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PoliticsNation, Wednesday, January 25, 2012

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Guests: Valerie Jarrett, Senator Bernie Sanders, Representative Tim Huelskamp, Tad Devine, Erin McPike, Rod Smith

REV. AL SHARPTON, MSNBC ANCHOR: Welcome to POLITICS NATION. I`m Al
Sharpton.

Tonight`s lead. Can President Obama sell his message of fairness?
Fresh off his State of the Union speech that put the national spotlight on
fairness, the president went to Iowa today to drive the point home.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There are people in
Washington who seem to have collective amnesia. And their philosophy, what
there is of it, seems to be pretty simple. We`re better off when everybody
is left to fend for themselves and everybody can play by their own rules.
And I`m here to say they`re wrong.

(END VIDEO CLIP)

SHARPTON: It`s central to what President Obama stands for and what he
told the nation last night.

(BEGIN VIDEO CLIP)

OBAMA: We can either settle for a country where a shrinking number of
people do really well while a growing number of Americans barely get by, or
we can restore an economy where everyone gets a fair shot and everyone does
their fair share and everyone plays by the same set of rules.

Now you can call this class warfare all you want. But asking a
billionaire to pay at least as much as his secretary in taxes? Most
Americans would call that common sense.

(END VIDEO CLIP)

SHARPTON: This is common sense. It`s a fact that there`s a raging
economic divide in America. But common sense isn`t a Republican strong
point.

Here`s how GOP establishment`s pet Mitch Daniels spun it last night.

(BEGIN VIDEO CLIP)

GOV. MITCH DANIELS (R), INDIANA: No feature of the Obama presidency
has been sadder than its constant efforts to divide us, to curry favor with
some Americans by castigating others.

(END VIDEO CLIP)

SHARPTON: No, Governor, not talking about inequality divides us. The
message is wrong. But the messenger is even worse. Mitch Daniels worked
in the Bush White House and oversaw the first round of Bush tax cuts. The
man who said the war in Iraq would be swift and affordable. He was the man
who oversaw a $200 billion increase in the deficits.

That`s their guy. That`s their Mr. Economy. So it`s no wonder other
Republicans missed the reason why this country is so angry.

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R), HOUSE MAJORITY LEADER: The reason why Warren
Buffett`s secretary and so many millions of other Americans are frustrated
is they see policies that have been promoted for the last three years by
this White House that frankly don`t work.

SEN. MARCO RUBIO (R), FLORIDA: I have never seen a president pit
Americans against each other like this president does.

(END VIDEO CLIP)

SHARPTON: More talk of division, but the poster boy of unfairness had
his own take.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I also looked at a president
who I think is disconnected from reality. I just don`t think he
understands what`s happening in American homes across this country. People
in the middle class in America are hurting.

(END VIDEO CLIP)

SHARPTON: The president doesn`t understand the middle class? This
from Mr. .006 percent. This from Mr. Let Detroit Go Bankrupt. This from
"let foreclosures run their course."

No, Willard, you`re the one with the disconnect. President Obama is
doing what he can to fix it.

Joining me now from the North Lawn of the White House is Valerie
Jarrett, White House senior adviser and assistant to President Obama.

Miss Jarrett, thanks, as always, for coming on the show.

VALERIE JARRETT, WHITE HOUSE SENIOR ADVISER: My pleasure. Good
evening, Reverend Sharpton.

SHARPTON: Now after such an optimistic speech last night that I heard
nothing but a lot of applause and a lot of positive comments from all kinds
of Americans, what do you make of these absurd claims from some elements of
the Republican Party`s that this is divisive and that the president is
disconnected from the middle class?

JARRETT: Well, you know what? We prefer to listen to the American
people. And what we heard last night and what we`ve heard in the course of
today is overwhelming support. An outpouring of support for President
Obama`s message because, Reverend Sharpton, you`re right. It was an
optimistic message. It was a message about fairness and equality and
making sure that we`re building an economy that will last and where nobody
gets left behind.

And those are the basic values of our country. And the president had
a chance to outline his plan. It`s a bold plan. It`s one based on
supporting manufacturing. Making sure that we have an energy policy where
we`re building for the future, investing in domestic production, reducing
our dependence on foreign oil.

He focused on American skills, making sure that our workforce can
compete against anybody in the world because they are trained to the
marketplace, to the innovative and great ideas of our entrepreneurs.

And he also talked, as you started out, about American values. About
fairness. About making sure that nobody gets left behind. This is a make-
or-break time for the middle class and people who are moving -- want to
move into the middle class. President Obama is fighting for those people
each and every day.

He had -- he`s had a terrific first day of his trip. He`s out, as you
mentioned, in Cedar Rapids, Iowa, at a great company that`s building
conveyor belts and it really shows the American people what manufacturing
is all about. These are great jobs. These are jobs we can have them. You
can have a lifetime career at one of these companies. You can put your
children through college. Have a life saving, retire with dignity.

