updated 12/22/2011 10:07:40 AM ET 2011-12-22T15:07:40

Guests: Chris Van Hollen, Howard Dean, Jo-Ann Reid, John Nichols, Scott
Arnold

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

John Boehner is holding 160 million Americans hostage and the speaker
of the House is refusing to let the Democrats do their jobs. I got
commentary.

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

(BEGIN VIDEOTAPE)

REP. STENY HOYER (D), MARYLAND: Mr. Speaker, you`re walking out.
You`re walking away. Just as so many Republicans have walked away from
middle class taxpayers.

SCHULTZ (voice-over): Today, House Republicans literally ran away
from a vote to cut taxes.

HOYER: We were on the floor to do our work. And they walked out.

SCHULTZ: Tonight, Democratic Congressman Chris Van Hollen will tell
us what happens next.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Roosevelt believed that
government should level the playing field to create equal opportunities.
President Obama believes that government should create equal outcomes.

SCHULTZ: Mitt Romney continues to attack the president with bold-
faced lies. The Grio`s Joy-Ann Reid and John Nichols of "The Nation"
magazine will sort fact from fiction.

In "Psycho Talk" tonight, a FOX News host is looking for handouts from
yours truly.

ERIC BOLLING, FOX NEWS: You think being the successful TV guy --
you`d think he`d buy a drink back. Greg, he never once offered to buy a
drink.

SCHULTZ: And in Iowa, Newt Gingrich is telling gay Americans to vote
for the Democrat.

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Well, if that`s the most
important to you, then you should be for Obama.

SCHULTZ: We`ll talk to the Iowan who confronted Newt Gingrich.

(END VIDEOTAPE)

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

President Obama and the Democrats have John Boehner boxed in and they
can`t let him out this time. Boehner is taking heat from all sides because
the speaker is being walked like a dog by the Tea Party.

Today`s editorial in the "Wall Street Journal" took Republicans to
task over all of this. "Mitch McConnell famously said a year ago that his
main task in the 112th Congress was to make sure that the president of the
United States, Barack Obama, would not be re-elected. Given how he and the
Speaker John Boehner have handled the payroll debate, we wonder if they
might end up re-electing President Obama."

That is spot-on. The Republican Party is imploding before our very
eyes. Conservatives don`t want to give the president of the United States
a win, but some realize the damage Boehner is doing to the party. Thirty-
nine Republican senators voted for a two-month extension and some of them
are publicly calling Boehner out on it.

(BEGIN VIDEO CLIPS)

SEN. JOHN MCCAIN (R), ARIZONA: It is harming the Republican Party.
It is harming the view, if it`s possible anymore, of the American people
about Congress. And we`ve got to get this thing resolved and with the
realization that the payroll tax cut must remain in effect.

UNIDENTIFIED MALE: Are Republicans getting killed right now in public
opinion? There`s no question.

(END VIDEO CLIPS)

SCHULTZ: President Obama called Boehner today and told him there was
still time to take the Senate`s package. Boehner refused and asked the
president to call on Harry Reid to get a conference committee together.

The speaker has his head completely stuck in the sand on the golf
course. Today, Boehner and his buddies held a photo op to pressure
Democrats.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We`re here, we`re
ready to work. We`re looking for our counterparts to sit down with us so
we can do what the president, bipartisan leaders in the House and Senate
all want, and that`s to extend the payroll tax cut for one year.

(END VIDEO CLIP)

SCHULTZ: Really?

While Boehner was doing his photo op, House Minority Whip Steny Hoyer
was trying to do the people`s business. Hoyer went to the House floor to
introduce the Senate`s two-month extension. The Republicans walked out.

(BEGIN VIDEO CLIP)

HOYER: Mr. Speaker, Mr. Speaker, Mr. Speaker -- would like to ask for
unanimous consent that we bring up the bill to extend the tax cut for 160
million Americans. As you walk off the floor, Mr. Speaker. You`re walking
out. You`re walking away. Just as so many Republicans have walked away
from middle class taxpayers.

(END VIDEO CLIP)

SCHULTZ: This is why the Tea Party went to Washington. They have
been hell-bent on destroying the middle class and President Obama at all
costs. Hoyer put it like this on my radio show today.

(BEGIN AUDIO CLIP)

HOYER: There are a lot of people in Washington who are prepared to
sink the ship in order to drown the captain.

(END AUDIO CLIP)

SCHULTZ: Drown the captain. Now, who would the captain be? Well,
that would be the president of the United States. Sink the ship? That`s
the country.

Couple of numbers to remember -- I will throw this at you a lot: 160
million Americans are going to be affected by this decision. By those
Republicans walking out of the House today, failing to vote on that Senate
package. This is how many Americans are going to be affected.

Now, here`s how it`s playing out politically as I see it. Do you
really think, in your heart, that the Tea Partiers care about the
unemployed? Do you think they care about the economy?

And the answer to both of those questions is absolutely not. Their
mission is to defeat, is to defeat President Obama.

Now, let`s call time-out for a moment and praise the Democrats for
holding the line over the last 24 hours. They have not caved in and called
for a conference committee. That`s the good news, because a year ago, this
time, they caved in on the Bush tax cuts. So we`re making progress.

Hold the line, Democrats. You will win in the long haul on this.

