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'The Last Word with Lawrence O'Donnell'for Tuesday, July 3, 2012

Read the transcript to the Tuesday show

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Guests: Dorian Warren, Paul Campos, Glenn Greenwald, Sister Simone
Campbell, E.J. Dionne

LAWRENCE O`DONNELL, HOST: Hey, Ezra, I have the feeling that you are
the one person in New York who is not rushing off to some beach spot for
the Fourth of July tonight.

EZRA KLEIN, MSNBC POLICY ANALYST: No, but I am rushing somewhere
else.

O`DONNELL: Why don`t you come running across the hall, over here to
THE LAST WORD and we will discuss the news of the day.

KLEIN: Sounds great.

O`DONNELL: I`ve got room for you. Come on over.

KLEIN: I`ll be right there.

O`DONNELL: OK, great.

You know, the Supreme Court has now made auditioning for the
Republican vice presidential slot the most impossible word game in
politics.

(BEGIN VIDEOTAPE)

ALEX WAGNER, MSNBC HOST: The message from down ballot Republicans is
crystal clear.

SEN. MITCH MCCONNELL (R), KENTUCKY: This law is a tax.

UNIDENTIFIED MALE: A tax.

REINCE PRIEBUS, RNC CHAIRMAN: It`s a tax.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I thought it was a tax.

WAGNER: The mandate is a tax and the Affordable Care Act is too
costly.

BILL O`REILLY, FOX NEWS: I may be an idiot for not considering that.

ERIC FEHRNSTROM, ROMNEY CAMPAIGN: It was a penalty.

CHRISTIE: Are you stupid?

FEHRNSTROM: It was a penalty.

RUSH LIMBAUGH, TALK RADIO HOST: What the heck does it matter?

FEHRNSTROM: It was penalty.

LIMBAUGH: You`re wasting your time talking about whether it`s a
penalty or a tax.

CHRISTIE: Let`s not focus on what spokespeople are saying, OK?

UNIDENTIFIED MALE: Chris Christie --

CHRIS JANSING, NBC NEWS: New Jersey Governor Chris Christie.

CHRISTIE: I don`t think it`s exclusively a tax or a penalty, it`s
both.

ANDREA MITCHELL, NBC NEWS: Chris Christie not ruling out saying yes
to being on the ticket.

CHRISTIE: You have to answer the call and listen, at least.

UNIDENTIFIED MALE: He`s picking up the phone.

JANSING: How important are optics like this?

UNIDENTIFIED MALE: This pick could be coming pretty soon.

THOMAS ROBERTS, MSNBC ANCHOR: Today, the Obama campaign pivoted back
to Bain.

JANSING: A brand-new ad from the Obama campaign is hitting the air
waves in nine states.

AD NARRATOR: Mitt Romney`s companies were pioneers in outsourcing.

UNIDENTIFIED MALE: This is the attempt by the Obama campaign to
define Mitt Romney before he has a chance.

UNIDENTIFIED MALE: He`s had an image as an automaton.

MITCHELL: He`s got lots of specifics out there, they just contradict
each other.

UNIDENTIFIED MALE: Keep it vague.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I love this country. I
love America! I love America!

UNIDENTIFIED MALE: Keep on the president`s record.

UNIDENTIFIED MALE: Usually we don`t elect automatons.

ANN COULTER, POLITICAL COMMENTATOR: If we don`t run Chris Christie,
Romney will be the nominee and we`ll lose.

(END VIDEOTAPE)

O`DONNELL: There is a new audition question for the Republican vice
presidential hopefuls.

(BEGIN VIDEO CLIP)

ERIC BOLLING, FOX NEWS: Is Obamacare a tax?

CHRISTIE: Sure. Yes. I mean, listen, I thought all along that it
was a tax. And I don`t think it`s exclusively a tax or a penalty. It`s
both.

(END VIDEO CLIP)

O`DONNELL: And that was Chris Christie, failing the audition, even
after the Romney campaign showed him how to answer that question word for
word yesterday when Chuck Todd asked it.

(BEGIN VIDE CLIP)

FEHRNSTROM: The governor believes that what we put in place in
Massachusetts was a penalty and he disagrees with the court`s ruling that
the mandate was a tax.

(END VIDEO CLIP)

O`DONNELL: Today, the head of the Republican Party tried to make it
sound like he was agreeing with the Romney campaign, even when he was
disagreeing.

(BEGIN VIDEO CLIP)

PRIEBUS: Our position is the same as Mitt Romney`s position, it`s a
tax.

(END VIDEO CLIP)

O`DONNELL: With the Republican world drowning in message confusion,
it fell to Rush Limbaugh to come to the party`s rescue and straighten out
everyone.

(BEGIN VIDEO CLIP)

LIMBAUGH: The point has to be what this country is going to become.
Not whether this is a tax or a penalty, so that Republican consultants can
guide candidates to winning elections. That`s not what this is about.
This is about real substance.

A disastrous Obamacare decision and apparently, it hasn`t sunk in
yet. In the Republican establishment, how outrageously bad this is. There
are no silver linings in it.

We have to inform as many fellow citizens as possible what is in
store for them -- their freedom, their health care, their lives. We can
fight to repeal Obamacare. And we must. But we have to win the next
election big.

