.

Sam, how big of a divide is this to the Republican Party, and just how upset are the Tea Partiers?

SAM STEIN, HUFFINGTON POST:  Well, they‘re not happy.  And I think the Erick Erickson post that you quoted at the top of the show sort of—is the tip of iceberg.  A lot of people that we‘ve talked to in the Hill at “The Huffington Post” in the Republican Caucus are displeased that Mitch McConnell went there.

I think your interpretation is right, Ed.  It is a blink.  It shows that the Republican caucus was not seriously going to let the debt limit be hit, which as a practical economist would probably argue is a great thing.  But from a pure political standpoint has really opened up McConnell and by extension John Boehner to criticism from their own caucus.

SCHULTZ:  Well, the Republican candidates for president, all of them want the nomination, and they‘re weighing in on this tonight.

Newt Gingrich tweeted, “McConnell‘s plan is an irresponsible surrender to big government and big deficits and continued overspending.”

Mitt Romney‘s campaign put out this statement.  “Mitt Romney does not believe the federal debt limit should be raised without tying it to spending cuts, budget caps and a balanced budget amendment.”

How can the president right now take advantage of all of this, Sam? 

What do you think?

STEIN:  Well, I think he does it simply by holding out.  I mean, while it was very painful to Democrats and progressives to see him propose a $4 trillion package, which included raising the eligibility age of Medicare—right now, he has the posture of looking like the only serious person in the room.  And on top of that, he actually has a plant to goes further in terms of deficit and debt reduction and his Republican counterparts.

And from the White House‘s vantage point, that‘s political gold for them.  They want to hit these independent voters.  They think this is the way to do it.  You might argue that it‘s not.  That‘s a perfectly reasonable argument.

(CROSSTALK)

SCHULTZ:  Well, how does the president or the Democrats go against 80 percent of the American people?  I mean, they‘ve got a pretty fat number on their side.  They can politically do just every—anything they want as long as they protect the big three.

So, I think they‘ve been on pretty solid ground throughout all of this.  They got the people behind them, and now, this divide is taking place.

STEIN:  I think you‘re right.  I think there‘s a way that the White House could have framed this where they would have been the champions of Medicare as opposed to the slashers of Medicare.  The preservers of Social Security as opposed to the tinklers of the Social Security.

SCHULTZ:  Yes.

STEIN:  And they didn‘t play that card, and I think we could look back to them and say it was probably a strategic error on their part.

(CROSSTALK)

SCHULTZ:  Huffington Post‘s Sam Stein—you bet.  Thanks, Sam.  Good to have you with us tonight from “The Huffington Post.”

STEIN:  Thanks, Ed.

SCHULTZ:  Remember to answer the question there at the bottom of the screen.  I want to know what you think.

The clinic owned by presidential candidate Michele Bachmann has taken government aid.  Now, an undercover video seems to show a totally discredited therapy to cure homosexuality.

It‘s primary day in Wisconsin, according to the “Milwaukee Journal Sentinel,” fake Republican Otto Junkermann has been defeated.  What will today mean for the recall effort, and more importantly, Scott Walker‘s anti-worker agenda?

You‘re watching THE ED SHOW on MSNBC.  All that‘s coming up.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  The latest results out of Wisconsin.  The Republican plan to steal elections has gone up in flames.  It‘s been a rough night at the office for Otto Junkermann and his cronies on the Republican side.

All real Democrats are leading fake Democrats in the state Senate primaries.  I know it sounds strange, folks.  Nothing like this has ever happened before.  but it is unfolding in Wisconsin.

John Nichols of “The Nation” is all over the story tonight.  He‘s waiting in the wings and he will keep us up to date with the latest numbers as they come in.

But, next, the undercover video from the clinic owned by presidential candidate Michele Bachmann and her husband.

(COMMERCIAL BREAK)

SCHULTZ:  Inside the Bachmann clinic just when you thought you heard it all.

Welcome back to THE ED SHOW.  Thanks for watching tonight.

Presidential candidate Michele Bachmann likes to rail against government spending.  She does it all the time.  We know the clinic owned by the congresswoman and her husband, they have gotten more than $160,000 in government aid.

And now, an undercover video seems it to show the clinic practicing reparative therapy, which is a completely discredited therapy to turn gay people straight through prayer.

Our next guest here on THE ED SHOW tonight posed as someone seeking to rid himself of his homosexual urges.

Here is part of the exchange that took place after the counselor asked about the last time he had been to a woman.

