updated 8/8/2012 9:17:21 AM ET 2012-08-08T13:17:21

Guests: David Cay Johnston, Bob Shrum, Joy Reid, Kelli Goff, Mark Simone,
Jonathan Alter, Betty Sutton

ED SCHULTZ, HOST: Good evening, Americans. And welcome to THE ED
SHOW from New York.

Ninety-one days before the 2012 election, a new report explains why
Mitt Romney might owe Senator Harry Reid an apology.

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

(BEGIN VIDEOTAPE)

SEN. HARRY REID (D-NV), MAJORITY LEADER: The word is out that he
hasn`t paid any taxes for 10 years.

SCHULTZ (voice-over): A shocking new report outlines how Mitt Romney
may have legally dodged taxes.

REID: Let him prove that he has paid taxes because he hasn`t.

SCHULTZ: David Cay Johnston will give us the details and Eugene
Robinson is here on the politics.

SARAH PALIN (R), FORMER ALASKA GOVERNOR: Well, seeing as how Dick --
excuse me, Vice President Cheney never misfires --

SCHULTZ: Dick Cheney never apologized for shooting someone in the
face. But Sarah Palin`s got him running scared.

DICK CHENEY, FORMER U.S. VICE PRESIDENT: It wasn`t aimed so much at
Governor Palin as it was against the basic process that McCain used.

SCHULTZ: Democratic strategist Bob Shrum will weigh in on the power
of Palin.

Another day, another lie, from the Romney campaign. This time, it`s
about welfare. MSNBC`s Jonathan Alter is here with reaction.

REPORTER: Governor, what did you buy?

SCHULTZ: And Mitt Romney lets his true colors shine with another out
of touch moment. You won`t believe what the unemployed millionaire picked
up at the hardware store.

(END VIDEOTAPE)

SCHULTZ: Good to have you with us tonight, folks. Thanks for
watching.

You know, in this election cycle, every day is Tax Day in the 2012
presidential campaign. Even when the conversation isn`t about Mitt
Romney`s personal tax returns, it`s about his tax policies.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: He`d ask the middle
class to pay more in taxes so that he could give another $250,000 tax cut
to people making more than $3 million a year.

(BOOS)

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

(CHEERS)

(END VIDEO CLIP)

SCHULTZ: The president`s latest nickname for his opponent has the
right wingers throwing absolute fits. They`re trying to defend Mitt Romney
by calling Robin Hood a Tea Party member.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Robin Hood was stealing from the
government. Robin Hood was a Tea Party activist. Robin Hood was anti-
taxes.

(END VIDEO CLIP)

SCHULTZ: But all the right wing noise can`t hide the fact that the
president`s larger point is this -- a major message of this election is
about tax fairness. Mitt Romney`s tax policies give advantages to the very
wealthy at the expense of middle class families in America. That`s his
plan. This is why so many people want to see Mitt Romney`s tax returns.
Who is this guy? What does he believe?

For the past week, Senate Majority Leader Harry Reid -- I mean, this
guy has been raked over the coals for saying that he has a source that told
him that Mitt Romney didn`t pay any taxes for 10 years. Well, a new
article is out. "U.S. News and World Reports" shows that how Romney could
get away with a ridiculously low tax rate. The article quotes an
accounting professor from the University of Notre Dame saying I wouldn`t be
surprised if Mitt Romney paid nearly zero taxes in 2008 and 2009.

Mitt Romney says, this isn`t true.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Let me also say
categorically, I have paid taxes every year, and a lot of taxes.

(END VIDEO CLIP)

SCHULTZ: Ooh, I want to see that. Well, when your income is sitting
around a $20 million a year, yes, you`re going to pay a lot of taxes, even
if your tax rate is at 1 percent. That`s where I think the American people
are. That`s a heck of a lot of money.

Let`s take Mitt Romney`s 2010 tax returns as an example. We know he
made $21.7 million. He paid $3 million in taxes. His entire income comes
from where? Well, investments in capital gains, dividends, and interest.
The maximum tax rate he could pay on his income is at 15 percent. But you
also have to factor in 4.8 million he declared as a loss carried over from
prior years.

Now, Romney`s final rate after deductions is at 13.9 percent. Mitt
Romney says he doesn`t know if he ever paid a lower rate than 13.9 percent.
And Senator John McCain says his campaign saw 23 years worth of tax
returns?

McCain said last month, "I can personally vouch for the fact there was
nothing in his tax returns that would in any way disqualify him to be a
candidate."

Well, that`s all good to know. But what about the tax returns John
McCain`s campaign did not see? Namely years 2008 and 2009.

Now, you might remember a little problem we had with the economy back
in the old financial sector smacked up pretty good back in 2008. The S&P
500 fell 37 percent. Most investors, how did it go? Well, they lost
money.

One hundred percent of Mitt Romney`s recent income is from
investments. It`s safe to say that Mitt Romney lost money in the financial
collapse. You know, we know he declared a loss as recently as 2010.

"U.S. News and World Report" says the loss carried over to 2009 could
have provided a huge deduction. "Combined with the same sorts of
charitable donations and other deductions he claimed in 2010, that could
have pushed his tax burden close to zero."