Those are the companies that the president wants to help. The ones
who are going to invest in America, not ones that are outsourcing, ones
that are coming back right here because they recognize that this is the
greatest country on earth. That`s the optimistic spirit that I think the
American people were responding to last night.

SHARPTON: And you know what you just said, I know that the particular
policy things the president outlined last night. I also know that he`s
going to have to face stiff opposition because there`s some in Congress
that will fight on every one of the points. But the one thing I think they
can`t fight is the spirit he raised last night of America is back. And
really igniting in the American people some hope and some we can make it.

I know that we`re hurting, but times are looking better. And if we
finish the journey, we can bring America together if we get on everyone`s
side. I think the key last night was he really revived a lot of the
American spirit and the unity of what we could do if we all came together.

JARRETT: Absolutely. He believes in America. And, yes, we went
through a very tough time. We lost four million jobs as the president said
in the last six months of the prior administration. Four million jobs
before President Obama`s policies could take hold. But we`ve also had 22
consecutive months of private sector job growth. Over three million jobs
have been created.

Now our unemployment rate, as you know, Reverend Sharpton, is still
far too high.

SHARPTON: Right.

JARRETT: So we much have work left to do. But we are absolutely
moving in the right direction. And it is that optimistic spirit that I
think the president captured. And that resonates with the American people.
People want fairness. They know that the very wealthy didn`t get wealthy
alone. They got wealthy because they live in a country that -- where a
government does what it`s supposed to do.

It educates our children it provides infrastructure, roads and
bridges. It provides the research dollars for science and technology. And
so when you do well in America, as we want everybody to do, you also have a
responsibility to your country and to make sure that it`s a country where
everybody has a chance to move to the middle class and do well and have
that great invention that turns into a global company that`s started in a
garage. Everybody should have that opportunity. That`s what the president
is fighting for.

SHARPTON: And that`s fairness. Let me ask you one question, quickly.
I know that the president more than most public figures I`ve ever known or
have studied is involved in a lot of these speeches and themes himself.
Give us a peek in the public. How much of what we heard last night,
especially that rekindling of the American spirit and values and hope, how
much of that is the president and how much of that is the speechwriters? I
mean how much -- because we got a sense last night this was personal to
him.

JARRETT: It was very personal. And the president has a terrific team
of economic advisers who proposed a wide range of policies to the
president. He has great speechwriters. But in the end, I think it was the
president`s personal touch, the edits and the re-edits over and over again.
He wanted to make sure that he delivered a speech that was passionate and
it embodied what he truly believes.

And I had read the speech ahead of time, Reverend Sharpton, but
listening to the president deliver it, you could tell he meant every word
that he was saying. And I think that that passion and that energy and that
love of country came through and it resonated broadly to the American
people.

And I think that`s a spirit that will keep us moving forward. You
can`t stop him. He made it clear he wants to work with Congress. He has a
robust agenda but he also made it clear he`s not going to stand back and
wait for Congress alone. He`s going to do what he can do within his power
through executive authority and he`s going to move our country forward.

He wants to do that in a collective spirit. And as he ended his
speech, he made it very clear if you think about those Navy SEALs, as they
went up those stairs.

SHARPTON: Right.

JARRETT: Looking for Osama bin Laden. They did that, Reverend
Sharpton, as a team. And it`s a model that we should all be following. So
he really called upon us to think about that model and try to work together
because that`s what makes our country so great. And we work together,
there`s just no limit to what we can do.

SHARPTON: Valerie Jarrett, thanks for joining me tonight from the
White House briefing room.

JARRETT: You`re welcome.

SHARPTON: Thanks as always for your time.

JARRETT: Thank you. Thank you. Good night, Reverend Sharpton.

SHARPTON: Good night.

Joining me now, Senator Bernie Sanders, independent from Vermont.

Senator Sanders, thanks for coming on the show.

SEN. BERNIE SANDERS (I), VERMONT: My pleasure.

SHARPTON: Now the president talked about fairness and we hear a lot
of people now raising the issue that you`ve been raising for years about
economic fairness. About we`re not saying that there must be equal results
but there certainly should be equal investment and an even-playing field.
Does this put the Republicans in a bad spot, Senator Sanders?

SANDERS: Absolutely. I mean, they talk about class warfare. The
fact of the matter is, there has been class warfare for the last 30 years.
It`s a handful of billionaires taking on the entire middle class and
working class of this country. And the result is, Al, that you now have,
in America, the most unequal distribution of wealth and income of any major
country on earth, and the worst inequality in America since 1928.

SHARPTON: Wow.

SANDERS: How can anybody defend the richest 400 people in this
country owning more wealth than the bottom half of America, 150 million
people? And that gap between the people on top and everybody else is
growing wider. How would you like to try to defend that?

