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'The Last Word with Lawrence O'Donnell' for Thursday, September 8, 2011

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Guests: Chuck Todd, Chris Matthews, Ed Schultz, Al Sharpton, Jay Carney, Rep. Barney Frank, Ezra Klein, Bob Greenstein

LAWRENCE O`DONNELL, HOST: President Obama says there`s nothing
controversial in his jobs plan. How long do you think it will take the
Republicans to find something?

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The question is whether
in the face of an ongoing national crisis, we can stop the political circus
and do something to help the economy. So, for everyone who speaks so
passionately about making life easier for job creators, this plan is for
you. It`s not just Democrats who have supported this kind of proposal, 50
House Republicans have proposed the same payroll tax cut that`s in this
plan. You should pass it right away.

(APPLAUSE)

OBAMA: This idea came from a bill written by a Texas Republican and a
Massachusetts Democrat. It`s the kind of proposal that`s been supported in
the past by Democrats and Republicans alike. You should pass it right
away. You should pass it right away.

(END VIDEO CLIP)

O`DONNELL: President Obama`s just finished a 32-minute speech to a
joint session of Congress laying out $447 billion legislative plan he calls
the American Jobs Act. The centerpiece of his proposal is cutting the
payroll taxes for workers and employers. The president is also calling on
Congress to extend business tax cuts and to inject much more federal money
into infrastructure, construction, and repair projects.

President Obama said everything in the plan has been supported by both
Democrats and Republicans and that everything in this bill will be paid
for.

Joining me now is NBC news political director and chief White House
correspondent, host of MSNBC`s "DAILY RUNDOWN," Chuck Todd.

Chuck, thanks for staying with us.

The president did not specify a whole host of tax provisions in here.
What is the White House strategy on that?

CHUCK TODD, HOST, "DAILY RUNDOWN": On that specific point on how to
pay for this and he -- you know, he hinted at it a little bit as you noted,
but he is going to put his own proposal to the supercommittee to deal with
corporate tax reform, personal tax reform. And which, oh, by the way, will
come in the way of figuring out also how to find not just $1.5 trillion
that the supercommittee is supposed to do but then throw in the additional
$450 billion that he`s asking for for this plan. So, that is something in
the next couple weeks that he`s going to do here.

But another reason why they didn`t want to put it in this speech is
they didn`t want to load this speech up with Washington speak, if you will.
For instance, the word "infrastructure" -- something we were just talking
about. Never was said. And yet it was described for a good 10 minutes of
the speech.

But it was scrubbed of Washington words. It was a very simple speech
to talk over the heads of Washington to make him sound more of a populist
and more campaigner. It sounded at the end almost like a campaign speech
when he was making the threat essentially that if they don`t act, he will.

Now, a couple of first reactions that I do think merit reporting here,
Lawrence, tonight. Speaker Boehner, very conciliatory in his release, he
said he hopes the president considers the Republican plan on job creation
but then he says this -- the proposals the president outlined tonight merit
consideration. We hope he gives serious consideration to our ideas as
well. It`s my hope that we can work together to ends the uncertainty
facing families and small businesses and create a better environment for
long-term growth, private sector job creation.

So, not a criticism in the release at all from Speaker Boehner. And
yet, the first presidential candidate release that I received happened to
come from Jon Huntsman, not somebody who is a bomb-thrower, normally, and
he immediately called it empty rhetoric.

And the reason I want to contrast those two, Lawrence, is I think this
is the challenge facing this White House which is politics happening inside
the Republican Party on one hand. You have a fired up Republican base that
is already looking toward the next election. Is that base going to have
influence inside the House Republican caucus essentially politically
handcuffing Boehner as he was almost in some ways -- he doesn`t admit it
but others will say for him -- that he was kind of handcuffed by his base
and politics of his base before in trying to do the so-called grand
bargain.

O`DONNELL: Chuck, any indication in the White House today they made
last-minute edits or changes to this draft today based on what they heard
in the MSNBC debate last night of the Republican presidential candidates?

TODD: No indication on that. But I can tell you that this speech has
been tinkered with a lot today. There wasn`t any excerpts, none of that.
Now, that`s somewhat normal for this president, to tinker with it.

But when you look at it again, this is unlike any speech that I have
seen and witnessed in a joint session of Congress because it wasn`t about
legislation. It was much more of a populist rhetoric saying like "pass
this jobs bill" and saying it in the prepared remarks that it was some 17
times. So, on that front it was clear that the speech writers and the
president wanted to make sure he did not sound like a guy of Washington.

O`DONNELL: And also any indication that White House legislative
affairs office has run any of this by the Congress in either body, any of
the chairman in the Democratic Senate, any of committee of jurisdiction
chairman in the House of Representatives?

