updated 6/25/2012 2:47:42 PM ET 2012-06-25T18:47:42

Guests: Jonathan Alter, Carolyn Maloney, Xavier Becerra, Mike Hatch, Krystal Ball, Mark Simone, Karen Finney, Sen. Bernie Sanders


ED SCHULTZ, HOST: Good evening, Americans. Welcome to THE ED SHOW,
live from Minneapolis.

Republicans bring contempt charges against the attorney general. But
the real target is President Obama.

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

(BEGIN VIDEOTAPE)

REP. DARRELL ISSA (R), CALIFORNIA: The committee meets today to
consider reporting a resolution to the House of Representatives -- finding
the attorney general, Eric Holder Jr., in contempt of Congress.

SCHULTZ (voice-over): Darrell Issa`s political hit job reaches an
unprecedented level. A House panel holds Attorney General Eric Holder in
contempt of Congress.

UNIDENTIFIED MALE: Some might be forgiven for describing the
proceedings today as akin to a kangaroo court.

REP. CAROLYN MALONEY (D), NEW YORK: I am horrified that you are going
forward with this contempt charge.

SCHULTZ: Tonight, Congresswoman Carolyn Maloney on the Republican
witch hunt, and Jonathan Alter with the latest from the Hill.

Republicans are still scrambling after the president`s immigration
move.

SEN. MARCO RUBIO (R), FLORIDA: The president doesn`t even try to
strike a balance. The biggest problem I have with it is that he ignores
the Constitution and the Congress and shoves it down our throat.

SCHULTZ: Congressman Xavier Becerra responds to Marco Rubio`s hurt
feelings.

Two percent Tim Pawlenty is the new darling for the V.P. pick. I`ll
tell you why he`s a perfect pick for Mitt Romney.

And Republicans are about to cut food stamps for the poor again.
Senator Bernie Sanders is fighting back and he`s here tonight.

(END VIDEOTAPE)

SCHULTZ: It`s good to have you with us tonight, folks. Thanks for
watching.

Republicans are trying to take out President Obama at any cost.
Today, the United States attorney general was collateral damage. It was a
straight party line vote in the House Oversight and Government Reform
Committee today. All 23 Republicans on the committee voted to hold
Attorney General Eric Holder in contempt for an investigation into a failed
firearms sting operation in Arizona.

The program was inherited by the Bush -- by the Obama administration,
and it was ended by Attorney General Eric Holder.

Committee Chairman Darrell Issa claimed he wanted to avoid the
contempt vote. He said in a statement late today, "Today`s proceeding
would not have occurred had Attorney General Eric Holder actually produced
the subpoenaed documents he said he could provide."

But Issa pushed ahead with the contempt vote even after President
Obama asserted executive privilege over many of the documents in question.
A president can invoke executive privilege to protect sensitive
information. This is only the first time President Obama has used
executive privilege. President George W. Bush did it six times. President
Clinton used it 14 times.

But Republicans are making sinister allegations against Attorney
General Eric Holder and the president of the United States.

(BEGIN VIDEO CLIP)

REP. DAN BURTON (R), INDIANA: There`s no question in anybody`s mind
that`s been involved in this investigation that the attorney general has
been stonewalling this committee.

Now the president of the United States has claimed executive
privilege. That brings into question whether or not Eric Holder knew about
it and how much did the president know about this?

(END VIDEO CLIP)

SCHULTZ: But Republicans are refusing to ask anyone on the Bush
administration who knew about the operation and when it started to come
forward and testify. The so-called gun walking program was started in 2006
as Operation Wide Receiver. By 2009, it turned into Operation Fast and
Furious.

Arizona`s Bureau of Alcohol, Tobacco, and Firearms set up a program
where illegal weapons were sold and then monitored as they were taken
across the border in an attempt to track gun traffickers. In 2010, border
patrol agent Brian Terry was killed in a shootout that guns involved were
part of the Fast and Furious operation.

Republicans are putting this at the feet of the Obama administration.
But Congressman Peter Welch wanted to know why the committee did not
question anyone who started the program.

(BEGIN VIDEO CLIP)

REP. PETER WELCH (D), VERMONT: It would seem to me very reasonable,
in pursuit of a full investigation that we would want to have those folks
in, ask what happened and get the complete picture, allow us then to have
that as part of our investigation.

(END VIDEO CLIP)

SCHULTZ: It was Attorney General Michael Mukasey who was in charge of
the Justice Department at the time the program started, but Mukasey, he
hasn`t testified in the investigation. In fact, no members from the Bush
administration have been asked by Darrell Issa or subpoenaed to testify.

Attorney General Eric Holder, he`s been there nine separate times, and
each time, the committee moved the goalpost on information they requested.
Sometimes, the Republicans didn`t even know that they were asking Holder to
break the law.

