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'The Last Word with Lawrence O'Donnell' for Friday, January 4th, 2013

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THE LAST WORD WITH LAWRENCE O`DONNELL
January 4, 2013

Guests: Peter Welch, Alice Rivlin, Thomas Mann; Norm Ornstein

EZRA KLEIN, GUEST HOST: Behind closed doors today, Speaker John
Boehner revealed the 113th Congress is not going to learn the lessons of
the 112th, brace yourself for the debt ceiling debacle, part two.

(BEGIN VIDEOTAPE)

ALEX WAGNER, MSNBC ANCHOR: John Boehner once again holds the
speaker`s gavel. Only in his hands, it is weightless and makes no sound.

CHRIS JANSING, MSNBC ANCHOR: The number one issue is still the
economy.

CHUCK TODD, MSNBC ANCHOR: The new jobs reports shows 155,000 jobs
added.

UNIDENTIFIED FEMALE: That`s about what was expected.

UNIDENTIFIED MALE: Things only get worse for John Boehner.

UNIDENTIFIED MALE: That poor son of a gun is getting hit from all
sides.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We are sent here not
to be something but to do something.

UNIDENTIFIED MALE: If Washington was going to do something, they had
their opening.

BOEHNER: It is a time to rise.

WAGNER: The next flight, the debt ceiling.

NEWT GINGRICH (R), FORMER HOUSE SPEAKER: I think that`s frankly a
dead loser.

BOEHNER: It is time to rise.

UNIDENTIFIED MALE: We really are playing with dynamite with the debt
ceiling.

JANSING: Is the glass full or half empty for Speaker Boehner?

UNIDENTIFIED MALE: Underneath the story about ideology.

BOHNER: Tax increases destroy jobs.

UNIDENTIFIED MALE: There`s a story about power.

UNIDENTIFIED MALE: We always assume Republicans have the leverage in
the debt ceiling negotiations.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I will not have another
debate with this Congress.

UNIDENTIFIED FEAMLE: That second phase of power.

OBAMA: They should pay the bills they have already racked up.

GINGRICH: He is the president.

WAGNER: Class A statesmanship.

BOEHNER: It is the time to rise.

WAGNER: Will the 113th Congress be any less dysfunctional than the
112th?

(END VIDEOTAPE)

KLEIN: With the fiscal cliff or curve or slope or whatever you want
to call it, I`m glad we don`t have to have this debate anymore.

Newly -- with that behind us, newly reelected U.S. House Speaker John
Boehner held his first closed door meeting with the 112th Republican House
Caucus to discuss this New Year`s resolution from President Obama.

(BEGIN VIDEO CLIP)

OBAMA: I will not have another debate with this Congress over whether
or not they should pay the bills that they have already racked up through
the laws that they passed.

(END VIDEO CLIP)

KLEIN: Sources inside the morning`s Republican caucus meeting say
Boehner told his members he will again use the debt limit as leverage to
cut spending.

So, here`s the deal. You give me spending cuts, I don`t crash the
global economy, sound good?

Senate Minority Leader Mitch McConnell announced the same strategy
publicly in an op-ed for Yahoo News, saying, quote, "The fiscal cliff deal
was the last word on taxes. Now, the conversation turns to cutting
spending on the government programs that are the real source of the
nation`s fiscal imbalance."

And the upcoming debate on the debt limit is the perfect time to have
that discussion. Perfect, eh?

The problem is not even Republicans believe that is going to work
anymore.

(BEGIN VIDEO CLIP)

GINGRICH: They`ve got to find in the House a totally new strategy. I
mean, confronting -- for example, everybody is now talking about, OK, now
comes the debt ceiling. I think that is frankly a dead loser, because in
the end you know it`s going to happen.

The whole national financial system is going to come into Washington
by television and say, oh my God, this will be a gigantic heart attack, the
entire economy of the world will collapse, you guys can`t be responsible,
and they`ll cave.

(END VIDEO CLIP)

KLEIN: All right. So Newt Gingrich, time to wander off the
Republican reservation, at least occasionally. But he is on the same page
as that fount of conservative wisdom, "The Wall Street Journal" editorial
board, which wrote today, "The next challenge will be the debt deadline,
arriving in early March. Mr. Boehner says he wants a dollar in spending
cuts over 10 years for every dollar increase in the debt limit. We`ll
support efforts to cut spending and reform entitlements, but the political
result will be far worse if the Republicans start this fight only to cave
in the end. You can`t take a hostage you aren`t prepared to shoot."