(END VIDEO CLIP)

O`DONNELL: And in veep stakes news tonight, Mitt Romney spent today
at his New Hampshire vacation home, where "Associated Press" cameras caught
him meeting with the head of his vice presidential search committee.

Tomorrow, Romney will campaign alongside New Hampshire senator and
possible V.P. candidate, Kelly Ayotte, and another V.P. candidate, Ohio
Senator Rob Portman will be in New Hampshire this weekend.

And in Romney money news today, "Vanity Fair" reports on the ugly
ways that Mitt Romney is making money in foreign countries and then hiding
it from U.S. taxes in the Cayman Islands. "Vanity Fair" reports that the
funds Romney invests in can maintain extraordinary secrecy because in the
Cayman Islands, a confidentiality law states that you can be jailed for up
to four years, just for asking about such information.

Joining me now are MSNBC contributor Ezra Klein, and Columbia
University political science professor, Dorian Warren.

We can ask you anything we want. There`s not going to be any
jailing.

Ezra, thank you for making that run across the hall.

KLEIN: Happy to be here.

O`DONNELL: I hope we captured it on video for our Web site, which is
tradition when Rachel does that.

So now we know, now I know why the money is in the Cayman Islands.
It`s against the law to even ask about it there.

KLEIN: It`s the chicken and the egg, which came first, the law or
the money?

O`DONNELL: Yes, I mean, with him, who knows?

But this in the world where, you know, he`s the regular guy out there
trying to appeal to people. The regular guy on a jet ski on Lake
Winnipesaukee with a $90 million house besides the lake. This Cayman
Islands thing is not going away.

KLEIN: No, this Cayman Islands money, remember, there was a Swiss
bank account that Mitt Romney had forgotten about at one point. And this
is the stuff that`s leading to the change in the battleground polling.

The Republican consultants and Democrats have begun to agree that
whatever the Obama administration is saying in the battlegrounds is
beginning to make battleground voters think, this guy does not really
understand our problems.

I heard a political consultant say to me once that the single most
important poll result is do they care about people like me? Does this
politician care about people like me? That is the poll number on which
Romney`s having incredible trouble getting traction.

He can get traction on economic manager, get traction on the deficit,
but not do you care about people like me. And it`s because it`s when they
hear about that, they think, he can`t possibly understand what I`m going
through.

O`DONNELL: Chris Christie, who -- when he feels like it, will call
reporters stupid for asking him questions that he doesn`t like, which he
already did this week with a New Jersey reporter. He is asked, you know,
about this tax versus penalty thing and he calls it a tax. I mean, that
right there means you can`t be on the vice presidential slot with Romney.

DORIAN WARREN, COLUMBIA UNIVERSITY: I think he just auditioned and
failed the audition to be vice president. I mean -- and the Republican
Party as a whole is -- it`s startling, actually, how -- the Republican
Party the last 30 years has been the leader in framing debates. And right
now, their messaging is all over the place. Some people are saying tax,
some people are saying penalty.

What I think would probably have a more winning frame would be
mandate, because people don`t like individual mandates, but they`re using
tax, and they`re not coordinating clearly with their candidate for
president. So this is a Republican Party in upheaval right now in response
to this Supreme Court decision.

O`DONNELL: Let`s listen to a Republican member of Congress who
really hasn`t been given a fair audition for the V.P. slot, Allen West.

(BEGIN VIDEO CLIP)

REP. ALLEN WEST (R), FLORIDA: It`s a tax. I think that the governor
probably needs to look at who he has within his circle of advisers and
probably get him to get them to provide the right type of counsel and
advice.

(END VIDEO CLIP)

O`DONNELL: You got to figure Allen had ruled out V.P. by the time he
picked tax on the tax versus penalty multiple choice.

KLEIN: I am so with Rush Limbaugh on this one. I don`t get to say
it all that often, but I so agree. It doesn`t matter! It is the same
policy it was two weeks ago.

O`DONNELL: To Republicans, if you`re going to attack it, it
shouldn`t matter.

(CROSSTALK)

O`DONNELL: That`s what Rush is saying.

KLEIN: Yes. But this whole conversation the media has been having
after the bill was ruled on, I`ve shocked by it.

The Supreme Court did two things. They did nothing to change the
individual mandate, the way it works. That bill is exactly the same, as
unpopular as it was before. And they did change the Medicaid part, leading
to possibly millions not getting insurance.

And what everybody wants to talk about is whether or not we`re going
to call this thing a tax or a penalty, as it works in the same way we
thought it would, raising a small amount of money, to help bring healthy
people into the insurance field (ph) and will probably be paid by about 1
percent of Americans.

It is to me just like appalling. I can`t believe so many people have
fallen for this spin. And now Republicans have got themselves caught in
knots over it and have to spend more days talking about which one it is.
It is absurd.

O`DONNELL: This is a great point because the Republicans chase this
word "tax," because that`s their favorite word. If we can hit you with a
tax rap politically, and Democrats fear the word "tax."

KLEIN: Terrified of it.

O`DONNELL: Horribly. So we understand the politics of it. But then
this is the first time it cannot work for the Republicans, because of
Romney.

