updated 7/26/2011 11:50:02 AM ET 2011-07-26T15:50:02

Guests: Sen. Bernie Sanders, Rep. Steve Israel, Rep. Keith Ellison, Robert
Reich, Joan Walsh, Michael Eric Dyson, Virg Bernero

ED SCHULTZ, HOST: Good evening, Americans. And welcome to THE ED SHOW tonight from New York.
The president of the United States took his appeal for common sense debt reduction to the American people this evening. He talked about compromise and a balanced approach.
House Speaker John Boehner—well, he came out and tried to blame the crisis on the president. It‘s all Obama‘s fault. He barely talked about compromise or raising taxes or fairness.
We got a lot of work to do tonight. This is THE ED SHOW. Let‘s do it.
(BEGIN VIDEOTAPE)
(MUSIC)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is no way to run the greatest country on earth. It‘s a dangerous game that we‘ve never played before. And we can‘t afford to play it now.
SCHULTZ (voice-over): Eight days before the economic disaster, the president addresses the nation on the debt crisis.
Tonight, reaction from Senator Bernie Sanders of Vermont, Congressman Steve Israel of the DCCC, Congressman Keith Ellison of the Progressive Caucus.
Analysis of the Republican response with Joan Walsh and Michael Eric Dyson.
The hidden damage of the Boehner bill with former Labor Secretary Robert Reich.
And we‘ll go outside the Beltway for reaction from America‘s mayor,
Virg Bernero
OBAMA: If you want a balanced approach to reducing the deficit, let your member of Congress know. If you believe we can with solve this problem through compromise, send that message.
(END VIDEOTAPE)
SCHULTZ: Great to have you with us tonight, folks. This is THE ED SHOW on MSNBC.
It‘s just eight days and two hours from right now the United States government will default and Washington pretty much is grasping at straws a this the hour, trying to stop all of this.
President Obama doesn‘t want this to happen. No president would want this to happen on his or her watch. So, he took the case, as he said he would, to the American people from the East Room of the White House.
And just over an hour ago, the president made it very clear that he is not on board with Speaker Boehner‘s plan.
(BEGIN VIDEO CLIP)
OBAMA: Defaulting on our obligations is a reckless and irresponsible outcome to this debate. And Republican leaders say that they agree that we must avoid default. But the new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts would force us to once again face the threat of default just six months from now. In other words, it doesn‘t solve the problem.
First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result. We know what we have to do to reduce our deficits. There‘s no point in putting the economy at risk by kicking the can further down the road.
But there‘s an even greater danger to this approach. Based on what we‘ve seen these past few weeks, we know what to expect six months from now. The House of Representatives will once again refuse to prevent default unless the rest of us accept their cuts-only approach.
Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions. Again, they will demand harsh cuts to programs like Medicare. And once again, the economy will be held captive unless they get their way.
This is no way to run the greatest country on Earth. It‘s a dangerous game that we‘ve never played before and we can‘t afford to play it now. Not when the jobs and livelihoods of so many families are at stake.
We can‘t allow the American people to become collateral damage to Washington‘s political warfare.
(END VIDEO CLIP)
SCHULTZ: And the president went on to say that, yes, he could back Harry Reid‘s plan in the Senate.
(BEGIN VIDEO CLIP)
OBAMA: And Congress now has one week left to act and there are still paths forward. The Senate has introduced a plan to avoid default which makes a down payment on deficit reduction and ensures that we don‘t have to go through this again in six months. I think that‘s a much better approach, although serious deficit reduction would still require us to tackle the tough challenges of entitlement and tax reform.
Either way, I‘ve told leaders of both parties that they must come up with a fair compromise in the next few days that can pass both Houses of Congress, and a compromise that I can sign.
I‘m confident that we can reach this compromise.
Despite our disagreements, Republican leaders and I have found common ground before. And I believe that enough members of both parties will ultimately put politics aside and help us make progress.
(END VIDEO CLIP)
SCHULTZ: And putting it in a historical perspective, the president also had a message for the Tea Party tonight.
(BEGIN VIDEO CLIP)
OBAMA: I realize that a lot of the new members of Congress and I don‘t see eye to eye on many issues. But we were each elected by some of the same Americans for some of the same reasons. Yes, many want government to start living with within its means. And many are fed up with a system in which the deck seems stacked against middle class Americans in favor of the wealthiest few.
But do you know what people are fed up with most of all? They‘re fed up with a town where compromise has become a dirty word. They work all day long, many of them scraping by, just to put food on the table.
And when these Americans come home at night, bone tired and turn on the news, all they see is the same partisan three-ring circus here in Washington. They see leaders who can‘t seem to come together and do what it takes to make life just a little bit better for ordinary Americans. They‘re offended by that. And they should be.
The American people may have voted for divided government, but they didn‘t vote for a dysfunctional government.
So I‘m asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your member of Congress know. If you believe we can solve this problem through compromise, send that message.
