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'The Rachel Maddow Show' for Tuesday, July 10, 2012

Read the transcript to the Tuesday show

Guests: Nancy Northup, James Carville

ED SCHULTZ, "THE ED SHOW" HOST: What we`re seeing is the crumbling of
America`s infrastructure. We don`t have the money to pay for the
essentials. And the question is how many firefighters are going to become
disenchanted, get out of the business, get out of this line of work and
leave communities vulnerable and then, all of a sudden, we have a new
template on how we`re going to have public employees service our
communities in America. That`s where I think this is the tip of the
iceberg.

John Judge, we`ll do the story again. I appreciate your time tonight.
Thank you.

That`s "THE ED SHOW." I`m Ed Schultz.

THE RACHEL MADDOW SHOW starts right now. Good evening, Rachel.

RACHEL MADDOW, HOST: Good evening, Ed. Incredible news there.

SCHULTZ: Thank you.

MADDOW: And thanks to you at home for staying with us this hour.

James Carville is here tonight for the interview. I`m really looking
forward talking to him. James Carville, of course, is the campaign
strategist who brought us the presidency of a man named Bill Clinton, who
you might have heard of.

Bill Clinton was elected in 1992. He beat Poppy Bush, beat him
easily. Bill Clinton was then wildly popular, as most presidents are,
right after they`re elected.

But then by the very next election, after the `92 one, by the very
next election, by the midterm election in 1994, the pendulum had swung way
back in the other direction. The Republicans won a landslide in the first
election of the Bill Clinton presidency. They took control of the House
from the Democrats, Newt Gingrich became the speaker of the House. The
House swung 54 seats to the Republicans -- 54 seats they picked up.

We have showed this before, but this cover from "Time" magazine in
1994 gives you an idea of how huge the victory was for the Republicans in
the first midterm election that President Clinton was in office. The GOP
elephant stampeding, right? Stampeding.

And if you look under the elephant`s foot, the elephant is destroying
the Democratic donkey, making the donkey`s eyeballs pop out on bloody
stalks. That`s what you get in terms of imagery in the press when you pick
up 54 seats in the House -- 54.

You want to know how many seats swung to the Republicans in the past
election? Sixty-three. Nine more seats than the Republicans won in their
big elephant squishing the donkey landslide in 1994.

This past election in 2010 went deep, deep red. In 2010, Republicans
won the governorships in 29 of 50 states. They won more seats in state
legislatures than they had won since 1928. They won 63 seats in the House.

But look at this. Look at this, the Republicans did great in both of
these midterm elections, 1994 and 2010. Whatever party the president is,
his party tends to lose seats the next time people get to vote. It happens
almost every time.

But when you compare what happened in the first midterm under
President Clinton to what happened under President Obama in his first
midterm, look what happened in the Senate. The Republicans did not get
much this time around in the Senate. Even as their landslide got bigger in
the House, it shrunk a little bit in the Senate.

Why did that happen? That happened because I am not a witch happened.
The Republicans were so cocky that they would be able to run the table in
the 2010 elections that they picked some coocoo for cocoa puffs Senate
candidates.

Republican voters and Republican Party picked really, really, really
out there, far right conservative candidates for the Senate in a bunch of
states in 2010, and those candidates did not win, even in that bright red
year. So the Democrats held the Senate in 2010.

I mean, there was I am not a witch Christine O`Donnell in Delaware.
There was second amendment remedies Sharron Angle in Nevada. Remember her?
She threatened if she did not unseat Harry Reid in the Senate, conservative
voters would start shooting people to get what they wanted instead.

There was also this guy, in Colorado, his name was Ken Buck.

(BEGIN VIDEO CLIP)

REPORTER: Why should we vote for you?

KEN BUCK: Why should you vote for me? Because I do not wear high
heels.

REPORTER: Is it constitutional for the government to have a Social
Security program where it directs the moneys we put into it?

BUCK: Let me tell you, I don`t know whether it`s constitutional or
not. It`s certainly a horrible policy.

REPORTER: Are you for abortion or against abortion? If you`re for
it, what instances would you allow for abortion?

BUCK: I`m pro life, and I`ll answer the next question. I don`t
believe in the exceptions of rape or incest.

(END VIDEO CLIP)

MADDOW: I don`t believe in the exceptions for rape or incest.

Ken Buck did not become a U.S. senator from Colorado. In a state
that`s always pretty closely divided anyway, in a year where Republicans
frankly had to try to lose, in an election where Republicans won just about
everything, Ken Buck could not win against a Democrat named Michael Bennet.
That was part because Michael Bennet made sure that Ken Buck came across as
a real extremist on the issue of abortion.

(BEGIN VIDEO CLIP)

SEN. MICHAEL BENNET (D), COLORADO: Ken has supported criminalizing
abortion in cases of rape and incest. My question is: who`s going to go to
jail, Ken?

BUCK: Who`s going to go to jail?

BENNET: When you criminalize abortion in cases of rape and incest,
and abortion occurs, who is going to jail?

BUCK: I`ll tell you, Senator, I don`t think abortion is going to be
criminalized anytime soon?

