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'The Last Word with Lawrence O'Donnell' forTuesday, August 7, 2012

Read the transcript to the Tuesday show

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Guests: John Podesta, Callum Borchers, Michelle Goldberg, Karen Finney,
Jonathan Capehart, Nate Silver

ALEX WAGNER, GUEST HOST: Mitt Romney`s newest attack on President
Obama is over a Republican idea that was supported by -- wait for it --
Governor Mitt Romney.


UNIDENTIFIED FEMALE: President Obama launched a new line of attack on
Romney`s tax plans.

us this trickle-down tax cut fairy dust before.

AL SHARPTON, MSNBC HOST: Don`t be fooled by the fairy dust. Mr.
Romney launched an offensive against President Obama on the issue of

UNIDENTIFIED FEMALE: Attacking President Obama over welfare reform.


AD NARRATOR: Under Obama`s plan, he wouldn`t have to work and
wouldn`t have to train for a job.

CARNEY: This advertisement is categorically false and it is blatantly

OBAMA: There are all kinds of different gymnastics being performed by
the Romney campaign.

CARNEY: Governor Romney himself --

SHARPTON: Signed a letter asking for the same waiver program.

BILL CLINTON, FORMER U.S. PRESIDENT: To give states powerful
performance incentives to place people in jobs.

AD NARRATOR: In 1996, President Clinton and a bipartisan Congress
helped end welfare as we know it.

CLINTON: The opportunity it gives us to end welfare as we know it.

AD NARRATOR: End welfare as we know it.

JOAN WALSH, SALON.COM: Newt Gingrich calling President Obama the food
stamp president.

DANA MILBANK, THE WASHINGTON POST: I don`t think you have to be the
sheriff of Nottingham to figure out exactly what`s going on here.

OBAMA: It`s like Robin Hood in reverse. It`s Romney Hood.

SHARPTON: Damned right.

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Robin Hood was stealing from the

SHARPTON: Romney Hood.

LIMBAUGH: Robin Hood was a Tea Party activist.

OBAMA: And guess what? It the does not work.

SHARPTON: Romney Hood!

OBAMA: It`s Romney hood.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: If I were to coin a term, it
would be Obamaloney.

SHARPTON: Romney Hood.

ROMNEY: Obamaloney.

JOE SCARBOROUGH, MSNBC ANCHOR: Stiff, awkward, fill in the blank,
Mitt Romney.


WAGNER: Good evening. I`m Alex Wagner, in for Lawrence O`Donnell.

There are 91 days to go until the presidential election, and there is
a telltale sign when a Republican knows he`s running a losing campaign.

Ronald Reagan`s losing campaign for the GOP nomination in 1976,
"There`s a woman in Chicago. She has 80 names, 30 addresses, 12 Social
Security cards. She`s got Medicaid, getting food stamps, and she`s
collecting welfare under each of her names."

Bob Dole`s losing presidential campaign in 1996.


welfare as we know it. I will insist on a swift passage and I will sign


WAGNER: Newt Gingrich`s losing presidential primary campaign this


food stamp president in American history. More people are on food stamps
today because of Obama`s policies than ever in history. If the NAACP
invites me, I`ll go to their convention and talk about why the African-
American community should demand paychecks and not be satisfied with food


WAGNER: And now, Mitt Romney.


AD NARRATOR: In 1996, President Clinton and a bipartisan Congress
helped end welfare as we know it, my requiring work for welfare. But on
July 12th, President Obama quietly announced a plan to gut welfare reform
by dropping work requirements. Under Obama`s plan, you wouldn`t have to
work and wouldn`t have to train for a job. They just send you your welfare
check, and welfare to work goes back to being plain old welfare.

Mitt Romney will restore the work requirement, because it works.

ROMNEY: I`m Mitt Romney and I approve this message.


WAGNER: That`s the new ad released by the Romney campaign today.
Romney repeated that message at a campaign stop in Elk Grove Village,


ROMNEY: If I`m president, I`ll put work back in welfare. We will end
a culture dependency and restore a culture of good, hard work.


WAGNER: This is yet another example of the cognizant dissonance of
Mitt Romney. He claims that the problem is that President Obama hasn`t
created jobs, then claims that people just don`t want to work.

But maybe this isn`t surprising from a millionaire who has referred to
himself as unemployed.


ROMNEY: I should also tell my story. I`m also unemployed.



WAGNER: But back to Romney`s welfare boondoggle. By now, you know
two things are a good bet when Mitt Romney launches a new line of attack
against President Obama. One, it`s probably not true. As "Reuters"
clarified today, the purpose of the federal waiver is to empower states to
improve the system.

"The directive from the Health and Human Services Department allows
states to pursue a waiver from the work requirement of the welfare law in
order to test alternative strategies that would help needy families find
jobs. The aim is to give states some flexibility in how they carry out the
welfare law, as some state governors have advocated, rather than sticking
to a rigid formula."

And number two: if Mitt Romney is now against something, he probably
once supported it.

