updated 8/2/2011 1:21:41 PM ET 2011-08-02T17:21:41

Guests: Rep. Steny Hoyer, Sen. Bernie Sanders, Rep. Chris Van Hollen, Rep.
Keith Ellison, Robert Reich, Michael Eric Dyson, Rev. Al Sharpton, Scott Paul

ED SCHULTZ, HOST: Good evening, Americans. And welcome to THE ED SHOW tonight from New York.
Breaking news from Capitol Hill: John Boehner has been humiliated by his Tea Party Republican members. And you see that right there? House is in recess. They‘re behind closed doors trying to do a deal. That means Boehner‘s radical plan to solve the debt limit crisis is on hold because he can‘t get the Tea Partiers onboard with this deal.
Tonight, Steny Hoyer is with us, also Chris Van Hollen, Keith Ellison and Senator Bernie Sanders. They are all here with their version on how this is all going down and how it‘s going to get solved.
This is THE ED SHOW. Let‘s get to work.
(BEGIN VIDEOTAPE)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The bill‘s not perfect. I never said it was perfect.
SCHULTZ (voice-over): Even the tan man knows his bill is no good. He was embarrassed by his own caucus tonight. But is Senator Reid‘s plan any better?
Former Labor Secretary Robert Reich knows the answer.
Constitutional scholar Michele Bachmann doesn‘t understand the 14th Amendment.
REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: He would be making spending decisions. He would be making taxing decisions. Clearly, that‘s unconstitutional.
SCHULTZ: We‘ll review the document for her.
And while Republicans hold the economy hostage, nobody‘s thinking about putting Americans back to work. Tonight, my commentary on how Washington and big business need to start hiring.
(END VIDEOTAPE)
SCHULTZ: Good to have you with us tonight, folks. It‘s an unbelievable day of news coming out of Washington, D.C.
House Speaker John Boehner, I guess you could say is finding out the hard way that a stiff drink and round of golf just isn‘t going to solve this problem. At this hour, the speaker seems to be politically hog-tied in his own caucus. He doesn‘t have the votes.
The American people are now witnessing the hourglass being turned on the American economy. There‘s going to be a lot of losers if they don‘t get it together.
Disaster looms and the Tea Partiers just don‘t seem to give a damn. A vote on Boehner‘s bill was scheduled for 6:15 tonight. It never happened.
Boehner is still trying to strong-arm the Tea Party membership of his caucus into doing some kind of a deal to move it over to the Senate. Congressman Louie Gohmert left Boehner‘s office and said he was “a bloodied and beaten no.”
At this hour, members of both parties are scrambling to find the bill that can pass both chambers. So, what are we witnessing here right now, folks?
This is a major victory for the Tea Partiers—them holding out and not falling prey to the horse trading that takes place in Washington from time to time when it comes to doing deals is changed. That has been brought to Washington by a group of radicals—and the American taxpayers, American citizens are going to be paying a deep, deep price for this. Stubborn, selfish, whatever word you want to put it to, the Tea Partiers right now are calling the shots in the House.
In the meantime, the Democrats are holding their caucus together. They‘re going to protect the big three. They want some revenue increases although the two plans on the table don‘t have that. So, we still could be a long way from some kind of conclusion.
An Obama associate told me today that if the president had an extension come to his desk, he feels that president would be obligated to sign it. What‘s the president going to do? Not sign an extension? Let the economy default? That‘s not a very good option.
Joining us now live from Capitol Hill, House Minority Whip Steny Hoyer of Maryland.
Congressman, great to have you with us tonight.
It has been a whirlwind of news. I‘ll just ask you straight up, Steny: what can you tell us at this hour? Where are we?
REP. STENY HOYER (D), MARYLAND: I think what we‘re seeing, Ed, is a stark example of why we could not no matter what we did try to come to a compromise with the Republicans. Their leader wanted to do that.
But the party of no is saying no to their own deal. The party of no is putting at risk the American taxpayer, the American family and America itself.
I think the American public has a right to be enraged, as I am, about the dysfunctional spectacle that they see with America on the brink of—in the first time in history being unable to pay what it owes.
I said on the floor that is not only a bad policy, it‘s an immoral policy.
And I would hope in the next few hours that we can come together, Democrats and Republicans, not as a partisan effort, as is now occurring.
Every Democrat is going to propose this bill that John Boehner offered. It‘s a bad bill. It‘s a bad deal for the American public. It‘s a bad deal, frankly, for all of those who rely on government functioning well.
So that I think what I hope to see is for some of the Republican Party
to come to their senses and realize they cannot survive as the party of no
--

SCHULTZ: Yes.
HOYER: -- and start saying yes to reasonable compromise that will solve this immediate problem and, yes, we‘ll deal with the long-term problem of debt and deficit in the coming weeks and months.