BENNET: You support it.

BUCK: Let me answer the question, you have once again tried to take
this debate off topic.

(END VIDEO CLIP)

MADDOW: Ken Buck had no idea what to say to being put on the spot
like that by Michael Bennet.

Ken Buck did support making abortion a criminal offense, even for
women who were made pregnant by a rapist or by incest. But as to what the
prison term should be if a woman does get an abortion under those
circumstances, he has no response. You`re changing the subject. Am I
changing? Am I allowed to change the subject?

Ken Buck lost that election badly, even when Republicans won
everything else. Ken Buck lost among women voters in Colorado by 17
points.

That was only two years ago, but you know what? Times have changed.
Now, if you ask a Republican politician how long the jail term should be
for an abortion, now they`ll just tell you. They`re not dodging it anymore
like Ken Buck did.

Republican Congressman Trent Franks has an abortion ban working its
way through the House of Representatives this week. It`s a federal ban but
it`s specifically targeted to women in Washington, D.C. You do not need to
ask Trent Franks who goes to jail for his abortion ban. It`s right there
in the bill.

Doctors should go to jail. Doctors should spend up to two years in
prison.

Republican Governor Bobby Jindal signed a similar bill into law in
Louisiana last month. You also do not need to ask Bobby Jindal who`s going
to go to jail. The bill the Bobby Jindal signed will send doctors to
prison also up to two years. Asking a Republican with a really extreme
anti-abortion position who`s going to go to jail, that used to be a really
dramatic rhetorical devise. You`d never get an answer because no one was
crazy enough to go on record talking about throwing people in jail for
abortion. Not even Ken Buck who is perfectly content to go on record
talking about a lot of crazy sounding things.

But that -- this sounds too crazy for me to say it meter is
recalibrated. That has changed, even just since 2010. Jailing people for
abortion is no longer a step over the line of wing nuttism, even for
mainstream Republican rhetoric, mainstream Republican legislation.

That same evolution as anti-abortion politics, the mainstream of
positions previously seen as coocoo has been happening in the great state
of Mississippi this year.

Back in April, the Republican governor of Mississippi, Phi Bryant,
signed into law what is known as a TRAP law.

TRAP, in this case, stands for Targeted Regulation of Abortion
Providers. And the acronym is not an accident. These are new laws, new
red tape and regulations that only apply to abortion providers. They`re
designed to make it harder to be an abortion provider. They`re laws that
are designed to and intend to shut clinics down.

But the folks who propose and pass and sign TRAP laws don`t usually
call them that. They usually at least try to pretend that`s something else
is going on. They try to frame the issue as something having to do with
safety and protecting vulnerable women who need protecting. That`s how
TRAP laws used to go down, anyway.

But things have changed. And in today`s Republican Party in the great
state of Mississippi, at least, you do not have to hide behind the health
and safety stuff anymore, you don`t have to pretend all you care about is
safety for women, you just can come right out and say that you`re trying to
shut down the only abortion clinic in the state by way of targeted over-
regulation. You could just come out and say it.

That`s what Republican Governor Phil Bryant did when he signed
Mississippi`s TRAP law back in April, targeting the state`s only clinic.

(BEGIN VIDEO CLIP)

GOV. PHIL BRYANT (R), MISSISSIPPI: I think it`s historic that today
you see the first step in a movement, I believe, to do what we campaigned
on, to say we`re going to try to end abortion in Mississippi.

We`re going to try to work to end abortion in Mississippi, and this is
an historic day to begin that process.

(END VIDEO CLIP)

MADDOW: Signing the state`s new law was a step toward a campaign
promise to end abortion in Mississippi.

The lieutenant -- that was the governor. The lieutenant governor was
also open and excited about using the law in Mississippi to ban abortion by
shutting down that clinic.

(BEGIN AUDIO CLIP)

TATE REEVES, MISSISSIPPI LT. GOVERNOR.: It`s been seven years since
we got good pro life legislation passed out of the Mississippi legislature.
That`s a bill that gives us a great opportunity to do to accomplish what
our goal needs to be. Our goal needs to be to end all abortions in
Mississippi. I believe the admitting privileges bill gives us the best
chance to do that.

(END AUDIO CLIP)

MADDOW: The admitting privileges bill. That`s the new TRAP law.

Republicans admit they think it`s their best chance at banning
abortion in an American state.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We have literally stopped abortion in the state of
Mississippi. The only clinic --

(APPLAUSE)

UNIDENTIFIED MALE: Three blocks from the capitol sits the only
abortion clinic in the state of Mississippi. A bill was drafted. It said,
if you were to perform an abortion in the state of Mississippi, you must be
a certified OB/GYN and you must have admitting privileges to a hospital.

Anybody here in the medical field knows how hard it is to get
admitting privileges to a hospital. It`s going to be challenged, of
course, in the Supreme Court and all -- but literally, we stopped abortion
in the state of Mississippi legally without having to do Roe versus Wade.

So, we`ve done that. I was proud of it. The governor signed it in
the law.