(END VIDEO CLIP)
SCHULTZ: The president asking the American people to engage. I guess we‘ve all got work to do. We have to speak up.
John Boehner, speaker of the House, got airtime to blast the Reid plan immediately after the president addressed the nation.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: This debate isn‘t about President Obama and the House Republicans. It isn‘t about Congress and the White House. It‘s about what‘s standing between the American people and the future we seek for ourselves and our families.
You know, I‘ve always believed the bigger the government, the smaller the people. And right now, we‘ve got a government so big and so expensive that it‘s sapping the drive out of our people and keeping our economy from running at full capacity.
The solution to this crisis is not complicated. If you‘re spending more money than you‘re taking in, you need to spend less of it.
(END VIDEO CLIP)(
SCHULTZ: It is so elementary and so simple for the Republicans, isn‘t it? Boehner‘s two-step approach is nothing but a joke. For Republicans, it all starts and ends with defeating President Obama and seeing him fail.
Just take a look at the title of Boehner‘s plan, “Two-Step Approach to Hold President Obama Accountable”? President Obama accountable? Did he inherit this?
Hold it there for just a moment. Boehner isn‘t trying to solve the debt crisis. This is all about making President Obama fail.
Let‘s dive into Boehner‘s two-step plan. Here‘s number one. Cuts that exceed the debt hike. Number two, caps to control future spending.
Now, those two steps seem pretty reasonable. The problem? Boehner‘s two-step plan, you see, really has three more steps to it.
Number three, a balanced budget amendment. Now, let‘s talk about that for just a moment. Where was all this talk about a balanced budget amendment when we were in two wars and off the budget? In fact, Dick Cheney said that deficits didn‘t matter.
That failed in the Senate. The balanced budget amendment failed in the Senate last week.
So, let‘s now go to number four. Entitlement reforms and savings—savings out of whose pocket? In other words, cuts to the big three.
And number five, of course, is the big one for Republicans: no tax hikes.
Boehner‘s plan is nothing but cut, cap, and balance, wrapped in a brand-new package and trying to be sold to the American people tonight. If you look at it side-by-side comparison, the two plans, Boehner is a fool not to take Reid‘s package.
Boehner‘s plan has $1.3 in cuts. Reid more than doubles the number with $2.7 trillion in cuts. So, who‘s the honest player here?
Boehner has two debt limit votes and Reid has one. Let‘s get it done.
Reid‘s plan also has deep cuts to the Pentagon budget, and it assumes that the wars are going to eventually end in Iraq and Afghanistan on a date, right?
Now, Boehner‘s problem with the Reid plan is that it takes the big three right off the table. And of course, the real Republican two-step is to kill the new deal and defeat President Obama and create more opportunities for more tax breaks at the top. Neither one of these plans tonight—it must be pointed out that this is somewhat of a capitulation on the parts of the liberals and the Democrats—neither one of these plans has a tax increase. So that is a victory in itself for the Republicans, isn‘t it?
Get your cell phones out. I want to know what you think. Tonight‘s question: what do Republicans really want—debt reduction or failure of President Obama? Text A for debt reduction, text B for failure of President Obama to 662639, and you can always go to our blog at Ed.MSNBC.com. We‘ll bring you the results later on in the program.
I thought tonight John Boehner looked like a schoolyard bully who wanted it his way and no other way. And I found it interesting that he talked about his experience as a small business owner? Really?
Mr. Boehner, come on back to the camera. Come on back to the camera and tell us what the Republican Party has done for small business since Barack Obama‘s been in the Oval Office.
You haven‘t done a damn thing. You have done nothing but obstruct everything this president has put on the table and been against everything this president has put on the table for small businesses.
And, of course, the Republicans say that they are the party of small business.
What about these taxes now? Mr. Boehner didn‘t mention anything about sacrifice tonight. He didn‘t talk about the middle class, he didn‘t talk about wage earners, he didn‘t talk about outsourcing, which really is also a big problem in our economy.
So, to me, the schoolyard bully tonight, he just passed the buck and went after President Obama, tried to put it on the shoulders of the president saying that, hey, we‘re accusing the president, you know? He‘s the one that‘s creating this crisis?
Joining me tonight is Senator Bernie Sanders of Vermont.
Senator, great to have you with us tonight. What did you think of the president‘s speech?
SEN. BERNIE SANDERS (I), VERMONT: I thought it was a good speech.
Probably should have been given six or seven months ago.
I think, Ed, the plan of the Republicans is pretty clear. What they want to do is everything they can to protect the wealthiest people in this country who are doing phenomenally well, whose tax rates are the lowest on record.
They want to protect corporate America. We have companies making billions of dollars in profits and not paying a nickel in taxes.
And then what they want to do in a variety of ways is not only slash discretionary spending on education, on health care, on environmental protection, on nutrition—their plan is to go after, as you referred, the big three. They want to decimate Social Security, Medicare, and Medicaid. That is their long-term plan of action.
SCHULTZ: Yes.
SANDERS: But as you also indicated, let‘s be very clear. The Democrats have compromised and compromised and compromised.
