updated 12/13/2012 10:33:58 AM ET 2012-12-13T15:33:58

THE ED SHOW with ED SCHULTZ
December 12, 2012

Guests: John Garamendi, William Cohan, Mayor Virg Bernero, Ted Strickland, Senator Kent Conrad


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

John Boehner is getting pressure from all sides, and looking for
friends wherever he can find them.

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

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I`m pretty confident
that Republicans would not hold middle class taxes hostage.

SCHULTZ (voice-over): Democrats put the ball back in Boehner`s court,
and they`re turning the screws on the speaker.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: It`s tough. But you have
to do it. So is the point that you don`t want to put your members on the
spot, figure it out.

SCHULTZ: Democrats, business leaders, Republicans, even Santa Claus
are pressing Boehner to do a deal. California congressman John Garamendi
is here with the latest.

The Michigan sneak attack proves it again -- union-busting is all
about politics.

KARL ROVE, FORMER BUSH AIDE: If a half a million people leave the
labor movement every year, pretty soon, you start having crimp in the
political budgets of these unions. It has a direct effect on the
presidential.

SCHULTZ: With Lansing Mayor Virg Bernero and former Ohio Governor Ted
Strickland on the politics of Michigan and what it means for the rest of
the country.

Plus, major news from the Fed that will boost the economy and help
your pocketbook. We`ll explain how.

The latest on the attorney general`s announcement about protecting
voting rights.

And Senator Kent Conrad, chairman of the Budget Committee, gives his
farewell address to the Senate. Tonight, I`ll ask him if the broken
chamber can ever work again.

(END VIDEOTAPE)

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

Details of the latest fiscal cliff counteroffer from the White House
have emerged, and Republicans are still whining and complaining.

The White House confirmed their new offer has $1.4 billion in revenue
from higher taxes on the wealthy. The previous offer was $1.6 billion.

The White House is offering $340 billion in cuts to Medicare and $250
billion in cuts to other programs.

President Obama spoke to ABC`s Barbara Walters about taxes on the rich
going up, whether Republicans like it or not.

(BEGIN VIDEO CLIP)

BARBARA WALTERS, ABC NEWS: Prediction: are you going to be able to
raise taxes? Yes or no?

OBAMA: Oh, taxes are going to go up one way or the other.

WALTERS: They are?

OBAMA: And I think the key is to make sure that taxes go up on the
high-end individuals like you and me, Barbara, we can afford it. It is
entirely possible for us to come up with a deal, but time is running short.

(END VIDEO CLIP)

SCHULTZ: The full interview between President Obama and Barbara
Walters will air Friday at 10:00 p.m. on ABC.

We do know the president said this, "I`d like to see a big package,
but the most important thing we can do is to make sure that middle class
taxes do not go up on January 1st."

Raising the Medicare eligibility age will not be a big part of this
package. The president said, "When you look at the evidence, it`s not
clear that it actually saves a lot of money."

As these negotiations drag on, public opinion remains firmly on the
side of the president. The latest NBC News/"Wall Street Journal" poll
shows 68 percent of Americans believe President Obama has a mandate to keep
the tax cuts for those making less than $250,000 a year, 65 percent said
the president`s mandate is to raise taxes on the wealthy and reduce
spending at the same time, 59 percent say the mandate is to raise taxes on
the top 2 percent.

Now, President Obama`s approval rating also on a roll. He is now at a
three-year high. You know what this is? Leverage.

The president is also getting support from powerful business leaders
that he met with last week. Top CEOs sent a letter to congressional
leaders, urging them to strike a deal and avoid going over the fiscal
cliff.

There were strong warnings about jumping off the cliff today. Federal
Reserve Chairman Ben Bernanke said failure to strike a deal would cause
huge damage to the economy.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: If the economy actually went
off the fiscal cliff, our assessment, the CBO`s assessment, outside
forecasters, all think that would have very adverse effects on the economy
and on the unemployment rate.

We cannot offset the full impact of the fiscal cliff. It`s just too
big.

(END VIDEO CLIP)

SCHULTZ: There was another figurehead on Capitol Hill today, urging a
solution to the standoff.

(BEGIN VIDEO CLIP)

"SANTA CLAUS", CATHOLICS UNITED SPOKESMAN: To parents everywhere,
call your representatives today, tomorrow, and every day, until they pass
the tax cut that is so important to you all.

(END VIDEO CLIP)

SCHULTZ: I guess we`re pulling out all stops. Senate Republican
leader Mitch McConnell was not really in the holiday mood today. He claims
the president is not giving Republicans anything to work with.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The president and his
allies have taken so many things off the table, the only thing left is the
varnish.

(END VIDEO CLIP)

SCHULTZ: Well, that`s good news.

House Speaker John Boehner says the White House offer is dead in the
water.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The president is
calling for $1.4 trillion worth of revenue. That cannot pass the House or
the Senate.

(END VIDEO CLIP)

SCHULTZ: Here`s a news alert for Speaker Boehner. It`s his job to
get a deal to pass the House.

Today, I spoke with Congressman Chris Van Hollen on my radio show.
The ranking member of the budget committee for the Democrats told me why
Speaker Boehner may be dragging these talks out so long.

