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'The Rachel Maddow Show' for Monday, August 1st, 2011

Read the transcript to the Monday show

Guest Host: Chris Hayes
Guests: Eugene Robinson, Ezra Klein, Rep. Jan Schakowsky, Wayne Slater

CHRIS HAYES, GUEST HOST: Good evening, Lawrence. Thanks so much.
And thanks to you for staying with us for the next hour. Rachel will be back tomorrow.
At this time on Friday night, just three short days ago, it appeared more likely than not that the United States of America was heading towards its first-ever national default. House Speaker John Boehner had just barely managed to pass a debt ceiling vote through the House of Representatives, and that bill was then soundly defeated just two hours later in the Senate. That was Friday.
What a difference a weekend makes. Late tonight, within the last two hours, the U.S. House of Representatives passed another bill to raise the country‘s debt ceiling, but this was a bill that enjoys not only bipartisan support but also bicameral support. By a vote of 269-161, the House passed a debt ceiling plan tonight that was crafted over the weekend by President Obama and congressional leaders from both parties. It‘s a bill that raises the debt ceiling by $2.1 trillion in exchange for more than $2 trillion in federal spending cuts over the next decade.
We‘ll dig into the numbers of this deal a little later in this show. Numbers that are in some ways better and in some ways worse than they first appeared. But right now, at least, it appears we‘re going to avoid the sort of acute catastrophe that as opposed to a drawn out one that just a few days ago just starting to seem inevitable.
When the vote was gaveled close tonight, now that it‘s expected to pass the Senate and be signed by the president, I think a lot of people, particularly a lot of liberals started looking around and saying how did this happen, how did we get here?
As drawn out as this process was, it didn‘t seem like an open or deliberative one. Unlike the debate over financial reform or health reform, all was conducted with the specter of impending doom floating in the air. As opposed to having a national conversation about all of the policies that were on the table, it‘s essentially one side trying to have that conversation while simultaneously being dangled out of a window. There was always this threat that disaster was just a breath away. In fact, it almost seems to me like our political institutions cannot function anymore but for that threat of imminent crisis.
The problem with that, as we‘ve learned the hard way over the last decade, is that situations of crisis are not situations that are most conducive to self governance. In fact, throughout history crisis and self governance have been all but mutually exclusive. And yet that‘s sort of how we‘ve chosen to operate over the past decade.
We all remember, of course, with the towers still smoking, the passage of the authorization for use of military force against terrorists. This was something that was largely lauded and widely supported and passed under the specter of imminent danger.
But it‘s been used since 2001 to justify everything from torture to rendition to secret CIA black sites to warrantless wiretapping. Patriot Act was passed in that period when everyone felt that another attack might be just around the corner.
Again, it was something that was largely lauded and widely supported and the civil liberty endangering effects of the legislation weren‘t visible until much later.
Skip ahead to the financial crisis, TARP, $700 billion thrown together during a weekend, a three-page proposal. Lawmakers told the world economy would implode itself, Armageddon would be ushered in unless it passed. TARP failed its first vote, let‘s remember, and then when the Dow plummeted as a result, a panicked Congress reconvened and passed it.
At least, though, in all those cases, there was some external crisis present. What we‘ve seen from this particular congressional class is a novel mutation of crisis governance, which is not to react to some external crisis, but rather to create imminent crises in order to restrict what the political system can produce. We saw this before the new Republican Congress was ever sworn in, right after the 2010 midterm elections, during the lame duck session of Congress.
Republicans threatened any help for the unemployed at a time of 9.4 percent unemployment, incredibly threatened to put people on the streets on Christmas Eve if they didn‘t get their way, essentially created this crisis, in order to preserve the Bush tax cuts, which were set to expire that month—a totally self-created crisis, but it worked.
Then in April, another crisis, a potential government shutdown, all hands on deck. Government workers were being briefed on what to do to shut down national parks. Senior citizens were sent into a panic about what was going to happen with their Social Security and Medicare benefits, all over a resolution to continue funding the government that Republicans were holding up. A self-created crisis in which Republicans managed to extract billions of dollars in spending cuts in a time the economy desperately needs more spending.
And now this, the debt ceiling fight—Republicans turning what has always been a routine congressional action into an imminent and dire crisis, pushing the country towards the brink of default. At each point along the way, the stakes get higher and higher—the fate of the unemployed, the fate of everyone who works for the government or uses government services, and now, the fate of global financial markets.
Each time this “create a crisis” strategy has been successful, wildly successful, each time the Republicans demands have been met and with each success, they are incentivized to employ the strategy again. This has become the new normal in Washington. And so, what we get are these self-created crises every few months and ultimately, an abnormal and insidious means of producing public policy.