But this is how I think the Tea Partiers are handling this whole
thing. They don`t care about these people. These people don`t donate to
them. They`re not in the top 1 percent or 2 percent -- to hell with them.

Don`t worry about that. Don`t worry about that. In fact, we`ve got
rules in place in a lot of states around America where a lot of the folks
aren`t going to be able to vote. Hell, they`re unemployed, they`re
elderly, don`t worry about them.

They don`t care about the unemployed. So, what the Tea Partiers are
doing right now, they`re behind closed doors saying, hold the line.

This is why we came to Washington. It`s like the perfect storm for
the Republicans. It`s the perfect storm for the Tea Partiers. This is
what they won`t to Washington for. This is what they live for.

They are there to disrupt. They are there to delay. They are there
to take away. They are there not to worry about the unemployed. They`re
not there to worry about the economy. They`re there to get power.

And the only way they can get power is to defeat the president of the
United States.

Now, you may be wondering, well, the American people, Eddie, you know,
they`re really on to this one. Really? For how long?

This is the first of the year coming up. Do you really think in
November that the Republicans are so inept with all of this money from
Citizens United, that they`re not going to be able to create a narrative
and blow it right back on the Democrats somehow?

They have right wing media. They have 450 right wing talkers. They
have Citizens United. They have unlimited funds.

They`re going to be able to change this narrative around. It`s going
to be hard and they`re going to take a short term political hit here.
There`s no question about that.

But in the long run, they`ll be able to go home to their constituents
and say, you know what, we didn`t spend any money. And we are there to
take down Obama. And Obama was not able to help the unemployed and Obama
was not able to keep the economy going.

They know -- they know that this tax holiday is working and they know
that 1.5 million Americans have been put on the rolls of private sector
jobs since this tax holiday went into effect. If they give President Obama
that again, they`re going to continue to add jobs. That`s going to be
against everything when it comes to doing what? As Steny Hoyer said,
sinking the ship and taking the captain down with it.

This is what the Tea Party is all about. They don`t give a damn about
the unemployed. Do you think they care about the 99ers? Do you think they
care about seeing President Obama have a better economy and adding jobs?
No.

So they are in the huddle right now and they`re saying, we`re not
coming out. We`re not coming out. This is where the Democrats cannot in
any way, shape or form say, OK, we`ll do the conference committee.

No. You must hold the line. This cannot be the same movie we saw
last December caving in on the Bush tax cuts.

No. The Democrats must be strong and they must hold the line. It`s
going to be our job.

That`s right. It`s going to be our job in the media over the next 11
months to make sure that the American people, they don`t forget this
number. That`s right.

If we keep telling the truth, we might be able to overcome this. It`s
going to take some guts. It`s going to take some political guts. Do not
cave into the Tea Partiers. Do not.

Get your cell phones out. I want to know what you think. Tonight`s
question: Will Republicans pay the political price for raising taxes on 160
million Americans?

Text "A" for yes, text "B" for no to 622639. Our blog is there for
you as well at Ed.MSNBC.com. We`ll bring you the results later on in the
show. I`m going to tweet a little bit during this show tonight. I can`t
wait.

Joining me now is Congressman Chris Van Hollen of Maryland.

Congressman, good to have you with us.

REP. CHRIS VAN HOLLEN (D), MARYLAND: Good to be with you, Ed.

SCHULTZ: You`re ranking member on the House Budget Committee.

Look, I could totally wrong. But I don`t think I am. I think that
these Tea Partiers are in the middle of their perfect political storm.
This is what they wanted all along.

Your take on this, Congressman?

VAN HOLLEN: My take is the same as yours, which is their ploy this
time is so transparent. It`s going to backfire on this.

I think the American people see exactly what`s going on. In fact, a
lot of Republicans, most Republicans recognize that this time, the
Republicans in the House, the Tea Party Republicans, have really taken this
way too far. That`s why you have all the senators on the Republican side
saying to John Boehner, speaker of the House, come on, bring the compromise
bill to a vote.

I was with Steny Hoyer today on the floor of the House where we tried
to bring up that compromise bill. We simply asked them for a vote -- a
vote on a bill that had 80 percent of the Republican senators supporting
it.

Apparently, Speaker Boehner did not want to come to the floor of the
House. He was apparently hiding out in his office.

But the answer to this riddle is very obvious, which is Mr. Speaker,
come out of your office, come on to the floor of the House, let`s take up
the bipartisan compromise Senate bill. We can get this to the president`s
desk within 24 hours.

SCHULTZ: Now, the Democrats` position right now, calling out Boehner,
obviously. But is this the situation where we`ve done all we`re going to
do and give us a call when you change your mind, John?

Is that where we`re at right now with the Democrats? Are the
Democrats going to hold the line and not make anymore changes, no more
conference committees? This is it?

VAN HOLLEN: Well, yes, because it`s not only what Democrats have
already done. It`s what Democrats and Republicans have already done. And
that`s the difference.

You don`t get 89 out of 100 vote in the Senate very often. You don`t
get 80 percent of Republican senators onboard very often. And so, we`ve
already seen what the bipartisan compromise here is, Ed. And what the
Republicans in the House are doing is trying to block the payroll tax cut.

Listen, when this president came before the Congress many months ago,
last September, he asked for a one-year extension of the payroll tax cuts.
The House Republicans said, no.