But liberals just don`t believe the White House could hold firm
against the GOP`s threats to push the country into default. They think
that even if the Republicans won`t really hurt the hostage, the White House
will still blink just in case Republicans are serious this time. And
conservatives, they believe the exact same thing. That was the whole
theory behind the whole fiscal cliff deal.

I disagree. Now, I don`t think the White House has much credibility
when they say they won`t negotiate over the debt ceiling. They will, they
negotiate over pretty much everything.

But I am convinced they intend to pay a big ransom for the debt limit
increase.

So, what will the White House negotiation position actually be?

The president laid it out pretty clearly on New Year`s Eve.

(BEGIN VIDEO CLIP)

OBAMA: My principle has always been, let`s do things in a balanced,
responsible way. And that means the revenues have to be part of the
equation in turning off the sequester and eliminating these automatic
spending cuts, as well as spending cuts. Now, the same is true for any
future deficit agreement. If Republicans think that I will finish the job
of deficit reduction through spending cuts alone, if they think that`s
going to be the formula for how we solve this thing, then they have another
thing coming.

(END VIDEO CLIP)

KLEIN: All right, you catch that. The White House really, seriously,
no kidding around, says they will not accept a bargain in which what they
got was an increase in the debt limit. So was Congress, and what they get
is Congress simply agreeing to pay its bills. That is not their payoff.
They see it as a historic responsibility to end the dawning precedent that
minorities in Congress can hold up the U.S. in the debt limit.

So it will be up to Boehner and to McConnell to decide between
accepting a balanced deficit reduction package or spending cuts and
revenue, or taking the whole country into default.

And I don`t think they will choose default -- for a couple of reasons
here. First, the Republicans are not nearly as crazy as the Tea Party
would have you believe. In the end, they weren`t even willing to go over
the fiscal cliff. And defaulting on our debt would do far more damage to
the economy than the fiscal cliff.

And Republicans are going to receive far more of the blame. Remember,
a lot of people thought Democrats kind of did want to go over the fiscal
cliff, because a lot of Democrats kind of did want to go over the fiscal
cliff. They thought they could get a better deal on the other side.

No one, no one anywhere thinks Democrats, and particularly the White
House, want to default on the debt. Everyone knows President Obama would
raise the debt ceiling, permanently, forever, no more question, tomorrow
morning if Congress gave him that bill.

So Republicans would take all the blame here. Making matters worse,
even Republican leaders have acknowledged we can`t default.

(BEGIN VIDEO CLIP)

BOEHNER: I would agree with the president that the national debt
limit must be raised.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: We know default is not
an option.

BOEHNER: So, we cannot allow our nation to default on our debt.

(END VIDEO CLIP)

KLEIN: Default is not an option, but we`ll do it if you don`t do what
we say? That`s a little bit of a hard argument.

Number two here, what exactly do the Republicans want to cut? They
have been afraid to name specific cuts to Social Security or to Medicare.
Medicaid cuts they will name. But they`re a total nonstarter in the White
House in the age of Obamacare.

So what is their demand going to be exactly? Will they force America
into default on behalf of spending cuts that they can`t name, because if
they did name them, it would be too unpopular? It seems a little unlikely.

Third, President Obama got the tax increases on the people he wanted.
This is really important. He got the money from bringing rates up. Now,
he can get more money through tax reform.

And John Boehner and a lot of Republicans are on record offering
revenue through tax reform. Mitt Romney ran on a presidential platform
that included closing loopholes and capping deductions. Republicans are
just much more flexible on tax reform than they are on tax rates.

And, finally, the last time we found ourselves embroiled in debt limit
brinksmanship, most people never even heard of the debt limit and they
certainly didn`t appreciate the consequences of busting through it. And
that includes many of the powerful economic interest groups in Washington.

Now, those interest groups understand it pretty well, and they also
understand who will be to blame if we go over.

Honeywell chairman Dave Cote is a Republican. But he told "The New
York Times" today, "The whole idea of using the debt ceiling that way or
saying, I`ll do this horrible thing to all of us unless you give in just
doesn`t make sense for anybody. It makes me very nervous. It is not a
smart way to run the country."