An earlier subpoena by Congressman Darrell Issa requested grand jury
transcripts and wiretap logs. Guess what, folks? It`s against the federal
law for Holder to release these documents.

These oversights are not accidental. Congressman Gerry Connolly of
Virginia identified exactly why the hearings were taking place.

(BEGIN VIDEO CLIP)

REP. GERRY CONNOLLY (D), VIRGINIA: We`re brought to this moment to
believe this is all about really a rogue attorney general who is
uncooperative with this branch of government and he needs to be reined in.
And the ultimate penalty we have available, contempt. And we`re going to
demean him. We`re going to tarnish his reputation because that`s how we
get to the president of the United States.

(END VIDEO CLIP)

SCHULTZ: The committee`s ranking Democrat, Congressman Elijah
Cummings, said it would be extreme for a contempt vote to be brought up for
the full Congress.

(BEGIN VIDEO CLIP)

REP. ELIJAH CUMMINGS (D), MARYLAND: If Mr. Boehner takes this to the
House, he will be seen as one of the most extreme speakers that ever took
charge of a House.

(END VIDEO CLIP)

SCHULTZ: But Speaker Boehner said Congress will go through with a
vote to make Attorney General Eric Holder the first cabinet member held in
contempt of Congress in the United States history. He`s said, "While we
had hoped it would not come to this, unless the attorney general
reevaluates his choice and supplies the promised documents, the House will
vote to hold him in contempt next week."

The Republicans no doubt are circling the wagons. It is election year
politics. They have no problem using the powers of Congress to score
political points against the president of the United States.

It`s a very complicated story, but it`s one that needs to be told in
every detail. It`s about politics. It`s about Washington politics.

And I don`t think the American people who are fair minded are going to
believe this is a true investigation until everyone who has been involved
in this Operation Wide Receiver from its inception ends up in front of
Darrell Issa`s committee putting up their right hand, telling everything
they know.

They`re hanging it on President Obama because they don`t want him in
office, and Eric Holder is just the vehicle to get there.

Get your cell phones out. I want to know what you think.

Tonight`s question: following the contempt charges against Eric
Holder, what do you think Republicans are more interested in? Text A for
the truth, text B for hurting the president, to 622639. You can always go
to our blog at Ed.MSNBC.com. We`ll bring you results later on in the show.

Joining me tonight is Congresswoman Carolyn Maloney of New York.

Congresswoman, appreciate your time tonight. A lot of detail to the
story, no question about it.

What is the end game for the Republicans here? Just what do they want
if they don`t want to bring everybody in who has been involved in the
program to testify? What do they want?

REP. CAROLYN MALONEY (D), NEW YORK: I think it`s obvious, Ed, that
it`s a witch hunt. And a witch hunting season that won`t be over until
November. Their actions are extreme, unprecedented and politically
motivated.

SCHULTZ: Why haven`t members of the Bush administration been asked to
testify?

MALONEY: Well, the Republicans are in charge. We raise it every
meeting. We raise it over and over again. That those that were in charge,
the head of the AFT, the head of the A.G. that initiated it under President
Bush, they should come in and testify.

If you`re going to look at a problem, you have to look at it from the
beginning, not just come in at the very end and try to wrap it around the
attorney general who knew nothing about it, did not create it, and I think
it`s outrageous how they are bringing him with a contempt charge.

He`s done everything he possibly could.

SCHULTZ: Who is in charge -- yes. Who --

MALONEY: He`s testified, he testified nine times, he released 7,000
pages of documents. He appointed an I.G. He`s bent over backwards to
accommodate their demands.

SCHULTZ: Who is in charge of the Alcohol, Tobacco, and Firearms
division in Arizona when the program was started? And why haven`t we heard
from that person?

MALONEY: Well, we raised that today. I, in fact, put in an amendment
that the head should come in and testify. And in fact, in internal
documents, he did say that he knew nothing about, that he knew nothing --
that Holder knew nothing about it and the president knew nothing about it.

Yet they don`t want to look at anything that happened under the Bush
administration. This is the fourth program, there were three previous
programs under the Bush administration, and the contempt charge has nothing
to do with Fast and Furious. It is very narrowly tailored, going after
internal communications in the Justice Department.

That`s where Attorney General Holder drew the line. The president
came forward with his demands.

And I agree. I agree. He invoked his demands and I think that
they`re right.

SCHULTZ: What will happen if the Congress holds a contempt vote?

MALONEY: I certainly hope it doesn`t happen, and if Speaker Boehner
does hold a contempt vote, he`ll be more extreme than former Speaker
Gingrich. Gingrich did not bring a contempt vote on Janet Reno.

And this is the first time that the president has come forward with an
executive privilege. And I believe he`s right.

And if it gets to the point where you can`t even communicate in an
agency or all of your documents have to come to the public, it will be
difficult for people to really express themselves. And he drew the line
there.

SCHULTZ: Sure.