There`s another trick big investors like Romney like to have. It`s
called tax harvesting. Tax harvesting is when an investor sells off weak
investments at a loss. This is done to offset taxes on better performing
investments. I guess you could say it`s a smokescreen against the IRS.

There`s no proof Mitt Romney did any of this. But we won`t know
unless we see his tax returns. But we do know that the tax code is
designed for wealthy Americans and that`s the conversation Republicans
simply do not want to have.

Mitt Romney`s plan will make the little guy pay a higher rate. This
is Mitt Romney`s idea of tax fairness.

(BEGIN VIDEO CLIP)

ROMNEY: We have right now a 15 percent tax on capital gains. That`s
the rate I would keep in place for now. And what I would say is we would
have removed the tax for people in middle incomes, their tax would go to
zero. The tax for higher income folks would stay the same.

(END VIDEO CLIP)

SCHULTZ: No matter what he says, Romney`s plans still benefits the
wealthy at the expense of the middle class in this country. Let`s say
you`re a middle aged person, you know, your income is, what, let`s take
$52,000 a year, $2,000 is investment income. But you are still taxed on
your total income at 25 percent.

President Obama wants guys like Mitt Romney, the wealthiest Americans,
to pay the same on most investment income as wage earners do on their
income. Until Mitt Romney understands the fundamental idea of tax
fairness, I think the Romney Hood nickname works pretty well at this point
in time in the campaign.

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

Tonight`s question, do you think people as rich as Mitt Romney will
ever pay their fair share of taxes? Text A for yes, text B for no to
622639. You can leave a comment at our blog at Ed.MSNBC.com. We`ll bring
you the results later on in the show.

I`m joined tonight by Eugene Robinson, MSNBC political analyst and
associate editor and Pulitzer Prize-winning columnist for "The Washington
Post". And David Cay Johnston, columnist for "Reuters" and author of the
book "Free Lunch."

Gentlemen, good to have you with us tonight.

This is the discussion that simply will not go away. I kind of find
it entertaining. I`d like to know how Romney is going to get out of this
mess.

David, let`s start with you, first.

How likely is it that Romney got his taxes to nearly zero in 2008 and
2009, and that may not be what he wants to have the American people see and
know?

DAVID CAY JOHNSTON, REUTERS: I think there`s a very good chance of
that. This loss carried forward in the 2010 return means that he had
greater losses than capital gains the previous year, and he had $5 million
losses to carry forward. That suggests he paid very little tax.

Because he was the manager of an investment fund, he was able to
defer, and that would be at the heart of if there was a 10-year period of
little or no tax being paid, and to make a bad joke, it`s a thin reed to
lean on, but it`s a very important point.

He could have lived by borrowing against his taxes while paying no
assets as many very, very wealthy people do. So, there`s a very good
chance he paid little or no tax.

And you have to parse what he said carefully, Ed. He said I paid a
lot of taxes. He didn`t say I paid a lot of federal income taxes. He
didn`t say I paid a lot of Massachusetts state income taxes. He said I
paid a lot of taxes.

Well, even the poorest person in America pays taxes.

SCHULTZ: Eugene, this is the story that Mitt Romney wants to go away.
And it doesn`t seem like it will go away, but as Harry Reid -- has he
really made this argument harder for Romney with his ordeal that`s going on
for a week now?

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Well, yes, he made it much
harder for Romney. There`s an old Irish proverb, if you want an audience,
start a fight. And what Harry Reid did was start a fight, and the audience
is paying attention.

So he comes out with this statement, I`ve got a source. He didn`t pay
taxes for 10 years. And, gee, if I`m wrong, show me.

And he just puts it out there, and Romney has to respond in some way.
And there`s no response he can really make that is satisfying, I think,
except showing that Harry Reid is wrong, if indeed he is wrong. And
clearly, Romney does not want to open the taxes. So, you have to conclude
there`s something in there he doesn`t want us to see.

SCHULTZ: Well, the big calculation is that he thinks this will hurt
him with the American people. They just won`t comprehend any of the stuff
because they don`t live like this. Most people don`t.

Here is Romney being asked about his tax rate by ABC News.

(BEGIN VIDEO CLIP)

REPORTER: We know that there was one year when you paid about a 13.9
percent tax rate. Can we clear this up by asking you a simple yes or no
question? Was there ever any year when you paid lower than the 13.9
percent?

ROMNEY: I haven`t calculated that. I`m happy to go back and look.

(END VIDEO CLIP)

SCHULTZ: David, is it possible Mitt Romney can`t calculate what his
tax rate was in prior years?

JOHNSTON: No, it is not possible. And someone who is as money
motivated as Mitt Romney knows exactly what he paid in taxes every year.
Here`s very hard not to pay taxes.

There`s a huge scandal in Italy where he made an investment when he
was running Bain that returned $28 for every dollar they put in and paid
essentially no income taxes. That`s one of many examples of how carefully
Romney paid attention to legal tax avoidance and may have for all we know,
engaged in some kind of illegal or questionable tax avoidance, but it`s not
credible for him to say, gee, I don`t know, especially when he said, I`ll
go check to ABC and now he hasn`t done it.

