updated 12/21/2012 11:29:17 AM ET 2012-12-21T16:29:17

THE ED SHOW with ED SCHULTZ
December 20, 2012

Guests: Chris Van Hollen, Elijah Cummings, John Garamendi, Steve Benen, Michael Tomasky, Rep. Steny Hoyer, Howard Dean

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

This is the situation at this hour: The House is in recess subject to
the call of the chair.

John Boehner doesn`t have the votes.

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

(BEGIN VIDEOTAPE)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I did my part.
They`ve done nothing.

SCHULTZ (voice-over): John Boehner`s "Plan B" is dead on arrival.
But that`s not stopping him from wasting America`s time.

SEN. HARRY REID (D-NV), MAJORITY LEADER: These are gyrations I`ve
never seen before.

SCHULTZ: Tonight, Congressman Chris Van Hollen on the Republicans in
chaos.

Congressman Elijah Cummings and John Garamendi on where the Dems go
next.

Plus, ABC`s Jake Tapper took it to the president on gun control.

JAKE TAPPER, ABC NEWS: Where have you been?

SCHULTZ: Today, the Republican leadership was forced to respond.

Former Vermont Governor Howard Dean on the Republican disappearing act
on guns. And a preview of tomorrow`s NRA news conference.

And righties have their bogus war on Christmas.

UNIDENTIFIED MALE: Santa, if you will, I understand you don`t like to
say happy holidays. Why?

SCHULTZ: Tonight, I`ll tell you about the real war on Christmas and
the people who stand to suffer for it.

(END VIDEOTAPE)

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

Tonight, Washington Republicans are wasting our time. Republicans are
supposed to vote on John Boehner`s infamous "Plan B" at this hour. The
House is in recess as Republican leaders basically are scrambling to get
all the votes.

House Speaker John Boehner pushed for a vote on the bill even though
it has no chance of surviving in the Senate. It would be vetoed by the
president if it did.

Boehner`s "Plan B", it makes tax increases permanent for income above
$1 million. Compared to the White House plan, basically, folks, it`s a
joke.

President Obama proposed a $2.5 trillion package -- $1.2 trillion
would come from spending cuts, $1.3 trillion would come from tax increases.

"Plan B" only includes $1 trillion in tax revenue and the rest of
course is unspecified. It also includes no deal on raising the debt
ceiling.

President Obamas latest offer takes the debt ceiling off the table for
the next two years, which I think most Americans want. Boehner flat out
lied to the American people today when he announced tonight`s vote.

(BEGIN VIDEO CLIP)

BOEHNER: President Obama and Senate Democrats haven`t done much of
anything. Their "Plan B" is just slow-walk us over the fiscal cliff. And
for weeks the White House said that if I moved on rate, that they would
make substantial concessions on spending cuts and entitlement reforms.

I did my part. They`ve done nothing.

(END VIDEO CLIP)

SCHULTZ: It is the height of dishonesty to say the president of the
United States has done nothing.

The president`s opening offer -- just for the record -- was $1.6
trillion in new revenue. Then, he dropped it to $1.4 trillion. After
another counteroffer the president dropped it again down to $1.2 trillion.
This is exactly halfway between the president`s first offer and Speaker
Boehner`s first offer of $800 billion.

On top of this, the president changed his offer on taxes for incomes
above $250,000, which, of course, was his signature vow I think of the
presidential campaign. He replaced it with what? A tax increase over
$400,000, even a better break for middle classers and beyond. Plus, a cost
of living adjustment to Social Security benefits, which has got a lot of
people on the left all riled up.

The president`s supporters not real thrilled about this deal. But
Boehner continues to lie about it.

(BEGIN VIDEO CLIP)

BOEHNER: Frankly, I`m convinced that the president is unwilling to
stand up to his own party on the big issues that face our country.

(END VIDEO CLIP)

SCHULTZ: It is the other way around, folks. Speaker Boehner got a
good deal from the president, and he couldn`t sell it to his own members.
Boehner had to go crawling to some random person for help in selling "Plan
B" to the Republican caucus.

Boehner and Republican House Leader Eric Cantor -- well, they met with
anti-tax lobbyists and chief driver of the truck, Grover Norquist, to ask
him for cover. Norquist gave his blessing to "Plan B", saying that it
would not violate his anti-tax pledge.

Republicans have already passed a second part of the plan. It
replaces the automatic defense spending cuts, which kick in at the end of
the year.

Instead of defense cuts, the Republican plan cuts funding for what?
Food stamps? Can`t get enough of those poor folks serving it up, you know
what I mean? And, of course, they`ve got to go after health care. It
eliminates the child tax credit and ends unemployment benefits for millions
of Americans.

Eric cantor is confident the entire "Plan B" will pass.

(BEGIN VIDEO CLIP)

REPORTER: Do you think you have the votes to pass "Plan B", among
Republicans?

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: Yes, we`re going to have
the votes to pass both with tax, permanent tax relief bill, as well as the
spending reduction.

(END VIDEO CLIP)

SCHULTZ: Really? If Cantor and Boehner had the votes this afternoon,
why did they wait for tonight to hold the vote?