MALONEY: Invoked his executive privilege, and he`s right. It`s the
only time he`s invoked it. I think it`s just totally political. I think
it`s --

SCHULTZ: OK. Congresswoman Carolyn Maloney, thank you for your time.
I appreciate it very much.

Now, let`s turn to Jonathan Alter, MSNBC political analyst and
"Bloomberg View" columnist.

You were on the Hill today, Jonathan.

JONATHAN ALTER, BLOOMBERG VIEW: Hey, Ed.

SCHULTZ: You spent some time -- you bet -- you spent some time with
Nancy Pelosi. And her reaction, I thought, was very interesting. She
said, "It doesn`t serve our country, and it undermines the true purpose of
contempt of Congress. That`s why I didn`t arrest Karl Rove when I had the
chance."

What did she mean when she said that?

ALTER: Well, you know, Karl Rove resisted a lot of efforts for him to
testify on things like the firing of U.S. attorneys for political reasons
during the Bush administration, and they could have very easily voted with
Democratic control of the House, they could have held Rove in contempt.

And as Speaker Pelosi, Leader Pelosi indicated today at this lunch she
had with a few reporters, there`s actually a prison in the Capitol, and
they could have hauled Rove into the prison for refusing to testify. And
indeed, John Boehner will have the power if the vote goes through next
week, and there`s every expectation that they will vote contempt, at that
point, John Boehner can haul Eric Holder into that prison, that`s what it
was designed for, to give the Congress the ability to do that going back a
couple hundred years.

Does John Boehner want to do that, to haul him in handcuffs
essentially? We`ll see.

SCHULTZ: Yes.

ALTER: You know, I saw another former speaker today, Newt Gingrich,
and we also spoke about this. And he was basically licking his chops over
this.

He thinks it`s very, very politically advantageous for the Republicans
with pro-gun voters, a number of whom are Democrats. They think they can
score points in states like Michigan which has a lot of Second Amendment
supporters in it, swing state.

So this is heavily politicized right now. The question is, will the
Republican house go too far and get on the wrong side of public opinion?

They`re already disliked by the American public. If they actually
follow through on what a contempt charge actually carries, and arrest --
essentially arrest Eric Holder, we`ll see how the American public reacts.
I don`t think it would be positive.

SCHULTZ: Well, it would seem to me the American public, and I can
only imagine how fair-minded Americans out there would be reacting, that
they haven`t even gotten testimony from all of the people and gotten all of
the information about this program, but they`re ready to hold a contempt
vote.

I mean, there`s no doubt that Mr. Holder is holding back the identity
of informants that could be very damaging to a lot of things when it comes
to national security. But here again, the Bush administration, the Bush
administration started this. Why haven`t they been forced to come forward
in full disclosure?

ALTER: I think that`s a very good question which you have raised on
the program.

In terms of -- here`s the thing that`s different. The claims of
executive privilege are very common. I think Ronald Reagan claimed it in
the case of super fund investigation, you know, of pollution, and in three
or four other cases. It was claimed a lot by Bill Clinton and by George W.
Bush.

So that`s common, and usually when the shoe is on the other foot, it`s
Democrats who would complain about Republican presidents trying to protect
documents and claiming national security. So, all that`s politics as
usual, right? It depends on whose ax is getting gored.

What`s different this time is going nuclear with this contempt
citation. Executive privilege is common, contempt is not common. And so,
this is where we`re going into real uncharted territory in terms of the
extremism of this Republican House.

SCHULTZ: Well, they`re trying to make Eric Holder look like a crook.
They`re trying to make him look like he`s hiding something from the
American people.

ALTER: That`s right.

SCHULTZ: That there`s a real underhanded operation for the Obama
administration, and they did nasty some real stuff and they`re trying not
to reveal any of it.

I find it absolutely amazing. It`s a story that going to go on long
well into next week.

Jonathan Alter, great to have you with us tonight. Thanks to your
time.

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

Senator Marco Rubio says President Obama is shoving his
administration`s immigration policy down our throats. Senator, this isn`t
about you. This policy is overwhelmingly popular.

Congressman Xavier Becerra joins me for the discussion.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, Senator Marco Rubio tries to make the president`s
action on immigration all about him. We`ll bring you the details.

Tim Pawlenty is on everyone`s short list to be Mitt Romney`s running
mate. We`ll show you why it would be just a dream ticket for the
Democrats.

And Republicans are on the verge of cutting food stamps for the poor
yet again. Senator Bernie Sanders is fighting back, and he`ll join us
later. Share your thoughts on Twitter using the #EdShow.

We`re coming right back. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

The president`s leadership on immigration has left the Republican
Party in disarray, and today, Senator Marco Rubio of Florida tried once
again to vote to attack the president and feel sorry for himself.

Rubio was more than happy to agree with the "Fox and Friends" crowd,
saying that the president had undercut Rubio`s watered down DREAM Act.