SCHULTZ: You know, we show the vulture chart here on THE ED SHOW from
time to time about where the income is going over the last 30 years in this
country.

Eugene, could it be possible that Mitt Romney is the perfect candidate
for the Democrats, at a time when there`s a conversation about tax fairness
going on and this is a huge uh-oh moment for the Republicans?

ROBINSON: Well, I think what the Democrats could do worse, frankly,
than having Mitt Romney to run against at this moment. I mean, it is
totally not credible that he doesn`t know what his tax rate was. That
makes no sense.

And I just don`t think this is going away. It`s ridiculous to say,
oh, you poor American people, you wouldn`t understand the burdens that a
rich man like me carries through life when I try to do my taxes. It`s
ridiculous. Sure, people will understand. That`s the problem. People
will understand what`s going on there, and they`ll see how the tax code is
weighting to favor those with a net worth of $250 million or so.

SCHULTZ: And, David, don`t you find it interesting if you look at his
tax policy, what he wants to implement, it kind of parallels the kind of
return we think he had in 2008 and 2009.

JOHNSTON: Well, absolutely. And remember, Romney`s tax plan is to
raise taxes on families with children at home and families who want to send
their children to college. Now, that ought to be, and I suspect will be
before the election, a much more important issue than it is right now.
Raising taxes on families with children was a big goal -- lowering them was
a big goal of the Republicans. Romney wants to raise them.

Going after people who want to get a college education to get ahead,
excuse me?

SCHULTZ: When does the story end, Gene Robinson?

ROBINSON: The story ends either when Mitt Romney shows the taxes and
shows there`s nothing in there or on Election Day. But it`s not going away
any other way.

SCHULTZ: Or one of you guys in Washington actually digs up the source
that Harry Reid has been talking about, right?

ROBINSON: Right.

JOHNSTON: It comes up with his tax returns.

SCHULTZ: Eugene Robinson, David Cay Johnston -- great to have you
with us tonight. Thanks so much.

Remember to answer the question at the bottom of the screen, share you
thoughts on Twitter @EdShow and on Facebook. We always want to know what
you think.

Next, poor Dick Cheney, he`s so misunderstood. He`s now clarifying
comments he made about Sarah Palin. Bob Shrum weighs in on that.

Stay tuned. You`re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, Dick Cheney backtracks on his comment about Sarah
Palin`s V.P. nomination, and the RNC chair is saving her a spot at the
convention. Bob Shrum on the power of Palin? That`s next.

And the Obama campaign continues its push to open up early voting for
all folks in Ohio. Now some military groups are joining the fight. I
think they`re wrong at it. Ohio Congresswoman Betty Sutton will join me
for the conversation.

And it could be Mitt Romney`s biggest lie yet. A new Romney campaign
ad claims the president is gutting welfare? We`ll have the facts later.

Share your thoughts with us on Facebook and on Twitter using the
#EdShow. We`re coming right back.

(COMMERCIAL BREAK)

SCHULTZ: We all know Dick Cheney does not apologize. He hasn`t
apologized for Iraq, for warrantless wiretapping, for torture. In fact,
when Cheney shot his friend in the face, the friend apologized to him.

But now, the former vice president is getting about as close to an
apology as he could ever get. And walking back comments he made about
Sarah Palin. The controversy erupted last week when Cheney said putting
Palin on the 2008 Republican ticket was a mistake.

(BEGIN VIDEO CLIP)

CHENEY: I like Governor Palin. I`ve met her. I know her. She`s an
attractive candidate. But based on her background, she had only been
governor for, what, two years. I don`t think she passed the test.

REPORTER: Of being ready.

CHENEY: Of being ready to take over. And I think that was a mistake.

(END VIDEO CLIP)

SCHULTZ: Well, it didn`t take long for Palin to pounce on those
comments.

(BEGIN VIDEO CLIP)

PALIN: Seeing as how Dick -- excuse me, Vice President Cheney never
misfires, then evidently, he`s quite convinced 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.

(END VIDEO CLIP)

SCHULTZ: Last night, Cheney clarified his remarks on FOX News. He
wasn`t criticizing Palin. He was criticizing the process.

(BEGIN VIDEO CLIP)

CHENEY: It wasn`t 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 that McCain process in `08 had been
well done or was it a mistake. I said I thought it was a mistake.

(END VIDEO CLIP)

SCHULTZ: RNC Chair Reince Priebus is also trying to make nice.
Priebus said he`s hopeful Palin will have a role at the upcoming Republican
convention in Tampa.

(BEGIN VIDEO CLIP)

REINCE PRIEBUS, RNC CHAIRMAN: Certainly, she`s great. And we`ve -- I
think a lot of her, and hope that she does speak.

(END VIDEO CLIP)

SCHULTZ: Let`s bring in Democratic strategist Bob Shrum.

Bob, great to have you with us tonight.

Are we witnessing Sarah Palin having just enough political juice where
they can`t diss her and they have to include her? What`s this all about?

