updated 12/19/2011 11:30:59 AM ET 2011-12-19T16:30:59

Guests: Jonathan Alter, Hilary Shelton, Caroline Heldman, Mike Papantonio, Steve Israel, James Peterson, Alan Grayson

ED SCHULTZ, HOST: Good evening, Americans. And welcome to THE ED
SHOW tonight from Minneapolis.

Breaking news: A deal has been reached on Capitol Hill to extend the
payroll tax cuts and unemployment benefits. That`s good news for the
holidays.

But the deal also forces the White House to make a decision on the
Keystone pipeline within 60 days. Are they kicking the can down the road?
More details ahead.

Also tonight, Republicans are mounting a coordinated effort to keep
you from voting in the 2012 election. The right wing can`t win the game,
so they`re changing the rules.

This is THE ED SHOW -- let`s get to work.

(BEGIN VIDEOTAPE)

ERIC HOLDER, U.S. ATTORNEY GENERAL: The right to vote is not only the
cornerstone of our system of government. It is the lifeblood of our
democracy.

SCHULTZ (voice-over): The lifeblood of our democracy is under attack.
Tonight, my commentary on voter suppression and its impact on the 2012
election. "Ring of Fire" radio host Mike Papantonio joins us with legal
analysis, Professor Caroline Heldman with all the numbers, and Hilary
Shelton of the NAACP with the on the ground response.

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: It`s another Iraq
coming. It`s war propaganda going on.

SCHULTZ: Ron Paul is being slammed by the GOP field because he`s got
a shot at winning Iowa.

REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: With all due
respect to Ron Paul, I think I have never heard a more dangerous answer for
American security.

SCHULTZ: MSNBC political analyst, Jonathan Alter, is here, with
analysis on last night`s debate.

And the right wing`s love for Tim Tebow and his faith is now taking
center stage in politics.

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: Let me tell you, I
hope I am the Tim Tebow of the Iowa caucuses.

SCHULTZ: Tonight, I`ll ask Dr. James Peterson what righties would
think if Tim Tebow were a Muslim.

(END VIDEOTAPE)

SCHULTZ: Good to have you with us tonight, folks.

Breaking news out of the Senate on Capitol Hill this evening, Senate
leaders have reached a temporary two-month agreement on the extension of
the payroll tax holiday and unemployment benefits. The deal, however,
includes a key Republican demand, a provision on the Keystone XL pipeline,
a project President Obama had previously promised to veto. The deal
requires the president to make a decision on the pipeline in 60 days.

The story just broke. We`re rounding up folks on Capitol Hill. We`ll
talk with Congressman Steve Israel on the deal later on in the program.

A political tsunami is what I call it. That`s what`s coming, just in
time for the 2012 election. Folks, laws in a dozen states in the country
designed to severely reduce voter participation. We need to pay attention
to this.

In many states, it looks like outright voter suppression, which is why
the Justice Department is taking a hard look at the laws. But you know
what, it might be too late. I mean, it`s going to take a hell of a ground
game to beat this.

Progressives, you got listen up, because this is where a major battle
is being waged for the 2012 election. Nothing parallels what has happened
over the past year when it comes to legislation.

Legislation has been introduced in more than 30 states, 14 of those
states have enacted new laws. And the attorney general of the United
States, Eric Holder, says the Justice Department is carefully reviewing
these laws.

Now, here`s why -- eight of these states have enacted new photo ID
laws, including South Carolina, Texas and Wisconsin. Five states have cut
back an early voting, including Florida and Ohio. Now, six states have
made voter registration a hell of a lot more difficult -- Ohio, Florida,
Illinois, Maine, Texas and Wisconsin.

Now, the effort is vast and these laws disproportionately affect the
poor, the elderly, college students, people of color, and people in rural
America are going to have it a lot tougher to vote in 2012.

Most of these key groups, what are they? They are key Democratic
constituencies.

Now, out of those 14 states, 5 million eligible voters could
potentially be affected. That`s a heck of a number. You know what it
affects? A hundred and seventy-one electoral votes are in play, my
friends, which is 63 percent of the 270 electoral votes needed to win the
presidency.

The numbers are staggering. Five of these 14 states are considered to
be battleground states. Now, think about that. Five states are
battleground states in an era when one battleground state can swing the
election, either way? Wow.

Think about the laws in eight states requiring photo ID. Now, it`s
important, because 11 percent of citizens do not have a photo ID. Again,
we`re talking about the poor, the elderly, college students.

We know this is an orchestrated effort by the Republicans and the
right wing in this country. They saw how successful President Obama
brought in a new wave of young voters and minority voters were engaged.
And the working class for the first time in a long time when he trounced
John McCain.

So, this is how they`re coming back. They`re afraid of losing on a
fair playing field. So they are literally changing the playing field
through legislation in many states. The righties have spent years, you
know, trumping up the big lie about voter fraud in America so that they can
enact new laws which basically amount to voter suppression.