Then finally when they realized that was a losing proposition, they
put together a bill, loaded it up with all these poison pills and sent it
over to the Senate. Even the Senate Republican realized that was a
nonstarter. So, they worked with the Democrats.

What you`ve got going now is not Democrats versus Republicans, but
you`ve got is the Republican right versus the Republican far right. That`s
what`s happening.

SCHULTZ: Well, you`ve also got 174 of them in the House there that
are telling Boehner, do not punt. OK? And so, the bottom line here is
this: Democrats are going to have to remain strong. Not go to conference
committee. And it`s going to hurt some folks.

And in the long run you`re going to have to make the case to the
American people that this is a Republican problem. They are the ones that
are holding up the bipartisan effort.

Now, is there any chance in your opinion that Boehner will blink and
will move on this?

VAN HOLLEN: Well, I hope that he will listen to the American people.
I hope if he`ll listen at least to his fellow Republicans who are telling
him and shaking him and saying, Mr. Speaker, wake up because you`re doing
tremendous damage to the Republican Party.

And unfortunately, the real damage, of course, is being done to the
American people -- 160 million Americans are going to see their taxes go up
and the millions more out there looking for work but need the unemployment
compensation because they can`t find a job.

So, look, Ed, I think the American people are watching this.

SCHULTZ: They are.

VAN HOLLEN: And essentially, the whole country realizes that the
obvious thing to do is extend for two months the payroll tax cut while we
try and work together to do the full year which is what Democrats have
wanted all along and what House Republicans opposed until very recently.

SCHULTZ: And do you think if Boehner blinks that his speakership is
in jeopardy with his party?

VAN HOLLEN: Well, I hope what he would say to his fellow Republicans
is, you know, just a few days ago I, the speaker, recognized that this was
a good compromise. This was something that served the American --

SCHULTZ: He shifted.

VAN HOLLEN: -- people well.

And you, my caucus, told me to take a hike and therefore we`ve gotten
ourselves driven into this corner.

I don`t know if he`ll take that path forward. He`s apparently going
to make a statement at 10:00 a.m. tomorrow, along with some of his members.
But as of now, I don`t expect any change.

But the more he hears from folks that he listens to -- unfortunately,
he doesn`t listen to the great mass of the American people, but he does
read "The Wall Street Journal" editorial.

SCHULTZ: Well --

VAN HOLLEN: Karl Rove has now been, you know, come out very clearly
saying the House Republicans have created a credible mess for themselves.
What the Republican Party is worried about now is not the American people
but they are worried about their own survival. And this is causing great
damage. Unfortunately, in causing themselves damage, they`re doing it by
hurting the American people.

SCHULTZ: Congressman Chris Van Hollen, great to have you with us
tonight. I appreciate your time. We`ll see how it unfolds as the saga
continues tomorrow. At 10:00, Boehner going to make a statement. Thank
you, Congressman. Appreciate your time.

Remember to answer the question there at the bottom of the screen. We
want to know what you think. And share your thoughts on Twitter @EdShow.

Coming up, Newt Gingrich is whining about Mitt Romney`s negative
campaign commercials in Iowa. That`s right. Gingrich is complaining about
negativity in politics. Governor Howard Dean weighs in on that.

And later, Mitt Romney distorts the president`s record on the economy
in a campaign speech. I`ve got the facts. And I`ll talk to Joy-Ann Reid
and John Nichols about all of that.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Coming up on THE ED SHOW: Newt and Mitt are fighting it out
again and the winner seems to be Ron Paul. Former DNC chair Howard Dean
gives us his take on the GOP infighting. That`s next.

FOX Newsers griped about the president having coffee with me and other
progressive journalists. Then Eric Bolling tells a story about buying me a
drink? Folks, he`s all wet. I can`t wait to get to "Psychotalk" tonight.

And Newt Gingrich gets tough questions on gay marriage. I will speak
with the man who spoke with Newt Gingrich later on in the show.

Tweet us your thoughts throughout the show using #EdShow.

Stay tuned. We`re right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I`m sure I could go out and
say, "Hey, please don`t do anything negative." But, you know, this is
politics, and if you can`t stand the heat in this little kitchen, wait
until the Obama hell`s kitchen turns up the heat.

GINGRICH: He wants to try out the kitchen, I`ll be glad to debate him
anywhere. We`ll bring his ads and he can defend them.

Let`s test this kitchen. I`m happy. I`ll go in the kitchen.

Go back and ask Governor Romney, would he like to come in the kitchen?
I don`t think so. I don`t think he wants to do anything except hide over
here and pretend it`s not his fault that he`s flooding the people of Iowa
with falsehoods.

(END VIDEO CLIP)

SCHULTZ: A-ha! Sounds like a triple dog dare to me.

Newt Gingrich is raising the 2012 stakes, challenging Mitt Romney to
debate him one-on-one in Iowa. I love it.

But there`s a third candidate these guys should be concerned about.
Conventional wisdom in Iowa says Ron Paul is going to be a force in the
caucuses. He`s still on the rise, up at 28 percent in the latest poll.
So, Newt Gingrich and Mitt Romney are fighting it out for second place.
Romney has made it clear, he`s going to bloody Newt Gingrich as much as he
possibly can using the super PAC dollars to cover Iowa with ads like this
one.