(BEGIN AUDIO CLIP)

REP. CHRIS VAN HOLLEN (D), MARYLAND: We know that he has so many
Republicans who are not willing to accept a reasonable deal that I`m
worried that he`s got in the back of his head, you know, I better not bring
that to the floor of the House because these same guys are going to be
voting on whether or not I`m speaker.

(END AUDIO CLIP)

SCHULTZ: Boehner is finding out how tough it is to be speaker of the
House.

A former House speaker gave him some advice today about striking a
deal.

(BEGIN VIDEO CLIP)

PERINO: That`s what we all take the job to do, to risk it for
something, not to just sit in the office. It`s tough. But you have to do
it. So, is the point that you don`t want to put your members on the spot?
Figure it out. We did. Figure it out.

(END VIDEO CLIP)

SCHULTZ: Boehner`s problem is he`s got fewer people around him to
help him figure it out. The House speaker`s support group getting pretty
small as of late, in fact, every day it gets smaller. There are Republican
caucus members like Tom Cole who want to strike a deal, there are corporate
leaders calling for an agreement, the American public wants a deal tonight.

The only people left on John Boehner`s side are these guys, the Tea
Party coalition in the Congress. Guys like Senator Rand Paul. How about
Congressman Paul Broun? There`s a good ally for you. And there`s old,
good ole Louis Gohmert. You can always count on him.

These are the people keeping John Boehner from reaching a deal on
taxes.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We are going to do the moral thing here, and
that`s not keep spending future generations` money.

UNIDENTIFIED MALE: I want to get rid of the Department of Education,
the Department of Commerce, the Department of Labor. And let`s get rid of
the EPA while we`re doing it.

SEN. RAND PAUL (R), KENTUCKY: Why would we ever even consider as
Republicans think about raising taxes? I tell them come to me after you`ve
gotten rid of all the spending. Come to me when you`ve gotten rid of the
$3 million you spent last year to watch monkeys on methamphetamine.

(END VIDEO CLIP)

SCHULTZ: We keep hearing Republicans talk about taking hostages and
negotiations, that they are holding the middle class tax cuts and the debt
ceiling as leverage.

You know, maybe it`s time for the Democrats to do the same doggone
thing. Take a hostage here and there, like higher rates.

Maybe the Democrats ought to tell John Boehner, you know what, 39.6
percent looks pretty good right now, because after the first of the year
we`re going for 42 percent. Make Boehner come to the table, and make him
come squealing to the table saying you can`t go to 42 percent.

Oh, yes we can, because there is enough progressives in the House that
would band together and say you know what? We need to go beyond, because
we`ve got some real fiscal problems in this country. And we can go to the
wealthiest Americans and get a hell of a lot more than the old rates under
Bill Clinton.

Why not go to 42 percent? Why not go to 45 percent for people who
make over $10 million a year?

I mean, do we really want to solve this? Do we really want sacrifice?
Or do we just want to take our toe and put it in the lake and see if it`s
still cold out?

Come on, folks. These lawmakers in Washington need some pressure put
on them. We need to go higher than 39.6 percent. We need to go to at
least 42 percent for the wealthiest Americans making over a million dollars
a year and tell Boehner this is the way it`s going to be, or you`re going
to lose the deal that`s on the table right now.

Let`s take a hostage. Let`s take the rates.

Get your cell phones out. I want to know what you think tonight.
Tonight`s question: is John Boehner ignoring the American people to save
his job as speaker? Text A for yes, text B for now to 622639. You can
always go to our blog at ed.MSNBC.com. We`ll bring you the results later
on in the show.

I`m joined tonight by California Congressman John Garamendi, who sits
on the House Ways and Means Committee.

Congressman, good to have you with us.

REP. JOHN GARAMENDI (D), CALIFORNIA: Good to be with you, Ed, as
always.

SCHULTZ: You bet.

Interesting point brought up by your colleague about how the timing of
this is getting more and more interesting. Is John Boehner delaying a deal
in order to protect his job? What do you think?

GARAMENDI: Well, we certainly know we has a very raucous caucus. He
has a very divided caucus, one that is causing him great angst and a lot of
trouble pulling it together.

What he needs to do is reach across the aisle, come to the Democrats.
We put this thing together in half a day. But he hasn`t been willing to do
that because he could very well lose his job if he were to seek a
compromise.

SCHULTZ: Do you think there`s enough progressives, liberals in the
House that could circulate a petition and say maybe we better go to a
higher rate if Boehner wants to start taking hostages? Maybe we should go
to 42 or 43 percent. Maybe he better take this deal while it`s on the
table.

What about that?

GARAMENDI: Well, there are many different kinds of leverage, but the
big leverage is already out there. That is everyone`s taxes are going to
go up on January 1st unless the Republicans come to the table and accept
the fact that middle class tax bill is already on the -- in the House. We
could take it up tomorrow.

SCHULTZ: But that has not moved him yet, Congressman. That has not
moved John Boehner as of yet. What`s it going to take to move him?