I just don`t think if you look at the big picture. You know, there`s
a one-month plan, a quarter plan, a half-year plan in business -- if you
look at the total effort for President Obama to get re-elected in November
of 2012, this is going to be a heavy lift for the Democratic and
progressive and liberal community in this country.

Now, get your cell phones out. I want to know what you think.
Tonight`s question: Are Republicans deliberately disenfranchising voters to
win elections?

Text "A" for yes, text "B" for no to 62263. Always go to our blog and
make a comment, Ed.MSNBC.com. We`ll have the results later on in the show.

And I want to tell our viewers, we`re going to spend a lot of time on
this and gets into the devil in the detail in many of these states on just
how it`s all going to break down. But what is the ground game?

I`m joined tonight by Hillary Shelton, senior vice president for
advocacy sand policy and the director of the Washington bureau of the
NAACP. Caroline Heldman joins us again tonight, professor of politics at
Occidental College. And Mike Papantonio, attorney and the host of "The
Ring of Fire" radio show.

Here we have tonight the numbers with the professor, the attorney to
tell us what the legal options are, and Hillary Shelton to tell us what is
going to be the ground game in all of this, because it is going to take a
massive coordinated effort to the Democrats and liberal community in this
country to fight back against the legislation that has been passed in these
battleground states. It is huge, no doubt about it.

Caroline, I want to start with you tonight. Give us the numbers.
What kind of an impact could this have in 2012 if we were really to do
nothing as a citizenry over on the left?

CAROLINE HELDMAN, OCCIDENTAL COLLEGE: Well, the Brennan Center has
provided the best data over at NYU and they`re predicting that upwards of 5
million registered voters might be demobilized in key Electoral College
states -- obviously, Wisconsin, Ohio, Pennsylvania, efforts in Florida.
The League of Women Voters has actually suspended their registration
efforts because they`re so restricted now in Florida.

So, the impact will be felt. And it really tells us elections matter.
The fact so many Republicans were elected in 2010, that they were able to
implement this Koch brothers-funded American Legislative Exchange Council`s
long-term plan to suppress voters, this mean that elections matter.

And, you know, it`s not the first time we`ve seen it. We saw it with
Bill Clinton after he turned out the African-American vote in 1992. There
were similar efforts, unsuccessful, in the South with Republican whites who
didn`t like the fact that blacks have turned out to vote.

SCHULTZ: Hilary Shelton, looking at the landscape of all of this,
it`s going after the black community. Or is that an overstatement? What
do you think?

HILARY SHELTON, NAACP WASHINGTON BUREAU DIR.: No, you`re absolutely
right. As a matter of fact, when we look at the data, we`ve determined
about 25 percent of all African-Americans do not have the kinds of photo ID
to meet these new very stringent and suppressing standards. So, in
essence, they`re trying to cut out African-American voter participation.

If we look at states just like North Carolina, we saw that North
Carolina was won by about 40,000 votes. But if the same stringent voter ID
provision was applied in North Carolina, and thank God it`s been suspended,
at least for the time being, that about 240,000 African-Americans in North
Carolina would not be able to vote.

SCHULTZ: Wow.

SHELTON: This is (INAUDIBLE) driven.

SCHULTZ: That is a huge number.

Mike Papantonio, at this point, what are the legal options? What
could be done? Because at this point, you know, it`s going to take a heavy
lift to get this coordinated in all of these battleground states. But is
there anything the attorney general can do at this point?

MIKE PAPANTONIO, "RING OF FIRE" RADIO HOST: The problem is the fight
is going to be over at 1964 Voters Right Act. And, unfortunately, the deck
has been stacked. While we`ve been worrying about elections in the Senate
and Congress, what the Republicans have been doing is stacking the courts
with Republican judges. And, unfortunately, what you have now in 11 of the
13 federal appeals courts, you have Bush-appointed judges, Republican-
appointed judges, that are going to act more like politicians than they are
judges.

Now, the problem is we`re starting way behind. These are the same
judges who are going to issue orders dealing with scheduling. They`re
going to issue orders dealing with discovery orders, dealing with
interlocutory appeals.

These are judges that are going to make decisions that can make the
case go away. They can dismiss the case. They can interpret the law in
the way to what the 1965 Voters Rights Act doesn`t have any teeth at all.

Eleven months is not enough time to fix the problem. It`s going to be
chaos. It`s going to be discrimination.

The new Jim Crow-type of era is on us. And what`s happened, Ed, is it
happened to us while we weren`t paying attention.

SCHULTZ: Well, Professor, tell us, what is the heaviest lift here?
What is the biggest obstruction that what you can see of any of the laws
passed in these states?

HELDMAN: Well, I have no doubt they will ultimately be found
unconstitutional, whether a violation of the Equal Protection Clause in the
14th Amendment or poll tax in the 14th Amendment and the 24th Amendment.
But the problem is that Eric Holder and others who are bringing cases will
have to wait until after the election when it`s actually had an impact, and
it doesn`t have to be intentional.