BOB SHRUM, DEMOCRATIC STRATEGIST: Well, there are two things here.
First of all, Reince Priebus didn`t do his job. His job is to protect the
presidential nominee. What he did by that comment was saying, it`s fine
with me if she speaks, and put it in Romney`s court.

Now, I think she`ll end up speaking -- she`ll end up speaking in
fringe time, but that doesn`t mean the networks aren`t going to take some
or a lot of what she said and put it out there.

And secondly, with Cheney, he didn`t misfire the first time. He was
right on target, but the roof fell in on him. His own daughter Liz Cheney
went after him.

You know, I have a friend who is a Republican strategist who`s
described the California Republican Party as a narrow cult in search of
heretics. That increasingly describes the national GOP. You`re not
allowed to believe in climate change. You`re not allowed to say that Sarah
Palin wasn`t qualified.

She wasn`t qualified. How could Dick Cheney who`s been around the
presidency since Gerald Ford, who`s a serious guy even though I disagree
with him on almost everything, how could he possibly think that someone who
says we have to stand with our ally, North Korea, is qualified to be
president?

SCHULTZ: What does it say about Palin`s power? Does she have just
enough political juice at this point?

And you bring up an interesting point about Dick Cheney`s daughter,
Liz Cheney. Not also wanting to, it seems, alienate Sarah Palin. It`s a
crowd they don`t have to be at odds with, isn`t it?

SHRUM: Yes, look, Romney -- Romney has shown throughout this, and I
think this is what this reflects, that he will say anything, do anything,
dot any I, cross any T, that the right wing demands in order to get the
votes.

She has appeal with a certain segment of the Republican Party. Romney
wants those votes. He`s going to be forced to put her on the convention
program unless she turns it down and declines herself.

But, look, all you have to do is look at the polling. The country
knows she wasn`t qualified, and, in fact, she didn`t run in 2012 for one
simple reason. She couldn`t have won the Republican nomination for
president.

Even in that narrow party, she`s not got majority support, but she`s
got a very loyal, devoted following. If you diss her, they`re going to
diss you.

SCHULTZ: And if Palin does get a substantial role at the convention,
gets a lot of buzz with it, obviously, what kind of position does it put
Mitt Romney in? Because she`s not going to going in there lighthearted
about -- with any kind of moderate views. I mean, she`s going to be there
to bend the party even further to the right, and that`s exactly where Mitt
Romney doesn`t want to be.

SHRUM: Well, look, if she gets a substantial role, and I can`t
believe she will, you run the danger that we saw with Pat Buchanan in 1992.
He spoke on the same night as Ronald Reagan at the `92 Republican
convention. He gave a sulfurous, angry, hateful speech. It blew Reagan`s
sort of out of attention and it really hurt George H.W. Bush`s campaign.

I can`t believe they would let her speak in primetime.

On the other hand, wherever she speaks, she can do damage now because
the way we cover conventions, if she speaks at 1:00 in the afternoon, she
says something incendiary, you can bet that that night when the networks go
on the air, they`re going to show it.

SCHULTZ: Well, when it comes to right-wing talkers, I wonder if she`s
going to be able to outdo Rand Paul and Rick Santorum who are also going to
get podium time.

How is that lineup going to be handled by Romney when it comes to
trying to get independents?

SHRUM: Well, I think that`s the afternoon follies. They`re not going
to let those folks in primetime. If they do, they`re crazy.

But I think they think they have to let Santorum speak. They have to
let Rand Paul speak because they`re trying to get Ron Paul to stay on the
reservation.

Look, Romney is in a lot of trouble. In my view, he`s lost the
summer. He`s had a dreadful summer. He`s got a 37/52 approve/disapprove
in the pew poll. He`s going to try to cobble together every element of the
base he can to keep himself viable in this presidential election.

SCHULTZ: Can he turn it around in 90 days?

SHRUM: It`s going to be very tough. You know -- I mean, your earlier
segment on the tax returns --

SCHULTZ: Yes.

SHRUM: -- I mean, you take his tax returns, you take his tax plan.
You know, he`s going to maybe get a bounce out of the convention, although
that`s not assured. But it`s not going to deal with his underlying
problems.

Right now, he looks like a guy who`s not only sort of out of touch
with people, but in many ways out of his depth. He just can`t handle this
process.

SCHULTZ: Bob Shrum, always great to have you on THE ED SHOW.

Thanks so much.

SHRUM: Thanks, Ed.

SCHULTZ: The Romney campaign is misleading folks about early voting.
Congresswoman Betty Sutton weighs in next from Ohio.

And President Obama is attacking Mitt Romney`s backwards tax plan.
Meanwhile, Mitt is fighting back with baloney? Our panel will weigh in on
the tax debates.

Stay tuned. We`re coming right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

Last night on this broadcast, we told you about the controversy
erupting over early voting in Ohio. A controversy over early voting,
really?

A Republican backed law is restricting early voting for Ohio voters
with the exception of members of the military. Rather clever, don`t you
think? Well, the Obama campaign was trying to fight the restrictive law.
They want early voting to be widely available for all Ohioans. For
military and nonmilitary voters, and the campaign has filed a federal
lawsuit.