GARAMENDI: Well, about 20 more days, because then it happens. In 20
days, we`re going to see those taxes go up on middle class Americans. And
that is not in his interests. It certainly is not in the interests of the
economy.

And it`s all going to be laid right on his doorstep, and on the
doorstep of his entire caucus.

And so it`s up to him. He`s got to make the deal just as Minority
Leader Pelosi said. You`ve picked a tough job, but you`ve got to do it
because you`re the leader in the House. You set the pace.

He`s got to come. If he came to the Democrats tomorrow, we could put
this thing out. Would he lose his job? I don`t know.

But that`s not about his job. It`s about the American public and the
middle class and the economy.

SCHULTZ: Well, Boehner is telling members that they shouldn`t be
making any plans for the holidays, and they`re dragging their feet through
the holidays, I guess.

You wrote that these negotiations are this way, the way you see it.
You wrote it on "Huffington Post." "I`m willing to take a tough vote. I`m
willing to make sacrifices. I`m willing to feel the heat. But I`m not
willing to solve the fiscal cliff by throwing seniors over the fiscal
cliff. I draw the line at drawing benefits in Medicare and Social
Security."

What line are you willing to cross to get a deal with the Republicans?

GARAMENDI: Well, I just said what line I`m not willing to cross. The
lines that can be done on Medicare, there are very significant savings
available in Medicare. The president has proposed, what, $350 billion of
savings over 10 years without touching the benefits.

The notion of increasing the eligible age to 66, 67 is really stupid.
There is no other way to describe it. It is bad public policy. It is
terrible for seniors, and it doesn`t save much money.

What it does is it shifts the costs to those people who can`t get to
Medicare because they`re not yet old enough, and it will also shift the
cost back to employers and to the new exchanges which are going to be
created in just a year and a half. So it is a really non-starter to throw
the seniors over the cliff.

But we could do things. How about negotiating drug prices? Prevented
by law, the federal government`s prevented by the current law, put in
during the Bush administration. Can`t negotiate drug prices.

SCHULTZ: Do you really think the Republicans would agree to that? I
mean, that would be the same thing as the Veterans Administration. They`re
allowed to negotiate.

GARAMENDI: Absolutely.

SCHULTZ: But if you do that, that of course is going to be a hit the
big pharma, and Republicans are going to protect big business.

GARAMENDI: Well, I`m sorry. This is about the American economy.
This is about balancing our budget.

They`re going to be a lot of hits taken in this situation. We know
there are going to be cuts in other areas. We know there is also a lot of
fraud.

Just reported in the last week that about $28 billion of fraud a year
and a half ago in the Medicare system. We need to continue to go after
that.

We need to also make sure that the payments to doctors and providers
are both adequate and not unnecessarily high. And we`ve done a lot of
prevention. We`ve already seen the inflation rate in Medicare reduced
significantly since the Affordable Healthcare Act.

SCHULTZ: So you`re heading in the right direction. They should take
this deal.

GARAMENDI: Absolutely.

SCHULTZ: And you`re saying another 20 days, home for holidays might
not happen.

Congressman, good to have you with us tonight.

GARAMENDI: Always.

SCHULTZ: John Garamendi from California with us here on THE ED SHOW.

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

Coming up, the Federal Reserve announces a major move to bolster the
United States economy. We`ll tell you what the plan means for you if
you`re in the middle class, next.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, we`ll take a look at what`s the heart of
Michigan`s right-to-work law. It`s not only about politics, it`s about
money. Follow the money.

And it really is the latest attempt to tip the scales for the GOP
coming up for 2016. We`ll have all the details.

Later, Attorney General Eric holder makes a push for election reform.
Hear, hear. We`ll have his comments and talk about it.

And North Dakota Senator Kent Conrad joins me to discuss the fiscal
cliff negotiations and look back on his time in the Senate as the Senate
Budget chairman.

Don`t forget, you can listen to my radio show on Sirius XM Radio
Channel 1271, Monday through Friday, noon to 3:00 p.m.

Be sure to share your thoughts with us on Facebook and on Twitter
using #EdShow.

We`re coming right back.

(COMMERCIAL BREAK)

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

Over the past two years, Federal Reserve Chairman Ben Bernanke has
repeatedly asked Congress to do something to help the economy.

Well, Democrats and President Obama have put a number of major bills,
job bills on the table. But Boehner and McConnell and that crowd, they`ve
just done nothing. It`s a do-nothing Congress, and they have fought it
every step of the way.

So, now, with the fiscal cliff looming, the Federal Reserve is taking
matters into their own hands. Bernanke announced today that the Fed will
take unprecedented steps to boost the economy. The Fed is currently
spending $40 billion a month on mortgage bonds. And now, they`re willing
to take to it the next level by purchasing $45 billion worth of treasury
bonds per month.

The Fed also grid to keep short-term interest rates near zero. They
plan to keep interest rates low until the unemployment rate falls to 6.5
percent, or the inflation rate reaches 2.5 percent.

This is the first time in the Fed`s history that they have ever made
goals for the nation`s economic recovery.

For more, let`s turn to William Cohan. He is a "Bloomberg View"
columnist and author of "Money and Power: How Goldman Sachs Came to Rule
the World."