(BEGIN VIDEO CLIP)

NARRATOR: Newt has more baggage than the airlines. Freddie Mac
helped cause the economic collapse, but Gingrich cashed in.

And Newt is the only speaker in history to be reprimanded. He was
fined $300,000 for ethics violations by a Republican Congress.

Newt Gingrich, too much baggage.

(END VIDEO CLIP)

SCHULTZ: Now, get a load of this. Newt Gingrich, the guy who
practically invented the idea of vilifying political opponents, is now
whining about Romney`s attacks?

(BEGIN VIDEO CLIP)

GINGRICH: I challenge Governor Romney today to tell his super PAC,
they have $1,400,000 of negative ads lined up in Iowa next week. I
challenge him to get the super PAC to run positive ads and see if he can
compete on a positive basis rather than trying to tear down my candidacy.

(END VIDEO CLIP)

SCHULTZ: All right. Let`s turn to former DNC chair Howard Dean. He
is now a consultant with McKenna, Long and Aldridge.

Governor, good to have you with us tonight.

HOWARD DEAN, FORMER DNC CHAIRMAN: Thanks for having me on, Ed.

SCHULTZ: You bet.

What do you make of Newt Gingrich whining about the process? Did you
ever think you`d see that day happen?

DEAN: I`ve seen this movie before, eight years ago on the Democratic
side when I was the front-runner. Here`s what`s going to happen. I`ll
predict to you right now that either Ron Paul or Rick Santorum are going to
win the primaries and neither Romney nor Gingrich will win the caucus in
Iowa, neither Romney nor Gingrich will win the caucus in Iowa.

And if Romney is not careful, he`ll come in fourth, because what
happens when you do this, for Mitt Romney to think he`s not going to get
the blame for what his PAC does is crazy. He`s going to get the blame.
He`s going to tear down Gingrich because Gingrich can`t match him. They`re
both going down together.

Now, how far they go down, we don`t know. But if Mitt Romney doesn`t
come in third at least in Iowa, he`s got a problem when he goes to New
Hampshire.

SCHULTZ: Could this be a real political opening for Ron Paul? I
mean, these two guys are duking it out. And one thing about Ron Paul,
Governor, is that he is consistently on the rise. He hasn`t taken any
dips.

What do you make of that?

DEAN: I think Ron Paul is a very interesting candidate with some
enthusiastic support, but he`s not going to be the president. You`ve got
to have -- people have got to imagine you president of the United States at
the end of the day in order to vote for you.

I think he`s got a very strong following. He`s very well organized.
And he might well win Iowa.

If I had to bet right now, I`d think he`d be the front-runner. But
he`s not going to win New Hampshire. He`s not going to win some of these
other states and not going to be the nominee.

The best thing that -- this is very smart on Romney`s part, by taking
down Gingrich and making sure Gingrich doesn`t have momentum coming out of
Iowa. If it hurts Romney`s candidacy in the short run, Ron Paul winning in
Iowa helps Romney enormously, because if you have to choose between the two
of them, you`re going to choose Mitt Romney.

SCHULTZ: And as far as Gingrich is concerned, he`s putting out
positive ads like this. Let`s take a look.

(BEGIN VIDEO CLIP)

CALLISTA GINGRICH, NEWT GINGRICH`S WIFE: Is there anything for
inspiring than American towns and neighborhoods brightly lit for the
holidays?

N. GINGRICH: It reminds us of the fire of freedom that burns bright
in the America we love.

C. GINGRICH: Merry Christmas and happy New Year. I`m Callista
Gingrich.

N. GINGRICH: And I`m Newt Gingrich. And I approved this message.

(END VIDEO CLIP)

SCHULTZ: Doesn`t get more all-American than that. But does something
like this work in this environment --

DEAN: Nope.

SCHULTZ: -- where this super PAC is just beating the tar out of him?

DEAN: It doesn`t work. Unfortunately, this is the death spiral.

I got into this with Dick Gephardt. I didn`t know I was putting these
ads in the air. That was my campaign that did it. But, apparently,
Gephardt wanted to take us down because he needed to win. And we
apparently retaliated. That was the end of both of us.

So, you know, this is a bad spiral to be in. But Romney`s made the
calculation he can afford to lose the Iowa caucuses and he`s got to keep
Gingrich from winning it at all costs. If that`s his calculation, I`m not
an expert on Republican politics, but if that`s true, he`s going to
succeed.

SCHULTZ: Why do you think Gingrich is slipping so fast? What is it?
What has he done that has caused this spiral?

DEAN: Well, look, these negative ads work, Ed. I hate to say it, but
they do. They`re throwing everything at him but the kitchen sink,
attacking him.

And Gingrich doesn`t have the money or organization to respond.
Gingrich took off only about two or three weeks ago. So, now, he`s
suddenly going to come up with this Iowa machine that everybody else -- not
everybody else -- but Ron Paul and Mitt Romney have had for months?

It`s just impossible. It`s an impossible situation for Newt. It
really is.

You know, I`ve been in this situation. It`s very, very difficult when
you`re having all that money thrown at you.

SCHULTZ: And, finally, Governor --

DEAN: And you don`t have an organization and don`t have a ton of
money.

SCHULTZ: Finally, Governor, the move by the social conservatives,
many in Iowa to support Rick Santorum. What does that mean 10 days out?