SHARPTON: Well, let me show you. Today to probably no one`s
surprise, at least not to your surprise, let me show you what the
personalities at FOX News had to say after an inspiring speech and appeal
to fairness. Here`s what they had to say.

(BEGIN VIDEO CLIP)

SEAN HANNITY, ANCHOR, FOX NEWS` "HANNITY": I didn`t get any sense at
all of any grand vision that he has for the country, short of igniting
these embers of class warfare.

STEVE DOOCY, ANCHOR, FOX NEWS` "FOX & FRIENDS": The president using
Warren Buffett`s secretary to kick off his class warfare campaign in last
night`s State of the Union address.

DAVE RAMSEY, HOST, "THE DAVE RAMSEY SHOW": Last night our president
declared war on success. In the name of this class warfare politics and
this envy.

(END VIDEO CLIP)

SHARPTON: Class warfare seems to be their talking point. And, you
know, someone tweeted me today, Senator, something that`s very interesting.
When they attack working class people and the poor, when they attack people
that need assistance, when they attack people that need help, when they
attack people who want the right to collective bargaining, when they attack
people that want better schools, it`s called responsibility.

But when those people question why they pay less percentage of tax,
why they have loopholes, it`s called class warfare. So if the rich attack,
it`s not warfare. If the poor raise a question, it`s warfare. There`s
something funny to me about that scenario.

SANDERS: Well, I think, Al, the Republicans now have a very hard and
difficult hand to play. They are very much on the defensive, and they
should be. Look. In the last 10 years, 80 percent of all new income went
to the top 1 percent. And to pick up on your point, you got Republicans
out there who want to destroy Medicare. They want to destroy Medicaid. At
a time when 50 million people have no health insurance at all.

That`s a death sentence. And yet they see this as a responsible
action. The truth of the matter is -- and I think the "Occupy Wall Street"
people deserve some of the credit. The American people are catching on
that the game is not fair. That the rich are getting richer while
everybody else is getting poorer. They want economic policies now which
protect the 99 percent and not just the 1 percent.

Now there`s one point, Al, I thought a lot of what the president said
last night was good. There`s one point where I have real concerns. You
may have heard him talking about his willingness to talk to Republicans
about, quote/unquote, "reform of Social Security, Medicare and Medicaid."

SHARPTON: Right.

SANDERS: Between you and me what reform is are cuts. I will strongly
oppose that. Social Security, Medicare and Medicaid, life and death for
tens of millions of our people. We`ve got to defend those programs. Not
see them cut.

SHARPTON: Well, we`ll be watching it, Senator. And it is amazing to
me how people that need help, children, become a football to play games
with in a political contest rather than something that this country should
say how do we elevate and make their lives better.

Senator Bernie Sanders, thanks for your time and thanks for joining me
tonight.

SANDERS: My pleasure.

SHARPTON: Ahead, the debate over millionaires paying their fair
share. A lively discussion. One with a member of Congress and of the Tea
Party caucus.

Plus, is there panic inside the Romney camp? We`re live in Florida
with some big news on Willard`s woes.

And I`m still waiting for my call from Newton Leroy Gingrich. But he
was all over the air today with his racial politics again. I`m responding
to that tonight.

You`re watching POLITICS NATION on MSNBC.

(COMMERCIAL BREAK)

SHARPTON: You`re looking live at a shot in Chandler, Arizona, where
the president of the United States, Barack Obama, will be speaking shortly.
He`s on a roll. We`re going to get some of what he says soon when he comes
up.

(COMMERCIAL BREAK)

SHARPTON: President Obama in the State of the Union said that
millionaires and billionaires should pay their fair share in taxes and
Democrats in Congress are ready to help him get it done.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D), MAJORITY LEADER: But nothing is more important
to Congress than reducing income inequality.

SEN. RICHARD DURBIN (D), ILLINOIS: It is a matter of, as Republican
critics would say, paycheck envy or class warfare. It`s a matter of
reality.

SEN. CHARLES SCHUMER (D), NEW YORK: It`s a priority for us to act on
some kind of Romney -- I mean Buffett rule this year.

(END VIDEO CLIP)

SHARPTON: A "New York Times" poll shows 55 percent think the rich
don`t pay their fair share. And majorities of Republicans, independents
and Democrats also -- say there`s a class conflict between the rich and the
poor.

With that kind of public opinion on his side, can the president get
GOP lawmakers to see things his way?

Joining me now is Congressman Tim Huelskamp, a Tea Party Republican
from Kansas.

Congressman, thanks for joining me again.

REP. TIM HUELSKAMP (R-KS), TEA PARTY CAUCUS: Thank you, Reverend Al.

SHARPTON: Let me ask you a question. Let`s forget parties. Is it
fair that billionaires pay a lower tax rate than their own secretaries?