The Reid proposal calls for $2.7 trillion in cuts, a lot of it military, but not all of it. And you know how much we‘re asking from the wealthiest people and largest corporations? Zero. Zero.
SCHULTZ: Well, I found it interesting tonight—you just said that the Democrats have compromised. The president seemed to be an honest broker tonight. He‘s willing to serve some pretty tough cuts, support the Reid plan, which is $2.7 trillion. It‘s not the $4 trillion the president was talking about.
But in a reversal politically in all of this, what did you make of Boehner accusing the president of wanting a blank check? Where does that come from?
SANDERS: That comes from a good speechwriter.
The reality is, the president has been to my mind much too aggressive in talking about cuts. Let‘s be clear. There are millions of progressive who extremely upset that this president has begun to talk about major cuts in Social Security, cuts in Medicare, and hundreds of billions of dollars of cuts in Medicaid.
SCHULTZ: But the Reid plan tonight, Senator, the Reid plan tonight has the big three off the table.
SANDERS: That‘s right.
SCHULTZ: So, I think progressive voices in this country are being heard by the White House, and also by the Senate.
Does this have a chance of passing?
SANDERS: Ed, yes and no. You are right. The big three are not in the Reid proposal. But you know what is in the Reid proposal? A commission made up of 12 people, six Democrats, six Republicans. And within that commission, what could happen, what could happen is Social Security, Medicare, and Medicaid could be impacted.
The point is, our position, which says that the wealthy and large corporations have got to contribute to deficit reduction is what the overwhelming majority of the American people want. And what we have got to do and should have done six months ago is rally those people, put the Republicans on the defensive, and say you‘re not going to decimate programs for working families, for the kids and the sick and elderly, and give tax breaks to billionaires.
SCHULTZ: Senator, great to have you with us. Thanks so much.
Now, let‘s turn now to Congressman Steve Israel, chairman of the Democratic Congressional Campaign Committee.
Congressman, good to have you with us tonight.
I thought John Boehner was very partisan, played the blame game—but let‘s go to the Reid plan. Do you think that has a chance and would you go along with the Reid plan, what you know of it?
REP. STEVE ISRAEL (D), NEW YORK: Well, I would support the Reid plan. But I‘ll tell you, I‘m skeptical. Look, John Boehner tonight, before he even presented his plan to his own Republican caucus called Rush Limbaugh to get Rush Limbaugh‘s seal of approval for John Boehner‘s plan.
So, how do you negotiate with a group of people when they believe that it is Rush Limbaugh who should decide the future of this country? How do you negotiate with a group of people who have closed the door, moved the goalpost, thrown these temper tantrums. This is just reckless endangerment of our economy and it is time for these Republicans to put the politics aside, stop the partisanship, come to the table, and do what is right for the middle class and this economy.
SCHULTZ: What do you think John Boehner meant about the comment about a blank check?
ISRAEL: Look, frankly, he has no credibility. This is a guy who has walked away from negotiations, thrown temper tantrums, gotten us close to a deal and then said there was no deal. I‘m not really interested in what John Boehner has to say. I‘m interested in what the middle class of America has to say.
I‘m interested in—
SCHULTZ: Well, he‘s trying—Congressman, he‘s trying to paint the picture to the middle class Americans that it‘s President Obama who has created this, quote, “crisis atmosphere.” What about that?
ISRAEL: Ed, you know what, the American people—you cannot fool all of the people, all of the time. That may be what the Republicans believe, but it cannot be done.
Look, I think the president did a good job tonight of really explaining the basic difference between Republicans and Democrats.
SCHULTZ: Yes.
ISRAEL: What the Republicans are saying, Ed, in their plan is this:
if you are one of my constituents on Long Island, we want to reduce the deficit, but we want to do it on your backs. We want to fire your teachers, raise your local taxes, make it your expensive for you to send your kids to college, all in the pursuit of protecting corporate tax loopholes.
And that is not a common sense prescription for our economy, it accelerates the erosion of the middle class, and that‘s why 71 percent of Americans agree with Democrats and disagree with Republicans.
SCHULTZ: So do you think we‘re any closer—is Washington any closer to an agreement tonight after these two gentlemen spoke to the country?
ISRAEL: Quite honestly, although I don‘t find the Reid plan to be perfect, and it is because you have a Republican majority in the House of Representatives, it is probably the best we can get for the time being. We can solve this problem, we can agree to the Reid plan, we can form this commission, we can increase the debt ceiling—as we did seven times in the Bush administration, and then get to the more fundamental issues challenging our economy.
SCHULTZ: Congressman, great to have you with us tonight. Appreciate your time.
ISRAEL: Thanks, Ed.
SCHULTZ: Steve Israel with us here on THE ED SHIOW.
Remember to answer tonight‘s question there on the bottom of the screen. I want to know what you think.
We‘ll have much more on the president‘s speech coming up, including the Progressive Caucus response from Congressman Keith Ellison and Joan Walsh and Michael Eric Dyson are here tonight, will join us to discuss the bumpy road any debt ceiling legislation faces. That‘s all coming up. Stay with us.