TODD: This plan, no. The argument that they made that they`ve been
making for weeks is that this is sort of the thousand flowers bloom
approach. No one idea that they have in here from the extension of the
payroll tax cut, the tax credits for businesses that do hiring -- all of
those things. They are bills that have already had some sort of bipartisan
support even inside the current Congress.

You heard them talk about the one bill, the bill he was referring to
is a bill on infrastructure bank. My apologies for using Washington speak,
that John Kerry and Kay Bailey Hutchinson, the Texas Republican and the
Massachusetts Democrat, that he referred to and didn`t call by name but
that was -- it`s all of those. So, they would argue all of this has been
vetted individually, but no, they haven`t vetted the whole bill on this
front.

And one more point here, Lawrence. Tomorrow, the president goes to
Richmond. That`s the media market -- home congressional district of Eric
Cantor. Tuesday, the road show continues, Ohio -- home state of John
Boehner.

So, it`s pretty clear what they want to do is sort of an old school
State of the Union approach where you throw your agenda out there and then
you actually travel the country and sell it. This president didn`t do that
with health care very well and didn`t do it with previous State of the
Unions. Something got in the way. The plan this time is not to let
something else get in the way.

O`DONNELL: Chuck Todd, you`ve done a great job of scrubbing your
comments of Washington speak tonight, too. Chuck, thank you very much for
staying with us. Thanks, Chuck.

TODD: All right, buddy.

O`DONNELL: Joining me now, MSNBC`s Ed Schultz and Al Sharpton here in
New York, along with Chris Matthews, who joins us again from Washington.

Chris, I`m going to keep going back to the practicalities of how does
this thing move and how does it move given that it spreads over so many
congressional committees. This is a very, very difficult challenge
legislatively and Boehner we now know -- Chuck just reported the Boehner
reaction statement -- very conciliatory, welcoming in effect. Let`s have
the dialogue. Let`s take a look at your plan and please consider some of
our proposals.

Does that indicate that this may be a smoother path at the beginning
in the House of Representatives for the president?

CHRIS MATTHEWS, "HARDBALL" HOST: Yes, it looks like a door has been
opened by this speaker for some bill to pass this session or rather this
fall. In other words, it may be a mix and match kind of situation but he
clearly didn`t say we`re not going to do anything. I think that means that
there`s two tests here. One is to get them to act on something. And that
would include obviously these easier things the president threw out
tonight. Something in terms of payroll tax relief which has to be popular
with business on the employer side. It`s got to be better to hire people
cheaper if you want to hire people anyway, if you want to hire people.

And, secondly, something on infrastructure that does benefit these
members of Congress, including an incumbent`s feature which every member of
Congress in right now will get credit for infrastructure built on their
watch. So, it`s good for them all potentially. So, get something through.

The second step is a really campaign to get 218 in the House for
something that really passes that`s good enough for Democrats and the
country, and the 60 or something that avoids a filibuster in the Senate to
actually get to meet your standard of actual effectiveness.

But I think there`s two standards. Will there be movement? Will
there be action? Will there be a vote on something is the first standard.
And I think he may be moving toward success in that regard.

You don`t get dead on arrival statements coming out from the speaker
tonight. You don`t get that door is slammed look at the thing. So, maybe
they`re going to get action and then question is will they get the right
kind? I think it`s two steps. It looks like they are moving already on
the first.

O`DONNELL: Ed, how much action does the president have to get out of
this to call it some form of success? I mean, does he have to get all of
the way through to legislative passage of at least 51 percent of what he`s
asking for or does he have to just show that Congress has gone to work for
him?

ED SCHULTZ, HOST, "THE ED SHOW": Well, I think going to work is a big
thing. That`s something they haven`t done in the minds of the American
people. There is such a stalemate going on in Congress right now. That
would be a heavy lift and a good move.

Speaker Boehner should like what he heard tonight because President
Obama said that it would be paid for. Paid for means more cuts are on the
way. Spending cuts is what Boehner has been talking about for months on
end.

So, they want to chip away at the big three. And the president
tonight told his base you got to give up a little bit on Medicare and
Medicaid. You know, he says we`re going to have to make these reforms.
We`re going to have to make some minor changes. Now, we get into the devil
in detail.

But we do know this. If it`s $447 billion and it`s going to be paid
for, this supercommittee has already been told by the president of the
United States, have at it, start cutting. I`m with you. I told the
country I`m on record that we`re willing to make more cuts.

And you pointed out earlier not the specifics of exactly what kind of
tax increases are going to come along. We do know that Boehner has never
had any appetite whatsoever when it comes to shared sacrifice asking the
wealthiest Americans to do something about it. I thought the president
tonight hit a home run in asking the country and asking the Congress who
are we and what do we stand for and are we going to do anything for the
American people in the next 14 months because there`s a lot of people
hurting.

And that`s a general message that will ring across the country in a
populist fashion.

O`DONNELL: Let`s listen to what the president actually said about
possible Medicare and Medicaid changes.