Joining us now is Eugene Robinson, Pulitzer Prize-winning columnist for “The Washington Post,” MSNBC contributor.
Great to see you, Gene.

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Good to be here, Chris.
HAYES: Well, Gene, am I being hyperbolic? Is this something you knew
and distinct, this kind of brand of self imposition of crisis—or is this the way the system always works? It has certainly escalated, Chris.
ROBINSON: You know, look, this government, our political system has always worked best with a tight deadline. Things tend not to get done until they have to get done.
But you‘re right that this is different. There was a famous quote from Rahm Emanuel when he was chief of staff a couple of years ago to the effect that what a shame it would be to waste a crisis. Well, the Republicans have learned never waste a crisis, just make the crisis and then use it to an advantage. They seem to be perfecting the technique.
HAYES: What episode of this, coming away. I mean, there are just sort of these two aspects of it, right? There‘s the kind of substance of what the actual deal that was struck and passed by the House today is, and then there‘s a process by which it produced. I wonder, what do you find most sort of ominous about how this whole deal went down?
ROBINSON: How much time do we have actually? If you want to talk process, look, if you reward hostage takers, they take more hostages. And so, it‘s positive reinforcement for those who would practice this technique of saying, look, we‘re going to blow the place up unless you give us what we want. And so that is disturbing because we‘re obviously going to see it again.
In terms of the substance of the deal, you know, what was the administration‘s first position? Well, give us a clean bill raising the debt ceiling like we always do and the Republicans said no. So the fall back position was OK, so we can have some budget cuts but let‘s have new revenue too. We got to have that. And the Republicans said no, and in the end it turned out just to be budget cuts.
Now, the administration did some creative work in sort of undermining
--

HAYES: Fine-print jujitsu, I recall.
ROBINSON: Exactly. Jujitsu, (INAUDIBLE) that I was thinking. And so, in fact, you know, $350 billion of the $900 billion in—for sure cuts over the next decade are in defense cuts, which is—and this is an unprecedented whack at the burgeoning defense budget. And there are other things in there that I think are quite clever.
But in the end, you know, is this a victory for the administration?
No, is it a victory for the Republicans? Yes.
HAYES: Well, and also, I want to get to the question of what comes after this. Because whatever the substance of this deal—I mean, one of the things I think that‘s disturbing or worrisome is the fact that at each point, is doesn‘t seem—the White House seems surprised all over again when this strategy is pursued the next time.
So, the president was asked specifically in a press conference, you know, after the Republican election by Marc Ambinder from “The Atlantic,” basically saying, when are you going to go to the debt ceiling? Well, I think they‘re going to be responsible. Well, of course, they‘re not.
And it brings us to the question of what is the next irresponsible moment? Are we going to go through this in September with the continuing resolution?
ROBINSON: Well, we‘re going to go through something like this in September. Some sort of angst stand and some sort of drama in September. I can pretty much guarantee that. And, you know, one of the reasons the administration was so set on getting something that at least takes us past the election is that they did see aha, gee, they are going so hold us hostage on the debt ceiling again in a few months. So, you know, they have certainly learned that much, but can they see the next thing coming? I‘m not sure.
HAYES: Eugene Robinson, Pulitzer Prize-winning columnist for “The Washington Post” and an MSNBC contributor—hanks so much for joining me tonight.
ROBINSON: Great to be here, Chris.
HAYES: For one group of Republicans, this is a critically important vote even if they‘re not actually voting on it. Mitt Romney, I‘m looking at you. How their positions on the great debt ceiling freak out of 2011 will affect the 2012 presidential candidates. Just ahead.
First, one more thing about the ultra-crisis, the only good thing to come out of it with that vote. That sound you hear at tonight‘s vote in the House was applause—same applause for three minutes and 30 seconds. I counted.
As what the members are clapping for is this woman. That right. There is Congresswoman Gabby Giffords, returned to the chamber the first time today since she was shot nearly seven months ago. Giffords‘ colleagues couldn‘t believe it. Fellow Arizona Democrat Raul Grijalva reportedly took her face in his hands and said it‘s you, it‘s you. Other members cried.
As to why she was there, Congresswoman Giffords traveled back to Washington to vote in favor of the debt deal, to avoid default by the U.S. government.
Congresswoman saying in a statement, “I had to be here for this vote, I could not take the chance that my absence could crash our economy.”
Well, if this manufactured crisis did nothing else, at least it provided the means and motivation to bring a critically-wounded congresswoman back to work among her many grateful colleagues.
