updated 8/23/2012 10:44:41 AM ET 2012-08-23T14:44:41

THE LAST WORD WITH LAWRENCE O`DONNELL
August 22, 2012

Guests: Michelle Goldberg, Michael Crowley, Jared Bernstein, Robert Reich, Nia-Malika Henderson


LAWRENCE O`DONNELL, HOST: OK, if Mitt Romney and Paul Ryan will stop
lying about President Obama, I`ll stop telling the truth about them.

(BEGIN VIDEOTAPE)

THOMAS ROBERTS, MSNBC ANCHOR: Akin is defying the head of the ticket,
the leader of the party.

UNIDENTIFIED FEMALE: He really has nothing to lose here.

UNIDENTIFIED MALE: He has nothing to lose.

UNIDENTIFIED FEMALE: The problem is, the Republican Party has a lot
to lose.

CHRIS JANSING, NBC NEWS: Establishment Republicans will just have to
put up with Todd Akin.

CHUCK TODD, NBC NEWS: Akin will not be ignored.

REP. TODD AKIN (R), MISSOURI: This is not about me.

TODD: He`s doing the morning talk shows.

AKIN: This is not about my ego.

JANSING: He won`t go away.

TAMRON HALL, MSNBC ANCHOR: Paul Ryan going on the record about Todd
Akin.

REP. PAUL RYAN (R-WI), VICE PRESIDENTIAL CANDIDATE: Rape is rape.

HALL: Trying to distance himself from Akin.

UNIDENTIFIED FEMALE: Paul Ryan --

RYAN: I`m proud of my record.

UNIDENTIFIED FEMALE: -- believes that abortion should not be
available.

UNIDENTIFIED FEMALE: The Romney campaign want nothing to do with Paul
Ryan`s budget.

UNIDENTIFIED MALE: The GOP`s numbers are upside-down in our poll.

UNIDENTIFIED FEMALE: Nothing to do with Paul Ryan`s connection to
this legislation.

UNIDENTIFIED MALE: The headwinds that Mitt Romney has to face are the
Republican brand.

ALEX WAGNER, MSNBC HOST: There are some dark clouds over Florida, and
it sure looks like a storm`s coming to Tampa.

ROBERTS: Tensions within the GOP hitting a boiling point.

UNIDENTIFIED MALE: They`re doing everything they can to shoot
themselves in the head.

HALL: The most conservative platform in modern history.

UNIDENTIFIED FEMALE: Why are we arguing this?

HALL: Mitt Romney on abortion.

UNIDENTIFIED FEMALE: This has been a tough one for Mitt Romney.

UNIDENTIFIED FEMALE: Mitt Romney supports legislation that would
criminalize abortion.

UNIDENTIFIED FEMALE: I kind of feel sorry for the Republican Party at
this point.

AKIN: This is not about me.

UNIDENTIFIED FEMALE: This guy has made a joke of them.

AKIN: This is not about my ego.

JANSING: He won`t go away.

TODD: But Akin will not be ignored.

WAGNER: An act of mutiny within the Republican ranks.

UNIDENTIFIED MALE: These guys are just nuts.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: My presidency will be a pro-
life presidency.

Do I believe that the Supreme Court should overturn Roe v. Wade? Yes.

I was a severely conservative Republican governor.

(END VIDEOTAPE)

O`DONNELL: Some of our older viewers will know who I was paraphrasing
in my opening line tonight. If you know who inspired that line, tweet me
the answer.

But first, with 76 days until the election, President Obama had this
to say just moments ago about bat crap crazy Republican Congressman Todd
Akin. "This is an individual who sits on the house committee on science
and technology, but somehow missed science class. And it`s representative
of the desire to go backwards instead of forwards and fight fights that we
thought were settled 20 or 30 years ago."

I actually thought the fight about where babies come from was settled
much longer ago than that.

Even Ann Coulter has finally found a Republican she hates, Todd Akin.

(BEGIN AUDIO CLIP)

ANN COULTER, CONSERVATIVE COMMENTATOR: It`s going to be a huge
problem for Republicans. Now I officially hate him.

(END AUDIO CLIP)

O`DONNELL: Todd Akin has still not heeded Mitt Romney and Paul Ryan`s
calls to drop his Missouri Senate campaign against Senator Claire
McCaskill.

Today, Rush Limbaugh explained, perfectly logically, how that makes
Mitt Romney and Paul Ryan not nearly as powerful as Rush Limbaugh.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: I never did order him to step
down. I was very -- I hope he does pull out. And I tried to make the case
why it was the right thing to do, pull out.

Folks, if I had demanded Akin drop out, he`d be gone. If I had
demanded that Akin quit the campaign, he`d be gone.

(END VIDEO CLIP)

O`DONNELL: That was sick, deluded, egomaniac Rush Limbaugh.

