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'The Last Word with Lawrence O'Donnell' for Tuesday, December 13, 2011

Read the transcript to the Tuesday show

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Guests: Steve Schmidt, Jonathan Capehart, Candace Gingrich-Jones, Steny Hoyer, Rep. Steny Hoyer, Andrew
Kaczynski

LAWRENCE O`DONNELL, HOST: Breaking news, Christine O`Donnell has just
endorsed a candidate for president of the United States. Yes, that
Christine O`Donnell.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: His ego is so enormous.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: His impact would be so
horrifying that we would, in fact, basically lose our civilization.

UNIDENTIFIED FEMALE: It`s enormous even for a politician.

MARTIN BASHIR, MSNBC HOST: I want to get to Newt in a second.

UNIDENTIFIED FEMALE: I hate to interrupt you.

BASHIR: We have some breaking news, gentlemen, this afternoon.

DONALD TRUMP, BUSINESSMAN: A terrible thing is happening.

BASHIR: This is obviously a catastrophe.

TAMRON HALL, MSNBC ANCHOR: He`s not going to moderate that debate
December 27th.

BASHIR: Tragic news, indeed.

HALL: He`s fired himself.

DAVID CORN, MOTHER JONES: I think he fired himself, but God, God love
Donald Trump.

TRUMP: Only two people are showing up.

UNIDENTIFIED MALE: They all run away from him.

BASHIR: This is clearly a catastrophe for western democracy, isn`t
it?

UNIDENTIFIED MALE: The circus act is over.

CORN: The car at the circuses with all the clowns, it just lost its
driver.

UNIDENTIFIED MALE: Silly season.

TRUMP: It`s very unfair.

ANDREA MITCHELL, NBC NEWS: Republicans are not happy with their
choices.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Why do they like me?
Because a lot of people do like me. Some don`t.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Appreciate Governor Romney
taking that position.

UNIDENTIFIED FEMALE: Give me a break.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Ask Newt Gingrich, I`m not at
all concerned about it.

MITCHELL: Somehow I don`t -- I`m not buying it.

ROMNEY: We`re not running negative ads at that point.

NARRATOR: Newt has a ton of baggage. Gingrich was fined $300,000 for
ethics violations.

ROMNEY: I`m not going to say outrageous things.

UNIDENTIFIED MALE: They want somebody who throws rhetorical bombs.

GINGRICH: Electric magnetic pulse may be the greatest strategic
threat we face.

UNIDENTIFIED FEMALE: Anybody painting Newt Gingrich out as some kind
of messiah is smoking.

UNIDENTIFIED MALE: No, I would never say that. No, no.

UNIDENTIFIED FEMALE: I can`t handle it.

(END VIDEOTAPE)

O`DONNELL: Eleven days after shocking the world with the announcement
he would moderate a Republican presidential debate, Donald Trump shocked no
one by admitting he wasn`t going to do what he said he was going to do.
After getting laughed off the air last night by Bill O`Reilly who seemed
unconvinced, to put it mildly, that the Trump debate would even take place
after Trump downgraded it to what he called a chat.

Trump took to YouTube today to explain why he was dropping out.

(BEGIN VIDEO CLIP)

TRUMP: They want me to announce that I won`t run as an independent
candidate. And I won`t do that, because if the Republicans pick the wrong
person, I would in fact seriously considering running. But because of the
fact the Republicans are upset and because of the fact I refuse to give up
the possibility of running as an independent candidate, I decided to cancel
the debate.

(END VIDEO CLIP)

O`DONNELL: That`s the always presidential looking YouTube.

As viewers of this program know, Donald Trump will never run for
president, but he has obviously determined that he can use the lie that he
might run for president as his excuse for bailing out on the debate that
he, himself, had pathetically downgraded to what he called just a chat
yesterday -- an event that was going to be as humiliating for Trump as it
would have surely been for front-runner Newt Gingrich, if they both had
actually shown up for that event. The Gingrich campaign struggled today in
what it hoped to be the first day of no negative campaigning.

After Romney and Gingrich took shots at each other, last night in New
Hampshire, Gingrich vowed to run a positive campaign and urged Mitt Romney
to do the same.

(BEGIN VIDEO CLIP)

GINGRICH: Tomorrow morning, I`ll release a letter to my staff, to any
consultants and to any surrogates we have, indicating that our
determination to run a positive campaign and also indicating should any
super PAC who is doing so in my name attack any of my friends who are
running, that I would publicly disown them and urge people not to donate to
them.

(END VIDEO CLIP)

O`DONNELL: It seems Craig Bergman did not get the Gingrich memo until
it was too late. Bergman was hired last week as Iowa`s state director, but
had to quit today after it was revealed he said this about Mitt Romney`s
faith. "There`s a national pastor on the anti-Mitt Romney bandwagon. A
lot of evangelicals believe God would give us four more years of Obama just
for the opportunity to expose the cult of Mormon. There`s a thousand
pastors ready to do that."