Or wait a minute. They haven`t had the vote yet. They`re still
counting heads.

The Republican House leader spent the day trying to round up the
votes. Many Republicans are still not on board.

Congressman Tim Huelskamp says he`s a no.

(BEGIN VIDEO CLIP)

REP. TIM HUELSKAMP (R), KANSAS: The trillion-dollar tax hike, even in
Washington speak, it still is a tax hike. It`s going to raise rates to
exactly what Nancy Pelosi suggested in May.

(END VIDEO CLIP)

SCHULTZ: These obscure congressional members are giving Speaker
Boehner all kinds of trouble.

Congresswoman Marsha Blackburn is also leaning towards a no vote.

(BEGIN VIDEO CLIP)

REP. MARSHA BLACKBURN (R), TENNESSEE: You know, I have to tell you,
I`m in that lean no category because I`m one of those people that wants to
see the spending cuts, and that`s what my constituents are wanting to see.

(END VIDEO CLIP)

SCHULTZ: Conservative representatives don`t want to go back to their
districts with a vote for a tax increase on their records. That would kind
of screw up their next campaign, you know? And, of course, they want to be
more right than Grover Norquist.

Senate Majority Leader Harry Reid doesn`t understand why Boehner is
wasting his time with a vote that doesn`t matter.

(BEGIN VIDEO CLIP)

REID: Get back and start talking to the president. You have a
multitrillion-dollar deal they`ve been talking about -- multitrillion-
dollar deal. They`re a couple hundred billion dollars apart. This is
absolutely senseless, that the speaker`s doing what he`s doing. These are
gyrations I`ve never seen before.

(END VIDEO CLIP)

SCHULTZ: Of course, Harry Reid`s from Vegas. He knows all about
gyrations.

Senator Dick Durbin says today`s actions by Republicans remind him of
something else.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), ILLINOIS: Remember the closing scene in "Thelma
& Louise"? Rather than face the reality of what lies ahead, they hit the
gas. That`s what we`re hearing from Speaker Boehner now -- hit the gas and
go over the cliff.

(END VIDEO CLIP)

SCHULTZ: The entire Republican Party is in this car right now, and
they are flying off the side of the cliff. That can`t be good. That was a
commercial, too, wasn`t it? A guy in the back of a truck?

White House spokesman Jay Carney had a different movie in mind today.
Republicans need a superhero to save them from this mess they`re in.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The Republicans in the House
have decided to run down an alley that has no exit. What I`m confident of
is that they don`t have at the end of that alley like a batplane to fly out
to their own rescue.

Do you remember that scene? It was good. A good scene.

REPORTER: Does the president have a batplane?

CARNEY: I can`t talk about that. It`s classified.

(END VIDEO CLIP)

SCHULTZ: Joining me now is Congressman Chris Van Hollen of Maryland,
former DCCC chairman. And I think he might be -- knowing that this is a
very serious time in American history, but there are moments of comedy
coming out of the Republican caucus tonight.

Congressman, there is breaking news from the Hill right now. There
will be no vote on "Plan B". The speaker has pulled his own bill.

Here is the statement his office has just released. "The House did
not take up the tax measure today because it did not have sufficient
support from our members to pass. Now, it is up to the president to work
with Senator Reid on legislation and avert the fiscal cliff. The House has
already passed legislation to stop all of the January 1st tax rate
increases and replace the sequester with responsible spending cuts that
will begin to address our nation`s crippling debt. The Senate must now
act."

Congressman, your reaction. What happened with John Boehner today?

REP. CHRIS VAN HOLLEN (D), MARYLAND: I was going to say, Ed, from the
beginning of your introduction to just a few minutes ago, we got the
announcement that they were folding up shop for tonight and maybe longer
because Speaker Boehner, having walked away from negotiations with the
president and cooking up this "Plan B", which was never going to go
anywhere in the Senate, now is not going anywhere in the House because he
can`t even persuade his own members to pursue this option.

The speaker should get back in the negotiations with the president.
The president has met him more than halfway. And now, it`s time for
Speaker Boehner to either let the House vote on the proposal the president
has put forward or give up the game. I mean, at this point, if he can`t
persuade his own members to go for "Plan B", it`s time for him to let the
American people speak. They`ve been very clear that they support the
approach the president`s taken.

SCHULTZ: Congressman, you stay with us. Chris Van Hollen, we`re
waiting to hear from Majority Leader Eric Cantor. And we`re going to go to
him in just a moment.

Congressman Van Hollen, how embarrassing is this for Boehner? He`s in
quicksand right now.

VAN HOLLEN: Yes, it`s very embarrassing for the speaker, and it
demonstrates what many of us said all along, which is that he unfortunately
cannot control his own Republican caucus. The Republican caucus in the
House of Representatives has become a very extreme group, way out of the
American mainstream, captured by Tea Party extremists so that even John
Boehner, the speaker, their leader, can`t get them to support his proposal.

And I should say, Ed, his proposal would still give people earning
over a million dollars a year a $50,000 tax break compared to the Senate
Democratic tax bill. In other words, they get a $50,000 break at least
compared to what happened if they went over the cliff or if we got the
Senate bill. And at the same time they were actually proposing to increase
taxes on 25 million American families by taking away some of the tax
deductions for middle-income Americans to send their kids to college and
things like that.