The White House is betting that most Americans see it that way, too.
And I think they`re probably right. But a key part of it will play out in
Congress.

And joining me now is Congressman Peter Welch, Democrat from Vermont,
who is looking to play a key role in that discussion.

Congressman Welch, thank you for being here tonight.

REP. PETER WELCH (D), VERMONT: Thank you.

KLEIN: Now, you are introducing two resolutions on the debt limit.
Could you quickly walk me through what they are?

WELCH: Well, there`s two. Number one, the Congress should have an up
or down vote on a clean debt ceiling increase so that the American people
can hold us accountable if we`re not going to be willing to pay our bills.
That`s number one.

Number two --

(CROSSTALK)

KLEIN: And by cleaning, spending and other things?

WELCH: It doesn`t include negotiations this way or that way. If we
owe the money, we pay the money. We pay our bills. And it`s not a tactic
to work your will in a tough taxing and spending negotiation.

But the second one actually I think is actually more important, it`s
the reinstatement of the Gephardt Rule. That was in place from `77 to `95,
and it was -- and repealed essentially by Newt Gingrich, our earlier guest,
or commentator. And what that said is that when Congress voted on a
budget, that included let`s say spending in Iraq or in Afghanistan or tax
cuts that President Bush advocated, that by operation of accepting that
budget, the debt ceiling would be increased or decreased to accommodate the
budget that Congress voted for.

So it takes out the hypocrisy because if Congress ought to raise its
spending, it`s got to pay the bills. So, those are the two things I think
that make the point that this idea of defaulting on our bills simply can`t
be part of the equation.

KLEIN: And where are your colleagues on this? I mean, I spoke today
actually with Minority Leader Nancy Pelosi, and she said that, in the White
House, she told us that she is amazed when President Obama begins speaking
about the debt limit. His whole demeanor changes, he becomes very hard
line on it.

Are your colleagues standing firm on this? Are they -- are they
radicalized against the idea that the debt limit deal can be used to hold
the country hostage? Or is there kind of a feeling that we need -- there
needs to be a negotiation here?

WELCH: No, I think there is zero tolerance in our caucus for using
that as a tactic, and what happens is, we blew it frankly in August, when
we allowed a linkage to occur between budget negotiations and the debt
limit. And in fact, that was very damaging, it led to the first downgrade
in our AAA bond rating in the history of the country. And the cost,
according to the Treasury, is going to be about $90 billion in additional
interest payments over the next 10 years.

And, by the way, here is the thing that is so dangerous. In your
introduction, I agreed with your analysis. But the one thing that I think
was left out is that the Republican conference actually are true believers
on this. They think that this is a tactic that will work for them. And
they`re divided into two groups in the Republican conference -- the folks
who would vote no on raising the debt ceiling, and a larger group that
would vote hell no.

And the dilemma here is that I think Speaker Boehner clearly knows
this is a tactic ultimately can`t prevail. It will do too much damage,
because the power to default is the power to destroy. If we have a percent
increase in our debt service obligation, that costs the American taxpayers
a trillion dollars over 10 years, but he`s got a conference that thinks
that they`ve got the president right where they want him. That`s all this
talk about the leverage equation changing.

So our position, I think, from the outset has to be zero tolerance
when it comes to a tactic that says it`s a legitimate option for America to
default.

KLEIN: Well, Congressman Peter Welch, we`ll look anxiously to see if
you`re able to convince them they`re wrong. Thank you very much for being
here tonight.

WELCH: Thank you.

KLEIN: Coming up, the job numbers out today reminds us the fiscal
cliff deal struck this week might have been better than a possible
alternative of going over the cliff. But it was still terrible. Up next,
what that deal should have looked like to really tackle our economic
problems.

And in the spotlight tonight, the worst Congress, maybe ever.
Congressional scholars Norm Ornstein and Thomas Mann are here to help me
put the 112th Congress into the awful perspective it deserves.

But amid all the awful dysfunction in Washington, D.C., there is one
politician who is performing, even over-performing. Coming up, I will
announce the most productive politician in the Capitol.

(COMMERCIAL BREAK)

KLEIN: This week, some celebrated the fact that Washington finally
came together and got something, finally, anything done on the fiscal
cliff. But as far as the economic policies go, this week`s resolution was
not a huge success.