WARREN: Well, right. Because Obamacare is nothing but Romneycare on
steroids, right?

O`DONNELL: Yes.

WARREN: And it`s also a policy that came out of the Heritage
Institute a long time. So it`s actually a right-leaning policy that has
been contorted for liberal purposes. So they`ve been boxed in in terms of
this usage of the word "tax".

But there`s a conversation we should be having over the Supreme Court
decision, and that`s the implications of the Medicaid ruling. What does it
mean to curb federal power? What are the long-term implications of that?
We don`t really know, but that`s the conversation we should be having.

O`DONNELL: And, Ezra, this was the piece that I thought had to
constitutional problem at all, because we`ve done so many changes,
expansions of Medicaid over time. But this time, they said, no, no. This
is a change in the nature of the program, which I don`t think it is. But
this is a possibly much bigger impact in terms of what the coverage might
end up being, than even the mandate was going to be.

KLEIN: And they did, to be fair. They only changed the way of an
enforcement penalty. What they said was that the federal government
couldn`t take away all the state`s pre-existing Medicaid money if it didn`t
go with the expansion. It doesn`t -- it doesn`t change the way --

O`DONNELL: Which in effect made it mandatory.

KLEIN: It made it mandatory. Now it`s a little bit more optional.
But it should be said, it remains an incredible deal for states.

Right now, the federal government pays 57 percent of their Medicaid
costs. That is good enough for every single state in the Union to
participate. In this bill, going forward, they will pay 90 percent of the
expansion, and 100 percent for the first three years.

So I don`t actually expect many states to sit it out. But that is
the real change here.

And by the way, one other point on Romney who also passed the mandate
-- in Massachusetts, one of the ways they got everybody covered is they
brought Medicaid up to 133 percent of poverty for everybody, exactly like
the Affordable Care Act does.

WARREN: And just on this point in terms of states opting out, seven
Republican governors have already said that they will opt out and eight are
leaning towards that way. So we have 15 states that are at this point
saying they`re not going to implement the law.

O`DONNELL: We actually have a team upstairs making the calls to all
50 state legislatures, because it requires an act of the legislature, which
the governor has to sign. Illinois, by the way, thinks they might be able
to do it by executive order. So we`ll sort that out. But it`s going to
take a few weeks of record reporting just to try to get all 50 states on
record as to what really is the impact of this decision.

And then, as you`ve pointed out, they may not act on what they say
they`re going to do. Because they may look at this two years down the road
or a year down the road and say, you know what, the numbers here are such
that I think we are going to take this deal.

And so, the suspense about what really happened in the Supreme Court
is going to take many months to work itself out.

KLEIN: All of the incentives on the health care bill change after
the election. We have that certainty.

Right now they`re not sure, because they want to kill the thing, a
lot of the Republican governors. If Obama wins the election, the
Affordable Care Act is here to stay and they have to live in that world.
And there`s money in that world.

O`DONNELL: Ezra Klein, the hardest working man on MSNBC prime-time
tonight, and Dorian Warren -- thank you both very much for joining me.

WARREN: Thanks, Lawrence.

KLEIN: Thank you.

O`DONNELL: Coming up, Bill O`Reilly promised he would call himself
an idiot if the individual mandate was declared constitutional. We`ll find
out what an O`Reilly promise is really worth, in tonight`s "Rewrite."

And you heard it here first last night, the story that became today`s
Supreme Court news on how Chief Justice John Roberts actually wrote the
majority opinion in the health care case and most of the minority opinion.
We`ll have more on how that happened, later.

And also later, the Church of Scientology is under siege -- thanks to
the divorce of its most important member. Is Scientology losing its grip
on Hollywood?

(COMMERCIAL BREAK)

O`DONNELL: The nuns on the bus rolled into Washington today,
protesting Paul Ryan`s Republican budget. Sister Simone Campbell joins me
with what must surely have been a spiritually fulfilling meeting with Paul
Ryan. I mean, a good Catholic boy like Paul Ryan wouldn`t slam the door on
the nuns, would he? Paul Ryan?

And more on the intrigue later inside the Supreme Court. We have
more information tonight about how Chief Justice John Roberts managed to
write both the minority opinion of the court and the majority opinion by
switching his vote from one side to the other, and making Supreme Court
history in the process.

(COMMERCIAL BREAK)

O`DONNELL: It was in this segment last night that we broke the news
that Chief Justice John Roberts wrote both Obamacare opinions. The
majority opinion finding it constitutional, and the minority opinion
finding it unconstitutional.

(BEGIN VIDEO CLIP)

O`DONNELL: Professor Campos, I was just told before we came on that
you may be able to add to our knowledge of this with some breaking news
information of your own from a source close to the drafting of this
opinion.

PAUL CAMPOS, LAW PROFESSOR: Yes, Lawrence. I`ve been speaking with
someone who was involved in the drafting of the opinions, who wasn`t
willing to divulge that information, up until now.

In fact, the first 48 pages of the 65 pages of the joint dissent were
really the majority opinion. Only the last 17 pages of that joint dissent
were added on, essentially, for the most part, after Chief Justice Roberts
changed his vote.