So, it was a bad plan. But he couldn`t even sell his bad plan to very
extreme members of his own caucus.

SCHULTZ: This moment I think is a hangover from 2010. These Tea
Partiers have come in here, and they have bent the right wing -- they have
bent the Republican caucus so far to the right -- I mean, they put cuts on
the table that no one was even talking about tonight. They won`t even
raise taxes on people making above $1 million.

I mean, what does that tell you how far -- I mean, it doesn`t matter
what President Obama puts on the table. This wing of their party will not
accept anything -- it seems like -- to get us to where we have to go.

So, Congressman, does this officially make it a Republican problem for
us going over the cliff?

VAN HOLLEN: Oh, there`s no doubt about it. Even if they had passed
"Plan B", as Harry Reid and others said, this was going to be a fast trip
over the cliff.

SCHULTZ: What should the Democrats do now, Congressman? What`s the
next play here?

VAN HOLLEN: Well, we need to call on the speaker to bring up the plan
that`s been proposed by the president. It`s a balanced plan, as you well
know. There are lots of things in that plan that I don`t like and lots of
Democrats don`t look. I still have reservations about them. We`d have to
fix parts of it.

But at the very least, let`s bring up that plan, put it to a vote.
That`s true democracy. If the speaker really wants to allow the process to
work, let`s have a true democracy, a true majority vote in the House of
Representatives, and then we could pass a true balanced plan, the kind of
compromise plan that the president has put forward.

SCHULTZ: You said earlier today on MSNBC that you think that Boehner
is stringing this out because he`s concerned about his position as speaker
of the House. Has he lost control of his caucus tonight?

VAN HOLLEN: Well, clearly he has. And it reinforces the point that I
did make earlier today, which is a concern I`m sure he has that if he were
to allow the House to have an up or down vote, you know, just -- let`s
allow a majority in this House to work its will on a proposal that`s put
forth by the president after certain negotiations, preliminary negotiations
with the speaker, that there`s a very real risk that he would lose his
speakership.

So I suspected all along he may be dragging this out until January
3rd, which is when he is up for his election in the House for speaker. And
I would hope he would put the country over the politics of the Republican
House caucus, because what we are seeing tonight is they are a really
extreme group. They`re willing to drive the country off the cliff. And
it`s really a sad day for the country and the overall process.

SCHULTZ: So if you just joined us, breaking news tonight. The
speaker of the House does not have enough votes. They have canceled the
vote on "Plan B".

Chris Van Hollen joining us here on THE ED SHOW.

Congressman, when you look at what the president did, he put Social
Security on the table. This is, of course, what the Republicans have
wanted all along. They have wanted took after the big three. And they
didn`t even go after that offer. Change CPI -- they didn`t even go down
that road.

What does that tell you about Republicans? I mean, we`ve seen all
this obstruction over in the Senate. We`ve seen obstruction and the
failure to bring up bills on jobs that the president wants in the House.
And now, tonight, they couldn`t even get their own caucus together.

We`ve had 34 months of private sector job growth. I mean, the
country`s running without Republicans right now. Fair statement?

VAN HOLLEN: It`s running without Republicans. But the problem is
that we need Republicans to help us avoid going over the fiscal cliff,
which would be a huge increase on middle-income Americans, which would
definitely hurt the economy.

SCHULTZ: Have you ever seen anything like this?

(CROSSTALK)

SCHULTZ: Have you ever seen --

VAN HOLLEN: So what they`re doing, they`re holding the entire country
hostage as we speak.

SCHULTZ: Absolutely.

VAN HOLLEN: We`ve got 11 days to go before we go over the cliff. And
as one of your earlier guests said, they`re just putting their foot on the
accelerator.

You know, the bill -- the cut bill that they brought up today, Ed, was
a reflection of priorities because while they still are trying to put a tax
bill on the floor that provides a $50,000 average tax break to people
making over a million dollars compared to the Senate bill --

SCHULTZ: Yes.

VAN HOLLEN: -- they called today for cuts that would cut 300,000 kids
from the school nutrition programs and reduce nutrition and food programs
for 22 million Americans with families.

I reminded my colleague, Paul Ryan, the chairman of the Budget
Committee, of the comment that his running mate made during the election
about the 47 percent, when Mitt Romney said, you know, the 47 percent of
America was not Mitt Romney`s problem.

And what they did today in the House in terms of their cut bill was to
make good on Mitt Romney`s promise, that they don`t care about that 47
percent.

SCHULTZ: Quickly, I have to ask you this. Eric Cantor could not
deliver the right wing tonight for John Boehner or did he purposely not do
it?

VAN HOLLEN: Oh, I don`t know what`s going on in the Republican
caucus. As far as I could tell, Eric Cantor was working with the speaker
to try to round up the votes.

SCHULTZ: OK.

VAN HOLLEN: And, frankly, it`s a reflection on the inability of the
entire House leadership to convince the far right of their party to prevent
us from going over the cliff that brings us to the point where we are right
now.

SCHULTZ: Congressman Chris Van Hollen, great to have you with us.
Thanks so much.

