updated 11/16/2012 11:17:51 AM ET 2012-11-16T16:17:51

THE ED SHOW with ED SCHULTZ
November 15, 2012

Guests: Luis Gutierrez, Ruth Conniff, R.T. Rybak, Richard Wolffe, Michael Tomasky

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

Republicans are trying to reinvent their image with minority voters.
Don`t let them fool you.

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

(BEGIN VIDEOTAPE)

GOV. BOBBY JINDAL (R), LOUISIANA: We need to stop being the dumb
party. We don`t win elections by insulting voters.

SCHULTZ (voice-over): Republicans continue to insult voters.

Tonight, Congressman Luis Gutierrez and former Republican Party chair,
Michael Steele, on the Republican chaos that plays right into the hands of
the Democrats.

Progressives stay on offense over the fiscal cliff.

SEN. BERNIE SANDERS (I), VERMONT: We`re going to make some of our
colleagues here an offer they can`t refuse.

(CHEERS)

SCHULTZ: Republicans just keep laughing.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: It`s a joke. A joke.

SCHULTZ: E.J. Dionne and Ruth Conniff have the latest on the fight
for the middle class.

Richard Wolffe on another disastrous day for Senator John McCain.

And first, it was Papa John`s. Now, Denny`s is serving up a
grandstand breakfast on Obamacare.

(END VIDEOTAPE)

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

The Republican Party has an identity crisis. African-American and
Hispanic voters have been told they were bribe by their vote for President
Obama. This is not a winning message for Republicans -- now or in the
future.

Mitt Romney was the big loser for the Republican Party and he`s now
throwing the GOP into turmoil as he rides off into the sunset.

Once again, Romney was recorded telling his big donors what he really
thinks about Americans.

(BEGIN AUDIO CLIP)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: What the president,
president`s campaign did was focus on certain members of his base
coalition, give them extraordinary financial gifts from the government, and
then work very aggressively to turn them out to vote.

(END AUDIO CLIP)

SCHULTZ: Extraordinary financial gifts. MSNBC can confirm the
authenticity of the recording although we do not know when the call was
recorded.

Romney went on to explain why he believes minority voters chose
President Obama.

(BEGIN AUDIO CLIP)

ROMNEY: What the president did is he gave them two, two things. One,
he gave them a big gift on immigration with the DREAM Act amnesty program.
Number two, put in place Obamacare which basically is $10,000 a family. I
mean, it`s a proven political strategy, which is give a bunch of money from
the government to a group and guess what? They`ll vote for you.

(END AUDIO CLIP)

SCHULTZ: Romney even had suggestions for Democrats about more free
stuff to offer voters.

(BEGIN AUDIO CLIP)

ROMNEY: What I would do if I were a Democrat, running four years from
now, I`d say, you know what, dental care ought to be included in Obamacare.
Immigration we can solve, but the giving away free stuff is a hard thing to
compete with.

(END AUDIO CLIP)

SCHULTZ: Does he not want to solve the immigration problem in this
country? I hope the Republicans don`t change at all.

Mitt Romney`s parting shot on the national stage has left Republicans
scrambling. Most members of the parties, you know what they did? They
stuck behind Mitt Romney when this 47 percent video came out and was
revealed to the public.

This time, the knives are out. Conservative Louisiana Governor Bobby
Jindal doesn`t want Romney`s comments to ruin the party`s electoral
chances.

(BEGIN VIDEO CLIP)

JINDAL: This is completely unhelpful. This is not where the
Republican Party needs to go.

Look, we want -- if you want voters to like you, the first thing
you`ve got to do is to like them first. And it certainly is not helpful to
tell voters that you think their votes were bought. That`s certainly not a
way to show them you respect them, like them. We need to stop talking down
the voters.

(END VIDEO CLIP)

SCHULTZ: Jindal sounded downright liberal there, didn`t he, as he
tried to counter the damage Mitt Romney has done.

(BEGIN VIDEO CLIP)

JINDAL: I truly believe people that are on food stamps, on government
assistance don`t want to be there. They`re there because they don`t have
the ability to get better paying jobs. It`s our responsibility to adopt
policies that grow the economy, that give them the education, give them the
opportunities to have a better quality of life.

(END VIDEO CLIP)

SCHULTZ: Other Republicans jumped on the bash Romney bandwagon.
Governor Scott Walker of Wisconsin is no friend of a middle class. He took
a stand against Romney`s comments saying, "The GOP isn`t just for people
who are currently not dependent on the government. It`s for all
Americans."

This is the same guy who took away collective bargaining rights for
the middle class workers in the state of Wisconsin. Give me a break.

Even one of Mitt Romney`s potential vice presidential picks realized
the danger of Romney`s comments.

(BEGIN VIDEO CLIP)

SEN. KELLY AYOTTE (R), NEW HAMPSHIRE: I listened to the comments. I
don`t know what the context fully was.

I don`t agree with the comments. I think the campaign is over. And
what the voters are looking for us to do is to accept their votes and then
go forward and we`ve got some big challenges that need to be resolved as
you know.

(END VIDEO CLIP)

SCHULTZ: Oh, Senator, go have some coffee with that guy name, what`s
his name? Mitch McConnell.