Here is Governor Romney`s signature on a 2005 letter from the
Republican governor`s association, which says, "Increased waiver authority
is an important aspect of moving recipients from welfare to work."

Joining me now are: John Heilemann, national affairs editor for "New
York" magazine and an MSNBC political analyst; John Podesta, chair of the
Center for American Progress and a former White House chief of staff to
President Clinton; and Callum Borchers, political correspondent for the
"Boston Globe."

Thank you all for joining me.

John, I want to go to you first. "The Hill" reports this is the
fourth time the Romney campaign or its allies have name checked Bill
Clinton and/or, trying to show some daylight between Presidents Clinton and

You, of course, spoke to Bill Clinton. What does Bill Clinton think
of this latest line of Romney attack?

unplugged from reality. We`re in the kind of silly season of negative ads,
but this one has no basis in fact.

One of the things, Alex, you did a pretty good job of stating what
this waiver authority is all about, but one of the requirements in the
waiver possibility that Secretary Sebelius put forward is that you have to
show that you`re going to increase employment by 20 percent, or you don`t
get the waiver. So unless a state comes in and says that we have a
strategy that`s more efficient, that`s more effective, and will actually
put 20 percent more people into work than our current program, then you`ll
get the waiver authority.

So it does what I think President Clinton wanted it to do in 1996,
which is to push the dignity of work and to try to get people into work.

WAGNER: John, I have to ask you, what does former President Clinton
make of the Romney campaign`s attempts to sort of tie Mitt Romney to Bill
Clinton`s legacy? I mean, does he find that as outrageous as a lot of us

PODESTA: Well, you know, look, I think anytime that somebody wants to
try to put on new Democrat clothes, that`s probably OK with him, but as
long as they -- as long as they`re dealing in reality. And I think when
they use the record to factually distort what`s really going on and to try
to create a wedge where there is no wedge, and actually, this is probably a
pretty good example of them missing the wedge of welfare and trying to get
it back, but they`ve tried the wedge between Obama and Clinton, and it just
doesn`t exist.

And I think that the president believes that, again, welfare reform
was built on state experimentation. He granted 44 waivers before the law
was even passed to put people into work. And I think as long as this
waiver authority is being used for the purposes that he wanted, which is to
end welfare, as the way we used to know it, and really support work, I
think that he`ll stick with President Obama.

WAGNER: Cal, I want to go to you. As someone that has sort of
witnessed Mitt Romney`s career thus far and has done a great job reporting
on it, can you expound on Romney`s 2005 position on welfare when he was
governor of Massachusetts, a time Mitt Romney would not like to have a lot
of sunlight shed on?

CALLUM BORCHERS, BOSTON GLOBE: Sure, Alex. It`s interesting to note,
you know, John`s absolutely right. He was advocating a similar type of
waiver at the time in 2005. But it`s important not to overreach on that
argument. I remember Massachusetts at the time was one of those 44 states
that was already operating under a waiver.

It was going to expire that year. And Mitt Romney was actually called
heartless, as far as the work requirements on, you know, welfare recipients
in Massachusetts. He wanted to end exemptions for, you know, mothers who
had children under 2 years of age or women who were in their third
trimester of pregnancy. He was very stringent on work requirement.

So, it`s important not to overreach and try to paint him as somebody
who was soft on welfare reform himself.

I think this is a case where there`s probably not a whole lot of
difference between Mitt Romney and Barack Obama on this particular issue
and perhaps we`re making an argument where maybe there shouldn`t be one.

WAGNER: Or perhaps the Romney campaign is making an argument where
perhaps there shouldn`t be one.

John Heilemann, I want to draw your attention to Romney on FOX News
speculating about the White House`s political motive regarding this whole
welfare situation.


ROMNEY: You see the president taking action, trying to get the base
of his party. He`s going one after the other, saying, we`re not going to
enforce the illegal immigration laws. We`re going to extend, or if you
will, give a grant away from work requirements.


WAGNER: That`s because, of course, according to Mitt Romney,
President Obama`s base is just illegal immigrants and welfare queens, as
you would have it. But really, this is a play by Mitt Romney to appeal to
a certain part of the Republican base, or at least white working class
voters that he needs to win the election. Is it not?

about this, Alex.

John Podesta talked about Republicans trying to get this issue back.
We`ve got to do a little bit of history. When Bill Clinton made the notion
of ending welfare as we know it part of the core of what he used to run in
the 1992, it was a huge political moment. The notion that welfare --
resentment towards welfare recipients had been unsuccessfully used,
Republicans had exploited the resentment of the undeserving poor claiming
money from the government for a long time very successfully.

Clinton was able to make himself a new kind of Democrat by making that
pledge and then delivering on it. Republicans had been frustrated at not
having this issue ever since that law went into effect, and it has been an
extraordinary success. I mean, there is not -- anybody who was involved in
passing that law in 1996, Republican or Democrat alike, looks at what`s
happened to the welfare population, to labor force participation since
then, even in a down economy, there is a lot more work going on, and you
have Republicans now seeing a little bit of an opportunity here.