(BEGIN VIDEO CLIP)

OBAMA: I realize there`s some in my party who don`t think we should
make any changes at all to Medicare and Medicaid and I understand their
concerns. But here`s the truth: millions of Americans rely on Medicare in
their retirement and millions more will do so in the future. They pay for
this benefit during their working years. They earn it.

But with an aging population and raising health care costs, we`re
spending too fast to sustain the program. If we don`t gradually reform the
system while protecting current beneficiaries, it won`t be there when
future retirees need it. We have to reform Medicare to strengthen it.

(END VIDEO CLIP)

O`DONNELL: Al Sharpton, no applause on that one. Democrats sitting
on their hands when he`s talking about making adjustments to Medicare in
order to pay for these jobs provisions.

AL SHARPTON, HOST, "POLITICS NATION": Well, everyone needs to know
what that means. When you say gradually reform it, you`re not going to
touch the people that are impacted now, but going down the road what does
that mean and how far down the road are we talking about? So, I think that
the devil is definitely in the details there.

But, again, as I said earlier, I think the tone was brilliant. I
think that it would be very difficult for Boehner to look as a reasonable
person to come out and saying with the president saying that he`s going to
look at some of the Medicare and other things that we all don`t want to see
touched are that he`s going to deal with some gradual minor changes. How
could Boehner look like he is even a patriot to say no, we`re not going to
talk about anything?

Now, last night we talked about people talk about Ponzi schemes and
everything else. You hear the president saying to his base, we`ll have to
make adjustments. We`ve got to be bigger Americans. I think he checkmated
Boehner but that doesn`t mean that Boehner and them won`t double back and
extract more than we are willing in terms of the president`s base to give.

So, I think the work begins tonight. I think the president set a tone
but this is far from over.

O`DONNELL: Chris Matthews, when the president talked about having the
rich pay more of their fair share, he actually talked as he`s done before
about Warren Buffett paying more in his higher rate, higher income tax rate
than Warren Buffett`s secretary pays, and Republicans you could hear it,
Republicans in the House of Representatives laughed when they heard him
making the Warren Buffett comparison. It doesn`t sound like they are ready
to get in there and start changing what Warren Buffett has to do on his tax
return.

MATTHEWS: Yes, I don`t think they take that seriously. And let`s
look at the humor in this to some extent. People like Buffett have a lot
of money they`ll never even look at, let alone spend. They don`t need it.

So, when they talk about giving back money to the government
rhetorically, it means nothing until practical sense. By the way, they`re
not giving back the money. And I think a lot of these Republican people
would say, wait a minute, if you want to make a contribution to the U.S.
treasury, go ahead, buddy. I`ll make it $125,000 a year and I do have a
couple kids in school so don`t talk about me being rich.

I think they are very skeptical. I don`t think that`s smart rhetoric
using Warren Buffett. There`s something phony about it -- something phony
about Obama himself saying I`m going to pay higher taxes. Everybody knows
the president of the United States, this young Harvard lawyer is going to
leave the White House however he leaves it and makes a ton of money if he
wants to.

The idea that he has to sacrifice because he pays a higher tax rate is
ludicrous. I`ll tell you sometimes they hit these points -- they strike me
as phony baloney that they need to go back to values. I personally think
they made a big mistake when they played around with taxes saying, or we`re
going to bring back Bush tax cuts or keep them for people under $250,000
and get rid of for people over $250,000.

We have a progressive tax system. Stop playing the game. It reminds
me of Al Gore back in Florida saying, OK, we can recount three of the
counties because that`s where I`m going to do better. If you play the
Mickey Mouse politics game, the other side is going to play it. That`s
what I think.

O`DONNELL: Ed Schultz, there are things in here that Democrats have
been standing in the way of. He talked about free trade agreements,
Panama, Colombia and South Korea. He wants to pass free trade agreement
bills with them. He talked, it sounded I think probably to most listeners,
kind of fanciful when he was talking about if we buy Kias here, the South
Korean car, we should sell Chryslers in South Korea. I don`t think there`s
Americans out there who think you`re going to be selling Chryslers in South
Korea if you just pass this trade bill with South Korea.

SCHULTZ: Well, you know, Lawrence, that`s the dirty little secret in
all of this. The people we`re doing trade deals with, they have a level of
protectionism. And they protect their industries a heck of a lot more and
they dump all of their stuff on our markets. And I don`t see anything in
these trade agreements from what I`ve read, nor I have heard anything from
labor that says, you know what, this is really going to be great for us.

Getting back to what Chris was talking about, one thing that the
president is going to have a hard time selling to his base and that is
eliminating pages of loopholes and deductions, and we can lower one of the
highest corporate tax rates in the world. Wow. Hold the phone on that
one. The base is going to go nuts on that corporate profits through the
roof in this country.

You got corporations with money off-seas that are not repatriating
that money. The president did not address that tonight. I think he`s
going to have hard time with this caucus on that one.