The Gingrich campaign announced today that Bergman has agreed to
resign from the campaign because his comments were, quote, "inconsistent
with Newt`s 2012 pledge to run a positive and solutions oriented campaign."

Bergman had made that statement, that controversial statement, the day
before he was hired last week.

Mitt Romney obviously didn`t get Newt Gingrich`s memo either. He told
"The Washington Post" this afternoon, "I think Gingrich has shown a level
of unreliability as a conservative leader. Today when Republicans were
fighting for cap and trade and needed a leader to stand up against cap and
trade, he did. And he did an ad with Nancy Pelosi about global warming.

When Republicans took one of the most courageous votes I`ve seen in at
least a decade to call for the reform of Medicare under the Paul Ryan plan,
he goes public and says this is a right wing social engineering plan. Even
today he called it `suicide`."

A new NBC News/"Wall Street Journal" poll tonight shows Newt Gingrich
is the first candidate this campaign cycle to hit the 40 percent mark in
our polling. Among registered voters who say they would vote in the
primary, Gingrich leads with 40 percent. That`s 17 points ahead of Mitt
Romney. Ron Paul is third with 9 percent.

President Obama leads all three in head to head matchups. Romney
polls two points behind President Obama. Gingrich polls a full 11 points
behind the president. Ron Paul polls 13 points behind.

But that poll was taken before tonight`s breaking news that Christine
O`Donnell, the only Senate candidate in the last election who had to deny
she was a witch, just minutes ago endorsed the sinking ship called the
Romney presidential campaign.

(BEGIN VIDEO CLIP)

CHRISTINE O`DONNELL: In making my decision, I might be hurting some
people, but I think infrastructure and executive experience are important.
For that reason, I`m endorsing Mitt Romney.

(END VIDEO CLIP)

O`DONNELL: It is not yet known whether speaker Gingrich has reached
Christine O`Donnell to thank her for endorsing Mitt Romney.

We do have this statement from the Romney campaign just in.
"Christine O`Donnell has been a leader in the conservative movement for
many years," lied Mitt Romney. "Christine O`Donnell recognizes excessive
government threatens us now and threatens future generations and I am
pleased to have her on my team."

Joining me now, "Washington Post" opinion writer, MSNBC political
analyst and senior LAST WORD Trump correspondent, Jonathan Capehart. Also
MSNBC analyst Steve Schmidt, who is the former senior adviser to
McCain/Palin campaign, senior strategist in Bush/Cheney `04 campaign and
managed Governor Arnold Schwarzenegger`s 2006 re-election campaign.

Thank you for joining me on this night of serious breaking news.

Steve, Christine O`Donnell finally announced.

STEVE SCHMIDT, MSNBC ANALYST: We shouldn`t be making it this easy for
you.

(LAUGHTER)

SCHMIDT: I think, you know, the serious side of it is that`s a Senate
seat that Republicans should hold. But for her nomination, Mike Castle
would have been the Republican United States senator from Delaware.

There`s an important lesson, I think, for Republicans out there,
Sharron Angle in Nevada, Christine O`Donnell in Delaware. Those are races
we would have won, but for nominating people who are totally and utterly
unqualified for the offices they were running for.

O`DONNELL: Jonathan Capehart, when do you expect the first Mitt
Romney arm around Christine O`Donnell photo op?

JONATHAN CAPEHART, MSNBC POLITICAL ANALYST: Probably in Mitt Romney`s
mind when he`s president of the United States and she`s on a rope line.
That statement from Mitt Romney`s campaign read just like a hostage note.
I mean, he needs to say that because Christine O`Donnell -- I mean, she got
the nomination because Tea Party folks in Delaware wrapped their arms
around her because they got upset that the establishment and the Republican
organization was moving toward Mike Castle.

So the fact that Mitt Romney is lunging toward Christine O`Donnell and
heaping lots of false praise on her says that he`s very worried about a key
number that I don`t know if you have a chyron for it in the NBC News poll,
about the number of people who believe Mitt Romney is a conservative. And
there aren`t nearly enough of them to help him get the nomination. I think
he`s somewhere around 20-something percent. That`s bad for something who`s
supposed to be the nominee for the Republican Party in 2012.

O`DONNELL: Well, with the Christine O`Donnell endorsement, the number
of Republicans who think Mitt Romney is a nut has gone up by some small
percentage, no doubt.

Steve Schmidt, the 11-day national nightmare of the Republican Party,
the Trump debate, is now officially over. Trump had a really tough time
with you wise men of the Republican Party who criticized the concept of a
Donald Trump-moderated debate.

I want you to listen to what Donald Trump had to say about you. Let`s
listen to this.

(BEGIN VIDEO CLIP)

WOLF BLITZER, CNN: Managed John McCain`s campaign four years ago. He
says this about you. He says, "For three and a half years, a lot of people
who should have known better have been complicit in kowtowing to a
Republican wack pack in which Trump is a leading member. The result is a
diminished Republican brand that appears unhealthy to millions of Americans
who are looking for an alternative to the status quo."