Mr. Cohan, good to have you with us tonight.

WILLIAM COHAN, BLOOMBERG VIEW: Great to be here.

SCHULTZ: What do you make of this move? Bernanke has been out there
that Congress has to move on something. They didn`t. But now, kind of in
the 11th hour, he makes this move. How big is it?

COHAN: It`s very big. It`s creative. It`s unprecedented.

And I think it`s by and large going to help the middle class --
assuming you`re somebody in the middle class who wants to refinance your
mortgage or get a mortgage to buy a home in the first place, because what
he is doing is lowering, trying to lower long-term interest rates. As he
said, short-term interest rates he is going to keep at a quarter of a
percentage point. He can`t do much more with that. But long-term interest
rates he can try to drive down by buying mortgage-backed securities, by
buying treasury securities.

In a sense, creating artificial demand in the market, which lowers the
interest rates, increases the price of bonds. Bonds trade inversely to
their interest rates. And so, that will drive down interest rates,
encouraging people to borrow more money.

SCHULTZ: So what is this going to do to the housing market? We`ve
seen a slow recovery come back? Should this really be a shot in the arm?

COHAN: Well, it should help encourage that recovery along. What it
does, it keeps mortgage rates lower than they ordinarily would be.

SCHULTZ: And for the long-term?

COHAN: And for a longer period of time.

SCHULTZ: OK. They`re setting goals for the unemployment rate and
inflation rate. What does that tell us?

COHAN: Well, it tells us that he probably wants to keep this program
in place for another year or two years. I think Goldman Sachs estimates
that this will be in place until the first quarter of 2016, because that`s
how long it will take for the unemployment rate to reach 6.5 percent.

Now, that`s good news, again, if you`re borrowing money. But if
you`re a saver, Ed, that is not good news, because interest rates are going
to come down, and you`re not going get anything on your savings.

SCHULTZ: So what do you think prompted this? Possibly more
filibusters? More stagnant movement on job creation by either side of the
aisle? Or was it just these fiscal cliff negotiations that are going on
right now, the inability to make a deal?

COHAN: It`s the do-nothing Congress. I mean, their inability to make
this deal. I mean, the best thing for the economy would be to make a deal
and get off the fiscal edge, right?

But if they`re not going to be able to do that, then Bernanke is
smart. And again, it`s unprecedented for him to do that. It`s smart for
him to go in and continue to try to stimulate the economy.

SCHULTZ: You know, it`s one thing for him to say that he is very
concerned about the fiscal cliff and what it would do to the economy, but
then to back it up with this move.

COHAN: Yes. You got to give the guy a lot of credit. It might be
his bid for a third term as Fed chairman, frankly, because it is creative.
It`s unprecedented, and, by the way, the Europeans are now following his
lead.

SCHULTZ: What`s the danger here?

COHAN: Well, the danger is that we`re creating a bit of a bubble with
these low interest rates, just like we did, unfortunately, in 2003 and 2004
when Greenspan kept interest rates low. And that created the housing
bubble, because investors were looking for higher yield. And when
investors start looking for higher yielding bonds, then they take risks
that they wouldn`t ordinarily take. And that`s the risk here that we`re
creating a bubble in interest rates. And, of course, savers are not happy
right now.

SCHULTZ: What about the credit markets? Is it going to be hard to
get money in this economy because you`ve got to back it up with securities
and whatnot, or is that going to change, that dynamic going to change at
all?

COHAN: Well, this program, Ed, has actually been in place for three
or four years now, and credit has not been that easy to get. You know, if
you`re a big corporation, they`ll throw buckets of money at you.

SCHULTZ: Sure.

COHAN: But if you`re trying to refinance your mortgage or get a
mortgage in the first place, they`ve made it that much harder. And this
isn`t necessarily going to make it that easier. It`s just if you get a
mortgage, the rates will be lower.

So people should be encouraged to try to refinance, should try to get
that mortgage in the first place. But that doesn`t mean they`re going to
get it.

SCHULTZ: They are worried about the economy, though, because they`re
not only talking about it, but making this move.

COHAN: That`s right.

SCHULTZ: William Cohan, great to have you with us tonight. Thanks so
much for being on THE ED SHOW.

Coming up, Republicans can`t win on the power of their own ideas, so
they need I guess you could say to cheat to win the next election. And
they`re setting the stage right now. Find out how Michigan`s new law could
change the landscape in the next presidential election.

We`ll talk to former Ohio Governor Ted Strickland and Lansing Mayor
Virg Bernero, and I`ll tell you exactly where the money is going.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: These so-called right-to-work laws, they don`t have to do with
economics. They have everything to do with politics. What they`re really
talking about is giving you the right to work for less money.

(END VIDEO CLIP)

SCHULTZ: President Obama telling it like it is.

Welcome back to THE ED SHOW.

Michigan`s right-to-work law, my friend, is not about the economy. No
matter what they tell you, it`s not about the economy. It`s about money in
the political machine in this country. Here is what Governor Rick Snyder
of Michigan wants you to believe it is.