Today, Paul Ryan made the mistake of allowing reporters to ask him a
few questions on his campaign plane.

(BEGIN VIDEO CLIP)

REPORTER: Congressman, you co-sponsored abortion-related legislation
with congressman Akin. Do you regret that now?

REP. PAUL RYAN (R-WI), VICE PRESIDENTIAL CANDIDATE: That bill passed
I think by 251 votes. It was bipartisan. I think it`s H.R. 3 you probably
talk about. I think we had 251 votes, 16 Democrats. I`m proud of my pro-
life record.

(END VIDEO CLIP)

O`DONNELL: Knowing that more questions on his abortion record were
coming, Paul Ryan tried to make his escape before being stopped for a
question on the difference between Ryan`s and Romney`s policies on
abortion.

(BEGIN VIDEO CLIP)

RYAN: I`m proud of my record. Mitt Romney`s going to be the
president and the president set policy. His policies for exceptions for
rape and incest and the life of the mother, I`m comfortable with it because
it`s a good step in a right direction.

(END VIDEO CLIP)

O`DONNELL: Bloomberg News reports that Paul Ryan has co-sponsored 38
anti-abortion measures, including some that make no allowance for rape.
Akin co-sponsored every abortion bill supported by Ryan in the almost 12
years the two Republicans have served together in Washington.

Paul Ryan also co-sponsored, with Congressman Akin, a bill that
describes something he called forcible rape. Paul Ryan is now trying to
pretend that that never happened.

(BEGIN VIDEO CLIP)

REPORETER: You sponsored legislation that has the language "forcible
rape." What is forcible rape as opposed to --

PAUL: Rape is rape. Rape is rape, period. End of story.

(END VIDEO CLIP)

O`DONNELL: Today, Todd Akin left open the possibility of leaving the
Missouri Senate race.

(BEGIN VIDEO CLIP)

AKIN: I am never going to say everything that could possibly happen.
I don`t know the future. It makes me uncomfortable to think that the party
bosses are going to dictate who runs as opposed to the election process.

(END VIDEO CLIP)

O`DONNELL: Here is the advice Todd Akin is getting from Sarah Palin.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER ALASKA GOVERNOR: I`m suggesting that he get
out. Maybe Todd Akin needs to learn a little lesson from me. You need to
know when to step back and wait to be invited to participate, and not
invite yourself to the party.

(END VIDEO CLIP)

O`DONNELL: Yes, yes, yes. The great teacher about quitting, Sarah
Palin.

Senator Claire McCaskill soldiers on in Missouri -- the only person,
the only person standing tonight between Todd Akin and a seat in the United
States Senate. Senator McCaskill has survived the bombardment of negative
attack advertising financed by Karl Rove`s super PAC. And she is still
standing.

Mitt Romney cannot stop Todd Akin. Paul Ryan cannot stop Todd Akin.
Ann Coulter cannot stop Todd Akin. Karl Rove cannot stop Todd Akin.

The only people, the only people who can stop Todd Akin from going to
the United States Senate now are the voters of Missouri and their senator,
Claire McCaskill.

Joining me now, MSNBC`s Joy Reid and Richard Wolffe and Michelle
Goldberg of "Newsweek" and "The Daily Beast."

Let`s listen to what Rush Limbaugh had to say today, advising
Republicans how to handle this issue.

(BEGIN VIDEO CLIP)

LIMBAUGH: For any and all of you Republicans, when you are asked why
you don`t have a rape exception in the party platform on abortion, don`t
answer it. Don`t get into the substance. Don`t answer the question,
Republicans. Don`t go anywhere near it.

It`s a setup, it`s a trap. You turn it right back around on them, and
you ask the reporter if they`ve asked the Democrats about the extreme
aspects of their position.

(END VIDEO CLIP)

O`DONNELL: Joy Reid, yet another example of why Rush Limbaugh could
never spend a day as a political candidate himself. Of course, there is
nothing extreme in the Democrats` position on abortion. But Rush Limbaugh
clearly thinks, now, that politically, at least, the no exception for rape
provision, that is their official party position, he believes that is a
serious political liability, and what he`s at least saying there, it is so
dangerous, we can`t even talk about it.

JOY REID, MSNBC CONTRIBUTOR: Yes, absolutely. Lawrence, actually, I
love this debate, because the truth of the matter is, the conservative base
of the Republican Party, particularly the evangelical base, has been
getting rolled by the pols and by the party hacks in that party for 20 or
30 years. They promise them they agree with their conservative beliefs and
if given the opportunity and given political power, they will give those
beliefs the force of law.

But the minute actual movement conservatives say anything, the pols
and the hacks, and that includes the elected people like Paul Ryan and the
media hacks like Rush Limbaugh, run away from them like they have typhoid.
This is what happens, election cycle after election cycle. We`re just
getting to watch it happen in real time.