Republicans, you know what they got? You got a lot of soul-searching
to do. In fact, former Mississippi Governor Haley Barbour said the GOP
needs to look deep into their souls.

(BEGIN VIDEO CLIP)

HALEY BARBOUR (R), FORMER MISSISSIPPI GOVERNOR: We`ve got to give our
political organizational activity, you know, a very serious -- proctology
exam. I think that`s the only --

(LAUGHTER)

BARBOUR: We need to look everywhere is my point.

(END VIDEO CLIP)

SCHULTZ: That would be up where?

Most people see a party which is still leaving minority voters by the
wayside. The images of long lines on Election Day are still burned into
the voters` minds. These lines were engineered by who? Republicans --
trying to suppress voters in Democratic areas.

In Florida, Republican lawmakers pack the ballot with unnecessary
measures to keep voters in the line for as long as they possibly could so
they wouldn`t do what? Vote.

Scott Walker`s colleague in Wisconsin said Mitt Romney would have
absolutely won the state of Wisconsin if they had just had some voter ID
laws. Right?

President Obama won Wisconsin with more than 205,000 votes. That`s a
lot of people to suppress in order to make a sure Romney absolutely would
win type situation. Don`t you think?

One of the most outrageous post-election comments about minority
voters came from the chairman of the state of Maine, their Republican Party
up there. Charlie Webster, he questioned the mere presence of African-
American voters at the polls.

(BEGIN VIDEO CLIP)

CHARLIE WEBSTER, MAINE REPUBLICAN PARTY: In some parts of the state,
for example, in some parts of rural Maine, there were dozens, dozens of
black people who came in and voted Election Day. Everybody has a right to
vote, but nobody in town knows anybody who`s black.

How did that happen? I don`t know. We`re going to find out.

(END VIDEO CLIP)

SCHULTZ: Webster tried to explain himself to "Talking Points Memo".

"You know, when you see a lot of black people, a lot of people who are
black like six or eight or 10 people, you think, wow, where do they live?
That was my point. There`s nothing about me that would be discriminatory.
I know black people. I play basketball every Sunday with a black guy."

Are you kidding me? You think the Republican Party`s got some work to
do? I think they need, like, a clinic.

Republicans don`t have a difference of opinion on the stage of their
party. They have a multiple personality disorder. Mitt Romney talked
about voters getting gifts, but the GOP turmoil is the gift that just keeps
on giving to the Democrats.

Yesterday, President Obama showed how a party should proceed after an
election, with focus and determination and listening to the electorate.
The president is committed to winning the tax fight for the middle class.

The Democrats cannot be derailed by all this GOP identity crisis.
That`s why I`m talking about it tonight. This is a time for the
progressive community in America to speak with authority and with clarity
on what this country really wants.

Liberals, this is our time. It`s time to govern. It`s no time to
back down.

And if you`re out there, and if you think the election season`s over,
you`re wrong. This -- we fought and we worked hard for this opportunity to
be in this position to do what? Make change.

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

Tonight`s question: Can Republicans reinvent themselves with minority
voters? Text "A" for yes, text "B" for no to 622639. I want you to go to
our blog at Ed.MSNBC.com and leave a comment on this one. We`ll bring you
the results later on in the show.

Joining me tonight, Congressman Luis Gutierrez of Illinois. Also with
us, Michael Steele, MSNBC analyst and former chairman of the RNC.

Gentlemen, great to have you with us tonight.

REP. LUIS GUTIERREZ (D), ILLINOIS: Thanks.

MICHAEL STEEL, FORMER RNC CHAIRMAN: Good to see you, Ed.

SCHULTZ: Congressman, you were on the floor today introducing your
Republican colleagues to Hispanic voters in America. Did they hear your
message?

GUTIERREZ: I certainly hope so, because I think America`s a nation of
immigrants. A nation that welcomes new blood and new vitality and that`s
what`s made us strong and makes us the kind of democracy we are in the
world.

And so, I hope that they did, because to be quite honest, what I said
today on the House floor was if you talk about self-deportation to 10
million people, millions of whom have American citizen children, if you say
to thousands, tens of thousands of young people who gathered across this
country and said to President Obama, yes, we`re going to take you up, we
don`t want to be deported, we want a work permit, that you`re just going to
not extend that program that -- as a matter of fact you will veto the DREAM
Act.

If you`re going to go hang out with the SB-1070 folks in Arizona and
Governor Brewer and then go to Iowa with members of Congress who say the
only way we can control these immigrants is the same way we control our
farm animals, the use of electricity --

SCHULTZ: Michael, how much --

GUTIERREZ: -- that`s a party that says, we don`t really know who you
are.

SCHULTZ: Michael, respond to that. There`s a lot there to unpack.

STEELE: There is a lot there to unpack. I think the congressman is
largely correct in his assessment and I appreciate his introduction of the
Hispanic community to the party. And in the sense that for the past 10
years or so, but more recently, especially, we have really been tone-deaf.
You had George Bush and a few others who tried to crack open and sort of
expose some opportunities for the party to have a real dialogue and
communication, but we`ve seen how that`s played out.