TRUMP: Well, I can only say this, look, Steve Schmidt is a
lightweight. He is a guy who did a horrible job running John McCain`s
campaign. You just said John McCain`s. John McCain lost.

He did a horrible job running it. I watch him on your show, and I
don`t even know how he gets on your show. I`m sure the ratings are very
bad as he speaks.

BLITZER: He`s an MSNBC contributor now. He`s been on my show in the
past. Not now.

TRUMP: He`s a lightweight. Total lightweight.

BLITZER: He`s a smart guy, Steve Schmidt.

TRUMP: I don`t know if he`s a smart guy. Are you telling me he`s a
smart guy?

(END VIDEO CLIP)

O`DONNELL: A lightweight or a smart guy. I leave it to you.

SCHMIDT: Well, I, you know, listen, he`s obviously -- he`s very
upset. He`s very upset. You know, it`s no small achievement to be the
head of the Republican wack pack in 2011. And I think he`s done it with a
plum.

And I think the party escaped a bullet here by having him participate
in this debate to moderate it, the public relations disaster. And, you
know, when you look at this NBC poll out today, Lawrence, you see very
clearly the president is enormously vulnerable on the economy. So, when we
have the front-runner talking about the biggest threat being
electromagnetic pulses, we have the Donald Trump show over here, this is
hurting the Republican brand and is hurting Republican Party`s chances to
take the White House in 2012.

O`DONNELL: Jonathan, there`s no regular on this show who is closer to
Donald Trump than you. You`ve actually spoken to him at least on the
phone. So, today`s development, he started to crumble yesterday when he
reduced the whole thing to a chat.

CAPEHART: To a chat.

O`DONNELL: Telling Barbara Walters it`s going to be a chat. He told
Bill O`Reilly it was going it be a chat. Bill O`Reilly couldn`t keep a
straight face, asking Trump if he was going to show up for his own debate.

CAPEHART: Yesterday I felt a tremor yesterday morning during our
editorial board meeting. Around 10:35 I sent an e-mail to Mr. Trump`s
executive assistant asking would it be possible for the two of us to talk.
After he did "The View" and talked about how his debate was going to be a
chat, I called him and I asked him, pointblank, is there any possibility
that you won`t do this considering you only have two people showing up and
also the amount of criticism that there is? And I should have realized and
understood that he was giving me a dry run for the argument that he would
use more than 24 hours later to pull out of the debate.

And that was there are people within the Republican Party who say they
would participate in the debate if I pulled out -- if I didn`t -- if I
pulled away from my threat to run as an independent for president.

And he said that there was no way he would give that up. That`s one
of the rationales he used in his pulling out of the Newsmax debate on the
27th.

O`DONNELL: And, Steve, he continues to tell a lie that the equal time
rule prevents him from saying he`s going to run for president. The equal
time rule only applies when you filed candidacy papers which he would not
have to do until "The Apprentice" run was done. He could say today I`m
going to run for president and have no effect whatsoever.

But this -- can the party leave Trump behind? What he`s going to
continue to lie about, maybe I`ll run for president. But now, all this
lying will be, I`m going to run as an independent. Does that mean the
Republican Party can now just cut the cord from this nut?

SCHMIDT: I think it`s important the Republican Party cut the cord
from, as you rightly described, this nut. I mean, look, the country is $15
trillion in debt.

We are engaged in hostilities in Afghanistan. Troops are leaving
Iraq. It`s a dangerous world. There are serious issues confronting the
country.

And the fact that we have spent so much time, you know, in this clown
show is terrible, I think, not just for the Republican Party, but for
politics in general, for our political system and it`s one of the things
that`s fueling the cynicism and the sense that the country`s on the wrong
track with so many Americans.

O`DONNELL: And, Steve, I just want you to know, lightweight is the
most complimentary negative that Trump has ever used. It`s usually much,
much, much worse than that.

Jonathan Capehart and Steve Schmidt, a smart guy, thank you both very
much for joining me tonight.

CAPEHART: Thanks, Lawrence.

O`DONNELL: The Trump debate madness is really finally over. The 11
days after idiocy and constant lying by Donald Trump from the debate
announcement to the debate cancellation is in tonight`s "Rewrite." It`s
all there in a few minutes.

Newt Gingrich says he`s changed. Yesterday, he even signed a pledge
saying that he`s changed and can now stay faithful to his wife. The woman
who`s known Newt Gingrich longer than any of his wives, his sister, Candace
Gingrich, joins me next to explain why there`s absolutely nothing her
brother can say to get her to vote for him for president.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN OLIVER, SENIOR POLITICAL CORRESPONDENT: Money isn`t Gingrich`s
narrative. He`s the infidelity guy. His problem is oaths. He could
flaunt his wealth all he likes. What he can`t do is promise to be
America`s president for richer or poorer, and definitely not in sickness
and in health, without evoking images of President Gingrich getting bored
with us and messing around with a younger country behind our back.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

O`DONNELL: Newt Gingrich`s new commanding lead in the NBC News/"Wall
Street Journal" poll is not the only change in his life. That is if you
believe Newt Gingrich.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS: How are you different than you were when you
were speaker?

