updated 11/30/2012 11:37:16 AM ET 2012-11-30T16:37:16

THE ED SHOW with ED SCHULTZ
November 29, 2012

Guests: Wendell Potter, Steven Greenhouse, Rep. Jim McDermott, Tara Dowdell


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

John Boehner wants cost-cutting details from the president? Tonight,
details on the speaker`s shell game.

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

(BEGIN VIDEOTAPE)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The White House has
to get serious. This is not a game. I`m disappointed in what`s happened.

SCHULTZ (voice-over): The speaker of the House is disappointed. He`s
also deceptive and dishonest.

BOEHNER: Democrats have yet to get serious about real spending cuts.

SCHULTZ: Tonight, Richard Wolffe on today`s nonsense from Republicans
and where a deal on the fiscal cliff stands.

And former health insurance executive Wendell Potter on what Obama`s
proposed $340 billion in Medicare cuts will mean for seniors.

Vice President Joe Biden stumps for the middle class at a retail store
that treats its workers right.

I`ll talk Costco and fiscal cliff with Steve Greenhouse of "The New
York Times."

Plus, Hostess executives tank their company and cost the people their
jobs. So why are they still demanding millions of dollars in bonuses?

And we`ll tell you how Senator John McCain fits in with Congressman
Louie Gohmert`s latest conspiracy theory.

REP. LOUIE GOHMERT (R), TEXAS: This administration sent planes and
bombs and support to oust Gadhafi so that al Qaeda and the Muslim
Brotherhood could take over Libya.

(END VIDEOTAPE)

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

Republicans are walking tall in public but hanging their heads behind
closed doors. House Speaker John Boehner struck a defiant tone during a
news conference today. He blamed the president and Democrats for stalling
negotiations on a debt deal.

(BEGIN VIDEO CLIP)

BOEHNER: Despite the claims that the president supports a balanced
approach, the Democrats have yet to get serious about real spending cuts.
And secondly, no substantive progress has been made in the talks between
the White House and the House over the last two weeks.

(END VIDEO CLIP)

SCHULTZ: Tough talk. It`s also completely divorced from reality.

Right before the news conference, Boehner met with Treasury Secretary
Tim Geithner who offered Republicans a detailed plan to avoid the fiscal
cliff. It included $1.6 trillion in new revenue from tax hikes on the
rich. The White House is giving $400 billion in savings from Medicare and
entitlements. There`s also a request for at least $50 billion in
infrastructure spending, mortgage relief, and other stimulus measures.

None of this is a surprise to the Republicans. This is what President
Obama campaigned on. It`s also what Republicans have been presented behind
closed doors for weeks.

"Politico" reported on the deal taking shape behind the scenes. It
includes most of the same details the White House has in its proposal.
According to "Politico", House Republican leaders recognize President Obama
holds the high cards and the public is likely to blame Republicans if
negotiations blow up and the New Year begins with a fiscal disaster.

The facts didn`t stop Speaker Boehner from claiming the White House is
holding up negotiations.

(BEGIN VIDEO CLIP)

BOEHNER: The majority leader and I just had a meeting with the
treasury secretary. It was frank, and it was direct. I was hopeful we`d
see a specific plan for cutting spending.

(END VIDEO CLIP)

SCHULTZ: The treasury secretary`s proposal seems pretty specific. It
even includes $400 billion in specific cuts. But John Boehner sees
something different.

(BEGIN VIDEO CLIP)

BOEHNER: We know what the menu is. What we don`t know is what the
White House is willing to do to get serious about solving our debt crisis.

(END VIDEO CLIP)

SCHULTZ: So what is this all about? I mean, I guess John Boehner has
his own definition of specifics. According to the John Boehner dictionary,
specifics means, having all the attributes John Boehner agrees with and
nothing he doesn`t like.

Keep in mind -- this is the same Boehner who said $38 billion in cuts
was the largest real dollar spending cut in American history. When Boehner
got those cuts last year, he called himself a pretty happy man. What a
difference an election makes.

Senate minority leader, majority leader, Harry Reid, doesn`t
understand what Boehner is thinking.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: I don`t understand his
brain, so you should ask him. OK?

(END VIDEO CLIP)

SCHULTZ: White House Press Secretary Jay Carney explained the real
reason a deal hasn`t been reached yet.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We`re not there yet because
the remaining obstacle here is on the revenue side, is that Republicans, at
least Republican leaders, have yet to accept the essential fact that in
order to achieve the kinds of revenue that are necessary for a balanced
proposal, balanced plan, rates on the top 2 percent, the top, the
wealthiest earners in this country, are going up.

(END VIDEO CLIP)

SCHULTZ: Republicans are buckling. The Democrats know it.

Here`s New York Senator Chuck Schumer saying what Republicans don`t
want to hear.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER (D), NEW YORK: We don`t expect the Republicans to
be enthusiastic and start cheerleading about a deal that includes higher
rates on the wealthiest Americans. They`re not going to openly concede on
this point this far out from the deadline, but they see the handwriting on
the wall.

(END VIDEO CLIP)

SCHULTZ: And the handwriting on the wall is spelling out three words:
Congressman Tom Cole.