HUELSKAMP: Well, I think what we heard the other night was a campaign
speech. We can`t forget. This guy has been president for three years and
we have two million less Americans working today and he needs to run on
something other than his record.

SHARPTON: But Congressman --

HUELSKAMP: And I think what he`s dong is --

SHARPTON: Congressman --

HUELSKAMP: Yes, sir.

SHARPTON: I have those talking points, too, for the GOP. I asked you
a question off the sheet. Is it fair for billionaires to pay a lower tax
rate than their secretaries?

HUELSKAMP: Well, they actually don`t, according to the IRS. The
effective tax rate of these millionaires and billionaires is more than most
secretaries unless they are exceptionally high paid. Forty-eight percent
of all Americans don`t pay any income taxes right now, Reverend Al. And
you do know that.

SHARPTON: Is it fair, though --

(CROSSTALK)

SHARPTON: Is it fair -- your -- one of your candidates for president,
Willard Mitt Romney, reported himself that he paid around 14 percent in
taxes. The average middle class American, Warren Buffett`s secretary, pays
30 percent about. Is that fair?

HUELSKAMP: Reverend Al, the average American doesn`t pay 30 percent
in income taxes.
SHARPTON: Is it fair?

HUELSKAMP: It`s not true, Al. What is true is, is the president --

SHARPTON: Is it fair? If those statistics that I reported that they
are saying are true, is it fair?

HUELSKAMP: It`s not true according to the IRS. What is true --

SHARPTON: So you won`t answer whether it`s fair.

HUELSKAMP: Well, it`s not true.

SHARPTON: You`re trying to argue -- on the basis of the report, if
the report is inaccurate, fine. You stipulate that. I`m just asking you,
is it fair? Is the arrangement fair, in your opinion?

HUELSKAMP: Well, the arrangement is not the fact. The fact is, two
million Americans are out of work today because the president`s policies.
And let`s not forget for two years --

SHARPTON: So you`re saying that Mr. Romney and Mr. Buffett are both
misleading the public?

HUELSKAMP: You know what is misleading the public is the president of
the United States. Just a year ago, a little over a year ago --

SHARPTON: The president of the United States didn`t release Mr.
Romney`s taxes. The president didn`t release the figures on Warren
Buffett`s secretary.

HUELSKAMP: No, but two years ago or not -- excuse me, 13 months ago,
the president of the United States said we can`t raise taxes on anyone. He
actually signed the extension of the Bush/Obama tax cuts. It is really
deceptive to turn around and say, no, wait a minute, now I`m against them
because it`s a campaign year. He signed those into law last December of
2010. Is that fair of him to do that?

SHARPTON: Well, I would hope that he doesn`t -- that he didn`t do it
then and I hope he doesn`t extend them now. But what I`m trying to bring
home to the American people is that you guys can`t even discuss fairness.
I have asked you several times whether something is fair. And you can`t
even bring yourself to discussing fairness.

We`re going into the president is misleading and the president --
basic fairness. That`s all American people want to know. Can we think --

HUELSKAMP: You know what I think the American people want?

SHARPTON: And I was -- but I`m asking you. Several times, as an
American, to an American -

HUELSKAMP: Is it fair?

SHARPTON: -- is it fair. You can`t even answer that.

HUELSKAMP: No, here`s what I will answer, what fairness is. When I
talk to Americans in Kansas, they are looking for a job. And what`s unfair
is the policy of this president have lost two million jobs in America.
Actually we have four million Americans more -- four million more Americans
in poverty because of this president`s policies since he took office.
That`s the failure of his policies.

SHARPTON: Well, all right. Let`s take what you just said since you
won`t answer the fairness question. Let`s go to Kansas, to your district.
In your district, the median income in your district is $43,013 per year.
Mitt Romney pays a lower tax rate and makes $57,000 a day.

Since you are worried about your district, how do you think the people
in your district feels that Mr. Romney who makes more a day than they make
a year pays a lower tax rate? You said they want jobs. They get a job and
they`ll be paying a higher tax rate than Mr. Romney.

Does that concern you as their congressman?

HUELSKAMP: Most Kansans I talk to aren`t concerned and worried about
what the guy down the road makes. They`d like to keep their own job.
They`d like to make a living themselves. And they don`t --

SHARPTON: But they`d also like to be paying a fair rate, wouldn`t you
think that? Or you think they don`t care?

HUELSKAMP: Well, there are plenty of folks that would like to punish
others, and -- but that`s not --

SHARPTON: How is that punishing --

HUELSKAMP: -- the typical American dream.

SHARPTON: So let me get this right. So for billionaires and
millionaires to pay at the same rate as everyone else is a punishment?

HUELSKAMP: They don`t pay at the same rate as everybody else. Forty-
eight percent --

SHARPTON: I gave you specific example with Mr. Romney.

HUELSKAMP: Forty-eight percent of all Americans pay no income taxes
whatsoever.