SCHULTZ: Congressman, what about the 14th Amendment for the president? I don‘t mean to put the cart before the horse, but there have been a number of Democrats who spoken on record saying that they believe that that is an option. We‘ll talk more about that later in the show.
But one so visible, your colleague on the leadership team, Jim Clyburn.
Is this a possibility in your opinion? Is the president maybe in a position asking the American people make me do it? What do you think?
HOYER: Well, I think that certainly it‘s arguably in his power to do so under the Fourth Section of the 14th Amendment.
SCHULTZ: Would suggest that now?
HOYER: Well, I would not suggest it now. But I know the president is looking at it. I know his legal team is looking at it, whether he has that option. He doesn‘t believe he does. His legal advice has been that it would be at best questionable, doesn‘t believe he has that authority.
But very frankly, if it came down to his looking default in the eye on Tuesday or taking this action as President Clinton said—better to take the action and find out later that perhaps he went beyond his authority but at least protected the credit worthiness of the United States of America.
SCHULTZ: And, congressman, here is the math in the House. If Harry Reid can get a bill through the Senate, Boehner, the speaker, will need 21 Republicans to pass the deal. Do you think he can do it?
HOYER: Well, I would hope he could. Now, when you say 21, you‘re assuming all 190 plus Democrats would vote for that. I think you‘re pretty close to correct on that. We want to see the credit of the United States protected. We want to make sure that American families don‘t lose the value of their home, their 401(k), have their interest rates go up on their credit card, on their college loan.
It would be a disaster for American families if we do not extend this debt limit—so that Democrats are going to be very, very inclined to support a reasonable, bipartisan effort.
The question is: can we get 20 to 30 Republicans who want to save America‘s credit, save America‘s image, have us perceived around the world as a government that is in fact functioning? Hopefully that‘s the case.
SCHULTZ: OK. What about a short-term extension? Is that in your opinion a possibility?
The president has been on record saying that he doesn‘t want to kick the can down the road. But you don‘t want to see the country default either.
If the two parties are close to some kind of a deal, what would the feasibility be of an extension?
HOYER: Ed, the president has made it very clear that his intent is
veto a short term extension. And the reason he says that is because he
believes we would be in the same position 60 day from now, 90 days from
now, however long that extension was. He believes we would be in the same
position which is -
(CROSSTALK)
HOYER: Ed --
SCHULTZ: But, Congressman, if chambers can‘t come to an agreement—
I don‘t mean to interrupt you, I just want to I think it‘s important for you to go on record here. You know, this is changing so fast. I mean, if the president isn‘t faced with any other option—I mean it would be terrible to have him put in that position. But it might be best thing if the House and Senate can‘t get together on a bill.
HOYER: I understand what you‘re saying. I think that there‘s a lot of merit in that.
But the problem with it is, Ed, what the Republicans are trying to do through holding hostage the credit worthiness of America and really holding hostage all of America‘s families and individuals is they‘re trying to simply eliminate government. They don‘t like government. They‘re just certain aspects, national defense, national security that they support. Otherwise, they want to eviscerate government.
The American people don‘t want that. The American people didn‘t vote for that. They don‘t want to see Social Security savaged. They don‘t want to see Medicare privatized. They understand that these are items that are absolutely essential for the welfare of our people.
But the Republicans are holding hostage the credit of the United States of America for the first time in history in order to achieve their objectives.
What the president is concerned about, and rightfully so, Ed, is if you have a 60-day, 90-day extension and then another 60-day extension and you fight this every 60 days, and what that means is the world every 60 days sees the United States of America unable to act in a rational, first world leader role.
SCHULTZ: And finally, let—
HOYER: And he thinks that‘s very dangerous and I agree with him.
SCHULTZ: And finally, let me ask you this tonight. If there is no vote, are members of Congress and yourself nervous about the overseas markets? They‘re about ready to open this hour.
HOYER: Let me tell you, I‘m very nervous. This is, Ed, I‘ve told people, I‘ve been in Congress 30 years. I don‘t know that I‘ve been as concerned about the welfare of our country as I am tonight.
SCHULTZ: And that says it all.
HOYER: When I see a party that cannot even agree with itself and has refused over the last four months to come to a compromise on making sure that we do something that every leader, every leader, Republican and Democrat understands is absolutely necessary and that is to enable our country to pay the bills it‘s already incurred.
It is shameless that we have come to this position.
SCHULTZ: Congressman Hoyer, you just about seen it all. You got a new chapter to put in that career of yours. This is unbelievable stuff unfolding.
Steny, thanks so much for joining us tonight. I appreciate it.
HOYER: You bet, Ed. Thank you.
SCHULTZ: And before we get to our next guest, Vermont Senator Bernie Sanders, I want to know what you think about all this mess. Get your cell phones out. Tonight‘s question: Will Tea Party Republicans force America to default? Text A for yes, text B for no to 622639, and always visit our blog at Ed.MSNBC.com. Results coming up later on in the program.