(BEGIN VIDEO CLIP)

RUBIO: The president doesn`t even try to strike a balance. But the
biggest problem I have with it is that he ignores the Constitution and
Congress, and shoves it down our throat.

(END VIDEO CLIP)

SCHULTZ: The president shoving it down our throat. Rubio didn`t stop
there.

(BEGIN VIDEO CLIP)

RUBIO: The problem is that with so many issues confronting this
country, a lot of my colleagues would say, why don`t we do this now, why
can`t this wait? I would argue because the young kids want to start school
in September. Now, they`re going to say, there is no urgency, it`s being
taken care of.

Plus, it poisons the well by injecting election year politics into
this issue, which should be a nonpolitical issue. It makes it harder to
kind of find that balanced bipartisan approach to this solution. I mean,
he`s doing this as an election year stunt, as much as anything else, and
people see through it.

(END VIDEO CLIP)

SCHULTZ: Well, Senator Rubio, it`s not about you. It was a
leadership moment from the president of the United States when the time had
reached a tipping point.

That`s why Americans are in favor of this by a margin of 2 to 1.

Let`s turn to Xavier Becerra of California.

Congressman, great to have you with us tonight.

What is -- what is your reaction to Senator Rubio? He says the
president is shoving this down our throats. What do you say to that and
how would you characterize the Republican reaction since this decision was
made?

REP. XAVIER BECERRA (D), CALIFORNIA: Ed, America had been waiting for
solutions on immigration reform. Everyone knows our system is broken, and
desperately needs to have some change. The president has been waiting.
He`s been trying to get some change, and without Congress willing to act,
he decided it`s time to do something.

So, this was leadership at action. The president came up with a
solution, and Republicans right now are so far coming up with excuses.

So, good for the president, good for America, and good for all of
these young women and men who want to serve in our military, who want to
become the next scientists of America.

SCHULTZ: Rubio says, Senator Rubio of Florida says that the president
is circumventing the Constitution. He`s going around the Constitution and
he`s out of bounds on that.

What do you say? How is he doing that?

BECERRA: I don`t know. I don`t get it. The president is acting
within his executive authority. He is doing what previous presidents have
done.

In fact, I`m surprised that Senator Rubio, of Cuban-American descent,
would say this because this is similar to the action that was taken on
behalf of Cuban-Americans back in the `60s to allow them to stay in the
U.S. under a program called parole in place (ph).

So, I`m not sure. Certainly, the Constitution does not prohibit this.

SCHULTZ: Well, is it just a case where the Republicans throw out
anything that is going to stick for them? To point out the facts, in 2010,
the DREAM Act passed the House and was filibustered by Senate Republicans.
Let`s not forget that.

And this year, Speaker John Boehner of the House said that passing
Rubio`s watered down version would be difficult at best, yet Rubio claims
this was an election year stunt. What do you make of it?

BECERRA: Ed, look, we have been waiting for years to try to get
somewhere. As you mentioned, in 2010, under a Democratic majority, the
House passed a bipartisan DREAM Act. The Senate actually had the votes to
pass it and send that bill to the president for his signature in 2010, if
it wouldn`t have been for the procedural maneuvers engaged by Republicans
in the Senate to keep a 55-vote bill out of 100 senators from going to the
Senate, by using the procedural trip we know called the filibuster. So, we
could have done this.

So, when Mitt Romney a few days ago said the president could have done
this a long time ago, he`s waited years without doing anything, he either
misspoke or was intentionally misrepresenting the facts, because he had had
to know that the president tried it. It was Republicans who stopped
immigration reform from moving forward.

SCHULTZ: I mean, it`s very clear that this issue has caught the
Republicans flat footed on all fronts. Mitch McConnell doesn`t know what
to say about it. He`s waiting for his candidate, the leader of the party
now, Mitt Romney to say something. He doesn`t know what to say about it.

Has this really hurt the Republicans and really exposed them for not
really having a plan and certainly being unwilling to adjust to anything
the president wants?

BECERRA: Well, I certainly think you have to ask the question, does
Mitt Romney look presidential when he`s dodging a question on something
very important to Americans? I don`t care where you stand on immigration,
this is very important.

For him to rope-a-dope and try to avoid having to answer doesn`t seem
very presidential to me. And for Senator Rubio who for months was talking
about the possibility of doing something for these dreamers, these DREAM
kids, to say that, all of a sudden, it stops because the president uses his
executive authority makes no sense either.

SCHULTZ: Well, I`m like Senator Rubio to call some of these Democrats
he claim he`s been working with to hold a press conference, get some
Democrats you have been working with, Senator Rubio, and go hold a press
conference and tell us how upset everybody is. It`s 2 to 1 in favor.
That`s where American people.

Congressman Xavier Becerra, great to have you with us tonight. Thank
you.

BECERRA: Thanks.

