updated 4/11/2012 12:58:50 PM ET 2012-04-11T16:58:50

Guests: Ezra Klein, Antonio Villaraigosa, Kate Zernike


RACHEL MADDOW, HOST: Good evening, Ed. Thanks very much. What you
were just talking about with Senator Lautenberg, we`ve got more on that
ahead this hour. Thanks, man.

ED SCHULTZ, "THE ED SHOW" HOST: Great. Thank you.

MADDOW: Thanks to you at home for staying with us for the next hour.

If things look different, that is because we`re in Los Angeles again
tonight.

We`re going to be speaking live this hour with the city`s mayor who
is also the chair of the Democratic National Convention, Antonio
Villaraigosa.

But in the world of politics, today, the biggest news was news that
everybody knew would come some day. But we didn`t have any real reason to
expect that today would be the day it came. And that news is, of course,
the de facto crowning of a Republican nominee for president, Mitt Romney.
Mitt Romney`s last remaining, even remotely conceivable, long shot, maybe
potentially viable opponent conceded the race today.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: We made a decision to get
into this race at our kitchen table against all the odds. And we made a
decision over the weekend that while this presidential race for us is over,
for me, and we will suspend our campaign effective today, we are not done
fighting. We are going to continue to fight for those voices. We`re going
to continue to fight for the Americans who stood up and gave us that air
under our wings that allowed us to accomplish things that no political
expert would have ever expected.

I walked out after the Iowa caucus victory and said, game on. I know
a lot of folks are going to write, maybe those even at the White House,
game over. But this game is long, long ay from over.

(END VIDEO CLIP)

MADDOW: For former Pennsylvania Senator Rick Santorum the race is
over as of tonight.

Now, oddly, after saying today that his presidential campaign is
over, Rick Santorum did go what he had another campaign event tonight with
religious rights, anti-gay figure James Dobson of the group Focus on the
Family. I don`t know why he did that. Maybe it`s a sign of how Mr.
Santorum wants to keep a hand in the old school religious right part of the
Republican Party in the post-president presidential candidacy phase of his
career, maybe. I don`t know.

It might be an oversight that Mr. Santorum did not officially endorse
Mitt Romney today in his "I`m getting out" speech. That, of course, left
the arm chair candidacy of Newt Gingrich to make a plea today for any
remaining Rick Santorum supporters to please now support Newt Gingrich
instead.

But with Rick Santorum now out of the race, with or without an
endorsement, with Newt Gingrich pledging he will show up in Tampa to
collect his nomination but he`s really not doing all that much work anymore
toward trying to get that nomination in the meantime. With Ron Paul`s
quixotic campaign soldering on and attracting large crowds, particularly on
college campuses, but with nothing really to show for it in terms of
momentum toward the nomination or states won or delegates accumulated, it
now seems like it`s OK to say that it is essentially done.

And with the sometimes minor distraction of the super sad, true
Republican nominating contest effectively now behind us, it is worth
admitting that we`re sort of now back to where we started, which is that
the most interesting question in all of partisan politics right now, the
defining question of the American right in this age is a question that has
remained totally open, totally unanswered and totally fascinating ever
since roughly February 2004 -- which is when it was confirmed that George
W. Bush would not replace his vice president. George W. Bush would not be
replacing Dick Cheney on the ticket in order to improve his reelection
chances into 2004.

And that was critical because nobody ever even for a second thought
that Dick Cheney would run for president himself. That he would try to
succeed George W. Bush. And so, the succession question has been open
since then, the question of who would inherit the leadership of the
Republican Party, who would become the new face of the Republican Party,
the new spirit of the party in the wake of the George W. Bush years -- that
has been the central and most interesting question in American politics for
almost a decade now.

Post-Bush/Cheney, the party did have to nominate something else for
the 2008 race. The party nominated John McCain for president and Sarah
Palin for vice president. No one, however, I think would say today that
either of them have since emerged as leaders of their party.

And so, who is running it? What does the Republican Party stand for
after George W. Bush? Who is the Republican Party after George W. Bush?

Today on the day that Mitt Romney all but locked up the Republican
Party`s next nomination for president, today we learned that the Republican
Party post-George W. Bush is the Republican Party of George W. Bush. In a
totally unforeseeable, strange confluence of political news, George W. Bush
picked today to gather headliner Republicans, governors like Chris Christie
of New Jersey and Mary Fallin of Oklahoma, members of Congress like Paul
Ryan of Wisconsin. George W. Bush picked today to convene in Manhattan, a
who`s who of current Republican politicians to campaign for keeping his tax
cuts. Wow!

The still deeply unpopular president has kept a low profile since
leaving office in January 2009. But his emergence today of all days
heading up a conference on tax policy and the economy, did put him squarely
back into today`s 2012 politics.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FORMER U.S. PRESIDENT: If you raise tax, in other
words, if you let the -- I wish they weren`t called the Bush tax cuts. If
they were called some other body`s tax cuts, they are probably less likely
to be raised.