Bernie Sanders, independent from Vermont now joins us here on THE ED SHOW tonight.
Senator, good to you have with us.
Will Mitch McConnell be able to get enough Republicans to raise the debt ceiling in the Senate? What do you think?
SEN. BERNIE SANDERS (I), VERMONT: I don‘t know. I think clearly what‘s going on in the House is a disgrace. It is an outrage. I think it is really a very sad day for this country, Ed, when the American people are now looking at two plans, neither of which by the way, has one cent of revenue from the wealthiest people in this country and the largest corporations—both of which are doing phenomenally well and both of which include massive cuts for working families and education, health care, nutrition, and a whole lot of other programs desperately needed by people who today—because of the recession today, are in a heck of a lot of trouble.
I certainly hope that our right-wing friends in the House go beyond their extreme ideological purity and allow something to happen or else, as Steny Hoyer said, we‘re going to be in very serious shape.
But what really bothers me is that we have a poll coming out just the other day in “The Washington Post.” You know what it said? Seventy-two percent of the American people think those folks making above $250,000 a year should be asked to pay more in taxes. People want to defend. They want to protect Social Security, Medicare, Medicaid, and, in fact, those programs are on the chopping block as well as many others.
So the real question that we have to ask ourselves is how is it that the Congress is so far removed from what the American people want who want shared sacrifice. That‘s the bad news.
I can tell you some good news. Today, some of us met with a lot of union leaders. I think what they understand is the real fight in order to protect working families in this country is not going to take place here in D.C. between negotiations of one group of people who say no, no, no and another group of people who say well, I give you this I give you that. That the real solution is going to be what‘s happening in states like Wisconsin and in Ohio, where working people are beginning to fight back successfully.
What we have got to do is create a movement where any member of Congress says I‘m going to savage Social Security, Medicare, Medicaid, I‘m going to cut education, nutrition and other health care programs and fight for tax breaks for the very rich—not one of those people should be returned to office.
SCHULTZ: Yes. But, Senator, you know, respectfully, and you have been the clearest of all voices in Washington on protecting those institutions and listening to the concerns of the American people. But we‘re a long way from any electoral decision to be made. A lot of water is going to go over the dam between now and then.
And we are faced now with a crisis with very few options at this point. Boehner can‘t get the House in order. The Tea Partiers are winning a major victory. They‘re hard right-wing. They don‘t want to see that debt ceiling go up.
How do we navigate out of this? What is our best possible solution?
What is a possible scenario as you see it at this hour?
SANDERS: Well, I think, you know, that the majority leader here in the Senate is going to probably push as hard as he can to get Republican support for his approach, pass it here in the Senate and tell the people in the House, here it is. If you want to support a bipartisan approach passed in the Senate, you will have to pay political responsibility for the United States defaulting for the first time in American history.
SCHULTZ: And I‘ve got to ask you, Senator, that meeting you had with labor leaders, I know that the AFL-CIO and the CWA, the Service Employees International Union, they were all representative and the flight attendants and whatnot.
What is their feeling about President Obama‘s position in all of this?
Do they think he‘s done enough? Is labor mad at the White House?
SANDERS: I don‘t want to paraphrase what other people said in a private meeting. But, you know, I think among progressive circles in this country, there is disappointment that the president hasn‘t been stronger. There is disappointment that out of nowhere, the president has gone back on a campaign promise not to cut Social Security, that he has put Medicare and Medicaid on the table for no particular reason that I can understand.
So, you know, I think a whole lot of folks in this country are disappointed.
SCHULTZ: Senator, good to have with you us tonight. Thanks so much.
Bernie Sanders, independent from Vermont. with us here on THE ED SHOW.
Remember to answer tonight‘s question at the bottom of the screen. We obviously want to know what you think, our text question.
Congressman Chris Van Hollen and Keith Ellison will join me to talk more about what‘s going on in Washington.
And the longer the debt debate goes on, the longer Washington ignores the American people‘s number one priority—jobs, jobs and more jobs.
Stay with us. Commentary coming up.
(COMMERCIAL BREAK)
SCHULTZ: Welcome back to THE ED SHOW.
Some Democrats in the House continue to stand up to the president‘s right to raise the debt ceiling under the 14th Amendment. Today, some of them held a press conference at the corner of Constitution and 14th Street.
Here is the Congressman John Garamendi of California.
(BEGIN VIDEO CLIP)
REP. JOHN GARAMENDI (D), CALIFORNIA: Our president, we believe, has the ultimate power to solve this. We hope he doesn‘t have to use it. We hope that Republicans come to their senses and move forward with a more rational approach, perhaps the approach that Mr. Reid has put forward in the Senate.
(END VIDEO CLIP)
SCHULTZ: Of course, Congressmen James Clyburn and other House Democratic leaders also support the president‘s right to do this if necessary.