O`DONNELL: Well, his retort to that is going to be, I can make
corporations pay more taxes if I kill the loopholes I can still bring the
rate down and they`ll end up paying more. But you have to do both in order
to do that. You must kill the loopholes first and I don`t see Republicans
doing that.

SHARPTON: Well, I don`t see how Republicans allow you to do that
without a real fight.

I think also in the trade agreements that you`ve got to remember that
for a very interesting reason, I would say -- I`m trying to be careful with
language, Trumka, Richard Trumka, the head of AFL-CIO, was the first lady`s
guest tonight. So, I think part of trying to get labor not only on board
but having them energized because they`re the ones that can do the local
work with having the head of the AFL-CIO sitting there.

So, I think part of the strategy is how this hits the ground but a lot
of how this hits the ground is where the devil in the details on how it`s
going to be read by those that are going to have to live with this.

O`DONNELL: Al Sharpton, Ed Schultz, and Chris Matthews, thank you all
very much for joining me tonight.

Coming up, reaction and hopefully more details from inside the White
House. Press Secretary Jay Carney joins me next.

And later, Congressman Barney Frank ranking member of the House
Financial Services committee will be here with a look at the opposition to
the president -- the president will definitely face in the Republican
House.

(COMMERCIAL BREAK)

O`DONNELL: Two federal officials tell NBC News that U.S. intelligence
has intercepted information regarding a potential threat coinciding with
the 10-year anniversary of 9/11. The officials say this threat has more
credibility than others they`ve heard over the past few days.

Another White House official says on a 10-point scale, this threat is
a five or a six, adding that this threat is very specific but parts of it
don`t add up. Reporter from Jonathan Dienst (ph) of WNBC in New York
reports that the threat is leveled at New York City and Washington, D.C.

One threat mentioned a car bomb. A separate threat mentioned bridges
and tunnels.

The Department of Homeland Security issued a statement tonight saying
the threat is, quote, "credible and specific but unconfirmed." The
government will continue to track down the threat and ask all Americans to
remain vigilant.

Coming up, I will be joined by White House Press Secretary Jay Carney
followed by Congressman Barney Frank.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Regardless of the arguments we`ve had in the past, regardless
of the arguments we`ll have in the future, this plan is the right thing to
do right now. You should pass it. I intend to take passage to every
corner of this country.

(END VIDEO CLIP)

O`DONNELL: We continue our coverage of the president`s address.
Joining me now, White House Press Secretary Jay Carney.

Jay, thank you very much for joining us tonight.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Lawrence, thanks for having
me.

O`DONNELL: Jay, what changes did you make in the speech today based
on what you saw in the Republican debate last night?

CARNEY: Zero. No changes. The proposals in the speech have been
worked on for four to six, maybe eight weeks now by the president`s
economic team, working with the president and the vice president.

And there were no changes made in reaction to the debate and that`s
because nothing that happened in the debate has anything to do with what
matters here which is that the American economy needs attention. It needs
Washington to act as the president said and to act now.

What he put forward, the American Jobs Act, and what he`ll submit in
detailed legislative language early next week is a plan built on proposals
that have historically garnered bipartisan support and if Congress is
willing to put politics ahead of party, do the right thing by the American
people and the American economy, they will act and they will pass this
legislation.

O`DONNELL: Jay, let`s listen to one thing that should have bipartisan
support -- what the president wants to do for working families and getting
them a $1,500 tax break. Let`s listen to what he said.

(BEGIN VIDEO CLIP)

OBAMA: The typical working family will get a $1,500 tax cut next year
-- $1,500 that would have been taken out of your pocket, will go into your
pocket. This expands on the tax cut the Democrats and Republicans already
passed for this year. If we allow that tax cut to expire, if we refuse to
act, middle class families will get hit with a tax increase at the worst
possible time.

We can`t let that happen. I know that some of you have sworn oaths to
never raise any taxes on anyone for as long as you live. Now is not the
time to carve out an exception and raise middle class taxes which is why
you should pass this bill right away.

(END VIDEO CLIP)

O`DONNELL: Jay, that was the Democrats cheering when they heard what
they believe and what I took to be a direct hit on Grover Norquist and his
pledge that many Republicans in the House and the Senate have signed to
never raise taxes included closing loopholes.

Did the president intend to specify that Grover Norquist pledge?

CARNEY: I don`t think it had anything to do with Grover Norquist
specifically. But, obviously, he was referring to the pledge that a lot of
elected Republicans have taken, and making the point that if, certainly, in
a situation where if Congress doesn`t act, taxes will go up on working
Americans and everyone that gets a paycheck. That`s just a terrible idea.