(COMMERCIAL BREAK)
SCHULTZ: Coming up: progressives have often been stunned by some of the concession offered by President Obama over the past week, especially. Those concessions may be off the table for now, but don‘t bet on it. Congressman Keith Ellison, co-chair of the Congressional Progressive Caucus gives his take, next.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIPS)
OBAMA: The American people may have voted for divided government, but they didn‘t vote for a dysfunctional government. So, I‘m asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your member of Congress know.
BOEHNER: I want you to know I made a sincere effort to work with the president, to identify a path forward that would implement the principals of cut, cap, and balance. And I‘ll tell you, I gave it my all.
Unfortunately, the president would not take yes for an answer.
(END VIDEO CLIPS)
SCHULTZ: He gave it his all. And then he comes out to the American people and says that President Obama wants a blank check. You don‘t even have to follow politics to see what‘s happening here.
A blank check? The president of the United States wanted the big plan, $4.7 trillion. He was ready to put the big three on the table—and the Republicans walked from it.
Good to have you back with us tonight here on THE ED SHOW.
President Obama and Speaker Boehner presented two dramatically opposed can accounts of this crisis. And it seems to me that one of those two leaders came far closer to the truth and far closer to a sincere explanation of just how this mess came about.
Now, they‘re at a stalemate. With the Boehner plan out there and the Reid plan out there and no certainty that either plan could pass both Houses of the Congress—this stalemate could be quite a while.
Let‘s bring in Democratic Congressman Keith Ellison of Minnesota and also the co-chair of the Progressive Caucus.
Congressman, good to have you with us tonight.
REP. KEITH ELLISON (D), MINNESOTA: Good to be here, Ed.
SCHULTZ: The president—did he do anything that you wanted him to do tonight? Or did he do anything that you didn‘t want him to do?
ELLISON: I thought the president did a good job in laying out what the contrast was. The president talked about what we care about in the Progressive Caucus, which is working Americans—people who work hard every day to put food on the table. He showed empathy for them, which is what I think is important to do right now.
John Boehner, on the other hand, seemed to be on some other world. I mean, he‘s talking about a blank check. He‘s trying to blame President Obama, saying he won‘t take yes for an answer. He‘s trying to foist blame on President Obama, who has bent over backwards to try to work with them.
I found his remarks rather shocking.
SCHULTZ: So, does the Reid plan, in your opinion, have a chance with the Progressive Caucus? Because all along, the liberals in the Congress, and you‘re the co-chair of the Progressive Caucus, have said, the big three, off the table. The Reid plan gives you that nugget that you‘ve been trying to protect all along.
Where does that leave you tonight?
ELLISON: Well, it certainly does give us a chance. We do believe it has our basic requirement, which is to protect Social Security, Medicare, and Medicaid. Of course, it does lean heavily on defense cuts, which is a good thing.
But we still want to parse through it to make sure we know what we‘re getting in for. We know there were going to be some cuts, we are realistic, we are here to work constructively, but it does meet our basic requirements.
But what our position was that we won‘t vote for anything that does undermine Social Security, Medicare, and Medicaid, but we didn‘t say we‘d automatically vote for anything that didn‘t. So, we got to look at it, but it looks promising, but we‘re not ready to bite just yet. We‘re still reviewing the Reid plan. But it is within the eligible range of things we would consider.
SCHULTZ: Is there anything that Boehner put out in his plan that you could embrace? Would it have a chance with Democrats?
ELLISON: I don‘t see anything—I mean, as a matter of fact—I mean, the Boehner plan is absolutely ridiculous. It would probably result in a downgrade of our credit rating, even if it did pass, because the credit rating agencies aren‘t satisfied with just some short-term six-month plan. They want to see this thing solved for some reasonably reliable period of time.
So, I think the Boehner plan is DOA and doesn‘t make any sense.
SCHULTZ: How does it sit with you that there are no tax increases in either one of these plans? That there‘s no new revenue that‘s going to be coming in the door and that there‘s a chunk of change that‘s going to be cut?
ELLISON: Disgusting. I mean, I think that‘s a very unfortunate feature of the Reid plan. I mean, at least, you know, the fact is, we do recognize—we are realistic.
But the fact is, we have always believed, Progressive Caucus has always believed that the way we get out of this crisis is that we get more people back to work. We put American infrastructure, American manufacturing, we get Americans building bridges, roads, light rail, all these things that need to be done, all across America, and that is the way we get ourselves out of this deficit situation, is we put Americans back to work.
SCHULZ: Well, for the Reid plan, that really is the devil in the details. How far does $2.7 trillion go and how would that affect job creation? Because that has been the real problem right now.
ELLISON: That‘s the question. I mean, that‘s why when you ask me, are we ready to sign up for it, I say, we‘ll see. It meets our basic criteria, but it doesn‘t necessarily mean that it‘s what with we think is need to build this economy.