What my source is very clear on is that most of that opinion was, in
fact, Chief Justice Roberts` opinion for the court. Most of that was now
the joint dissent.

(END VIDEO CLIP)

O`DONNELL: Joining me again tonight is Paul Campos, a professor of
law at University of Colorado-Boulder and a contributor for "Salon."

And Glenn Greenwald, a former constitutional law and civil rights
attorney, and contributing writer for "Salon". He is the author of the new
book, "With Liberty and Justice for Some: How the Law is Used to Destroy
Equality and Protect the Powerful."

Professor Campos, in the piece you wrote today in "Salon", under the
headline, "Roberts wrote both Obamacare Opinions," you say that the chief
justice began writing the opinion that Obamacare is unconstitutional, and
then switched to writing the other opinion, that Obamacare is
constitutional.

And in making that switch, the chief changed which side was the
winning side and which side was the losing side. But one of the pieces of
evidence you offer in your article is, this is surely the first time in the
court`s history that a dissent has gone on for 13,000 words before getting
around to mentioning that it is, in fact, dissenting, the last 19 pages do
so repeatedly. And that adds to your -- to the information that you`ve had
from a source, at least one source, inside the court, doesn`t it?

CAMPOS: Yes, it does. When I first read the joint dissent, I was
struck by the extent to which it really read like a majority opinion, until
relatively close to the end.

So what took me aback about Jan Crawford`s story for CBS this weekend
was the claim that the joint dissent was drafted after the majority
opinion, in response to it -- that didn`t really seem particularly
plausible.

And then, a source inside of the court confirmed, in fact, for me,
when quizzed on this question, that that`s not the way that it happened.
What happened was that Chief Justice Roberts drafted an opinion, had five
votes for it. He changed his mind about the individual mandate section of
the opinion.

The other dissenters were -- excuse me, the other members of the
majority at that point refused to go along with that, of course. And so,
he ended up writing another opinion, and they took over what had been the
opinion of the court and added this final section to it, and that`s why it
reads so bizarrely. Where you have three quarters of an opinion that reads
exactly as if it`s the opinion of the court, and then all of a sudden it
veers off for its last quarter and starts talking about why it`s
disagreeing with the court, when for the first 47, 48 pages, it speaks as
if it were the opinion of the court. Which I think helps explain the very
strange treatment of the Ginsburg opinion by the majority as well.

So I think we both have now textual evidence and evidence from inside
the court that what happened was that Roberts` switch ended up producing a
situation in which the bulk of the dissent was written by the same justice
who wrote the opinion of the court, which is, I think, a close to
unprecedented situation.

O`DONNELL: And, Glenn, what Professor Campos calls the strange
treatment of the Ginsburg dissent is that -- of the Ginsburg opinion is
that the dissent refers to the Ginsburg dissent. The Ginsburg opinion was
a concurring opinion with the majority. This is yet another clue that they
-- that that opinion, when the dissent with was first written, Ginsburg was
in the minority.

GLENN GREENWALD, SALON: Yes, we don`t know exactly what went on
here. I have great regard for Professor Campos, and I`m sure someone in
the court have told him this, just as people have told Jan Crawford
something a little bit different. I think people have different agendas.

But what he`s absolutely right about and what is crucial is that this
opinion is extremely strange. And a lot of legal experts reacted exactly
the way that he did, that I did, that something happened here that is very
unprecedented.

And, you know, I think it`s really important to keep in mind how much
political pressure was on the court for this case. The right has hated the
Supreme Court for decades, going pack to the Warren court, and especially
Roe versus Wade, and now the left has been hating the court almost as much,
if not more so, from Bush v. Gore and Citizens United.

Had this decision resulted in a 5-4 predictable partisan split,
striking down one of the most intensely democratically debated laws in the
many years, I really think the court`s legitimacy as this institution would
have been irrevocably destroyed.

And so, I do think John Roberts is sort of a guardian of the court
felt he had to do something. But there`s no question some shenanigans want
on internally, and that`s very, very unusual.

O`DONNELL: Now, this would be the moment in our story telling when
we cut to President Obama at the State of the Union Address, scolding the
Supreme Court, and Alito mouthing his thing -- but we don`t have time for
it because we have a much more important clue to present here, which is
this absolutely stunning audio recording of a "National Review" editor
speaking at Princeton University 26 days before the Supreme Court handed
down this decision.

(BEGIN AUDIO CLIP)

RAMESH PONNURU, NATIONAL REVIEW: My own educated guess, based on
people I talked to at the Supreme Court, is that -- well, as I`m sure
people know, there`s an initial vote the same week on the Friday of the
oral arguments, and my understanding is that there was a 5-4 vote to strike
down the mandate and maybe some related provisions, but not the entire act.
Since then, interestingly, there seems to have been some second thoughts,
not on the part of Justice Kennedy, but on the part of Chief Justice
Roberts, who seems to be going a little bit wobbly. So right now, I would
say it`s a little bit up in the air.

(END AUDIO CLIP)

O`DONNELL: Paul Campos, that`s 26 days before this opinion. You
have someone saying, I have a source, this is a conservative editor of the
"National Review" saying, I have a source inside the Supreme Court who`s
telling me that Justice Roberts is going a little bit wobbly.