It`s exactly right. There`s the most -- the two most troubling things
about this are: first, that the ad itself is full of outright lies. The
notion that work requirement has ended is a lie. The notion that a waiver
is, by definition, not the end of something. It is a bypass of something
that continues to exist.

John pointed out the things on policy, on the 20 percent requirement
of adding to labor force participation. That`s one thing. When Romney
says this thing about how this is the political motivation of this is to
somehow appeal to the Democrat base, it is walking right up to the edge of
playing the race card. It`s not quite there yet, but it`s very close.

And I think the combination of the dishonesty of the ad and tinkering
around with this kind of language puts us into a different place in this
campaign and the possibility of going someplace much, much uglier than any
of us want to go, or certainly that we thought we would go this soon.

WAGNER: I mean, let`s talk about the exploiting the race issue,
because, you know, when you talk about the term, welfare queen, you talk
about Newt Gingrich, food stamp president -- I mean, isn`t this a desperate
move by the Romney campaign? We know they`ve had a terrible, terrible
summer. Can this work for them?

HEILEMANN: Well, look, there is (INAUDIBLE) up at Harvard, has done
like this great book about the Tea Party and what the Tea Party`s really
all about. And a lot of this, that part of the Republican base, it`s not
actually white working class voters, although that`s a part of it. It`s a
broader section of the Republican Party that is very much animated by some
of the things I was talking about before, resentment towards what they see
is undeserving Americans, taking away money that they think is theirs. The
Romney campaign needs to have that part of the party enthused about his

And in a lot of swing voting segments of the country, where there are
a lot of working class voters who are undecided about the president,
preying on resentments, making them feel as though President Obama is a
traditional, old-school, liberal kind of Democrat, that is right, that is
something that if there was more to it, it could be a very successful
political maneuver.

Given that there is not that much to it in substance, I think it seems
a little bit more desperate and gasping and not likely to be effective.
But it is something that`s had great historical resonance in presidential
politics. And so, they`ve got a lot of money behind this ad and we`re
going to see if it has more effect than some people expect or hope.

WAGNER: John, what does the Obama administration or the Obama
campaign need to do in response to this?

PODESTA: Well, I think they`ve begun to do what they need to do,
which is to push back extremely aggressively on the lies that are contained
in the advertisement. And I think that you know, in the end of the day,
the media has a responsibility here as well. You know, it`s not enough
just to, once in a while, put up the Pinocchios and the fact check thing.

I think -- this is really, I think, a turn, as John was suggesting,
into some very ugly ground and I think he needs to be, you know, really
questioned about what`s the strategy? What`s the motivation?

You know, we saw a bunch of the people involved in the Romney campaign
looking at trying to do this in 2008. I think Senator McCain, to his
credit, rejected that, but it`s creeping back in. And I think you in the
media have some responsibility to, you know, to really call it out.

WAGNER: That`s why we have you on the program, John.

Cal, I want to go to you. In terms of how Mitt Romney has sort of
pivoted in and around the tax question, he -- let`s listen to what he said
in a FOX interview. Romney`s dissidence was once more on display with
respect to the Tax Policy Center. For context, the Romney campaign last
week derided the Tax Policy Center as partisan and liberal and called its
report a joke.

Let`s listen to -- let`s listen to what Mitt Romney said.


ROMNEY: The Tax Policy Center in looking at my plan, they haven`t
looked at the first two things I said. No tax increases whatsoever. As to
the Tax Center, they also said that President Obama is raising taxes on
middle income people.


WAGNER: This is -- this is on the same day, Cal, that Mitt Romney
called -- coined a phrase, in his words, Obamaloney. This has now become a
sort of back and forth between the two campaigns about who`s lying the
worst. What do you make of it?

BORCHERS: Yes, you know, it`s a tough debate. And, you know, it`s
funny. I`ve been looking quite a bit actually at that Tax Policy Center
study. And it`s a case where they`ve been cited by both sides, Republicans
and Democrats, including Mitt Romney, who as you noted, has cited that
study -- not that study, but that center itself as a credible, independent
third party objective resource.

So, you know, the tax plan is simply a case where they`ve made the
determination that, you know, there`s no possible way to keep all of his
campaign promises at once. And that one thing that he might have to do
would be to eliminate some of the tax benefits that are overwhelmingly
enjoyed by middle and lower class voters. The biggest problem for Mitt
Romney is that he hasn`t outlined his plan in specific enough detail to
fully refute that claim. He has promised not to raise taxes and to
maintain progressivity, but hasn`t given us the entire window into how he
plans to do that.

WAGNER: To say the least, the window, I think we`re just dancing
around with the shades and the sashes at this point. John Podesta, John
Heilemann, and Cal Borchers -- thanks for very much your time all of you.

BORCHERS: Thanks, Alex.

WAGNER: Coming up, no one called Republican Congressman Steve King a
dirty liar on national television last week for his unfounded allegation
that President Obama`s mother telegrammed a birth announcement from Kenya,
so how did Harry Reid become public enemy number one? That`s next.