So this is real-time. I think your -- I think your clarion call to
the left is very appropriate. This is, you know, the spoils of war is the
opportunity to govern in victory. And for the Republican Party right now,
it`s not just soul searching. It`s, you know, following up on what Haley
Barbour said. The establishment needs to -- before you do that proctology
exam, pull your head out and understand exactly what`s going on.

And really what this time means for Hispanics, African-Americans and
all Americans, when you`re looking at a two-party system and one party is
tone-deaf to exactly what`s happening.

SCHULTZ: All right. Michael, let`s put aside the financial talk and
the big battle going on in Washington right now.

STEELE: Right.

SCHULTZ: If the Republican Party were to change, don`t you have to
come around on women`s issues like equal pay? Like letting them make
decisions with their body when it comes to health care?

I mean, there are some social fundamental things right now that the
Republican Party`s out of step with. At least that`s what I saw in this
election.

Your thoughts on that?

STEELE: I think there`s some legitimacy to that. Look, you know,
we`re fundamentally a pro-life party. We believe very much in the sanctity
of life. But there`s a way you can have that discussion without making
women especially feel that they`re out of place, out of step, because of
their particular belief or value system on that issue.

Look, you know, there`s a broad cloth or swath of issues out there
where we can find that common ground to stand on that talk to where people
are. And I to your point, Ed, that the party has to recognize that, you
know, not everything is going to be lockstep with us 100 percent, on most
things. Ronald Reagan said, I thought were very true, where we have that
common ground, let`s stand there for the fight for better jobs, equal pay -
-

SCHULTZ: Yes.

STEELE: -- and opportunity.

SCHULTZ: Congressman, I want to ask you, my commentary you heard a
moment ago, now is the time to move.

GUTIERREZ: Yes.

SCHULTZ: And if you`ve got minorities on your side, they`re voting
with you, and there`s more young kids coming in to us, that want to see an
opportunity that the Democrats are putting on the table --

GUTIERREZ: Sure.

SCHULTZ: -- if you don`t legislatively move right now, are you
missing an opportunity? I don`t want to ask about what are the Republicans
going to do to fix their camp.

GUTIERREZ: No.

SCHULTZ: What are the Republicans going to do to enhance their camp?

GUTIERREZ: I think the republic -- I think that the Democratic Party
has to respond. Here`s what I`ve said, Ed. I said, the same energy, the
same vocation, the same numbers, the same enthusiasm that Latinos came out
to vote for President Barack Obama, that`s the kind of enthusiasm, energy,
vocation, and commitment --

SCHULTZ: We got to do the DREAM Act.

GUTIERREZ: -- that we have to show to the cause. We cannot start to
wander or wonder whether or not we were right, because let me just say
this. One out of 10 voters today is Latino. In 10 years, most will tell
you that 25 percent of all voting age Americans will be Latino. So it`s a
growing population.

SCHULTZ: Yes.

GUTIERREZ: And it`s a population, because democracy is a tough thing.
But --

SCHULTZ: What about that, Michael?

STEELE: I think the congressman is exactly right. I`ve been saying
since election night the reality for the GOP is that every month 50,000
Hispanics turn 18 years old. And if we are not prepared to deal with that
math --

SCHULTZ: Yes.

STEELE: -- to deal with that reality, then we will be the party of
the Whigs. We will go --

SCHULTZ: And, gentlemen, we will leave it there. Thank you.

Congressman Luis Gutierrez and Michael Steele with us tonight here on
THE ED SHOW -- thanks so much.

Remember to answer tonight`s question there at the bottom of the
screen. Share your thoughts on Twitter @EdShow and on Facebook. We want
to know what you think.

Coming up, he`s a warrior for the folks. Senator Bernie Sanders and
progressives know that they have a mandate to protect the middle class from
this fiscal cliff. E.J. Dionne and Ruth Conniff join me.

Stay with us. We`re coming right back on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ: Coming up: Bernie Sanders stands up for the middle class
while Republican leaders try to hold the line for the millionaires. Ruth
Conniff and E.J. Dionne join me for the discussion next.

Big city mayors are trying to stop the Republicans from taking the
middle class hostage in these negotiations. Minneapolis Mayor R.T. Rybak
is leading the charge and he is with us tonight.

And if you can`t beat `em, impeach `em. We`ll have the latest right
wing attempt to take down President Obama with "Newsweek`s" Michael
Tomasky.

Share your thoughts with us on Facebook and Twitter using #EdShow.

We`re coming right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Thanks for watching tonight.

Middle class Americans will not be the ones kicked over the fiscal
cliff. Not if Bernie Sanders and true Democrats have anything to say about
it. You can always count on Bernie, can`t you?

Here`s Senator Sanders today at a progressive summit in Washington.

(BEGIN VIDEO CLIP)

SANDERS: We`re going to send a loud message to the leadership in the
House, in the Senate, and President Obama -- do not cut Social Security, do
not cut Medicare, do not cut Medicaid, do not cut --

(CHEERS)

We must not balance the budget on the backs of the elderly, the sick,
the children, or the poor.

(END VIDEO CLIP)

SCHULTZ: On the other side of the aisle, Senate Minority Leader Mitch
McConnell is sounding obstinate right out of the gate.