(COMMERCIAL BREAK)
HAYES: So, how do you pay for government? With tax revenue. And when you stop paying, what happens? As President Bush once said, the math doesn‘t work. That‘s just ahead.
(COMMERCIAL BREAK)
HAYES: Whenever Congress reaches one of these by now routine, last minute crisis averting compromises, most people watching have two immediate questions, one, what the heck is in it? Two, is it any good?
Now, sometimes we in the punditocracy like to skip immediately to answering the second question because, well, it‘s more fun and better TV than reading through the fine print. That instinct is compounded by the fact this deal is pretty complicated.
So, if you‘re feeling a bit bewildered, I‘m here to tell you, you‘re not alone. Newspapers, blogs, and Web sites, have even resorted to flow charts to try to explain it. And I myself have spent the last day trying to get my head around it.
Because it‘s not just one thing that the House passed today. The debt deal is actually layered. There are things that happen immediately and other things that will roll out over time.
And then, finally, a bit of meta-legislation that attempts to control the process by which future deficit reduction will happen.
So, think of it as having three main components. First, big kahuna. The thing everyone has been fighting about: the debt ceiling. The debt ceiling gets raised enough to allow treasury to continue meeting its obligations until after the 2012 election.
In exchange for this munificent from the GOP, Congress then imposes spending caps on discretionary spending. That‘s the part of the budget that doesn‘t include Social Security, and Medicare and Medicaid. You know, stuff like national parks, scientific research, education, highways, stuff like that. The spending caps start in the fall and they start relatively small and then get bigger. They are predicted to reduce spending by about $900 billion over the next decade.
Finally, Congress creates a bipartisan joint committee. This is the super Congress or super committee you‘ve been hearing about that will get together in November with the task of coming up with another $1.5 trillion in cuts.
This is where both tax increases and Social Security and Medicare cuts could come back into the deal, because that super committee, which will have an expedited process to vote on its recommendations can more or less come up with whatever it wants. But you‘re thinking—what if there‘s no agreement for the super committee? Well, that‘s not a surprising thought given what we‘ve been through. I mean, there‘s reason to think they won‘t come to an agreement.
So, what happens then? Well, if that‘s the case, then another round of automatic cuts goes into effect. This is the trigger everyone‘s been talking about, in the amount of $1.2 trillion, which will hit everything from the Pentagon to payments to Medicare providers.
The thinking on the trigger here is that the second round of automatic cuts will be so unpalatable across the board, hitting Democratic and Republican constituencies that Congress will be motivated to pass whatever the super committee comes up with, but be careful what you wish for because anyone who thinks a body composed equally of Democrats and Republicans will produce anything other than a conservative agenda has not been paying attention.
And if you‘re sitting there saying to yourself, wait, how can this Congress for spending cuts three or five congresses from now—you‘re not alone. Your name might as well be Chris Hayes, because that‘s what I‘m thinking, too.
Joining us is now Ezra Klein, columnist for “Washington Post” and “Bloomberg,” also an MSNBC policy analyst and the man I like to talk to when every sentence I have ends in a question mark.
Well, Ezra.
EZRA KLEIN, MSNBC CONTRIBUTOR: Hi, Chris. How are you?
HAYES: OK. I‘m genuinely trying to figure out this statutory mechanism here. Obviously, the CBO, the Congressional Budget Office, it scores these cuts for 10 years, understood.
But how does this Congress say what spending is in, say, 2017?
KLEIN: It doesn‘t. And one thing to always note when you see a bill like this, they keep saying discretionary spending, and the reason they keep saying discretionary spending is because nobody knows what discretionary spending is. That‘s why they don‘t like to say Medicare cuts or Social Security cuts, people what those are. Discretionary spending, no one knows what it is.
But what they do then is they set arbitrary levels of discretionary spending to get them to a goal and they put in place what they call a trigger, or in this case, actually, they call spending caps, works like a trigger. And that basically means if they go over their caps, there‘s an automatic set of cuts made across the board to discretionary spending.
Now, the next question you would ask is—well, couldn‘t Congress in 2015 or 2018 simply say we‘re not going to listen to the trigger, we‘re going to vote the trigger out of existence? And the answer is they could. And they have before. There was a trigger back in, I think it was the late 80s and early 90s called Gramm-Rudman, they didn‘t let that go into effect.
So, the trick of the trigger is it‘s got to be can‘t be quite so horrible that Congress won‘t let it happen, but just bad enough that it forces Congress to do what it‘s supposed to do.
HAYES: If I were to ask you, and I‘m sort of putting you on the spot, but if I were to ask what‘s the good, the bad, and the ugly here, what would be your sort of headlines for each of those categories?