The Romney campaign is jumping into the fray and misleading folks
around the country, especially in Ohio, into thinking that the Obama
campaign wants to disenfranchise soldiers from voting?

Here`s the candidate himself.

(BEGIN VIDEO CLIP)

ROMNEY: Any effort to impede the right of our military members
overseas or here domestically in voting would be an extraordinary violation
of the trust we should have for those who serve so valiantly.

(END VIDEO CLIP)

SCHULTZ: Can I call time-out for a moment? Think about this. Mitt
Romney and the Romney campaign, the candidate himself, is claiming that
President Obama, the president of the United States, any president of the
United States, would be trying to disenfranchise people who put on the
uniform to defend this country, do months of deployments around the world,
ah, President Obama really doesn`t want them to have a chance to early
vote.

Are you kidding me?

And here is the crux of the story I cannot believe. There are 15
military groups, including AMVETS, that have intervened in the campaign`s
lawsuit because they`re with Mitt Romney. "Efforts to facilitate and
maximize voting should be welcome, not viewed with constitutional
suspicion."

The Obama campaign agrees with the military groups on this count. An
official with the Obama campaign told THE ED SHOW that, quote, "They
welcome the veterans groups as interveners. They do not agree with all of
the issues they raise in the brief, but they do believe not only should
active military be able to access early voting, all registered voters
should as well."

Now how can these military groups side with Mitt Romney side thinking
that it`s not good for all Americans, the folks in Ohio, to be having
access to early voting? The fact that the Obama campaign is glad to have
them involved in the suit proves that they are not out to disenfranchise
members of the military. They want early access for all registered voters.

Once again, the Romney campaign is trying to hoodwink a bunch of
Americans. I`m joined tonight by Congresswoman Betty Sutton of Ohio.

Congresswoman, I don`t know how else to put it, but these military
groups have had their heads screwed on wrong. I think that they`re right
wing and they`re taking the bait from the Romney camp. What are your
thoughts on this?

REP. BETTY SUTTON (D), OHIO: I think what Romney is doing is wrong.
Trying and politicize our veterans or our military groups and lead them
down a path that Politifact checked -- the nonpartisan group, has called
false, is just outrageous. I mean, we want everyone to be able to vote.
And of course we want our active military, and of course we want our
veterans.

But we also want our firefighters and our police officers and working
families. We should be working to make the vote available to everybody,
and make it easier for people to cast those ballots that our military
fights to protect the right for them to do.

SCHULTZ: I think the Republicans are nervous after the Measure Two
vote went the way it did, when it cams to the collective bargaining and how
the get out vote effort was absolutely mammoth in the state of Ohio by the
Democrats. I think they`re nervous about that. Is this an effort by
Republicans to suppress the Democratic vote?

SUTTON: I think it`s pretty clear. We have seen this going on across
the country. And certainly, there`s no place that is more -- you know,
more in play that Ohio. We are often called the swing state. And so we
have seen these efforts. We saw it with Issue Two, Senate Bill Five, an
attack on our working families, fire fighters, police officers, and other
public workers. Indeed, an attack on the middle class.

They were trying to stack the deck against them, take them away from
the bargaining table. And beat back their rights. And of course, the
people, as you point out, came out in droves. Every fair minded Ohioan --
it wasn`t just labor that came together. It was all of us.

And I think that they are concerned. When we can get the word out,
when we can cut through the noise and the distractions just like this one,
that they`re trying to create, trying to pit people against each other,
active duty military versus other folks, veterans versus other folks. It`s
not right. We should be working to make it easier to vote.

SCHULTZ: You use the term fair minded. Quickly, where does Governor
John Kasich stand on this?

SUTTON: Well, I`ll let Governor John Kasich speak for himself. But I
saw where he stood on working families when he supported the passage of
Senate Bill Five and the people spoke up. And I`m hoping that he will see
the light and others will see the light, that frankly 93,000 Ohioans voted
in those days in 2008. We need to make sure that they have access to those
polls.

SCHULTZ: And these military groups, these veteran groups that are
lining up with the Romney camp, I wonder if they know what they`re doing.
I think they`re just ideologically bent to support a Republican any way.
And it`s helping Romney mislead the public on exactly what is coming down
with this story.

Congresswoman Betty Sutton, thanks for your time tonight.

SUTTON: Thank you, Ed.

SCHULTZ: There`s a lot more coming up in the next half hour of THE ED
SHOW. Stay with us.

(BEGIN VIDEO CLIP)

OBAMA: It`s like Robin Hood in reverse.

(END VIDEO CLIP)

SCHULTZ: President Obama slams Romney on his bogus tax plan. And
Mitt fights back with sandwich meat.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: My baloney has a first name. It`s O-S-C-A-R.

(END VIDEO CLIP)

SCHULTZ: The panel will weigh in on Mitt Romney`s laundry list of
problems.

And Romney tries and fails again to seem normal. You don`t want to
miss Mitt Romney`s latest out of touch moment.