Here`s what he said about the president this morning.

(BEGIN VIDEO CLIP)

MCCONNELL: Let`s be clear. An opening bid of $1.6 trillion in new
taxes just isn`t serious. It`s a joke. A joke.

(END VIDEO CLIP)

SCHULTZ: House Speaker John Boehner has been far milder in this
rhetoric. And according to "Politico`, some House Republicans might
consider a tax hike on millionaires. "Many Republican lawmakers privately
concede that the 2012 election left them far short of a mandate on taxes.
And if urged by Democrats to raise rates on the mega-wealthy, they will
have a tough time resisting."

For the record, President Obama`s position sounds much more in line
with Senator Sanders` way of thinking.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There are some tough
things that have to be done, but there`s a way of doing this that does not
hurt middle class families, that does not hurt our seniors, doesn`t hurt
families with disabled kids.

(END VIDEO CLIP)

SCHULTZ: Let`s bring in Ruth Conniff, political editor for "The
Progressive Magazine". Also with us tonight, E.J. Dionne, MSNBC
contributor, "Washington Post" columnist and author of the book, "Our
Divided Political Heart."

Great to have both of you with us tonight.

Ruth, you first.

You know, this could set up to be a moment of real disappointment for
liberals if the Democrats can`t close the deal. I mean, there was, you
know, 2010, when they didn`t think they got enough of health care, and when
the economy was struggling a little bit. They thought President Obama
didn`t fight hard enough for `em.

This is round two. And I think that liberals are pretty energized.

How important is this moment in history?

RUTH CONNIFF, THE PROGRESSIVE MAGAZINE: It`s absolutely critical.
And you can see that the Republicans feel that it`s critical because it`s
their political opportunity to scare us about the fiscal cliff and use it
to actually do something that has nothing to do with the deficit which is
this changing of Social Security that they want to put on the table.
That`s something that Bernie Sanders addressed very effectively.

It was interesting he quoted Ronald Reagan on the floor yesterday to
point out that Social Security has nothing to do with the deficit or
balancing budgets, that payroll tax that employers and employees pay into
the trust fund that finances that, and it should not even be discussed in
these negotiations.

But furthermore, this whole election, this whole national election was
a referendum on the Republicans` ideas expressed so well by Mitt Romney, by
the way, yesterday afternoon when he talked about -- you know, with such
contempt for people who might need college loans, or health care, God
forbid.

And, you know, this election showed Americans are completely opposed
to the proposed reforms by the Republicans on Medicare and Social Security.
They don`t want entitlements changed or touched.

SCHULTZ: Yes.

CONNIFF: And they want to see the top 2 percent pay some taxes, like
they did in the Clinton era.

So if their elected representatives come in and within a week they`re
talking about changing entitlements and not raising taxes on the very rich,
it`s not just liberals who will be disappointed. This is whole country
here that are behind what Obama and the Democrats --

SCHULTZ: Sure.

CONNIFF: -- campaigned on which is justice.

SCHULTZ: E.J. Dionne, if you had to pick a side you could team up
with to negotiate, who has the upper hand here?

E.J. DIONNE, THE WASHINGTON POST: Well, I think it`s pretty clear
despite what Senator McConnell said today that the Republicans have given
in fundamentally on principle and we`re talking about what the price is
going to be for a tax increase. John Boehner said early on -- well, we can
do it through tax reform.

But he -- that, by saying that he was saying we can raise taxes on the
rich.

Now, think there are some really tricky things that we face here. One
is, the Republicans just don`t want to go back to those Clinton rates. I
think the right way to do this is to restore all the Clinton rates and then
have a discussion of tax reform.

You`re not going to be able to raise as much money as people say you
can.

SCHULTZ: Yes.

DIONNE: For example, are people going to really want to whack at the
mortgage deduction when we`re just coming out of a housing crisis? And
then if you don`t really whack at it, then you`re not raising much money.

But the Republicans, I think, have signaled very clearly that they
know that if they spend the rest of the year sounding like they`re just
fighting to save very rich people from modest tax increases, they know
that`s a political loser.

SCHULTZ: All right.

Here`s Speaker Boehner on the chances of cutting a deal. Here it is.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: If you`ve looked
closely at what the president had to say and you look closely at what I
have had to say, you know, there are no barriers here to sitting down and
beginning to work through this process.

(END VIDEO CLIP)

SCHULTZ: Ruth Conniff, I really don`t know what that means. Do you?

CONNIFF: It makes me nervous because I don`t really want to see us
moving that close to Boehner.

And, you know, it`s interesting. I talked to economist Dean Baker,
who`s -- he`s the economist in America who showed that the housing bubble
was a threat back in 2002, before it actually popped in 2005. He has a lot
of credibility.

And he said, you know, the best deal might be no deal. If Obama can
go into these negotiations and say this fiscal cliff is not actually going
to impact people on January 2nd, it`s recessionary, but he could get the
two main things he campaigned on, even if there`s no deal, which is an
instant hike on the very rich and no touching of Social Security, Medicare
and Medicaid.

SCHULTZ: Yes.