(BEGIN VIDEO CLIP)

GOV. RICK SNYDER (R), MICHIGAN: Right-to-work is about the
relationship between the union and workers. And this is about being pro-
workers, giving workers the choice. If anything, this should encourage
unions to be more responsive to workers.

It`s about economic development. We will get more and better jobs
coming to Michigan because we`re going to be more competitive.

(END VIDEO CLIP)

SCHULTZ: OK. So let me get this straight -- the Republicans in
Michigan are concerned about this relationship between the union and its
workers. They`re really -- hey, this is kind of like the health care
debate. Don`t let the government get between you and your doctor. The
government`s getting between the union and its workers. Why?

This is not about economic development. Unions account for only about
20 percent of the workforce in Michigan. Michigan`s new right-to-work law
isn`t going to affect economic development in a positive way whatsoever.
And there is a road map to prove that.

Look at states around the country that are right-to-work. Union
membership has declined in this country, and that`s what they want, so has
middle class incomes.

You see that? That graph right there starts back in 1967. And it
goes all the way to 2011. And as union membership has gone down, so has
middle class income.

So if anything, Michigan`s new right-to-work law will hurt economic
development.

Governor Snyder also says the law was all about the workers, really?
He is concerned about the workers. That too is a lie.

All the unions are saying is this -- if you are going to be a union
member, you are going to be expected to pay dues. You know, you`re going
to be not required to be a part of the union. That`s another thing that`s
out there.

They`re saying well, gosh, you have to join the union. No, you don`t.
That would be against the law.

It`s like if you go play nine holes of golf and you have the choice of
paying the fee or just playing for free, what are you going to do? Hey,
Charlie, let`s play the front 9 for free. You`re going to take the free
deal, right?

What this legislation really does is give workers the chance to get
all the benefits of collective bargaining without paying dues like
everybody else who has decided to pay dues. And if you want to know what
was really going on in Washington -- in the state of Michigan, which of
course is being pushed by some in Washington, all you have to do is follow
the money.

All right. Let`s go to the billionaires that we love to talk about,
the Koch brothers. They want to take down the Democratic infrastructure in
this country by basically manipulating the political environment in
America.

They don`t give a damn about workers. They want union dues to go away
so the infrastructure just dries up. If labor is taken way from the
Democrats, Barack Obama might not be in the White House. You can just ask
Karl Rove.

(BEGIN VIDEO CLIP)

ROVE: They lost 612,000 union members in 2010 alone. Now think about
it. Every one of the 612,000 people had literally perhaps several hundred
dollars worth of union dues going into the political coffers of their union
to spend on politics.

So yeah, you keep having a couple hundred thousand people each year --
if a half million people leave the labor union movement every year, and
pretty soon you start having a crimp in the political budgets of these
unions. It has a direct effect on the presidential.

(END VIDEO CLIP)

SCHULTZ: Oh yes, let`s crimp those political budgets out there. And
the way we can do that is pass a right-to-work law that will tell union
members that they really don`t have to pay dues. That way they`re not
going to pay them, and it`s going to reduce their resources even more.
It`s going to shake the foundations of the Democrats even more.

You know, the Koch Brothers are over there saying, who is making all
these phone calls? Who is doing all this social networking stuff? Where
are they getting money for that? They`re getting it from the unions.
Without labor, Democrats lose a solid base in Wisconsin, in Michigan, Ohio
and Pennsylvania and Illinois.

Let`s see, think about that. All those states together, holy smokes,
that`s the Rust Belt of America. It`s the bread basket of union membership
in this country.

So look at a these right-to-work states. They almost always go
Republican. So what the GOP is missing is what? The Rust Belt. That`s
right. If they can crack the Democratic hold on the Rust Belt, they can
cobble together electoral victories.

Keep in mind, none of those Michigan Republicans ran on a right to
work platform, because if they had had, they would never have been elected
to the House or Senate in that state. They were mum`s the word. They were
pretty quiet about that.

But, you see, once they got in, here comes the big money interests
like the Koch Brothers. They are now pulling all the levers of government
in the shadows in every state they possibly can. Right wing groups
reportedly threatened Michigan Senate Majority Leader Randy Richardsville -
- threatened his leadership post and promised him a primary challenge in
2014 if he refused to move on this right-to-work legislation.

He did. It passed. It`s signed. Now it`s law. They got what they
wanted. Americans for Prosperity, founded by the Koch Brothers as one of
the big monied interests behind right to work. The American Legislative
Exchange Council, ALEC, is also funded by the Koch Brothers. ALEC writes
legislation state by state.

Guess what? Michigan`s proposed right to work bills mirror ALEC
language practically word for word. These guys didn`t even have to write
the bill. It was handed to them.

This is not conservatives` only line of attack. Oh, there is more.
There are attempts to change the electoral college in Ohio, Pennsylvania,
and Virginia. A Virginia state senator has proposed a scheme to allocate
electoral college votes based on districts rather than the popular vote.

It`s a way of marginalizing urban voters in the next election. Game
plan page two. You see, listen very carefully to Romney`s running mate,
Paul Ryan, right after the election.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), WISCONSIN: I think the surprise was some of the
turnout. Some of the turnout, especially in the urban areas, which
definitely gave President Obama the big margin to win this race. There is
always an electoral college strategy in winning these things. And you know
what states you need to win to get to 270 electoral votes.