SCHULTZ: Coming up, Tim Pawlenty could get picked as Romney`s running
mate. Find out why. Let me tell you, find out why this would be a dream
ticket for the Democrats.

And Howard Dean has a shocking prediction on the future of health
care. The Supreme Court could open the door for what liberals really want
in the country. Yes, it`s called universal health care.

Stay tuned. We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

This is my favorite part of the show because this is the dream ticket
for Democrats. Now, everyone from "Politico" to the "Wall Street Journal"
says former Governor Tim Pawlenty of Minnesota is the favorite for vice
president for Mitt Romney. Remember, Pawlenty had to give up his own bid
for president well before the Iowa caucus. He maxed out at 2 percent in
the polls, trailing Michele Bachmann and Donald Trump.

Governor Romney, let me help you vet this guy tonight. You see, when
Tim Pawlenty was governor, the I-35 bridge suddenly collapsed during rush
hour on August 1st, 2007. Eight lanes plunged into the Mississippi River,
13 people were killed, 145 others were hurt. Investigators blamed
structural problems.

For years, Governor Pawlenty refused to fund the inspections which
could prevent accidents like the I-35 tragedy. He gutted transportation
funding just four months before the bridge collapsed. At the time, "the
Huffington Post" put it like this: "Tim Pawlenty did not cause the bridge
to collapse. He does however embody the conservative approach to
government that did."

Pawlenty`s spending cuts caused other problems for Minnesota as well.
By the end of his term, Pawlenty left nine percent of Minnesotans without
health insurance. Property taxes had shot up all over the state. In eight
years of a booming U.S. economy, he only added 6,200 jobs. That would be
6,200 jobs.

Worst of all, he stuck Minnesota with a record breaking five -- five
billion dollar deficit. So Mitt, I think T-Paw would really be the perfect
fit for your campaign.

Let`s turn to Mike Hatch, former attorney general of Minnesota, who
ran against Tim Pawlenty and lost to him by just a few thousand votes.
Mike, good to have you on the program tonight. When you hear that Tim
Pawlenty is on the hot list and being reported by the "Wall Street Journal"
and "Politico" that hey, he could be the guy, what goes through your mind?
Is he ready to be vice president, maybe even president?

MIKE HATCH, FORMER MINNESOTA ATTORNEY GENERAL: Well, I`m taking -- I
think there`s two viewpoints on this. The political viewpoint is, of
course, that he doesn`t make a lot of mistakes. Maybe doesn`t get more
than two percent, but he does not make mistakes. The Rubio moment that you
mentioned earlier, probably not something that a presidential candidate
wants to see for a running mate.

So as I listened to that Rubio comment, Tim Pawlenty certainly goes up
the chart. Having said that, the one thing in common between what I call
country club Republicans and the Tea Party republicans is accountability
with regard to finance. And it`s certainly in Minnesota during that eight-
year term, the two terms over eight years, we had a lot of duct tape that
was going on in Minnesota.

And as you mentioned, property taxes went up. College tuition just
shot through the roof. Our per pupil spending went down for students, for
kids. And we were left with a 5.5 billion dollar deficit -- projected
deficit as he left office. That`s very hard to reconcile with the idea of
balanced budget approach to anything.

SCHULTZ: Why would the Romney camp want Tim Pawlenty?

HATCH: Well, I can give a good reason, and that is simply balance.
He is, you know, a governor from a blue state, as Romney is. They`re both
governors from northern states, much like -- I`m telling it like it is.
Look at Clinton and Gore. They did have some common branding. Most vice
presidents -- I don`t think we have seen -- maybe one, Lyndon Johnson -- in
the last 100 years win a -- bring something to a presidential ticket. The
Kennedy/Johnson ticked in 1960.

Other than that, vice presidents generally don`t win. They can hurt
you, but they don`t generally win an election. Tim Pawlenty won`t win an
election, but the issue is will he hurt them. If the rule is do no harm,
he probably fills that gap. In terms of criticism, he does not have --

SCHULTZ: Go ahead.

HATCH: Well, I was going to say, again, fiscal responsibility is a
key component of this election. The governor fails in that regard.

SCHULTZ: Is he a man of conviction?

HATCH: He is. He does what it takes to win the election. He does
well at that. He`s a good campaigner. He`s smart. I don`t know what his
conviction is. He`s certainly -- you know, he`s dealing with a Democratic
legislature, so they did have their differences. I don`t think leaving the
state with a 5.5 billion dollar deficit is fiscally responsible. I think
that -- so I think that underscores his conviction right there.

SCHULTZ: All right, Mike Hatch, good to have you with us tonight.
Thanks for the insight. Thanks so much.

There`s a lot more coming up in the next half hour of THE ED SHOW.
Stay tuned.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I don`t think American
elections should be bank rolled by America`s most powerful interests, or
worse, by foreign enemies. They should be decided by the American people.