The conservative from Oklahoma was the first Republican to admit the
GOP should pass the Democrats` bill to extend the tax cuts on income under
$250,000. Other Republicans are joining Cole`s ranks.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: If you`re going to sign me up with a camp, I like
what Tom Cole has to say. I know you had him on the show earlier at
length. I think Tom presented a very thoughtful, articulate position.

(END VIDEO CLIP)

SCHULTZ: Republican Senator John Thune of South Dakota dropped the
bomb on FOX News.

(BEGIN VIDEO CLIP)

MARTHA MACCALLUM, FOX NEWS ANCHOR: Are Republicans willing to hold
the line to say to the president, I am sorry, we will never agree to a deal
that involves an increase in taxes? Are they?

SEN. JOHN THUNE (R), SOUTH DAKOTA: I think any deal that passes up
here that raises taxes and raises taxes, as I mentioned earlier, on small
businesses, Martha, is not going to enjoy a Republican support. Now, there
may be enough Republicans who would vote for something like that to pass it
in the House of Representatives.

(END VIDEO CLIP)

SCHULTZ: Well, if there are enough Republican votes to pass the bill,
the game`s over, isn`t it? Republicans are facing the inevitable, it seems
like.

Nebraska Congressman Lee Terry told the "Omaha" newspaper, "We`re
screwed either way. We really have no leverage in these discussions."

We also learned today GOP leaders were actually polling their members
in the House to see exactly what sort of tax hikes they would go along
with, that they would support.

This is a whole lot of wiggle room for the Republicans at this point,
and it certainly isn`t any game plan for them if they`re out polling their
own members this late in the game.

This is why John Boehner went out and lied to the American people in
the press today. He doesn`t know what the heck is going on. He doesn`t
know where his caucus is. He knows the White House put out hard numbers on
the table an all he can do is pretend that they don`t exist.

Republicans can talk a big game in front of the cameras, but behind
closed doors and at the negotiating table, they`re just not very strong.

Boehner is one of these guys who likes to play golf at the country
club. And then after he plays golf at the country club, he`s going to have
a couple drinks, he`d sit down and play poker.

I want to give the speaker credit today. He had a pretty good poker
face on today. For a moment, he was kind of convincing.

But we all know the truth. The Obama team has put the budget in front
of him. He knows what the cuts are. And for him to go out in front of the
American public and be disingenuous about he doesn`t know what the
specifics are is a flat-out lie.

Get your cell phones out. I want to know what you think. Tonight`s
question: who is John Boehner fooling? Text A, for no one, text B for
himself, to 622639. You can always go to our blog at Ed.MSNBC.com. We`ll
bring you the results later on in the show.

Joining me now is Richard Wolffe, who is not a card player. He is
MSNBC political analyst and vice president and executive editor of
MSNBC.com.

I thought it was an Academy Award performance by Boehner today.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Pretty good, huh?

SCHULTZ: He knows what the numbers are, don`t you think? Why is he
doing this?

WOLFFE: It is what the numbers are and he knows what the other side
is holding here. Look, he`s got to pretend like he fought for something.
But he does have no leverage.

Tom Cole, by the way, isn`t just a guy from Oklahoma. He led the
Republican conference. That`s the ideological core. Those are the sort of
torch-holders for the whole movement.

And so, when Tom Cole says, we got to go with what we`ve got here.
We`ve got to take what we got. We`re going to declare victory and move on.

That`s how it`s going to play out. And Tom Cole didn`t say that once.
I know it kind of got leaked but he said it over and over and over again.

And here`s the deal. They`re not going to vote for a tax raise.
That`s not the vote that`s going to be in front of them. The vote in front
of them is going to be to cut taxes. Taxes will rise anyway because the
Bush tax cuts will expire.

Then they`ll bring in legislation saying let`s cut taxes for the
middle class and every Republican out there including John Boehner will say
I voted for a tax cut, not a tax hike.

SCHULTZ: Well, here`s Tom Cole speaking with Chuck Todd about Cole`s
advice to pass the tax extensions for 98 percent of Americans. Here it is.
Rather comical.

(BEGIN VIDEO CLIP)

REP. TOM COLE (R), OKLAHOMA: That advice was given in private, but
you guys have a way of figuring out what said in private. Somebody leaked
it out. That`s fine because I`m not going to tell you --

CHUCK TODD, MSNBC ANCHOR: You didn`t intend for this to go public?

COLE: No.

TODD: You did not -- this is something you were -- OK.

COLE: Yes. But, again, it is what I said. It`s not an inaccurate
report.

(END VIDEO CLIP)

SCHULTZ: I mean, did Republican leaders want Cole`s advice to be
leaked?

WOLFFE: Of course they did. I mean, and if they didn`t want it to be
leaked, they wanted it to be repeated. So John Boehner has some wiggle
room. He can look like he`s the tough guy to the Tea Party folks who have
to vote him back in as speaker.

But Tom Cole is really laying out the policy. If they wanted to shut
him up, he would have been shut up. And so, where does this leave them?