We‘re going to look at it. But job creation and infrastructure and investment is what is needed to get America back on track right now.
SCHULTZ: Congressman, good to have you with us tonight. Thanks so much.
ELLISON: Thank you.
SCHULTZ: So there‘s some light at the end of the tunnel at the Progressive Caucus.
While Congress bickers over spending can cuts, no one in Washington has anytime to address the real crisis of America job loss. Former Labor Secretary Robert Reich joins me next.
And later, what are the GOP presidential hopefuls saying about tonight‘s speech? We‘ve got their reactions.
You‘re watching THE ED SHOW on MSNBC. I‘ve got more commentary.
Stay with us.
(COMMERCIAL BREAK)
SCHULTZ: Thanks for being with us tonight.
You know, it takes big ideas to get this country back on the right track in times of great economic turmoil. One of the most ambitious plans of the New Deal was the Works Project Administration, which spent more than 13 billion dollars on public projects, and provided jobs to millions of Americans for eight years. The WPA helped get us out of the Great Depression.
Couldn‘t we take a page out of that? Right now, we have 9.2% unemployment, declining wages—and the unemployment is much higher than that—and stagnant home values. We need government spending to help boost the economy, the same way it did during World War II afterwards.
All right? So instead, we have two political parties fighting over who can cut more spending from the budget, and put the country‘s financial future at risk. That‘s where we are.
Oh, by the way, the president asked the American people to engage tonight. There are reports, “Huffington Post” saying, that the House servers, they‘re crashing. Congressional websites are crashing tonight, they‘re getting hit so hard by the American people.
I thought tonight was a great night for America. You got the president out there and the speaker. Can‘t we do this every night? I mean, I love the debate. In fact, I think round two should be President Obama and Speaker Boehner going at it on live TV.
Hell, let‘s just negotiate out in public. Joining me tonight is former Labor Secretary Robert Reich. He‘s also professor of public policy at the University of California at Berkeley, and the author of “Aftershock: the Next Economy and America‘s Future.”
I hope we have a future. They can‘t decide anything in Washington.
Mr. Reich, good to have you with us tonight.
ROBERT REICH, FMR. LABOR SECRETARY: Well, good evening.
SCHULTZ: You know, both of these plans, if you take that kind of money out of the economy, what‘s the affect going to be, in your opinion?
REICH: If you take the money out of the economy, there is less money for people to spend and that means fewer jobs. I mean, one thing that is not being said—there is a big lie being perpetrated by Republicans, and it transcends this entire deficit/debt issue.
And the lie is that if the government reduces its spending, somehow we create more jobs. That is exactly the reverse of reality, Ed. The reality is, because of Medicaid and Medicare and Social Security payments, people have more money to spend. Because of roads and bridges and light rail and education and basic resources, people have jobs.
The whole notion that the budget deficit is the biggest enemy we face in this country is wrong. The biggest enemy is joblessness, unemployment and low wages. That‘s the thing that‘s haunting this American economy.
SCHULTZ: So Mr. Reich, are you telling us tonight that if either one of these plans were accepted, we are going to have some tough economic issues. It could even get worse than it was before?
REICH: Well, it certainly—if we start cutting the budget deficit
right now, Ed, it is going to get worse. Unless we are talking about
raising taxes on people only at the very top. And people at the very top -
let‘s face it, being rich means you have everything you need. You‘re not going to spend very much.

In fact, being rich means you don‘t really have to spend very much at all. Everybody else—you know, you want to hire people now. You said the WPA, the CCC, Civilian Conservation Corps. We need to create jobs now.
SCHULTZ: So the Democrats, if they were to get the Reid plan, they would protect the big three, which is big for the base, big for people on fixed incomes. And it would not increase revenue. And it would cut what you‘re talking about, the possibility of job creation, because we‘d be taking too much out of the economy.
So how could this be viewed as a win for the president?
REICH: I don‘t think it would be a win. It‘s a win only relative to what the Republicans are proposing. But if you save Social Security and Medicare and Medicaid, that‘s great. But if you take 2.7 trillion dollars out of the economy, and if you do it soon, unfortunately, then you‘re going to have a tremendous problem.
If you don‘t raise taxes on the rich, where are those cuts going too to come from? They‘re going to come from education, from infrastructure, from basic R&D, from all of the things that you need to grow the economy and create jobs.
SCHULTZ: And of course, if we go back to the old tax rates, before the Bush tax cuts, we would be looking at four trillion dollars into the Treasury over the next decade. Is that correct?
REICH: Of course we would. Look, I was very proud. I was a member of the Clinton administration. We ended the Clinton administration with 22 million net new jobs and a five trillion dollar surplus.
SCHULTZ: Mr. Reich, great to have you with us tonight. Always look forward to your take. Thanks so much. Robert Reich, former Labor Secretary here on THE ED SHOW. Speaker Boehner‘s tough guy act isn‘t fooling anybody. His bogus two step plan doesn‘t even have the support of House conservatives. But as the debt clock is ticking, the tan man seems to be in denial.