Ands, of course, there you have the other side, well, the poor pitiful
women that can`t afford to go out of state are just going to start doing
them at home with a coat hanger. That`s what we heard over and over and
over. But hey, you have to have more values. You have to start somewhere
and that`s what`s we`ve decided to do.

(END VIDEO CLIP)

MADDOW: Got to start somewhere.

By this time tomorrow, in the next 24 hours, the anti-abortion
movement and Republicans may for the first time ever have succeeded in
banning abortion in an American state. Last week on the day this new
Mississippi law was set to go into effect, a federal judge in Jackson,
Mississippi, blocked the law with a temporary restraining order.
Temporary.

That temporary order expires after a hearing scheduled for 1:00 p.m.
Central Time in Mississippi tomorrow. If the judge does not rule tomorrow
to keep blocking the implementation of that Mississippi law, it`s going to
go into effect immediately, and the doctors at the state`s only abortion
clinic will be required to have admitting privileges at a local hospital.

The doctors at that clinic do not have the admitting privileges at a
local hospital. That`s why the law was designed that way.

The clinic owner tells us tonight that the doctors have applied for
those privileges, but no surprise, they have not gotten any word back from
the hospitals. It`s not surprising. That`s how it`s designed to work.
Getting admitting privileges is not an easy thing.

Medical researcher recently pointed out to the folks at "Bloomberg
News", to grant privileges, many hospitals require physicians to live
within a short distance of the hospital and -- this is crucial -- to admit
a minimum number of patients a year, often 10 or more.

A typical abortion provider would rarely admit more than one patient a
year for abortion complications, and in many years would have no
complications requiring hospitalization at all.

So the thing you need to get admitting privileges, you can`t get if
you`re an abortion doctor. So we`ll require you to have admitting
privileges. That will be the excuse we use to shut down the last clinic in
the state, and thereby ban abortion.

Now that a federal judge is deciding on whether or not this is an
illegal effort by the state to ban abortion, the governor and the state
Republicans who we played tape of earlier, they`re trying to back track on
some of the earlier language about wanting to and intending to ban abortion
in the state, but they`re on record. It`s exactly what they`re trying to
do. It`s exactly what they might be just about to do depending on what
this judge does in Mississippi tomorrow.

With only one clinic left in the state, Republicans shutting down that
one clinic by hook or by crook, that`s all it takes. And if Mississippi
Republicans succeed in what they`re trying to do here, it is suddenly
becoming very important to know in America that beyond Mississippi, there
are four other states in our country that are in the same boat. Four other
states with there`s only one abortion clinic left.

So, if the state legislature and governor just come up with one way to
shut that clinic, they will have banned abortion in that state without
overturning Roe versus Wade. If Mississippi gets away with it tomorrow,
then there are four other states just like it who only have one clinic who
could try to ban abortion in the exact same way. And three of those four
are under unilateral control of the Republican Party.

Joining us now is Nancy Northup, she`s president and CEO of the Center
for Reproductive Rights, the organization representing the Jackson Women`s
Health Organization in its lawsuit against the state of Mississippi

Nancy, thank you for being here. I appreciate it.

NANCY NORTHUP, CEO, CENTER FOR REPRODUCTIVE RIGHTS: Thank you for
following the story.

MADDOW: I`m following it intensely as you may be able to tell from my
wordy introduction. In terms of the way that I explain it, you`re very
involved in the case, did I get anything wrong?

NORTHUP: No, you`re right. What exactly is going on in Mississippi
is this law is designed to shut down the one clinic in the state. They
know that the doctors are from out of state, that it`s going to be very
hard for them to get admitting privileges in the state because they set it
up not to be fair.

You know, if it were a case that they were going to measure the
admitting privileges based on experience, based on quality of care, Dr.
Parker has admitting privileges where he practices outside the state of
Mississippi, but they know he`s not going to get it in Mississippi. That
was the whole point of the law.

MADDOW: Are techniques like these, and a number of states have tried
these with a number of different angles and they have been more or less
successful in shutting down clinics in their state by using these
techniques -- broadly speaking, is this a legal way to effectively ban a
procedure that is otherwise technically legal?

NORTHUP: It`s not a legal way. It`s unconstitutional. We`ll be in
court tomorrow arguing that, because the purpose of this law, and you went
through what the governor said, the lieutenant governor said, the bill
sponsor said, is that their intent is to stop the abortion privileges in
the state of Mississippi, and the Supreme Court has made clear that laws
that have the purpose or effect of blocking women`s access to abortion
services are unconstitutional.

And that`s what we`re going to be arguing tomorrow. They can`t do
through the back door what they can`t do directly.

MADDOW: If the judge tomorrow in Mississippi does not extend the
temporary restraining order or take some other action that has that effect,
what`s the practical effect, presumably Mississippi`s clinic closes in
short order?

NORTHUP: It closes its doors. It can`t continue to provide services
on a day after they don`t get the injunction in place. I mean, the law`s
in effect, it has criminal penalties and the doctors could not go forward
with providing the services until and unless the judge blocks the law.

MADDOW: How did Mississippi get to be a state with only one abortion
cling in it?