They`re not going to play the card on the debt ceiling because that
was a disaster for them. They`re going to say, you know what, we tried to
say the Democrats were not serious about spending cuts, but they have no
option. They lost the election.

You know, Republican voters were lied to about the state of the polls.
They were lied to about the state of America. And if they want to believe
that this is the only path that only spending cuts will get them to deficit
reduction, they can carry on believing that or get to a place where they`re
going to get re-elected.

SCHULTZ: Richard, I think the president is offering a great deal to
the Republicans. Here`s why. These guys can go home 98 percent and say,
you know what, 98 percent of you, I got the tax cuts. I didn`t raise your
taxes.

And, oh, by the way, my base, you wealthy folks over here, look what
Obama did to you. He raised your taxes. That`s only going to infuriate
the wealthy even more.

The fact here is, is that he has given them something they can
campaign on, plus, they can turn around and say, these are his cuts to
Medicare, not ours.

WOLFFE: Right.

SCHUTLZ: I don`t now why they don`t take this deal for the good of
the country and come back and fight another day.

WOLFFE: That`s the biggest lie of all, by the way, to say that
Democrats are not serious about entitlements, $400 billion of cuts to
Medicare is a cut to entitlements. That`s going to mean hardship for
seniors. That`s a real cut.

Now, you can pretend like the hospitals are going to swallow all of
that cost cut -- they`re not. They`re going to pass that on. That means
less health care. Those are real dollars.

And so, you can say that Democrats are not serious, but $400 billion
to most people, that`s real money.

SCHULTZ: Well, the Obama team is saying they can find these costs in
inefficiencies and providers. That`s where they`re going to go. They keep
pushing the idea there`s no question it`s not going to hurt the benefits.
This is the devil in detail.

WOLFFE: OK.

SCHULTZ: The point being here is he has $340 billion on the table,
maybe to $400 billion on the table in the cuts and Boehner goes out in
front of the American people and denies there are specifics on the table.

WOLFFE: Right. Remember, most of the Bush cuts survived this kind of
deal. And, you know, when you look at the overall package, there`s going
to be talk about let`s have tax reform, let`s go after entitlements.

This is -- this is a real deal for Republicans. They`re not going to
turn it down because there`s nowhere else to go. Otherwise, all the tax
cuts go.

SCHULTZ: You mean they`re just going to wait until December 23rd,
we`re going have this drama until --

WOLFFE: They want to go home.

SCHULTZ: -- eat turkey for the holidays. I get it.

Richard Wolffe, good to have you with us as always.

WOLFFE: Thanks, Ed.

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

Coming up: President Obama and Republicans have different ideas about
how to get savings out of Medicare. Wendell Potter of the Center of Public
Integrity will join me with the facts.

Stay tuned.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, Vice President Joe Biden looks out for the middle
class at a store that does the same. Coming up, how Costco is big business
done right. With Steven Greenberg of "The New York Times."

The righties are going nuts with a brand new conspiracy theory. A
sitting member of Congress says the president is propping up al Qaeda?

And speaking of conspiracy theories -- is there a hidden meaning in
the photo of the president and Mitt Romney in the Oval Office today? An ED
SHOW investigation, my friends, is ahead.

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

We`re coming right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Democrats like to
pretend as though they`re the great protectors of Social Security,
Medicare, and Medicaid. They make solemn pledges all the time about how
they won`t even entertain a discussion about reform.

(END VIDEO CLIP)

SCHULTZ: And we are back. That`s Senate Minority Leader Mitch
McConnell saying Democrats won`t even entertain a discussion of reforming
entitlement programs?

Simply not true. Democrats want to extend the life of these programs.
The real issue is what kind of reform are you talking about?

Medicare is central to the discussion because Republicans want to cut
benefits, or raise the eligibility age. But President Obama has a plan to
get savings out of Medicare on the provider side. It`s obviously an
important distinction.

President Obama`s 2013 budget would cut $340 billion out of Medicare
over 10 years primarily through these four methods: requiring drug makers
to pay rebates to Medicare in some circumstances. And they want to reduce
costs by discouraging hospitals from releasing patients too early and then
readmitting them which is more expensive. Also, reducing coverage of bad
debts of hospitals and nursing homes. And charging higher premiums to
high-income beneficiaries.

There is nothing in those four measures which raises the eligibility
age or cuts benefits to Medicare recipients.

Today, we got further confirmation about the administration`s proposal
in the fiscal cliff negotiations. Medicare and other entitlements would be
cut by $400 billion over 10 years.

Let`s bring in Wendell Potter to sort it out. Mr. Potter is a
columnist for the Center for Public Integrity and "The Huffington Post",
and is author of the book "Deadly Spin."

Wendell, great to have you back with us here on THE ED SHOW.

WENDELL POTTER, CENTER FOR PUBLIC INTEGRITY: Thank you, Ed.

SCHULTZ: Sort this out for us. When the White House says it has in
its budget a cut of $340 billion, maybe up to $400 billion, is that going
to hit beneficiaries? Is that going to affect people that go in and see
the doctor?