VAN HOLLEN: Good to be with you, Ed.

SCHULTZ: We are waiting a statement from Majority Leader Eric Cantor
and I would assume we might hear something within the hour from the White
House.

Share your thoughts with us on Twitter @EdShow and on Facebook. We
want to know what you think.

Democratic Leader Nancy Pelosi calls John Boehner`s bill the bills to
nowhere. Boy, was she right?

Boehner didn`t have the votes. What will the Democratic strategy be
now? Congressman Elijah Cummings and John Garamendi join me next.

Stay with us. We`re coming right back.

(COMMERCIAL BREAK)

SCHULTZ: Coming up next on THE ED SHOW, I`ll ask Congressman Elijah
Cummings and John Garamendi how the Democrats proceed after tonight`s
disaster for Republicans.

Plus, all the political fallout with Steve Benen and Michael Tomasky.

And we`ll hear from Eric Cantor next.

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 joining us tonight.

Speaker John Boehner didn`t have the votes for his own "Plan B" this
evening. Boehner was desperately trying to save face with his caucus after
rejecting an offer by President Obama he should have taken.

Here`s what Eric Cantor had to say just moments ago leaving.

(BEGIN VIDEO CLIP)

REPORTER: Is there going to be a vote tonight?

CANTOR: No.

REPORTER: No vote tonight?

CANTOR: No.

REPORTER: Will there be a vote tomorrow?

CANTOR: No.

REPORTER: Are you ditching "Plan B"? Will there be a vote today?

CANTOR: No.

(END VIDEO CLIP)

SCHULTZ: Let`s bring in Congressman Elijah Cummings of Maryland and
also, Congressman John Garamendi of California.

Gentlemen, breaking news tonight. Very interesting.

Congressman Cummings, did you think it was going to come to this? Did
you think John Boehner was not going to be able to get the votes and be
able to hold the vote in the House tonight?

REP. ELIJAH CUMMINGS (D), MARYLAND: I have a feeling he probably
wouldn`t be able to do so because this plan is one that`s inconsistent with
the Republican philosophy. Keep in mind, they don`t want to tax the
wealthier people one dime. And so, that`s why this failed.

Let me tell you, one of the things that Speaker Boehner ought to be
concerned about right now is that as a result of not being able to get
these votes, he`s now emboldened the Tea Party and basically the Tea Party
is controlling the Republican Party. And that`s so bad because they are
now pushing us over this cliff.

The president`s been very reasonable. But again, the Tea Party has
again ruled, unfortunately.

SCHULTZ: Congressman Garamendi, where does John Boehner go from here?

REP. JOHN GARAMENDI (D), CALIFORNIA: Well, I don`t know where he
would go. But I know where we have to go. We`ve got to find a compromise.
We`ve got to get this done. We cannot let America hang out because of the
chaos in the Republican caucus.

It`s just really a tragedy if we don`t get this together. We`re more
than willing to compromise -- the president`s gone way, way down the road
toward compromise. Obviously, the Republicans are unable to even get their
act together, let alone reach a compromise.

SCHULTZ: How are you going to reach a compromise with these people?
With their position, on what was on the table.

Congressman Cummings, I mean --

CUMMINGS: It`s going to be very difficult. But I hope that Speaker
Boehner will go back to his caucus and remind them that we just came
through an election and that the people have spoken and they`ve spoken very
clearly. And I`ve got to tell you, Ed, I`m beginning to feel that much of
the Republican caucus must be out of touch with the American people. They
act like an election never happened.

We`ve got to move on, though. I mean, there`s so many people at
Christmas time who are suffering. And we -- and just think. This is now -
- we spent several days, and Speaker Boehner spent several days creating
this distraction. That`s what it`s been.

When we could have had this resolved and we could have moved on. But
yet they`ve got us -- they literally are pushing us over this cliff when
the president has been extremely reasonable.

SCHULTZ: John Garamendi, do you think the president should come out
with another offer, or is this it? Are we going over the cliff?

GARAMENDI: Well, the president has put a very good offer on the
table. He`s got probably 180 clear votes. There were 21 Republicans that
did not go with what I would call the Ryan budget plan, which was
devastating to the 47 percent that was discussed earlier.

So, all we need is those 21 Republicans to come on board and we could
put this together.

So, it`s really a question I think of whether Speaker Boehner`s
willing to do what`s right by America or to hang on as best he can to his
speakership.

SCHULTZ: So, this is the latest from majority leader captor`s office.
"The House has concluded legislative business for the week. Members are
advised that the house will return for legislative business after the
Christmas holiday when needed."

Congressman Cummings, if you had to put a percentage on whether we`re
going over the cliff right now after tonight`s events unfolding, that they
couldn`t round up the votes, what would you put it at?

CUMMINGS: I think -- I think it`s going to be very difficult to avoid
it. But I`m hoping that they will come to their senses over this Christmas
holiday, and I hope that they`ll work with the president. I know the
president has extended his hand. And I`m sure he`s willing to work through
the Christmas holiday to get it done because he realizes how important it
is. And I`m hoping that they will put the country before their party.