DEAN: Well, look, the Republicans don`t have a nominee. But Romney
is the one that looks the most like a nominee. He`s the most, probably the
best appealing to independents. But the rank and file of the Republican
Party don`t like him.

You`ve seen what the Tea Party has done with the Republicans in the
House. Boehner doesn`t run the Republican Party in the House anymore.

They`re even stronger in the caucuses. They`re well organized. They
do not like Mitt Romney.

So, they`re casting a doubt. And every time they seize on a
candidate, the candidate implodes -- whether it was Rick Perry, because he
couldn`t put two sentences together, or Herman Cain because of his
infidelities, or Newt because of his past baggage.

Romney`s, of course, having to take down Newt. Newt has not imploded
on his own. Maybe he would have at some point. Romney is spending a
couple million bucks because if he knows Newt Gingrich wins the Iowa
caucuses, Romney has got a real fight in his hands. If Romney keeps him
from winning the Iowa caucuses, then Romney is probably home free with 30
percent of the Republican vote and other 70 percent wishing they were
someplace else.

That`s why Santorum is coming back, because they`re casting around --
now that Gingrich is being destroyed, their last hope is Santorum or Paul.

SCHULTZ: Yes. Governor Dean, great to have you with us tonight.
Thanks so much.

DEAN: Thanks, Ed.

SCHULTZ: Did I stiff this man out after a drink? He says yes. I
honestly, honestly don`t remember. A very special "Psycho Talk" is next.

Later, Wisconsin Senate Majority Leader Scott Fitzgerald sends around
a fund-raising e-mail claiming fraud of the Scott Walker recall effort. A
recall volunteer knocks down his claims. Now, she wants an apology.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: And in Psycho Talk tonight, earlier this week, I had coffee
at the White House with about ten others of the liberal persuasion. Well,
that didn`t sit too well with the folks over on Fox.

(BEGIN VIDEO CLIP)

ERIC BOLLING, FOX NEWS ANCHOR: This lump of lefties included Schultz,
Rachel Maddow, a few bloggers too boring to mention, and that lady from
"the Nation." Seriously, the crowd in this room was bigger than their
collective audience.

Basically it was occupy the White House without the drum circle and a
vandalized porto-potty.

(END VIDEO CLIP)

SCHULTZ: Cheap shots all over the place. Come on. Moments later,
commentator Bob Beckel and former White House Press Secretary Dana Perino
reminded the group that President Bush did exactly the same thing with
right wing talkers.

(BEGIN VIDEO CLIP)

BOB BECKEL, DEMOCRATIC STRATEGIST: It`s one of the outreach things
that you do with media. You know. You`ve been through this before. I
mean, they used to have on the White House, when George Bush was there, you
had a lot of conservative radio people out, right?

DANA PERINO, FMR. WHITE HOUSE PRESS SECRETARY: Once a year.

BECKEL: Yeah. And so that`s --

PERINO: That was great.

BOLLING: Bush used to have get togethers. Is there a difference
between that and this?

PERINO: Probably -- well, not --

BOLLING: When you hear about that?

PERINO: Not really.

(END VIDEO CLIP)

SCHULTZ: Nevertheless, host Eric Bolling, well, he had to get
something off his chest totally unrelated to the topic at hand.

(BEGIN VIDEO CLIP)

BOLLING: I went over to Dell Fresco`s over there. And I met Ed
Schultz by accident, bumped into him. I bought him a scotch. You`d think,
being a successful TV guy, you`d think he`d buy a drink back. Never once
offered to buy a drink.

(END VIDEO CLIP)

SCHULTZ: Sorry, dude. I didn`t realize you were looking for a
handout. But for the record -- now for the record, first of all, I don`t
drink with Republicans. But I do not remember meeting Eric Bolling ever.
Yes, I do go to Dell Fresco`s. It`s a nice restaurant. I love going over
there.

I do enjoy Crown Royal and a Diet Coke. And the people who know me,
come on, they know that I`m pretty good at picking up the tab. Heck, it`s
the holiday season. So let`s not call it Psycho Talk tonight. But just do
me a favor, Eric. If you do see me out any time, just identify yourself
and if it really bothers you, I`ll give you a handout. And I`ll buy you a
cool one.

Mitt Romney made a hard turn in New Hampshire last night and repeated
a six-month-old lie about the president`s economic record.

Newt Gingrich proves once again he`s only interested in governing a
select few, after he tells a gay man to vote for President Obama. That
man, Scott Arnold of Iowa, will join me later in this program. Stay tuned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: President Obama lectured us
about Teddy Roosevelt`s philosophy of government, but he failed to mention
the important difference between Teddy Roosevelt and himself. Roosevelt
believed that government should level the playing field to create equal
opportunities. President Obama believes that government should create
equal outcomes.

(END VIDEO CLIP)

SCHULTZ: Mitt Romney says President Obama wants government to create
outcomes. Sounds like socialism to me. Romney unveiled a new stump speech
in New Hampshire last night, where he said the president was guilty of
wealth redistribution.

(BEGIN VIDEO CLIP)

ROMNEY: In an entitlement society, everyone receives the same or
similar rewards, regardless of education, effort and willingness to take
risk. That which is earned by some is redistributed to others. And the
only people who truly enjoy real rewards are those that get to do the
redistributing.