So, if you`re going to have this pledge, honor it in the next several
months to ensure the tax cut is passed and that Americans get in this case
because we`re expanding the tax cut, $1,500 -- the average American family
an extra $1,500 next year. And you know, Lawrence? That makes a huge
difference when you are making ends meet, when you are buying school
supplies, when you`re paying your mortgage, maybe your washer or dryer is
broke and you need it replaced.

So, that`s money in the pockets of those families and it`s money that
when they spend it, goes straight into local businesses who then have
greater demand, who then hire more workers and you create a virtuous cycle.
And that`s why we are so confident that once outside economists and outside
analysts unaffiliated with the administration or Democratic Party, look at
this plan, they will judge it to be positive for economic growth and
positive for job creation.

O`DONNELL: Jay, the president has things in here that Democrats have
been blocking, for example, the trade bills with South Korea, Panama,
Colombia. And Democrats don`t want to hear about cuts to Medicare and
Medicaid.

Is there any -- have you wired any of this ahead of time by working
with Democrats in Congress and vetting some of these things before they
went into the president`s speech?

CARNEY: Oh, certainly, we`ve been in consultations with peeks and
months, as you know, about our overall economic ideas and proposals, the
free trade agreement certainly with trade adjustment assistance to help
workers affected by trade. We believe that we will get cooperation from
Republicans in the House and Senate to move those free trade agreements and
trade adjustment assistance through. We`re confident about that. That`s
an important step to take.

As for what the president said about his vision for long-term deficit
and debt control, well, you know, I think I was on your show talking about
it. The president believes that we have to make tough choices. And he
will put forward when he does his specific proposals for the supercommittee
-- so-called supercommittee in Congress and to Congress generally for long-
term deficit and debt reduction that will include some adjustments to
Medicare and Medicaid.

He said tonight he understands that`s not always popular with every
member of his party nor is what he absolutely thinks is essential the need
to our overhaul tax code and close loopholes and ensure that wealthiest
among us pay their fair share is popular among Republicans. Everybody has
got to take a step towards the center to get essential things done on
behalf of the broad swath of the American people.

O`DONNELL: Jay, before you go, what do we need to know about the
terror threat that`s just been revealed?

CARNEY: Well, what I can tell you, Lawrence, I said the other day
here in the briefing room to the White House press corps is that the
president chaired a meeting two days ago of his senior homeland security
team going over all of the preparations for the 9/11 anniversary, tenth
anniversary of those terrible attacks. We have known for some time that
ever since the raid in Abbottabad that brought justice to Osama bin Laden
that al Qaeda was interested in and has been interested in significant
dates, including of course the 10-year anniversary of 9/11. So, we were
hyper-vigilant.

As to this specific that`s just coming in, you can be assured the
president has been thoroughly briefed and updated and that his team and all
of the agencies responsible for homeland security are on the job making
sure we`re taking all of the necessary precautions.

O`DONNELL: Jay, the threat that we reported specifies Washington and
New York. Is it possible that the administration might be issuing a
warning for travel to places other than Washington and New York?

CARNEY: You know, that`s outside of my lane, Lawrence. I`m not going
to get into the specific threats. Obviously, DHS is addressing this,
Department of Homeland Security, and other national security agencies may
be addressing it. I can just tell you. I can obviously confirm what DHS
put out and can assure you that the president is on top of this and his
whole team is on top of it.

O`DONNELL: White House Press Secretary Jay Carney -- Jay, thank you
very much for your time tonight.

CARNEY: Thank you, sir.

O`DONNELL: Coming up, the Republican plan for the economy continues
to hinge on tax cuts. Bob Greenstein breaks down what we`ve heard from
last night`s debate about what Republicans would do.

And later, Congressman Barney Frank of Massachusetts on what if
anything his colleagues across the aisle will be willing to do about jobs.

(COMMERCIAL BREAK)

O`DONNELL: Still to come tonight, we`ll take a closer look at the
policies in tonight`s speech. Ezra Klein will join me.

And later, Barney Frank will tell what the president can expect from
the House of Representatives. That`s coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: It`s a balanced plan that would reduce the deficit by making
additional spending cuts, by making modest adjustments to health care
programs like Medicare and Medicaid, and by reforming our tax code in a way
that asks the wealthiest Americans and biggest corporations to pay their
fair share.

(END VIDEO CLIP)

O`DONNELL: That was President Obama tonight pointing out that his
plan includes measures that will displease both Republicans and Democrats.
Joining any now, Democratic Massachusetts Congressman Barney Frank.

Thanks for joining me tonight, congressman.

REP. BARNEY FRANK (D), MASSACHUSETTS: Glad to.

O`DONNELL: Congressman, there was a moment where the president was
talking about the example of Warren Buffett`s tax return and how his
secretary pays a higher tax rate. The camera was on the president, but I
could hear some laughing.

You were in the chamber. Was that Republicans laughing at that?

FRANK: That was scornful laughter from the Republicans. Here`s the
illogic of it. What they say is well, if Warren Buffett thinks he should
pay more taxes, he can do it voluntarily. Of course that`s not a policy
the Republicans follow.