But Republican congresswoman and presidential candidate Michele Bachmann is crying foul.
(BEGIN VIDEO CLIP)
BACHMANN: It‘s Congress that does the spending. The president is prohibited to do that. If he had the power to do that, he would effectively be a dictator. There would be no reason for Congress to even come into Washington, D.C.
He would be making the spending decisions. He would be making the taxing decisions. Clearly, that‘s unconstitutional.
(END VIDEO CLIP)
SCHULTZ: But President Harry Truman invoked the 14th Amendment once to raise the debt ceiling. So, President Obama wouldn‘t even be the first to do it. If it comes down to invoking the 14th Amendment or allowing default, one of them is clearly the better choice.
(COMMERCIAL BREAK)
SCHULTZ: Welcome back to THE ED SHOW.
Let‘s bring in Congressman Chris Van Hollen, as we continue our discussion tonight. He‘s the chairman of the Democratic Congressional Campaign Committee.
Congressman, good to have with you us tonight.
REP. CHRIS VAN HOLLEN (D), MARYLAND: Good to be with you.
SCHULTZ: I said in my opening statement on this program tonight that
change has come to Washington. We‘ve never seen a group—I don‘t think -
campaign on obstruction the way they did and going after federal spending and then not falling prey to the horse trading that is taking place.

I mean, the Tea Party is a viable political force tonight. Can we agree on that or am I wrong?
VAN HOLLEN: Well, there‘s no doubt about that, Ed. In fact, what you‘ve got is a group within one branch of the Congress which, of course, is one of two branches the executive and the congressional branch dealing with law-making authority. Obviously, we have the judiciary as well.
But this small group has essentially taken the position that unless they get things 100 percent their way, they‘re going to threaten to tank the economy.
SCHULTZ: Well, let me ask you this. Are you happy to see the Boehner plan tanking tonight? Now, it would seem to me—and they‘ve told the members to stick around. There might be a vote.
John Boehner is not going to call a vote unless he‘s got the votes.
Is that correct?
VAN HOLLEN: Well, that‘s right. It is way too risky for him to do that.
SCHULTZ: OK. So his plan is tanking as the clock ticks. Is that good news for the Democrats?
VAN HOLLEN: Well, because it‘s a bad bill for the country, I think it‘s good news for the country that he‘s having such a difficult time putting the votes together.
The question will be whether he‘ll now say, you know, let‘s try and compromise genuinely with the Democrats or whether they‘re going to cave in to some of their, you know, colleagues on the far right, trying to amend the bill and go back to the rules committee and come back to the floor of the House with an even worse bill, even farther away from the kind of compromise than we need to get things moving for the good of the country.
SCHULTZ: So, as this plays out, if the Boehner bill can‘t get it done in the U.S.—Mitch McConnell, as I see it, now comes a big player to save Boehner‘s fanny over the House. I mean, Mitch has to go over there and talk to some of those Republicans and say, look, we got to go along with Harry‘s deal here. We‘re going to try to get what we can get so we can keep this country from not defaulting. And then, of course, Boehner has to peel off Democrats in the House.
I mean, I think that‘s the only possible way to get a deal right now.
McConnell becomes a key player here.
VAN HOLLEN: Well, that‘s right, Ed. McConnell really has been a key player from the beginning. But this strengthens his hand even more. He can say to his Republican colleagues—look, this thick didn‘t get through the House or even if it does ultimately get to the House, look how difficult it was.
SCHULTZ: Yes.
VAN HOLLEN: It‘s time for us to work together with Harry Reid to try and get something good—something good done for the good of the country. Otherwise, as he recognized early on, there‘s a very big danger that American public will look at this and they‘ll say this new crew in the House drove the economy into the ground.
SCHULTZ: Do you think there‘s a chance to get revenues back in a deal?
VAN HOLLEN: Well, we‘ve said all along that if you‘re going to do any kind of grand bargain, if you‘re going to really take a balanced approach to significant deficit reduction, you have to have that. And so, if the discussion goes again toward a large bargain, that‘s absolutely essential.
But as you know, Ed, the sticking point has been this—Republicans in the House especially have taken the position that you can‘t cut a single corporate loophole, not one penny if that penny goes to deficit reduction.
SCHULTZ: Yes.
VAN HOLLEN: Even as you look today where Exxon is reporting huge profits, they still think that the taxpayers should be subsidized. Exxon can make all the money it wants. But it shouldn‘t have your money, my money, nor your viewers money and the taxpayer money—they don‘t need that.
SCHULTZ: And finally, the 14th. Does that become a viable option?
More Democrats are coming out saying that.
VAN HOLLEN: Well, look, I think the president should keep all his legal options on the table. I‘m sure the Justice Department is taking a good look at this to see how it applies to the different obligations the U.S. government has incurred. Does it apply to bondholders? Does it apply to Social Security beneficiaries? Does it apply at all?