(BEGIN VIDEO CLIP)

JOHN BECKER, TRUTH WINS OUT:  I had, like, a sex dream involving girls and I felt bad about it afterwards.  Like that I remember very distinctly, I couldn‘t tell you want age I was, but it was right around the time that I started puberty and I remember having that dream and I remember feeling about it.

THERAPIST:  What sort of happens is, you know, men have perverted what the attraction to the woman should be.  But the truth is God, God has designed our yes to be attracted to the woman, a woman‘s body.  To be attracted to, you know, everything, you know, to be attracted to her breast.

(END VIDEO CLIP)

SCHULTZ:  Michele Bachmann‘s husband Marcus Bachmann has previously denied that his clinic practices reparative therapy.  A Bachmann spokesman says that Bachmann and Associates is a Christian counseling center.  But Congresswoman Bachmann is still, she won‘t answer questions about the reparative therapy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  What is your opinion on reparative therapy and is it conducted at that center?

REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE:  Well, I‘m running for the presidency of the United States, and I‘m here today to talk about job creation and also the fact that we do have a business that deals with job creation.  We‘re very proud of the business that we created.

(END VIDEO CLIP)

SCHULTZ:  Let‘s bring in the director of communications for Truth Wins Out, John Becker.

John, good to have you with us tonight here on the program.

What were you trying to accomplish on this mission?  What did you want to do?

JOHN BECKER, TRUTH WINS OUT:  We wanted to see for ourselves whether or not the clinic that‘s owned by Marcus and Michele Bachmann engages in reparative therapy which, as you pointed out, is a completely, scientifically discredited practice that purports falsely to change people from gay to straight.  We felt these rumors were unconfirmed for long enough and that the American people to know whether or not the Bachmanns were tied to something that extreme.

SCHULTZ:  Have you ever done anything like this before?

BECKER:  Personally, no, I had not.  This is my first experience.

SCHULTZ:  OK.  So, you go into this eyes wide open.  Was it hard to comprehend what he was saying and also capture everything you wanted to capture?

BECKER:  It was—what I tried to do myself was to put myself back into the mental place that I was at when I was a teenager.  I struggled to come to terms with my own sexual orientation.  So, that part—it was a little daunting, but it helped me to kind of understand it and talk with him a little bit.  But, you know, I had to really try to direct the questioning to get what we needed to know.

SCHULTZ:  Did you think that they were engaging in reparative therapy?

BECKER:  Absolutely, without a doubt.  The treatment that I was given, the advice that I was given meets the bar for reparative therapy.

SCHULTZ:  OK.  Let‘s play another part of the undercover video which you recorded.  Here it is.

(BEGIN VIDEO CLIP)

BECKER:  Do you think it‘s possible for people, to totally free of those attractions or will they always be there?

THERAPIST:  Oh, I think it‘s possible to be totally free of them.

BECKER:  OK.

THERAPIST:  For sure.

(END VIDEO CLIP)

SCHULTZ:  You provided NBC News with a good deal of this footage.  Was it clear that this counselor in your mind was clearly using the technique of reparative therapy?

BECKER:  Absolutely.  That‘s why I asked him several times, just to make sure that I understood what he was saying, you know, is it possible to be free of same-sex attraction?

And that promise for the potential of change is a very key component to reparative therapy.

SCHULTZ:  How eye-opening is this to you and the gay community in America?

BECKER:  It‘s very eye-opening.  It‘s—sometimes because we live in the 21st century, it‘s difficult to imagine that there‘s a large segment of our society that still believes that homosexuality is an extrinsic factor can be removed.  So, it‘s very eye-opening for me.

SCHULTZ:  Reparative therapy is widely discredited, but was the counselor doing anything illegal in your opinion?

BECKER:  I don‘t have any legal training, so I guess I leave that to the sharper minds than myself to sort out.  But, certainly unethical, I was never—I was never given any informed consent document to sign, you know, outlining the risks of reparative therapy, including elevated risk of depression and suicide possible alternative just like gay affirmative therapy.  I was never informed of that.

And the fact that nobody ever told me at the clinic that reparative therapy has absolutely no basis on research.  So, I don‘t know about the legality of it, but certainly, ethicality, it‘s very, very shaky ground.

SCHULTZ:  And what do you think this clinic says about Congresswoman Michele Bachmann who wants to be president of the United States?