(END VIDEO CLIP)

MADDOW: Former President Bush should not be so modest about his
legacy in the Republican Party. Not only does everybody still call them
the Bush tax cuts, but this Republican Party after him is absolutely
campaigning on keeping the Bush tax cuts. Despite the decade so far of the
Bush tax cuts exploding the national debt, adding trillions to the deficit,
remember they said they would pass them because we had a surplus, we had
extra money. That`s how they justified passing them in the first place.

Despite what the Bush tax cuts have done to the debt and deficit,
Paul Ryan and Mitt Romney, calls for keeping the Bush tax cuts in place,
even for the wealthiest people in the country who don`t need more tax cuts,
but they are not only keeping them in place, the Ryan/Romney plan calls for
doubling down on the most radical idea of the Bush tax cuts in the first
place, which was to narrowly target the people who already have the most
money in the country and focus intently on giving those people more
taxpayer help than anybody else.

The Ryan-Romney plan would give the average millionaire, look at this
-- Ryan/Romney plan would give the average millionaire $265,000 per year.
Extending the Bush tax cuts would give those $129,000 tax cut per year Paul
Ryan and Mitt Romney are good with that. But then they want to add to it.
They get to $265,000 because they are doubling down on that idea, with
their own additional rich people bonus tax present -- another quarter of a
million dollars for every average millionaire.

This is not the politics of past anymore. Talking about George W.
Bush right now is right at the center of today`s Republican Party thinking,
in today`s politics.

Today, President Obama was in Florida arguing for closing the
loophole that lets people who make their money as financers, people like
Mitt Romney pay essentially mini-tax rates instead of the tax rates that
everybody else has to pay.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I`m saying, you`re
bringing in a million bucks or more a year, then what the rule says if you
should pay the same percentage of your income in taxes as middle class
families do.

(APPLAUSE)

OBAMA: You shouldn`t get special tax breaks. You shouldn`t be able
to get special loopholes.

(APPLAUSE)

(END VIDEO CLIP)

MADDOW: The president`s proposal is sometimes shorthanded as the
Buffett Rule, named after Warren Buffett who usually pays a lower tax rate
than his secretary does.

I think it might stick better with people if they call it the Romney
loophole rather than the Buffett Rule.

But in any case, President Obama`s proposal would essentially leave
the tax rate for rich people where it currently is, but it would close the
loophole that prevents really, really rich people from paying that tax rate
if they made their money in the Mitt Romney world of finance. It is a
loophole specifically for people whose income comes from the financial
sector.

George W. Bush in Manhattan today weighed in on that as well. He
gave the Republican Party standard line that it would be a mistake to raise
any taxes on rich people because we need to ensure that rich people get as
much money as possible because they are the job creators. So, the more
money rich people are given, the better off we all mysteriously are.

To be clear, though, this is not about the overall tax rate on
zillionaires going up. It is just a question about whether or not people
who specifically make their zillions in hedge funds and private equity,
like Mitt Romney did, whether or not they should pay a special mini tax
rate that is even less than what other zillionaires pay.

It`s a very specific idea. The George W. Bush legacy is the central
issue in partisan politics, certainly in Republican politics in this
decade. And the way that has played out for Mitt Romney so far is things
like Romney having to explain to Poppy Bush, to George H.W. Bush, that no,
no, he hasn`t received George W. Bush`s endorsement and then Barbara Bush
has to interject and say, we`ll talk about that later.

And it`s things like Mitt Romney having a political constraint on his
foreign policy in the campaign because his foreign policy in the campaign
because his foreign policy advisers are essentially a roster of George W.
Bush policy guys. And when America thinks about the foreign policy of
George W. Bush, they do not think good things.

The central issue of this election, though, of course, is the
economy, right? And today, on what I think is an arguably day one of the
Romney versus Obama 2012 election, the day that Rick Santorum gets out of
the race, the day that the path was cleared for Mitt Romney, today of all
days, George W. Bush, helpfully popped out of where ever he`s been to hang
the legacy of Bushanomics around Mitt Romney neck.

And that is a legacy that in part looks like this. Eight reckless
debt-exploding years of fiscal irresponsibility, the sort of image that
only hangs around Mitt Romney`s neck, given that he wants to continue any
of the same Bush economic policies, this is the sort of thing that also
hangs around questions about whether or not somebody like Rob Portman or
somebody like Mitch Daniels might have a chance as being Mr. Romney`s vice
presidential choice.

The problem for each of them is that they were both George W. Bush
budget guys and the George w. Bush budget was not a pretty thing.

This goes to the central question of what people think of when they
feel aggravated about the state of the economy now. Do they think of the
current president? Do they think of President Obama? That is what
Republicans hope.

But is there a possibility that people think about George W. Bush and
his economic legacy? His economic record.

It`s not just the national debt and deficit that President Bush left
behind. This, for example, is median household income during the Bush
administration. Median household income, as you can see, actually went
down during the time that President Bush was in office.