So, folks are saying, you know, they`re presenting a false argument
saying, it`s about voter fraud. If it disproportionately affects certain
Americans, it will be found to be unconstitutional. But that`s going to
happen after the election. And that`s the biggest barrier.

SCHULTZ: Yes.

HELDMAN: So, at this point, it`s mobilization. People actually -- I
hope they have awoken the sleeping Democratic giant and people turn out to
vote who typically don`t turn out to vote in elections, because across the
board, we should be concerned about this. It`s partisanship in front of
democracy.

SCHULTZ: Well, Hilary Shelton, what kind of ground game are we
talking about here? It sounds to me it`s going to take an effort like
we`ve never seen in American politics before.

SHELTON: Absolutely. We`ve got to run two tracks throughout this
whole program. One track, exactly what`s being described, to repeal these
very repressive measures. The other track is, unfortunately, we have to
make sure every American has whatever they need to be able to register and
vote.

The sad thing is we have these politicians who are driving this effort
that decide that it`s better to suppress and prevent Americans from voting
and thereby taint the entire Democratic system, rather than make sure that
every American has the opportunity to vote and actually fight for those
votes if they want to win the elections.

We`ve got to make sure everyone has the photo IDs. We`re going to
have to struggle to make sure everybody has everything they need, the
paperwork, certified copies of their birth certificates, and make sure they
get what they need in hand so we can get to the polls and make sure they
can cast that vote in November.

SCHULTZ: I tell you what, when you talk about poor people in a rural
area and getting them to vote with all of those circumstances, it is going
to be a heavy, heavy lift. It is going to take communication and a ground
game unlike anything we`ve seen.

Now, Mike, I`ve talked to conservatives. They say they`re so worried
about people that are coming in that are not American citizens and they`re
here. They are undocumented workers and they`re voting. And that this
will clear that up.

What do you say to that?

PAPANTONIO: Ed, when more than 30 Republican governors controlled
state offices, they used the argument to go to the legislators and tell
them, make up a myth. It`s fantasy talk, Ed. It`s totally fantasy talk.

Every time they were asked, come forward and show up. For example,
Rick Scott in Florida was put to the test, said -- Rick Scott, Mr.
Governor, come show us where this fraud has taken place. He couldn`t show
it because it doesn`t exist.

But nevertheless, it creates this visceral scare and legislators have
something to hang their hat on and they have the right to take away
people`s rights to vote.

The real problem here, though, Ed, I keep coming back to you, is this
isn`t just a legislative problem. This has now become a problem with the
judiciary. As lawyers, we like to think that politics don`t get wound up
in things as important as this. But I got to tell you something, these
Republican judges that have been appointed understand that it`s payback
time. And if you believe they`re going to move this through the system
quickly between now and the next election, we`re kidding ourselves.

So, the fight really is not can we win in court? We probably can. I
believe we can. It`s going to have to be after all of this is over because
we waited too long.

Eric Holder was told three years ago to do something. He ignored it
like he`s ignored so many other issues. And --

(CROSSTALK)

SCHULTZ: Hilary Shelton, do you believe that Mr. Holder was too slow
to the punch here?

SHELTON: I don`t. I think Eric Holder has been on top of this thing
by many ways. He`s just restricted by the law and the judges we talked
about a little bit earlier. We`re convinced he`s on it, he gets it, he
sees how important it is to make sure we address these issues.

But we are going to have to make sure people come out and vote on
Election Day, to make sure they can cast that vote anyway.

SCHULTZ: All right. Hilary Shelton, Caroline Heldman -- Professor,
great to have you with us -- Mike Papantonio, always. Thanks for your time
tonight. I appreciate it.

Remember to answer tonight`s question at the bottom of the screen and
share your thoughts on Twitter @EdShow. We want to know what you think.

And we`re going to cover this story a lot in the coming months. It`s
going to take a heck of an effort. It is the story going in to 2012.

Ron Paul has momentum in Iowa, but FOX News is pretending he doesn`t
have a chance. Really? Jonathan Alter joins me for the conversation on
the Republican establishment and why they`re afraid of Ron Paul.

And Congress avoids a government shutdown, but the Republicans are
still holding the middle class hostage over an oil pipeline. Congressman
Steve Israel is here tonight, along with former Congressman Alan Grayson.
They will weigh in.

You`re watching THE ED SHOW on MSNBC. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, Ron Paul had a big night last night at the
debate. And the front-runners, they are afraid of the Ron Paul surge in
Iowa. Jonathan Alter joins me on that discussion.

In "Psycho Talk," Mitt Romney tries and fails once again to connect
with the middle class.

Righties are just bowing down to the Denver Broncos quarterback Tim
Tebow for professing his faith. Would they do the same thing if he wasn`t
a Christian or if he was a Muslim? I`ll talk to Dr. James Peterson later
in this hour.

Share your thoughts on Twitter with us tonight using #EdShow.

We`re come right back. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PAUL: To declare war on 1.2 billion Muslims and say all Muslims are
the same, this is dangerous talk. Yes, there are some radicals. But they
don`t come here and kill us because we`re free and prosperous. Do they go
to Switzerland and Sweden? I mean, that`s absurd.