O`DONNELL: Richard Wolffe, you`ve spent real time over the years
tracking down candidates.

RICHARD WOLFE, MSNBC POLITICAL ANALYST: Right.

O`DONNELL: And getting these questions in front of them. It`s a
crazy dream of Rush Limbaugh`s that he actually thinks Republican
candidates can just refuse to go near this question.

WOLFFE: There`s so many things that are crazy about Rush Limbaugh,
where do you begin?

Yes, his press advice is as crazy as everything else that spews out of
his mouth. But the reason this is hard to move beyond, even for
overstressed, you know, over-tired reporters on the campaign trail, the
reason that this is so easy is because Republicans haven`t just fallen into
this as a setup or some kind of stray comment. This has been their policy
for years, for convention after convention, no exception. This has become
mainstream for Republicans, to the point where they were prepared to send
the federal government and its credit rating over the edge, because of
abortion and that debate.

So they`ve made this a priority, at a time of economic hardship, at a
time of historically high unemployment, at a time when they had got power
in the House by saying they were going to concentrate on jobs. They`ve had
abortion votes. They`ve tried to go after what was left of federal funding
for abortion.

And as a result, because of this crazy obsession, they`ve had to try
to redefine rape, and weaken protection for minors. And it`s just caught
up with them. Finally, we`re paying attention.

But it was going to catch up with them some time or other.

O`DONNELL: Let`s listen to Paul Ryan in 2000, when he was trying to
earn his stripes, as it were, in the House of Representatives, as a hard-
core abortion opponent. Let`s listen to what he had to say then, about the
health exception for abortion.

(BEGIN VIDEO CLIP)

RYAN: The health exception is a loophole wide enough to drive a Mack
truck through it. The health exception would render this ban virtually
meaningless.

(END VIDEO CLIP)

O`DONNELL: Michelle Goldberg, that kind of talk has been on the House
floor for many years. I don`t think Mitt Romney understood, when he chose
Paul Ryan, that he would be bringing it right into this presidential
campaign.

MICHELLE GOLDBERG, NEWSWEEK: And to be fair, he probably couldn`t
have predicted it, because this talk has been so prevalent, it`s been in
the platform, you know, year after year, or cycle after cycle. And usually
people don`t pay that much attention. I mean, that was in certain ways the
favor that Todd Akin did all of us, was by really highlighting what it is
that the modern Republican Party stands for.

You know, the party has gotten used to being able to speak with two
voices, or it`s gotten used to being able to kind of play this double game,
where it says one thing to its base and it says another thing to the
general public, and it kind of hopes that people won`t listening to each
other`s conversation. Todd Akin, you know, said what he said to a national
audience, instead of just to a kind of Republican base audience, that
probably wouldn`t have found it particularly objectionable.

And now, with meanwhile, you have the Republican Party running away
from its platform, or at least a Republican candidate running away from its
platform, infuriating a lot of anti-abortion activists.

You know, I talked to people today who are absolutely livid at
Romney`s refusal to back Todd Akin, and people are coming forward with a
lot of money for Akin. I mean, he`s on track to raise $100,000 today.

O`DONNELL: Let`s see what Senator Claire McCaskill gets at the same
time. The next reports are going to be very interesting, because,
obviously, her candidacy has noted had this kind of attention since this
campaign began.

Let`s quickly listen to what Todd Akin, how he amended his apology
today on the "Today" show.

(BEGIN VIDEO CLIP)

AKIN: While I apologize for the misuse of that word, at the same
time, I don`t apologize for the fact they am strong in my belief of pro-
life.

(END VIDEO CLIP)

O`DONNELL: Joy Reid, where does Akin go from here?

REID: Well, I mean, the thing about it is, Akin has absolutely -- you
know, there`s no incentive for him to really play ball. The party didn`t
want him to be the nominee. He became the nominee over their objections.

But he knows, and Paul Ryan knows that there`s really not a difference
between their views on abortion rights. He`s the one representing the
authentic beliefs of the base, and now the party leaders, quote/unquote,
"Mitt Romney," who no one actually believes is in charge, they`re refusing
to stand by their base.

Akin`s got the base`s heart right now. It`s going to be interesting
to see if Romney can assert himself as the leader of a party who doesn`t
agree with anything he says and doesn`t trust him.

O`DONNELL: Joy Reid, Michelle Goldberg, and Richard Wolffe -- thank
you all for joining me tonight.

WOLFFE: Thanks, Lawrence.

GOLDBERG: Thank you.

O`DONNELL: Coming up, what does the Akin controversy mean to control
of the United States Senate? We will see what the Missouri race means in
terms of what will happen to the plans of power in the Senate after this
election.

Also coming up, Mitt Romney continues to tell more and more lies about
the president. Tonight, we`ll look at his welfare lie, and of course, his
Medicare lie. Even conservatives are saying that Romney is lying now.