CAMPOS: Yes, Lawrence. I think what`s really interesting about this
is that the sort of code of Omerta, you know, that the Supreme Court
normally operates under, you know, that those who know don`t tell really
seems to be breaking down. The very fact that we`ve had now leaks, not
months or years after the decision, but really even before the decision
came down, in regard to the -- as what Glenn correctly referred to -- as to
the shenanigans taking place in terms of the process in which this decision
was made, I think is a kind of extraordinary comment on the degree to which
now the court is being overtly politicized in a way that I think is pretty
much unprecedented in American legal history.

O`DONNELL: And Glenn, John Fund wrote in the "National Review" today
from his own sources. "I`ve learned from own sources that" -- there is an
amazing amount of leak going around here, and I think the people who are
claiming to have sources there are credible, that they do have sources.

GREENWALD: Yes. I mean, Ramesh Ponnuru, he`s a very conservative
commentator for sure, but he`s also extremely credible and well-regarded on
both sides of the political spectrum, and what he was describing certainly
is what he was hearing. And as it turns out, it was quite prescient.

O`DONNELL: And let`s -- this is clerks. The only people who could
be saying this are clerks.

GREENWALD: Yes. And these clerks are ideological, and they -- you
know, they have an interest in depicting what`s going on.

But I think that the really interesting here is even what you
referred to earlier, the reference to Justice Ginsburg as a dissent, this
is not a mistake that Supreme Court justices, with all the checks on their
opinions, just simply make accidentally.

O`DONNELL: They deliberately left that in there.

GREENWALD: Yes, there was a suggestion that it was sort of a way of
signaling to the public that this shift was --

O`DONNELL: We were winning.

GREENWALD: Right. And it was sort of a last-minute thing, and look
at what John Roberts did. I think that`s a really credible theory.

O`DONNELL: Oh, yes.

Paul Campos and Glenn Greenwald, thank you both very much for joining
me tonight.

GREENWALD: Thank you.

CAMPOS: Thank you.

O`DONNELL: Coming up, it`s religion night here on THE LAST WORD.
We`ll be joined by one of the nuns on the bus, and THE LAST WORD senior
Catholic analyst, E.J. Dionne.

And later, freedom of religion or freedom to indoctrinate. The
children of Scientology and why Katie Holmes doesn`t want her daughter to
be one of them. That`s coming up.

And in the "Rewrite" tonight, we`ll find out if Bill O`Reilly is a
man of his word. The word being "idiot." That`s coming up.

(COMMERCIAL BREAK)

O`DONNELL: Bill O`Reilly promised he would call himself an idiot if
the individual mandate was found constitutional. He really did. And then
he took that night off when it was found constitutional, and the next
night, and had all weekend to think about it. And he came back on the show
last night saying that he is a man of his word. I will show you the video
of exactly what the idiot said in tonight`s "Rewrite".

And the Nuns on the Bus went to see Paul Ryan in Washington, and, you
know, a good Catholic boy like Paul Ryan would never refuse to see the
nuns. We`ll hear all about it from Sister Simone Campbell.

And later, does freedom of religion include freedom from religion?
That`s one of the things Katie Holmes is seeking in her divorce from Tom
Cruise and the Church of Scientology. That`s coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), HOUSE MINORITY LEADER: Thank you, sisters.
Thank you, all of you, for what you do. America is truly blessed by our
nuns.

UNIDENTIFIED MALE: Thank you, sisters.

UNIDENTIFIED FEMALE: Thank you, sisters.

UNIDENTIFIED MALE: Thank you, sisters.

UNIDENTIFIED FEMALE: Thank you, sisters.

Thank you for acting on your beliefs.

(END VIDEO CLIP)

O`DONNELL: In the Spotlight tonight, the Nuns on the Bus. Those were
just a few of the 75 members of Congress who went on camera to thank the
Nuns on the Bus. The sisters` two-week, nine-state bus tour for social
justice and against the Paul Ryan budget rolled to a close yesterday in the
nation`s capital. The nuns were cheered by their supporters as they made
stops at the Congressional offices of some of the bill`s supporters,
including its creator, Paul Ryan.

The sisters and other religious groups have come up with an
alternative to Paul Ryan`s plan called the Faithful Budget. In its
preamble, they state, "in the current political and economic climate,
neither party is giving voice to the needs of the families who are
struggling to overcome poverty. It is simply not true that we must reduce
assistance for the poorest among us in order to achieve fiscal recovery."

Joining me now, in her triumphant return to THE LAST WORD, Sister
Simone Campbell, the executive director of the National Catholic Social
Justice Lobby, and E.J. Dionne, a senior fellow at the Brookings
Institution, and the author of "Our Divided Political Heart." He`s also an
MSNBC political analyst. And he is THE LAST WORD`s senior Catholic
analyst.

Sister Simone, can`t wait to hear about this. You knock on Paul
Ryan`s door. You want to sit down with him and discuss theology and the
theology of social justice. Just you can take all the time you want. Tell
us just word for word how it went with Paul Ryan.