(END VIDEO CLIP)

SCHULTZ: The Obama campaign files a lawsuit demanding Karl Rove`s
super PAC disclose its donors. The big panel weighs in on the shadow money
and the Holder witch hunt next.

Howard Dean makes news with his prediction for a health care decision.
Details ahead.

And the war on the poor is exploding in Congress this week.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It`s beneath this body to cut food assistance
for those who are struggling the most among us.

(END VIDEO CLIP)

SCHULTZ: Food Stamps will be cut unless something is done. Senator
Bernie Sanders brings the fight to THE ED SHOW tonight.

(COMMERCIAL BREAK)

SCHULTZ: All right, let`s talk about the money. It was really easy
for Karl Rove to go out raising money, getting millionaires and
billionaires to open up their checkbooks. It isn`t that tough when folks
know that their identities are going to be protected. Rove`s super PAC,
Crossroads GPS, doesn`t have to disclose donors because it is structured as
a tax exempt organization.

In fact, loopholes in the tax code allow Crossroads GPS to be
considered a social welfare organization. But we all know Karl Rove isn`t
raising money to help the homeless. He`s spending millions and millions of
dollars to push an extreme right wing agenda.

Now an attorney for the Obama campaign, for President Obama`s re-
election team is challenging how Crossroads does business. The "New York
Times" reports chief council Robert Bauer wants Crossroads to disclose its
donors. Bauer argues that donor identities can no longer be shielded by
the social welfare organization structure. Bauer writes in his complaint,
"Crossroads seems to believe that it can run out the clock and spend
massive sums of money in this election without accounting for a trace of
its funding."

Now a federal appellate court has issued a ruling that makes it clear
that Crossroads is out of time. Bauer sights a court decision ruling the
government should decide the major purpose of groups like Crossroads. You
and I know it ain`t about social welfare groups.

Let`s bring in MSNBC contributor Krystal Ball, radio talk show host
Mark Simone, with us tonight, and also political analyst Karen Finney.
Great to have all of you with us.

I want to know -- Mark, we`ll start with you first. Why is Karl Rove
so protective of his donors?

MARK SIMONE, RADIO TALK SHOW HOST: Ed, you`re always picking on Karl
Rove. Here the guy`s trying to start a nice welfare program.

(LAUGHTER)

SCHULTZ: I just want to know who is giving to his welfare program.
That`s all.

SIMONE: You can`t blame the guy for trying. He may lose this court
battle. But listen, I think our whole system is messed up. We have to
tear this all apart and start over. At first, it was the super PACs was
the way around it, and now this -- making it a social program is the way
around the super PACs. I think we should just let anybody give any amount
they want to any candidate, as long as there`s full disclosure, and we know
who is giving what to who. Just make it more direct.

SCHULTZ: Karen, what do you think?

KAREN FINNEY, DEMOCRATIC STRATEGIST: Nice try, Mark.

SIMONE: It`s not a try. I`m serious about that. Just be open and
honest.

FINNEY: I agree on the disclosure problem. But here is what is going
on in this specific case. They are a social welfare program, Ed. I mean,
you`re being unfair to millionaires and billionaires, whose profits they`re
trying to protect. We saw last week actually some of the major donors say
that they were intentionally going to use these loopholes and these shadow
groups to give. And one of them, and I quote, said "because it will be
more under the radar."

So obviously the Obama campaign is trying to push the pressure on the
Romney folks -- or on Crossroad GPS, excuse me, to know that they`re going
to have to disclose at some point. Nobody is buying this line that they`re
welfare groups.

KRYSTAL BALL, MSNBC POLITICAL ANALYST: Let me say this, Ed. I was
just going to say, to Mark`s point, having full disclosure of everything
and direct giving to the candidates would be better than what we have now.
But what would be even better is not to have massive amounts of money and
influence. That`s the part that really troubling about this, is what are
these people getting for their money? What is it that they want?

And that`s the part that, whether they`re anonymous or they`re fully
disclosed, the American people have no idea, and we feel very cut off from
having influence with our own government because of these massive amounts
of cash.

SIMONE: If you want to donate money, make it the same limits on super
PACs, on any group you give to, or just open it all to everybody. If
somebody wants to give a ton of money, let them do it and let it be open
and transparent, and we all know it.

FINNEY: You know what, guys? We know that`s not going to -- all of
those things should happen, but we do have to deal with the reality of what
is happening in this election. One of the things that adds to how
disturbing this is we have also read reports that show that the Romney
campaign has actually attended fund-raisers for some of the super PACs as a
featured guest. That`s the way they`re legally able to get around some of
the restrictions.

But then we don`t know who Mitt Romney is meeting with, because
they`re so -- there`s such a lack of disclosure on their side. So we don`t
know, does he have a private meeting and then someone writes a 10 million
dollar check to Crossroads GPS? We have no way of knowing that.