This is the U.S. manufacturing jobs. Manufacturing jobs in the
United States during the 1990s heading into the year 2000 heading into the
Bush administration.

Here`s what happened to manufacturing in the United States under
President Bush. Yes, disaster.

The manufacturing sector is now rebounding under the current
president. Look at what happened during the Bush administration.

Throughout most of the 20th century as American workers got more
productive, their hourly wages increased as well, right? So, if you did
more over the course of the hour, you got paid more for that hour. Worker
productivity and hourly wages were sort of tied together as you there.

What happened during the Bush years? Yes, worker productivity
skyrockets, hourly wages remained totally flat.

There was one silver lining during the Bush years, though. There was
one economic exception to these rules. Quote, "The sole exception to the
2001 to 2007 period lackluster performance was the growth of corporate
profits. Corporate profits experienced annual growth of 10.8 percent as
compared with average growth of 7.4 percent for other comparable post-war
periods."

So, corporations and rich people did great under George W. Bush.
Everybody else pretty much got left behind. That is the economic legacy of
the George W. Bush years. A legacy which from the perspective of the Mitt
Romney campaign probably could have picked a better to crawl out of exile
and start making news.

(BEGIN VIDEO CLIP)

BUSH: I have decided to stay on the limelight. I have had plenty of
limelight. I don`t think it`s good for our country to undermine our
president. I don`t intend to do so. But I do intend to remain involved in
areas that I`m interested in.

(END VIDEO CLIP)

MADDOW: Joining us now is Ezra Klein, columnist for "The Washington
Post" and "Bloomberg News," and, of course, an MSNBC policy analyst.

Ezra, it`s great to see you. Thanks for being here.

EZRA KLEIN, MSNBC POLICY ANALYST: How are you?

MADDOW: Good.

I was surprise to see George W. Bush surfaced today because of its
policy impact. But it got me thinking about what he is. I mean, he did a
weigh into today`s policy fights. The Bush tax cuts were originally
presented as way of paying down the surplus. We had spare money so spend
it on a big tax cut.

What`s the impact of further extending or doubling down on those
kinds of cuts now versus what the situation was 11 years ago?

KLEIN: The impact is for, for the first part, $4 trillion in debt.
Over 10 years, extending the Bush tax cuts would create $4 trillion in
debt. I think it is important to say, that nobody has seriously put on the
table, specific spending cuts, that equal $4 trillion.

And that`s what you would need to do just to climb out the hole
you`re creating. So, for Republicans who say the whole question is
deficit, that`s really what`s holding the economy back, if you extend the
Bush tax cuts, you dug a $4 trillion hole for yourself that you need to get
out of before you can begin doing anything else. So, that is the first
piece.

The second bit is that problems Bush tax cuts were there to solve,
whether or not you think they work, I don`t think the 2000s were
particularly great economic year, are not the problems we have now.

The Bush tax cuts were developed at a time we had very large surplus,
we had a roaring economy. The idea is they were going to super charge
investment going forward. Then we had a light recession due to the 2001
busting of the tech bubble. They were supposed to give us insurance there.

What we have now, whatever else you think about is not an investment
driven recession. We have a recession of the middle class. We have a
recession or no longer a recession but a continued economic downturn, a
continued sluggish economy, in which consumer spending is not recovering.

And giving money to the folks at top is now how you make the middle
spend again. It is not suited for our current economic problems.

MADDOW: Well, in terms of our current economic problems, not only as
you describe the recession of the middle class but also the problem of
people at the bottom end of the economic spectrum doing incredibly poorly -
- forgive the phrase -- but not only high poverty rates but also a lot of
bad socioeconomic indicators that go along with poverty that isn`t short
term but that is extending into a year`s long problem.

Is the Ryan and Romney economic plan any better for economic
inequality, for people at the bottom of the income scale than the policies
of the Bush years were? Is that anything on which they`ve had a bit of a
course correction?

KLEIN: No. It is vastly worse. This is an important point to make
because George W. Bush ran as reaction to Newt Gingrich and the Republicans
of the 1990s who are considered cruel because they wanted to cut so deep
into Medicaid, so deep into welfare and other social programs.

And so, he said in his campaign, I will not balance the budget on the
backs of the poor, and he didn`t it. What he came in is he increased
deficit spending, but he did not pay for his tax cuts or as other spending
by cutting Medicaid or cutting food stamps, or cutting your own income tax
credit. In fact, he expanded food stamps. He actually expanded the
Medicare prescription drug program, creating it in the first place and did
much more than that.

What Romney and Ryan have proposed is to extend the Bush tax cut, so
$4 trillion there, add a couple trillion dollars more in tax cuts. So,
now, you`re $6 trillion, $7 trillion, and the way you actually pay for that
is you cut into programs for the poor. The only specific cuts they have
really named, the main ones are into Medicaid, into food stamps, are into
housing subsidies and job training. They talk about it in terms of what
they call block renting.