SISTER SIMONE CAMPBELL, NATIONAL CATHOLIC SOCIAL JUSTICE LOBBY: Well,
it`s quite a short little comment. We met with his staff. The staff took
copious notes. We haven`t heard a word back. We did get an e-mail just
recently saying, yes, there`s interest in a meeting. We`re trying to set
one up when he`s back in D.C. next week.

O`DONNELL: E.J. Dionne, I`m afraid this is not of the way I was
taught to receive nuns when I was being taught by them in my elementary
school. I`m, uh -- this is a -- what do you make of it? The nuns come to
Paul Ryan`s office. He has said he has based his budgeting and his
political thinking in his religious beliefs, and he won`t even discuss
those with the nuns.

E.J. DIONNE, "THE WASHINGTON POST": Well, first of all, thank you for
giving me that very august title.

O`DONNELL: Battlefield promotion, right here tonight.

DIONNE: You know, I -- when the health care fight was happening, when
a whole group of nuns endorsed the health care bill, and the bishops
opposed it, I wrote a column that I thought would resonate with many, many
Catholics. And it ran under the headline, "Listen to the Nuns," because
that is what we were always taught. And I`m not entirely surprised that
Congressman Ryan reacted that way, because he knows that what he is for may
be approved of by quite a few conservative Catholics, but it`s outside the
teaching of the Catholic Church going back a long way.

I think it`s really important to underscore that the Vatican may have
criticized the American nuns, but what the nuns are saying here is very
much mainstream Catholic social teaching. Back in 1919, the Catholic
bishops put out their Program for Social Reconstruction, which in many ways
pre-figured the New Deal. I think what`s different now is a new
conservative Catholic leadership is a little less vocal on these issues,
but it hasn`t actually changed the church`s positions.

And the nuns are out there being vocal in a way the bishops used to be
on these social justice questions. And obviously, for someone like
Congressman Ryan, that`s a little bit uncomfortable.

O`DONNELL: Let`s listen to Congressman Ryan`s governing philosophy on
what he said about it on ABC.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), HOUSE BUDGET COMMITTEE CHAIRMAN: We disagree with
the notion that our rights come from governments, that the government can
now grant us and define our rights. Those are ours. Those come from
nature and God, according to the Declaration of Independence, a huge
difference in philosophy.

(END VIDEO CLIP)

O`DONNELL: Sister simone, what would have been your response to that
if Congressman Ryan had the courage, if you don`t mind me saying, to sit
there and say that to you?

CAMPBELL: Well, I think Congressman Ryan has it part right and part
wrong, as usual. I mean, yes, God is significant in giving us the rights,
the human dignity. I mean, that`s why every person has human dignity. But
the fact is that the Vatican, Pope Benedict XVI recognizes that things like
health care are a right of all individuals in a modern society.

And those rights evolve over time. We work it out from what human
dignity is. And then you apply it in the current circumstance. So a right
to health care is very much at the core of Catholic social teaching.

O`DONNELL: E.J., this seems to be a critical point here, where some
Catholics take from scripture and from the life of Jesus Christ that they
should participate in a generous way through government in social programs.
And others say, no, no, because this was the work of Jesus Christ, it had
nothing to do with government and there`s nothing in the life and work of
Jesus Christ to indicate how government should run.

DIONNE: But Jesus actually was someone who was a rebel against
authority, in so many ways in his own time. I think it`s a mistake to try
to divorce Jesus from politics or Jesus from the political situation that
he was in. There is a real debate -- I think you put it properly -- among
Christians over whether what Jesus said about helping the poor -- and no
one can deny the centrality of the poor in Jesus` teaching -- how that
links to the role of government.

But in the Catholic tradition, certainly, there has always been a link
between a charity, justice, and the role of government, because Catholic
teaching says that government is a central organizer even of economic life.
The church is for the market, but it always wants the market to be within
moral limits.

O`DONNELL: And sister, how would you address that with Congressman
Ryan and others, who would say there`s nothing in the life of Christ that
is about the conduct of government?

CAMPBELL: Well, actually, our father -- there`s a whole acts of Jesus
about our father being a very political statement. So that that`s the
prayer Jesus gave us, all about bread tax and having daily bread was a big
thing in Rome -- in Roman law. But I think the real thing here is --
picking up on what E.J. is saying, is that Pope Benedict XVI makes it very
clear in his Encyclical Charity and Truth, that government is there to
ensure justice for all, and that once everyone has justice, then we can do
charity, the giving of something extra, and that the role of government is
to balance the excess of any culture or any large group of people.

So in our culture, which we have an extensive excess of individualism,
the role of government then is to help us balance it in relationship with
each other.

O`DONNELL: Sister Simone, I had eight years of Catholic education
with nuns in my elementary school. And many of them told me many things
that I didn`t want to hear. It never occurred to me that I had the option
of not listening to them, as Paul Ryan seems to think he does. Sister
Simone Campbell and E.J. Dionne, thank you both very much for joining me
tonight.

DIONNE: Thank you. And thank you to sister.

O`DONNELL: OK.

Coming up, Bill O`Reilly, the promise keeper, is in tonight`s Rewrite.
He said he would apologize, which he didn`t do, and that he would call
himself an idiot, which he didn`t exactly do, if the individual mandate was
ruled constitutional. The idiot is in tonight`s Rewrite.