BECKER:  I think it says that she holds a very, very dangerously archaic view of the LGBT population of the United States.  And I think that that‘s very telling in terms of how the policy she would enact and the way she would deal with the LGBT community were she to become president.

SCHULTZ:  John Becker, good to have you with us tonight.  Thanks so much for joining us.

BECKER:  Thank you, Ed.  It was a pleasure.

SCHULTZ:  Bill O‘Reilly is telling President Obama not to raise taxes on the wealthy.  Maybe it‘s because his boss currently makes B—billions of dollars through—what—tax loopholes.

And the Republicans‘ light bulb legislation fails to pass the House, but not before Marsha Blackburn and Steve Doocy teamed up for some dim-witted psycho talk.

And in Wisconsin, the bad news for Republicans keeps pouring in.  “The Milwaukee Journal Sentinel” says that another fake Democrat has joined Otto Junkermann in the defeat column.  John Nichols of “The Nation” coming up with a lot of results and commentary.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back to THE ED SHOW.  We‘re teaming up with the National Association of Free Clinics.  Together, we will hold a clinic on August 29th in New Orleans, Louisiana.  And it‘s only going to be possible with your help. 

The organization has previously held seven clinics.  Those clinics have helped thousands of folks get the health care they need.  To make a donation or to learn more about volunteering at the New Orleans clinic, you can visit their website at FreeClinics.us. 

You can also text the world “HEALTH” to the number 50555 to make a 10 dollar donation by phone.  We were going to have Jim Conklin on tonight to discuss his participation in all of the clinics that you‘ve helped pay for.  But due to the overwhelming breaking news of the Wisconsin story and Washington, we‘ll bring you that interview tomorrow night. 

We ask you to donate.  It‘s for a fabulous cause.  Don‘t cry for Rupert Murdoch.  His company is plagued by a scandal, but he‘s still making billions of dollars on the backs of who?  U.S. taxpayers. 

We‘re continuing to monitor the latest results out of Wisconsin.  Bad news for workers rights in the Badger State or should I say big news for workers rights in the state.  A fourth fake Democrat has gone the way of Otto Junkerman, who is going walleye fishing tomorrow because he‘s not going to be in the Senate.  You‘re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BILL O‘REILLY, FOX NEWS ANCHOR:  President Obama‘s making a huge mistake in trying to raise taxes now.  Why bother with that?  Just campaign on your economic position, Mr. President.  And if you get re-elected, you can raise taxes later. 

(END VIDEO CLIP)

SCHULTZ:  Here‘s the real reason Bill O‘Reilly and other Fox Newsers don‘t want tax increases on the rich.  Because under the current tax code, O‘Reilly‘s boss, Rupert Murdoch, actually makes money off the United States government. 

You can see here in the last four years, Murdoch‘s News Corp made 10.4 billion dollars in profit.  How much—how much did the company pay in corporate income taxes?  Zero.  In fact, after refunds, News Corp actually made 4.8 billion dollars. 

Think about that the next time Bill O‘Reilly says he‘s looking out for you and the next time he tells President Obama he is making a huge mistake by raising taxes on the wealthy. 

Joining me tonight is Pulitzer Prize winning journalist David Cay Johnston, author of “Free Lunch, How the Wealthiest Americans Enrich Themselves at Government Expense and Stick You With the Bill.”  He‘s also a columnist for Reuters.  And he wrote about Rupert Murdoch‘s tax profits. 

David Cay, great to have you with us tonight.  How did he manage this?  He has got to be playing all the angles on this one, isn‘t he?  How is he making money off the tax system? 

DAVID CAY JOHNSTON, COLUMNIST, REUTERS:  Well, Rupert Murdoch, since he became an American citizen, has became a great expert at how to play the tax game in America.  And while you and I and other Americans, Ed, have our taxes taken out of our paychecks before we get them, corporations have a whole different set of rules they operate under. 

They are allowed to sometimes reach back five, 10, 15 years and delay into the future as much as 30-plus years their tax matters.  Murdoch has the third highest number of tax haven subsidiaries—only Citigroup and Morgan Stanley have more subsidiaries and tax havens, like the Cayman Islands, than News Corporation. 

SCHULTZ:  Obviously by O‘Reilly‘s commentary right there, you have Murdoch using his media outlet to influence public opinion on taxes.  But doesn‘t he also have influence when it comes to politicians?  What do you think? 

JOHNSTON:  Absolutely.  Rupert Murdoch once, for example, flew the opposition in Britain in a corporate jet to Australia to attend an event.  And shortly after that, Tony Blair became prime minister. 