But the real secret is they give the money to the states and say that
money cannot grow as quickly as the programs are supposed to grow. That`s
where the savings come from.

So, George W. Bush didn`t balance the budget on backs of the poor by
not balancing the budget, Romney and Ryan, ands there`s just no way to get
around this, the only plan they have put forward for balancing the budget
given their tax plan is on the backs of the poor. It is a shift, but it`s
not in the right direction.

MADDOW: It`s taking the compassionate conservativism thing deciding
it didn`t work out and saying you`ll drop the compassion part.

KLEIN: Right.

MADDOW: Ezra, columnist for "The Washington Post" and "Bloomberg
News" and our great asset here at MSNBC as the policy analyst -- Ezra,
thank you very much. I really appreciate it.

KLEIN: Thank you.

MADDOW: All right. It turns out one area where President George W.
Bush did make some positive headway for his party is an area that`s
specifically and aggressively being abandoned by Mitt Romney. Adios,
elephantes. That`s next.

(COMMERCIAL BREAK)

MADDOW: Tonight on the interview, Los Angeles Mayor Antonio
Villaraigosa joins me right here in his town, straight ahead. Stick around
for that.

Plus, we`ve got a best new thing in the world, coming up. All ahead.

(COMMERCIAL BREAK)

MADDOW: Today, the skies opened. The sun broke through. The clear
day dawned for Mitt Romney when Rick Santorum, his last even remotely,
conceivably, maybe plausible rival conceded the race.

For Mitt Romney who has had a difficult time this year shaking what
was frankly always a pretty weak field of rivals, it must have felt like a
ray of warm sunshine beaming down on him after being caught out in a cold
rain. What a relief, right?

And then, today, all of a sudden, new cloud, rogue cloud. Today,
seriously, today, George W. Bush had to pick today to rejoin Republican
politics?

(BEGIN VIDEO CLIP)

BUSH: If you raise taxes, in other words, if you let -- I wish they
weren`t called the Bush tax cuts. If they were called some other body`s
tax cuts, they`re probably less likely to be raised.

(END VIDEO CLIP)

MADDOW: Former President George W. Bush reemerging from his post-
White House exile to put himself back in the news, back in the center of
Republican politics.

And this has two main negatives for the Republican Party`s now de
facto nominee, Mitt Romney. First and most obviously, there`s the overall
challenge for Republicans of Americans as a whole associating the
Republican Party with the George W. Bush years. With the Iraq war, with
the worse financial catastrophes since the great depression, with torture,
with astronomical deficit, with, with -- choose your poison.

The last time they had a choice between Barack Obama and a Republican
Party still mostly associated with George W. Bush, the George W. Bush era
Republican Party lost in a land slide.

Today, the party`s nominee from that year was on the Turkish border
with Syria demanding that the United States get into another war in the
Middle East.

The Republican`s vice presidential nominee from that year today is
still Sarah Palin. Every day, she does not work in politics except as a
commentator in the conservative cable TV network, FOX News.

So, for problem one for Mitt Romney and having George W. Bush
reentering Republican politics today, hosting his big economic conference
with all sorts of Republican boldfaced names today, on what was supposed to
be Mitt Romney`s big day in the sun, problem one is that this was the last
day in the world the Romney campaign would want America to have a big
visual reminder of George W. Bush Republicanism.

But beyond the problem of there being bad things about the George W.
Bush era that Republicans do not want to remind the country about right
now, Mitt Romney also has a different problem of there being some
relatively good things about the George W. Bush era, at least when you
compare those things to Mitt Romney.

Por ejemplo, George W. Bush made a real effort to cultivate the
Latino vote. Even though outside of the Cuban committee in Florida,
Latinos are not a traditionally Republican constituency. In 2004,
President George W. Bush got 44 percent of the Latino vote in the general
election, that is a lot for the Republican.

Now, in the next election, as I mentioned, Republicans got
shellacked. They lost overall in something approaching a landslide. And
even as they lost with almost everyone, Republican lost disproportionately
with Latinos. The Republican proportion of the Latino vote in 2008 dropped
to 31 percent and the Republicans lost the election badly.

But now, now look at how Mitt Romney is doing now with Latino voters.
Look, yes, no. That`s really bad. That`s 14 percent. I can almost count
that high in Spanish and I don`t speak Spanish.

John McCain got 31 percent and he got crushed. George W. Bush got 44
percent and now Mitt Romney is at 14?

Yes, there`s a reason for that.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: The answer is self-
deportation which is people decide they can do better by going home because
they can`t find work here because they don`t have legal documentation to
allow them to work here.

I`m running for office for Pete`s sake. I can`t have illegals.

The question is, if I were elected and Congress would have passed the
DREAM Act, would I veto it. And the answer is yes.

(END VIDEO CLIP)

MADDOW: In addition to that charm offensive toward Latino voters,
Mitt Romney ran ads against Rick Santorum attacking him for voting for
Sonya Sotomayor in her confirmation to a federal circuit court, where she
served being nominated to the Supreme Court. Mitt Romney attacked Rick
Santorum for that vote as if the nation`s first Latina Supreme Court
justice has turned out to be some kind of scandal that politicians should
be ashamed of.