KLEIN: So, the big headline news in this bill is how much it actually cuts defense. If you‘re talking about what is good, you can argue good both ways, maybe you don‘t think defense should be cut that much. But for many years --
HAYES: I don‘t.
(CROSSTALK)
KLEIN: Defense has been off the table. I mean, you have made the point before, what is it, worst four words in budgets are non-defense nondiscretionary spending.
Now, what the Republicans and Democrats did here was they solve the problems of how do you do a balanced deal if Republicans aren‘t going to do revenues, but saying , well, instead of doing revenues, Republicans will do defense cuts. And so, spending cuts account for half of the initial cuts and then if we actually do hit the trigger, the defense cuts are gigantic. I mean, they treat defense as fully $1 of every $2 in the trigger and it would get cut by $600 billion on top of the $350 billion already in the initial bit.
The ugly, I‘d say, is the discretionary, nondefense discretionary spending because the thing about nondefense discretionary is that‘s education, it‘s medical research, it‘s infrastructure, transportation, it‘s all that win the future stuff the White House is talking about and that we need. And politicians love to cut it because nobody knows what‘s in it and programs generally speaking are smaller than programs like Medicare, Medicaid, or Social Security, so they don‘t have powerful constituencies protecting them. But because they don‘t, they got more often and they‘re actually leaner. So, we‘re cutting more into the bone when we go into nondefense discretionary than frankly when we end up in somewhere like Medicare or the tax code, or defense.
HAYES: OK. So, the other thing I want to get to here because I think this is—something, again, I think the White House has proven itself very adept at least sort of rescuing non-totally catastrophic results from these deals by being very clever with the fine print. So, the chronology are somewhat key, I think, because they are fairly back loaded, am I right?
KLEIN: They are quite back-loaded. Now, the one catch to that—so, there‘s only about $22 billion in 2012.
HAYES: I‘m sorry. Say, $22 billion, right?
KLEIN: $22 billion, I believe. So, the one catch to that is this bill does not extend unemployment insurance or the payroll tax cut. You put those together, those are brought in the 2010 tax deal. They continue until the end of this year. This bill says nothing about them.
Now, if you don‘t extend those, you‘re actually looking at about $150 billion cut in the economy in 2011 -- I‘m sorry, ‘12 compared to 2011. So, add those together, you‘re almost at $200 billion. That‘s a real big reduction in not just spending but targeted government support for recovery.
So, that would be a big deal. But as you aside, but aside from that, what‘s actually in this bill specifically is back loaded to cut towards the end of the 10-year window in order to protect the recovery. But not, unfortunately, in order to actually support the recovery further.
HAYES: I guess the final question is, is there any light horizon in terms of addressing the exactly the thing that you just mentioned in terms of unemployment and the things that what we‘ve been banging here at this anchor desk at the network and the in the pages of “The Nation,” and in on your blog, which is that a complete reluctance, inability for Washington to deal with the obvious problem of a need for more stimulative measures for demand for supporting people that are unemployed.
KLEIN: What kills me about this deal, Chris, what—I can‘t believe it when I actually sort of step back a little bit and look at it, is that we did it so stupidly. There‘s a clear deal here. There are two different perspectives on the economy right now. One is you need more deficit reduction in the long-term. We have a real deficit problem. And there‘s a need for more support now.
So, any economist would tell you this is not hard. You do a lot of deficit reduction between 2015 and 2025, and you do a fair amount of support in the next couple of years until unemployment, say, gets below 7 percent. We did not do that. Instead, we did not do very much deficit reduction in the long-term and we did no stimulus and, in fact, look to be removing it now.
So, we really got a deal here that is the worst of the both worlds. There are things about it that were not as bad as it could have been, but that is not high praise given how bad the economy actually is.
HAYES: I think worse of both worlds in Latin is actually the District of Columbia‘s official motto.
Ezra Klein, for the “Washington Post” and “Bloomberg,” also an MSNBC policy analyst—thanks a lot for coming on.
KLEIN: Thank you.
HAYES: As promised, Michele Bachmann voted against raising the debt ceiling, potential economic catastrophe be darned. But does courting disaster translate into votes in, say, Iowa? It just might. That‘s ahead.
(COMMERCIAL BREAK)
HAYES: Republican leadership in the House was so proud of itself today for reaching a deal on the debt ceiling, it‘s planning to give itself the rest of the summer off. No, really. Reportedly, House Majority Leader Cantor‘s office announced today the House will adjourn tonight and not return until after Labor Day, five entire weeks off. See you dudes in September.