They would cut Medicare. Many of them would cut Social Security.
They would cut a lot of other programs. They don`t voluntarily refuse to
do it. I haven`t heard Paul Ryan say, you know what? Under my plan, if
you`re not yet 55, you`ll never have Medicare. I haven`t heard Paul Ryan
promise that he`ll never use Medicare, that he`ll go with one of his own
vouchers.

So that was the derisive laughter by the Republicans at the notion
that there would be wealthy people who would think it was be a better idea
to pay higher taxes.

O`DONNELL: Congressman, this bill will move through a handful of
committees at minimum. And what are prospects in the House of
Representatives for this bill?

FRANK: I`m afraid they`re not very good. As I`m standing hear, I am
hearing one of the younger Republicans proclaim loudly that government
can`t do anything. You know, when the president was caricaturing them,
unfortunately, he was describing them.

These are people who do not believe we have any capacity to come
together and do anything. And I am afraid that the right wing that has the
Republican party by the throat is going to simply block anything. I think
the president did a very good job of making clear that he was compromising.
This isn`t everything I would like him to do. It isn`t even everything he
would like to do.

But I think he correctly said, look, I want to get results. The only
chance of getting results is to say to the Republicans, I`m giving you some
of the things you want. I`m afraid that it is not going to be helpful.

I credit the president for trying. I don`t know what more he could
have done. But you are dealing with people who really -- look, let`s be
very clear about the Tea Party, about their patron, Grover Norquist, who
has made them all sign these pledges.

These are people who do not understand that government has an
important role, that there are things that we can only do if we come
together to do them, to build bridges, to protect ourselves, to provide for
the elderly in their retirement years, if they weren`t otherwise wealthy.
These are people that don`t believe in it.

Frankly, in the first place, sadly, I have to say, and I`ve had to
conclude this, they don`t want the economy to get better. Because if the
economy gets better, Barack Obama`s chances to win get better. And these
are people for whom the major goal in life is now to defeat Barack Obama,
and secondarily to discredit government.

They don`t want people to think that there are things we can do,
unemployment compensation, building roads, rehiring teachers and
firefighters. They don`t want people to think that those things can be
worthwhile, because they are ideologically committed to the view that there
shouldn`t be any government.

So they`re not trying for success. People shouldn`t mistake this.
They don`t want Obama to succeed and they don`t want us to show that
government can work for the private interest.

O`DONNELL: Congressman, there are those who think that the president
just has to jump on Air Force One and go around to a specific set of
congressional districts, possible swing districts currently held by
Republicans, and point out the bridge that would be fixed in that district,
point out the school that would be repaired, rebuilt in that district, show
teachers who would be hired in that district.

Is that a strategy that could work? Can Air Force One get around to
enough Congressional districts to make that work?

FRANK: Look, people sometimes know how strongly they feel, but think
the other side can be more easily influenced. Doing that kind of thing is
very hard. I believe the president should try and will try. But, you
know, let`s go with the metaphor here. Air Force One is a transport plane.
It`s not a bomber.

The president can`t go over districts and bomb them into submission.
The other thing you have in this -- this is the sad part. What`s
dominating the Republican party electorate today is not Americans as a
whole. It`s narrow segment that vote in primaries.

I know this from talking to some mainstream conservatives who have
been intimidated by this. What you have is a fairly small number of
Republicans. But to their credit, by the way, they`re the ones who vote.
And the people who don`t vote have no right to criticize them, in my
judgment. But the primaries that determine what Republicans gets
renominated are the most right wingers.

So you see people like Orrin Hatch or Richard Lugar move far to the
right. And unfortunately, all Barack Obama says doesn`t threw this
hardcore that dominates Republican primaries.

O`DONNELL: Congressman Barney Frank of Massachusetts, thank you very
much for joining me on this important night.

FRANK: You`re welcome, Lawrence.

O`DONNELL: Coming up, the policies behind the president`s plan.
What, if any, stimulative effect would they really produce?

And then to the Republican ideas and what they would do and wouldn`t
do. Analysis with Bob Greenstein coming up.

(COMMERCIAL BREAK)

O`DONNELL: We have another update now on the potential terror threat
coinciding with the 9/11 anniversary this weekend. Federal officials now
tell NBC News they received this information within the last 24 hours, and
it came from the tribal areas of Pakistan. The intelligence indicated that
it is possible that three men could be plotting to set off car or truck
bombs in Washington, D.C. or New York.

We will be back with more analysis of the president`s speech next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: We have to decide what our priorities are. We have to ask
ourselves, what`s the best way to grow the economy and create jobs?

Should we keep tax loopholes for oil companies? Or should we use that
money to give small business owners a tax credit when they hire new
workers? Because we can`t afford to do both.