NORTHUP: It`s a state with a long history of hostility. I mean, one
of the provisions of the law, the OB/GYN requirement was by a court in the
`90s.

And so, you know, it has tried again and again and again in every way
it can. It tried to put a personhood on the ballot last year, and that was
too extreme. And the voters said no.

MADDOW: By a large margin.

NORTHUP: But nevertheless, they`re back this year trying to block the
constitutional right of the women of Mississippi, to make them in effect
second-class citizens.

MADDOW: In terms of the overall fight her here -- we have seen since
the landslide election in 2010, I mean, it`s not only the reason, but it`s
really been an avalanche since then of anti-abortion legislature in the
states.

Republicans have prioritized it in the House, too, HR-3 in the House
was an anti-abortion bill and they`re still working on them today. But in
the states, it really has been a phenomenal tide of anti-abortion
legislation

As a person who is an advocate for reproductive rights, who`s fighting
on this Mississippi case directly, is there a way for your side to play
offense or at this point, is it -- is defense all you can do to try to stop
the anti-abortion regulations that are being pushed in the Republican
controlled legislatures?

NORTHUP: Oh, I would say by going to court, we`re actually going on
the offense. I mean, we had victory after victory after victory in states
this year, including three in Oklahoma alone. And in those decisions, the
courts are reaffirming that women have a constitutional right to access
abortion services.

In North Dakota, we got a state court to rule it`s a fundamental right
in North Dakota and it was violated in that case. So what we`re seeing is
the courts are standing up and in this way, it`s also getting the
attention.

I mean, we`re drawing the line. It`s waking up the pro choice public,
and we need to have stronger rights protection. We need the same
protection for women in Mississippi as they have in New York.

And we`re going to keep on fighting this fight until we insure every
woman in the United States has the same right to access abortion services
that the Supreme Court has guaranteed.

MADDOW: Is it important to you to see the White House, the
president`s re-election campaign running ads on the issue of protecting
reproductive rights, to see the president saying I will protect
reproductive rights and Mitt Romney will not? Does that matter to your
overall project?

NORTHUP: What matters to us, and again, we focus on the courts, we`re
not the Center for Reproductive Rights, the group that works in electoral
politics.

MADDOW: Right.

NORTHUP: It matters that people understand that whoever gets elected,
we need to protect our rights, that it`s fundamental, that politicians can
come and go, but access to abortion services cannot come and go. It has to
be fundamental. That`s what it means to be a fundamental right, and we`re
going to be working in the courts, and we need to make sure we get
protection, and you know what? The public is stand up for that, too.

MADDOW: Nancy Northup, president and CEO for the Center for
Reproductive Rights, representing the Jackson Women`s Health Organization,
the last clinic in Mississippi in its lawsuit. We`re awaiting that ruling
tomorrow eagerly. It`s a really, really, really important case. Thanks
for being here.

NORTHUP: Thank you for following the story and for doing so.

MADDOW: All right. Tonight, here for the interview is James
Carville. We`re very excited about that.

And a really big political story that nobody in the media will talk
about except for me. That`s all ahead. Stay with us.

(COMMERCIAL BREAK)

MADDOW: On the night of July 15th, 2010, this is how we opened the
show. It was a big night.

(BEGIN VIDEO CLIP)

MADDOW: What you`re looking at right here is something we have never
seen before. This is the camera on the sea floor at the site of the
Deepwater Horizon oil disaster showing that blown out well not spewing oil
into the Gulf of Mexico, for the first time in 87 days. The first time.

(END VIDEO CLIP)

MADDOW: For more than three months, residents of the Gulf Coast and
all over the country watched in a state of prolonged horror as hundreds of
thousands of gallons of black, sticky, toxic crude oil flowed into one of
this country`s most treasured bodies of water, the BP oil spill.

As days turned into weeks, and then weeks turned into months, we all
sat essentially helpless as one of the richest corporations the planet has
ever known tried and failed and tried and failed and then tried and failed
again to contain, let alone stop that leak in the Gulf of Mexico.

But finally, after 87 long days, the country could at least start to
breathe again. The flow of oil had been stopped. That was July 15th.

That feeling of momentary relief, that feeling that we could finally
exhale, that lasted all of 12 days. Before here we go again.

(BEGIN VIDEO CLIP)

BRIAN WILLIAMS, NBC NEWS: With the current sensitivity about oil, a
spill in Michigan is getting a lot of attention. A leaking pipeline that
sent oil into a creek that feeds the Kalamazoo River and while booms have
been deployed, an estimated 848,000 gallons of oil is already escaped.
Trails of oil sheen can be seen all the way down the river, far from the
bulk of the spill

(END VIDEO CLIP)

MADDOW: Less than two weeks after BP finally managed to plug their
leaking well in the Gulf of Mexico, it happened again. Instead of BP this
time, it was a Canadian oil company Enbridge.