This leaves a whole lot of stuff unfinished, including crucially reauthorization of the Federal Aviation Administration. You know, the guys in charge of overseeing the safety of all those planes whizzing about overhead thousands of feet in the air carrying our loved ones.
Also, NBC news is reporting this evening that the same Republicans who claims this is all about reforming rural air service just objected both a Democratic proposal to make huge cuts in that service and a clean extension of FAA authority.
So the partial shutdown of the FAA, now in its tenth day will last at least 45 days or more.
Now, remember that all of this is happening in the middle of a deficit fight, as well as an economic recovery that is seriously stalling.
Congressman Pete DeFazio pointed out today, far better than we ever could, that the decision to keep the FAA shutdown is a decision that is both dangerous and costly, really, really costly.
(BEGIN VIDEO CLIP)
REP. PETER DEFAZIO (D), OREGON: At the least, at the least, they could have extended the Federal Aviation Administration authority. So we‘re walking away from $200 million a week, that is in taxes, that would come from users of the system; 4,000 federal employees have lost their jobs or are laid off, collecting unemployment. Republicans don‘t care about federal employees, let‘s put that aside.
But 90,000 private sector construction workers and small businesses are also unemployed because we brought all the safety and security improvements across the entire system to a screeching halt because we‘re not collecting taxes which the airlines are now capturing for profits.
Could that be in here? That would put 94,000 people back to work.
Nope, that‘s not in here. That‘s too much to ask.
(END VIDEO CLIP)
HAYES: It‘s really crazy, and Congress doesn‘t get back from vacation until September 6th. But tomorrow night, right here, Transportation Secretary Ray LaHood will be Rachel‘s special guest on the FAA shutdown. I‘ll be tuning in for that.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
CHRIS JANSING, NBC NEWS: You have been quoted coming out of your caucus as calling this agreement a sugar-coated Satan sandwich. Was that indeed your quote? Is that how you feel about this deal?
REP. EMANUEL CLEAVER (D), MISSOURI: It‘s a very accurate quote. If I were a Republican I‘d be dancing in the streets. I don‘t have any idea what the Republicans wanted that they didn‘t get.
(END VIDEO CLIP)
HAYES: It‘s not exactly a secret that not everyone on the left is happy with this new deal that was struck over the weekend to not have Republicans destroy the economy. And there‘s lots not to love about the deal. But what might be hardest for liberals to swallow about this new compromise with the Republicans is there‘s no revenue in it, there‘s no taxation in this deal.
Remember, the president himself said he would not sign a bill—would not sign a bill unless it was balanced.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let‘s live within our means by making serious historic cuts in government spending. Let‘s ask the wealthiest Americans and biggest corporations to give up some of their breaks in the tax code and special deductions. This balanced approach asks everyone to give a little without requiring anyone to sacrifice too much.
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 I can sign.
(END VIDEO CLIP)
HAYES: Of course, the deal we got has no balance and it is getting signed.
This isn‘t new, of course—this anti-revenue down with taxes thing. It‘s a trend and it‘s been going on for decades. What is at its heart, a movement to destroy this country‘s social welfare system by starving it of tax dollars.
Taxes aren‘t just in and of themselves. No one wants there to be higher taxes because, hey, taxes are awesome. No, taxes are means by which the government pays for its provisioning of public goods. Taxes get us roads, parks, and schools and sewers, and running water.
If you stop paying for the government to provide public goods, then not surprisingly what tends to happen is that the quality of those public goods decline. You get, instead, public mess.
And this deal, where the Republicans say, hey, maybe we‘ll destroy the economy, Democrats say, OK, we‘ll give you tons of spending cuts and no taxes, just how you like it. And the Republicans say, OK, groovy, good negotiating with you.
This deal calls into question whether our political system has totally lost the capacity to raise revenue, to pay for the vital public good, and if you think I‘m being hyperbolic here, hold on tight because there is a chart coming up with your name on it.
In the era of the mythic Beltway of partisanship of President Ronald Reagan and House Speaker Tip O‘Neill, the Deficit Reduction Act of 1984 was born, passed, and signed into law. The former White House economist Jared Bernstein points out, yes, that tax-cutting Ronald Reagan agreed to a budget deficit-cutting deal that was more than 80 percent new revenue, more than 80 percent more taxes. A deficit-reducing budget bill passed in 1990 under the first President Bush, just under 40 percent taxes.
Then, in 1993, Bill Clinton and the Democratic-led Congress passed the budget bill to cut the deficit. That was about 60 percent taxes.