And the Romney campaign cooks up a welfare whopper. MSNBC`s Jonathan
Alter is here with the latest.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: He`d ask the middle class to pay more in taxes so he could
give another 250,000 dollar tax cut to people making more than three
million dollars a year. It`s like Robin Hood in reverse. It`s Romney
Hood.

(LAUGHTER)

(END VIDEO CLIP)

SCHULTZ: That is the money soundbite this week. Welcome back to THE
ED SHOW. President Obama obviously hitting Mitt Romney on his reverse
Robin Hood tax plan. The president was talking about a non-partisan Tax
Policy Center study that found Romney`s tax plan would predominantly favor
upper income taxpayers.

The report shows that taxpayers with incomes of over a million dollars
would see an average tax cut of 175,000 dollars. Middle class families
with children would pay on average 2,000 dollars more in taxes. And
taxpayers earning less than 30,000 dollars a year would get an average tax
increase of about 130 dollars.

Here`s how Mitt Romney described the factual attacks on his tax policy
earlier today.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: We`ve been watching the
president say a lot of things about me and about my policies. And they`re
just not right. And if I were to coin a term, it would be Obama-loney.
It`s a -- he`s serving up a dish which is simply in contradiction of the
truth. And it relates to everything from how I`m going to help the middle
class to tax policy. He`s simply saying things that are not accurate.

(END VIDEO CLIP)

SCHULTZ: For more, let`s turn to Joy Reid, managing editor of
TheGrio.com, radio talk show host Mark Simone, and Kelli Goff, political
correspondent for TheRoot.com. Great to have you with us tonight.

Mark, let me ask you, if Mitt Romney is going to claim that President
Obama is lying about his plan, why doesn`t he release the specifics to
prove that he`s lying about the plan?

MARK SIMONE, RADIO TALK SHOW HOST: That`s a very good question. This
tax foundation study is totally flawed. It`s based on nothing. They have
made up details that don`t exist. Without getting into the weeds, if you
go to Jennifer Rubin in the "Washington Post," it`s a pretty good
breakdown. She asked a great question. Why didn`t they just call the
Romney campaign and ask them to fill in some of the details, rather than
just make up assumptions of what you think they would be?

SCHULTZ: But he comes out saying that the president is lying without
giving specifics.

SIMONE: We are in the middle of a campaign. You`re supposed to
exaggerate. Listen, if the original campaign was hope and change, and four
years later it`s character assassination and class warfare, you have to
wonder, how successful was the first term?

SCHULTZ: I`m not a part of the panel. I`m just the moderator.
Character assassination. All we`re asking for is his taxes and also his
details on his tax plan.

KELLI GOFF, AUTHOR, "THE CAN DO CANDIDATE": Also, I have another
question. How are you supposed to call the Romney campaign for details
when they say they`re going to release details later about their plan?
That would make it tough to get those details right now. And the other
thing, this is turning rather silly, right? It`s like President Obama
sings, Governor Romney sings. They have a sing-off.

It`s sort of like turning into one of those desperate, bad reality
dating shows, like you make out with him in a hot tub. I`m going to do you
one better and make out with him in a fantasy resort. These are people
running for the highest office in the land and this is what it`s come down
to, Obama-loney and Romney Hood?

JOY REID, THEGRIO.COM: I think the problem is, though, one thing is
just a quip, right? The reason that the Romney Hood slam on Romney works
is because it`s playing on something that people believe to be true, that
Mitt Romney wants to cut taxes on the rich by raising taxes on the middle
class. That`s something that this tax policy study found out that people
believe.

What is Obama-loney supposed to even mean? It`s almost like if they
were playing the dozens and Romney`s mama joke was, well, your mom is a
woman and not very nice. It`s not funny. It doesn`t work. It`s not
witty. And I don`t even understand what it means.

SIMONE: It means that nobody`s taxes are going to be raised.
Everyone gets a 20 percent tax cut.

REID: Romney is doing with the tax cut plan the same thing he`s doing
with his own taxes. He`s saying, just trust me, there`s nothing bad here,
but I`m not going to tell you what my plan is.

SIMONE: I think he`s fine with the tax returns. He released the same
amount as John McCain.

SCHULTZ: No, he didn`t.

SIMONE: He`s got a second year coming out.

SCHULTZ: No, no, no. John McCain in the Senate released every year.
As long as he was in the Senate, every campaign, he released them all. By
the time he ran for president, he released two years. That was just to
catch up. But the number of returns and disclosure on John McCain far
exceeds anything we have gotten from Mitt Romney.

SIMONE: Same as Ronald Reagan.

SCHULTZ: Same as Ronald Reagan?

SIMONE: Released one year.

SCHULTZ: Wait a minute, the standard was set by Mitt Romney`s dad
here. Certainly, more than two years is needed, especially with 2008 and
2009.

SIMONE: Actually, that was an exception because after that, there
were very few releases. Ford, others didn`t release. Most presidents
haven`t released.

SCHULTZ: The fact is that John McCain released far more than Mitt
Romney has.

SIMONE: Let me ask you this, if that`s important --

SCHULTZ: Wait a minute, you need to tell me I`m correct on that.

SIMONE: You`re correct on that.