If you think that is the reason, we have no chance of winning this.
They come here and explicitly explain it to us, the CIA has explained it to
us. They said they come here and they want to do us harm because we`re
bombing them.

(END VIDEO CLIP)

SCHULTZ: Congressman Ron Paul coming on strong in the Republican
presidential debate last night in Sioux City, Iowa, and, of course, for
good reason. Iowa polls show this guy surging. He`s behind Newt Gingrich
by just a single percentage point in one poll.

Republican election watchers in Iowa are very impressed. Former state
GOP leader and founder of an Iowa Republican blog, Craig Robinson, says,
"There`s a very high probability that Ron Paul will walk away with this.
Nobody has more dedicated and passionate staff than Ron Paul."

But the people on a certain cable news channel, they don`t want
Republicans to think Ron Paul has a chance at all. This is what FOX News
viewers heard about Ron Paul all week long.

(BEGIN VIDEO CLIPS)

CHRIS WALLACE, FOX NEWS: There is not, you know, rock solid support
for everybody, for anybody except, perhaps, Ron Paul, who does get his 15
percent to 20 percent.

NEIL CAVUTO, FOX NEWS: If Ron Paul wins here, what then?

WALLACE: Well, the Ron Paul people are not going to like my saying
this, but to a certain degree, it will discredit the Iowa caucuses.

RUSH LIMBAUGH, RADIO TALK SHOW HOST: I think right now anybody other
than Ron Paul could beat Obama if the election were tomorrow.

RUDY GIULIANI, FORMER NYC MAYOR: And Ron Paul to me is a complete
distraction.

DICK MORRIS, FOX NEWS CONTRIBUTOR: I absolutely positively guarantee
you that if Ron Paul is the Republican nominee, Barack Obama --

BILL O`REILLY, FOX NEWS: He`s not going to be.

MORRIS: Barack Obama is the next president.

O`REILLY: Right. He`s not going to be the nominee.

(END VIDEO CLIPS)

SCHULTZ: For more, let`s turn to Jonathan Alter, MSNBC political
analyst, and columnist for "Bloomberg View."

Jonathan --

JONATHAN ALTER, MSNBC POLITICAL ANALYST: Hi, Ed.

SCHULTZ: -- it must be something in the water or maybe it`s in the
air that all of a sudden they`re against Ron Paul. It`s an orchestrated
attempt.

Did they get the memo? What`s happening here? What do you make of
it?

ALTER: Well, it looks like he could win the Iowa caucuses. That`s
terrifying to them. They see him as the crazy uncle in the attic and they
kind of like some of what he says on the economy. They like it when he
bashes Obama. They like it when he talks about the deficit.

In truth, you know, his economics are in cloud cuckoo land. He wants
the gold standard. And, you know, he predicted if the Fed were to print
more money, as it obviously did over the last few years, they`d have
rampant inflation. So, he`s been totally discredited by any rational
person on the economic side. They like that.

What terrifies FOX News and many Republicans is what he says about
foreign policy. They see it as isolationist. But he is not so far out of
tune with a pretty good number, especially of younger voters, who don`t
want to get into another war.

And when they hear somebody like Newt Gingrich talk about, oh, maybe
we`ll survive, remember that quote from the last debate? And talking about
bombing Iran?

SCHULTZ: Yes.

ALTER: Mitt Romney`s talking about bombing Iran. That scares them
and that helps Ron Paul.

SCHULTZ: Well, I think you`re spot-on. I mean, I think his position
on international intervention, I think the libertarian position of being
socially liberal and fiscally responsible is connecting with a new
generation of voters. And I`m told by sources in Iowa, he does have the
young people on his side down there.

And there`s a lot of comments being made about Ron Paul`s gathering
down there in Iowa that paralleled what President Obama had. They`re
young, they`re organized, and they`re energized.

ALTER: Right.

SCHULTZ: And if they show up, he is going to win Iowa. And I should
probably point out, that his polling numbers in New Hampshire aren`t all
that bad right now. Are they?

ALTER: No, I think Iowa`s a better state for him because it`s an
organization state. Those caucuses are about, you know, getting a very
committed group to come out. So, New Hampshire, you remember, Obama lost
there. It`s a different kind of state. I don`t think it will be
responsive to what he says on foreign policy in particular.

Remember, he`s getting close to serious isolationism. I mean, Dick
Morris wasn`t totally wrong when he said if Ron Paul was president in 1941,
he wouldn`t have gotten into a war with Japan and Germany.

SCHULTZ: But when he talks about the finances, he gives the country
straight talk. Like last night, he said, well, how are you going to build
the military if you don`t have money? And he`s being backed up by all this
conversation in Washington because all they`re doing is fighting over
money. He talks about the Federal Reserve.

But I find it fascinating that this is in the middle of the country
where you have a relatively conservative senator in Grassley and a pretty
liberal guy in Tom Harkin.

Here`s some of Ron Paul last night talking about his governing
philosophy. Here it is.