So, the Republican Party this year is in a fragile position. Their
nominee has taken policy positions that are wildly unpopular with Latino
voters. And Latino voters are therefore saying that Romney is therefore
wildly unpopular with them.

That said the last election cycle did see three Latino Republicans
elected to statewide offices. The governor offices in Nevada and in New
Mexico, as well as the U.S. Senate seat in Florida. And, oh, yes, George
W. Bush is kicking around again and Latino voters did not dislike him as
much as they disliked Mitt Romney.

So, when the Republican Party is in this kind of fragile position,
one thing to watch is how the Republican Party tries to course correct.

That`s part of why New Mexico Governor Susana Martinez had to all but
beat reporters off with a stick in telling them only does she not think she
is going to be picked as Mitt Romney`s vice president, she does not want to
be is picked as Mitt Romney`s vice president. And if she is picked as Mitt
Romney`s vice president, she will say no.

Nevada Governor Brian Sandoval is finding himself in the same
position and he is saying the same thing. Not just I don`t want it, but I
will say no if I`m asked.

Also, Florida Senator Marco Rubio saying the same thing. Not just,
no, I don`t want the job. But I will say no if I`m asked to do the job.

The three newly elected statewide Latino Republican officials in the
country are now constantly being badgered about whether or not they would
please like to be vice president, because the Republican Party has a huge
problem with Latino voters and everybody wants to see how Republicans are
going to try to fix that.

I have a different question about this though. How is the Democratic
Party, not the Republican Party, but the Democratic Party going to try to
prevent the Republican Party from fixing this problem that it has with
Latinos? How is the Democratic Party going to press their advantage here?

The next chairman of the Democratic National Convention is the
current mayor of Los Angeles, Antonio Villaraigosa. He`s here in person
for the interview, next.

(COMMERCIAL BREAK)

MADDOW: Being the top elected official in the nation`s second
largest city means dealing with things as diverse as a giant bear on the
loose this morning right in the middle of the city. We`ll have more on
that later.

Also, carmageddon, the shutdown of the busiest freeways in the entire
country for a massive blunt force strike construction overhaul.
Carmageddon passed without incident and under its time constraints.

It means dealing with the largest jail system in the world. The Los
Angeles County jails have 22,000 people on them on average, on any average
given day. They have been plagued with trouble. Today, L.A. Sheriff Lee
Baca announced a commitment to shutting down what`s considered the most
problematic facility, the old section of landmark Men`s Central Jail, the
landmark decision for the city and frankly, for justice.

If you are this particular top elected official in this nation`s
second largest city, getting your day-to-day work done also now means
handling the responsibility of chairing the Democratic Party`s National
Convention this summer, at which the party will renominate Barack Obama for
president, spurring him on, the party hopes, to re-election.

Joining us tonight for the interview is Mayor Antonio Villaraigosa of
Los Angeles.

Mr. Mayor, thanks for being here. It`s nice to see you.

MAYOR ANTONIO VILLARAIGOSA (D), LOS ANGELES: Great to be here. I`m
a fan.

MADDOW: Oh, thank you.

Well, I want to ask you about chairing the convention. What do you
hope the convention is going to accomplish for the party in terms of
sending a message to the voters? What can happen at the convention that
can`t happen at the campaign more broadly?

VILLARAIGOSA: Well, there`s going to be a spotlight on the
convention. An opportunity building up to the convention to get -- to
solicit people`s ideas about what they think the platform should be like,
what they would like to see in our convention and the campaign, and the
conversations that are going to take place at kitchen tables all across the
country.

It`s an opportunity to be more open with respect to how we have that
conversation.

MADDOW: One of the controversies that is sort of brewing ahead of
the convention and nobody knows sort of, it`s one of real unanswered
questions. Nobody knows really what`s going to happen between now and the
convention itself is this question of whether or not there is going to be
plank on marriage equality in the party`s platform in time for the
convention.

What`s your position on that and what do you think is going to happen
given the president`s own articulated feelings on the issue?

VILLARAIGOSA: Well, when I was speaker of the California state
assembly, I did all the gay and lesbian civil rights issues, anti-
discrimination, domestic partnership benefits, the first registry, the
dignity for all students bill. I`ve been on record in support of marriage
equality since 1994. I believe it should be part of the platform.

But what I`ve said to people is there`s going to be a process. You
have to have delegates. They pick a platform committee. They weigh in on
what the platform should look like. That process will take place going
into the convention.

And as I`ve said before, I hope that plank is in there because I
think it goes to the heart of who we are. We`re for family values. We`re
for the notion that government shouldn`t interfere with the fundamental
liberties that comes with the right to marriage.

MADDOW: If that discussion happens at the platform level, and at the
party level, does it push to president to go further than he wants to go on
that issue as the party`s presidential nominee?