(END VIDEO CLIP)

SCHULTZ: I mean, can this guy be any more dishonest? Does he really
believe President Obama is redistributing wealth so no one is rewarded for
hard work? I mean, the nation`s bankers, they would disagree. They`re on
track for record bonuses this year. That`s right. And if you look at
corporate profits, well, they`re at a record high as well.

So President Obama wants the richest Americans to return to the
Clinton-era tax rates. And trust me, the rich is going to be just fine
even if they have to go up three percent more in the income tax bracket.
But Romney continues to blatantly lie.

(BEGIN VIDEO CLIP)

ROMNEY: I`ve heard stories of the great Obama recession, of families
getting by on less, of long planned for retirements replaced by two jobs at
minimum wage.

(END VIDEO CLIP)

SCHULTZ: All right. Here we go again. This isn`t the first time
Romney spread the lie about the Obama recession. He did it when he
announced his candidacy in June.

(BEGIN VIDEO CLIP)

ROMNEY: When he took office, the economy was in recession and he made
it worse. And he made it last longer.

(END VIDEO CLIP)

SCHULTZ: Well, way back in June, the lie about Obama`s recession was
completely debunked. The National Bureau of Economic Research said "June
2009 marked the end of the recession that began in December of 2007."

Wall Street, let me tell you, they are not in a recession. Check out
how the Dow Jones has gone up in the past three years. You in the market?
You ought to be.

The nation`s GDP growth has been in positive territory since President
Obama`s first year. You like that? So I guess we`re down to two options
here. One is that Mitt Romney is completely divorced from reality. Option
two is he`s lying and willing to say anything to get elected.

And I vote for option two.

(BEGIN VIDEO CLIP)

ROMNEY: I think people recognize that I`m not a partisan Republican,
that I`m someone who is moderate and my views are progressive.

(END VIDEO CLIP)

SCHULTZ: Moderate. It`s one thing for Mitt Romney to flip-flop on
his own positions. It`s another thing for him to blatantly lie, over and
over again, about the existing record of the president of the United
States.

I`m joined tonight by Joy-Ann Reid, MSNBC contributor and managing
editor of TheGrio.com; John Nichols, Washington correspondent of "the
Nation" magazine with us.

Joy-Ann, great to have you with us.

JOY-ANN REID, THEGRIO.COM: Great to be here.

SCHULTZ: Will the real Mitt Romney please stand up? What`s going on
here?

REID: It`s amazing. I think what you seeing here is a little bit
desperation, right? Mitt Romney is not popular with the base of the
Republican party. They want someone who`s going to be a harder slugger,
somebody who is going to get up and jab his finger at Barack Obama and call
him a socialist to his face, or call him maybe a Mau, Mau Kenyan.

He`s trying to play the role. It`s really actually rather pathetic.
The speech sounds like it could have been written -- Steve Bennett was
absolutely right, could have been written by Glenn Beck, doesn`t sound like
Mitt Romney at all.

And it isn`t really dignified to try to completely change your
character to be more like what the base wants. You`re supposed to be a
leader. How does that show leadership quality?

SCHULTZ: John, don`t tax cuts for the rich create these outcomes that
they`ve been preaching all these years? What do you make of it?

JOHN NICHOLS, "THE NATION": Absolutely. Ed, we have had
redistribution of the wealth for a number of years. Unfortunately, it`s
been redistribution upward. We`ve been taking money from working folks and
moving it to the wealthiest people in this country. We did it with bank
bailouts. We did it with tax breaks for the rich.

Even President Obama, just a year ago, was forced to compromise and
make estate tax changes that benefited millionaires and billionaires. This
has hardly been a period where the wealthy have been suffering.

You know, the problem with Mitt Romney making this line is I think it
just reemphasized his desperation, as has been said before. He is trying
to compete with Newt Gingrich to be the Republican who`s most likely to
accuse Barack Obama of being a socialist. The problem is, Gingrich really
is crazy on this stuff.

SCHULTZ: I`m just amazed, though. The guy`s lying. He`s been lying
for six months. He`s shifting all over the place. Joy-Ann, how does he
get away with it? Why don`t the Republicans call him out on it?

REID: Factually, a multiple choice Mitt. It really fits. He will
literally say anything to be president. It`s one thing to have the
ambition to be president of the United States. It`s quite another to
literally be able to contort and twist yourself to say literally anything
you think will get you there.

I think that plays into the worst part of Mitt Romney`s reputation.

SCHULTZ: John, if Romney believes that President Obama is the
entitlement president, why doesn`t he take a stand on the payroll tax
holiday, which is the hottest debate in Washington and in the country right
now?

NICHOLS: The most painful thing to watch today was Mitt Romney doing
a press availability in New Hampshire where the reporters had to ask him,
again and again and again, where do you stand on this issue where there`s a
clear divide? In a two-minute period, Mitt Romney took every single stand
on the issue.

He was all the way from being with Bernie Sanders over to being with
John Boehner and everything in between. The fact is, the guy just cannot
take a clear stand. He`s had a problem with this again and again. But in
this closing argument speech, he is trying to out anti-socialist Newt
Gingrich. And it just isn`t going to work.

It rings so very false that I think it reemphasizes all of the things
that worry a lot of Republicans, and also just a lot of Americans beyond
the Republican base, with regard to Mitt Romney. He just doesn`t seem
real.