(BEGIN VIDEO CLIP)

PAUL: I would be a different kind of president. I wouldn`t be
looking for more power. Everybody wants to be a powerful executive and run
things.

I as a president wouldn`t want to run the world. I don`t want to
police individual activities and their lifestyle. And I don`t want to run
the economy.

So, that`s an entirely different philosophy but it`s very, very much
in our tradition and in the tradition of our Constitution.

(END VIDEO CLIP)

SCHULTZ: I mean, this is the Tea Party candidate, is it not?

ALTER: Well, in some ways it is. If you`re looking at it in terms of
shrinking government, absolutely. He has been extraordinarily consistent.
You`ve got these other candidates who are all over the map. And, Ron Paul,
you know, you might not like him, but he has got the courage of his
convictions. And he seems like a more honest candidate than most of the
others.

The other sort of purely tactical thing going on here, Ed, is that
Michele Bachmann had a good debate and she might be coming up. Santorum is
not going to win or place, but he`s got some committed people in Iowa.

SCHULTZ: He does.

ALTER: He spent a lot of time.

Every one of the votes that they get comes out of hide of Newt
Gingrich who is sinking now. So, you know, Romney`s behind. Romney could
rally some, but the dynamics with a couple weeks to go right now, they
favor Ron Paul.

SCHULTZ: Yes.

I just wish one of these Republicans debates, that they would, before
they all start, they`d be force the raise their right hand and say, I swear
to tell the truth, the whole truth and nothing but the truth. I mean, I
think that would be great, don`t you?

Jonathan, great to have you with us tonight. Thanks so much.

ALTER: Good to see you, Ed.

SCHULTZ: And we should point out, too, the number one attack dog on
Newt Gingrich has been Ron Paul.

ALTER: Yes.

(CROSSTALK)

SCHULTZ: Yes. And now you see Gingrich kind of stammering and
stuttering a bit when it comes to the polls right now and sinking. So,
we`ll see if it continues. I can`t wait to get to Iowa. Thanks, Jonathan.

ALTER: Thanks, Ed.

SCHULTZ: Coming up, Mitt Romney is talking about his tough life as a
missionary in France, but he leaves out the part where he lived in a
mansion in Paris, complete with a whole staff. "Psychotalk" is next.

And later, another righty who is no stranger to "Psychotalk," Alan
West, says something probably about as despicable as anybody has said in
the Congress this year. The Tea Partier is digging in his heels. He`s not
backing off.

Stay with us. We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: And in "Psycho Talk" tonight, the unemployed multi-
millionaire Mitt Romney is still struggling to connect with the middle
class. He tried again recently by describing his tough life as a
missionary in France.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Number of the apartments I
lived in when I was there didn`t have toilets. We had instead the little
pads on the ground, OK, you know how that works. And pull the -- there was
a chain behind you with kind of a bucket affair.

Most of the apartments I lived in had no refrigerators. I don`t
actually recall any of them having a refrigerator. Most of the apartments
I lived in had no shower or bathtub. If we were lucky, we actually bought
a hose and stuck it in the sink and we hold there with a hose and big
bucket tub underneath us we`d put in the kitchen and wash ourselves that
way.

(END VIDEO CLIP)

SCHULTZ: Here`s the part, Mitt Romney is leaving out. The British
newspaper "the Telegraph" reports, Mitt spent "a significant portion of his
mission living in a Paris, France, mansion." It was the headquarters of
the Mormon mission in France. The building is now worth $12 million. And
Romney`s fellow missionaries describe the mansion as a palace. It had full
plumbing, no buckets, I mean, necessary at all. Each bedroom was connected
to a bath or a shower. So, no hoses.

I mean, the mansion, you know what it had? It had a washer, dryer,
refrigerator, all the amenities. Let`s not forget the professional cooks
for the young missionaries. The "Wall Street Journal" reports, "the
mansion came with a dozen house staff including a Spanish chef and a house
boy named Jose."

When Mitt Romney returned to the United States, he spent the next few
decades making up for months of poverty he suffered in France. Today, he`s
worth about $200 million and his bulldozing his 12th million-dollar home
because he wants a bigger one. And let`s not forget how he loves to throw
out $10,000 bets on a whim.

So, for Mitt Romney to continue to push the idea that he`s in touch
with regular people is zany "Psycho Talk."

Christmas vacation is about to start for the lowest rated Congress
ever. And I`ll tell you about the lump of coal Republicans stuffed in your
stocking. Late breaking news on the deal on Capitol Hill and the reaction
from the president is next.

Conservatives, they love this guy, Tim Tebow. One right wing blow
hard says the bronco quarterback would get the same love if he converted.
The mile lie high is coming up.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to "the Ed Show." Thanks for watching tonight.

Congress may have avoided a government shutdown, but it has managed to
kick the can down the road once again when it comes to the middle class tax
relief. Earlier today, the house passed a $1 trillion bill that will keep
the government running through the fall. The Senate is expected to vote on
it tomorrow.