VILLARAIGOSA: I`m glad you asked about the president, because let`s
be clear, and I think you are very clear. You know, this is the president
that passed "don`t ask, don`t tell," who opposes DOMA, who supported and
signed anti-hate crimes legislation, who extended benefits to same sex
couples in the federal government. I believe ultimately that our party
will embrace the most forward progressive plank on that issue.

I can`t tell you where the president is going to be. I can tell you
where he`s been. And he`s got a record second to none on these issues.

MADDOW: In terms of the general election, the contours of the
general election, one of the things I was discussing before the break was
the real problem that the Mitt Romney candidacy and therefore Republicans
in general have right now with Latino voters, you are one of the most
prominent and well-known Latino elected officials in the country. You`ve
got a very high profile for a very long time. It`s set to only increase
with this role as chairman.

VILLARAIGOSA: It means I`m old, right?

MADDOW: Well, you`ve been doing this since you were 3 years old.

But do you think that the Republican can turn it around? And do they
turn it around with policy? Or do they turn it around with tone? Do they
turn it around by choosing a Latino vice presidential nominee for Mr.
Romney?

VILLARAIGOSA: They`re going to try to turn it around. I mean, I
think Mr. Romney`s campaign person said that they were going to approach
this like a kid would with an Etch a Sketch. They`re going to try to erase
our memories about what he has said and what he`s done. I think you
chronicled a lot of what he`s done.

I mean, the idea that we would engage in the south deportation of 11
million people. No country in the history of the world that I know of has
ever done that, that you`d separate families that way, that we wouldn`t
come up with a more humane way to secure our borders and create a pathway
to citizenship. It`s untenable.

The fact that the DREAM Act, to him, serving in the military,
defending your country is handout, you know, he`s taken positions that are
so extreme, so far out of the mainstream for where the Republican Party
icon, Ronald Reagan, where George W. Bush, President Bush was at on this
issue -- so far out of the mainstream when he`s campaigning with Kris
Kobach who is the author of the Arizona and Alabama laws.

MADDOW: He says Arizona should be a model for the nation.

VILLARAIGOSA: Yes, he does. It`s going to be very difficult to try
to move away from what he said and what he`s done. I didn`t see him
challenge Mr. Cain when he said jokingly, he says that he was going to
electrify the fence.

I mean, when you`re a leader and you hear someone say something like
that, you stand up and say, no, not on my watch. I want to be a uniter,
someone who brings the nation together, someone who solves these tough
problems in a more humane way that`s commensurate to our values.

So, I don`t -- they`re going to make that effort. I don`t think who
you pick for vice president is ever really made a difference for the most
part. But they may try to do something like that. There`s no question
that they are going to try to move away from where they have been with
respect to this primary. And I think it`s important for the media to make
sure they are honest about who they are and what they have done.

MADDOW: I have to ask you one last Los Angeles question, which is
this issue about the jails. The Los Angeles County jail system is so big
that it makes national news. We`ve talked about it a lot on this program
before. And I know you and I both have worked on California prison issues
in previous lives and in previous jobs.

Do you have a position at this point on what`s going to happen with
this huge old jail in Los Angeles that Sheriff Baca today talked about
closings down?

VILLARAIGOSA: I think he`s talking about closing down the old part
of the jail. That will be -- the devil will be in the details. I want to
make sure whatever we do, we`re not just letting people out, that we`re
putting re-entry programs together. We`re doing smart things to address
the crime issue.

I`ve said many times it`s not enough to talk tough. We want to be
smart and effective. That means we need to allocate resources for it, too.
So, that`s my hope.

MADDOW: Mr. Mayor, thank you. It`s great to see you.

VILLARAIGOSA: Good to see you, too.

MADDOW: I love being here.

VILLARAIGOSA: I`m glad you do.

MADDOW: Thank you.

VILLARAIGOSA: Keep, spend, spend, spend. We need the revenue.

MADDOW: Being from northern California saying I like L.A. actually
just took a little chuck out.

(CROSSTALK)

MADDOW: Antonio Villaraigosa is the mayor of Los Angeles. He is the
chair of this year`s Democratic National Convention.

We will be right back.

(COMMERCIAL BREAK)

MADDOW: Programming note. I will be on "The Tonight Show with Jay
Leno" tonight. If you have a really, really good arm, Mr. Leno`s studio is
about a stone`s throw from where I`m sitting now. It is always a lot of
fun to get to be on the tonight show, both intrinsically and in terms of it
being surreal that I`m actually on the freaking "Tonight Show." And I can
report, Jay Leno -- the Jay Leno, actually read my book, and I had a great
conversation with him about it.

So, totally cool and humbling and also surreal. Me talking about my
book, "Drift," with Jay Leno, on NBC on "The Tonight Show" tonight -- I
know. Great.

Also, best new thing in the world, still ahead.