And House Speaker John Boehner is in the "Rewrite" tonight. We have
new "off the cliff" information from CBO about just how much pressure is
going to be on Congress if, if we go off the cliff in January. That`s
coming up.

(COMMERCIAL BRESAK)

O`DONNELL: Mitt Romney is a truly extraordinary liar as a
presidential candidate, but lying is an old Republican tradition. We`ll
show you how old and how long Democrats have been complaining about it,
coming up.

And also, we`re going "off the cliff" tonight -- another "off the
cliff" segment. John Boehner`s added something to where we stand in the
"off the cliff" drama that we`re headed for on New Year`s Eve. That`s
coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

COULTER: This selfish swine, Todd Akin, is going to hurt the
Republican Party.

(END VIDEO CLIP)

O`DONNELL: Why does Ann Coulter call Todd Akin a selfish swine?
Because Todd Akin`s bat-crap crazy ideas on rape are going to make it so
much harder for Republicans to win control of the Senate.

Right now, Democrats hold 51 Senate seats, Republicans 47,
independents, two. Republicans would need to pick up four seats to gain
control of the Senate. They would need only three seat ifs Mitt Romney
actually won the election, because then the vice president, Paul Ryan,
would be able to cast tie-breaking votes.

Here are the 10 Democratic-controlled states Republicans think they
could pick up Senate seats -- Nebraska, Missouri, North Dakota, Montana,
Wisconsin, Virginia, Florida, Ohio, New Mexico, and Hawaii.

Joining me now, Jonathan Capehart, editorial writer for "The
Washington Post" and MSNBC contributor. And Michael Crowley, he is the
senior correspondent and deputy Washington bureau chief for "Time"
magazine.

Michael, what is -- what are Republicans thinking Akin is doing to
their overall campaign to take control of the Senate?

MICHAEL CROWLEY, TIME: Blowing it. I think, to put it pretty simply.

Blowing it not only because this state was one of their best shots at
a pickup, but sort of infecting, you might say, races around the country.
Elizabeth Warren is already jumping on this issue in Massachusetts, making
a lot of hay out of it. And you know, it`s going to really help, I think,
energize female pro-choice voters in a lot of the states that are
competitive.

And look, it was not going to be easy for Republicans to win back the
Senate, but they had a chance to do it, and I think now that chance has
really shrunk.

And so, you know, I think they were on the cusp, and they couldn`t
really afford to take a step back and they have. So right now they`re
thinking, this guy`s blowing it.

O`DONNELL: And, Jonathan, Michael brings up a good point. I didn`t
even mention the Massachusetts race. What I was showing there was, here
were the seats that prior to this week, the Republicans were aiming at,
thinking, we have really solid shot, you know, at these 10. We`ve got to
be able to pick up what we need in there somewhere.

But also makes it more difficult to hold on, where they -- for
example, in Massachusetts, with Elizabeth Warren running. And so, that`s
what it seems to me all this panic is about, from Ann Coulter and everyone
else.

JONATHAN CAPEHART, MSNBC CONTRIBUTOR: Well, that gets to the point
that Michael just made, that, yes, he -- Akin has blown it from the
Republicans` perspective, blown the Senate race in Missouri, but it`s sort
of the infectious nature of other race.

And keep in mind, the very first sitting senator to jump out there and
say that Todd Akin needed to get out of the race, needed to resign from the
race was Scott Brown. And the moment I saw that come across, you instantly
thought, oh, he`s -- that`s right. He`s running for re-election in a tight
race against Elizabeth Warren, and you better believe that she and the
Democrats were going to use that against Scott -- against Scott Brown in
that race there.

The Republicans are in a whole world of trouble here, which is why
you`re seeing the entire Republican establishment just unload on
Congressman Akin.

But the problem that they`re having is, they`re beating up on him for
having positions that they say are offensive and wrong and demeaning, but
they were perfectly fine with all of that when he didn`t open his mouth and
actually say what he actually believed. And so, you know, if you`re Todd
Akin and you know that not only are you right in your beliefs, so you
believe, but the Republican Party platform backs you up, why would you get
out of the race? Especially when you won the primary with no backing, you
-- no money, and you still won the race with the votes from Missouri
Republican primary voters.

O`DONNELL: You know, it`s clear that the Republican establishment
wants Akin out of there. What I`ve been quoting Rush Limbaugh tonight, and
Ann Coulter, to make the point that even the crazy edge of the Republican
Party is panicked about this, in the same way that the establishment party
is.

And here`s Ann Coulter`s latest idea about how to handle things in
Missouri. She says, "This selfish man has decided to play a game of
chicken with the Republican Party. It`s time for a nuclear bomb.
Republicans should stage a write-in campaign for a popular Republican, such
as Kit Bond, former governor and senator from Missouri."