SCHULTZ: John, it would seem to me the Tea Party has had enough of
John Boehner. And they didn`t give him the votes tonight because they
don`t think he`s conservative enough. And so, this was a tipping point and
this was their chance to make a statement, and they`ll go home and say that
they stood by their principles and didn`t raise taxes. What about that?

GARAMENDI: Well, that`s obviously what they did. But the larger
question is what is going to happen to America. What`s going to go --

SCHULTZ: They don`t care. They don`t seem to care, do they?

GARAMENDI: Well, that`s not the entire Republican caucus. There`s a
large percentage of the Republican caucus that is rational on this issue
even though they may not be exactly where we are in the Democratic caucus.
These votes can be put together.

Speaker Boehner, would you really be serious about what`s good for
America? We can put the president`s plan on the table, on the floor
tomorrow, and it would pass with Republican votes if Speaker Boehner is
willing to put his speakership at risk.

SCHULTZ: You think it would pass? You think the -- you think the
president`s plan would pass if Boehner were to bring it up?

GARAMENDI: I think it has a very good chance of passing.

SCHULTZ: OK.

GARAMENDI: It`s a compromise all the way through. And it has the
balance of cuts and taxes. It`s a good plan. We ought to move forward.

There are things in it that I don`t like. But as I said on your show
earlier, I`m willing to compromise and do what`s good for America.

SCHULTZ: And, Congressman Cummings, is it an intriguing question to
know just how hard Eric Cantor may have worked for votes tonight?

CUMMINGS: Oh, yes. It is. I`m not sure how hard he worked. But the
fact is the Tea Party, Ed, the sad story that comes out of this is the Tea
Party can go back and say they controlled the process.

And I`ve got to tell you, Ed, it is very, very painful when I think
about all the people who will suffer as a result of the Republican Party
being in disarray and not wanting to tax the richer of the rich one dime
more. It`s just a sad occasion.

SCHULTZ: It is.

Congressman Elijah Cummings and John Garamendi, great to have you with
us tonight, gentlemen. Thank you so much.

Coming up, Steve Benen of the Maddow Blog and also Michael Tomasky of
"The Daily Beast" are here with their reaction. What`s the next play?

Then, President Obama was asked where has he been on guns? Tonight,
we`re asked where have the Republicans been? Where have they gone?

We`ve got disturbing answers -- stay with us -- just ahead.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. John Boehner`s failure to get
support for his plan B is probably the worst possible outcome for the
Republicans in these fiscal cliff negotiations. Let`s bring in MSNBC
political contributor Steve Benen of "The Maddow Blog" and also Michael
Tomasky, special correspondent for "Newsweek" and "The Daily Beast."

Well, gentlemen, we`ve had a lot unfold here over the last half hour.
John Boehner may be one of the weakest Speakers of the House ever. He
could not get votes tonight to put behind the plan that he put forward,
which tells me he must not know his caucus very well, or he certainly has
underestimated the revolt that`s taken place over on the right wing.

Steve, what do you make of what unfolded tonight? How damaging is
this to the whole process?

STEVE BENEN, "THE MADDOW BLOG": Well, it`s certainly a fiasco for the
speaker. We`re reminded right now that he`s a leader without followers.
And a leader without followers is pretty much useless. He`s going to have
to struggle to pick up the pieces very quickly, going back to the
president, trying to find out some kind of plan C.

And also keep in mind there`s two weeks left until his re-election as
speaker. I no longer think that that`s a sure thing. I think this is such
a fiasco that his future as speaker is very much in doubt.

SCHULTZ: Michael, your thoughts? What happened to Boehner tonight?

MICHAEL TOMASKY, "THE DAILY BEAST": Just what Steve said. I also
doubt his future speakership pretty seriously. But look, Ed, the main
thing here, let`s not lose focus. The main thing here is what the
Republican party has just done to the country. These people aren`t
legislators. They`re vandals.

This is really outrageous. Barack Obama moved and moved and moved.
You chronicled his steps very well at the top of the show, the changes he
made in his approach, the steps he took to go meet Boehner halfway, at
least halfway, his balance of tax revenues and spending cuts. Boehner
also, to his mild credit, last week -- at the end of last week, Boehner
also moved a little bit.

But then after he moved, obviously his caucus came to him and said no,
buddy, no way; we`re not going to sit for this. And then he tried this
gambit, this plan B gambit. And they said no even to that. They`re not
legislating. They don`t care about the country. They don`t care about
what happens to the economy.

They care only about naked political power and being primaried from
their right in their Congressional districts. Those are the only two
things they care about.

SCHULTZ: Steve, what about Grover Norquist? He gave them cover, told
them to go ahead and vote on this from the standpoint of it`s not going to
violate his anti-tax pledge. What does this say about his influence or
lack of on the Tea Party?

BENEN: You know, yesterday John Boehner was kind of pleading with his
various caucus members, going around explaining to them all of the various
conservatives that were on board with this plan, Grover Norquist among
them. I think we`re learning that Grover Norquist`s power on Capitol Hill
has dwindled to almost nothing.

And there are others, such as Freedomworks, that initially said they
were on board. Then they changed their mind, as did the Heritage
Foundation. I think as the day unfolded, the opposition from the right
became so overwhelming that what Grover Norquist was saying or not saying
became ultimately irrelevant.