He gets himself invited to parties.  And he plays all sides of the game here.  You know, “the New York Post” went after Bill Clinton vociferously.  But in 2006, when Hillary Clinton ran for re-election, she had a fund-raiser hosted by none other than Rupert Murdoch. 

SCHULTZ:  Do you think Republicans will ever get rid of these loopholes?  They are out there sounding the alarm that we‘ve got unfair playing field, that we‘re at 35 percent of the corporate tax, should be dropped to 25 percent.  But they‘ll never give up those loopholes, will they? 

JOHNSTON:  Well, the companies want this, Ed.   This about this, that 4.8 billion dollars that we as taxpayers turned over to Rupert Murdoch‘s company—we‘re out borrowing money and paying interest on it to give money to his company. 

So companies want this.  It‘s free capital to them taken from the taxpayers.  And look at Murdoch‘s newspapers constantly promoting we can‘t afford to provide nutrition for children and college educations for smart and ambitious young people, and we can‘t afford Medicare, and all these other programs. 

How come there‘s no mention that perhaps we can‘t afford to turn 4.8 billion dollars over to Murdoch, instead of paying taxes from his company‘s profits. 

SCHULTZ:  Pretty amazing stuff.  Great work again.  David Cay Johnston, thanks for joining us tonight. 

Rupert Murdoch makes a lot of money off U.S. taxpayers, as you just heard.  But the phone hacking scandal consuming News Corp is threatening his bottom line.  The News Corp stock price is down more than 15 percent over the last week.  And calls to investigate News Corp corruption charges are increasing.

ThinkProgress.org is asking visitors to sign a petition urging the Justice Department and Securities Exchange Commission to probe Murdoch‘s company for potentially violating U.S. law. 

Let‘s turn now to Mike Papantonio, host of the nationally syndicated radio show “Ring of Fire” and one of the best attorneys I‘ve ever known.  Great to have you with us tonight. 

I tell you what, it doesn‘t get any juicier than this, does it?  Does this go inside the building at Fox News?  How deep does this run, do you think? 

MIKE PAPANTONIO, RADIO TALK SHOW HOST:  This is a story about their financial future as much as it is about bribery, potential perjury, potential criminal interference with investigations.  Look, yesterday they lost almost three billion dollar in market capitalization, because shrewd investors understand where this story can go. 

Let me tell you where it can go.  It‘s so bad that today they had to pump five billion dollars—News Corp put five billion dollars into buying up their own stock, Ed. 

When a company does that, it‘s worried because they‘re in a free fall. 

That‘s what you see when you see a corporation do that. 

SCHULTZ:  Why isn‘t the Justice Department going after this one? 

PAPANTONIO:  Unfortunately, the Justice department doesn‘t have a very good record.  Eric Holder has a terrible, pathetic record where it comes to going after white collar criminals.  As a matter of fact, they could—under the Foreign Corporate Practices Act, they have a shot clearly right here. 

They took a shot at a corporation called Lindsay Manufacturing in May.  The jury came back, under the Foreign Corrupt Practices Act, and they convicted them. 

Unfortunately, this is a Justice Department that would rather throw a kid in jail for having an ounce too much pot than they would Wall Streeter who has stolen trillions of dollars from the American economy. 

So the way they look at Rupert Murdoch is no different, even though bribery occurred in the U.K., News Corp is an American company.  They‘re responsible for that bribery that occurred in the U.K., because it‘s one of their foreign subsidiary. 

They could easily—this department could easily go after Rupert Murdoch directly.  I got to tell you something, months ago “the New York Times” said this goes all the way to Rupert Murdoch.  You can bet this story does go all the way to Rupert Murdoch.  It does involve potential perjury.  It does involve corruption.  It does involve potential bribery. 

SCHULTZ:  News Corp gave a million dollar donation to the U.S. Chamber of Commerce.  And they‘ve lobbied to get rid of anti-bribery laws.  I don‘t know how the Justice Department can‘t make this connection, how they can‘t connect these dots. 

PAPANTONIO:  Ed, all they have to do is read the 45-page complaint that was filed by shareholders.  Rupert Murdoch‘s own shareholders are suing him because they‘re afraid of the corrupt practices that he is engaged in.  They‘re afraid it‘s costing their corporation money. 