And so, I hope that they will continue to keep that in play in a sense that they need to thoroughly look at that as a legal option.
SCHULTZ: Chris Van Hollen, great to have you with us. Thanks so much.
VAN HOLLEN: Good to be with you.
SCHULTZ: Let‘s turn to now Keith Ellison who was the co-chairman of the House Progressive Caucus.
Congressman, good to have you with us tonight.
REP. KEITH ELLISON (D), MINNESOTA: Good evening, Ed.
SCHULTZ: Where do you see the situation at this hour?
ELLISON: Well, quite frankly, Ed, I really only see two options ahead of us. I see one where perhaps we can get enough sensible people together for a clean debt bill. That might be possible. Hopefully, Republicans will see that we can continue this discussion around deficit reduction later. We don‘t have to couple it with the debt ceiling bill.
And failing that, I think what we‘re going to see is we‘re going to have the president r president to invoke his presidential authority to protect the public debt of the United States.
So because tonight, you know, we—this bill, this Boehner bill was supposed to be up last night. Now here it is late in the night and we haven‘t seen it up yet. I don‘t suspect we‘re going to see it up at all.
Of course, when the speaker of the House cannot get a bill passed, that‘s pretty scary thing right there. And so, I really—it‘s not really shaping up like there‘s going to be a bargain here.
And I just want to say, the president has bent over backwards to try to be reasonable. And he has not been getting any kind of cooperation from the speaker and the Republican caucus.
So, at this point, I‘m hoping for the best always. But I think that clean debt ceiling vote and then continuing on with this conversation or failing that, 14th Amendment option is what‘s in front of us.
SCHULTZ: Keith, how strong is your caucus tonight—the Progressive Caucus and, of course, the entire Democratic Caucus? How strong is it?
ELLISON: I think we‘re solid. We have core values. But we‘re not inflexible.
But you know what? Social Security, Medicare, Medicaid—these are fundamental important programs. They‘re bread and butter Democratic programs.
SCHULTZ: Congressman, I have breaking news here. We‘re told that there will be no vote tonight. Your reaction to that?
ELLISON: Expected. I didn‘t anticipate there was going to be one.
Remember, Ed, last night we were supposed to vote on the Boehner bill. Tonight, we were supposed to vote on it. Mr. Boehner has no control over that caucus.
I mean, the inmates have taken over the asylum, man. I mean this thing is ridiculous.
SCHULTZ: Congressman McCarthy, the whip, is announcing that there will be no vote tonight.
So I don‘t know. In some strange political way, I just think this really empowers the Democrats to stay shoulder to shoulder and don‘t break ranks and let the fight continue in the Republican Caucus because we haven‘t seen this kind of disarray with the Republicans in over a decade. I mean there‘s been a long time. Bush and Cheney and Tom DeLay, they never had these kind of problems.
I mean these Tea Partiers—they‘re not going to move at all. They‘re not going to be subject to the horse trading. And this really strengthens you guys.
What do you think?
ELLISON: Well, I think you‘re absolutely right. But here‘s the other thing, it‘s not just brinkmanship and gamesmanship, it‘s doing the right thing for America. It‘s wrong to hold Social Security, Medicare, Medicaid. It‘s wrong to dismantle government.
Government has an important role in our economy and reacts in a way with the free market to make a stable market so that business people, investors and others can participate in this.
SCHULTZ: Well, it‘s very interesting the way it‘s unfolded.
Congressman Keith Ellison, here, what we‘re looking at tonight here is a speaker of the House who has repeatedly gone out and blasted this president for no jobs and has not offered anything on job creation whatsoever. He has been totally negative on this administration, totally complaining about Obama being the problem. But when it‘s time for the rubber to meet road, John Boehner does not have the leadership to avert a default in this country.
I mean, I think that speaks volumes about how weak the Republicans really are.
Congressman Ellison, great to have you with us tonight.
And, again, if you didn‘t hear it, folks, there will be no vote in the House. That announcement coming from the GOP whip just moments ago.
The Boehner plan and the Reid plan have scary similarities. But we‘ll ask Robert Reich why the Reid plan is a little bit better.
And Tea Party Congressman Joe Walsh reportedly owes more than $100,000 in child support. But he‘s OK, because it makes him more like real Americans? This dude is in outer space and he‘s going to the zone.
(COMMERCIAL BREAK)
SCHULTZ: Welcome back to THE ED SHOW. We told you just moments ago, there will be no vote tonight in the House on the Boehner bill. John Boehner could not get the Tea Partiers together. There will not be a vote. That announcement just coming moments ago from the GOP whip in the House, Congressman McCarthy.
NBC‘s Luke Russert is on Capitol Hill. Luke, the speaker of the House went into caucus yesterday and told everybody to get in line. It didn‘t happen. How did it come down tonight?