Michael, that is the state of desperation that Republicans find
themselves in. I can`t think of anything more hopeless than that idea.

CROWLEY: No, that doesn`t seem too promising. I guess Lisa
Murkowski, you know, tried that in Alaska with some success, but I just
don`t think you`re going to get somebody who`s out of the political game.
You`re going to have to talk them into coming back in. It`s not somebody
who`s still in the public eye. In the case of Bond, I think it`s a real
long shot. And I think Democrats have just got to be thrilled about this.

And by the way, let`s just zoom out for a minute and think about the
stakes here, Lawrence. We talked so much about the presidential candidates
and campaign, we don`t think about the control of Congress. The president
is not an emperor, of course. They can`t pass legislation by fiat.

Now, even if Obama -- if Obama`s re-elected, the Republicans will be
able to filibuster his agenda, and I think he`ll have similar problems to
the ones he has now. But Romney, if they can get control of the Senate,
number one, they set the agenda, and number two, there is the possibility
of making big changes through reconciliation, doing an end run around
Democratic filibusters. You only need 50 votes for that, so the stakes are
huge.

O`DONNELL: Jonathan Capehart and Michael Crowley, thank you very much
for joining me tonight.

CAPEHART: Thanks, Lawrence.

CROWLEY: Thank you.

O`DONNELL: Coming up, another episode of "off the cliff."
Republicans are starting to get really scared that the Democrats are ready
to go off the cliff, the fiscal cliff on New Year`s Eve. That`s in the
"Rewrite."

(COMMERCIAL BREAK)

O`DONNELL: Republicans on Capitol Hill, John Boehner included, are
starting to get really scared of going off the cliff. That`s right.
Another "off the cliff" segment coming up in the "Rewrite."

And, you know, things have gotten really bad when even the
conservatives won`t defend Mitt Romney`s lies about President Obama.
That`s next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Since 1996, welfare recipients were required to
work. This bipartisan reform successfully reduced welfare rolls. On July
12th, President Obama quietly ended the work requirement, gutting welfare
reform.

(END VIDEO CLIP)

O`DONNELL: In the Spotlight tonight, Mitt Romney`s big lies. Now, I
know that doesn`t exactly narrow down the subject we are about to discuss,
since he`s told so many big lies. But specifically tonight, we are
focusing on his lies about welfare and Medicare.

First, the welfare lie. A former Republican congressman who actually
voted for the 1996 welfare bill just can`t take it anymore. He can`t take
Mitt Romney`s lie.

(BEGIN VIDEO CLIP)

JOE SCARBOROUGH, MSNBC ANCHOR: I was talking to a very loyal
Republican over the weekend. And usually the Republican will say, hey, you
know, Joe, you`ve got this wrong. Mitt`s this and Mitt`s that. And so, I
said to him -- I said, can you help me out on something? Because I`ve been
looking for a week and a half to try to figure out the basis of this
welfare reform ad. Like, what is -- he goes, that`s completely false.

(END VIDEO CLIP)

O`DONNELL: The Romney/Ryan about being America`s new protectors of
Medicare isn`t working either.

(BEGIN VIDEO CLIP)

ROMNEY: With regards to seniors, those are people who are today 55
years of age and older -- today`s seniors, if you will. My plan presents
no change. The plan stays the same, no adjustments, no changes, no
savings.

The president`s plan cuts Medicare -- excuse me. Well, let`s see.
I`ve got to -- there we go, by 716 billion dollars.

(END VIDEO CLIP)

O`DONNELL: Despite Mitt Romney`s best efforts at the whiteboard, the
NBC News/"Wall Street Journal" poll shows President Obama with a 16-point
advantage on Medicare. When asked whose plan for Medicare do you agree
with, 50 percent said President Obama`s, 34 percent said Mitt Romney`s.
And today`s "New York Times" exposed Romney`s Medicare law neatly in this
headline: "Patients Would Pay More if Romney Restores Medicare Savings,
Analysts Say."

The Times correctly referred to the 716 billion as Medicare savings,
not Medicare cuts. One economist quoted in "the Times" piece called
Romney`s pledge to restore the savings both "puzzling and bogus," while
Harvard health expert John McDonough said this: "there are only two
explanations, either they don`t understand how the program works, which is
hard to imagine, or there is some deliberate misrepresentation here,
because they know how politically potent this charge is."

Well, actually, both things are possible. They can not understand
Medicare and know that they`re lying about Medicare at the same time.
Today, in Nevada, President Obama explained what motivates Mitt Romney`s
lies.

(BEGIN VIDEO CLIP)

OBAMA: Less than 11 weeks, not that I`m counting, but -- we will --
we will see the other side spend more money than we`ve ever seen on ads.
And you know, these aren`t like positive ads, where they`re putting out
their plan, because they don`t really have a plan.