SHARPTON: But those --

HUELSKAMP: The effective tax rate is zero, Reverend Al.

SHARPTON: Now first of all --

HUELSKAMP: And you know that.

SHARPTON: We can get into the argument -- if we can into the argument
of payroll tax and all that. But what I`m telling you is one that we all
know. Mr. Romney released this himself, Congressman. He`s paying 14
percent. We`re not guessing. He released it. The Democrats didn`t
release it. The president didn`t.

HUELSKAMP: Sure.

SHARPTON: He said this is what he`s paying and you know that in your
district people pay a higher rate and you can`t even say whether that`s
fair or not. That`s the problem in America.

HUELSKAMP: Well, I think -- well, fairness in America is not the end
result. It`s not the end result. It`s the opportunity. And everybody in
America today has the opportunity to get ahead. We have opportunity in
America unlike any other country in the world. And that`s what we should
be promoting rather than dividing America. This president has said --

(CROSSTALK)

SHARPTON: I think you`re absolutely right.

HUELSKAMP: And he is a divider.

SHARPTON: And I think the only way we`re going to get ahead is we at
least have to agree on fairness. And as long as we can`t even talk about
whether someone making more money a day than people in your district make a
year and whether they ought to be paying the same rate or a fair rate,
whether we can`t even discuss whether that`s fair, how do we get ahead,
Congressman? We need to get ahead.

(CROSSTALK)

HUELSKAMP: Reverend Al, can I ask you a question? Reverend Al? Can
I ask you a question?

SHARPTON: Let`s do that. Congressman, I`ve got to go.

HUELSKAMP: OK.

SHARPTON: Thank you, Congressman Huelskamp. We`ll have you on again.

HUELSKAMP: Hey, appreciate it. Let`s not --

SHARPTON: Maybe next time we can talk about fairness.

HUELSKAMP: Let`s not be envious, Reverend Al. Thank you.

SHARPTON: Envious? I`m not envious. I am trying to be --

HUELSKAMP: Hey, what, what is your income a year, Reverend Al?

SHARPTON: My income --

HUELSKAMP: What`s your income?

SHARPTON: I`ll tell you, my tax rate, my tax rate is the same as the
people --

HUELSKAMP: No. What`s your -- what`s your income? What do you make
for this show?

SHARPTON: My tax rate is the same percentage that the average person
in your district. It`s certainly not 14 percent.

HUELSKAMP: What`s your income?

SHARPTON: I just paid it by quarterly. I wish I had a 14 percent
rate.

HUELSKAMP: Well, that`s your -- tell us your income.

SHARPTON: President Obama`s three-day blitz through five battleground
states is under way. We`re live in Arizona when the president comes up.

(COMMERCIAL BREAK)

SHARPTON: Welcome back to POLITICS NATION. As we wait on the
President, he is going to be speaking momentarily in Arizona. You saw just
my discussion with Congressman Huelskamp. This is the problem. This is
what we`re facing. Just a conversation on fairness. You, me, whoever.
Whatever our incomes, some are doing better than others, the President
said. Those of us who are doing better, those that are not doing as well,
there shouldn`t be different standards and different rates and loopholes
and ways of ducking and dodging. And not having the same investment. But
we can`t ever get to legislation if we can`t even discuss fairness. The
President of the United States when we come back as he continues talking
about fairness around the country.

(COMMERCIAL BREAK)

SHARPTON: President Obama speaking in Chandler, Arizona. Let`s
listen to some of what he`s saying.

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA (D), UNITED STATES: Adams. Really? And it was so
remarkable that my trip director was with me. He said, this stuff is like
magic.

(LAUGHTER)

How do they do this? And while I was there, Intel`s CEO Paul
Otellini, someone whose advice I rely on as a member of my jobs council,
announced -- he announced that Intel would be building a new factory here
in Arizona. A factory which will turn out some of the fastest and most
powerful computer chips on earth.

(APPLAUSE)

A factory so big I`m told that right there is the world`s largest
land-based crane. Can pull up to -- what is it, 4,000 tons? Is that
right? Four thousand. So, not only that, but Paul informs me that the
microscopes that they are going to have here will be twice as good as the
ones they had. Up in Oregon. So, I decided I had to check this out for
myself. Because, honestly, first of all, who wants to miss out a chance to
see the crane? That thing is huge. But there`s a more important reason
that I`m here. I`m here because the factory that`s being built behind me
is an example of an America that is within our reach. An America that
attracts the next generation of good manufacturing jobs. An America where
we build stuff and make stuff and sell stuff all over the world.

(CHEERS AND APPLAUSE)

We can do that. We`ve got to come together. We`ve got to come
together and restore the basic American promise that if you work hard, you
can do well enough to raise a family and own a home. Send your kids to
college. Put a little away for retirement. Maybe come down to Arizona.
Where the weather is like this all the time. It never gets above 70
degrees, does it? That`s what people are looking for. They don`t expect
anybody to give them anything. But they want to be able to earn and
deserve security, the ability to take care of their families, dignity in
their retirement. That`s what Americans are looking for. That`s what they
deserve.