GINGRICH: Oh, I think I`m much more mature than I was when I was
speaker.

(END VIDEO CLIP)

O`DONNELL: The man who in 1997 started the coup that eventually drove
Newt Gingrich to resign from the speakership and House of Representatives
thinks Gingrich has changed, too.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: He`s been out of government
for a long time. He`s matured as a person. He`s reattached himself to his
faith.

You know, the coup started in my office. So, obviously, the guy
doesn`t hold grudges. But, yes, I think he`s leveled out as a person. And
all of us, even his worst critics would say that Newt is a guy that can
really hold a room, a very smart fellow.

(END VIDEO CLIP)

O`DONNELL: Senator Lindsey Graham stopped short of endorsing Newt
Gingrich.

And yesterday, Newt Gingrich actually signed his name to a pledge that
he has changed. He signed the controversial Family Leader`s pledge that
had been submitted to Republican presidential candidates months ago in
Iowa. In the pledge, Gingrich affirms, quote, "My strong support of the
mission of the Family Leader by solemnly vowing to defend and strengthen
the family through the following actions I would take as president of the
United States.

Defending marriage. As president I will vigorously enforce the
Defense of Marriage Act which was enacted under my leadership as speaker of
the House. I will support sending a federal constitutional amendment
defining marriage as the union of one man and one woman to the states for
ratification."

And in the most interesting component of the pledge, Newt Gingrich
said, "I also pledge to uphold the institution of marriage through personal
fidelity to my spouse and respect for the marital bonds of others."

Joining me now, a woman who has known Newt Gingrich longer than any of
his wives, his sister, Candace Gingrich-Jones.

Thanks very much for joining me tonight, Candace.

CANDACE GINGRICH-JONES, NEWT GINGRICH`S SISTER: Thanks for having me
on, Lawrence.

O`DONNELL: Candace, there is this dispute as happens sometimes in the
evolution of pronunciations. I saw you discuss this with Rachel last week.
You pronounce the last name differently than your brother does.

GINGRICH-JONES: I do. In Pennsylvania, the hard "CH" of the last
name is pronounced as a "K." German, Pennsylvania Dutch background, and
Newt I think spent a lot of his time in Georgia and folks there were saying
Gingrich and never corrected them.

O`DONNELL: He just went with the local`s choice on that one.

GINGRICH-JONES: Yes. Yes. I would think so. And just a little
point, I actually don`t know him longer than all of his wives. He was
actually married and had a kid before I was even born, so almost as long.

O`DONNELL: I thought you were closer in age than that. OK. That`s a
very helpful clarification.

Now, he just signed a pledge yesterday saying not only he would behave
himself, as a husband in the traditional confines of what we all understand
that to mean, but that he will respect the marital bonds of others. That
would be others except his sister.

GINGRICH-JONES: Yes. It`s a little, you know, disappointing to think
that, you know, he has affirmed this pledge, that others signed this pledge
to, you know, to strengthen families, but yet they`re leaving out all of
the lesbian, gay, bisexual and transgendered families in the country.

O`DONNELL: And you will apparently not be working for your brother`s
re-election, or election. He`s not been elected before.

GINGRICH-JONES: Right. I have never worked on a campaign and I
sincerely doubt anything would change between now and anytime in the future
for me to be working.

O`DONNELL: You did favor President Obama`s election last time and
will be working for his re-election or supporting his re-election this
time?

GINGRICH-JONES: Absolutely. I don`t think there is, you know, any,
any discussion that needs to be had, you know, specifically about, you
know, LGBT issues and issues of equality. Between President Obama and
anyone who happens to win the GOP nomination.

O`DONNELL: How often do you see Newt?

GINGRICH-JONES: You know, every now and then, a few times a year.

O`DONNELL: And how uncomfortable is it for you to discuss the
personal elements of your relationship with your brother publicly like
this?

GINGRICH-JONES: Well, you know, it was a decision at first, you know,
to do it. What I saw was a real opportunity I think to educate, you know,
all of America about the realities of, you know, what an American family
does look like. You know, our family is not that different from a lot of
others, you know, folks who have differing opinions, struggling over
difficult issues. You know, we just happen to have the magnifying glass
over our family.

O`DONNELL: And any possibilities of you being able to pick out a
visitor`s bedroom in the White House if he ever gets there?

GINGRICH-JONES: I don`t think that day is going to come, Lawrence.
I`m not even going to consider that.

O`DONNELL: You`re not going to entertain hypotheticals.

(LAUGHTER)

O`DONNELL: Just like Newt.

Candace Gingrich-Jones, thank you very much for joining us tonight.