(COMMERCIAL BREAK)

MADDOW: The Bill and Melinda Gates foundation says it is going to
stop funding the conservative group known as ALEC, the American Legislative
Exchange Coalition. It`s a group that promotes conservative legislation at
the state level.

The spokesman for the Gates Foundation telling "Roll Call" newspaper
this week that it does not plan to make any future grants to ALEC.

The Coca-Cola Corporation and Pepsi both had corporate memberships
with ALEC and both of those companies have announced plans to drop those
memberships. So has Kraft Foods telling "Politico" last week that it will
not renew its membership in ALEC. Same with Intuit, the software company
behind Quicken and TurboTax.

And same with McDonald`s. McDonald`s telling "Mother Jones" that
that company has also decided not to renew its ALEC membership this year.

In other words, tough times are falling on the folks at ALEC as the
group`s typically quiet efforts to push conservative legislation in the
states have been getting a lot more attention lately -- from the stand your
ground laws like the controversial Florida measure at the center of the
Trayvon Martin case right, which ALEC worked with the NRA to export to
other legislatures, to new make it harder to vote laws which an ALEC task
force adopted in 2009, to draconian anti-immigration measures, ala
Arizona`s papers please law which closely resembles a model bill drafted at
an ALEC conference.

The stuff ALEC does, the legislation ALEC peddles and proliferates
among the states is increasingly being regarded as toxic. It`s a group
that`s counted in the past on flying under the radar, on nobody knowing
what they`re doing. And now that they are no longer under the radar, now
that people are paying attention to who they are and what they do, ALEC
frankly is becoming political poison.

And so, now, is really bad time to be known as a politician who keeps
introduce legislation that`s sort of written by ALEC, which is to say it`s
a bad time to be New Jersey`s Republican governor, Chris Christie.

"The New Jersey Star-Ledger" having just found a pattern of
similarities between ALEC`s proposals and several measures championed by
the Christie administration. And you might think being outed as the guy
who keeps introducing ALEC legislation would be the worst political problem
for New Jersey Governor Chris Christie, but it turns out, Governor Christie
is having a really bad political time right now in more ways than the one.

Being the ALEC guy at the moment public opinion is turning against
ALEC, when even big companies that didn`t mind being part of it before are
running away from ALEC in a full on sprint, at the same time that`s
happening, Governor Christie is dealing with $1.5 billion corporate welfare
record, which is getting more and more attention at a time he really wants
to seem like a fiscal conservative. Having not served a full term as New
Jersey governor yet, Chris Christie is on the hook for having passed out a
record amount of state money to corporations, $1.5 billion.

And then there`s today`s bombshell in "The New York Times," news that
the reasons Chris Christie gave at the time for unilaterally killing the
biggest public works project in the country might not have been real
reasons.

This is based on findings from a Government Accountability Office
report, a bipartisan, nonpartisan report that is set to be released this
week. "The Times" is reporting today that Governor Christie exaggerated
when he said that unforeseen costs to his state were forcing him to cancel
a new train tunnel between New Jersey and New York.

"The Times" finding that Mr. Christie also misstated New Jersey`s
share of the project`s costs. And while Mr. Christie said at the time that
the agreement with the federal government would have required the state to
pay for any and all cost overruns in the project, the GOA report says that
the federal government was, in fact, offering to share those costs.

So what was the problem? Well, having nixed the big tunnel project,
Governor Christie spent the money for it, spent the tunnel money on the
state`s transportation trust fund, which it just so happens was almost
empty at time and which it just so happens is funded by a gasoline tax,
which it just so happens Chris Christie made a campaign promise not to
raise.

So how do these dots connect? Killing a giant state federal
infrastructure project did a couple of things for Chris Christie. It
helped make him a famous conservative Republican guy. He`s known as the
guy who stood up to the feds and killed this expensive tunnel project.
He`s got his own bridge to nowhere, but he killed it.

It also gave him an extra $4 billion to help him keep a campaign
promise. An extra $4 billion to funnel into the transportation trust fund,
can thereby keep his promise not to raise the gas tax, which incidentally
was the second lowest in the nation. It also means that Amtrak and New
Jersey transit trains will continue to share two century-old single-track
tunnels underneath the Hudson River. That`s all there is. And those
tunnels are now operating at capacity.

Over the next two decades, demand is projected to grow 38 percent.
Where will the projected growth go if the tunnels are already at capacity?

Chris Christie made sure it would go nowhere.

Joining us now is Kate Zernike. She`s "The New York Times" reporter
who broke today`s story, detailing the federal government`s disputes with
Chris Christie official tunnel story.

Ms. Zernike, thank you very much for being here. It`s nice to have
you here.

KATE ZERNIKE, NEW YORK TIMES: Thanks, Rachel.

MADDOW: Let me ask in summarizing your reporting quickly like that,
did I get any of the details wrong? That was a lot of details. I wouldn`t
be surprised if I misstated something.

ZERNIKE: No, I think you hit the high notes.