SCHULTZ: To both of you, Joy-Ann, it would seem to me that the Obama
White House would love to go up against Mitt Romney. I mean, President
Obama would tear him up in a debate. He`s got so many positions to work
on. What do you think?

REID: Pick any of them. With Romney, there`s also another thing, in
addition to what John Nichols was saying, it also reinforces a core problem
for the Republican party. They are the one percent. They`re the party
that is defending the wealthy and saying, we won`t let them pay a dime more
in taxes.

We`d like the poor to pay tax. They`re the ones who don`t pay. We
think the rich are better people. We think they`re more moral, this sort
of Ayn Rand view of the world that the vast majority of Americans do not
share.

Most Americans don`t think that there`s something wrong with people
who lost their homes.

SCHULTZ: John, do you think this is going to hurt him in Iowa? Do
you think it`s going to hurt him in New Hampshire? Are the people of New
Hampshire -- are they paying attention to this stuff?

NICHOLS: Well, it is somewhat problematic, because his problem in New
Hampshire is that he continues to bleed support to a more genuinely
moderate candidate, Jon Huntsman. And for Romney to make the sort of tin
ear decision to go after the Newt Gingrich base at a time when it seems
that Gingrich is starting to lose support I think is a tactical error.

I don`t think it`s going to help him. I don`t think right wingers are
going to come to him. And I do think it might cause a few more moderates
to another look at Jon Huntsman.

SCHULTZ: Joy-Ann Reid, John Nichols, always a pleasure. Great to
have you with us on THE ED SHOW tonight.

Scott Walker puts out a cheesy Christmas ad. But with the recall
effort moving along, it may not be a very happy New Year for the governor.
The latest on the Walker recall coming up.

(COMMERCIAL BREAK)

SCHULTZ: To the middle of the country, the heartland, the attempt to
recall Governor Scott Walker of Wisconsin is well ahead of schedule. I
mean, these folks have done a heck of a job. They`re going to get a
million signatures. In just one month, the Democrats have collected over
500,000 signatures. They only need about another 40,000 to get it done.

They`ve got a month to do it. So they`re ahead of schedule but
working hard at it. Governor Scott Walker is doing his part, too. He has
filled his recall war chest with 5.1 million dollars. His party is
charging full speed ahead with its attempts to discredit the democratic
recall process.

Now, Senate Majority Leader Scott Fitzgerald recently sent out a fund-
raising letter accusing Democrats in his district of including signatures
from Mickey Mouse in the recall petition. This week, one of Fitzgerald`s
constituents confronted him with the truth about fraud.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I have personally reviewed every single one of
the 10,000 and counting signatures that we`ve gathered.

SCOTT FITZGERALD, WISCONSIN SENATE MAJORITY LEADER: I think,
obviously, it`s a statewide issue.

UNIDENTIFIED FEMALE: Mickey Mouse, Adolf Hitler, stuff like that is
not going to get by me. It won`t be turned into the GAB. So you`re
accusing us -- this isn`t a statewide thing in your email. You`re saying
that you need help to fight the fraud that`s happening right now in the
recall petitions in your district.

And so you`re accusing me of fraud. You`re accusing my volunteers of
fraud. Yes, you are. You said it. Issue an apology to me and my
volunteers. Issue a correction.

FITZGERALD: OK. Thanks a lot.

UNIDENTIFIED FEMALE: Are you going to do either one of those?

FITZGERALD: No, I`m not going to do either one of those.

(END VIDEO CLIP)

SCHULTZ: Confronted with a truth about voter fraud, Scott Fitzgerald
refuses to admit his mistake. Meanwhile, Governor Scott Walker is trying
to mend fences with a new campaign commercial.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We`re grateful for the opportunity to serve the
people of Wisconsin. In this season of peace, our hope is that we can put
our differences aside and move forward together.

GOV. SCOTT WALKER (R), WISCONSIN: From our family to yours, blessings
of the season.

(END VIDEO CLIP)

SCHULTZ: Blessings. We just don`t want you to collectively bargain
or get paid a living wage. Such a sweet message this holiday season,
Scott. But it`s hard to forget you spent the better part of this year
waging war on working Wisconsinites.

It`s hard to put aside the fact that you put money out of the pockets
of public employees and took away their right to collectively bargain.
There`s a reason you`re being recalled, governor. People aren`t going to
forget about it because of a sappy holiday commercial. Nice try.

If elected president, Newt Gingrich promises to govern a select part
of society. Don`t believe me. We`ll show you the tape that proves it.
Next, Scott Arnold, the man who confronted Gingrich, the candidate, over
marriage equality. He`ll join me next. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: THE ED SHOW survey tonight, I asked the audience will
Republicans pay the political price for raising taxes on 160 million
Americans? Ninety seven percent of you say yes; three percent of you say
no.

Coming up, Newt Gingrich says if you think gay marriage is a big issue
in 2012, you should just go ahead and vote for President Obama. The Iowa
voter he said that to joins me next.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Excuse me. Newt Gingrich
proves once again that he`s not interested in being president of the entire
United States. He`s only interested in governing a select few. Yesterday,
Gingrich was approached on the subject of marriage equality in Iowa by a
gay man named Scott Arnold.