GINGRICH-JONES: Thanks for having me on, Lawrence.

O`DONNELL: Coming up, will the Republican House of Representatives
actually go on vacation and do nothing to stop a tax increase on January
1st? I`ll have an exclusive interview with House Democratic whip Steny
Hoyer.

And the campaign season`s king of opposition research happens to be a
college student. He watches endless hours of C-Span video to find old
clips of candidates saying stuff they wish we would all forget. Mitt
Romney`s worst enemy joins me later.

(COMMERCIAL BREAK)

O`DONNELL: House Democratic whip Steny Hoyer joins me next to tell us
if the Republican House of Representatives is really going to leave
Washington for the holidays and allow a big tax increase to hit working
people on January 1st.

And all 11 days of Donald Trump`s madness and lies about his debate
will be compressed into tonight`s "Rewrite."

(COMMERCIAL BREAK)

O`DONNELL: Tonight, the Republican House of Representatives voted on
an extension of the payroll tax cut, not a further reduction in the payroll
tax that President Obama favors. The bill passed 234 to 193, with
irrelevant items attached to it that the president promised would provoke a
veto if the bill reaches him in that form.

After the Republicans attached a 1,700 mile oil pipeline from Canada
to the Gulf of Mexico to the bill, the White House issued a formal veto
threat letter to the House of Representatives. "If the president were
presented with HR 3630, he would veto the bill."

That made the vote tonight an academic exercise, especially since the
bill didn`t come close to getting a veto-proof two-thirds majority in the
House.

Joining me now is Congressman Steny Hoyer of Maryland, the House
Democratic Whip. Congressman Hoyer, why did the Democrats vote against
this bill overwhelmingly today?

REP. STENY HOYER (R), DEMOCRATIC WHPI: Because this was not a real
bill, Lawrence, in the sense that the president indicated he would veto it.
The leader in the Senate, the majority leader said it couldn`t pass and
wouldn`t pass the Senate. We have 72 hours to go before the government
shuts down.

We have 18 days, approximately, left to go until the end of the year.
We need to stop playing politics and pretense and get down to doing things
that both parties can pass. Frankly, what we did today is one of the
reasons this has been the least productive Congress in which I`ve served in
30 years. And statistically, the fewest number of bills signed by a
president.

We had many more bills signed when we took over the majority and
George Bush was president by a factor of 100 percent more. The fact is
that we voted against it because we need to get to the business on a bill
that can, in fact, pass, can make sure that the people don`t lose their
unemployment insurance, make sure the taxes don`t go up for working
Americans on their payroll tax, and make sure that docs are compensated to
make sure they`re available for seniors getting their medical services.

All those are critically important for us to pass by the end of the
year. The Republicans know that. But they chose to, in effect, stick
their fingers in the eye of the president of the United States and put
extraneous items in this bill that have nothing to do with any of the three
items I`ve just mentioned, but have to do with items that they know the
president has said he`s not for and would veto.

That`s not the way to get business done. That`s not the way to come
to agreement. It`s simply the way to make political points. And that`s
not very fruitful or productive at this late date. Wasn`t fruitful before
this, but certainly not fruitful at this late date.

O`DONNELL: Congressman Hoyer, do you see any way for the Democrats
and the Republicans to come together on how to pay for this bill, even to
pay for the elements that they agree on?

HOYER: Yes, I do. And I think we must do that. Obviously from a
Democrat`s perspective, and in the Senate, where we have the opportunity to
put something on the floor, the Democrats in the Senate have continuously
offered a small percentage surtax on those with a net income of a million
dollars or more.

We could easily pay for what is needed here with a small percentage,
less than three percent, or in that neighborhood, surtax on the wealthiest
in our nation. The Republicans have consistently opposed that contribution
to this effort by our wealthiest citizens.

But nevertheless, I am sure that we can arrive and pay for the bills
if we come together and sit down. Lawrence, as you know, with respect to
the first two continuing resolutions to keep government going, with respect
to the debt limit extension to keep our country able to pay its bills, and
with respect to the last appropriation bill that we did, which we called a
minibus, Republicans called me and said, hey, can you give us some votes?
We can`t get there without votes from the Democratic side.

And we gave them those votes. We talked. We came to compromise. We
came to an agreement. And we did that. This time, they didn`t call me.
This time, they weren`t interested in compromise. They were interested in
simply making their political point.

O`DONNELL: Congressman Hoyer, you served in the House of
Representatives with the man who is now leading the polls in the Republican
campaign for the presidency. You`ve worked with a Speaker Gingrich. Can
you imagine working with a President Gingrich?

HOYER: You know, the American public continues to send us the message
that we ought to come together. We ought to come to agreement. And we
ought to responsibly lead this country in a bipartisan fashion. I don`t
know of anybody that I`ve served with who has promoted exactly the opposite
message, division, wedge issues, not coming to consensus, but going a
policy of politics rather than of agreement.