And now, to our most current balanced budget deal. Earlier this summer, when the crisis of the looming debt ceiling was only just beginning to roll off the assembly line of Republican shenanigans, the White House was pushing a deal that involved a three to one compromise, $3 of spending cuts to every $1 of tax increases. In other words, if the Republicans would go ahead and vote not to blow up the economy, the White House would give them a deal that‘s only 25 percent tax increases, that‘s lowest one so far on the chart. You can witness the blue shrinking.
Republicans themselves had advocated earlier this year a reduction plan that was 15 percent revenue.
So, where does that lead us? Where are we today?
Now we have a final “let‘s not destroy the economy by blowing it up through the debt ceiling deal,” how much of that deal is revenue? Zero. Zero percent. There‘s no revenue. It cuts the deficit by $2.1 trillion with no guaranteed taxes—no concrete evidence that taxes will be a part of raising all this extra money.
Now, the White House will say, oh, but don‘t you worry, we‘re going to have the hammer in our hands of the expiration of the Bush tax cuts, which are a very, very significant chunk of revenue, and that‘s true. But we‘ve been there before. They‘ve had the hammer of the expiration of the Bush tax cuts in the lame duck session and completely failed to use them to raise revenue.
Part of the problem here is that Democrats and liberals have sounded almost like Republicans on taxes. Always boasting about keeping taxes low, always promising no one who makes less than $250,000 a year is going to see their taxes go up, and that‘s not true—or it shouldn‘t be.
Taxes are going to have to go up, period. Taxes right now as a percentage of GDP are at a 50-year low.
One of the things that characterizes a country with poor governance is an inability to collect taxes to fund the state. We‘ve seen this in action in Greece. And this agreement today calls into question whether or not we‘re on a slippery slope that leads down that same path.
Joining us now, Congresswoman Jan Schakowsky, Democrat of Illinois.
Congresswoman, hanks for being here.
REP. JAN SCHAKOWSKY (D), ILLINOIS: Thank you, Chris.
HAYES: So, you voted against the bill today. What was the deciding factor for you?
SCHAKOWSKY: Well, the deciding factor gets down to what you were talking about—that fact that all of the cuts come from people who have already sacrificed so much, middle class people, our senior citizens, poor people—all the people that we should be protecting and not a hair from the head of a millionaire or billionaire, as you said, not one penny from the wealthiest Americans.
But, you know, you asked a really important question, are we capable of raising taxes? And if you asked the American people, you know, do you want higher taxes? They say no. Do you want a balanced budget? They say yes.
But if you say do you—would you prefer to raise revenue, to have higher taxes, especially for millionaires and billionaires, from rich people or to cut Medicare, Social Security, forget it. Hands down people do not want those things cut. And I dare say, if you say do you want clean air, do you want clean water, do you want food inspection—they say, of course, we do. That‘s what we expect. We want police, we want teachers, we want all those things, so—and the phone calls that I was getting today, 20 to 1 in my office, I heard others saying 100 to 1 not to support this plan.
HAYES: God bless, Evanston, Illinois.
I want to ask you about the sort of expiration of the Bush tax cuts in a second. But I want to ask you live on national TV an honest question. If that vote was tied today in the House and you had not voted yet and they were holding that vote open and you were the deciding vote, would you have voted the same way you voted today?
SCHAKOWSKY: You know what? I probably would have changed my vote. I‘ll be honest with you, although I have very clearly said that I would have like to see the president invoke the 14th Amendment.
But you know what? People have voted against debt ceilings before to make a very clear statement that, you know, we don‘t want to have a deal that is a bad deal. The president himself did it, but we never obstructed actually raising that debt ceiling.
(CROSSTALK)
SCHAKOWSKY: So there would have been a lot of pressure.
HAYES: There would have, and this strikes me in some ways, and this relates to the expiration of the Bush tax cuts, and I‘m not saying I would have done any differently in your position. But this strikes me as exactly the asymmetry that gets us in this position, because I think if I would asked that question of a lot of those freshmen, the Tea Party, you know, about the earlier bill they voted down, they would have said, hey, screw it, I would have voted no and damn the consequences.
If that‘s the dynamic when we come up to the expiration of the Bush tax cuts, what says that‘s going to be any different?
SCHAKOWSKY: No, I absolutely think that at that point, we can mobilize people and that‘s what we‘re going to be doing this summer and that‘s what we‘re going to have to be doing going forward saying if we‘re going to create jobs, if we‘re going to grow the economy, if we‘re going to address the real crises of a disappearing middle class and a disappearing American Dream, then we cannot let the wealthy get away with absolutely no skin in the game whatsoever, including the corporations who are getting tax refunds instead of paying any taxes at all.