And even though Gingrich, himself, has experienced the joys of
marriage several times, the former speaker believes a portion of the
population is not entitled to the same right. Here`s the exchange.

(BEGIN VIDEO CLIP)

SCOTT ARNOLD, IOWA VOTER: My question is, is how do you plan to
engage such a large community of people who on this one specific issue do
not support you? May agree with you on the other parts you stand for. How
to you plan to engage and get the vote of gay Americans and those who
support them?

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: I think for those for whom
the only issue that really matters is the definition of marriage, I won`t
get their support. And I accept that that`s a reality.

On the other hand, for whom it`s not the central issue in their life,
if they care about job creation, if they care about national security, if
they care about a better future for the country at large, then I think I`ll
get their support.

ARNOLD: So what if it is the biggest issue?

GINGRICH: Then I won`t get their support.

ARNOLD: And how do we engage if you`re elected? Then what? What
does that mean?

GINGRICH: Well, you engage on every topic except that.

ARNOLD: Except the one that`s most important.

GINGRICH: If that`s the most important --

(CROSS TALK)

GINGRICH: If that`s the most important to you, then you should be for
Obama.

ARNOLD: OK. Thank you.

GINGRICH: That`s perfectly legitimate.

(END VIDEO CLIP)

SCHULTZ: Joining me is the man who confronted Newt Gingrich in Iowa,
Scott Arnold. Professor Arnold, good to have you with us tonight. I
appreciate your time. You`re a Democrat. You`re openly an Obama
supporter. So what was your curiosity level to go talk to the former
speaker? Why did you want to talk to Newt Gingrich?

ARNOLD: Well, I guess I did go into the event with an open mind. And
my question was directed at him sort of as a hypothetical. If you are
elected president, and I, you know -- you are my leader as an American, how
do you plan to engage gay Americans when your agenda or things you have
said, comments you`ve made in the past clearly don`t support us?

I just -- I wanted to know where we fit in, essentially.

SCHULTZ: Were you surprised by the answer?

ARNOLD: I was very surprised. I guess looking back, it was almost as
if he drew a line in the sand saying, you know, I don`t want your support.
Go vote for this other guy because there`s no place for you in my -- you
know, in my presidency. There`s no place for you, almost in a sense, you
know, as an American.

You know, what do we do? What do gay Americans do if Newt Gingrich is
president? It was baffling really.

SCHULTZ: You pointed out to him that would effect millions of
Americans. His answer was so yester-year. Newt Gingrich, he essentially
told you that if he gets to the White House, he`s not going to engage in
your issues or the gay community. What do you think this say about the
Republican party, if anything?

ARNOLD: I think one, it says there`s a huge disconnect between the
Republican party and millions of Americans, not only gay Americans but
people who support gay Americans, gay families. I think even bigger, if
he`s going to be the president of the United States, this becomes a
worldwide issue.

I mean, Hillary Clinton`s speech at the U.N. recently -- you know, gay
rights are human rights. There are places in this world where gays are
killed, even in the United States. So I think it`s just very irresponsible
of him. When people look to the United States to be a leader, if he`s our
president, he`s not leading on this issue.

SCHULTZ: He says if you`re interested in jobs -- I assume that you`re
a good red blooded American like everybody out there. You`re interested in
jobs.

ARNOLD: Exactly.

SCHULTZ: You`re an adjunct professor, an educated man. Did he
convince you on that front about jobs, that he could be a guy that could
create jobs?

ARNOLD: No. Absolutely not. But I guess what he doesn`t realize is
that a lot of Americans hold social issues near and dear to their heart. I
mean, what`s the point of a job if you`re not happy? And how are gay
Americans supposed to be happy and inspired and live the life that they are
afforded, I guess, as an American, with him in charge? That`s what I think
the issue is.

SCHULTZ: Do you think you did the gay community in this country a big
favor by pushing him on this exchange?

ARNOLD: You know, I read a couple message boards where someone asked
if this was part of a gay agenda or someone planted me in the audience to
ask him this question. You know, I guess the question that I asked came
from my heart in a reactory sort of moment, where I was speaking from the
gut.

So I didn`t, I guess, have the interest of all gay Americans in mind
when I asked. But that`s why I`m talking to you. Yeah. I think this
needs to be told. I think that people need to know what he said. And, you
know, I`m happy to do it.

SCHULTZ: Most of the GOP presidential hopefuls have criticized the
lifting of Don`t Ask, Don`t Tell, and support amending the Constitution to
define marriage as exclusively between a man and a woman. What kind of
message is the Republican party sending to gay Americans?

ARNOLD: A message that we`re second class citizens. Like you said,
it`s from yester-year. It`s not progressive. It`s not --

SCHULTZ: Did you feel like a second-class citizen the way he talked
to you last night?

ARNOLD: Yeah. If he wants to be president, he should be president of
all Americans. And, yeah, that did make me feel like a second-class
citizen. Absolutely.

SCHULTZ: Scott Arnold, good to have you on the program tonight.
Thanks for speaking out.

For a clarification, it`s not only Crown Royal/Diet Coke. I do like
to drink beer. Not all the time, but sometimes.

That`s THE ED SHOW. I`m Ed Schultz. Happy holidays. You can listen
to me on Sirius XM Radio channel 127, Monday through Friday.

"THE RACHEL MADDOW SHOW" starts right now.

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

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