And just hours ago, the Senate reached a temporary two-month agreement
on the extension of the payroll tax holiday and unemployment benefits. The
deal includes a key Republican demand. A provision of the keystone XL oil
pipeline, something president Obama previously promised to veto.

A senior Obama official tells Reuters that the Republican insistence
on including a decision on the pipeline in the deal means almost certainly
that the pipeline will not be built. Minutes ago, majority leader in the
Senate, Harry Reid, told reporters he feels pretty good about a more
permanent deal being struck in February. "We have a lot of ammunition and
will not have the threat of a government shutting down."

So, that`s the reaction of Capitol Hill. Let`s go to Congressman
Steve Israel of New York. He is also the chairman of the DCCC.

Congressman. Good to have you with us tonight. Is this a good deal?
I`m sure with the majority in the house, they`re going to control the eggs
here, but to you think this is a good deal the Democrats and the White
House have made?

REP. STEVE ISRAEL (D), NEW YORK: Well, it`s not going to be a good
deal until we deliver that middle class tax cut. You know, I remember in
2001 when the Bush administration and house Republicans wanted to give a
tax break to the richest of the rich. They bulldozed that thing through.
But when it comes to giving a $1,000 tax break to middle class and working
families, every poison pill they can come up, every delay they can think
of, any stalled tactic they can employ. We can`t afford it. We have to
give it two more months. Now, we have to link it to this oil pipeline. We
have got to link in to Medicare cuts. I don`t know what it is about the
middle class that the house Republicans, do not like.

SCHULTZ: Well, the bill is paid for by the government charging higher
transaction fees, what I`m told, when people use Fannie and Freddie.
What`s so good about that? What do you think of it?

ISRAEL: I don`t understand why the Republicans can`t bring themselves
to engage in common sense. The choice is very simple. You can pay for
this middle class tax cut, simply by asking 300,000 Americans who are
making over $1 million to pay a tiny surcharge on every dollar over a
million. And in order to protect those 300,000 families, instead of giving
a tax cut to 160 million families, they`re now saying, well, let`s get it
from Fannie and Freddie, let`s get it from cuts to Medicare.

Look, I`d rather have a two-month deal than no deal at all, but at the
end of the day, these Republicans are going to have to make a decision.
Who are they for? Are they willing to pass this middle class tax cut for
160 million Americans or going to stand by and protect those 300,000 people
making over 1 million bucks?

SCHULTZ: Well, congressman, I got to ask you straight-up, does this
have cave written all over it?

ISRAEL: Well, look, no, it doesn`t have cave because cave would have
been a complete termination of the middle class tax cuts. What it has is
we need more time to put pressure on these Republicans to pass this middle
class tax cut.

I do not believe that we should allow them to hold the middle class
hostage to oil pipelines and these other things. We`ve got two more
months. The good news with the middle class it that they will have that
tax cuts at least for the next two months.

SCHULTZ: What about this oil pipeline? I mean, the White House is
now saying that this almost means that it will not be built. What does
that signal to the Republicans? I mean, they want this pipeline. The
environmentalists want more studies on it. And the White House doesn`t
want to make a decision in 60 days. So, I mean, how does the dynamic of
this play, in your opinion?

ISRAEL: This pipeline is just another hostage. This pipeline has
nothing to do with the middle class tax cut. My point is instead of doing
a clean middle class tax cut, they`re going to bring in every hostage they
can. And this is one of them. They`re saying we will not provide $1,000
tax cut for middle class families unless oil companies get richer through
this pipeline. It`s the wrong priorities. It has nothing to do with the
middle class tax cut. You want to be against the pipeline or for the
pipeline, fine. But don`t hold middle class families hostage to the
pipeline and oil company profits.

SCHULTZ: And this package is going to cost about $30 billion. And
the transaction fees on Freddie and Fannie are going to pay for it. I`ll
tell you what, looks like a pretty good Republican extension to me. But it
keeps the story alive in 60 days.

Congressman Steve Israel, good to have you with us tonight. I
appreciate your time.

Let`s turn now to Alan Grayson, former congressman from Florida who is
running again.

Alan, good to have you on. You know, if you look at every poll in
this country, the American people in a majority want the wealthiest
Americans to pay a little bit more. But yet the Democrats now have taken
the millionaires` tax increase off the table. What`s your reaction to
that?

ALAN GRAYSON, FORMER CONGRESSMAN (D-FL): Well, it`s more hostages
taking by the Republicans as congressman Israel just said. And who are the
hostages? Who actually suffers by the threat of the government shut down?
Who would be hurt by that?

The people who get Social Security, who get Medicare, the people who
get Medicaid, the people who get unemployment insurance. So, the
Republicans are holding hostage the old, the sick and the poor for the sake
of who, the billionaires. Because they know that if the government does
huts down, the billionaires laugh all the way to the bank. So, we`re going
to see this over and over again.

SCHULTZ: Yes. So, did the Democrats cave in your o pin pinion? Is
this a good, temporary deal in your opinion?