And who`s still the queen of Tea Party hearts? Here`s a hint. Dick
Cheney called her a mistake.

Ands later, I`ll introduce you to the man who might just keep Mitt
Romney from the Oval Office. And no, it`s not Barack Obama.


WAGNER: Senator Harry Reid says he was told Mitt Romney didn`t pay
taxes, so he should release more tax returns. Republicans are calling Reid
a liar and journalists are comparing him to Joe McCarthy. But where is the
outrage over conservative conspiracy theories and race baiting regarding
President Obama and his family? Ari Melber and Michelle Goldberg join me

And speaking of unfounded allegations, we have another wacky theory
about Mitt Romney`s vice presidential pick. That`s coming up.


WAGNER: In the world of politics, there are now two different sets of
rules when it comes to matters of outrage, one for the right and one for
the left. When Harry Reid accuses Mitt Romney of paying zero dollars in
federal taxes for a decade, the White House is made to give comment.


CARNEY: For the campaign, tit-for-tat at the purely political level,
I refer you to the campaign.


WAGNER: Mitt Romney gets to go on FOX News and for at least the third
time, tell the Senate majority leader to shut up.


ROMNEY: The message I gave Harry Reid was put up or shut up.


WAGNER: He also gets to go on FOX News, and for at least the second
time, bolster his claim that Reid is making a baseless accusation with his
own baseless accusation that the White House could be harry Reid`s puppet


ROMNEY: I don`t know who gave him this line of reasoning, whether it
came from the White House or the DNC or a staffer, but he ought to say
where it came from.


WAGNER: Meanwhile, Mitt Romney faces no questions, no scrutiny
whatsoever, when one of his high-profile supporters goes on CNBC and for at
least the bazillionth time -- by our count -- floats the idea that
President Obama was maybe, probably, totally, likely born outside of the
United States.


DONALD TRUMP, TRUMP ORGANIZATION (via telephone): If I were Romney,
and I`m not, I would say very simply, I will release my returns, which are
100 percent legit, everything`s fine, if you release the information that
we want -- whether it`s his passport records, whether it`s his college
applications and college records. And I would sort of absolutely -- if I
were Romney, I would do this -- I will release my returns if you release
the records that you`ve been trying to shield for the last four years.


WAGNER: Normally, it would be best to ignore where Donald Trump is
getting his information, but the source is an article posted to Glenn
Beck`s Web site, "The Blaze". A man named Wayne Allyn Root claiming to be
a classmate of President Obama`s at Columbia University says, quote, "The
Obama scandal is at Columbia. Root says he believes President Obama,
quote, "attended Columbia as a foreign exchange student."

What`s more -- he backseat up this insidious race baiting claim by
saying, "Call it gut instinct, but my gut is almost always right."

So why is this even worth talking about? Well, as you heard, this bat
crap crazy piece is being cited by Donald Trump on CNBC. It was picked up
by the Drudge Report. It`s even featured on FOX News` "Fox Nation" Web

And it`s being read on the air by the loudest voice of the Republican


RUSH LIMBAUGH, TALK RADIO HOST: He posted yesterday at Beck`s Web
site, "Obama has a big skeleton in his closet, his college
records. Romney should agree to release more of his tax returns, only if
Obama unseals his college records."


WAGNER: Yet there is no outrage aimed at the right, at Rush, Trump,
or Drudge. Team Romney is not forced into any questions about this.

But for questioning Romney`s taxes, Harry Reid is made out to be
Joseph McCarthy.


BOB SCHIEFFER, CBS NEWS: Isn`t this kind of like Joe McCarthy back in
the era when he said, "I have here in my hand the names of 400 people in
the State Department who were communists"?

GEORGE WILL, ABC NEWS: Harry Reid doesn`t have any evidence either.
This is McCarthyism from the desert.

UNIDENTIFIED MALE: He`s now revealed for the small, vicious little
man that he is. He goes to the senate floor to announce an anonymous
accusation, which would have made Joe McCarthy blush.


WAGNER: So why are there two completely different sets of rules?

Joining me now, Ari Melber, an MSNBC contributor and correspondent for
"The Nation," along with Michelle Goldberg, author and senior contributing
writer for "Newsweek" and "The Daily Beast".

I first want to bring your attention to the fact that the guy behind
this new claim about President Obama, Wayne Allyn Root, actually just spoke
to Sean Hannity.

This is what he said.


WAYNE ALLYN ROOT: I was a pretty connected guy, I knew a lot of
people. I knew pretty much everyone, I thought, in the political science
department. I never met him, I never saw him, I never heard of him. No
one that I know at Columbia ever met him, ever heard of him, or ever saw

It`s strange. It`s mysterious. Doesn`t mean he didn`t go there, by
the way. I`m sure he went there, but he`s probably busy smoking pot and
attending socialist meetings. What can I tell you.