This is a corporation that in the last ten years has a negative 11 percent loss to shareholders.  And shareholders are mad as hell about it.  They sued Rupert Murdoch.  They said he needs to get out of the corporation because he runs this corporation like it‘s his private club, instead of a business. 

SCHULTZ:  If he‘s out, what does that do to Fox News, in your opinion? 

PAPANTONIO:  I think at this point, Fox News, if you follow the way Fox News handles this, they think they‘re above this fight.  You can‘t—all day today and tomorrow, you won‘t find Fox News mentioning a word about this story because they know where it goes. 

But I got to tell you something.  Right now on the Internet people are asking real questions, like how far does this go?  What did Rupert Murdoch know?  Was this more than just trying to shake down politicians by tapping their phones. 

This is an ugly story.  I got to tell you something, Ed, this is the best day Rupert Murdoch will have as this story goes forward.  This is as good as it‘s going to get for Rupert Murdoch.  You know what, when you live in a glass house and you throw rocks at your enemies for decades, you can expect a damn rock shower to come back at you. 

That‘s what Rupert Murdoch is getting ready to experience. 

SCHULTZ:  Mike Papantonio, always a pleasure.  Good to have you on with us tonight.

Congresswoman Marcia Blackburn hates the new light bulb efficiency standards and she see thinks they‘re a great metaphor for the Obama administration.  The problem is Bush is the one who signed those standards into law.  Psycho Talk is next.

And ahead, no joy for the Junkerman campaign tonight.  The Associated Press has called four of the six Democratic primaries in favor of the real Democratic candidates in the Wisconsin primary.  Latest results coming up.  Stay with us.

(COMMERCIAL BREAK)

SCHULTZ:  Breaking news out of Wisconsin.  Major breaking news here, all real Democrats have defeated their fake Democratic opponents.  And most of them have won by wide margins.  Fake Democrat Otto Junkerman has been defeated by more than 30 points.  More on this story in just a few moments.

And up next, a major Republican setback in the war on light bulbs. 

(COMMERCIAL BREAK)

SCHULTZ:  In Psycho Talk tonight, I want to tell you about a psycho vote that took place in the House today.  Republicans, led by Joe Barton of Texas, think that the biggest threat to America right now is this right here.  It‘s the light bulb. 

You got to watch out for this sucker.  You see, Republicans haven‘t done squat about jobs.  But light bulbs, let me tell you, they‘re a priority.  Smoky Joe tried to repeal the light bulb efficiency standards established in the 2007 law. 

Barton‘s bill failed, but not before Steve Doocey and team got together with Congresswoman Marcia Blackburn to lobby for votes. 

(BEGIN VIDEO CLIP)

STEVE DOOCEY, FOX NEWS ANCHOR:  Will it be lights out for the incandescent light bulb, replaced by that thing right there, the pig tail, as we call it in my house?  Today, the House is set to vote on repealing the ban which forces Americans to buy the more expensive energy efficient bulbs. 

We don‘t need the light bulb police. 

REP. MARCIA BLACKBURN ®, TENNESSEE:  People just feel this is a great metaphor for all the big government overreach.  These bulbs are dangerous.  They‘re filled with mercury.  They don‘t work. 

Like the Obama administration, they‘re too expensive to afford. 

(END VIDEO CLIP)

SCHULTZ:  Really?  The problem with Blackburn‘s great metaphor is the Republican congresswoman wrote the law and w signed it.  So as for all the hollering about how expensive the pigtail bulbs are, I have a quick math lesson for Doocey and Blackburn, the congresswoman from Tennessee. 

Don‘t worry.  It‘s a very easy one.  We won‘t stump you.  I‘ll even use Fox numbers that they put up yesterday.  A regular incandescent light bulb costs 60 cents.  The pigtails runs 3.40.  But the pigtail lasts up to ten times as long as the old kind. 

So here‘s where the math comes in.  At 60 cents a pop, you could spend six bucks on 10 of these babies.  That‘s right.  Or 3.40 on this one, the old pigtail kind that‘s going to take over America. 

Plus, you are saving more money on your electric bill because the pigtail bulbs like this, they use less energy.  For Steve Doocey and Marcia Blackburn of Tennessee to be completely in the dark about the issue is twisted Psycho Talk. 

The latest election results out of Wisconsin, all fakers are out.  They‘ve been defeated.  What does this mean for Governor Scott Walker‘s union busting agenda?  Well, we‘ll visit with John Nichols.  He has the story next.