So to Krystal`s point, what are people getting for this money? We do
need to deal with it in the context of this election right now.

BALL: And there`s a bigger problem too, even outside of DC for
organizations, which I don`t even know why this provision exists. A social
welfare organization on the right or the left, they should have to disclose
their donors. But you also have C-3 organizations, which not only don`t
have to disclose their donors, but you can get a tax deduction for
contributing to them.

And grouped like ALEC, the American Legislative Exchange Council,
which has had massive influence in state legislatures, in particular,
across the country, is a 501-C-3. So you can give them a donation and get
a tax write off.

SIMONE: We`ve turned the campaign contributions into the same thing
as our income tax system. It`s all loopholes, deductions and nonsense.
Just simplify it.

SCHULTZ: Yes, but Mark, it`s pretty easy for Karl Rove to go out and
tell a multimillionaire, hey, look, give us a bunch of money. Nobody is
going to know who you are. We can work on stuff for you. That`s what it`s
all about. I mean, if people know, hey, I don`t want my name in the media.
Hell, I`m ready to give 10 million dollars, but I don`t want my name out
there -- the dynamic of the whole thing of raising money changes quite a
bit.

I want to talk about Eric Holder. Mark, what about this contempt
vote. Is it warranted knowing that no Republicans have testified in front
of this committee?

SIMONE: Well, it`s probably not warranted. I mean, listen, Fast and
Furious was a mess. I`ve always been against Eric Holder as attorney
general, even when he was acting attorney general under Bush. I just don`t
think he`s that competent. He`s sloppy about this stuff. This is a mess.
But you get these crazy congressmen with a gavel and a TV camera and they
go nuts.

Whether it`s Henry Waxman or Darrell Issa, it`s just grandstanding.
They play politics. And I understand the position Obama is in.

SCHULTZ: You`re on our side on this. You`re on our side on this. I
like that.

FINNEY: Not exactly.

SIMONE: But Obama said when he was running, it`s wrong to use
executive privilege in a case like this, and he`s right. But I understand
his dilemma. This guy`s a long time ally and friend. Nixon went through
the same thing. These guys have been with him before the White House.

FINNEY: Mark, come on. You did not just make the Nixon -- no, no,
no. There`s no comparison to Nixon. There`s no comparison to Nixon.
Essentially, if President Obama were to turn over the documents that we`re
talking about, he would be breaking the law. The president is not going to
break the law just to make Darryl Issa happy.

(CROSS TALK)

FINNEY: Be very clear about what this is about. If Darryl Issa
really cared about getting guns off the street and really cared about
giving some closure to the family, then he would be subpoenaing documents
that had to do with what actually happened. And by the way, he would not
have Eric Holder taking the fall for Mukasey. That`s part of what is so
outrageous about this.

Holder is the guy who stopped this program. This programs started
under President Bush.

(CROSS TALK)

SCHULTZ: We`ll leave it there. Krystal Ball, Mark Simone and Karen
Finney, and carob, great to have you with us tonight, great discussion.
Thanks so much.

Howard Dean says she hopes the Affordable Care Act`s individual
mandate gets thrown out. I`ll explain next. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R), MAJORITY LEADER: We`re going to take to the
floor a bill that calls for the total repeal of Obamacare, so that we can
start over and we can tell the American people, we`re on your side.

(END VIDEO CLIP)

SCHULTZ: Oh yeah, they`re on your side. They`re going to start over.
Republicans always say, we`re on your side when it comes to health care
reform, right? Where is their plan? But they`re not offering any
solutions whatsoever.

Now the Supreme Court is expected to rule on the constitutionality of
the president`s health care law any day now. Now look, no matter what
happens, it is a real opportunity for Democrats to take control of the
issue and work towards improving this nation`s health care system. That`s
how I see it.

So does Howard Dean. As the "Washington Examiner" reports, former
Governor Howard Dean of Vermont told a group of progressive activists that
there are many parts of the law that should remain in tact because they are
worth preserving, but, quote, "but I don`t give a damn about the individual
mandate. I think it was a foolish thing to do anyway, but then I hope it
does get thrown out."

Folks, this is all about messaging. This is a great opportunity for
the Democrats. Americans know our health care system needs fixing. What
we have is OK. It`s a start. If the Supreme Court strikes down the
Affordable Care Act, 77 percent of Americans want President Obama and
Congress to go right back at it and try again and come up with new
legislation. Only 19 percent of the American people in this country think
the health care system is fine and just leave it the way it is.

Congressman Keith Ellison of Minnesota says the Supreme Court ruling
will give Democrats the chance to push the single payer system, something
liberals wanted from the start. He says, "I whole heartedly think that if
this individual mandate gets thrown out, it`s an opportunity for us to
organize right away."

Amen to that. I mean, folks, this is a great opportunity for liberals
to look at this as a positive if the Supreme Court strikes this down,
because then we can go right to what the majority of the American people
want, and that is single payer. Don`t give up, liberals. Single payer is
what we want and what this country wants.