So it`s hard for me to believe that a nation that wants to see us come
together and work together would support, frankly, one of the most divisive
figures we`ve had in American politics over the last three or four decades.

O`DONNELL: And do you think that`s the way Newt Gingrich would be
seen if he was the Republican nominee? And if so, wouldn`t that make him
exactly who President Obama should want to run against if he wants to have
an easier time winning than running against Mitt Romney?

HOYER: Lawrence, I think -- I happen to believe that Barack Obama`s
going to be re-elected. I think he`s shown a lot of courage in leading
this country in the deepest economic recession that almost anybody alive in
America today has experienced.

So I think he`s going to be re-elected. When he`s compared with the
alternative, whoever that alternative is -- but I think, frankly, Newt
Gingrich will be a particularly vulnerable nominee, if he, in fact, is the
nominee, because of his past history of dividing, of creating wedge issues,
of creating confrontation, which I don`t think the country wants.

This president has reached out across the aisle to try to come to
bipartisan agreement. Very frankly, he hasn`t had much success. I think
we all have to admit that. It takes two to tango. Very frankly, I think
when Mitch McConnell says at the beginning of this year that my principle
objective is the defeat of Barack Obama, it clearly says to the American
public, and therefore, I`m not going to cooperate with him, to make him
look successful.

Of course, in the process of Obama`s not looking successful as a
result of Republican obstructionism, the country doesn`t succeed. That`s
the real loser, the people of America, the people looking for jobs, the
people who want to see us pass a jobs piece of legislation which creates
jobs and grows the economy.

O`DONNELL: Congressman Steny Hoyer, thanks for joining us tonight.
Good luck with your annual Christmas ritual of trying to get the
Republicans to do the right thing.

HOYER: We`ll keep trying. Thanks a lot, Lawrence.

O`DONNELL: Thank you.

And now the humiliation of Donald Trump as a debate moderator is
complete. We`ll show you the insanity that was the Donald Trump debate
from start to finish in tonight`s Rewrite.

And the most feared man in the Republican presidential campaign is a
22-year-old college student. Why? He`s been watching C-Span and posting
clips to his Youtube page, clips the Republican candidates were hoping you
would never see. The Republican presidential candidate`s worst nightmare
will join me later.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, "THE LATE SHOW": Did you see the new Rick Perry
commercial? Talking about a war on religion. This is very odd. Here`s
the new Rick Perry I want to be your president commercial. Take a look at
this one.

GOV. RICK PERRY (R), PRESIDENTIAL CANDIDATE: I`m not ashamed to admit
I`m a Christian. You don`t need to be in the pew every Sunday to know that
there`s something wrong in this country when gays can serve openly in the
military --

UNIDENTIFIED FEMALE: This message was approved by Rick Perry.

(END VIDEO CLIP)

O`DONNELL: It was 11 long days ago that the Republican candidates for
president were hit with a crisis like no other in the history of
presidential campaigning.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We are just confirming that Donald Trump will
moderate a Republican debate on December 27th in Des Moines, Iowa. Joining
us by phone is Donald Trump. Thank you so much for joining us, Mr. Trump.

DONALD TRUMP, "THE APPRENTICE": Absolutely. My honor.

UNIDENTIFIED FEMALE: So we got word -- actually "the New York Times"
put out the note that it was official that you would be moderating this
debate December 27th. You`re doing it, why?

TRUMP: Well, I was asked to do it by a number of people, including
some of my friends that are Republicans and strong Republicans. I thought
it would certainly be a little change of pace for Donald Trump. So I`ll do
something that I`ve never done before.

This is what you should be doing, not me. But I`ll do something that
I`ve never done before and we`ll give it a shot. We`ll see how it is. I
think I have lot of good questions to ask. I feel very strongly about the
country.

So we`ll see how that turns out. It could be the last debate before
the primary in Iowa.

O`DONNELL: Ron Paul, the only anti-war and anti-torture Republican
candidate is now the most eloquent anti-Trump candidate. He issued this
statement in response to the announcement that Donald Trump would moderate
a Republican presidential candidate`s debate.

"The selection of a reality television personality to host a
presidential debate that voters nationwide will be watching is beneath the
Office of the Presidency and flies in the face of that office`s history and
dignity. To be sure, Mr. Trump`s participation will contribute to an
unwanted circus-like atmosphere."

JOHN HUNTSMAN (R), PRESIDENTIAL CANDIDATE: I`m not going to kiss his
ring and I`m not going to kiss any other part of his anatomy. This is
exactly what is wrong with politics. It`s show business over substance.
If he had any courage at all, he would be running for president of the
United States of America, as opposed to manipulating the process from the
outside.

TRUMP: Look, Ron Paul has zero chance -- zero of getting elected or
getting the nomination. He`ll do OK in Iowa. And after Iowa, he`ll fade
into oblivion. So Ron Paul, you know, frankly that some of these people
aren`t there -- Huntsman is another one.