GRAYSON: There are some good things about it. There are some bad
things about it. Congressman Waxman has already said that the keystone XL
deal is something that will addict America to dirty fuel for the next
generation. So that`s not a good part of it at all.

SCHULTZ: What message does this send to the middle class? That
anything that benefits them is now connected to oil.

GRAYSON: Well, it`s not. It`s simply not. And what you see over and
over again, as the Democrats hold out for what`s good for the middle class,
what`s good for people in need and the Republicans constantly hold out for
something that will make the rich get richer whether it`s the oil company,
billionaires or somebody else. And it only happens when the Republicans
control the house.

You know, in your lifetime and in my lifetime, going all the way back
to Eisenhower, three-quarters of the time there`s been a Republican
president, the Democrats have controlled the house. And not once have the
Democrats tried to pull this stunt.

And now we`ve seen this with Clinton and seen this with Obama and
going to see it every time there`s a democratic president and the
Republicans control the house. This is now their favorite stunt. The
threat to shut down the government and to throw the poor and old people and
sick people in the street.

SCHULTZ: How do you think the president played this?

GRAYSON: I think the president needs to be tough. It`s the only
thing the Republicans ever understand.

SCHULTZ: Alan Grayson, good to have you on the program. Thanks so
much.

Allen west refuses to apologize for comparing the Democrats to a
genocidal killing machine? I`ll show you what the tea party hate merchant
said today. That`s coming up.

(COMMERCIAL BREAK)

SCHULTZ: Up next, Congressman Allen West of Florida, tea-partier,
compares Democrats to Nazi propagandas. And he`s doubling down.

Later, Rick Perry hopes he`ll be the Tim Tebow of the Iowa caucus.
Dr. James Peterson on the right wing`s Tebow obsession.

Don`t forget to tweet us using the hash tag edshow. We want to hear
from you. Stay tune. We will be right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to "the Ed Show." Thanks for watching tonight.

Ask yourself the question at home tonight. Has anybody in the
Congress said anything like this as of late? And not apologize for it?

Tea-partier and Congressman Allen West out of Florida is packing a
lifetime of crazy into his first year in office. And he`s not slowing down
a bit. This week he told reporters, "if Joseph Goebbels was around, he`d
be very proud of the Democrat party because they have an incredible
propaganda machine". Of course, Goebbels was Hitler`s minister of
propaganda.

The National Jewish democratic council and the anti-defamation league
immediately called for the congressman from Florida, Allen West, to
apologize. New York Congress` Steve Israel and Gary Ackerman also demanded
an apology. And longtime congressman John Conyers of Michigan sent this
letter to Allen West.

He said "he was really disappointing to hear about your Goebbels
remark. He was a vicious, notorious anti-Semite who went down in history
as propaganda for Hitler. I beg of you to help raise the level of
congressional discourse so that we can engage in vigorous debate without
resorting to personal attacks."

Now, there have another people on the record asked him to do something
but Allen West, what has he do? Well, he refuses to back down. He
responded to Conyers with a note back saying this. "The democrat party
does, indeed, have a vicious propaganda machine. It espouses lies and
deceit and the master of deceptive information would truly be proud. I
have been personally attacked and denigrated on countless occasions. I do
not appreciate your letter."

Really, congressman? Why don`t you show us the tape of when that`s
happened to you? I`d like to see it. Not only is Allen West refusing to
apologize, he`s playing the victim and he`s even blaming reporters for
twisting his words.

You know, I expect this kind of thing from a, certain washed up former
FOX News host, but it is beyond unacceptable from a sitting United States
congressional member. I hope the folks in Allen West`s Florida district
are paying attention and make sure his first term is also his last. Allen
west is now portraying himself with evidence as a right wing hate merchant
and has no boundaries when it comes to insults.

The only thing uglier than Tim Tebow`s throwing motion is Rick Perry
trying to steal the spotlight. We`ll take Perry deep next. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Tonight "the Ed Show" survey, I asked you, are Republicans
deliberately disenfranchising voters to win elections, 98 percent of you
said, yes, 2 percent of you said, no. I like number. We need to pay
attention to that story.

Coming up, Denver broncos quarterback Tim Tebow is a GOP fan favorite
for his touchdown celebration. I`ll make Bill Bennett take a knee, next.

(COMMERCIAL BREAK)

SCHULTZ: And finally tonight, Tim Tebow is the hottest football
player in the national football league right now. He`s got a record. He
has six wins in a row as a new quarterback of the Denver Broncos and has
led his team comeback victory after comeback victory. He`s quite a story.
He`s also a devoted Christian who often displays his devotion on the
football field. So it`s no surprise a failed presidential candidate would
try to hitch his broken wagon to the Tim Tebow train.

(BEGIN VIDEO CLIP)

RICK PERRY (R), PRESIDENTIAL CANDIDATE: There are a lot of folks that
said Tim Tebow wasn`t going to be a very good NFL quarterback. There are
people who stood up and said, well, he doesn`t have the right throwing
mechanisms or don`t -- you know he`s not playing the game right. And, you
know, he won two national championships and that looked pretty good. We`re
the national champions in job creation back in Texas. And so, but am I
ready for the next level? Let me tell you, I hope I am the Tim Tebow of
the Iowa caucuses.