LUKE RUSSERT, NBC NEWS CORRESPONDENT: An absolutely real shocker out of Washington, Ed. There was a lot of confidence in the GOP leadership staff this morning, even saying by the time the night is over, we will have passed two bills out of the House that have raised the debt limit.
Well, that‘s just not the case. Around 6:00, this bill was pulled. It was clear they did not have the votes. There were all sorts of rumors they were two votes away. Then it became six votes, then 10, then 12. The number is somewhere around there.
But this is a huge setback because it shows that John Boehner, as of right now, cannot pass a bill through the House of Representatives to raise the debt limit that every single Democrat in the House and in the United States Senate has said they are against. This is clearly a Republican bill, despite the fact that Republicans said it was drawn up in a bipartisan way over the weekend with Harry Reid.
They can‘t get their own members onboard. And I spoke to some of these Tea Party guys and they said, look, I‘m not going to walk the plank for something the Senate has said they will defeat. It‘s unclear what exactly the pathway is forward now.
We‘re hearing that the House Rules Committee, which would be the committee that would be in charge of seeing a bill to write the rules for how it would be debated tomorrow if there‘s any tweaks to it, is on standby tonight.
So possibly Boehner could make some deals to get that number to 216 that he needs by giving some members some—something in return, by tweaking the bill a little bit. But if that‘s the case, that will be the third time the bill has been tweaked in a span of two to three days.
So it‘s quite a remarkable set of events that happened here tonight on Capitol Hill.
SCHULTZ: Luke, you visiting with some of the staunch conservatives in the House, these Tea Partiers. How stuck in concrete are they? How inflexible are they? Could they move at all to raise the debt ceiling?
RUSSERT: Honestly, Ed, they view the issue of spending with religious fervor. They view it as why they were sent to Washington. A lot of them have never held elected office before. You hear often complaints from GOP aides, saying these guys just don‘t know when to get onboard and get with the program.
I think tonight they would point as a fine example of that. But I‘ll show you an easy story with you right now. A few hours ago, members of the South Carolina delegation, who are all supposed no votes, went into Boehner‘s office and Cantor and McCarthy was there, had their arms twisted.
And one of them, Congressman Mulvaney, came out and then walked to the House Chapel, which is right off the Rotunda, and said I‘m going to go pray for the leadership. I‘m still a no vote.
So you see to what degree these guys are entrenched, not really willing to move. It shows there is no clear path to 216 right now for the Republican bill to raise the debt limit.
SCHULTZ: It will be a busy weekend, no doubt. Luke Russert on Capitol Hill, thanks for joining us to night.
Now let‘s bring in former Secretary of Labor under Bill Clinton and professor of public policy at the University of California, Berkeley, Robert Reich. Mr. Reich, good to have you on tonight.
Your reaction to these developments. I know you‘re not a fan of either one of these bills. But where do we go now?
ROBERT REICH, FORMER LABOR SECRETARY: Well, we‘re seeing a Republican crackup of historic proportions. And we‘re also seeing kind of a smoking out of the radical right in the Republican caucus. You know, these people, as has been said, they really are willing and they are now almost on record to see the economy collapse just for the sake of preserving their own ideological purity.
I have not seen anything like this. I‘ve been sort of around politics and in politics for the last 35 years. This is the most extreme group who have—they almost have a choke hold on government and on the economy right now.
SCHULTZ: And Mr. Reich, how do you think their constituents—do you think their constituents are telling them to hold the line like this?
REICH: I can‘t—you know, some of their radical constituents obviously are. I don‘t think understand the implications for the economy, for average people. I mean, if there is no increase in the debt ceiling, if the president‘s hands are really tied next week, next Tuesday, then interest rates goes up. The dollar goes down.
It‘s not going to sudden economic catastrophe. But it‘s going to be an unfolding catastrophe. It‘s going to hurt many of those same people who are supporting those congressmen who are taking that ideological position.
SCHULTZ: What is the president‘s best move right now, if he has one at this point, with a dysfunctional government, a dysfunctional Congress?
REICH: Well, I think that the president may have to—and again, we don‘t know what‘s going to happen by Tuesday. But if by Tuesday there is no agreement and it‘s looking increasingly like there is not going to be an agreement, the president may have to simply instruct the secretary of the Treasury to go ahead and pay the bills of the United States. The Federal Reserve Board will honor those payments and honor those IOUs.
Then if Republicans are upset and say the debt ceiling has not been lifted, you‘re acting unconstitutionally, then they will take the president to court. And he will use the 14th Amendment to say I have a Constitutional obligation to protect the full faith and credit of the United States. If it comes that.
Hopefully it‘s not going to come to that.
SCHULTZ: More Democrats are on board with that. Robert Reich, author of the book “Aftershock,” thank you so much for joining us tonight.
The American people say jobs, especially manufacturing jobs, should be the top priority for Washington. So why aren‘t elected leaders doing anything about it?