WAGNER: Ari, Wayne Allyn Root, who`s gut is never wrong, says he
thinks the president was probably busy smoking pot and attending socialist
meetings. This is something that`s made up the Republican food chain or
down it depending on where you place these folks.

ARI MELBER, THE NATION: Well, it`s a powerful account from someone`s
whose firsthand evidence is, they never met the guy, they weren`t there.
It doesn`t matter where this guy went to college, because he doesn`t even
claim to know anything about Barack Obama.

I think your opening here really showed the problem, which on the one
hand, there`s a desire to deny oxygen to this kind of crap. But on the
other hand, if you don`t deal with it, it bubbles up through the ecosystem,
and it is this bizarre reverse mirror image of what happens to much more
legitimate claims.

I think the bottom line is if you`re talking about the media in terms
of Washington-based media, they are not comfortable with liberals being
aggressive or strong, not in a political context and not in a policy

So what Harry Reid said, and I don`t think he meant -- necessarily
said it the perfect way, but what he said was, we`re not giving up. You
haven`t given up your returns, you owe them, and here are the kind of
questions that come up, and here`s what some sources have said. He was
very clear about what he was questioning there.

And I think George Will and Bob Schieffer and other folks, especially
establishment Washington folks, don`t know what to do with Democrats or
liberal who act like that.

And as a final point, or a larger context, because it`s bigger than
Harry Reid, you know, in 2003, "The Guinness Book of World Records" said we
have the largest protests in world history against the Iraq war. But if
you went out and looked for media coverage in 2003 or if you go on Google
and do a time-sensitive search, you`ll see, they were barely covered by
D.C.-based media, seriously. If you look at Tea Party, which was by all
measurements a much smaller entity, because it was this conservative
protest, it gets a lot more attention. That`s a cycle we`re still dealing

WAGNER: And look, I certainly think the media is implemented in this.
And, Michelle, you have a great piece in "The Daily Beast" today talking
about sort of the media`s role.

But let`s break down exactly what`s happening here. You write,
"Reid`s insinuations are pretty tame by the standards of contemporary
political combat. The idea that Obama has camouflaged his past in order to
illegally usurp the presidency requires wild leaps of logic, and if true,
would mean that he is a criminal. By contrast, every year more than a
thousand millionaires use various legal tricks to avoid paying income tax.
Reid`s claim is not criminal in any case, nor does it imply that Romney has
broken any law."

And yet, the rhetoric surrounding this has engendered a response on
the right that I think is not -- I mean, it`s shocking.

MICHELLE GOLDBERG, NEWSWEEK: I don`t think it`s shocking on the
right, right, because the right loves to play the victim. You know, that`s
it`s whole M.O.

What I do think is shocking when you see someone like Richard Cohen at
"The Washington Post" or some of these other kind of self-satisfied
centrist commentators, who are so kind of obsessed with their own version
of bipartisanism, that they have to pretend that Democratic and Republican
sins are the same thing, and that the harshest Democratic rhetoric is
automatically as outrageous as the harshest Republican rhetoric.

So, we`ve just gotten through a period in which Michele Bachmann and a
bunch of other congressmen have demanded an investigation into Muslim
Brotherhood infiltration into the State Department. And you were talking
about Donald Trump. I think an even more pertinent example is the fact
that one of Romney`s senior foreign policy advisers, John Bolton, has said,
what`s wrong with asking questions? You know, I think this is a question
we should look into.

So this kind of insinuation of, we`re just asking. You know, if
somebody has an answer, I`d like to hear it. This is a pretty standard
political tactic. That`s a much more outrageous charge than the charge
that Romney has used a really standard accounting trick that -- again,
there`s a piece in "U.S. News & World Report" right now about how Romney
could have done this. He probably didn`t do it for 10 years, but it`s not
beyond the realm of possibility at all.

WAGNER: It may not even be illegal to do what he has done.

GOLDBERG: I mean, that`s kind of the point, right? The point is that
we`re in the middle of a big debate about what is the proper tax rate for
millionaires and for the 1 percent in this country? And this is a kind of
demonstration of how the current tax system works.

I mean, the fact is, is that he released tax returns that showed him
paying, I think it was 13.9 percent. He won`t say that he`s paid less that
be that or he won`t say that he`s never paid less than that, so I think he
almost certainly has paid less than that in the past.

WAGNER: Ari, I want to remind everybody, as the worth "McCarthyism"
is trotted out and bandied about, we are also talking about a Republican
Party, elected officials from Steve King to Jean Schmidt, Newt Gingrich,
Mike Huckabee, Mike Coffman, who have challenged President Obama`s birth
certificate or college records. These are elected officials, who should be
held to the same standard that old McCarthyite, Harry Reid, should be. And
yet, it doesn`t seem to be happening.

MELBER: Well, I think that tells you two things. Number one is, in
this modern environment, you don`t even have to be a black president to be
challenged. You could be any kind of president. If Mitt Romney can`t
handle people asking questions about his financial records and his business
records, then he`s not ready to be a presidential candidate, let alone
president. That`s just number one on the fact that we do have an
exhaustive process.