And instead of watching the people of Louisiana and Mississippi and
Florida begin to fear for their own livelihood, now it was the people of
Michigan, the Kalamazoo River was in an instant transformed into a sea of
oil. A 30-inch pipeline, a big two and a half-foot wide pipeline that ran
beneath the surrounding wetlands ruptured out of nowhere and sent oil
rushing into the Kalamazoo River, and sent entire Michigan communities into
a state of emergency.

(BEGIN VIDEO CLIP)

TOM WAIT: About 877,000 gallons of oil have spilled out into the
creek here near the Kalamazoo River. I spoke with an official with the
state, and they say this may be the worst oil spill ever in the Midwest.

(END VIDEO CLIP)

MADDOW: What happens along the Kalamazoo River in Michigan two years
ago would soon become the single most expensive onshore oil spill in U.S.
history. That`s because there`s one key difference between what happened
off the coast of Louisiana, what happened in over oil spills and what
happened in Michigan two weeks later. What happened off the Gulf Coast is
what we have sadly become accustomed do dealing with as a country. It`s a
crude oil spill.

We`re not very good at cleaning up crude oil, but we have a lot of
experience trying to do that. What happened in Michigan however was not
crude oil. It was something called tar sands oil. Tar sands oil that was
being transported from Canada, and as it turns out, we have no freaking
clue how to clean up tar sands oil when that spills.

Crude oil generally floats to the top of it water where some of it can
be skinned off. But tar sands oil doesn`t do that. Tar sands oil sinks to
the bottom of whatever it`s in. How do you get it off the bottom of a
riverbed? Good question.

Michigan residents saw their pristine river turned into a test bed for
how to clean up the oil spills. The best they could come up with was to
literally shake the river bed, to agitate the river bed with big machines
in order to try to make the oil temporarily rise to the top where they
could get at it. Sorry, Michigan, that`s all we`ve got.

Ultimately, the people who lived along the Kalamazoo River didn`t have
to wait one month, two months, four months, five months, six months. It
took the oil company two years to clean up the mess they made in Michigan.
That oil spill happened in July 2010. It was not until three weeks ago
this year that the Kalamazoo River finally reopened to the public and it
reopened to the public despite that there still oil submerged beneath the
oil bed.

So, three weeks ago, the good people of Michigan got their river back,
significantly worse for wear. And today, today, they got to learn what
happened in the first place, way back in 2010 on the day that giant spill
turned their lives upside down.

Today, the NTSB, the National Transportation Safety Board released
findings of their investigation into what happened in that spill. They
found that the oil company responsible for that pipeline knew about cracks
in that particular stretch of pipeline a full five years before the pipe
ruptured. Quoting the NTSB, "For five years, they did nothing to address
the corrosion or cracking at the rupture site."

But wait, it gets worse. The investigation also revealed that it took
the oil company, this company Enbridge, it took them a good 17 hours before
they even realized that one of their own pipes had burst. And in that
time, they pumped more than 600,000 gallons of oil through the ruptured
pipeline and right into the river.

The NTSB also found that Enbridge employees did not have adequate
skills to deal with the leaks, the company didn`t bother making sure enough
resources were in place to respond to a spill like this, and thanks to lax
regulations, Enbridge never had to lay out how they would deal with a worst
case scenario.

(BEGIN VIDEO CLIP)

DEBORAH HERSMAN, NTSB CHAIRMAN: This accident was a result of
multiple mistakes and missteps by Enbridge. Safety is a commitment. It is
a requirement. It must be a way of doing business and not just a slogan.
If companies can commit to safety with the same vigor that they pursue
profits, then we will see integrity management programs with real
integrity.

(END VIDEO CLIP)

MADDOW: If companies commit to safety with the same vigor they pursue
profits. Is that tautologically possible?

Enbridge for their part responded today saying they met all regulatory
standards at the time of the Kalamazoo River oil spill.

Think about that for a second. If that`s true, if that`s not an
endorsement for more and better regulation of this particular industry,
it`s hard to imagine what would be.

Look, as used as directed, we can make a spill like this and it takes
two years to clean it up and we`ll have no idea how to do it.

This week, the week we were reminding how incapable we are of cleaning
up oil when it spills, particularly tar sands oil, this week is also the
week when we learn that the oil sands industry is launching a big,
expensive, new PR campaign aimed at convincing you how great tar sands are.
Not only how great they are, but how when there`s a spill involving oil
sands, involving tar sands oil, it`s really no big deal.

If you care to join us for a glass full of the July 2010 Kalamazoo
River while we talk that over, maybe you can convince the country of that.

(COMMERCIAL BREAK)

MADDOW: Wisconsin, we finally have a winner.

A month ago, the state of Wisconsin`s backlash against Republicans
stripping union rights resulted in a recall election in which the Democrats
took control of the state Senate. Now, they had tried to recall Republican
Governor Scott Walker as well. But while that effort did not work, the
Democrats` effort to take back the Senate did -- except for one
complication.

Even though the election was more than a month ago, Republicans have
not been willing to give it up. They wouldn`t let the Democrats take over,
until today. The Republican who lost his seat and thereby lost the
Republican Party`s control of the Senate in Wisconsin had been threatening
to file a lawsuit over his race, thus keeping the legislature in limbo
indefinitely. But today, he decided he could get out of the way.