And I think in the future, you`ll see him isolated and alienated even
more.

SCHULTZ: Here is Majority Leader Eric Cantor right after the decision
was made there was going to be no vote tonight. Here it is.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Is there going to be a vote today?

REP. ERIC CANTOR (R), MAJORITY LEADER: No.

UNIDENTIFIED FEMALE: No vote today?

CANTOR: No.

UNIDENTIFIED FEMALE: Will there be a vote tomorrow?

CANTOR: No.

UNIDENTIFIED MALE: Are you ditching plan B?

UNIDENTIFIED MALE: Will there be a vote today?

CANTOR: No.

UNIDENTIFIED FEMALE: What happens next?

(END VIDEO CLIP)

SCHULTZ: Michael Tomasky, the leader of the House -- majority leader
speechless. What do you make of that?

TOMASKY: It was interesting, the question you asked Cummings and
Garamendi in the previous segment, how hard Eric Cantor really worked for
this. I pictured him maybe as being like Mitt Romney`s pollster, you know,
the guy who told Romney, don`t worry, you`ve got New Hampshire in the bag
and all that stuff. Cantor may be feeding Boehner bad numbers, because
Cantor, of course, has his eye on the Speaker`s chair.

And as Steve mentioned, that vote is going to happen on January 3rd.
And that vote is now very much up in the air. So they put up a united
front publicly for the purposes of this vote. But I have a feeling there
were a lot of machinations going on behind the scenes.

SCHULTZ: All right. Steve Benen and Michael Tomasky, great to have
you with us tonight.

We are going to be joined by Steny Hoyer when we come back, who is the
whip in the House for the Democrats. And he said earlier today he hasn`t
seen anything like this in his 30-plus years in the Congress. What does he
make of this situation? That`s next. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. House Speaker John Boehner has
failed to get enough support to bring his plan B bill up for a vote.
Majority Leader Eric Cantor said legislative business is done for the week
and sent the House members home for Christmas.

For more, I`m joined tonight by Congressman Steny Hoyer of Maryland.
Steny, great to have you with us tonight. I don`t know how you do a deal
with a dysfunctional bunch. But Eric Cantor said earlier today that they
had the votes, then they didn`t hold the vote. Where are we at this hour?

REP. STENY HOYER (D), MINORITY WHIP: Ed, what I think today shows
very, very clearly that, in fact, President Obama has been willing to
compromise, willing to make a balanced deal possible from his perspective.
And I think John Boehner wanted to get there. But what John Boehner has
shown tonight is that his caucus does not want to make a balanced
agreement, to make sure that working Americans don`t get a tax increase, to
make sure that we deal with the doctors` reimbursement for Medicare, make
sure the sequester doesn`t happen.

His crowd has too many theocratic members, who are interested only in
their own ideology and not in the welfare of the country. I think it`s a
sad day for our country. I`m glad that this went down to defeat because
now hopefully we come to grips with the fact the only way this is going to
work, not on a partisan basis, but on a bipartisan coming together. I am
hopeful that John Boehner and Eric Cantor will join with the president,
Leader Pelosi and myself and Harry Reid and Mitch McConnell, to come to a
balanced agreement that we then, in a bipartisan fashion, can pass, because
it`s obvious that the Republicans will not pass anything.

They won`t touch revenues at all, as is self-evident by this vote --
by this failure to be able to act even on their own Speaker`s proposal, not
on a compromise, but on their own proposal. It is dramatic evidence that
the president was right. And frankly Speaker Boehner was wrong. It`s not
us who won`t come to the table to pass a balanced deal. It is the
Republican conference in the House of Representatives.

SCHULTZ: Steny, is this also a message that it`s going to be awful
tough to get around the Tea Party?

HOYER: Well, you know, I still believe that John Boehner and Eric
Cantor have the ability. I think they would. And if they can`t, well, I
think there`s a question as to their leadership ability. But I would
certainly think they can get 125 or 150 or 160 members of their caucus to
join a like number in our caucus to pass a balanced constructed deal, that
the president of the United States will support, and that will put America
on a fiscally sustainable path.

SCHULTZ: Does this mean we`re going over the cliff?

HOYER: Well, the president doesn`t want to go over the cliff. As
you`ll recall in the third debate, he said we weren`t going to go over the
cliff. None of us want to go over the cliff. That`s not good for our
economy. It`s not good for our people. And we need to work to avoid that.

I am hopeful that in the next five days, six days, between now and
next Wednesday, when I presume we`re going to be coming back -- I am
hopeful that the president, I know is willing to work, the speaker and
others will work to try to get to an agreement that can, in fact, be
adopted by the House of Representatives, passed by the United States
Senate, and signed by the president of the United States.

That will require what we haven`t seen in this Republican majority,
the willingness to compromise and be reasonable and make sure the math
works.

SCHULTZ: But congressman, how much farther can the Democrats go?
Aren`t the Democrats bound by the success of the Obama team in the election
and the number of seats that were picked up in the House and the number of
seats that were protected in the Senate, and the pickup in the Senate, two
seats by the Democrats?