CONNIFF: And then the Republicans just as E.J. points out would have
to turn around and explain why they wouldn`t then want to go along with a
tax decrease for 98 percent of voters. Right? So they would have to stand
up against that and that is an impossible position. If they even know that
Obama would consider letting them go off the cliff, I think that might be a
stronger bargaining position.

SCHULTZ: Well, we haven`t heard much about this payroll tax cut, but
this part of the fiscal cliff. How`s this going to play out, E.J.?

DIONNE: Well, I think the -- first of all, I want to underscore
something Ruth said which is this doesn`t have to be a cliff. And I think
we shouldn`t be scared of the cliff. I think he does, the president does
need to stick to this as a bargaining position.

You don`t have to put all the cuts in effect the first month of the
year. You have the -- the government can kick those down the road. You
don`t have to change the tax table. So you don`t have to start withdrawing
money from people`s paychecks.

SCHULTZ: Yes.

DIONNE: So I think there are ways of going over the cliff and make it
more like I against Lawrence O`Donnell says a curb on the street.

I think the payroll tax is really difficult issue, because a lot of --
and liberals are torn about it because on the one hand, I kind of like the
idea of goosing the economy and letting people keep another year of their
payroll tax cut, but we`re worried about the long-term for Social Security.
It`s a tough, tough issue.

SCHULTZ: No doubt.

All right. Ruth Conniff, E.J. Dionne, great to have you on the
program. Thanks so much.

DIONNE: Good do be with you.

SCHULTZ: Next, the real cost of the fiscal cliff. President Obama
gets a firsthand look at what`s really at stake in cities across the
country.

And while John McCain was out complaining about the lack of details
given on Benghazi, he misses a key briefing offering details about
Benghazi. Richard Wolffe will weigh in.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Thanks for staying with us tonight.

While the Republicans bicker about the budget in Washington, President
Obama got to see what`s really at stake in this fiscal cliff debate. The
president visited a section of Staten Island still reeling from hurricane
Sandy.

The storm hit more than two weeks ago. The cleanup is still a huge
challenge here in New York City and Long Island and across New Jersey
tonight.

One senior citizen`s home is still in a really tough shape. He`s got
a foot of sand in the hallway.

The Port Authority just released this security camera footage. You
can see water pouring into the path train station in Hoboken. Hundreds of
thousands of people rely on the path trains every day, service still isn`t
fully restored. The Port Authority relies on federal money to run those
trains so people can get to work. Cities across New Jersey and New York
also depend on federal dollars to recover from disasters like this. Now
those dollars are in jeopardy.

Mayors of some of the nation`s largest cities met today with Vice
President Joe Biden about the financial threat. And they`re not just
worried about disaster relief. The U.S. Conference of Mayors says
Republican spending cuts would cost cities at least 110 billion dollars
just next year. The cuts would take 36 percent out of education. Housing
programs would suffer. Workforce training programs could get cut.

The cuts would also force cities to lay off workers. The hurricane
recovery shows how much local governments rely on federal help.
Republicans, independents and Democrats are joining forces.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I was speaking on
behalf of the country when I said we are going to be here until the
rebuilding is complete.

(END VIDEO CLIP)

SCHULTZ: The nation`s mayors are hoping the Democrats will keep them
in mind as they debate the debt.

I`m joined tonight by Minneapolis Mayor R.T. Rybak, who was in that
meeting today with the vice president and talking about budget cut to
cities. R.T., good to have you with us tonight.

What did you tell the vice president? How severe would these cuts be
to towns such as yours?

MAYOR R.T. RYBAK (D), MINNEAPOLIS, MN: First off we heard the vice
president say before we even opened our mouths that he gets what we`re
talking about, that sometimes you can cut a dollar in Washington and feel
good about it, but you create an expense at a local level. If you cut
programs for immunization for kids, you wind up having costs in hospitals.
If you cut domestic abuse prevention programs, you increase costs for cops
at a local level.

So we`re saying, look, we`re mayors. We`ve had to do this balancing
of budgets and tough cuts for years. We get the tough job in Washington.
But let`s not be feeling real good in Washington about cutting something
that provides real service at a local level and raises costs.

SCHULTZ: So you got to get money into the Treasury. I mean, that is
the bottom line. Somehow elected officials in Washington have to figure
out how to start to replenish the Treasury to be able to pay for stuff like
this, because a lot of these cities depend on federal help. It has to come
from the wealthiest Americans, doesn`t it?

RYBAK: You know, Ed, we were really clear about that. That was a
debate a month ago. The debate is over. He had an election. The election
was clear. Republicans and Democrats said it was the clearest choice you
should have. The question put before America was, do we want to ask those
at the very top to pay a little more so we don`t have to cut these
programs? America answer resoundingly: we want a little more from those
who are doing very, very well, so that those who are in the middle can keep
moving forward and those at the very bottom cannot be removed from the
protection they need to grow.

SCHULTZ: What are Republican mayors saying about this?

RYBAK: Scott Smith, the Republican mayor of Mesa, is the vice chair
of our group. And he`s part of the group. And I think we all appreciate
that we have to have a balanced approach.