And when we watched -- look at the map here, Virginia and Ohio coming
in, and those ones coming in as tight as they were, and then looking like
we were going to lose them, that was when it became pretty clear to us that
we weren`t going to win.

(END VIDEO CLIP)

SCHULTZ: Oh, yes. So what we`ve got to do now is change that. We
got to make sure the next time it comes in, whoever runs again, and it
might be me, Paul Ryan says -- we`ve got to make sure that that electoral
college is all right for the Republicans. So we`ve got three strategy
points here: marginalize the urban vote by screwing around with the
electoral college, dismantle Democratic infrastructure by going after the
unions through right the work laws state by state, keep voters from casting
their vote in the first place through voter suppression laws.

And we`re four years away from the next election. So they`ve got
plenty of time to just chip away at this in 2013, `14, `15 and get a head
start on the Democrats. Michigan`s right-to-work law is a victory for
Republicans, no question about it. But this fight, you know, I keep
hearing that this fight isn`t over. Really?

I`ll talk with Lansing Mayor Virg Bernero about what is next for
workers in Michigan and former Ohio Governor Ted Strickland on what it
means for unions in other states. There is a lot more coming up in the
next half hour of THE ED SHOW. Stay right with us.

(BEGIN VIDEO CLIP)

ERIC HOLDER, ATTORNEY GENERAL: Who are we as a nation? Shouldn`t we
be coming up with ways in which we encourage more people to get to the
polls to express their views?

(END VIDEO CLIP)

SCHULTZ: Attorney General Holder makes a major announcement on
protecting votes rights. Details ahead.

And retiring Senator Kent Conrad, chairman of the Budget Committee, is
here with his thoughts on how the broken chamber can get its act together.

(COMMERCIAL BREAK)

SCHULTZ: Good to have you back with us. Thanks for staying with THE
ED SHOW tonight. Make no mistake about it. Republicans scoring a big
victory yesterday. No question about it. Give them credit where credit is
due. They do stay on point. Despite thousands of protesters and national
news coverage, Governor Snyder turned Michigan into the so-called right the
work state.

As the president said Monday, it`s a right to make less money law.
The Republican governor won`t admit that the law is designed to keep unions
from campaigning for Democrats. He won`t admit that the law will make it
easier for him to get reelected. Snyder just keeps saying that the bill
was all about giving Michigan workers more freedom.

Yes, more freedom! We believe Governor Snyder, yeah. He is gutting
the unions to give more freedom to less than 20 percent of the workforce in
the state? Actually, only 17.5 percent of the workers in the state of
Michigan are union members. That`s 671,000 people. Governor Snyder needs
to explain why a small percentage of his state needed such a massive legal
overhaul before the end of the year in a lame duck session of their
legislature.

Let`s turn to Virg Bernero, mayor of Lansing, Michigan, where all the
action was yesterday and in recent days, and former Ohio Governor Ted
Strickland with us tonight. Gentlemen, great to have you with us.

It`s either unions took a shot in the boiler or a sleeping giant has
just been awakened. Only time will tell as this all unfolds. Governor,
you first. Is Ohio getting pressure to pass the so-called right-to-work
legislation? What is going on there?

TED STRICKLAND, FORMER GOVERNOR OF OHIO: Well, there are efforts
under way in Ohio right now to gather signatures for an initiative. And I
think we`re going to face this challenge in Ohio and I think other states.
Listen, Ed, a handful of billionaire oligarchs are pouring money into
states.

Adelson has just said that he intends to fund anti-union initiatives
at the state and local levels. And that`s what we`re facing. It`s an
attack on the middle class. But we`re going to be ready for it in Ohio.

And I believe -- as you said, I believe a sleeping giant has been
awakened, and I think the people of Michigan will bring back Michigan`s
union ability.

But temporarily a setback. But our eyes are open. We know the
threat. And we`re going to be ready for it.

SCHULTZ: All right. Governor Snyder was on "MORNING JOE" this
morning claiming the new law is not anti-union. Here it is.

(BEGIN VIDEO CLIP)

SNYDER: I don`t believe this is actually anti-union. If you look at
it, I believe this is pro-worker. Because the way I view it is workers now
have freedom to choose.

RICHARD WOLFFE, MSNBC.COM EXECUTIVE EDITOR: Hang on a sec. Are you
serious? Are you serious, this is not anti-union?

SNYDER: I don`t view it as pro or anti-union. Unions just need to be
responsive to people to step up and deliver value. And workers have that
choice. And workers should have that choice. They shouldn`t be compelled
to join something they don`t see value in.

(END VIDEO CLIP)

SCHULTZ: Virg Bernero, isn`t it interesting how government in
Michigan is so concerned about the relationship between union and its
workers?

MAYOR VIRG BERNERO (D), LANSING, MICHIGAN: Yeah, it`s interesting
this freedom, freedom and this choice. You know, if the governor and
others who are for this believe really in this kind of freedom and choice
in a democracy, then why don`t they make taxes voluntary? Because the
reality is that that`s what union dues are.