And you‘re looking at video taken in the Capitol rotunda earlier. Nearly a dozen religious leaders are arrested for protesting the GOP‘s cuts to the poor. Michael Eric Dyson and Reverend Al Sharpton join me next. You‘re watching THE ED SHOW on MSNBC. Stay with us.
(COMMERCIAL BREAK)
SCHULTZ: Breaking news out of Washington tonight, no vote on the Boehner bill. Joining me now is the founder and president of the National Action Network, Reverend Al Sharpton here tonight, and also professor of sociology at Georgetown University, Michael Eric Dyson. Gentleman, thanks for joining us this evening.
The markets, Professor Dyson, are going to be very interesting tomorrow. We‘re going to find out just how nervous this country is. What do you anticipate?
MICHAEL ERIC DYSON, GEORGETOWN UNIVERSITY: Well, there‘s going to be a lot of nervousness, a lot of anxiety, a lot of market insecurity. I think this shows, as you know Robert Reich just said, that this small splinter group has really taken American hostage.
John Boehner cannot rally his troops together. He can not galvanize his troops in a way that proves his authority. He‘s been critical of Obama for not having leadership and exercising legitimate authority. Here it is that he can‘t even get his stray cats together to stand together shoulder to shoulder.
I think this says to the nation that we don‘t have a leading party, a Speaker of the House who‘s concerned about the ultimate good of the people or at least the Tea Party isn‘t. He‘s capitulating to them in a very vicious way. I think this strengthens the Democrats if they can stand together.
SCHULTZ: Reverend Sharpton, where do you think the president stands tonight? Do you think he has a move to make within the next 24 hours?
REV. AL SHARPTON, NATIONAL ACTION NETWORK: I think that the move is going to be—I think Secretary Reich is right. If there is no movement, he‘s going to have to move forward Tuesday. And many of us have said he‘s got to use the 14th Amendment.
But I think he sits tonight in a mixed bag. One, he has proven to be smarter than anyone thought. He played chess while they were playing checkers. He called their hand. He put everything on the table and got a lot of people like you and I angry. And they still won‘t move.
So at the end of the day, did he really show how inflexible they were that they would even risk the default of this country, even if he put it on the line?
SCHULTZ: So do you think this is President Obama‘s plan all along, knowing that this is how it was going to play out?
SHARPTON: I don‘t know.
SCHULTZ: He had 4.7 trillion on the table and they didn‘t take it.
SHARPTON: I don‘t know, but we will never know now. But now many of us can say we don‘t know if he was calling your bluff or not, because you guys have shown that no matter what, you put in your ideology and your right-wing wish to make sure that you run this country in a way that rich people are protected above the interests of the people.
So I think the president, if that was his move, he won. If it wasn‘t his move, we‘ll never know.
SCHULTZ: Michael Eric Dyson, does the respect for the president go up in the minds of the base tonight, where they have been showing some frustration as of late? What do you think?
DYSON: It has to. Because what it shows is the utter intransigence that he‘s been dealing with. What Boehner and the Tea Party have made clear tonight is that we are dealing with a group of people who are incompetent in term of their political sensibilities. They have not adjusted to the ways of Washington in the best sense of that word, learning to compromise, learning to follow an axis of true balance and assertion of one‘s belief.
How do you balance your particular and peculiar beliefs over against the interests of the common good? I that what we‘ve seen tonight is that Obama has had to deal with this time and time again. And he can‘t even call upon the fellow feeling of good sentiment among citizens that they should share. So I think this is what it shows.
SHARPTON: It‘s an unprecedented night when you see the Republican quarterback call a huddle and get sacked by his own team.
SCHULTZ: Reverend Al Sharpton and Michael Eric Dyson, great to have you fellows with us tonight. Thanks so much.
Coming up, Tea Party Congressman Joe Walsh is in the zone.
(COMMERCIAL BREAK)
SCHULTZ: And in Psycho Talk tonight, Freshmen Tea Party Congressman Joe Walsh of Illinois. This dude has been all over TV slamming President Obama for preaching fiscal responsibility. But Walsh is a fraud. He can‘t even keep his personal finances together. Now it turn out that the guy‘s a deadbeat dad.
His ex-wife has been fighting for nine years to get Walsh to pay child support for three kids. Court documents accuse Walsh of owing more than 117,000 dollars. Walsh acknowledges that he owes child support, but he disputes the amount. And he defends himself by saying he‘s just like all the other deadbeat dads out there.
(BEGIN VIDEO CLIP)
REP. JOE WALSH ®, ILLINOIS: I know that story just broke. It‘s interesting that it just broke right now as I‘m out there trying my best to fight this president and fight the Democrats and solve this debt crisis.
But, look, I‘m the most openly vetted candidate in the world. I‘ve had financial troubles. I talked about them throughout the campaign. This is where real America is.