And later, how the latest celebrity divorce case raises difficult
issues about freedom of religion and freedom from religion in this country.
Why more than money is at stake in a divorce in the Church of Scientology.
That`s coming up.

(COMMERCIAL BREAK)

O`DONNELL: In the Rewrite tonight, well, Bill O`Reilly finally said
he`s an idiot. Or did he? Let`s take another look at Bill O`Reilly
promising to call himself an idiot if the Supreme Court found that the
individual mandate is Constitutional.

(BEGIN VIDEO CLIP)

O`REILLY: This is absolutely a mandate. It`s absolutely a force.
It`s absolutely police powers from the federal government. And it`s going
to be five to four. And if I`m wrong, I will come on and I will play your
clip and I will apologize for being an idiot.

(END VIDEO CLIP)

O`DONNELL: And then when the Supreme Court found the individual
mandate Constitutional, Bill O`Reilly took the day off. But he did call in
to his own show and do a phone interview with the substitute host, in which
he never quite got around to calling himself an idiot. Then he maintained
complete silence the next night by staying home and letting his substitute
host do the show without any input from him.

And then last night, Monday night was his first night back in the
anchor chair since the Supreme Court ruling. And after suffering days of
shame heaped upon him by me and others, who noticed that he did not fulfill
his promise to call himself an idiot, O`Reilly knew that he just had to do
something. He showed the video that I just showed you and then he said --

(BEGIN VIDEO CLIP)

O`REILLY: I am a man of my word, so I apologize for not factoring in
the John Roberts situation. Truthfully, I never in a million year thought
the chief justice would go beyond the scope of the Commerce Clause debate
and into taxation.

(END VIDEO CLIP)

O`DONNELL: Never in a million years, huh? How about say the last
three years? In the last three years, O`Reilly could have heard me explain
how the individual mandate`s claim of Constitutionality resides not in the
Commerce Clause, but exclusively in the power to tax. I said it many
times. Sometimes I told the story of how FDR`s labor secretary, Frances
Perkins, discovered from a tip she picked up from a Supreme Court at a
social gathering that the constitutional authority for the Social Security
Act should be within the power to tax.

That`s why LBJ and the Democrats created a separate Medicare tax to
fund Medicare, when they created the program in 1965, so that it`s
Constitutionality would also be firmly grounded in the power to tax, just
like Social Security. If what Bill O`Reilly just said is true, which is a
very big if -- it`s O`Reilly we`re talking about here.

But if it`s true, it means. One, my feelings are hurt that Bill
doesn`t watch this show. And two, Bill is just as horribly informed and
uninformed about current events as his Fox News audience is. But I
digress. Let`s keep rolling the video and see if he calls himself an
idiot.

(BEGIN VIDEO CLIP)

O`REILLY: Truthfully, I never in a million years thought the chief
justice would go beyond the scope of the commerce clause debate and into
taxation. I may be an idiot for not considering that.

(END VIDEO CLIP)

O`DONNELL: "I may" -- "I may be an idiot?" May be an idiot? Let`s
roll that video from the thing where he said what he said.

(BEGIN VIDEO CLIP)

O`REILLY: And if I`m wrong with, I will come on and I will play your
clip and I will apologize for being an idiot.

(END VIDEO CLIP)

O`DONNELL: OK, there was no "may" in there. He said, "I will
apologize for being an idiot." And he said he will apologize. So, where`s
the apology?

(BEGIN VIDEO CLIP)

O`REILLY: I`m not really sorry.

(END VIDEO CLIP)

O`DONNELL: You -- you`re kidding me. He promises two things, he will
apologize and say he`s an idiot. Then he specifically says he`s not sorry
and he hedges on the idiot thing. Never mind how you feel about that.
Imagine how demoralizing it was for the Fox News team to watch their
fearless leader be afraid to do the right thing, to do what he said he was
going to do.

Now they know their fearless leader is a fraud, if they weren`t smart
enough to catch on to that before. And so now O`Reilly -- now that
O`Reilly proved that, even to the Kool-Aid drinkers at Fox News, how -- how
could they ever, ever look O`Reilly in the eye again?

(END VIDEO CLIP)

UNIDENTIFIED MALE: Well, you know, I think you`re -- I think you`re
being too sensitive.

(END VIDEO CLIP)

O`DONNELL: And there you have the world according to Fox News. You
know, back in the Rat Pack days, Dean Martin once said of Frank Sinatra,
"it`s Frank`s world, he just lets us live in it." And as has been obvious
for many years now, Bill O`Reilly is the leader of the Fox News Rat Pack
and it`s Bill`s world and he lets the rest of the rats live in it.

And the only time they are allowed to disagree with Bill is when he
says this --

(BEGIN VIDEO CLIP)

O`REILLY: I may be an idiot. I may be an idiot. I may be an idiot.

(COMMERCIAL BREAK)

O`DONNELL: in a country that included freedom of religion as a
founding principle of our government, what happens when your freedom to
practice your religion runs into your spouse`s freedom to not practice your
religion? And which one of you has the right to impose your religion on
your child? These are the important and difficult questions raised this
week by the newest celebrity divorce case.