Your first point is that Chris Christie said that the costs would be
much higher. Christie came out when he announced this decision to cancel
the tunnel, he said my steering committee on this tunnel has said that the
costs are going will be at least $11 billion and maybe as much as $14
billion. And the GAO report found that these costs -- these estimates
didn`t exist.

What they said is that for two years, well before Christie took
office, that there had been an estimate that it could be anywhere from $9.5
billion to $12.4 billion. These estimates didn`t change. It wasn`t as
though the Christie administration came in and suddenly discovered there
was some new cost, which is clearly how it was portrayed at the time.

And the governor was sort of playing off this idea that the tunnel
was supposed to cost $8.7 billion. That has been a very early estimate
that was signed on by the federal government and by the New Jersey transit
to get their first funding agreement. But New Jersey transit officials had
said all along and fought with the federal government saying that this
project isn`t going to cost anymore than $10 billion.

So the governor clearly overstated when he said that the New Jersey
transit said it would be at least $11 billion.

MADDOW: And when he -- I remember the contemporaneous reporting at
the time. I remember him explaining it as if there was a sudden and
previously unforeseen cost projection that he had not seen coming and
that`s why we had to act in this unexpected and unilateral way.

When he killed the tunnel project way back in October of 2010 -- why
didn`t anybody question or challenge those cost estimates that he was
putting forward at the time? Why did it take until now toe merge?

ZERNIKE: Well, I think, first of all, the cost estimates for a
project like this are confusing, so he played on some of that confusion.
But also, remember, the governor, as I`ve said, put out this memo, saying
my committee says it`s going to be between $11 billion and $14 billion. So
you have a memo from the governor saying his steering committee has done
this. So I think people took it at face value.

But what the GAO report did was look at what the estimates had been
over time and find out exactly what the estimates had been. And again,
they didn`t find any estimate of $11 billion to $15 billion. They found
one point where the federal government said, well it might be as high as
$13.7 billion, but that estimate only stood for a day before New Jersey
officials came back and said, no, we don`t think it`s going to be higher
than $10 billion.

So, again, as you say, the governor came out and said, well, I`m
shocked, shocked to discover this. But no one should have been shocked by
these estimates that had been hanging around for two years.

MADDOW: And yet, that has had continuing political fallout, mostly
about his reputation as a fiscal conservative. Governor Christie talked
about the tunnel project in a speech today, attacking it as a tunnel into
the basement of Macy`s, I think trying to caricature it as a sort of bridge
to nowhere.

Is this actually a new line of attack for Governor Christie? Hadn`t
he supported the idea of the tunnel at first, but now he`s attacking not
just the cost but the whole idea of the project?

ZERNIKE: Yes, he supported this in his campaign in 2009. He
supported it through the first months of his governorship. When he
canceled the tunnel, he did make noises about this tunnel into the basement
of Macy`s, tunnel going nowhere.

But he also said at the time, I see the merits of this tunnel. I
understand the commuters need this, but we just can`t afford it at this
time. And as you say, this really defined his reputation as this fiscal
conservative, as a hero in the Republican Party.

MADDOW: "New York Times" reporter Kate Zernike -- thank you very
much for your reporting on this and helping us to flush it out. I really
appreciate your time.

ZERNIKE: Thanks, Rachel.

MADDOW: All right. Best new thing in the world, coming up, bear
teaches human lessons. Yes.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: Best new thing in the world. OK, I am in here in Burbank,
California, part of the greater Los Angeles area.

Here on the left is where I am right now at NBC`s bureau in Burbank.
But see that big blob of greenish brown between me and La Crescenta? And
see that big blob of greenish brown on the other side of La Crescenta?
That`s pretty much wild land, hill country.

And that is supposed to be the home of this fella -- a male black
bear wearing roughly 400 pounds. A bear that has been roaming the streets
of La Crescenta and neighboring Glendale for about a month now. The bear
was first spotted going through a refrigerator, eating somebody`s
meatballs. It`s been seen drinking from a pool and knocking over trash
cans.

This morning, word went out that the bear was back in town, and with
news helicopters in hot pursuit, fish and game authorities were able to
corner the bear in somebody`s backyard. But not before the best new thing
in the world happened!

One guy -- watch this -- learning a vital lesson about text the
evening and walking at the same time -- see the guy? See the guy? See the
guy? Oh, God, it`s a bear!

Can we see that again? In super slow-mo, there`s the bear, there`s
the guy texting, looking down, looking at his -- and he notices a little
something -- oh, geez, right away?

Of course, California fish and game`s advice for anybody who
encounters a bear is don`t run away, they say face the animal, make noise,
and try to appear as large as possible.

But in this case, texting dude is OK. He says he was texting his
boss. And also, bear`s OK. Tranquilized and successfully transported to
the Angeles National Forest, for released back into the wild, even if it
does now have an unsightly ear tag.

But this close encounter between a texter and nature, oh, jeez, best
new thing in the world today.

Now, it`s time for "THE LAST WORLD" with Lawrence O`Donnell. Thanks
for being with us tonight. Have a great night.

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

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