He called my office. I don`t know if you know this. Wanted a
meeting. I didn`t give it to him. Maybe I should have. I didn`t give it
to him. But he wanted to come up and see me. Then I see him at a debate
saying, unlike you people, I didn`t go and see Donald Trump.

So he`s a Mormon. I`m sure he wouldn`t lie about it. I`ll tell you,
it will get great ratings.

We`re going to have a real debate. You read about a Huntsman, who`s
upset or Ron Paul, who`s never going to win anything. But you don`t read
about the thousands of people that want it. I mean, most people want it.

(CROSS TALK)

UNIDENTIFIED FEMALE: Charles Krauthammer said that he --

TRUMP: He`s a political hack.

UNIDENTIFIED FEMALE: George Will and Karl Rove.

TRUMP: By the way, these are the three people -- I have to tell you.
They`re hacks. We will get probably the highest ratings of any debate that
they`ve had because of all this controversy.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I`m not participating in
that.

HUNTSMAN: I think his infusing himself into the dialogue really dumbs
down and makes less consequential the very important issues that we must be
discussing to get this country back on its feet again.

GRETA VAN SUSTEREN, FOX NEWS ANCHOR: Have you thought through,
though, what this might be like?

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I assume it`s like "the
Apprentice" presidency. I mean, I think if you`re afraid to debate with
Donald Trump, people are going to say, so you want me to believe you could
debate Barack Obama, but you`re afraid to show up with Donald Trump?

I think it strikes me as kind of a very weak position. I don`t know
why people would do that.

NEIL CAVUTO, FOX NEWS ANCHOR: On your left is Senator Santorum and
former Speaker Gingrich. Others I guess still could join in. But what are
you going to do if it`s just those two?

TRUMP: Well, we`ll see. This is a Newsmax debate.

Well, I know a lot of the moderators. Some are wonderful, some
aren`t. I know the issues better than the moderators. That I can tell
you. Every issue better than the moderators.

O`DONNELL: Today a week after he was invited to participate in the
Donald Trump debate, Rick Perry`s brain finally unfroze long enough to
decide to decline that invitation. A Bachmann campaign spokesperson
confirmed to NBC tonight that Bachmann will not participate either.

TRUMP: I do get ratings. We would have the biggest ratings.

DON IMUS, RADIO TALK SHOW HOST: Absolutely.

TRUMP: I get the ratings. A lot of people would watch.

You know, this is a Newsmax debate. We may just do a chat. Newt and
I may just do a chat.

UNIDENTIFIED FEMALE: What do you mean by that?

TRUMP: We may just talk about the world and about the economy and
maybe it will be interesting to people.

BARBARA WALTERS, "THE VIEW": Are you still going to have debates with
just two candidates?

TRUMP: We may have a chat. We may have a chat. I may chat with Newt
for an hour. I think it will do well. Everyone says we`ll have the
highest ratings if we do it.

BILL O`REILLY, FOX NEWS ANCHOR: Newt Gingrich is showing up and
Santorum`s showing up. All right, are you going to show up to this debate?
Is it going to happen?

TRUMP: Well, I am going to show up. Maybe we`ll just have a chat.
We might just discuss the world and we`ll discuss it with ourselves.

Maybe we`ll just do a chat. Newt and I will talk about what has to be
done.

O`REILLY: You`re going to ignore Santorum? You`re going to just,
say, hey, get out of here?

TRUMP: No, no, he`ll be there. You know what? Look, he`s not doing
great in the polls.

O`REILLY: No, but he`s nice enough to show up. You have to ask him a
few questions.

TRUMP: You`re right. He`s been very nice and very gracious. I would
absolutely have him there.

UNIDENTIFIED FEMALE: Mark, I hate to interrupt you. I have about
four people in my ear telling me that we`ve been able to confirm Donald
Trump is out. He`s fired himself. He`s not going to moderate that debate
December 27th.

TRUMP: I`ve decided to cancel the debate. I don`t want to waste a
lot of Newt`s time or Rick Santorum`s time or Donald Trump`s time.

The Republicans, Neil, are very worried that I`m going to run as an
independent. And I certainly have looked at it. I even in my new book
that just came out, I disclosed in the financial disclosure my net worth
and my cash and my assets and lots of other things.

I am looking at it, if the Republicans choose the wrong candidate,
which is a possibility, and if the economy continues to be bad, which I
think it will be, because we have incompetent leadership.

As you know, we would have done very well. We would have gotten great
ratings. I think it would have been a very exciting debate and an
important debate.

(END VIDEO CLIP)

O`DONNELL: And so the 11 day Republican party crisis ended today with
Trump, as always, lying. I showed you last night how he had Rewritten what
I called the not yet canceled debate into merely a chat. Trump today
realized there is greater publicity value for him in continuing to lie
about the possibility of running for president than there is in moderating
a chat with Newt Gingrich and Rick Santorum two nights after Christmas.