Tonight in our survey, I asked you, following the contempt charges
against Eric Holder, what do you think Republicans are more interested in?
Seven percent of you say the truth, 93 percent of you say hurting the
president.

Coming up, the Senate is expected to pass this mammoth, trillion
dollar farm bill that unfairly targets low income Americans. Vermont
Senator Bernie Sanders will weigh in next. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Big Finish tonight, the Senate
is expected to pass a trillion dollar spending bill, while cutting aid to
the poor. They have reached this bipartisan agreement on a brand new farm
bill. The bill is going to cost taxpayers 969 billion dollars over the
next decade. The Tea Party has been ominously silent on spending related
to this bill. Big ago-business has lined the pockets on politicians on
both sides of the aisle.

Meanwhile, the massive spending bill manages to cut Food Stamps aid
for the poorest people in this country. Now Senator Gillibrand of New York
has opposed the cuts and introduced an amendment to stop them. She called
out the Senate on the floor yesterday. The Senate struck down her
amendment with a 33 to 66 vote.

Now this bill will now slash 4.5 billion dollars in Food Stamp funding
to the poorest Americans. These cuts will amount to about 90 dollars a
month for needy families. The farm bill is expected to pass the Senate
later this week. I mean, there`s a lot of hog here, folks.

For more, let`s turn to Senator Bernie Sanders of Vermont. Senator,
great to have you with us tonight. You have the floor, Bernie. What is
right and what is wrong about this bill?

SEN. BERNIE SANDERS (I), VERMONT: What`s right about the bill, it
ends some subsidies that go to big farmers and corporate agriculture who
really don`t need it. Clearly, what is wrong about this bill is that at a
time when poverty is increasing in America and when half of the people on
Food Stamps are either children or the elderly, it cuts four billion over a
10-year period.

But Ed, what I do want to tell you is our Republican friends in the
House are planning on cutting not four billion over a 10-year period, but
over 130 billion over a 10-year period. They are really going to war
against the very poorest children and senior citizens in this country. And
that`s something we cannot allow to happen.

SCHULTZ: So the House is saying that the cuts aren`t tough enough
here, yet they`re willing to line the pockets of big agribusiness. And I
think you can follow the money. You`re going to see people in the Senate
and in the House who are advocating for this, who are recipients of big
dollars from big agri- business. Or do I have that wrong?

SANDERS: No, you have it right, Ed. But what people have got to
understand, this is part and parcel of the Republican vicious attack
against middle income and low income people. This is not unrelated, these
attacks that we`re going to see from the Republicans in massive cuts in
Food Stamps, is directly related to the attacks you`re going to see on
Social Security, Medicare, Medicaid, and education.

What the Republicans are about are huge tax breaks for the wealthiest
people in the country, huge corporate loopholes for corporations that make
billions in profits. Then you go after working families, the elderly, the
sick, the children and the poor. This is where we`re moving as a country
if we don`t stop it. We`re moving towards and oligarchy where a few people
have incredible wealth and power. And they`re going to war against
millions and millions of people who are trying to hang on by their
fingernails.

SCHULTZ: Where is the Tea Party on this farm bill? Why aren`t they
screaming about this? This is the biggest piece of legislation financially
we have seen, when you compare it to the automobile loan, you compare it to
the health care bill, you compare it to the stimulus package. I mean, this
is the mother load right here. And the Tea Party is silent about big agri-
business getting what they want out of the Senate?

SANDERS: Well, I think you`re going to see the Tea Party very silent
about tax breaks for people who don`t need it. They`re very silent about
all of the subsidies that go to the oil companies and the coal companies.
They`ve very silent about corporate loopholes.

Unfortunately, what you have in the Tea Party are folks who end up
representing the wealthiest and most powerful people in this cannery. Ed,
I will tell you right now, we have more people living in poverty today than
in any time in the modern history of this country. You have many seniors
who are facing hunger. We`re seeing an increase in hunger among seniors.

We have the highest rate of childhood poverty in the industrialized
world. It`s both immoral, to my mind, not to mention bad economic policy,
to go after the weak and vulnerable at the same exact time as you`re
standing up, giving huge tax breaks for the richest people in this country.

SCHULTZ: You know, this is where I have to call out some Democrats on
this. How in the world can they support the cut in Food Stamps when we
have got economic conditions for the lower tier income earners in this
country, just as the number that you just stated.

I don`t get it, but it`s going to happen. It`s bought and paid for,
in many respects. Senator Bernie Sanders, great to have you with us
tonight. Thanks so much.

SANDERS: Good to be with you, Ed.

SCHULTZ: That`s THE ED SHOW. I`m Ed Schultz. THE RACHEL MADDOW SHOW
starts right now. Good evening, Rachel.

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

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