The good news is that we came as Republicans and Democrats, as mayors
from big cities and small cities, all around the country, and are able to
really speak with a voice that says, look, we want to be pragmatic about
this.

SCHULTZ: So you`ve got Republican mayors in your group that are
concerned about their cities, obviously in the cuts in federal help that
their own party is putting on the table?

RYBAK: They all do. I speak for myself, as I say, about what just
happened in the election. But I also, by the way, speak for the majority
of the country that voted for that. But the Republican and Democrat mayors
and the many, many nonpartisan mayors really stand up together to say that
we can`t just do this by balancing on the backs of local property
taxpayers. A tax at a federal level is a bad thing. A tax at a local
level and property taxes is just as bad. Don`t just pass one to the other.

SCHULTZ: OK. So if you were to take any federal cuts, would you have
to raise property taxes in your neck of the woods?

RYBAK: Probably. I never want to say that`s an absolute. Like I
just said, take that example. Of any of the crime prevention work we`ve
done, juvenile violence prevention, teenage pregnancy prevention --

SCHULTZ: Somebody`s got to serve it up.

RYBAK: They ultimately come down to more cops on the street. That
comes out of your local property taxes.

SCHULTZ: All right. Mayor R.T. Rybak, great to have you with us
tonight. Thanks so much.

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

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Benghazi.

Benghazi.

Benghazi.

Benghazi.

(END VIDEO CLIP)

SCHULTZ: John McCain demands answers on Benghazi as he skips a
briefing on Benghazi. Richard Wolffe breaks down another bizarre day for
the Arizona senator.

Denny`s is serving up a grandstand breakfast on Obamacare. Details
ahead.

And they couldn`t beat him at the ballot box. So now the far right is
talking secession and impeachment?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Our only recourse now is to move forward with a
full impeachment of President Obama.

(END VIDEO CLIP)

SCHULTZ: We`ll break down the latest freak-out with Michael Tomasky.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN: More than two months after the Benghazi attack, there are
still many unanswered questions.

(END VIDEO CLIP)

SCHULTZ: Oh, he wants answers. In fact, for weeks Republicans have
been complaining about the lack of information surrounding the attack on
the U.S. consulate in Benghazi. Senator John McCain leading the charge.
In the process, placing blame on U.N. Ambassador Susan Rice.

McCain spent the better part of yesterday on television maligning Rice
and threatening to block her nomination if the president taps her to be the
next secretary of state. Yet when McCain and other Republicans were given
the opportunity to be briefed on the attack, they didn`t bother to show up.

A two hour closed door session was held yesterday for members of the
Senate committee investigating Benghazi. According to "Foreign Policy
Magazine" the briefing included representatives from the State Department,
the Defense Department, the Joint Chiefs of Staff, the National
Counterterrorism Center and the FBI, all players in the room.

A Democratic aide tells CNN that seven out of nine Democratic
committee members attended the meeting and just three out of eight
Republicans showed up. So where was John McCain while his fellow committee
members were being given details on Benghazi?

He was holding a press conference, complaining about the lack of
details on Benghazi. McCain`s office says the senator missed the briefing
due to a scheduling error. Today, McCain was asked about his absence and
the senator got a little testy. He says "I have no comment about my
schedule. And I`m not going to comment on how I spend my time to the
media."

And it got more contentious from there.

(BEGIN VIDEO CLIP)

MCCAIN: I have no further comment. I have no further comment. How
many times do I have to comment. because I have the right as a senator, I
have no comment. Who the hell are you to tell me whether I can or not?

(END VIDEO CLIP)

SCHULTZ: Joining me now is Richard Wolffe, MSNBC political analyst
and vice president and executive editor of MSNBC.com. He seems like he`s
on a mission just to discredit the president if he`s not going to show up
for the briefing meetings which he`s complaining about. What is McCain up
to?

RICHARD WOLFFE, VICE PRESIDENT, MSNBC.COM: Do you think he`s a
disgruntled former presidential candidate?

SCHULTZ: I think he`s a little bitter.

WOLFFE: You know, I can understand why he has a few problems here.
Here was a guy who said, just a couple of years ago -- just a couple of
years ago that we should be giving arms to Moammar Gadhafi, the guy who
then, a few months ago, he decided it was actually a great thing that he
was out of power. Here was a guy who just a few weeks before he celebrated
the end of Gadhafi, said that we should be putting arms in the hands of the
Libyan rebels who presumably would then have been using them in Benghazi
against our own diplomats.

He was wrong about Gadhafi. He was wrong about how to conduct the
operation to support the rebels, in contrast to the president`s approach.
And he`s wrong now.

Look, if you`re a senator, you make your living talking to the press.
That`s what John McCain gets his respect for now. He was a great American
during the Vietnam War. But let`s face it, the respect he gets now is
because he appears on the press. If you live by the press, you die by the
press. He should be talking to people right now about why he wasn`t in
that hearing.

SCHULTZ: Now, McCain attacked Democrats for really going after
Condoleezza Rice an intel failures in Iraq before she was nominated for
secretary of state. Here`s some of that audio. Here it is.

(BEGIN VIDEO CLIP)

MCCAIN: Every intelligence agency in the world including the British
believed that Iraq had weapons of mass destruction. That was an entirely
different situation.