POTTER: No, not nearly as much as it would if they were to raise the
eligibility age to 67 which is not on the table and it shouldn`t be, or
cutting benefits. And these cuts or reductions in payments are not
targeted to doctors, at least at this point. They are to hospitals and to
nursing homes and home health agencies, as you said, drug makers.

And these are areas that the Medicare Payment Advisory Commission has
long said need to be -- these are cuts that should be made and has been,
need to be made for some time now.

SCHULTZ: Now, I`m told by my sources on Capitol Hill that if you were
to run the Veterans Administration the way they do their drug system, as
opposed to Medicare, that you would find instantly $150 billion. Is that
correct?

POTTER: That`s true, because the V.A. has the ability to negotiate
prices with the drug makers. And the Medicare Part D program, the
Prescription D program doesn`t have that because of the way the law was
passed and Republicans wouldn`t go along with that.

So, we have a lot of ability here to reduce unnecessary spending by
doing some things that would make a lot of sense, just like the V.A. does
it.

SCHULTZ: So what do you make of the Republicans saying they don`t see
the hard numbers? They don`t see the cuts?

POTTER: They`re just being very disingenuous and they don`t want to
be the ones to bring a plan to the table. And they`re going to have to do
that when it comes right down to it, because the president has laid out
something that does reduce the entitlement program significantly. And now
it`s going to be up to the Republicans to say if this -- the president to
say, if this is not good enough, then tell us what is?

SCHULTZ: So, one Republican talking point is that doctors will no
longer take Medicare patients because of Obamacare and other measures.
What`s your assessment of that?

POTTER: I don`t think that`s the case at all. In fact, this doesn`t
actually increase the number of Medicare beneficiaries and it doesn`t
reduce payments to doctors. So that shouldn`t occur at all.

And what we will see is that the Medicaid program will be broadened
and that will be one of the ways that more Americans will be coming into
coverage. That`s separate from what we`re talking about here now.

SCHULTZ: Yes.

POTTER: But that`s a good way to expand the coverage to low-income
individuals.

SCHULTZ: What about the $716 billion in savings that was already
taken to fund Obama care? This was, of course, a big political football
back and forth on the campaign trail. How does that play into the budget
at this point?

POTTER: Well, that number would presumably, as I understand it, would
continue to go forward. That represents a reduction in Medicare spending
of $716 billion over 10 years. And that, too, would come out of hospitals
and other health care providers, not doctors necessarily.

And also, health insurers. Health insurance companies have been paid
many billions of dollars over the years to participate in something called
a Medicare Advantage program. That needs -- those overpayments need to
end, and that would end under this program.

SCHULTZ: I think we`re seeing the Republican ideology play out in
this budget fight because they really don`t want these programs. They want
to get a chunk of them now and then the whole thing later on it seems like.
They`re all about privatization.

And the eligibility age of Medicare, if it were to go up, do you think
the Democrats would ever go with that? Not now, but down the road?

POTTER: I don`t think so. I don`t think they should, either. It
makes no sense.

For one thing, if you do that, you`re taking really the healthiest
Medicare beneficiaries out of the pool.

SCHULTZ: Sure.

POTTER: And you`re putting them at risk. They would have to go back
in the private market and pay the highest premiums, much more than they
would pay. So, it`s doing nothing more than shifting costs. It`s not
taking costs out of the system.

SCHULTZ: Wendell Potter, great to have you with us here on THE ED
SHOW tonight. Great resource to this subject. Thank you.

Joe Biden heads to Costco and talks up the middle class tax cut.
Costco has a history of being on the side of the middle class. And I`ll
talk with "New York Times" reporter Steven Greenhouse about that and much
more.

Then, a bankruptcy judge has baked up a very sweet deal for the
highest paid executives at Hostess. But the employees, they`re getting
burned. We`ll talk about that -- it`s not Twinkie heaven -- when we come
back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: In all honesty, I
didn`t have my own card. Jill wouldn`t let me have one.

(END VIDEO CLIP)

SCHULTZ: He`s a regular old Joe at the store, right? Joe Biden, vice
president, earlier today, embarking on a shopping spree at the discount
warehouse, Costco. To demonstrate a surge in consumer confidence, Biden
flashed his membership card and picked up a few items, including flowers,
children`s books, fire logs, 32 inch Panasonic TV, and a large apple pie.

Biden tried to -- tried some free samples as well. He chatted with
employees and shook hands with shoppers.

The visit to Washington, D.C.`s first Costco store provided a great
opportunity for the vice president to push for an extension of the middle
class tax cuts.

(BEGIN VIDEO CLIP)

BIDEN: Look around here. People are -- consumer confidence is
growing. And the last thing we need to do is dash that now by being unable
to extend the middle class tax cuts. Thanks for shopping with me.

UNIDENTIFIED MALE: Thank you.

BIDEN: I know you won`t tell anybody what I bought for Christmas.

(END VIDEO CLIP)

SCHULTZ: It`s important to note some Costco executives have ties to
the Democratic Party. The wife of Costco co-founder Jeff Brotman is an
Obama bundler. And the co-founder Jim Sinegal is a longtime Democratic
donor who defended President Obama`s economic record at the Democratic
National Convention. But Sinegal business model has always been on the
side of the worker, unlike Wal-Mart and Sam`s Club with its history of
union busting, low wages and benefits.