(APPLAUSE)

OBAMA: And the plan they`ve got won`t work.

(APPLAUSE)

(END VIDEO CLIP)

O`DONNELL: Mitt Romney is a truly relentless liar, but he is really
just the inheritor of an old Republican tradition of lying about Democrats.
Sixty years ago, the last Democratic presidential nominee from Illinois,
Adlai Stevenson, said this: "if Republicans will stop telling lies about
the Democrats, we will stop telling the truth about them."

Joining me now for more truth about the Republicans, Robert Reich,
former labor secretary under President Clinton, now a professor of
economics at the University of California Berkeley, and author of the book
"beyond Outrage," which will be in stores next week, and Jared Bernstein, a
senior fellow at the Center on Budget and Policy Priorities, and an MSNBC
contributor. He is the former chief economist to Vice President Biden.

Robert Reich, Adlai Stevenson`s old words could not be more relevant
to today`s campaign.

ROBERT REICH, FORMER LABOR SECRETARY: Exactly right. But, you know,
there has been a change over the years. I`ve been involved in about six,
possibly seven presidential campaigns. I`ve never seen such bald-faced
lies as I am hearing in this campaign from Republicans.

I mean, there are obfuscations. There are sort of -- and politics is
riddled with half-lies and half-truths. And there are mendacious
statements. But these are actual bald-faced lies. And they do it
repeatedly. I think the reason they`re doing them is they know they have
so much money. They`ve got a billion dollars.

And if you tell a big lie over and over again, even though the
mainstream media, even though everybody else who knows the facts are trying
to get out the facts, it doesn`t matter. You tell the bald-face lied over
and over again, with a billion dollars behind you, then some people are
going to believe it. And if they believe it, then they might vote for you.

O`DONNELL: Let`s listen to the latest message that Mitt Romney has
approved about Medicare.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Some think Obamacare is the same as free health
care, but nothing is free. Obama is raiding 716 billion dollars from
Medicare, changing the program forever, taxing wheelchairs and pacemakers,
raising taxes on families making less than 120,000 dollars.

Free health care comes at a very high price. The Romney/Ryan plan
will restore Medicare funding and protect and strengthen the program for
the next generation.

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

(END VIDEO CLIP)

O`DONNELL: Jared Bernstein, I`m going to give you equal time to
respond to that message.

JARED BERNSTEIN, CENTER ON BUDGET AND POLICY PRIORITIES: Thank you.
The thing that -- one of the things that caught my ear there is the
suggestion that by putting that 716 billion dollars back in, you -- Mitt
Romney will extend the life of the program. It`s exactly the opposite.

Those dollars, that 716 billion, are extra costs that are currently in
Medicare, taken out by the president in the Affordable Care Act, that are
engaged in things like over-payments to private insurers, excessive
reimbursement rates.

When you take those out, according to that very groovy guy, the
Medicare actuary, you actually extend the life of the program by eight
years. And this was quite clear in all of these factual rebuttals. By
putting that money back in, he`s actually shortening the life of the
program by eight years.

This is the Hospital Insurance Trust Fund. So that`s completely
upside down. The other piece of that, that I think is outright false, is
that -- the suggestion that those dollars actually come out of
beneficiaries. As I just stated, and the reason it extends the life of the
trust fund, is because those dollars come from inefficiencies on the
delivery side, nothing on the beneficiary side.

In fact, the Affordable Care Act improves the benefits of Medicare.

O`DONNELL: Let`s listen to the president`s own defense against Mitt
Romney`s welfare lie.

(BEGIN VIDEO CLIP)

OBAMA: My administration responding to the requests of five
governors, including two Republican governors, agreed to approve giving
them, those states, some flexibility in how they manage their welfare
roles, as long as it produced 20 percent increases in the number of people
who are getting work. So in other words, we would potentially give states
more flexibility to put more people back to work, not to take them off the
work requirement under welfare.

(END VIDEO CLIP)

O`DONNELL: Robert Reich, that`s what the truth sounds like on this
issue.

REICH: Yes. I mean, again, it`s exactly the opposite of what Romney
has been saying. The president responding -- you know, the Republicans for
years have been saying, we want more flexibility at the state level for a
lot of these programs. So what the president does, he turns around and he
says, OK, states, you have some more flexibility, particularly if you`re
going to put more welfare recipients to work.

Then Romney turns around and says, what the president did is exactly
the opposite of the truth. The president actually says Romney got rid of
the work requirement. I mean, nothing could be further from the truth.
Just like as Jared said, with regard to the Medicare reform and the
Affordable Care Act, which actually pushes providers -- gets excessive
reimbursements down, and helps beneficiaries, and helps extend the life of
the program, what Romney is saying, it actually takes away from the
program. And it`s going to take away from beneficiaries.