Should we keep tax breaks for millionaires and billionaires? Or
should we put teachers back to work, so our kids can graduate ready for
college and good jobs?

(END VIDEO CLIP)

O`DONNELL: President Obama put his ideas for job creation on the
table tonight. The Republicans running to take his job laid out their job
proposals at last night`s primary debate.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: We`re going to lower
the tax burden on you. And we`re going to lower the regulation impact on
you.

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: We cut that corporate rate
to zero, we pass repatriation to get that resources that are sitting
overseas, 1.2 trillion dollars, and we bring them back here. We`ll create
jobs.

HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: Here`s how I would fix this
economy. First, eliminate the current tax code. It`s a drain on
entrepreneurs. It`s the biggest barrier that`s holding this economy back.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Anybody who is earning
200,000 dollars a year and less ought to be able to save their money tax
free. No tax on interest, dividends or capital gains.

(END VIDEO CLIP)

O`DONNELL: Joining me now, the founder and president of the Center on
Budget and Policy Priorities, Robert Greenstein. He was a guest of
Democratic Leader Nancy Pelosi at the president`s speech in the House
tonight.

Thanks for joining me tonight, Bob.

BOB GREENSTEIN, CENTER ON BUDGET AND POLICY PRIORITIES: My pleasure,
Lawrence.

O`DONNELL: Bob, this plan is the plan that dare not speak its name.
Its real name is stimulus, but that word has been banned from politics in
Washington. This bill is designed to stimulate the economy, in the process
add jobs. How much of this bill, as outlined by the president, is actually
stimulus? And how effective is it as stimulus?

GREENSTEIN: You know, Lawrence, I was more impressed by the plan than
I expected to be. It`s bigger than I expected. It`s bolder than I
expected. And I think it is well designed.

If it were able to be enacted -- and I share Barney Frank`s
skepticism. If it were able to be enacted, it would have a substantial
effect on jobs. You have got 35 billion dollars to hire back teachers and
have us stop firing them. You have a big chunk for infrastructure,
including a fast 30 billion that could go to work right away hiring people
to repair school buildings.

There`s a program to provide subsidized jobs for low income people and
tax breaks to businesses to hire the long-term unemployed, both groups that
otherwise have a particularly hard time getting jobs. And we have evidence
that these kinds of things, particularly the subsidized jobs program, can
work.

Now, in a political savvy move, over 60 percent of the plan is in the
form of tax cuts. But the tax cuts, unlike those described in last night`s
Republican debate, are actually well designed. For example, I was
concerned when I heard the president was going to proposal to reduce the
payroll tax on the employer side. Big corporations are sitting on a
trillion dollars in cash. They don`t need more. Just giving them more
won`t spur more hires.

But when you look at the plan, it provides that tax break on only the
first five million dollars of a firm`s payroll. It will benefit small
firms that may be cash constraint. It won`t really do much for big
corporations that don`t need it.

So I was quite favorably impressed, but I was also struck by the
degree to which, in proposal after proposal, that in a less partisan
atmosphere would have both parties applauding, that tonight the degree to
which, on things that ought to be mainstream proposals in an economy with
nine percent unemployment, the Republicans just sat on their hands, stony-
faced.

O`DONNELL: Bob, the payroll taxes we are talking about not collecting
are taxes that fund directly Social Security and Medicare. What does this
kind of tax cut and that kind of cut in the flow or revenue to Social
Security and Medicare do to those programs?

GREENSTEIN: The proposal doesn`t affect payroll taxes that relate to
Medicare, just on the Social Security side. It really doesn`t do anything
to Social Security, because part of the proposal is that all of the payroll
tax revenue that would otherwise have gone into the Social Security Trust
Fund that now wouldn`t, because of the tax cut, the Treasury, instead,
takes general revenue from the income tax and makes the Social Security
Trust Fund whole.

So Social Security doesn`t lose a dollar as a result of this.

Now there would be legitimate concern that if this were a permanent
Social Security payroll tax pay cut that we couldn`t permanently or
wouldn`t permanently make Social Security whole. But this is just for one
more year.

O`DONNELL: Bob Greenstein with the Center on Budget and Policy
Priorities, thank you very much for joining us tonight, Bob.

GREENSTEIN: My pleasure, Lawrence.

O`DONNELL: Coming up, another look at the stimulative effects of the
president`s plan. Ezra Klein will join me.

(COMMERCIAL BREAK)

O`DONNELL: Before the president`s speech today, the Congressional
Super committee on Deficit Reduction met for the first time for an hour-
long organizational meeting. Tonight, the president issued a new challenge
to that super committee.

(BEGIN VIDEO CLIP)

OBAMA: The agreement we passed in July will cut government spending
by about a trillion dollars over the next ten years. It also charges this
Congress to come up with an additional 1.5 trillion in savings by
Christmas. Tonight, I am a asking you to increase that amount so that it
covers the full cost of the American Jobs Act.