And what does this all mean for the folks like you sitting at home? I‘ll talk to America‘s mayor, Virg Bernero, of Lansing, Michigan. Fly over country checks in to THE ED SHOW. Stay with us.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: Raising the debt ceiling does not allow Congress to spend more money. It simply gives our country the ability to pay the bills that Congress has already racked up. In the past, raising the debt ceiling was routine.
Since the 1950s, Congress has always passed it. And every president has signed it. President Reagan did it 18 times. George W. Bush did it 7 times. And we have to do it by next Tuesday, August 2nd, or else we won‘t be able to pay all of our bills.
(END VIDEO CLIP)
SCHULTZ: President Obama‘s mention of Ronald Reagan‘s debt ceiling record points out just how extreme republicans are today. Boehner‘s bogus two-step plan isn‘t even radical enough for some of these guys. Several conservatives have already said that they won‘t vote for it, including the head of the Republican Study Committee, Jim Jordan, who released the following statement today, “I cannot support the plan that was presented to House Republicans this afternoon. Only a balanced budget amendment will actually solve our debt problems. The Senate should resume debate on cut, cap, and balance act, amend it, if necessary, and pass it, so we can provide the American people a real solution.”
But the tan man seems to be in denial about the Republican dissent.
(BEGIN VIDEO CLIP)
BOEHNER: You see, there‘s no stalemate here in Congress. The House a bill to raise the debt limit with bipartisan support. This week, while the Senate is struggling to pass a bill filled with phony accounting and Washington gimmicks, we‘re going to pass another bill, one that was developed with the support of the bipartisan leadership of the U.S. Senate.
(END VIDEO CLIP)
SCHULTZ: Let‘s bring in Joan Walsh, editor at large, Salon.com. Also joining us tonight, Michael Eric Dyson, professor of sociology at Georgetown University, and author of “Can You Hear Me Now, the Inspiration, Wisdom and Insight of Michael Eric Dyson.”
Great to have both of you with us tonight. Joan Walsh, what does it say about Speaker Boehner when he gives Rush Limbaugh a call before he checks in with the real boss, I guess, of the party, before he goes further? What does that tell you?
JOAN WALSH, SALON.COM: Yes, he checked in with the real boss. You know, you caught me. I think the camera came to me in mid—open mouth, shaking my head, listening to that quote again. You know, we just have to talk about the utter mendacity of John Boehner tonight.
I‘m sorry, Ed. This man, for better or worse, has been negotiating with this president. On Friday, they got within 400 billion dollars of a deal. Sounds like a lot of money, but when you‘re talking about four trillion, it‘s not really that much.
They were close. He had to walk away. So what did he do? Did he come back today and say, hey, we were this close and here‘s some ideas to close the deal?
No, he went full-tilt, Tea Party crazy. And I just want to make it clear for the three of us and for our audience, we‘ve been talking about this for months now. And they have just introduced this idea of a balanced budget amendment, which is one of the most divisive ideas in America politics? Now?
Each time they get closer to a deal, there‘s a new, outrageous thing? This is mendacity. This is bad faith. And we just can‘t say enough about it.
SCHULTZ: Bad faith, underscored. No doubt about it. I agree with you, Joan. Michael Eric Dyson, you made a comment last week about President Obama and how they want to see him fail. My commentary tonight at the top of the show was, it starts and it ends with President Obama‘s failure. And quoting the number that Joan just pointed out, and also listening to Boehner tonight, saying that the president wants a blank check, there are no honest brokers in Washington on the Republican side.
How does this play out? And it is all about President Obama‘s failure.
MICHAEL ERIC DYSON, GEORGETOWN UNIVERSITY: It absolutely is. And Joan Walsh is absolutely right. Mendacity, emphasis on “men,” lacking audacity and engaging in lies and engaging in obfuscation and engaging in outright just repudiation of the truth.
Listen to what the president said. This has been a routine thing. People have done this since the ‘50s, 18 times under Reagan, 17 times under George Bush, 70 times since the ‘60s. And here we are now trying to stalemate President Obama and refuse to give him the victory, even with the Reid plan.
Even with Obama coming to the table, sacrificing things that many of us think are going way too far, he has struck the right note. We are willing to compromise, because the American people are hanging in the balance. And Ed, God forbid, we haven‘t even spoken about the poor people.
We‘ve talked about the middle class. What about poor people?
SCHULTZ: I was going to ask you about that. This is quite a financial haircut. This is going to hurt a lot of people. How will it affect minorities?
DYSON: I mean, minorities will be hurt. Working class people will be hurt. Middle class people will be hurt. And those at the bottom, whose boats are stuck at the bottom, who when the rising tide lifts will leave them behind, because they will have bailed out already, because there‘s so many holes in their crafts—economically, we‘re talking about no new tax revenue coming in here.
We‘re talking about spending cuts that are atrocious, in terms of their reduction of attention to the poor. And the Republicans still can‘t get on board.