(CHEERS AND APPLAUSE)

Now, we`re still recovering from one of the worst economic crises in
three generations. We lost nearly four million jobs in the six months
before I took office. Another four million before our policies had a
chance to take full effect, but here`s the good news. Over the last 22
months, our businesses have created more than three million jobs.

(CHEERS AND APPLAUSE)

Last year, they created the most jobs since 2005. Today, American
manufacturers are hiring again and creating jobs for the first time since
the 1990s. So our economy --

(END VIDEO CLIP)

SHARPTON: That is the President of the United States. Again, with
his message on manufacturing, dealing with the jobs situation, speaking now
in Chandler, Arizona. We`re going to monitor and go back as he makes his
points. I want to bring in democratic strategist Tad Devine, a senior
adviser for the Kerry and Gore campaigns. Tad, great to have you with us.

TAD DEVINE, DEMOCRATIC STRATEGIST: Good to be with you.

SHARPTON: What is President Obama trying to accomplish with this
five-state swing after the State of the Union Address?

DEVINE: Well, I think he wants to take that message that he delivered
so powerfully to the nation last night and amplify it and illustrate it.
He`s standing there in front of a construction site. A high-tech
manufacturing site. Earlier today he was in Iowa at another manufacturing
site. He`s going to go on tomorrow and the next day to talk about energy
and education and job training. So, I think what the President wants to do
is take that message he gave to America last night. That if we pull
together, that if we have a system that treats people fairly, if we make
the right investments we can rebuild this economy and we don`t have to go
back to the economy that he was left with the day he became president.

SHARPTON: Now, one of the things that he has said is that we should -
- the Congress ought to extend the payroll tax extension and he also talked
about how they should deal with a fair tax reform policy. I just had a Tea
Party congressman on who fairness, just you can`t even get them to discuss.
How do we translate this into legislation, Tad?

DEVINE: Well, I think what the President is doing is the right way to
win that fight. Last night he talked about it in very human terms. He had
Warren Buffett`s secretary sitting next to his wife in the halls of
Congress and he illustrated, what Warren Buffett said months ago. That his
secretary pays a lower rate than a billionaire does on his taxes and I
think there is no more powerful.

SHARPTON: The secretary has a higher rate.

DEVINE: That`s right. That Warren Buffett pays a higher rate than
his own secretary. And there`s no better illustration of that than Mitt
Romney`s tax returns which he made public. I mean, it`s unbelievable that
someone who is making so much money, over $20 million a year is paying so
little in taxes. It`s because the system is broken. I think the fact that
the President has decided to take this on, the fundamental question of
fairness in our society and make the fight on behalf of the middle class is
very, very powerful. It`s going to resonate with people. And I think the
reason he`s going to win this election.

SHARPTON: Now, the thing that bothers me is that when you raise this,
their response is you are just envious. You are just jealous. I mean, it
is bad enough you have this lopsided arrangement, but on top of that is to
say, well, this is lopsided. This is not fair. Oh, you`re just jealous.

DEVINE: Well, you know, they are going to do everything to try to
stop this debate. I mean, let`s face it. The public is with the President
when it comes to this issue. I think people recognize that there`s
fundamental unfairness in the tax system. I think the President said it
well last night. That it`s not a question of class warfare. It`s just
common sense that millionaires should pay as much in taxes as secretaries
or working people do. So, I think if the President goes out and frames
that argument powerfully, if he advances it the way he`s doing today, I
think he`s going to win that fight and ultimately win the election as well.

SHARPTON: Now, we had a note that he was met at the air strip when he
landed by the Governor of Arizona. And they exchanged some words about her
book scorpions for breakfast and how the President wasn`t pleased with it
and how she has clearly been extremely critical of the President. I think
also while he`s there, he`s going to deal with the question, at least deal
the President`s deal with the whole question of immigration and Latino
voters who are dissatisfied with a lot of what the right has done around
this question of immigration, which is certainly this Governor`s are simple
love, I know from marching out in Arizona about immigration rights. So,
clearly that`s part of the issue. When we look at the polls, the President
is more than two to one beating Mitt Romney with Latino voters. Does this
five-state trip also deal with the issues like immigration and other issues
around the economy?

DEVINE: I think he will deal with the issue of immigration as he did
in the State of the Union Address last night. I think the President is
going to have a real advantage with Latino voters. Number one, because
he`s on their side and fights that matter to them. Whether it`s the Dream
Act or other policies that Mitt Romney and other Republicans have opposed.
The President has made it clear that he wants to take on this tough issue
of immigration and try to find a path forward, so that we can have people
who want to come to this country, have an opportunity to do so legally.
That people who seek an education can do so with as much assistance as
possible.