(END VIDEO CLIP)
SCHULTZ: So Walsh thinks real America doesn‘t pay child support. And therefore, it‘s OK if he doesn‘t either. Walsh leaving his ex-wife high and dry with three kids is terribly inexcusable. And defending his nine year failure to pay child support by saying that he is just doing what real America does is deadbeat Psycho Talk.
The American people want jobs, not fights over the debt ceiling. There‘s a way to get jobs back in America. And I‘m going to tell you how it‘s going to all happen coming up.
(COMMERCIAL BREAK)
SCHULTZ: So the question is what do wealthy people do with their money during hard economic times? I walk through the lobby here at 30 Rockefeller Center almost every day to do this show and my radio show. And there‘s a real lesson to be learned about America from this building.
John D. Rockefeller Jr. leased this land that this building is on before the stock market crash gave us the Great Depression back in 1929. But Rockefeller moved ahead with his project despite his partner‘s dropping out. You know, this guy could have taken his money and saved it until the country was in better economic conditions.
Instead, he didn‘t. He used the money on the largest private building project ever at that time. And he put his trust in these guys, a famous picture, American workers. These 11 men were sitting 66 stories above where I am right now. During the worst economic conditions in our history, they worked hard and earned a living because there was an unselfish American named John D. Rockefeller Jr.
Rockefeller took a chance on the American worker and said we‘ve got to get this done. And Rockefeller Center became an economic engine for New York. It still is today.
You see those crowds around the big Christmas tree every year. It‘s a tradition. America has been through tough times in the past. And in those times, we relied on the most fortunate Americans to do the right thing. Who‘s going to step up and believe in the American worker now?
Who‘s going to put people to work like John D. Rockefeller did in a real tough economic time back during the depression?
We‘re broadcasting at the building tonight where he had a vision. So America can come through tough times. We are where America didn‘t give up.
(COMMERCIAL BREAK)
SCHULTZ: Finally tonight, the people want Washington to move past this debt debate and focus on jobs. But, of course, the lawmakers don‘t seem to be listening. A new poll sponsored by the Alliance for American Manufacturing finds the public overwhelmingly wants job creation over debt reduction, 67 to 29; 58 percent strongly believe jobs are the number one priority. The majority of those polled think Washington lawmakers are doing worse in creating jobs than they did last year.
Joining me now tonight is Scott Paul, the executive director of the Alliance for American Manufacturing. The numbers are turning. A year ago, they weren‘t like this. Scott, what‘s happening out there?
SCOTT PAUL, ALLIANCE FOR AMERICAN MANUFACTURING: Well, I think Americans know that we‘ve tried every other way. We‘ve tried financialization. We tried austerity. What we haven‘t tried is manufacturing. It‘s what we‘re really good at in this country, Ed, as you mentioned.
We know how to make things. But the American people don‘t see Washington focused on policies that will strengthen our manufacturing base. In fact, they see everything else.
And they are desperate for Washington to do something about manufacturing, to get tough with our trade partners, to stand up for American workers, to invest in this sector of the economy, and to make sure that America is the number one manufacturer in the world, which Americans don‘t think we are anymore.
They think China has gained that lead and that we‘re following behind.
They‘re worried about it.
SCHULTZ: Are lawmakers taking notice here to the numbers? What kind of response are you getting?
PAUL: We‘ve actually had a great response. We‘ve done a number of briefings on Capitol Hill and at the White House. We‘ve done them with Democrats and Republicans. And I can tell you, Ed, you know, politicians are saying the right things. They‘re talking about making America and made in America. But what we haven‘t got them to do yet is, you know, get beyond that photo op at the factory floor and really get down to it.
They need to pass some legislation to lower our trade deficit.
SCHULTZ: That was one of the things in the poll that I found interesting. The made in America, buy American is gaining strength.
PAUL: It is. In fact, it is surging. People thought made in America was great last year. They think it‘s incredible this year. It‘s like mom, apple pie and made in the USA. We saw a 44 percent increase—a 44 point increase in favorability on made in America, folks who feel very strongly about it. So clearly, people are desperate for American made products for an American made manufacturing policy.
SCHULTZ: How can this not be an issue in 2012?
PAUL: It‘s going to be. You saw Mitt Romney hitting President Obama on China yesterday. Mitt Romney doesn‘t have much ground to stand on on China. But you‘ll see it become an issue, especially in the battleground states that the president has to compete in, places like Ohio, Michigan, Pennsylvania.
You can‘t go there and not talk about factories.
SCHULTZ: Scott Paul, Alliance for American Manufacturing, thanks for your time tonight. Some very interesting numbers.
Tonight, I asked will the Tea Party Republicans force America to default? Eighty two percent of you said yes; 18 percent of you said no.
That‘s THE ED SHOW. I‘m Ed Schultz. Another live edition of “THE LAST WORD” with Lawrence O‘Donnell starts right now. We‘ll see you Monday night.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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