SCHULTZ: Well, on paper, the Democrats are willing to give the Republicans exactly what they want, no tax increases. There‘s nothing on paper, that the Republicans are putting on paper, that would give the democrats any wiggle room or anything they want in negotiation.
So I think tonight the president stepped out and asked for the order.
He asked the American people to engage. Joan Walsh, interesting strategy. And the websites are crashing in Washington right now on the congressional websites. Who wins tonight?
WALSH: You know, he wins optics, because he looks like he‘s willing to compromise. But I guess, you know, I‘m going to be a little bit of a problem here, Ed. But, you know, for him to say that the American people are most fed up with the failure to compromise I think is really missing the point. You know, that‘s what—David Brooks is really fed up with the inability to compromise.
Poor people and people who have lost their jobs, that‘s not the number one thing they‘re fed up with. People who have lost their houses, that‘s not the number one thing they‘re fed up with.
So I think the president continues to frame it in a very Republican way. And I‘m not sure he‘s winning. You know, he‘s going to call a deal if we don‘t have a default. He‘s going to say he won, but a lot of people are going to lose if we get the Reid plan.
SCHULTZ: The president tonight said he would embrace the Reid plan, but he didn‘t emphatically play to his base. Michael, what do you make of that? He did not get partisan on this. He talked about acceptable boundaries. What do you think?
DYSON: I think Joan is right. It‘s about the optics. Listen, Obama is assured that his base, even though the progressives are fed up and certainly disenchanted with some of the concessions and capitulations, as you‘ve talked about—what he understands is that they‘re going to stand behind him, because they see how right-wing and what a rightward drift the Republican party has been caught up in.
So what he‘s trying to do here is to appeal to the rest of America, who‘s not yet been persuaded or convinced that this is the unreasonable folly of men who refuse to compromise. It‘s the cons promise. That‘s what‘s going out here and Obama‘s trying to refudiate it.
SCHULTZ: I need someone to explain to me how a 4.7 billion dollar haircut in the budget, proposed by President Obama, is a guy who wants a blank check? I mean, that‘s the one—Joan Walsh, Michael Eric Dyson, thank you so much for joining us tonight.
Coming up, Republican presidential candidates weigh in on the president‘s speech, including Mr. Two Percent, Tim Pawlenty. You‘re watching THE ED SHOW. Commentary coming up. Stay with us.
(COMMERCIAL BREAK)
SCHULTZ: Welcome back to THE ED SHOW and thanks for watching tonight. Well, the responses from the Republican presidential hopefuls, they‘re just trickling in. Rick Santorum kicking off a parade of generic attacks, Tweeting that the president‘s speech was “pathetic.”
Meanwhile, Mr. Two Percent, Tim Pawlenty called the speech “all rhetoric and no results.” What, did you want him to give a solution tonight, Pawlenty? Front-runner Mitt Romney credits Mr. Obama with “a historic failure of leadership.”
Of course, none of these guys offering any kind of solutions on their own. To his credit tonight, President Obama recognized the frustration many folks out there are feeling and encouraged them to do something about it.
(BEGIN VIDEO CLIP)
OBAMA: The American people may have voted for divided government, but they didn‘t vote for a dysfunctional government. So I‘m asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your member of Congress know. If you believe we can solve this problem through compromise, send that message.
(END VIDEO CLIP)
SCHULTZ: Well, it looks like many Americans took the president up on that call to action. Think Progress is reporting that due to a high volume of traffic, the House servers have crashed.
People are angry and they are—have every right to be. >
Up next, I‘ll talk about just how this is affecting middle classers and low-income Americans across this country. America‘s mayor, Virg Bernero, Lansing, Michigan, next. He tells it like it is.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It‘s embarrassing. If we hold ourselves out as a premiere country in the entire world, and we can‘t even manage a budget, which any responsible family does. And here our national government looks like Curley, Mo, and Larry or the Marx Brothers.
UNIDENTIFIED FEMALE: Now‘s a time where people have to check their egos at the door, as people say, and come together, regardless of what party they‘re from, because it‘s got to get done.
(END VIDEO CLIP)
SCHULTZ: So a lot of Americans have had it with what‘s going on in Washington. Tonight, President Obama spoke directly to workers in this country, the middle classers, the folks who just want all this political maneuvering to stop.
(BEGIN VIDEO CLIP)
OBAMA: When these Americans come home at night, bone-tired and turn on the news, all they see is the same partisan three-ring circus here in Washington. They see leaders who can‘t seem to come together and do what it takes to make life just a little bit better for ordinary Americans.
They‘re offended by that. And they should be.
(END VIDEO CLIP)
SCHULTZ: Joining me now is America‘s mayor, from Lansing, Michigan—he‘s America‘s mayor because I said he is. Virg Bernero with us tonight. Virg, great to have you with us.
Your reaction to the president‘s remarks tonight. I mean, did he get closer to the deal in your mind?