SCHULTZ: You`re wrong on that?

SIMONE: I`m wrong. You`re correct.

SCHULTZ: All right.

SIMONE: If you think that`s important for a public leader, why do you
allow Reid, Pelosi and others to refuse to release any tax returns? You
know, when Romney ran against Kennedy, believe it or not, he used this as
an issue.

(CROSS TALK)

GOFF: -- held to a different standard. We should say for the record
that John McCain released more and has a lot less wealth.

SIMONE: I don`t know about that.

GOFF: I didn`t say his wife, I said him. There is less wealth.

SIMONE: Ted Kennedy has as much wealth as anybody, and refused to
ever release any tax returns.

GOFF: You asked what Obama-loney or whatever it means. What it means
is that the Romney campaign is seeing the same polls I have seen and that a
couple of other people have seen, right, which shows that in swing states,
his tax plan is not landing. In swing states, people actually do believe
that 250,000 dollars is a lot of money. And they want to see those people
pay more in taxes where.

(CROSS TALK)

REID: And more importantly, Romney is running in part on a plan to
tax Americans in a way that we understand would help him and his own social
class. And that`s why it`s relevant. And we understood how Ronald Reagan
got rich. He was in the movies.

GOFF: He worked for it.

(CROSS TALK)

SIMONE: You have the one percent paying beyond their fair share.
They pay 38 percent of the tax.

(CROSS TALK)

SCHULTZ: Go back to the old rates. Go back to the old rates at 39.6
percent under the Clinton years, where we created 22 million jobs. It has
been done and we can do it again. And we have to fix the Treasury.

SIMONE: Huge but there. That was under Clinton`s first term, where
things didn`t got that well. It was in the second term they went well and
he dramatically cut capital gains taxes. Is that what we`re for now?

SCHULTZ: Wait a minute now. If you take the eight years of 22
million jobs created when the tax rate was 39.6 percent, the fact of the
matter is we have been down that road before. When I`m answering your
questions -- I`m giving you a direct answer, if you ask exactly what do you
think they should pay, you got the number.

SIMONE: Remember, the bulk of those job creations and all that was in
the second term of Clinton. And he had dramatically cut capital gains tax,
which helped spur a lot of growth.

SCHULTZ: Let`s get back to, if I may, why doesn`t Romney offer
specifics on where President Obama is lying to the American people about
his tax plan?

SIMONE: Well, I agree he should do that. And I also agree he should
fill in those details. That`s why you make it easy for a tax foundation to
just make up details. He should fill them all in.

SCHULTZ: We should also point out, it`s a tax foundation that Romney
in the past has embraced and called nonpartisan.

SIMONE: Let`s also point out their favorite tax plan was Ron Paul`s.
I don`t know how seriously you can take them.

SCHULTZ: Joy Reid, Mark Simone and Kelli Goff, great to have you with
us tonight. Thank you.

Coming up, Mitt Romney makes another failed attempt to act like a
normal guy. You won`t believe what he told reporters at the hardware
store. We`ll bring you Romney`s latest out of touch moment, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ROMNEY: Is he that far out of touch with what the American people are
feeling? The answer is yes. Yeah, he is.

(END VIDEO CLIP)

SCHULTZ: Welcome back to THE ED SHOW. Get that, the guy who dodges
taxes with off shore accounts has the nerve to call President Obama out of
touch. But unfortunately for Mitt, he can`t seem to go a week without
letting his true colors just shine.

Mitt Romney tried to act like the guy next door, normal guy, regular
guy, on Monday in New Hampshire. With his shopping list in hand, the
candidate spent the morning running errands. He paid a visit to the local
hardware store and had to say this about his purchase.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Governor, what did you buy?

ROMNEY: Hardware stuff.

(LAUGHTER)

(END VIDEO CLIP)

SCHULTZ: Hardware stuff? You buy hardware stuff? Nobody buys
hardware stuff. Why didn`t he just show us what he bought? Any nails,
hammers in there, wood, screwdrivers? Not hardware stuff. This kind of
vernacular is kind of goofy, isn`t it?

This isn`t Romney`s first out of touch moment. He has a long history
of letting the real unemployed millionaire out of the bag.

(BEGIN VIDEO CLIP)

ROMNEY: I tell you what, 10,000 bucks, 10,000 dollar bet?

I get speakers fees from time to time, but not very much.

Ann drives a couple of Cadillacs actually.

I`m not sure about these cookies. They came from the local --

UNIDENTIFIED FEMALE: Bakery.

ROMNEY: 7-11, bakery or wherever.

I`m not concerned about the very poor. We have a safety net there.

Corporations are people, my friend.

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

(END VIDEO CLIP)

SCHULTZ: The library is quite thick right now here on THE ED SHOW
when it comes to finding out exactly what Mitt Romney has said, foot in
mouth, if you know what I mean. They have 90 days to turn this around. If
they are good at the image business, we`re going to find out. I don`t know
how he`s going to do it. He`s just not the regular guy.

His next fund-raiser will be in Iowa at a country club that was built
with public funds. Go figure.