So, when that one senator`s election is finally certified tomorrow,
the Democratic takeover of the Senate in Wisconsin will be certified.
Everybody thought the era of one-party Republican rule in Wisconsin was
over a month ago, but in actuality, it`s over tomorrow and then the real
fight starts to see if the Democrats are going to be able to do anything
with the Senate that the voters have just giving back to them.

(COMMERCIAL BREAK)

MADDOW: Here is a really, really, really stupid policy that we had
for decades in this country about a really important subject. Whether or
not -- whether you like the goal of this policy or you hate the goal of
this policy, the issue here is that this was just a really, really stupid
way to try to do it.

Here`s what it looked like. See if you can identify the stupidity
here. The federal government wanted to give loans to students to help them
pay to go to college. That`s the big bag of money here. And we gave out
that money for the students by giving the money to the banks.

The government said to the banks, you loan money to students and we
promise that you will get the money back. Even if the students don`t pay
you back, we will cover it. That is guaranteed. So the banks, not the
government, loaned out the money to the students.

But there was no risk to the banks at all. The government guaranteed
that they would get paid back.

So, the government put up the money for your loan, and when you as a
student paid it back, the bank got to keep the interest that you paid them
unless you defaulted and you didn`t pay, in which case the bank got paid
anyway, government paid them for that, too.

It was the best scam ever. Seriously, that makes me want to be a
bank. If corporations are people, right? Like that`s the corporation I
want to be. The bank gets paid no matter what for providing nothing.

The government is providing a loan. The bank is just being given a
guaranteed profit at no risk to pretend like it`s their loan when it`s not.
It`s not their money, it`s not their risk, they just get paid to be there
for no reason.

What a freaking scam. We wasted tens of billions of dollars every
decade doing it this way for a long time. Just shoveling taxpayer money to
the banks for nothing, for doing nothing. That`s how we did it for
decades, until we stopped doing that.

We stopped doing that in 2010. President Obama changed the law in
2010. He got rid of this inane system where the banks were a pointless
middle man, saving the taxpayers $60 billion over a decade.

The majority of the money saved, they put into direct aid to students
for pay for college, just Pell Grants, no middleman. It`s better for
everybody -- better for taxpayers, better for students, better for
everybody but the banks.

You want to know what the Mitt Romney proposal is on college cost?
You want to say it with me?

They would like to please bring back the old system. "The Boston
Globe" did a long piece on the Mr. Romney`s proposal this week, talking to
education experts about it. Even the right wing education experts they
could find to talk to about it said it was ridiculous. Literally, that is
a quote from one education expert who said he`s a Republican voter who is
likely to vote for Mr. Romney for other reasons.

But quote, "On this issue, Romney is just ridiculous. His campaign
staff doesn`t have any new ideas so they said let`s just go back to what we
were doing before the Obama administration came into place.

Quoting the same expert, "What`s in it for students or taxpayers?
Nothing."

Another conservative education expert at the Cato Institute said the
plan would offer no help to students, but, quote, "Obviously, it would have
an effect for banks and lenders who would be happy to go back to that. It
was a great gig for them."

If big national elections in America were fought on the basis of who
was looking out for the middle class, who was looking out for the American
dream of getting ahead by working hard, the American dream that you can get
a college education if you are smart enough and you work hard enough. If
big national elections in America turned on issues like that, this dumb
student loan issue would be Exhibit A in every contrast story about what
the two candidates are offering.

It`s not. At least it`s not yet, but James Carville, the political
strategist who got Bill Clinton elected president, has a plan, and things
like the stupidity of the old student loan system figure prominently in the
plan.

James Carville joins us for the interview right here, next.

(COMMERCIAL BREAK)

MADDOW: The interview tonight is James Carville. That`s next. Stay
with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: My best advice is find a
great institution of higher learning. Find one that has the right price,
shop around.

We`ve always encouraged young people, take a shot, go for it. Take a
risk. Get the education. Borrow money if you have to from your parents.
Start a business.

(END VIDEO CLIP)

MADDOW: Borrow money, if you have to, from your parents. Perhaps one
of them runs an automobile company.

Mitt Romney`s advice on paying for a college education in this
country: shop around. Mom and dad will set you up. Why haven`t you just
asked them already? What`s your problem?

James Carville and Stan Greenberg has a new book out conveniently
timed to try to make this next election about pocketbook issues like
affording college, pocketbook issues like all of the stuff that is central
to the existence and disappearance of the middle class in this country,
with trademark subtlety. The new book is called "It`s the Middle Class
Stupid!"

And Mr. James Carville joins here now for the interview.

James Carville, thank you for being here.

JAMES CARVILLE, DEMOCRATIC STRATEGIST: I`m delighted to be here,
Rachel.

MADDOW: You were saying when we were playing the clip, that issues
like the student loan thing resonate with people more than people think
they do. You think the Beltway doesn`t think issues like that resonate?

CARVILLE: I don`t think they do. They think it`s a big mistake.