So the inveterate liar will continue his book tour and continue to lie
about the possibility of running for president, because no one wants to
talk about the blather that`s in Trump`s book. And Trump obviously hasn`t
read his own book. So he doesn`t know how to talk about the book.

Trump will continue to lie about running for president in order to
promote his television show. And the most gullible performers at Fox News
will continue to nod worshipfully as Trump continues lying.

And viewers of this program will continue, as they always have, to
contentedly ignore the vulgarian`s big lie, because they know he will never
run for president, because he is just smart enough to know that he would
lose. And he is definitely smart enough to know that he cannot afford to
run for president.

Donald`s dark secret is that although he was born rich, he has managed
to maintain a rich lifestyle, he will never, ever be even close to rich
enough to finance a presidential campaign.

And Jon Huntsman was right about Donald. He doesn`t have the courage
to run and he never will. Little spoiled Donald Trump was born rich, but
he was definitely not born to run. And he never will.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ROMNEY: I think the old, you know, standby definitions of who votes
for which party have been blown away in this campaign. I think people
recognize that I`m not a partisan Republican, that I`m someone who is
moderate and that my views are progressive. And so they`re going to vote
for me regardless of the party label.

(END VIDEO CLIP)

O`DONNELL: Not a partisan Republican, progressive. That is how Mitt
Romney won the governor`s race in the state of Massachusetts in 2002. The
Romney campaign has been hoping that we`d all forget about that. That
video surfaced today and provoked this response from the Perry campaign:
"it`s no surprise that Mitt Romney would have described himself as having
progressive views. A quick look at his record shows that he pursued plenty
of progressive policies as governor."

The Romney campaign offered this defense to that video: "the very last
thing the Democrats want to do is run against Mitt Romney. That`s why they
are focused on his campaign and not on the economy. The Democrats are
continuing their campaign of deception in their strategy to kill Mitt
Romney."

Joining me now, the man who posted that video of old Mitt Romney
contradicting the position of new Mitt Romney, Andrew Kaczynski. Andrew,
thanks for joining me tonight.

ANDREW KACZYNSKI, ST. JOHN`S UNIVERSITY STUDENT: It`s great to be
here.

O`DONNELL: So how long have you been working for the Democratic party
and on Team Obama?

KACZYNSKI: Well, It`s funny. I`m actually a Republican. I just -- I
think people have a right to --

O`DONNELL: A what? Excuse me. Mitt Romney just said it`s Democrats
who are trying to kill him with this stuff.

KACZYNSKI: Yes, I thought that was -- I thought it was kind of funny.

O`DONNELL: So you`re in college here in New York City.

KACZYNSKI: I am. I go to school out at St. Johns in Queens.

O`DONNELL: What made you start digging this stuff up?

KACZYNSKI: It`s a funny story how I first got started. I remember
there`s that candidate -- there was the election to refill Anthony Weiner`s
seat between David Wepren and Bob Turner. I remember I looked around and I
found this kind of funny video of the candidate, David Wepren, kind of
doing a funny dance. And I put it online and it got something like 20,000
views.

And I remember after that, that`s where I realized that I could kind
of have an influence over the process.

O`DONNELL: I want to listen to something you found about Newt
Gingrich in 2005, talking about the individual mandate and health care.
Let`s listen to that.

(BEGIN VIDEO CLIP)

GINGRICH: Whatever the appropriate income level is, you ought to have
either a -- you ought to either have health insurance or you ought to post
a bond. We have no way -- we have a no way in this society to have a free
rider approach if you`re well off economically, to say we`ll cheat our
neighbors.

(END VIDEO CLIP)

O`DONNELL: That is stronger, as strong at least, or stronger than
anything Mitt Romney`s ever said about the individual mandate. We`re all
kind of familiar with the Mitt Romney stuff on this. But this is deadly
for Gingrich. So you`re taking out whatever you find, wherever you find
it.

KACZYNSKI: Yes. I kind of look at a bunch of sources. I look at
Youtube, Google Videos, obviously C-Span and even AOL Videos is kind of
cool.

But I really just kind of go looking for things that I think people
want to see. You know, if you`re a public figure, if you said something in
the public sphere, like Gingrich did, the people have the right to know how
your positions evolved and changed over the years.

O`DONNELL: All right. Do you have time after the show to meet with
the producers of this show? Because, you know, they didn`t find that
Gingrich video talking about the individual mandate. I would have loved to
find that.

KACZYNSKI: Yeah, of course.

O`DONNELL: Yeah. OK. Great. Andrew Kaczynski, he`s a student at
St. Johns University. And he is the worst things that has happened to the
Republican candidates so far this year, not including Donald Trump. Thanks
for joining us tonight, Andrew.

KACZYNSKI: Thanks for having me.

O`DONNELL: You can have THE LAST WORD online at our blog, The
LastWord.MSNBC.com. You can follow my Tweets @Lawrence.

"THE ED SHOW" is up next.

END

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