Tonight in our survey, I asked do you think people as rich as Mitt
Romney ever pay their share of taxes? Five percent of you say yes; 95
percent of you say no.

Coming up, Romney`s welfare whopper. Find out why his newest attack
ad could be Romney`s biggest lie, I mean his biggest lie so far.

(COMMERCIAL BREAK)

SCHULTZ: To the Big Finish tonight. It`s Mitt Romney`s biggest lie
so far. The Romney campaign launched a brand new attack ad this morning.
It claims President Obama is gutting welfare. Romney says people won`t
have to work under a new federal policy. The government will just send a
check to them.

Nearly every major news organization is now reporting that Romney`s
new ad is simply not true. In fact, Romney has actually been pushing for
this exact policy change. He and several other Republican governors asked
the federal government for more flexible -- flexible welfare rules back in
2005.

The Obama administration is now giving governors what they ask for,
more power and more flexibility in granting assistance. Greg Sergeant of
the "Washington Post" talked to two Republican governors who are taking
advantage of President Obama`s policy change. The governors of both Utah
and Nevada refuse to comment on Romney`s new ad, but both confirm the new
policy will not weaken work requirements.

In other words, Romney`s ad is a blatant lie. But Romney is not
backing down. He claims Bill Clinton is on his side.

(BEGIN VIDEO CLIP)

ROMNEY: I think President Clinton would be surprised to see that the
legislation he and Republicans agreed upon to put work into welfare is now
going to be waived, that work requirement, by virtue of a president who has
a very different view about welfare than I think Bill Clinton and
Republicans did some years ago.

(END VIDEO CLIP)

SCHULTZ: Romney is either lying or he`s misinformed. Former
President Bill Clinton is not surprised at all. In fact a Clinton
spokesman says President Obama`s new policy is consistent with policies
enacted in the 1990s. The former president is giving the plan his
blessing. Looks like Mitt Romney got it all wrong again.

Joining me tonight is Jonathan Alter, MSNBC political analyst and
columnist for "Bloomberg View." Great to have you with us. Why is the
Romney campaign telling one lie after another? I mean, we just ran a story
last night and also tonight on the Ohio voting. And now this. What`s
going on here?

JONATHAN ALTER, "BLOOMBERG VIEW": Well, they are starting to realize
that an economic message alone is not going to get them to the White House.
So they need to do some other things and getting people to think that
Barack Obama is soft on dependency and that he just wants to give a bunch
of money to poor people helps them solidify, they think, a base.

But the problem, Ed, is that the ad is simply untrue. I say that as
somebody who is a very strong supporter of welfare reform in the `90s, a
time when a lot of liberals didn`t like it. I think the Obama
administration made a mistake in putting some of those liberal opponents of
welfare reform in important positions in the Department of Health and Human
Services, which aroused suspicions, including on my part, that maybe they
really were weakening welfare reform.

But when you actually look at the memo that the department put out,
when you actually examine the evidence in this case, they are not doing
anything to weaken the work requirement, much less gut welfare reform.

SCHULTZ: Why would he rope Bill Clinton into this?

ALTER: Because Clinton is right in the ad. He`s trying to drive a
wedge between Clinton and Obama, to say to a certain kind of voter who
likes Clinton that Clinton wasn`t as liberal as Obama is. The problem is,
you know, as politicians used to say, there`s not a dime`s worth of
difference between Bill Clinton and Barack Obama on the issues.

But it`s important to the Romney campaign to make it seem like Barack
Obama is this wild-eyed lefty who wants to end welfare reform and put
everybody back on the dole. Problem, as I said, is it just ain`t so.

SCHULTZ: Romney`s been criticized by members of his own party for
creating the car ownership program while he was governor of Massachusetts.
Will this welfare ad backfire on him?

ALTER: You know, it`s a little hard to tell because there`s a lot of
what are called low-information voters. This was a huge buy that Romney
made. I read today, and I haven`t confirmed this, that it`s as much as 50
percent of their buy in battleground states. They`re putting a lot of
chips on this welfare ad, which is very misleading. And they`re trying to
use -- the same way they used Hillary -- remember there were some earlier
ads where they used Hillary against Obama. Now they`re trying to use Bill
against Obama.

And Bill is going to have to straighten it out at the Democratic
convention.

SCHULTZ: What is President Obama`s best move here? The Obama
campaign, what`s their best move here?

ALTER: I actually think because there`s so much money behind this ad,
it`s not just a cable news kerfuffle, that I think that the president
should go public and he should make a public statement and say that this is
a complete distortion of what he`s actually done, and maybe even get, you
know --

SCHULTZ: So all these news organizations scoring it as something that
is really a falsehood is going to help the president.

ALTER: That`s important.

SCHULTZ: But he shouldn`t stop there?

ALTER: Because those newspaper accounts that give four Pinocchios and
four long noses for these ads, those are read by the elites, by people each
who watch cable TV and are paying a lot of attention.

SCHULTZ: This could get in the mainstream and hurt him.

ALTER: To get it in the mainstream, you have to get the president to
refute it.

SCHULTZ: Jonathan Alter, great to have you with us. Thanks so much.

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

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

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