Aren`t you bound by the election results not to give in anymore? The
president has reduced the price a couple of times. He also put Social
Security on the table the other day, which was something I think you said
wasn`t going to happen. So how much more can the Democrats give?

HOYER: Ed, I don`t think there`s much more to give. I think the
president, as you`re correct, has come a long way towards trying reach a
balanced bipartisan agreement with Speaker Boehner. The problem Speaker
Boehner has, as is self-evident from the debacle that occurred tonight
where the Republican conference is deeply divided -- the problem that the
speaker has in reaching a balanced deal is that his caucus9 won`t support
it.

The president`s caucus I think will support him, if it`s a reasonable
deal, which the president thinks is good for the country. We need to get a
deal. We need to keep that uppermost in mind. And we`re not taking the
position, as the Republicans have taken, my way or the highway. We
understand in a democratic process, the electorate has spoken. They left
Republican leadership in charge of the House of Representatives. We picked
up seats.

We, frankly, got more votes nationally than the Republicans did in the
House of Representatives. But we didn`t win back the majority. So there
needs to be compromise. The country needs us to come to an agreement. But
what the Republicans have to understand is clearly they can`t get a large
number of their party. I believe that Speaker Boehner and Majority Leader
Cantor can get a majority of their party. Maybe it will be a small
majority of their party.

And if they come to a reasonable agreement with the president of the
United States, I think we can pass such an agreement. I think it would be
good for the country, good for the economy.

SCHULTZ: The question now is can John Boehner put the country ahead
of his speakership?

HOYER: I certainly think he can. I hope he will. And as I say, in
talking to the speaker, he has told me, and I believe him, he wants to get
a big deal. He unfortunately, as somebody, I think one of your speakers in
the previous segment said, you can`t be a leader if there aren`t followers.
And frankly, the Republican party is having a hard time following --
finding followers who want to be reasonable, who understand that democracy
is about compromise, and our economy and country are more important than
our parties.

SCHULTZ: Well, there`s a lot to think about over the holidays.
That`s for sure. You gentlemen are going to be back to work next week.
We`ll see what happens. Although the hourglass tonight just got turned in
a big way.

Congressman Steny Hoyer, great to have you with us tonight, sir.

HOYER: Thanks, Ed. Appreciate it.

SCHULTZ: Howard Dean joins me on the epic failure by House Speaker
John Boehner. Stay tuned. You`re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. NBC News reports that House
Speaker John Boehner made an impassioned plea tonight, asking for his
members to vote for his plan B fiscal cliff deal. Congressman Mike Kelly
of Pennsylvania reportedly stood in front of the room and screamed at his
colleagues for not supporting the speaker. But Speaker Boehner could not
get the votes.

More on this story when we come back on THE ED SHOW.

Coming up --

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Eventful last hour. No doubt
about it. You`re looking at tape of House Republicans leaving a conference
meeting earlier this evening, within the last hour. Speaker John Boehner
didn`t have the votes for his own plan B this evening. Republican House
Leader Eric Cantor sent his members home tonight after leadership failed to
pass a bill.

Keep in mind, both Boehner and Cantor spent all day saying that they
had the votes. Boehner introduced plan B to save face with his caucus
after rejecting an offer by President Obama. He should have taken the
president`s deal.

In a new NBC News/"Wall Street Journal" poll, it shows that 24 percent
of Americans will blame Republicans if we go over the fiscal cliff,
compared to 19 percent for the Democrats; 58 -- 56 percent will blame both
parties; 38 percent trust President Obama to handle the fiscal cliff; only
19 percent trust John Boehner.

And in the wake of tonight`s developments, I would imagine those
numbers would get a little worse for the speaker of the House. Joining me
tonight, former Governor Howard Dean of Vermont and cNBC political analyst.

Mr. Dean, good to have you with us, governor.

HOWARD DEAN, FORMER GOVERNOR OF VERMONT: Thanks, Ed.

SCHULTZ: Give us, in short order, your commentary. Without question,
what do you think has happened here this evening?

DEAN: Well, the inside baseball of this is really a problem for the
speaker. You can`t -- this is something you can`t do. You can`t have your
budget overridden, as governors know. And you can`t have a major
initiative like this go down when you think you have the votes and you
don`t. So this -- it would not entirely surprise me now to see Eric Cantor
or Kevin McCarthy, who`ve been waiting in the wings, kind of gently
stabbing the speaker in the back for a couple years, to make their move
after the new session starts.

The fiscal cliff -- as you know, I believe the country would be better
off if we went over the fiscal cliff. We would get enough revenues to be
serious about balancing the budget. We`d get some defense cuts, which
Congress will never vote for otherwise. We will get some human services
cuts, which I don`t like. But you know, we`re in a deep hole here and
everybody`s going to have to put something in the pot.

The truth is the belief that millionaires or people who make more than
250,000, if you tax them more, that`s going to solve the deficit problem,
that`s just not so. So I think it would be better for the country if we go
over the fiscal cliff. And I`m not sorry this has failed. But I do not
think this has helped John Boehner`s speakership.