First of all, they understand that Romney would be for letting the
banks make more money. Secondly, when you about what the middle class and
how do you regrow the middle class, how do you bring it back, education is
at the forefront. They understand that.

I grew up, you know, that was the ticket to prosperity. If you got an
education, you knew it was going to pay for itself. That was the best
investment you could make.

Now, not so sure. Sometimes, you know, we find out the kids have more
debt than the education is worth and we`ve got to change that.

And this kind of thing, I think this is a good issue. I think it`s a
good political issue. I think it will resonate with people and I think
they`ll understand it. I really do.

MADDOW: How do we end up -- one of the things you write about in the
new book is this idea that Democrats have to take themselves very -- take
the issue of programs like Social Security and Medicare very, very
seriously. They need to be seen as uncompromising defenders of the
programs that the middle class defend depends on.

How did we end up in a -- with a sort of political center of gravity
in Washington being or, Democrats are being willing to question those
programs? Some Democrats are willing to trade away security on those
programs?

CARVILLE: Because we make -- because we make -- I think we make a
fundamental error. The biggest problem we have in the country is the
deficit. So, if you look at that, you say, well, let`s cut entitlements
because the deficit is the biggest problem.

If you say the biggest problem we have in this country is that the
middle class is shrinking, it would clearly shrink if the deficit got too
high, and the country was burden with debt, but that would lead you to a
conclusion, let`s cut health care costs.

If you cut health care cost, that`s the easiest way to cut the
deficit, but no one -- the Washington consensus is we have to cut
entitlements. Let`s -- the real truth of the matter is, is that if you cut
health care costs, the cost of the entitlements will go down with that.

You have people that are -- when people do focus groups and political
people all come back and say the same thing, people are breaking down
crying. They`re breaking down crying, people say the same thing, I`m one
disease away from the end. They`re taking children back in their house,
they`re changing jobs. People are starting lawn mower services when
they`re 55 years old.

And the Washington consensus is, aha, this person can`t have Medicare.
Or the Washington consensus is, cut their Social Security.

Look, if you`re a cable TV contributor, I don`t care, I`m 67 1/2, I`m
happy to work another year pontificating. If I`m a shrimper or a hotel
maid, I might have another idea about going deeper into it.

MADDOW: On that issue, health care costs coming down would have this
huge impact on the deficit. In the Beltway right now, all they ever talk
about is the deficit. That`s true for a long time.

CARVILLE: Right.

MADDOW: So is -- part of the reason Democrats don`t get credit for
having passed health care reform, they haven`t sold it to the Beltway
chattering class as anti-deficit policy making?

CARVILLE: The deficit is an important issue. By the way, why would
anybody care about the deficit vote for a Republican? Go look for the
deficit as (ph) Democrats and Republicans. There`s no reason we need to
concede that as I recall the last time the budge was in surplus was under a
Democratic president.

But if you start from the vantage point up, how do we rebuild the
middle class and you went to Social Security and said we`re going to do
something with Social Security, might cut a benefit here or there, might do
other things, but this is to save Social Security. The middle class would
say, OK, I understand that.

But if you go to them as the elites in Washington want to do and says,
look, we started some wars, we shouldn`t have started, we got out of hand
with some tax cuts, we had to bail out some banks, we have to do something
like that, so you be a good Americans and we`re going to cut the Social
Security that you paid into so we can pay for our garbage we did. And
people say, no, I don`t want to do that.

And then the conclusion is they`re selfish, no, they`re just not
stupid.

They`ll pay for Social Security if it`s to strengthen Social Security
for their retirement. They won`t pay for mistakes Washington made in the
past.

MADDOW: I would tell you, though, I would feel like, as a person who
has a romantic feeling about Social Security as anybody else, I would feel
a lot more willing to talk about tinkering with Social Security in anyway
if I didn`t feel like there was a guy with a hockey mask and a chainsaw out
in the other side who was looking for any opening to kill it.

I feel like if a Democrat saying yes, we`ll tinker with it around the
edges right now, Republicans will figure out a way to get rid it. I mean,
they`re trying to privatize it. They`re trying to privatize Medicare.
They`re trying to get rid of everything.

Why would Democrats concede any ground on it?

CARVILLE: The elderly poverty rate in the United States in 1965 was
30 percent. We did -- improved Social Security, today it`s about 9.5, even
in the middle of a recession. That is the act of a just and moral nation.
That is a moral act.

That is -- God in heaven, the god of the Catholic Church that I`m in,
would be very proud and very happy about that. Very, very -- that -- about
two-thirds the number of old people in this country go to bed cold or
hungry has been reduced, is really a staggering accomplishment in the
United States. We should be very proud of that.

MADDOW: And I think Democrats` political response to that now should
be, like Nancy Pelosi said about Medicare, we do have a plan on Social
Security. It`s called Social Security.

CARVILLE: Yes!

MADDOW: We stand for it and we`ll defend it and we`re not going to
let anybody --

CARVILLE: But what I`m saying is, if you said you were going to do
something to strengthen Social Security, people would say, well, OK, that
makes sense. What they`re not willing to do is cut Social Security to
reduce the other part of the deficit.