I really think that we are going to be able to build the momentum that is necessary to say no, you are not going to continue to take it out of the middle class. And we‘re going to have the president with us making those speeches on the stump as he begins in earnest his campaign for the election. I believe him when he says that we are not going—that we will let those tax cuts expire unless there are some serious tax reform, and I certainly would recommend and introduced a bill, my fairness and taxation act, that taxes the millionaires and billionaires more.
HAYES: Congressman Jan Schakowsky of the wonderful state of Illinois
I really appreciate your time tonight. Thanks, a lot.

SCHAKOWSKY: Thanks, Chris.
HAYES: Can you get to the White House by just saying no all the time?
That‘s next.
(COMMERCIAL BREAK)
HAYES: This “Best New Thing in the World Today” arrives courtesy of the federal government of the United States of America. No, seriously, it does. On a day we‘re all feeling a bit frustrated with our government, a reminder of what it can do when it works., just ahead.
(COMMERCIAL BREAK)
HAYES: You‘re looking for the soul of the Republican Party these days, you have to look in two places. This is the part of the Republican party we‘ve been hearing so much about over the last couple of years, the Tea Party, which is really a proxy for the base, the Republican base—people who believe in small government, lower no taxes, fend for yourself America, or at least says it does until the politicians suggest cutting Medicare.
The base is where Congresswoman Michele Bachmann lives with the rank and file who‘ve had enough of whatever or something. Ms. Bachmann left her presidential campaign in Iowa today so she could vote on Capitol Hill against raising the debt ceiling. But she phoned the folks in Iowa and called for a show of hands.
(BEGIN VIDEO CLIP)
REP. MICHELE BACHMANN ®, MINNESOTA: Let me ask you this question, raise your hands, do you want me to vote no on raising the debt ceiling? Raise your hands. Very good. They‘ll tell me the results, I can‘t see it. But I know if you‘re—if you‘re raise of hands is anything like the rest of the country, it is a very strong no.
(END VIDEO CLIP)
HAYES: The second slice of the Republican soul belongs this year at least to one Willard Mitt Romney, a billionaire son of a governor who made his money laying off American workers and offshoring jobs, who was born wearing chinos and deck shoes and wants to joke with you about being unemployed.
Willard Mitt Romney is the 2012 candidate of the plutocrats, also known as Wall Street, aka the fat cats, the rich, the other half, even though they are more like the other top 1 percent or 2 percent. These Republicans are the plutocrats and Mitt Romney is their guy, to get him oodles of De Niro (ph) to show him how much they care.
So, Republican coalition has these two parts, the base and the plutocrats. And every once in a blue moon, we see these two sides at odds with each other. This happened when Congress and the White House bailed out the banks for instance, the great men of Wall Street almost unanimously wanted the bailout because it saved their hide, and the base hated it.
Guess what? Wall Street won. Wall Street won because Wall Street wins, as long as the plutocrats and base agree, well, then fine, they are the force. But when they differ, bet on Wall Street.
For this reason, I‘ve believed we get some deal to raise the debt ceiling. Wall Street was simply not going to let Congress tank the economy. Goldman Sachs does not want America to default on its debt, so that was probably never going to happen.
But I will admit I underestimated the extent to which the balance of power has shifted. It would make sense Michele Bachmann would oppose raising the debt ceiling. She knows her supporters well enough to thank them for raising their hands even though she couldn‘t see them.
Right through the weekend, Michele Bachmann was raising money for her promise to not raise the debt ceiling.
But Mitt Romney is the candidate of the plutocrats, of Wall Street, and the plutocrats wanted continuity for the U.S. economy. The plutocrats wanted stability, and they sure as heck didn‘t want the U.S. government to default on its debt.
This is what Wall Street got from the candidate of Wall Street. Quote, “While I appreciate the extraordinarily difficult situation President Obama‘s lack of leadership has placed Republican members of Congress in, I personally cannot support this deal.”
Given a “which side are you on” moment between the plutocrats and the base, plutocrat in chief threw in with the base. Probably only after he realized the deal would pass, but then that is Mitt Romney for you.
Joining us now is Wayne Slater, senior political writer for “The Dallas Morning News,” co-author of Bush‘s brain, which is still the definitive book on Karl Rove.
Mr. Slater, thanks so much for making time tonight.
WAYNE SLATER, THE DALLAS MORNING NEWS: Great to be with you, Chris.
HAYES: Wayne, were you surprised by the Romney statement? Was this vintage Romney? Was it surprising he came out against the deal?
SLATER: Well, it is vintage Romney. Look, he‘s able to say something politically on the other end, his Wall Street supporters know that Mitt‘s one of us. He‘s going to be there at the time. I mean, you know, your intro was exactly right. You have two factions who are competing for the soul of the Republican Party—the Tea Party or the teavangelicals and the plutocrats or the Wall Street on the other.