(END VIDEO CLIP)

SCHULTZ: Well, Rick Perry isn`t the only conservative trying to cash
in on Tim Tebow`s moment in the spotlight. Moralist and gambling addict
Bill Bennett says critics of Tebow are attacking Christianity. "Critics
have a problem with who Tebow is as a man. They`re bothered by his faith,
character and conviction."

FOX News is also urging Tebow to pretend evangelical Christians are
persecuted minorities, while people of the Muslim faith catch all the
breaks.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They write all these negative things. It`s mostly
because the press is secular. It is because they think this kind of
religion is weird.

KRISTEN POWERS, DEMOCRATIC POLITICAL ANALYST: There is such an anti-
Christian sentiment in the media. I don`t think its anti-religious because
I don`t think if he was Muslim it would probably be a problem.

UNIDENTIFIED MALE: There are prominent Muslim players in the NFL. If
they bowed to Mecca at the end of the touchdown, would the media pile on
them?

(END VIDEO CLIP)

SCHULTZ: Joining me now, Dr. James Peterson, director of Africana
studies and associate professor of English at Lehigh University.

Professor, good to have you with us tonight. I`d like you to give the
man an answer. Would the media pile on a Muslim player if he bowed to
Mecca at the end of a touchdown? What do you think?

DR. JAMES PETERSON, LEHIGH UNIVERSITY: Unbelievable! I mean, FOX is
sometimes like the anti-truth here. Let me be clear. Tim Tebow is a great
player. He has a lot of intangibles. I want to applaud him for that. I
loved watching him in college.

But first of all, Mr. Perry is no Tim Tebow. He`s not as smart as Tim
Tebow and won`t even have as much success as Tim Tebow. And times of the
FOX News folks, I mean, obviously they sort of work in double speak but are
articulating the antithesis of what would happen.

We`ve seen when they have Muslim athletes in the NBA. And what`s
happens, what happen to Chris Jackson, or what happen to Craig Hodges when
he did not want to do the national anthem. They were basically black
balled.

And so, I think we need to consider the fact this is a pretty
Christian centric country. And part of the reason why Tim Tebow can be so
outward with his faith and so public about it is because that`s acceptable
to many folk. But remember, this is not Tim Tebow. This is the media`s
coverage of it. And this is the ways in which people are responding to
him.

SCHULTZ: Well, I mean, Bill Bennett, where is he coming from? I
mean, his comment is critics have a problem with who Tim Tebow is as a man?
They`re bothered by his faith, character and conviction. Have I been
missing some news stories? Have I been missing harsh commentaries on a guy
playing quarterback in the NFL? So he shows his faith. Many people have
done this for years. What do you make of this?

PETERSON: Well, listen. Maybe I missed those stories as well. I
think people have been applauding Tim Tebow. I think he`s been more in the
spotlight. And by the way, you know, we`ve had running quarterbacks
before. But I don`t know if they`ve gotten this kind of attention.

Most time when we have running quarterbacks, many are black. And the
attention they get is they don`t have the mechanics, they can`t be
successful. Tim Tebow went through that a few minutes now he`s seeing
success. I have not seen the backlash against Christianity or him
professing his faith. I just know for a fact that if anyone were to
profess the Muslim faith in the same venues on the same platforms, they`d
be lambasted for it immediately.

SCHULTZ: Do you think FOX personalities understand just how the
hypocrisy they`re dealing with here?

PETERSON: Well, the FOX News network has a very, very specific
agenda. One of their agendas is an anti-Muslim agenda. And unfortunately,
members of their audience really buy into that. So, they can flip stories
like this. Because sometimes people watch things they really want to
believe. FOX News provides that for a pretty unfortunately wide audience
in the United States.

SCHULTZ: On FOX and friends last summer, they tried to recruit Tebow
to office. Here it is.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE REPORTER: A man of your conviction and leadership
is who we need in public office. Would you ever run? Great question.

TIM TEBOW, NFL QUARTERBACK: Not right now.

(END VIDEO CLIP)

SCHULTZ: Is devout Christianity the only requirement to run for
office with the Republican part, these days?

PETERSON: It certainly is not, although I`m a Christian. The
Christian principles are good in general, right. But folk can always kind
get mixed up about them sometimes. But listen, Tim Tebow has great
charisma and leader. The players that play would in love to play with
this. So, he does have some of those acts which we seen as he comes up on
pulse before. But obviously religion should not be the litmus test.

SCHULTZ: We`ve seen athletes come together in a circle and pray after
a football game, players from both teams.

PETERSON: That`s right.

SCHULTZ: FOX is, again, here come the straw man, you know?

Thank you Dr. James Peterson. Appreciate your time tonight.

That`s "the Ed Show." I`m Ed Schultz. "the Rachel Maddow Show" begins
right now.

Good evening, Rachel, good to see you tonight.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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