Sinegal says treating employees well is good business. Costco pays
its workers more, too. Costco CFO Richard Galanti told THE ED SHOW that
employees get $20.50 an hour on average, that`s about 40 grand a year.
Health benefits are offered to full and part-time employees, with workers
paying only about 10 percent of their premiums out of pocket.

Let`s turn to Steve Greenhouse, labor and workplace reporter for "The
New York Times" and the author of "The Big Squeeze."

Great to have you here tonight, Mr. Greenhouse.

What do you make of the symbolism, and I believe it`s symbolism that
the vice president went to Costco today to make a statement about the
middle class but also how to treat workers.

STEVEN GREENHOUSE, THE NEW YORK TIMES: I think it`s a twofer or
three-fer for Biden and the White House. It shows it`s important to go out
and shop. It`s important to stimulate the economy. If we`re going to pick
a store, let`s go to Costco which is really known for treating its workers
better than basically any general retailer in the country.

I`ve been covering labor for a few years for "The New York Times" and
a few years ago, several people were saying, you should take a look at
Costco. They really do remarkable job in how they treat their workers.

So I went out to their headquarters in Issaquah, Washington. I spent
a day with that gentleman next to Biden, Jim Sinegal, one of the co-
founders of the company.

And I thought, Sinegal -- you know, Jim Sinegal, why are treating your
workers -- so I figured, well, his father was a steelworker. He grew up in
Pittsburgh. I figured he was sympathetic to unions.

He grew up Catholic. I thought he must have been from Catholic social
justice family.

He said, no, no, that`s not why I treat our workers well. We`re not
the little sisters of the poor. He said it`s good business. It`s not
altruism. It`s good business.

He said treating workers well means they work hard for you. There`s
far less turnover. The typical Costco worker who`s been there more than a
year stays on average 17 years. Costco is known for having far less theft
than most retailers. And he says when someone has to put the Huggies on
the shelf in the middle of the night, they know exactly where to put it,
unlike some other companies where there is huge turnover and every six
months you have new employees.

SCHULTZ: Let`s talk about that turnover. They do not have the
turnover that the other retailer has, Walmart and Sam`s Club. But Walmart
and Sam`s Club makes more money than Costco. So it`s a philosophy here
that we`re seeing play out. Big can be better if it`s done right.

GREENHOUSE: Yes. We often talk about high roads and low roads. And
Senigal -- when I interviewed him, he said -- I asked him, why do you treat
your workers so well? He said, we have rock-bottom prices. The last thing
I want is shoppers to come in and think, Senigal, you`re running a sweat
shop, you pay your workers like dirt. He said, therefore, I`m going to pay
my workers the best of any retailer in the country.

So he`s able to do that by getting the workers to work really hard.
He has all these kind of retailing tricks. You know, he saves money. You
go into a Costco, you know, it`s not fancy. There`s cement floors. He
spends no money on advertising.

Most retailers spend two percent of their revenues on advertising.
That enables him to cut costs. He`s very ingenious in how he stocks the
store.

SCHULTZ: How do they compare to Walmart, I mean, in operation?

GREENHOUSE: The typical Costco warehouse sells around -- I think
around twice as much as the typical Sam`s Club per square foot. And Jim
Senigal was always proud of that. He said there might be a dispute about
who charges less, but there`s no dispute in how they treat their workers.

SCHULTZ: But this is the perfect play for the Obama team, to go to a
big retailer like this, when consumer confidence is up, middle classers all
over the place, to talk about these tax cuts, to show that this is where
people shop and this is how you treat workers. I mean, it really is the
perfect -- the perfect presentation for the Obama team at this point.

GREENHOUSE: In many ways, you`re right. Last week, I was covering
these protests at Walmart. And I interviewed numerous Walmart workers who
said we`ve been there three years, five years, 10 years, and we`re making
eight, nine, 10, 11, dollars an hour. You just put up that number. At
Costco, if you work there four and a half years, you`re making generally 20
dollars and 50 cents an hour. That translates to 42,000 or 43,000 dollars
a year. And then they kick in another 4,000 or 5,000 dollars to your
401(k).

So an amazing thing is the typical Costco worker there for four and a
half years is making as much as the typical Walmart assistant store
manager.

SCHULTZ: Steve Greenhouse, "New York Times." 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)

UNIDENTIFIED MALE: It`s over.

UNIDENTIFIED FEMALE: No more Twinkies?

UNIDENTIFIED MALE: This is it.

(END VIDEO CLIP)

SCHULTZ: Hostess executives demand huge bonuses while 18,000 people
get fired. Congressman Jim McDermott responds, next.

GDP is up, and unemployment is down. And this Congress is the most
unproductive in history. We`ll break down the numbers.

And Congressman Louie Gohmert goes off the deep end again. We`ll tell
you how Senator John McCain fits into his newest conspiracy theory.