(END VIDEO CLIP)

SCHULTZ: I mean, that`s off the rails, isn`t it?

WOLFFE: Before there was President Bush, before Dick Cheney convinced
President Bush to go invade Iraq, there was Senator McCain and Senator
Lieberman saying we need to go invade Iraq, before President Bush even got
to power.

So he can try and dress it up any which way he likes about the weapons
of mass destruction. The key thing that he and Lieberman pushed so hard
was that Iraq was an imminent threat. It was top of the national security
pyramid for them.

You cannot rewrite history. He`s not just off the rails here. He`s
lost a bit of his memory there.

SCHULTZ: OK. His faculties, he`s short on it?

WOLFFE: I think he`s being erratic.

SCHULTZ: OK. Susan Rice, there is no evidence that she misled the
public. In fact, the White House has been very clear, the president was
clear in his press conference that she had the same material that the
Congress had. Why is McCain so adamant about discrediting her?

WOLFFE: I don`t know about his personal motives here. I mean, I do
think there`s a striking pattern of critics of this administration. I
don`t know whether it`s John McCain, but them going after prominent
African-Americans in this cabinet, number one.

Number two, Susan Rice doesn`t have line responsibility as U.N.
ambassador for the events in Libya, for security for diplomats. As a
senior diplomat, she needs protection, herself. The idea that Susan Rice
would be willing to tolerate a lack of security for career foreign service
officials does not stack up.

She was prominent. She was out there on the Sunday shows. She was
working off the briefings they all had. But why is it Eric Holder, Valerie
Jarrett and Susan Rice are -- not just about John McCain, in general,
conservatives going after those figures. I think the president is right to
say these people need to be going after him. Don`t treat them as proxies
for the president.

If you want to go after President Obama, do that. Don`t make a
connection just because they happen to be out there.

SCHULTZ: OK. Richard Wolffe, thanks for coming in tonight on this
subject. Appreciate it so much.

Coming up, Republican pundits aren`t the only ones throwing tantrums
over the second term. Even restaurants aren`t safe from political
grandstanding. Stay tuned.

(COMMERCIAL BREAK)

SCHULTZ: So here we go. We got another mad owner out there. A rash
of restaurant owners are threatening to slash hours and fire employees to
skirt the laws of Obamacare. The National Restaurant Association has
called it premature to assess just how many of these -- how this law, this
health care law is going to affect individual businesses.

But some owners are already plotting ways to avoid paying for employee
health care. Meet John Metz, franchiser of Hurricane Grill and Wings, and
president of RREMC Restaurants, which runs 40 Denny`s and several Dairy
Queen locations. Along with cutting front of the house employees to under
30 hours in order to avoid full-time status, Mr. Metz is one of the first
to say he`d impose a surcharge to cover costs.

He told "the Huffington Post" "if I leave the prices the same, but say
on the menu that there`s a five percent surcharge for Obamacare, customers
have two choices. They can either pay it and tip 15 or 20 percent. Or if
they really feel so inclined, they can reduce the amount of the tip they
give to the server, who is the primary beneficiary of Obamacare. Although
it may sound terrible that I`m doing this, it`s the only alternative."

Absolutely, it`s the only alternative. He certainly wouldn`t want to
fork out any of the money. Remember, folks, these are the job creators
Republicans said would save the economy. The surcharge sounded terrible
enough that less than 24 hours later, representatives from Metz and
Hurricane Grill are already walking back his statements, calling the
surcharge just pure speculation.

The mandate requiring businesses with more than 50 workers to offer
coverage or pay a fine doesn`t go into effect until 2014. They don`t have
the details yet. This isn`t based on numbers. This is political
grandstanding. And I won`t darken the door of any restaurant that bends
over backwards to avoid providing their employees with health care just to
make a political point.

Tonight in our survey, I asked you can Republicans reinvent themselves
with minorities? Three percent of you say yes; 97 percent of you say no.

Coming up, outrage over President Obama`s re-election hits a whole new
level. historic proportions, as Republicans bring up what? Impeachment?
You got it.

The "Daily Beast`s" Michael Tomasky is here with reaction next. Stay
with us.

(COMMERCIAL BREAK)

SCHULTZ: And in the Big Finish tonight, despair among Republicans has
turned to rage. And now they`re starting a movement to impeach the
president of the United States. A fringe right wing group known for its
Birther conspiracy theories launched this robo call trying to gain support
for impeachment.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Our only recourse now is to move forward with a
full impeachment of President Obama. We suspect Obama is guilty of high
crimes, misdemeanors and that there may be grounds for impeachment as is
laid out in the Constitution.

Further, he may not even be a U.S. citizen, because nobody -- I mean
no one has seen an actual physical copy of his birth certificate.
Impeachment is our only option.

(END VIDEO CLIP)

SCHULTZ: You can count on Fox News to jump on the impeachment
bandwagon. They`ve been trying to blame the Benghazi disaster on President
Obama for two months. But after the election, they`re taking it to the
next level.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS ANCHOR: If he lied, what does that mean?

UNIDENTIFIED MALE: If he lied, the consequences would be significant,
including impossible impeachment, if he lied.