(END VIDEO CLIP)

O`DONNELL: The president says he will issue a more ambitious deficit
reduction plan a week from Monday, which will call for both reforms to
Medicare and tax revenue increases.

Joining me now is "Washington Post" columnist and MSNBC contributor
Ezra Klein. Ezra, thanks for joining me tonight.

EZRA KLEIN, "THE WASHINGTON POST": Good evening.

O`DONNELL: Did I just hear the president say I`m going to have the
super committee do the pay for side of this bill, and then let, you know,
the bridges and all of the infrastructure stuff, the teacher stuff -- let
all of that stuff be done by the other committees of jurisdiction?

KLEIN: I think he said he would like them to do it. I don`t think he
is saying they`re the only ones who can do it. My understanding from them
is that what they would like to do is to show they are serious about
getting this paid for, not just by saying it and not just by offering up a
plan, but by adding to the super committee`s trigger a equivalent amount to
the cost of this plan, so 450 billion dollars more.

And then the theory is Republicans and American people who pay
attention to triggers, which, of course, is all of them, will understand
that they really need to get this paid for, because if they don`t get it
paid for, then it`s going to get taken out of the budget indiscriminately.

O`DONNELL: Well, the other huge advantage of the super committee is
that they are procedurally protected, that their work product, if they come
up with one, is guaranteed a route to a vote procedurally in both bodies.
And normally a bill like this would have a great struggle getting to a vote
if it wasn`t in a reconciliation packages, which has similar kinds of
protections. But we may be getting a bit too technical there.

Ezra, your overall grade for the president`s speech tonight on policy?

KLEIN: On policy, a very solid B plus. He would have needed
something bigger and completely unpassable to actually fill the hole we`re
in. That would be about 700 to 800 billion dollars. But we are talking
450 billion. If you got that money into the economy in 2012, and it
actually got in there as demand, you would bring down unemployment by a
full percentage point. That would be a very big deal.

O`DONNELL: Can you get the money into the economy that fast?

KLEIN: You can get a lot of it there. Tax cuts move quickly. Some
of them get saved, but a lot of it moves quickly. These are pretty well
targeted. Particularly, I was impressed by targeting the employer side to
the small businesses. It`s a very good idea.

The state and local aid, that can move essentially immediately. We
lost an enormous amount of state and local jobs. If we stopped that, it
would be a huge lift to the employment numbers.

Infrastructure gets harder. Jared Bernstein`s schools idea, that was
in the bill. You can do that very quickly. You can do a fair amount of it
quickly. They learned a lot from the stimulus in what you can and cannot
do quickly. But in general, even if we don`t get every dime of
infrastructure in the economy in 2012, we still need to fix our
infrastructure. So if we that done in 2013, but we fixed a bridge, it`s
not like we lost anything there.

O`DONNELL: Ezra, there`s a lot of quicksand in this bill. The
general phrasing, the careful and very general, nonspecific phrasing about
Medicare and Medicaid. It seems to me that John Boehner may want to
discuss that first with the president. Exactly how much would you like to
cut in Medicare and Medicaid, Mr. President?

KLEIN: The big concern from folks around town, particularly liberals
around town, is that the administration is going to offer up things like
raising the Medicare eligibility age, cutting Medicaid into something
called a blended rate, which would lower reimbursements below what is
already a very low rate, and that much has happened during the debt ceiling
negotiations.

Republicans will pocket that, offer none of the revenues, take in none
of the jobs proposals, or very few of them, and walk away from the table
with now much further right ideas being made into the center.

So that is the concern. The question is whether or not the
administration is willing to simply say no if they don`t get the full
bargain here. One thing they didn`t say tonight, which I would have liked
to hear them say is they would not sign anything from the super committee
if it did not include significant action on jobs, that simply doing deficit
reduction would no longer be enough. And if the super committee didn`t
agree, then the trigger would get pulled.

I thought that was good leverage for them. And I would like to see
them, in the coming days, take advantage of it.

O`DONNELL: Ezra, what are the indications that the White House has
done the kind of homework you would have to do on a legislative package
like this to already know what at least a theoretical path -- strategic
path to passage in the Congress looks like?

KLEIN: You know, if you wanted my honest opinion, I don`t think they
know what a theoretical path to passage in the Congress is, because I don`t
really think there probably is one. It`s depressing on a night like this.
It was a good speech. It was rousing to folks who believe in these ideas.

But the reality is that John Boehner and Eric Cantor and Mitch
McConnell and Jon Kyl cannot give this president a major win before the
election. So this is about getting the people on their side, but it may or
may not pass.

O`DONNELL: MSNBC contributor Ezra Klein, thank you very much for
joining me tonight, Ezra.

KLEIN: Thank you.

O`DONNELL: Our coverage of tonight`s presidential address to Congress
continues now with "THE RACHEL MADDOW SHOW." Good evening, Rachel.

END

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