You know, the majority has voted for a union, and the majority rules
in a democracy, just like the majority voted for Rick Snyder. I might not
agree with his policies as governor, but I don`t have a choice to hold back
on my taxes. I might not agree with the direction the president is taking,
but I got to pay my federal taxes or the IRS will come after me.

So the idea that you get all the benefits of the union membership and
you don`t have to pay your dues, and the union has to earn the support, is
a bunch of nonsense. The majority in those shops have spoken; 51 percent
have wanted a union. And if you don`t like it, you can take your business
elsewhere. We`re only 17 percent union.

I agree with the governor, though. And Ed, it`s both a shot in the
gut and a call to action.

SCHULTZ: Right.

BERNERO: And I believe, you know what? Sometimes it takes both.
Sometimes it takes a slap in the face, a shot in the gut, a kick in the
shins to get people motivated. We are motivated and fired up.

SCHULTZ: The big political picture here is, governor, they`re after
the rust belt.

STRICKLAND: They are.

SCHULTZ: If they can break the backs of the unions and their
infrastructure of funding and pass laws to make it so people don`t have to
pay dues, this, of course, is going to break the backs of the Democrats in
those state. Or is that a bridge too far?

STRICKLAND: Well, I don`t think it`s a bridge too far. Ed, this
Michigan governor is intellectually dishonest. He is not speaking the
truth. This is an attack upon organized labor. It`s an attack upon the
middle class. And he is doing this at the behest of the Tea Party right
wing elements within his party.

He absolutely was dishonest with the people of Michigan. He said this
was not a part of his political priority.

SCHULTZ: But they`re going to the money in the Democrats. They`re
going right to the heart and soul of what supports the social networking.

STRICKLAND: Absolutely.

SCHULTZ: -- and the knocking on the doors and making the phone calls
and the get out the vote effort that really makes a difference in
elections. Mayor, what about this? You know, the front page of "the
Detroit Free Press" says that this fight isn`t over. What does that mean?
How are you going to fight this new law?

BERNERO: Well, there is any number of ways. Of course, lawyers are
going over this very carefully now. Advocates are looking at it carefully
to see if -- we think we can do an initiated law that will undo this law.
At the same time, it`s definitely motivation for `14. The governor is
exactly right. It is an attack.

We know that organized labor has been at the forefront of social and
economic change. So it is an attack on organized labor. It`s an attack on
the Democratic party. Many Democratic officials get support from the labor
unions.

And more than the money, what they get is organization. The unions
are organized. They`re good at organizing. And again, that`s what we`re
going to do.

We are motivated by this. And we`re not going to take it laying down.
So the law may be challenged. And there is -- every legal option is being
looked at. But it`s definitely a motivation to win the governor`s seat and
to take over the legislature in 2014. We`re starting that work today.

SCHULTZ: Well, governor, you got the unions to win their battle on
measure two in Ohio. It looks like this is going to have to be a repeat
performance.

STRICKLAND: That`s right.

SCHULTZ: And I don`t think that what we`re going to see here is these
legislative sessions controlled by the righties start making up laws, that
it`s going to be harder to recall, that it`s going to be harder to maneuver
around these laws. And the only way you`re going to be able to do this is
to vote these people out.

But I think it`s going to be very interesting in 2014 to see President
Obama engage his army of support in the Rust Belt to turn some of these
state legislative houses all around.

Great to have both of you with us tonight. Mayor Virg Bernero and
Governor Ted Strickland with us here on THE ED SHOW.

Attorney General Eric Holder slams our broken election system and
urges officials to consider national voting standards. We`ve got big news,
next. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I want to thank every American who participated in this
election. Whether you voted for the very first time or waited in line for
a very, very long time --

(APPLAUSE)

OBAMA: -- by the way, we have to fix that.

(END VIDEO CLIP)

SCHULTZ: President Obama addressing just one of the many issues
voters faced on election day. Now Attorney General Eric Holder is adding
his voice to the mix. Speaking at the John F. Kennedy Library, Holder says
it`s time to consider national voting standards.

The attorney general pointed to a MacArthur Foundation study that
found nearly 90 percent of voters support the creation of national
standards. Holder also said election officials should strive to administer
elections more efficiently and fairly.

He went on to say "this means taking steps to address long lines at
polling places and ensure that every polling place has an adequate number
of voting machines. We must acknowledge that giving our fellow citizens
access to the voting booth for longer hours and over additional days will
enable more of them to cast their ballots without unduly interfering with
work or family obligations that so many have."

Well put. In the meantime, the GOP isn`t giving up their fight over
voter suppression. Some of the toughest laws in the country have come in
swing states with Republican governors. Holder stopped short of supporting
specific legislation to create an unverified system, but he did call on
leaders to start a dialogue and work toward improving our elections.

So where does this go? As the head of the Justice Department, I
believe Holder should be one of those leaders. And as "the New York Times"
points out, if Mr. Holder is not going to organize and lead that
conversation, then who is? Great question.

Let`s get it on.

Tonight in our survey, I asked you is John Boehner ignoring the
American people to save his job as speaker? Ninety eight percent of you
say yes; two percent of you say no.