But there are two factions playing on very different fields. The Tea Party plays on the political field where servitude and bold colors and purity is what counts as part of rhetoric.
The plutocrats, that is to say Wall Street is playing and Mitt Romney, really, are playing on the policy side where compromise is king and ultimately that‘s what you have to have when your goal is not sending thing over the edge.
Let me just say, this whole conflict in the last few weeks raises a question in our democracy. Can you have a successful politics—and that‘s what the Tea Party has the last two years—a successful politics that ultimately makes it impossible to govern?
HAYES: That‘s a profound question, and I think in the long run it‘s hard to imagine the impossibility of governance being a sustainable kind of politics. But I think in the short run, it‘s reaping its benefits, and I think you see that in the skittishness of the other candidates today.
I mean, Rick Perry here—of course, your Texas governor. He says—he doesn‘t say anything. He says just to support—that he supports, quote, “cut, cap, balance approach.” That‘s it, one-sentence line. What do you make of that?
SLATER: That‘s politics. I mean, that‘s ultimately is the message. You don‘t talk about—do I agree with what portions of Boehner bill or the bill discussed now. That gets you in trouble. All you do is cite a big theme: cut, cap, balance.
That‘s a dog whistle basically to the Tea Party constituency that says I‘m on your side.
He never said whether he would vote or pass, sign or veto this bill today. What he did say was I‘m with the guys who are running the political side of things this year as I look to the primary states, Iowa, New Hampshire, South Carolina, Florida, and so forth.
HAYES: And what‘s so interesting about this, and I think I‘m sort of obsessed with this one poll which asks people: do you want your representative to stick to principle or compromise to get things done? And there‘s this remarkable result, which Democrats say, two to one, I want them to compromise and get things done, independents say, two to one, I want them compromise and get things done.
And Republicans say I want them to stick to principle—you see this in the dynamics. How much is that shaping the sort of contours of the policy positions they‘re staking out in this Republican field?
SLATER: Well, it is. I mean, basically when you have a constituency especially on the Republican side that will speak so clearly and express itself so clearly, I want to stand on principle even if it means running the country over the cliff, even if it means that you‘re back to Barry Goldwater in 1964. And what happened today when you had a sense of compromise is equal to Rockefeller agreeing with Barry Goldwater and joining.
HAYES: That‘s right.
SLATER: That‘s almost what you have right now, but it‘s not surprising.
HAYES: Goldwater gets the last laugh in that encounter. Wayne Slater, senior political writer for “The Dallas Morning News”—thank you again for dropping by.
SLATER: Great to be with you.
HAYES: Recall elections are rapidly approaching in Wisconsin to counter Governor Scott walker‘s union-busting agenda. “THE ED SHOW” will have the latest developments on those right after this show.
And here, “The Best New Thing in the World Today” benefits tens of millions of women. Well, come to think of, men. Some good news, up next.
(COMMERCIAL BREAK)
HAYES: This is what people think about what has been happening in Washington over the past few weeks. It‘s a word cloud based on the single word responses people gave to “The Washington Post” and Pew Research Center when asked for their characterization of the budget negotiations. Pretty grim.
But there are times when the government does something good, crazy as that may sound. And even like today when it does “The Best New Thing in the World.” Thanks to a decision in Washington, D.C. today, tens of millions of women who already have health insurance in this country will no longer have to co-pay for their birth control and other preventive services.
The Department of Health and Human Services deciding that under President Obama‘s health care act insurance companies can‘t charge women for among other things all FDA approved contraception which would includes the morning after pill, HIV screening and counseling, breast feeding support like pumps for new mothers, and domestic violence screening and counseling.
HHS Secretary Kathleen saying of the new guidelines, quote, “Under the law, we‘re making it illegal to charge women more just because of their gender.”
What‘s better about today‘s “Best New Thing”? It happens at a time when women‘s contraception is under massive assault from the extreme right wing, from House Republicans who cut off funding for family planning services, to newspaper columnists who write that contraception violates the natural, moral order, to organizations that equate taking the pill with murder. Meanwhile, that about a half of all pregnancies in this country are still unplanned.
So, the fact that in such a hostile atmosphere there was a historic decision to give women parity in health care, that is “The Best New Thing in the World Today.”
That does it for us tonight. Rachel will be back tomorrow night. You can read more of my work at TheNation.com where I am editor at large or follow me on Twitter, ChrisLHayes, and watch my new show weekend mornings here on MSNBC this fall.
Now it‘s time for “THE ED SHOW.” Good night.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
END
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