(BEGIN VIDEO CLIP)

REP. LOUIE GOHMERT (R), TEXAS: This administration sent planes and
bombs in support to oust Gadhafi so that al Qaeda and the Muslim
Brotherhood could take over Libya.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Thanks for watching tonight.
Now, it`s not the Powerball jackpot, but to these folks it`s probably
pretty close. Hostess Brands won big in bankruptcy court today. Bottom
line, the Twinkie will survive. The executives will get their bonuses.
But the workers, they`re out of luck.

Federal bankruptcy judge has approved Hostess` plan to go out of
business and fire more than 18,000 employees. At the same time, Hostess
won an approval to pay 1.8 million dollars in bonuses to its 19 executives.
By the way, those bonuses don`t include the CEO`s regular salary, which is
currently 125,000 dollars a month.

Hostess touched off a wave of nostalgia when it announced it was going
out of business last month. People started worrying about the future of
the Twinkie. Many blamed the workers.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You know, something like a union can take them
down. And we`re losing, you know, an icon company. So, you know, it`s a
pretty big deal.

UNIDENTIFIED FEMALE: All my life I`ve been eating Hostess cakes. I
don`t know what I`m going to do without them being here. This is going to
be a sad moment for me.

UNIDENTIFIED FEMALE: It`s going to be a tragedy, you know. My kids
can`t grow up to hostess cake.

UNIDENTIFIED FEMALE: They`re just like comfort for me. I`ve grew up
with them since I was a kid. I`ve been eating them and I`m really -- I`m
going to miss them.

(END VIDEO CLIP)

SCHULTZ: Well, first of all, rest assured, folks, the Twinkie is
going to be just fine. Hostess has been losing money for decades. Nobody
seemed to like the Twinkie until Hostess declared bankruptcy. Now the
brand`s a hot commodity. Hostess is courting, count them, 110 potential
buyers. Seventy of these 110 potential buyers are so serious they`ve
signed nondisclosure agreements to go over the books.

Hostess says it`s got 10 calls from interested buyers just yesterday.
One of the company`s financial advisers says, quote, "not only are these
buyers serious, but they are expecting to spend substantial sums."

He says there are so many interested buyers, it`s "like drinking from
a fire house." Trust me, the Twinkie brand is going to be just fine. The
executives will get paid despite their mismanagement. But the workers who
built the brand are really getting hurt.

More than 18,000 workers across the country are losing their jobs
right now, right before the holidays. Some have been given 20 or 30 years
to the company, that kind of service to them and loyalty. They`ve been
without health care coverage since December 1st. Hostess also stopped
paying pensions to them last year.

Hostess executives drive an iconic brand into bankruptcy twice.
They`re getting paid big bucks. The workers made concessions. And they
basically prayed for better management that never showed up.

Tonight, they are out of a job. I`m joined by Congressman Jim
McDermott of Washington, a member of the House Ways & Means Committee.
Jim, good to have you back on the program. Good to have you with us.

REP. JIM MCDERMOTT (D), WASHINGTON STATE: Great to be back, Ed.

SCHULTZ: You bet. Now your state is going to lose some jobs because
of this Hostess liquidation. But what message does it send? You have
these CEOs up on Capitol Hill that are telling lawmakers how the economy
ought to run, what we ought to be doing with all these tax cuts. And this
is the culture that just goes right down on the workers. What do you make
of it?

MCDERMOTT: Well, Ed, this is a perfect example of what mismanagement
in a company is all about and how venture capitalists never intended to run
this business to work. The bakers would not give concessions because they
said you have not made improvements for 60 years, and if you`d make
improvements, this place would run much better, you`d make much more profit
and you could keep the place open.

But the management was more interested in selling it than what they --
they went into bankruptcy twice and came out worse the first time than they
were when they went in. And now they come out and they get the judge to
give them 1,800,000 dollars a year bonus just to keep the lights on, so
they have some place for people to send in the 110 people who want to buy
the business.

The brand is good. The product is good. It`s the management that is
just really worthless.

SCHULTZ: So they didn`t invest in infrastructure in the company or
new technology that would have made them more profitable. And yet the
unions are taking the hit publicly saying, well, it`s their fault they put
them out of business. What do you make of that?

MCDERMOTT: Well, it`s typical. Always blame the workers. The fact
is that if you don`t invest in your business, if you don`t continue to make
reinvestment, like the president is talking about for the country --

SCHULTZ: Sure.

MCDERMOTT: -- we have to continue to reinvest in the country. Well,
if a business doesn`t continue to reinvest in new equipment and modernize,
they will ultimately go bankrupt. And this is a perfect example. You`ve
got Costco, where they invest back in, they invest in their workers, they
invest in the way they market, everything else, and it works. But you have
Hostess where they don`t, and it goes down. It`s really sad.

SCHULTZ: It is. It`s really wrong. It`s mismanagement across -- I
think there`s a moral component to this, too. Surprising to me that the
bankruptcy judge will go along and give these 19 executives, who are
probably going to get inherited by the next company to come along -- that
they would get 1.8 million dollars in bonuses.

Now, the -- what about the tax incentives? Will that have helped save
companies like Hostess? And of course, we have to point out the GOP killed
Invest in America Act.