What Romney is doing, again and again and again, with the help of huge
amounts of donations from billionaires is basically telling the American
people the exact reverse of the truth.

BERNSTEIN: Lawrence, if I might, I actually went to the Health and
Human Services document that Romney`s ad was based on. And this is where
the government itself is going forth and saying to the states, here`s how
you can apply for a waiver.

Here`s what it says, you can ask for new, more effective ways to meet
the goals of welfare, particularly helping parents successfully prepare
for, find, and retain employment. "Prepare for, find, and retain
employment." Does that sound to you like you`re ending the work
requirement?

O`DONNELL: Not to me. Robert Reich and Jared Bernstein, thank you
both very much for joining me tonight.

BERNSTEIN: Thank you, Lawrence.

REICH: Thanks, Lawrence.

Coming up, John Boehner accidentally exposed one of the Republican
lies about government spending. That`s in the Rewrite.

And First Lady Michelle Obama is more important on the campaign trail
than ever. We`ll show you a very revealing personal interview she did this
week.

(COMMERCIAL BREAK)

O`DONNELL: In tonight`s episode of Off the Cliff, the Congressional
Budget Office rewrites its estimate of just how bad the economy will be if
we do go off the cliff, the fiscal cliff. Today, the CBO updated its
economic outlook for the future, which is really hard to do these days,
because there is so much uncertainty about what government spending will
look like next year, and what our income tax rates will be next year.

Current incomes tax rates, so-called Bush income tax rates, are
scheduled to expire on January 1st, and go back up to the Clinton tax
rates. You remember the Clinton tax rates. They`re the higher income tax
rates we had in place when the economy was soaring in the 1990s.

And thanks to a crazy deal that Republicans made with the president to
raise the debt ceiling, on January 1st of next year, large automatic
spending cuts will go into effect, half of which would be in defense
spending. And the good news/bad news affect, according to CBO, of all of
that, is that the projected deficit for next year would be cut in half.

That is, obviously, the good news. The bad news is that the economy
would fall back into recession, with most of the damage hitting the economy
in the first six months of next year. Unemployment would go from just
above eight percent to about 9.1 percent.

This news provoked a sensible-sounding response from the Republican
speaker of the House. "Instead of threatening to drive us off the fiscal
cliff and tank our economy in their quest for higher taxes, I would urge
President Obama and Congressional Democrats to work with us."

There are some fun things to unpack in what John Boehner said. First,
Boehner sounds like he believes Democrats are willing to go off the cliff,
as I have been urging them to do, since that is the only way to bring
Republicans to the negotiating table quickly and get any kind of reasonable
outcome. Boehner`s use of the phrase "tank our economy," is also
important, because he`s accepting CBO`s description of what would happen.

Boehner is admitting that the spending cuts that will be triggered on
January 1st, unless Congress negotiates some other agreement, will help
tank the economy, along with an increase in the income tax rates. But,
remember that Republican orthodoxy now, which is to say the Republican lie
now, the Republican economic insanity now is that government spending does
not affect jobs in any way, doesn`t create jobs.

But there`s Boehner saying that cuts in government spending will tank
the economy, just as CBO says it will, and will increase unemployment. Of
course, we will not go into recession if we actually do go off the cliff on
January 1st, because what will happen is Congress will immediately go into
emergency negotiations to pass a package of new, lower-income tax rates.
And the Democrats should then have enough leverage to prevent the top tax
bracket from being lowered along with all the other rates.

And Congress can also simply agree to vote to eliminate the drastic
spending cuts that would tank the economy, or dramatically reduce those
spending cuts and stretch them out over a longer period of time to minimize
the negative economic impact.

No one is saying we should go off the cliff and stay off the cliff.
I`m not saying that. I, like John Boehner, accept the CBO scenario that
says that would probably tank the economy. But that CBO projection is
exactly what will force a very quick agreement on taxes and spending as
soon as, but not one minute before we actually do go off the cliff.

Republicans can save us from going off the cliff right now by simply
agreeing with the president, that all tax rates should be kept low, except
the top tax rate. But Democrats will not be taken seriously by Republicans
as negotiators if they don`t find a way to scare Republicans, if they don`t
find a way to make Republicans feel like Democrats.

In other words, if the Democrats don`t make Republicans feel that they
are dealing with people who are crazy enough to actually go off the cliff,
crazy enough or brave enough to take the risk, even the brief and very
temporary risk of going off the cliff. Republicans have thought that only
they get to use crazy scare tactics, only they get to threaten not to raise
the debt ceiling.

But now John Boehner sounds like he believes the Democrats just might
use the scare tactic of going off the cliff. John Boehner`s starting to
sound scared. And so is Mitch McConnell. And scared is exactly what we
need the Republican congressional leaders to feel for a change.