SCHULTZ: Well, the Tea Party protected the wealthiest Americans
tonight. There`s no doubt about that. But did we see vulture politics in
action tonight? Do you think Eric Cantor worked hard for votes?

DEAN: I don`t know. That`s the most interesting thing. As I said,
Cantor -- throughout John Boehner`s speakership and Cantor`s majority
leadership, Cantor`s been really trying to wrest the power of the caucus
away from John Boehner. In the last few weeks, it`s been all lovey-dovey
between them. So I don`t know. I think Cantor`s going to have a hard time
restraining his ambition, because this is a very bad blow to the speaker.

If you can`t deliver your caucus and you publicly fall on your face
like that, it makes everybody in your party look bad. The Tea Party people
know that. This is a problem for John Boehner.

SCHULTZ: Well, they`re going home tonight without a deal. They`ll
come back after Christmas. What`s the next best play for the president, do
you think, governor?

DEAN: I think the president -- unlike me, the president really does
want a deal. I`d like to make a bigger down payment. I think we`re not
going to raise the revenues or cut the defense to the degree we need to
without the fiscal cliff. This was a bipartisan deal made between
Democrats and Republicans a year and a half ago. And I think we ought to
keep it because it would be better for the country.

But I think the president does want to compromise. And he`ll try
again to compromise. The problem now is that the question is, is John
Boehner so weakened by this really pretty spectacular failure, from an
inside an Beltway point of view, that he can`t deliver anything?

SCHULTZ: It is a spectacular failure. He has been out badmouthing
the president day after day about the president not moving at all, being
disingenuous about it all. And then he doesn`t even know where his own
caucus is, trying to save face, couldn`t cut a good enough deal for the Tea
Party wing of his caucus. And now he goes home with egg on his face.

DEAN: Steny Hoyer -- sorry. Go ahead.

SCHULTZ: No, you go ahead.

DEAN: I was going to say, Steny Hoyer`s right. Eventually the only
way -- this is a huge risk for the Speaker. Eventually you`re going to
have to get this thing passed with let`s just say 160 Republican votes and
110 Democratic votes. That would mean that the bill would have to move
even further to the left to get the 110 Democrats. I don`t think the
speaker can survive that either, because then he`s really divided his
caucus.

So he`s really, really in a bind. His seat right now is the most
uncomfortable in Washington, D.C.

SCHULTZ: How much more should the Democrats give up to get a deal?
You`ve said you don`t want a deal. You want them to go over the cliff. Do
you think the president has put enough on the table to get a deal?

DEAN: No. He may have, but the problem is it`s not going to reduce
the deficit all that much. And it certainly isn`t going to cut defense all
that much. So again, I respect the president. And I certainly worked very
hard to get him re-elected. We just have a difference of opinion on this
issue.

I am uncomfortable with the idea that we`re not going to get much
deficit reduction out of this. And we`re not, given the last thing that`s
been on the table. And the Republicans wouldn`t even agree to that. I
think we`re just better off really biting the bullet, doing the deficit.
Wall Street will hate it for about two weeks and then they`ll suddenly
realize that finally we`re dealing with the deficit. And I think the
investors will like it a lot.

SCHULTZ: You think the president -- the Democrats should take Social
Security off the table?

DEAN: Well, you know, Social Security`s not the problem. Medicare`s
the problem.

SCHULTZ: It`s not the problem. But it was a negotiating chip that
the Republicans didn`t respond to.

DEAN: That doesn`t -- I was surprised at that. I didn`t understand
it that much. You know, I have a lot of faith in Nancy Pelosi. And if
Nancy Pelosi doesn`t think that the CPI Indicator is that -- I`m not
familiar with exactly what they were proposing. But if she says that`s not
going to harm Social Security, then I`m inclined to give her the benefit of
the doubt.

But somebody does have to do something about Medicare. And the way to
do it is not to cut benefits. It`s to change payment mechanisms to a
system where you pay by the patient instead of by the procedure. That`ll
change everything. You can save a lot of money in Medicare, and you don`t
take away anybody`s benefits.

I`d like to see something like that on the table because that really
is a game changer.

SCHULTZ: Well, we`re going to find out if Speaker Boehner wants his
job back or if he wants a deal. That`s really where we are right now.

DEAN: That`s about it. You`re about right. I agree with you.

SCHULTZ: Can he go back and get you enough Republican votes, mix them
in with support of the president over on the Democratic side, and come away
with something that`s going to save a lot of hurt for a lot of people in
this country? And I think the Tea Party tonight showed that they do not
want this president to succeed in any way, shape, or form. They want the
economy to go down. And if we go off the cliff, there might be a pretty
good chance that that could happen.

Howard Dean, great to have you with us.

DEAN: I don`t think so.

SCHULTZ: Go ahead.

DEAN: OK. I think we`ll get -- we probably will have a couple
quarters of recession. But when we come out of it, we`ll be much stronger.

SCHULTZ: Yeah. Governor Dean, good to have you with us tonight.
Thanks so much for joining us.

DEAN: Thanks a lot, Ed.

SCHULTZ: Lots of news tonight. That is THE ED SHOW. I`m Ed Schultz.

For more, let`s go to "THE RACHEL MADDOW SHOW," starting 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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