MADDOW: Yes, yes. In terms of this -- in terms of the overall
strategy for the election in November, if the election is about the
disappearance of the middle class and the challenges of the middle class,
what does that mean the specific issues are that these candidates will be
running ads on and competing on right down to the wire in November?

CARVILLE: Well, two things that come to mind are rising health care
costs and education, or what the middle class says are the two things that
matter most to them, that they see. Then, how do we become more
competitive? They`re completely into that.

They`re not -- it`s not like that -- but what they want is, they want
somebody to come up with a plan to say, this is going to help rebuild the
middle class. They were kind of against the stimulus, because they thought
it was just throwing money at the problem.

If you would have done many of the same things and said, this is a
program to help rebuild the middle class. We need to build infrastructure
in this country, to make us more competitive - we could make get more
people to work, they would support that instantly. What they`re looking
for is something --

MADDOW: But don`t talk about it in terms of its macro goals for the
economy. Just talk about the direct --

CARVILLE: Talk about the long-term benefit to the middle class. And
then they will go along with that. But it`s just the way they think. But
they know how much trouble they`re in. They know what they`re having to
do, and they want somebody to show them that there`s a way out. And the
person that does that is going to be rewarded.

MADDOW: Yes. Democratic strategist, James Carville, the leading
strategist in Bill Clinton`s presidential campaign, co-author of the new
book, "It`s the Middle Class Stupid!" -- I`m not taking it personally.
Thank you, sir. I really appreciate you being here.

CARVILLE: I love it. Thank you so much.

MADDOW: Thanks so much.

All right. An organized campaign is underway to take over the
Republican Party right now and nobody wants to talk about it except me.
That`s next.

(COMMERCIAL BREAK)

MADDOW: A story we`ve been following here on this show that frankly
does not get much attention anywhere else is the extent to which the
supporters of one of the Republican presidential candidates this year are
not giving up on him, even though Mitt Romney seemingly has the nomination
in the bag. Supporters of Ron Paul are taking over the Republican Party at
the state and local level. Ron Paul folks are now becoming Republican
Party state chairman in places like Iowa and Alaska. They`ve taken over in
places like Clark County, Nevada, where Las Vegas is, which is awkward if
you`re Mitt Romney and you`re counting on any help from the Republican
Party to win in a place like Nevada.

In addition to taking over the party whatever they can, Ron Paul folks
are still fighting to win the majority of delegates in as many states as
they can. If they do that again in Nebraska this Saturday, then according
to the Republican Party`s own rules, Dr. Paul will be eligible to be
nominated for president at the party`s official convention in Tampa this
fall, which means that at that convention, Mitt Romney`s nomination will be
contested. And there will have to be dueling speeches by him and Ron Paul,
and there will be a contested floor vote. And it will not go at all the
way these coronations are supposed to go.

I realize that this is not happening in Washington, D.C. and it is
something the Republican Party big wigs would like to keep as quiet as
possible. But the question of whether or not the Ron Paul folks are going
to take over the Nebraska Republican delegation this weekend turns out to
be quite a few a big deal. And the Ron Paul folks know that. And Nebraska
Republicans know that.

Very quietly last week, the Nebraska Republican Party confirmed plans
that they plan to increase security for their convention this weekend.
They said it was in the interest of holding an orderly convention, a
private security firm being brought in by the state Republican Party to
police their convention when it is facing the threat that supporters of
someone other than Mitt Romney will try to win election there.

The increased security plan was announced last week. We confirmed it
with the party last week, and then today they changed their minds. The
state Republican chairman now says the party has reconsidered and withdrawn
its plan to hire additional security officers. They say they`re hoping for
a convention that will be conducted the Nebraska way. By which they mean,
with civility.

Republicans have had a really hard time adjusting this year to the
idea that there`s ongoing, committed dissent within their ranks. And,
frankly, the media have helped by ignoring that dissent, by pretending it`s
not happening. It`s happening. The fact that these don`t look like
stereotypical Republicans does not mean that they are not Republicans.
They are. And they are taking over at the state and local level, while
everybody else studiously looks the other way.

Seriously. What exactly is the Republican plan to try to win Nevada,
which they`ve been trying to convince us is a swing state, when this is the
Republican Party in the part of Nevada that has three quarters of the
state`s population?

Republicans have a real problem here. It is a big deal, and that
there is no parallel for on the Democratic side. Trying to ignore that
fact will not make it go away. Private security guards or not, these
dissenting Republicans that everybody is trying to do may do something this
Saturday that turns the National Republican Convention this summer on its
ear.

I realize it is not happening in Washington and therefore the beltway
will not pay attention. I realize that the Republicans who are in charge
of the Republican Party don`t want to talk about this, so the FOX Newses of
the world will never cover it. But it is happening. And if we believe
that party politics mean anything in this country, the fact that one of
these parties is being taken over from within and it`s going to screw up
their big pageant/prom in the fall, kind of seems like a big story. All
eyes on Nebraska.

Now, it`s time for "THE LAST WORD" with Lawrence O`Donnell. 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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