And I think our business leaders are telling us that they want people
who are trained here with the skills that they need to work in businesses
and to establish new businesses. That`s a key to our economic success and
future. So, the President is on the right side of that fight. The fact
he`d go to states like Arizona and Nevada and Colorado, where Latino voters
can be the crucial difference in winning those states where he has a huge
advantage already and where he can build on that advantage, I think it`s
one of the reason that he`s got a good chance of winning all those states
in the general election.

SHARPTON: Tad Devine, thanks for your time tonight.

DEVINE: Good to be with you.

SHARPTON: Ahead, Newt surging in Florida. Is there panic inside the
Romney`s camp? That`s next.

(COMMERCIAL BREAK)

SHARPTON: Welcome back to POLITICS NATION. Sunshine showdown. A new
poll shows Mitt Romney`s lead has all but disappeared. In just one week,
Willard has wilted seven percent. But Newt has shot up 16 percent.
Gingrich is riding this wave all across Florida with hundreds of supporters
cheering him on at a rally today in Coral Springs. Much smaller crowds
greeted Willard at his campaign event this morning in Orlando.

Joining me now from Florida is Rod Smith, chairman of the Florida
Democratic Party and from Miami is Erin McPike from Real Clear Politics.
Thanks to you both for being here tonight.

ROD SMITH, CHAIRMAN, FLORIDA DEMOCRATIC PARTY: Good to be here.

SHARPTON: Rod, let me start with you. You know Florida politics
better than anyone I know. Is this Newt surge real?

SMITH: Yes. It`s real. You know, I started off telling people that
I thought Florida`s heavily dependent upon resources because of our
expensive markets, but I will tell you, the momentum and the feel out there
in my view is one in which Speaker Gingrich will do well. And the reason
why is Florida has a recent history of kind of a Tea Party insurgency doing
well. Governor Rick Scott ran against the then establishment attorney
general and he beat him. And our new Attorney General Pam Bondi, ran
against the sitting lieutenant governor and defeated her -- defeated him.
And both of them, I think, have -- were kind of associated with Tea Party
support. I think this is also in the long run, moving the whole debate
farther and farther to the right. And to the degree they do that, I think
it helps the Democrats in the long run. But I will tell you, Speaker
Gingrich has moved Romney a long way to the right. And I think that his
insurgency if you will is one that`s got them scared to death.

SHARPTON: Erin, you are there in Florida. You`ve covered both
Willard Mitt Romney`s appearances and you`ve covered Newton Gingrich`s
appearances. What can you tell us about the size and enthusiasm of the
crowds that you`ve observed?

ERIN MCPIKE, REAL CLEAR POLITICS: Well, Newt Gingrich`s crowds are
certainly larger and more raucous than Mitt Romney`s crowds. You know, I
think Mitt Romney`s events are coming off a little bit flat. It`s clear
that they are starting to panic a little bit. Last night, Newt Gingrich
had a very big rally in Naples. And it felt like it was a big Fourth of
July celebration. You know, it feels like summer here, obviously. But
lots of American flags. Just very boisterous rally. And, you know, I
think you are seeing that Romney is starting to get nervous and they are
sending out surrogates to Newt Gingrich`s events. Connie Mack, a
congressman here in Florida who supporting Mitt Romney has come to several
of Newt Gingrich`s event the last couple of days to talk to the press and
drive a message. You know, he`s crashing Newt Gingrich`s events. And you
know, I think with Mitt Romney, he`s just getting a little bit nervous and
that`s coming across in some of those interviews. So they are bringing out
John McCain over the next few days to campaign for Mitt Romney here in
Florida.

SHARPTON: Now do you think, Erin, that`s panic? Are you sensing
panic in the Romney campaign?

MCPIKE: You know, I think that`s clear to a lot of people here in
Florida by how both the campaign is acting and how the candidate is acting.
And he had an event at this building behind me, the freedom tower here in
Miami, to talk about his policy toward Cuba. And he used some more
bombastic language than we heard from him before to kind of go toe-to-toe
with Newt Gingrich on some of those policies. So, you know, I think that`s
just showing that he really has to get more visceral to go at it with Newt
Gingrich.

SHARPTON: Rod, you chair the party, the Democratic Party there in
Florida. And you`ve had to council many a candidate. Willard tried to go
after Gingrich the other night, and it seemingly didn`t bump him up to
where he wanted. What has to happen tomorrow night? What do you think
will happen in their debate tomorrow night which is before the Florida vote
on next Tuesday? What do you think Newt is going in to do? What do you
think Willard is going in to do?