MAYOR VIRG BERNERO (D), LANSING, MICHIGAN: Well, look, he gave a compelling, convincing, eloquent speech, no question. And I think he really touched the heart of many Americans. I‘m afraid it fell on deaf elephant ears in the U.S. House, though.
Look, Americans get it. Just like that guy said, you pay your bills. I mean, this is a bunch of utter nonsense. These people are wingnuts to think that they can just ignore the debt that had been racked up by a previous Congress. That would be like me coming in as mayor and saying, I‘m not going to pay the bills that other mayors and other city councils—that‘s my obligation.
The full faith and credit of the people of Lansing, the citizens. And he‘s got the responsibility of the full faith and credit of the United States of America. I think he can go ahead under the 14th Amendment, Ed, and pay the bill.
SCHULTZ: Well, there‘s no conversation about that. The president says he doesn‘t want to go down that route.
BERNERO: Well, he may have to.
SCHULTZ: The Center on Budget Policy Priorities says that Boehner‘s plan could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history. What does that mean to your town? What do these cuts mean if it come downs?
BERNERO: It‘s calamitous. Look, we‘ve already got over 10 percent unemployment in the state of Michigan. People are hurting. The debate in Washington should be about jobs. It should be about investment. And they‘ve been debating about this nonsense, when the American people know that if you use your credit card, you‘ve got to pay the bill.
You want to fight deficit spending? The time to fight it is when you pull out the credit card. The time to fight it is at budget time. After the bills have been racked out, you don‘t say, we‘re not going to pay the bill. Make us a nation of welchers.
It‘s unbelievable that we‘re even having this discussion. It is the height of irresponsibility. Since when is not paying your bills a conservative thing to do? And that‘s what these Tea Partiers are proposing.
SCHULTZ: Your thoughts on the balanced budget amendment. Where does this all come from?
BERNERO: This is, of course, out of right field. It‘s another tactic, Ed. And it‘s a reason why I think that the president ultimately might have to pull out the 14th Amendment, which says, clearly, that the debt of the United States must be recognized, that the validity of the debt will not be questioned.
What the Republicans are trying to do, Ed, is to close the barn door after the horse got out. They‘ve already spent the money.
SCHULTZ: There are no tax increases in either one of these proposals on the table that they‘re talking about right now. That, of course, is what the Republicans have wanted all along.
It offers up some pretty substantial cuts. More so in the Reid plan at 2.7 trillion. How does that navigate for a guy like you who‘s the mayor of a city, trying to make ends meet. You‘re looking at a housing issue. You‘re looking at high unemployment. You‘re having a hard time creating jobs. You‘re like any other mayor in the country. How does this work in flyover country?
BERNERO: Well, Ed, obviously, I mean, I‘m deeply concerned about it. I had to lay off 34 police officers, 11 firefighters. I mean, we are hurting, like cities all over the country. We used to get some officers under the Cops Program from the federal government. All that money is gone. The assistance is gone. Our roads are crumbling.
I mean, I could go on and on. Our schools—
SCHULTZ: So how does this work with no tax increases in either one of these plans? This is a Republican victory?
BERNERO: It‘s disappointing. It‘s disappoint. We are hurting. We are struggling. We‘ve got to start to make some investments in this country.
SCHULTZ: The wealthiest Americans will escape under the Reid plan.
BERNERO: They continue to get a pretty good deal. You know, even I think the president is proposing, just give us Reagan-era taxes. I think today, Ronald Reagan would be a liberal by what these Tea Partiers have put in place. It‘s incredible.
So, again, I think the president may have to stand up and simply raise the debt under the 14th amendment, which I think he has the right to do. And I think he should. And I think he should dare the Republicans in Congress to impeach him for standing up for the full faith and credit of the United States.
Yes, go to court, sue me, impeach me for paying the bills and recognizing the debt that has already been piled up. There is nothing conservative about not paying your bills.
The American people understand, you‘ve got to pay the bill. And the time to take a stand is at budget time. Let‘s have the debate.
SCHULTZ: And Virg, a lot of Republicans are always saying, well, we refer back to the last election. Has there been a sea change since last November?
BERNERO: Absolute—in terms of the people believing that they don‘t care about Social Security, Medicaid, that they don‘t care about the poor, they don‘t care about giving people a hand up, giving people an opportunity? I don‘t believe so. I don‘t believe so.
I think we‘ve got to stand up for investment. We‘ve got to stand up for treating people decent. Do we have to tighten our belts? Absolutely. And we‘ve done that.
SCHULTZ: The Democrats are willing to do that. Virg Bernero, mayor of Lansing, Michigan, good to have you with us tonight. Thanks so much.
Tonight in our survey, I asked what do Republicans really want, debt reduction or failure of President Obama? Three percent of you said debt reduction; 97 percent of you say failure of the president.
That‘s THE ED SHOW. I‘m Ed Schultz. You can listen to my radio show at Sirius XM Channel 127, Monday through Friday, noon to 3:00 pm. Another live edition of “THE LAST WORD” with Lawrence O‘Donnell starts right now.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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