But number two I think is perhaps the most interesting political point
here, which is this clearly scares them. There`s a reason why they are
just hitting the panic button. And that is because the hope was that they
could run this out, rope-a-dope through the summer and move on. Because it
is true, the press will eventually get bored if this story is old.

And what they are finding through Harry Reid and through other attacks
is maybe this isn`t going away. Walter Jones, a Republican congressman who
said if this is still alive in September, it`s a huge problem. And the
problem for Mitt Romney is, what is he hiding, and is it worse than the
political cost of looking like Dick Cheney on finance?

WAGNER: And nobody does a cost/benefit analysis like Mitt Romney.
Unfortunately, we have to leave it there. Ari Melber and Michelle
Goldberg, thank you both for your time.

Coming up, there is a conservative running for president in a swing
state, and a lot are very excited to vote for him. His name is not Mitt
Romney, but he could keep Mitt Romney from winning.

And isn`t the spotlight, Sarah Palin and her pack of Mama Grizzlies
are back. But do they still have bite?



GRETA VAN SUSTEREN, FOX NEWS ANCHOR: Let me ask you about the
conventions coming up. Not on your speaker list so far are Governor Palin.
Is she going to speak?

UNIDENTIFIED MALE: I can`t make that announcement tonight, but
certainly she`s great and we -- I think a lot of her and hope that she does


WAGNER: In the Spotlight tonight, the awkward relationship between
Sarah Palin and the Republican party. When a "Tampa Bay Times" reporter
asked Sarah Palin whether she would appear at the Republican National
Convention later this month, Palin replied, "we`ll have an announcement in
a couple of days." That was 14 days ago. An announcement has yet to be

This election cycle, Sarah Palin has endorsed five Senate candidates
who have faced primary elections. Of those five, four have won. We`re
awaiting the result of Palin endorsee Sarah Steelman`s primary tonight in
Missouri. Steelman faces John Bruner and Todd Aiken, who is backed by Mike
Huckabee. All three candidates sought Palin`s endorsement.

Former Vice President Dick Cheney said recently that John McCain`s
decision to nominate Sarah Palin for vice president was, quote, "a
mistake." Here was Palin`s response.


SARAH PALIN, FORMER GOVERNOR OF ALASKA: Well, seeing`s as how Dick --
excuse me, Vice President Cheney never misfires, then evidently he`s quite
convinced that what he had evidently read about me by the lamestream media,
having been written -- what I believe is a false narrative over the last
four years, evidently Dick Cheney believed that stuff, and that`s a shame.


WAGNER: Vice President Cheney, perhaps chastened, dialed back his
comments last night.


aimed so much at Governor Palin as it was against the basic process that
McCain used. My point basically dealt with the process, in terms of that
basic requirement, is this person prepared to step in and be president of
the United States when they`re picked. And it was my judgment -- I was
asked if I thought the McCain process in `08 had it be well done or was it
a mistake. And I said I thought it was a mistake.


WAGNER: Joining me now, MSNBC`s Karen Finney and Jonathan Capehart of
"the Washington Post." Karen, let me go to you first on this. Is Sarah
Palin still powerful enough that Dick Cheney, who many would call the
Emperor Palpatine of the Republican party, is scared of her?

that to watch Dick Cheney have to walk himself back and untwist out of a
knot that he got himself into over Sarah Palin, of all people. Look, the
reality is not only -- I mean, she has a good record, obviously, this time
around. And she had a pretty good record in 2010 as well with her

But she also -- look, she can galvanize a part of the base of the
party that a lot of these guys cannot get to. And they know that. And
particularly when you look at what it`s going to take to win this election
-- and by that I mean, this is an election that will be won inch by inch,
on the margins, every vote is going to count. You can`t afford to have
Sarah Palin angry. And you can`t afford to have her, you know, sort of
take her marbles, if you will, and go home, and not come out and support
and do everything she can for the nominee.

WAGNER: Jonathan, if Dick Cheney is scared of Sarah Palin, what does
that mean for Mitt Romney? Of course, the big question is whether she`s
going to have a role at the RNC, at the convention this summer. How big of
a role does Mitt Romney want Sarah Palin to have?

mean, I agree with everything that Karen just said. In an election where
every vote, and I mean every vote is going to count, the Republican party
doesn`t need to have Sarah Palin not just take her marbles and go home and
be angry; they don`t want her to take her marbles and sit in her at-home
studio in Alaska and blast the hell out of Republicans and the Republican
candidate from her studio there in Alaska on Fox News.

They don`t need that. They don`t want that to happen. But also, it`s
just sort of bowing to the reality that in 2008, it was Sarah Palin who was
the star of the McCain/Palin ticket. Remember, after the convention, the
word had gone out that John McCain and Sarah Palin would then leave St.
Paul, Minnesota, and campaign separately.

But they saw from the hall that night of her speech that there was no
way that they could campaign without her. So you need to have that person
who galvanized the party, reenergized the party in 2008 -- you have to have
her inside the tent in 2012.