SMITH: Well, right now, I think that Romney has a problem in Florida.
And tomorrow night, I -- he would have to work to dispel that. And that is
he really isn`t connecting with voters. In North Florida, I never thought
he would connect. You know, North Florida is kind of southern. And I
never really thought that he`d connect in my neck of the woods. In South
Florida, I think he`s got an immigration problem. Because I believe that
he has gone so far on his immigration policy that he`s actually allowed
Speaker Gingrich to kind of steal that issue from him. Tomorrow night, I
think he`s got to go on the attack. But the truth of the matter is, it`s
hard from a guy who was kind of a -- he was a presumptive leader for a long
period of time. He`s the establishment candidate.

And suddenly, now he`s got to go on the attack and he`s got to be
attacking someone that he thought was going to be out of the race by now.
And so, I think it`s going to be very difficult because I think all
Gingrich wants to do at this point in time is to continue to make Romney
less comfortable in his skin. And right now Romney does not seem
comfortable in Florida. And I think that the release of the tax returns
yesterday couldn`t have been at a worse time for him. The idea in Florida,
as I tell people all the time, the idea, you have your money in the Cayman
Islands, you know, it`s legal, but people figure there`s some reason behind
it that they don`t like. So, I just think everything right now is stacked
up and it does have the Romney campaign uncomfortable. And I, you know, I
got to believe in every debate you have to be yourself and you have to
connect. The other night, I thought he looked terribly uncomfortable being
on the attack. He knew he needed to be there. But that`s not who he is.
And if it`s not who you are, you can`t carry it off.

SHARPTON: Now, Erin, the Newt Gingrich has been hitting him on the
Swiss account and hitting him on the Cayman Islands. Very interesting,
today, though, Romney has attacked Newt for making money off the housing
crisis. But today, Think Progress reports that Romney also made money off
for foreclosures in Florida. They say Willard and his wife Ann invested in
Goldman Sachs strategic income fund. Twenty five percent of that fund was
in mortgage-backed obligations. The Romneys invested between $1 million to
$6 million in the fund. And the fund grew eight percent a year yielding a
hefty profit for the Romney family. So, it seems that even with his attack
on Newt on this area, it may come back and bite him facing this debate
tomorrow night, Erin.

MCPIKE: Well, sure. But to be clear, Mitt Romney didn`t make those
investments himself. It was a blind trust. And so someone was making
those investments for him. But the point that he was making in the last
debate about the drip, drip, drip is why he didn`t want to release these
tax returns at a critical time anyway because it`s stepping on any good
headlines that he could create. You know, and so that`s why I think, you
know, that issue is going to keep coming up. But both Newt Gingrich and
Mitt Romney are going to find little pieces in each of their records to
continue stepping on potentially good headlines for them. But one thing I
would add, Al, about Romney and Gingrich going back and forth and the
volatility in the polls, the Democrats cannot contain their glee about the
fact that.

SHARPTON: Well, that`s for sure. Let me ask you something quickly,
Rod. We talked a lot about voting here. I want you to come back and talk
about this rally Friday and what they are doing with voter suppression in
Florida. I know they`ve already canceled the Sunday voting. The big
concern. So, I`d like you to come back so we can talk about Friday.

SMITH: Absolutely.

SHARPTON: Rod Smith and Erin McPike, thank you very much for your
time tonight. We`ll be right back.

(COMMERCIAL BREAK)

SHARPTON: Finally tonight -- we know politics can be ugly. But
Arizona Congresswoman Gabby Giffords gave us a true moment of unity. Today
in an emotional ceremony, she delivered her letter of resignation to
Speaker Boehner. So, that she can focus on her recovery. Members of the
House who rarely see eye to eye on much of anything came together to honor
their colleague on the floor.

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R), HOUSE MAJORITY LEADER: Though Gabby may be
leaving Washington today, I know this won`t be the last we see of her.

REP. NANCY PELOSI (D), HOUSE MINORITY LEADER: You will be missed in
the House of Representatives, but your legacy in this Congress and your
leadership in our nation will certainly endure.

UNIDENTIFIED MAN: Gabby, we love you. We have missed you.

REP. GABRIELLE GIFFORDS (D), ARIZONA: And I miss you too.

(APPLAUSE)

UNIDENTIFIED MAN: America, thank you. We thanks you for the example
that you have given of overcoming adversity and doing so with a spirit
unparalleled.

DEBBIE WASSERMAN SCHULTZ (D), DNC CHAIR: Gabby wants her constituents
to know that her public service has meant a great deal to her and that this
is only a pause in that public service and that she will return one day.

(END VIDEO CLIP)

SHARPTON: We all look forward to that day. Her progress has inspired
many people and given us all hope. She has shown what it means to be a
public servant and is a true portrait of a fighter. It also showed in a
tragedy, people can come together. Let`s end the tragedy of not being able
to come together for other things that are also important. Let`s remember
what we did today for Congresswoman Giffords.

Thanks for watching. I`m Al Sharpton. "HARDBALL" starts right now.

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