MCDERMOTT: Well, there are a lot of things we could do with the tax
structure that could make this situation much harder for businesses to go
into bankruptcy. They go in there and they strip off the benefits. They
strip off the pensions. United Airlines has done that to their employees.
There`s all kinds of companies who use bankruptcy as a way of taking away
benefits from workers. That`s not fair.

When I fly home on the United Airlines from Washington, D.C., there
are all these flight attendants working at age 60 years old for one reason.
They still have their health care benefits.

SCHULTZ: Yeah.

MCDERMOTT: Their husbands don`t. That`s a terrible situation in this
country.

SCHULTZ: It`s happening in a lot of industries. It`s the corporate
culture that is strangling workers in this country and this is a classic
example. Still a hot brand, but not hot for the employee. Congressman Jim
McDermott, great to have you with us tonight. Thanks.

Coming up, good news for the economy, in spite of the do-nothing
Congress. We will break down the numbers next. It`s rather astonishing.

(COMMERCIAL BREAK)

SCHULTZ: We always love hearing from our viewers on Twitter @EdShow
and our Facebook page. Many of you are still using the president`s My2K
hash tag to tell us how you`re going to spend the money that you are going
save through the middle class tax cuts.

John Wheat says "my 2,000 dollars will help pay my student loans.
Better yet, forgive my student loans so I can put my 2K back into the
economy."

Richard Sanders says, "my 2K allows me to pay for my health insurance
premium."

And Ralph from New York say, "I will use my 2,000 to get Romney a dog
sitter the next time he takes a road trip."

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

Coming up, Louie Gohmert, congressman out of Texas, shares his latest
conspiracy theory about the president and Libya. So what does John McCain
have to do with all of this? Find out. It`s the Big Finish tonight. Stay
with us.

(COMMERCIAL BREAK)

SCHULTZ: And we are back. New data today proves President Obama can
turn things around even as the Republicans in Congress continue to do
nothing. So how do we prove it? Let`s start with jobs.

The number of Americans filing new claims for unemployment benefits
fell 23,000 to a seasonally adjusted 393,000 last week. As expected,
initial unemployment claims surged after Hurricane Sandy devastated parts
of the northeast. But today`s numbers from the Department of Labor show
the second straight week of decline, evidence of steady improvement in the
labor market.

The good news keeps on coming. The Commerce Department reports
economic growth in the third quarter was actually better than first
reported. The initial estimate had a GDP growth of just two percent. This
morning, the Commerce Department revised its estimates to show growth of
2.7 percent. That`s the best GDP figure since the end of 2011, and the
second best of the last three years.

So things are looking up. President Obama has an improving economy on
his hands, in spite of all the do-nothing Congress that`s going on in
Washington. Anyone who still thinks that the term "do-nothing Congress" is
just a little too harsh, take a look at this: 906 Bills were passed from
January 1947 through December of 1948 by the body that President Harry
Truman listed and labeled as the do-nothing Congress.

The current Congress, with one month to go, has passed 196 bills, by
far the lowest number since the United States House Clerks Office began
keeping track. Keep in mind, one of the bills the Republicans blocked was
the American Jobs Act, which could have added up to 1.3 million jobs by the
end of the year.

America is on the road to recovery, no thanks to Republicans, no
thanks to their obstructionist attitude and behavior. But imagine where
we`d be if they had just said, we`ll work with you, Mr. President, on jobs.

Tonight in our survey, I asked, who is John Boehner fooling? Fifty
seven percent of you say no one; 43 percent of you say himself.

Next, Republican Congressman Louie Gohmert has a long history of wild
conspiracy theories, but his latest one, well, it takes the cake.
Democratic strategist Tara Dowdell is here with reaction.

(COMMERCIAL BREAK)

SCHULTZ: And in the Big Finish tonight, Senator John McCain has waged
a personal war against Susan Rice over the last several weeks. In fact,
Senator McCain doesn`t normally shy away from war. In March of 2011,
McCain was one of the first senators to call for a no fly zone and air
strikes against Libya. Then in May, after control of Libya`s no-fly zone
had been given to NATO, McCain called for more U.S. involvement.

(BEGIN VIDEO CLIP)

BOB SCHIEFFER, ABC NEWS ANCHOR: Are you saying take NATO out of it
and put the United States in?

SEN. JOHN MCCAIN (R), ARIZONA: No, have NATO remain in, all seven of
our allies who are willing to. But the United States has got to get its
assets back into the air fight. And we`ve got to do it very strenuously.

(END VIDEO CLIP)

SCHULTZ: "Assets into the air fight," meaning air war, our planes and
our guys. Right? Well, let`s get this on the record. John McCain
supported U.S. air strikes in Libya. But now, a year and a half later, one
Republican is using the air strikes to attack President Obama.

Texas Congressman Louie Gohmert has cooked up a wild conspiracy theory
about bombing Libya.

(BEGIN VIDEO CLIP)

GOHMERT: This administration sent planes and bombs and support to
oust Gadhafi, so that al Qaeda and the Muslim Brotherhood could take over
Libya.