WAGNER: And it`s worth noting -- Karen, you talked about this, the
winners that Sarah Palin has picked. And certainly there have been a host
of big winners when we`re talking about the Republican bench. Everyone
from Nikki Haley to Susanna Martinez, John Kasich, Rick Perry, Rick Scott,
Kelly Ayotte, Jim Demint, Rand Paul, Marco Rubio. These are sort of the
royalty of the Republican party.

But Jonathan makes a fair point, which is that, at the end of the day,
even if Sarah Palin`s in your corner, it`s still always about Sarah Palin,
is it not? I mean, at the end of the day, I found this staggering. Palin
has spent -- the Sarah PAC has spent nearly one million dollars on an array
of items, such as travel and staff, but only 15,000 -- this is according to
"the Wall Street journal" that went to individual candidates. It is the
Sarah show.

FINNEY: And kind of like that family vacation that we saw last
summer, right, that was actually something of a listening tour. I mean,
look, the challenge that these guys have here -- and I think from the
language that you`re hearing from Reince Priebus to Sarah Palin, that
language -- really what they`re saying, the translation is we`re still
negotiating my role.

And clearly they have not come to her with something that she feels is
appropriate. I mean, that`s how I read, you know, between the lines in
terms of what`s being said here. I`ve got to say, though, if I`m the vice
presidential nominee of 2012, I don`t want Sarah Palin having a very big
role. Not just Mitt Romney, but can you imagine being the newly minted
vice presidential nominee on the Romney ticket, which is going to be a
tough enough spot to be in as it is? You don`t want Sarah Palin coming up
behind you and overshadowing you with the base of the party.

That`s the last thing you need when it`s supposed to be about the
rollout of, you know, this is our ticket, we`ve got to focus on winning.

WAGNER: Jonathan, the number one bona fide for any Sarah Palin
endorsee seems to be a Mama Grizzly. And the question is, can she ever
call Mitt Romney a Mama Grizzly?

CAPEHART: I don`t think so. And I don`t know if she`s even calling
Mitt Romney anything. I mean, has she endorsed him? Has she said he`s one
of us? Again, one of Mitt Romney`s -- probably his biggest problem is that
he`s still trying to convince the base of the party, the conservatives in
the party, the Sarah Palins of the party, that he is one of them, he is one
to be trusted.

And if he can`t get them on his side, and if he can`t get Sarah Palin
on his side, then he`s in big trouble.

WAGNER: Mitt Romney still has to prove his Orcine (ph) bona fides.
Karen Finney and Jonathan Capehart, thanks for joining me tonight.

CAPEHART: Thanks, Alex.

WAGNER: Coming up, you can find just about anything on the Internet
these days, including wild theories regarding Mitt Romney`s running mate.
"The New York Times" numbers guru Nate Silver joins me to dissect the web
clues you should be paying attention to.

And we`ll meet the man that may cost Mitt Romney the election. That`s


WAGNER: At this point in the election cycle, most American homo
sapiens can tell you that President Obama has a few faceless enemies to
contend with in his battle for reelection: the economy, the nation`s
unemployment rate, and basically most of Europe.

Mitt Romney, likewise, has his own fair share of hurdles: secret tax
returns, Swiss bank accounts, and his general inability to convince anyone
of anything that may or may not relate to policy, leadership, or what he
bought at the hardware store.

Add to this list of problems a man named Virgil Goode. Who is Virgil
Goode? According to "Time Magazine," Virgil Goode is the man who may cost
Mitt Romney the election. A former Virginia state senator and
representative to the United States Congress, Virgil Goode is running for
president as the candidate from the Constitutional Party. And he may be on
the ballot in the must win state of Virginia, which is home to a prized 13
electoral college votes.

A mid-July robo poll showed Goode capturing a whopping nine percent of
the vote in the state. Or more specifically, nine percent of votes that
Mitt Romney would like to call his own, giving President Obama a 14-point

But never mind those two guys. What would President Virgil Goode
offer the American people? According to his campaign website, Virgil Goode
will prioritize deficit cutting. He will make English the official
language of the United States. He will issue a moratorium on Green Cards
until the national unemployment rate is below five percent.

He will end the anchor baby situation and presumably, therefore,
strike certain parts of the 14th Amendment of the U.S. Constitution. And
he will firmly oppose any union between the United States, Mexico, and

More recent polling shows a much tighter race between the president
and the former Massachusetts governor. A "Real Clear Politics Average" has
Obama up by 2.8 percent. Still, 2.8 percent might be just enough of a
window for the anchor baby, 14th Amendment Green Card, U.S./Mexico/Canada
trifecta-averse Virgil Goode to squeeze in and really foul things up.

Lucky for Mitt Romney and the GOP, the Virginia Board of Elections on
Monday voted to ask the state attorney general to investigate suspected
petition fraud on forms submitted by Goode`s party to get him on the
ballot, which might mean no more pesky Virgil Goode.