(BEGIN VIDEO CLIP)

MCCONNELL: You might call this Thelma and Louise economics.

You might call this Thelma and Louise economics.

You might call this Thelma and Louise economics.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY: As of today, they have hired or trained
125,000 veterans and military spouses -- 125,000.

(APPLAUSE)

M. OBAMA: And they`ve done it more than a year ahead of schedule.
That`s pretty impressive. And this is just the beginning. We are only
scratching the surface. We`re just getting started. And we`re not going
to stop until all of our veterans know that when they hit that job market,
their skills will be rewarded.

(END VIDEO CLIP)

O`DONNELL: That was Michelle Obama today in Florida, proving once
again to be an invaluable asset to the Obama campaign, especially with
family and women`s issues at the forefront of the campaign this week. She
also had a candid chat with iVillage reporter Kelly Wallace this week,
where she talked about some surprisingly personal family issues.

(BEGIN VIDEO CLIP)

M. OBAMA: I have to say that I know that his ability to ultimately
kick the habit was because of the girls, because they were -- they`re at
the age now where you can`t hide. It`s clear. And he would have to start
having those conversations, because we discuss all the time. We talk about
drugs. We talk about sex. We talk about smoking. We talk about it all.
I mean, our --

UNIDENTIFIED FEMALE: So you`ve had the talk?

M. OBAMA: We`ve had all the talks that there are to have. I mean,
Malia is very inquisitive and open. And our view is that, you know, you`ve
got to approach kids where they are. And when they ask a question, you
know, our reaction and how open and how comfortable we are with the topic
really affects their willingness to share.

For him, he had to go and get it done. So when I knew that he was
trying -- we just didn`t talk about it. I mean, I didn`t think having
additional pressure of, how you doing today? Is it hard? Did you smoke?

UNIDENTIFIED FEMALE: It`s so hard.

OBAMA: Just let him, you know, develop his system of coping and work
it out. And it was probably a year out that he was able to talk to the
girls and say, I`ve quit, that he felt comfortable saying, dad quit.

I think open -- being open and honest with kids -- because the truth
is, we`re not perfect adults. And I don`t want my girls to feel like they
have to be perfect because they think I`m perfect.

UNIDENTIFIED FEMALE: Right.

OBAMA: And my mom was good about this with us. I mean, my mom was
very good about being honest and open about her imperfections. And I don`t
think my mom has too many vices. She`s a smoker herself, grew up in -- I
remember my brother and I, we used to hide their cigarettes and dip them in
hot sauce, and break them up in to little packs.

And my mom`s pretty stubborn about doing what`s in her own mind. But
she also recognized that this is a fault. You know, she never talked to us
in any way other than, don`t smoke. But, you know, her thing was, don`t
follow me. Be better than me.

UNIDENTIFIED FEMALE: Absolutely.

OBAMA: You know? So she taught us that you can be open and honest
about your own shortcomings, and it doesn`t necessarily mean your kids are
going to adopt them, those shortcomings. It may mean that they embrace
knowing those faults and they can move beyond them.

(END VIDEO CLIP)

O`DONNELL: Joining me now, Nia-Malika Henderson, "Washington Post"
national political reporter. Nia, I can tell you there`s nothing like
having a 14-year-old girl in the house to make you keep it real, as we`ve
just heard.

NIA-MALIKA HENDERSON, "THE WASHINGTON POST": That`s right. That`s
right. And I think that -- you look at that clip and you understand why
the First Lady`s approval ratings are so high. They`re 65 percent. She is
the most popular Democrat in the country. Certainly the most popular
Democrat in the White House.

And she`s able to, on the one hand, be out on the stump in Florida and
talk about policy, but then again talk about what it`s like to be a parent,
what it`s like to be a wife of someone who`s struggling to give up smoking.
So I think in those personal ways, she`s very much able to come across as
very accessible, especially to women, especially to parents who, as you
said, are dealing with the difficulties of being 14.

I sure remember being 14. And I was no walk in the park.

O`DONNELL: And then we start at the beginning of the segment, her
giving this speech with serious policy items in it. That same person who
can sit there on the sofa and be so real can also --

HENDERSON: With her shoes off, right?

O`DONNELL: Yeah, exactly. Yes. And then get out there today in
Florida and deliver the goods in the campaign speech.

HENDERSON: That`s right. And that`s why you`re going to see her all
over the place, I think. Next week, she`s actually going to be on
Letterman. Of course, that`s going to be the RNC convention. Certainly
she`ll get some buzz for that. She`s of course is doing this iVillage,
editing that website this week.

She`s going to be all over fund-raising. So this is, I think, just
the beginning.

O`DONNELL: Nia-Malika Henderson, thanks for joining us tonight.

HENDERSON: Thank you.

O`DONNELL: That`s it. "THE ED SHOW" is up next.

END

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