(END VIDEO CLIP)

SCHULTZ: What? The administration, John McCain and other Republicans
wanted U.S. air strikes on Libya? They did it to oust a dictator who had
American blood on his hands and was murdering his own people. And this
crackpot from Texas wants you to believe President Obama was trying to help
al Qaeda?

It`s important to remember Louie Gohmert isn`t a right wing blogger or
a Fox News host. He is a sitting United States congressman from Texas.
This guy has a very long and ugly history of disgusting rhetoric on a
number of issues.

(BEGIN VIDEO CLIP)

GOHMERT: I`m sure that there are people here who think abortion is
OK. I don`t want to make you sick, but I brought an abortion to show you
today.

(APPLAUSE)

GOHMERT: When militaries throughout history of the greatest nations
in the world have adopted the policy that fine for homosexuality to be
overt, they`re toward the end of their existence as a great nation.

They would have young women who became pregnant -- would get them into
the United States to have a baby. They wouldn`t even have to pay anything
for the baby. And then they would return back where they could be raised
and coddled as future terrorists. And then one day 20, 30 years down the
road, they could be sent in to help destroy our way of life, because they
figured out how stupid we are being.

(END VIDEO CLIP)

SCHULTZ: That kind of conversation and conspiracy theories are
commonplace for certain Republicans. But for some reason, they just always
seem to get away with it.

For more, let`s turn to Democratic consultant Tara Dowdell. Tara, is
this just something we`re going to have to put up with, that they`re never
going to change, that they just can`t stand President Obama so much that
this is just operating procedure as normal for them?

TARA DOWDELL, DEMOCRATIC STRATEGIST: It certainly seems to be. I
mean, this is really unreal, because I don`t think that Louie Gohmert
should even be in congress. This is -- because the problem here, Ed, is
not just that he`s saying these crazy things. The problem is some people
are listening and believing these crazy things that they`re saying, because
they`re saying this is a sitting congressman.

So he has gotten elected to office. There`s obviously some stature
associated with being in Congress. So for some people, they`re saying he
wouldn`t be saying this stuff if there weren`t some merit to it. It`s
dangerous.

Remember, he was the one that went after Huma Abedin, who is Hillary
Clinton`s aide in the Secretary of State`s Office. And he accused her of
being aligned with the Muslim Brotherhood. She needed additional security.

I mean, this man is irresponsible and he`s dangerous. And the fact
that he`s serving in Congress is disturbing to me.

SCHULTZ: There are a number of conspiracy theories on the president:
the Birther nonsense, the Muslim theory, that he`s a socialist, that he`s a
communist. And now they think he`s trying to repeal the 22nd Amendment so
he can win a third term. What about that?

DOWDELL: It just doesn`t get any more bizarre. I have to tell you, I
have a little bit of a different take besides the fact that I think Louie
Gohmert is obviously a bit crazy. I think he`s also a narcissist. This
man lives on television. He lives on radio. He is on all the time.
That`s why we`re hearing all these conspiracy theories.

You know what would be great? If he spent half the time he spent on
TV spinning these wild theories on working on helping to fix the country
and the problems that are wrong with this country. And the fact that he
spends so much time on these other things shows me that he doesn`t really
care.

SCHULTZ: Do you think there`s a racial component to all of these
conspiracy theories?

DOWDELL: I absolutely do, because they all seem to have reached a
crescendo once President Obama was elected. So I don`t see how people
could think there`s not a racial component. And it`s unfortunate, though,
when you point that out, they want to push back and say you`re using the
race card. But the reality is that the attacks on this president are
unprecedented. The reality is also that he`s need security and had more
Secret Service threats against him based on race than anybody else in the
history of the presidency.

And those are real issues. And Louie Gohmert is playing into it. And
that`s also what makes it so irresponsible.

SCHULTZ: You think their hatred for the president plays out in the
legislative processes as well? I know it does. I mean, I believe it does.
They -- 368 filibusters. I mean, they don`t want anything to go through
from his agenda and they come up with the wildest conspiracy theories that
we`ve ever heard.

Now, of course, it`s the bombing of Libya. I mean, it`s pretty
outrageous. How -- do you think in some certain ways that this is a
motivating factor for the progressive base?

DOWDELL: I do. I think it definitely motivates our base because
people see how unfair these attacks are. Even if you don`t agree with
everything that the president is doing or saying, people see that the
attacks on him are baseless. Talking about his birth certificate, why are
we still talking about this?

And I was personally insulted when the president had to show his birth
certificate.

SCHULTZ: Yeah.

DOWDELL: I mean, that`s so wrong.

SCHULTZ: Tara Dowdell, great to have you with us tonight. Thanks so
much for joining us.

DOWDELL: Thank you.

SCHULTZ: And a quick update on a story we did last night. President
Obama and Mitt Romney had their private lunch today at the White House.
The White House released this photo of the pair following the lunch. We
here at THE ED SHOW" noticed something odd about the photo. So we`re
starting our own conspiracy theory.

You can clearly see a pair of boxing gloves sitting in the background
right behind the president. Is the White House trying to show the American
people that President Obama knocked Mitt Romney out in this election? Did
they do this on purpose? We`ll never know.

But maybe Louie Gohmert can help us out. 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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