This just might be the stroke of luck the Republican party has been
waiting for. If not, they might have to embrace a distinctly anti-
immigrant, isolationist platform, based largely on fear mongering, simply
to gin up a few more votes.

Oh, wait, never mind. They already have.

Coming up next, just when the Romney campaign needed another
distraction, another unfounded report about his VP pick pops up on the
Internet. How do we know it`s unfounded? That`s next.



UNIDENTIFIED MALE: We find out that Jeb Bush and Condoleezza Rice and
Rick Santorum, your former rival, have all been giving speaking engagements
at the RNC Convention. So they`re off your long list?

ROMNEY: You don`t think that we would be so silly as to not provide,
from time to time, the capacity to throw people off, do you?


WAGNER: That was Mitt Romney today, once again providing absolutely
no clues regarding his vice presidential pick. Undeterred by a seeming
lack of evidence, "Drudge Report" announced that President Obama whispered
to a top fund-raiser this week that he believes GOP presidential hopeful
Mitt Romney wants to name General David Petraeus to the VP slot.

General Petraeus quickly knocked down any speculation this afternoon
in a statement from his spokeswoman. "Director Petraeus feels very
privileged to continue to be able to serve his country in his current
position. And as he has stated clearly numerous times before, he will not
seek elected office."

But it turns out, as everyone in the world speculates and waits with
bated breath for the announcement, Wikipedia, as usual, may have the answer
first. In 2008, Sarah Palin`s Wikipage was updated 68 times the day before
it was announced that she would be the Republican vice presidential
nominee. Joe Biden`s page was updated 40 times the day before Obama
announced him as his running mate.

So who is in the Wiki lead this time around? Just today, Chris
Christie`s page was updated twice. Tim Pawlenty`s page updated four times.
Paul Ryan`s seven times. Marco Rubio`s 22 times. And Senator Rob
Portman`s time was updated at least a whopping 103 times.

Joining me now, one of the most respected number crunchers in the
country, Nate Silver, author of "the New York Times" political blog, A pleasure to have you on set, Nate.

NATE SILVER, 538.COM: Thank you.

WAGNER: How much stock can we put into an open source like Wikipedia?

SILVER: Well, you know, those facts are managed by a consensus of
people, but certainly if you`re going to have a national rollout,
especially for a candidate like Palin, four years ago, who was not very
well known, you want that rollout to be good. A lot of people`s first
instinct is to go to Wikipedia, if you`re not familiar with the candidate.

I mean, 103 changes to Rob Portman`s page is quite a lot. I didn`t
know there were 103 facts worth knowing about Rob Portman.

WAGNER: I don`t know if Rob Portman knew that there were 103 facts
worth knowing. But in terms of the wisdom of the crowd, I mean, there are
various conspiracy theories about how involved the Romney campaign is in
throwing people off the scent. There`s this mysterious bus tour he`s
embarking on. Some people that`s just to confuse matters.

The candidate himself said, you know, do you think we`d be so silly as
to not sort of throw you guys off the scent? When it comes to this stuff,
Intrade is another area where folks go to sort of read tee leaves. And
Intrade is ranking the Republican VP nominees. Rob Portman is at the top
with a 30 percent chance. Tim Pawlenty`s at a 20 percent chance, Marco
Rubio 11.9, Paul Ryan 9.6. Condi Rice is still there at 2.3, Chris
Christie 4.6.

Where do you put Intrade as a predictor of this sort of stuff?

SILVER: Those numbers actually look pretty reasonable to me. I think
Rob Portman might make a lot of sense. But in general, this is just kind
of people betting on their conventional wisdom. There`s not a lot of
information here. It`s not a case where I have my polls and you have your
other opinion and we reach a consensus. It`s more like, we`re all
speculating. And here`s kind of what the average person is speculating.

It`s kind of fun, but it doesn`t mean we really have any real insight.

WAGNER: What is Intrade`s sort of record on getting politics right?

SILVER: So when there`s quantitative stuff to analyze, like polls, so
analyzing election results, it`s pretty decent. When it`s more subjective,
for example, Supreme Court decisions, it had Obamacare being overturned
instead of upheld, and quite a lot of confidence. That`s a case where it
didn`t do very well. Like the Michael Jackson trial or VP picks.

I doubt that Sarah Palin was very high on Intrade four years ago at
this time.

WAGNER: Well, Nate Silver, number cruncher extraordinaire, who is
your pick for Mitt Romney`s VP?

SILVER: I would go boring if I were Mitt. I would go with Rob
Portman, just for the reason that you can often get. It`s not night and
day, but you can often get an extra point or two or three in an important
swing state if your VP is from that state. And right now in Ohio,
ordinarily a slightly Republican leaning state, instead Obama`s ahead by
three, four points in the polls.

If you can cut that down to one or two points or to zero points, it`s
a big gain.

WAGNER: Nate Sliver says to Mitt Romney, go boring. You get THE LAST
WORD, Nate Silver. You can follow me on Twitter at @AlexWagner, and of
course tune into my show "NOW" at noon weekdays.


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