NBC News` "Today Show" national investigative correspondent Jeff
Rossen has the latest on the story.

(BEGIN VIDEOTAPE)

JEFF ROSSEN, NBC NEWS NATIONAL CORRESPONDENT (voice-over): Katie
Holmes emerging Monday, wading through the media mob scene. The soon-to-be
single actress out and about in New York City. Photographers following her
every move. And something`s missing, her wedding ring, gone. But even in
the midst of chaos, Katie looks relaxed. Hardly the portrait of a woman in
a custody battle with one of Hollywood`s most powerful stars.

And her new neighbors have a front row seat.

UNIDENTIFIED MALE: She`s been with her daughter. She holds her
daughter in a loving way. And she is a great asset to the building and is
handling herself great.

ROSSEN: Now questions about Tom Cruise`s religion playing a role
here. Did Scientology break them up?

TOM CRUISE, ACTOR: I think it`s a privilege to call yourself a
scientologist. And it`s something that you have to earn.

ROSSEN: Cruise, seen here in this church promotional video, praised
the faith.

CRUISE: We are the authorities on getting people off drugs. We are
the authorities on the mind.

ROSSEN: He`s a leader in the church, but Katie was raised Catholic.
Citing sources, "People Magazine" reports that she was concerned about
their daughter, Suri.

MIKE FLEEMAN, "PEOPLE MAGAZINE": The Church of Scientology is a
critical issue in this divorce, as it relates to Suri. She`s at an age now
where she is going to go to elementary school. Will she be raised and
educated as a scientologist or something else or something in between?
This is issue number one for Katie Holmes.

ROSSEN: Now Katie wants sole custody, filing divorce papers in New
York, and bringing Suri to Manhattan with her, spotted with her Hello Kitty
purse. Cruise reportedly wants to move the case to California.

ALTON ABROMOWITZ, DIVORCE ATTORNEY: New York has a presumption of
sole custody while states like California have a presumption of joint
custody, so she has a better chance of taking sole custody of the child
here in New York than probably anywhere else in the country.

ROSSEN: The couple owns property from New York to L.A., Italy, to
England. So it comes down to a judge deciding where Suri really lives.

A bicoastal battle with Katie firing the first shot, their daughter
caught in the middle of this new celebrity spectacle.

(END VIDEOTAPE)

O`DONNELL: NBC`s Jeff Rossen joins me now. Jeff, it`s been
fascinating to me to see how this is playing out. Obviously, the celebrity
aspect is what all the media cares about. But there is a fascinating
religious question here at the center of this, what is going to be divorce
case. And that is, how are these kids brought up? How was that handled in
the Nicole Kidman divorce from Tom Cruise?

ROSSEN: Look, you know, Nicole Kidman was raised as a Roman Catholic.

O`DONNELL: As was Katie Holmes.

ROSSEN: As was Katie Holmes. And by the way, they were both 33 years
old when the divorces happened. Who knows if it`s coincidence or not? But
so Nicole Kidman allegedly did not want her kids raised as Scientologists.
And that is allegedly one of the reasons that she left and she doesn`t
practice Scientology anymore.

The question is, and many published reports out there, that this all
came down now possibly for a couple of reasons. One, we`ll talk about the
Scientology angle, and that is that Suri, their six-year-old daughter, is
about to get into school and she`s about to start her education. And there
are published reports out there that Tom Cruise wanted Suri to get into the
C-Org (ph), which is sort of this sect of Scientology where the kids get in
there very, very young.

O`DONNELL: And do they have a school for that?

ROSSEN: Yeah, they have a school. And they begin their long road of
education. It`s sort of a camp. And the Church of Scientology, for their
part, denies that. They say no child under 16 is allowed in, officially.
So that`s number one, that she saw -- she was at that cross roads, needed
to make a decision about Suri`s future, according to several published
reports.

There is also the fact that they have this prenup. Again, we haven`t
seen those papers, but also widely reported that after five years of
marriage, she gets a certain amount of money. And, you know, they`ve been
married just over five years now.

O`DONNELL: So on the Scientology side, does she think New York will
be more favorable to her interests on getting her daughter away from
Scientology?

ROSSEN: Yeah, she wants full custody. She wants sole custody. And
according to "People Magazine," who`s spoken to family sources from Katie
Holmes, she doesn`t want Suri raised as a scientologist. So she wants sole
custody to raise her the way she wants. And in New York, the rules are
very much favored towards sole custody, whereas in California, they sort of
automatically go towards joint custody, unless proven otherwise.

So Tom Cruise`s lawyer has been reported as saying that he wants this
case moved to California. So the first battle, you know, that faces both
of them is where this thing is even going to be battled.

O`DONNELL: And the New York media is absolutely consumed by it.

ROSSEN: That never happens.

O`DONNELL: Jeff Rossen, thank you very much for joining me tonight.

We`ll be back here after the Fourth of July. And I will begin my day
on Thursday by guest hosting "MORNING JOE" from 7:00 am to 9:00 am. And of
course, I`ll be back here at this desk at 10:00 pm for THE LAST WORD. "THE
ED SHOW" is up next.

END


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