He knows the numbers in the House and the Senate and in this country
better than anybody else. Next is Senator Kent Conrad. He will join us on
the fiscal cliff talks and reflect on his 26 years in Washington. What is
wrong with the Senate?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD (D), NORTH DAKOTA: There are problems here. There
are problems in this chamber. As proud as I am of this institution, and I
will forever be, I have detected over the 26 years I`ve been here a change.
We spend now too much of our time seeking partisan advantage. And it
happens on both sides. And it`s all understandable. I understand it. I`m
not being critical of individuals.

We spend too little time trying to solve problems.

(END VIDEO CLIP)

SCHULTZ: Welcome back to THE ED SHOW. That was North Dakota Senator
Kent Conrad on the floor of the Senate earlier today, reflecting on his 26
years in Washington. Conrad will leave the Senate in January. As chairman
of the Senate Budget Committee, Conrad understands the numbers better than
anyone else.

And the senator predicted the mess we would find ourselves in with the
Bush tax cuts a decade ago. Take a look.

(BEGIN VIDEO CLIP)

CONRAD: The administration told us that we could have a massive tax
cut and they would still be able to have maximum pay down of the debt and
protect Social Security. Now what we`re seeing is they got the massive tax
cut, but now instead of maximum pay down of the debt, they`re asking for
the second biggest increase in the debt in our nation`s history.

And in protecting Social Security, instead of protecting it, under the
president`s plan, over the next decade, they will be taking almost two
trillion dollars out of Social Security to pay for other things, to pay for
his tax cuts, to pay for other spending.

(END VIDEO CLIP)

SCHULTZ: Joining me now is Senator Kent Conrad of North Dakota.
Senator, good to have you with us. You certainly had your crystal ball out
over a decade ago on where the economy was headed. You nailed it. There
is no doubt.

What about these fiscal cliff negotiations? Are we close to a deal?

CONRAD: I think we probably are. I`m not in the room, so I can`t say
with specificity. But I do believe they`re edging closer from what I`ve
heard. And hopefully they can announce something next week.

SCHULTZ: Senator, how can a deal be possible if the Republicans are
so bent on protecting the wealthiest Americans? It doesn`t seem like any
of them in full force want to move in that direction? Or are you hearing
differently?

CONRAD: Well, first of all, they`re in a very bad negotiating
position, because as you know, the law is very clear. And the law ends all
of the Bush tax cuts at the end of this year. Democrats have passed in the
Senate, with some Republican help, an extension of all the middle class tax
cuts. And so Republicans are really in an awkward position.

They`re holding 98 percent of the American people hostage to save the
two percent who are at the top, those earning more than 250,000 dollars.
The problem is the law is going to make those continuing tax cuts for the
wealthiest among us end at the end of this month. So they`re running out
of room for this negotiation.

SCHULTZ: Senator, you`ve seen the president`s proposal, as we all
have. Do the numbers add up? As you called it 10 years ago, do these
numbers add up today and head us in the right direction?

CONRAD: Yes, they do. And I think the president, in many ways, has
been unfairly treated, sometimes in the media, because people really
haven`t delved into what he is saying. He`s got an overall package here.
As I said on the Senate floor earlier today, we could take the best of the
Republican ideas, the best of the president`s ideas. We could have an
overall package of four trillion dollars, which is what we need. And this
country could be on its way.

And the cuts would be relatively modest. The revenue increase
relatively modest. You know, sometimes we forget to put these things in
context. The revenue increase the president is calling for is only four
percent of the revenue that we forecast over the next 10 years.

SCHULTZ: So you say his numbers are workable?

CONRAD: Absolutely. Workable and doable.

SCHULTZ: All right. Now you`ve been in Washington for 26 years. Is
the art of a deal lost?

CONRAD: You know, sometimes I wonder, Ed. My goodness. When we see
the bombs across the barricades in this town, you really wonder if people
forgot to listen to each other and to negotiate to conclusion, you know.
At the end of the day here, we need to -- we need to have an agreement that
is principled and puts the country on a sounder course.

SCHULTZ: Well, I asked that art of a deal, is it lost, because Mitch
McConnell`s stated deal was to make Barack Obama a one-term president. The
GOP has rallied around this notion of obstruction. How do you break that
kind of logjam? And can it be done?

CONRAD: You know, I think it can be done. Look, at the end of the
day here, this is a negotiation between the speaker of the House of
Representatives, Mr. Boehner, and the president. And I believe that they
will have a framework agreement. I believe they`ll have it early next
week.

And I believe it will secure the votes in both the Senate and the
House. We may miss some on the wings, but I think the center will hold.
And I think it can pass.

SCHULTZ: Senator Kent Conrad, it`s been a pleasure working with you
all these years. The Senate is going to miss you. You`re one of the well
reasoned ones on the Hill and in that chamber. I appreciate your time and
thanks for joining us tonight. All the best to you.

CONRAD: Thank you, Ed. Love your show.

SCHULTZ: Thank you.

And that is THE ED SHOW. I`m Ed Schultz. "THE RACHEL MADDOW SHOW"
starts right now.

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

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