(COMMERCIAL BREAK)

SCHULTZ:  Welcome back.  Finally tonight, I‘ve been saying for months, it‘s all about Wisconsin when it comes to workers‘ rights.  The results are in.  A real primary of fake candidates took place tonight.  At stake, the balance of the state senate and an opportunity to talk on Scott Walker‘s union busting agenda. 

This was a big hurdle for the Democrats tonight.  Six Republican state senators are facing recall elections.  Today, their Democratic challengers in districts all across the state were forced into primaries after Republicans went out and recruited to challenge those Democrats. 

It‘s part of the GOP strategy to sabotage the recall effort, to deplete their resources and give them more time to organize.  Now the Republicans have claimed all along that their anti-worker legislation was all about the budget and fiscal responsibility. 

But this latest move is costing the taxpayers 50,000 dollars per primary.  Republicans also tried to use last minute voter suppression tactics today.  One right wing group sending out robocalls earlier telling registered Democrats not to vote today, because the absentee ballot is in the mail. 

The general election is set for next month.  We‘ll be there to cover it.  Democrats need to win three seats to take control of the state senate and roll back the anti-worker agenda that has been put out by the Republicans in Wisconsin, headed up by Governor Scott Walker. 

Joining us tonight from Madison, Wisconsin is Washington correspondent for “The Nation” magazine, John Nichols.  John, what‘s your take on the results tonight?  This has to be viewed as a big night for the Democrats. 

JOHN NICHOLS, “THE NATION”:  This is a very big deal, Ed.  The Republicans recruited fake candidates.  And then they said, we‘re not going to campaign.  We just wanted to put them on the ballot to delay things.  In the last 36 hours before the elections, they spent thousands of dollars on robocalls, e-mails, placing signs around polling places and aggressive campaigning. 

You effectively saw the Democratic and the Republican operations in play in these primaries.  The results tell the story.  The Democratic candidates won as much as 70 percent of the vote.  Many of them winning in the 60s as well.  This was a very, very good night for Democrats and a real signal that they appear to be ready for those August elections. 

SCHULTZ:  What kind of turnout did you see in Wisconsin today?  And what does this mean for the general election in August? 

NICHOLS:  The turnout was much higher than many people expected.  We‘ve never had elections in July in Wisconsin.  It‘s never happened like this before.  So people didn‘t know what to expect. 

But in all of these districts, you had tens of thousands of people coming to vote.  There were lines at some polling places.  We don‘t know the exact percentage of turnout yet.  But it was a good, solid one.  In some of the districts very substantial . 

It does suggest that the excitement about this fight, this battle over Scott Walker‘s agenda, is still very much in play across Wisconsin. 

SCHULTZ:  How resourceful are the Democrats going into the August election, August 9th, which we‘re going to be there to cover it?  Did this deplete resources, in your opinion? 

NICHOLS:  It did.  Look, money had to be spent, and especially at the end, the Democrats really had to scramble to make sure they didn‘t have one of these fake Democrats come through. 

But I think these primaries turned out to be the good.  Former Attorney Peg Lautenschlogger (ph), a Democrat, said to me tonight that the Republicans tried a stealth game.  They tried to put everything they had in play.

But at the end of the night, all of the real Democrats, the real Democrats, came out as winners.  And that‘s the headline for tomorrow.  It‘s not bad news. 

SCHULTZ:  John, knowing these results, do you believe that the Republicans will lose control of the Senate in a month? 

NICHOLS:  I think it‘s going to be one of the fights of the century, Ed.  And I happen to believe that these results signal—because of these 65, 70 percent wins by the real Democrats—that there‘s a genuine possibility that control of the state senate in Wisconsin will flip, and that this state will again see checks and balances on an extreme Republican governor. 

SCHULTZ:  Quickly, next week, three Democratic state senators face elections.  Two are in primaries.  One, State Senator Dave Hansen, faces a general election.  What do you expect out of that? 

NICHOLS:  I think Dave Hansen will win his race.  He has a very weak Republican running against him.  Then in those two primaries, those will just be Republican primaries. 

I think it‘s going to be—I think the Democrats are going to post their first win next week. 

SCHULTZ:  All right.  We‘ll see you in Madison on August 9th.  John Nichols of “the Nation,” great to have you with us tonight.

Tonight in our survey, I asked, should President Obama accept Mitch McConnell‘s cave in on the debt ceiling?  Thirty three percent of you said yes; 67 percent of you said no. 

That‘s THE ED SHOW.  I‘m Ed Schultz.

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