HANNITY: What if we find out the president of the United States lied
heading into this election?

MICHELLE MALKIN, FOX NEWS CONTRIBUTOR: Well, there are many
Constitutional provisions for recourse on this. I think they have to be
contemplated.

(END VIDEO CLIP)

SCHULTZ: I thought Sean would be spending more time on his new
position on illegal immigration. Anyway. Meanwhile, the secession
movement is growing stronger by the day. As of tonight, seven states have
more than 25,000 signatures to secede from the union. And in Texas, over
180,000 people have signed up to break away from the United States.

Republicans couldn`t vote President Obama out. And secession isn`t a
realistic option. So they`re turning to Libya to try to impeach the
president. I say bring it on, the impeachment talk. The American people
voted for President Obama and his policies. Talk of impeachment will only
further unite Americans around this president. They chose to lead this
country.

This republican outrage is fantastic. It`s good for liberals because
it`s only going to motivate us and it`s only going to focus us not to have
a rewrite of 2010 when it comes to 2014, the midterms.

This is -- I guess you could say there`s no room for an off season in
politics these days, is there? For more, let`s turn to Michael Tomasky,
special correspondent for "Newsweek" and the "Daily Beast." Michael, good
to have you with us.

MICHAEL TOMASKY, "THE DAILY BEAST": Pleasure as always.

TOMASKY: How serious is this? Will impeachment talk end up
backfiring on Republicans and help the president? What do you think?

TOMASKY: Yes, I think it will end up backfiring on them ultimately.
But, you know, in the meantime, Ed, this is something to take kind of
seriously. And I don`t know whether to laugh about it or what. I was
originally going to come on this show and laugh at these clowns. But as I
was driving down here, the more I thought about it, the more steamed I got.

Because this -- this urge comes from some deep psychological thing in
the Republican and conservative --

SCHULTZ: It`s called hate.

TOMASKY: Yeah, it`s hate. They can`t just accept the legitimacy of a
Democratic president. They just won`t accept it.

SCHULTZ: Is it even possible for the Republicans to impeach this
president? I mean, high crimes and misdemeanor as that robo call went, I
mean, they`re counting on something being terribly wrong in the Benghazi
hearings.

TOMASKY: Yeah. I don`t see any high crime or misdemeanor here,
obviously. I mean, if the administration was not being completely
forthcoming about what it knew, what it didn`t know, first of all, that`s a
long way from being proven, a long way from being proven. All the evidence
we have so far, Ed, suggests that they were following the intelligence
guidance they were getting from our intelligence agencies, and that they
didn`t know otherwise.

Now Susan Rice even, when she went on the Sunday show and said what
she said, she got the talking points from the intelligence agencies that
morning. And it was being revised even as she was on the air. So there`s
no crime or misdemeanor here. There`s no high crime here.

It -- if there is a mistake, it was contained within the State
Department in all likelihood. It didn`t get to the White House. And it
was a mistake about the amount of security that should be given to a
consulate. That doesn`t strike me as an impeachable --

SCHULTZ: No, not at all. Will impeachment and secession movements
become mainstream for the Republicans? Are they going to have to distance
themselves from this? You know how these things start out with 20,000 and
30,000. The next thing you know, they become so politically strong that,
gosh, these lawmakers, they don`t want to get primaried, you know. So they
better jump in line. What about that?

TOMASKY: It`s all about that. You nailed it. They`re afraid of
getting primaries. Now, the fact Richard Mourdock lost that race maybe
will make some Republican senators feel that they can have a little bit
more elbow room on things like this. But it`s already being mainstreamed.
Who is being mainstreamed by? The man you were just talking about with
Richard Wolffe a few minutes ago, John McCain, who -- McCain and Graham and
Kelly Ayotte, she has replaced Lieberman now as the third --

SCHULTZ: What do we compare this to, this secession movement, to
anything in American history, other than the Civil War? I mean, this is
new territory, isn`t it?

TOMASKY: Yeah, yeah. It`s totally new territory. I see nothing.
Half of me wants to say, let them go. Let Texas go. Let Texas be a
republic of Texas. And they`ll soon find out what`s involved. For
starters, they`ll have to impose an income tax on people, which they don`t
now.

SCHULTZ: Yeah.

TOMASKY: And let them pay for their own Social Security. Let them
pay for their own Medicare. Let them see what it`s like. Fine.

SCHULTZ: All right, Michael Tomasky, great to have you with us
tonight. Thanks so much.

TOMASKY: My pleasure.

SCHULTZ: Tomorrow night on THE ED SHOW, the Post Office. Why is the
Post Office in your town closing? What did they ever do wrong? That`s
tomorrow night on THE ED SHOW.

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

RACHEL MADDOW, MSNBC ANCHOR: Good evening, Ed. Spectacular show
tonight. You were above and beyond your even usual greatness.

SCHULTZ: Does that mean I have to come back tomorrow night? It`s
Friday.

MADDOW: Yes. If you keep it up, you`re going to have to come back
Saturday and Sunday. So ease up, big guy.

SCHULTZ: I`m out of here.

MADDOW: Thanks, man. And thanks to you at home for joining us for
the next hour.

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

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