Up next, Alice Rivlin joins me to talk about exactly what we do need
to be doing for the economy if we could strip away all the politics.

(COMMERCIAL BREAK)

KLEIN: Let`s say I gave you just three pieces of information about
the U.S. economy.

Piece number one, we have a terrible unemployment problem that is not
solving itself.

Number two, we`ve got big deficits that will likely become
unsustainable in the coming years, but -- but, but, but -- are not a
problem right now.

And three, right now, the U.S. can borrow cheap, because the world
considers the U.S. economy a safe investment in a very dangerous world.

Given these three premises, what sort of economic policy would you
push for? What would you design?

Well, first you want to implement job creation measures now -- things
like tax credits or businesses that hire new workers maybe, investments in
infrastructure that we need to build sooner or later, so better do it
sooner we`ve got people out of work and cheap borrowing.

Second, you want to implement deficit reduction measures, things like
cutting spending and raising taxes.

Now, the problem, normally, those two actions create a conflict,
right? The process to create jobs costs money. That makes it harder to
erase the deficit.

So how do you untangle it?

Well, go back to that graphic. Go back to those three things.
Remember, there was a number three on that list. The U.S. can borrow for
cheap. They can borrow for nearly nothing, actually less than nothing
after you account for inflation.

So, here it is. Here is your answer, which is also the answer of
pretty much every single economist I have spoken to on any topic since
2008. We can borrow cheap to create jobs now while putting in place long-
term deficit reduction measures of a greater amount that will kick in once
unemployment fell to say, 7 percent.

Now, think about that while you hear this next bit of news from today.
Today, we learned that employers added 155,000 jobs in December. And the
unemployment rate was 7.8 percent.

What that means is last month, the economic recovery held steady, kept
chugging along. That`s been around 160,000 jobs a month for six months
now.

We survived the uncertainty of the presidential election, the economy
survived the uncertainty of the fiscal cliff negotiations, the economy is
moving, but not very quick. At the current trend of job growth we would
not be back to full employment until 2020 sometime. That is not good
enough. That is not nearly quick enough.

And so, in other words, January 1st would have been a great time for
Congress to pass a great jobs bill and reduction bill. But that is not
what happen -- not even close. The fiscal cliff deal, it`s contractionary.
It makes the economy worse in certain ways. It lets the payroll tax cut
expire, and it does raise taxes on the wealthy, which does a short-term
effect on the economy.

JPMorgan estimates the expiration of the payroll tax holiday alone
will put a 0.6 percent drag on the economy. Another firm puts a drag from
that measure at 0.4 percent of GDP growth.

Either numbers better than the recession we would have faced after a
full-on swan dive off the fiscal cliff. But neither number is very good.
And on top of that not very encouraging economic growth number, the deal
doesn`t come anywhere near to stabilizing the debt to GDP ratio over the
next decade.

So, remember, the information we gave you earlier, the three points,
we failed every single premise in this fiscal cliff deal. We did not solve
our jobs problem or make it better. We made it a bit worse. We did not
solve our deficit problem. We made it a little bit better, but not by all
that much. And we certainly did not take chance of the really cheap money
that we can get.

So, when it comes to generating policy that will actually solve our
economic problems, Congress failed. They failed us real bad.

Here to talk about the deal Congress should have passed is the
founding director of the Congressional Budget Office and a former member of
the president`s debt commission, the Simpson-Bowles commission, my friend
Alice Rivlin.

Alice, it is good to see you tonight.

ALICE RIVLIN, BROOKING INSTITUTION: Good to be here.

KLEIN: Now, you served on two of these bipartisan commissions that
did come to deals like the one I have outlined here, both Simpson-Bowles
and Domenici-Rivlin said in them, do a bit more fiscal stimulus now and do
a lot more deficit reduction later.

As far as I can tell, this is a unanimous opinion in the economics
professions. Why has it proved so difficult to reach on Capitol Hill?

RIVLIN: It`s not just the economics profession. A good number of
politicians, including five out of the six senators on Simpson-Bowles
thought this was a good idea, too. And they ranged from conservative to
quite liberal.

So, it`s not a new idea.

I don`t know exactly why we can`t get this across. We need, right
now, to stimulate the economy. We`re borrowing a lot and we can borrow
cheaply.

But I`m not worried about borrowing now. I`m worried about borrowing
a few years from now when we will have to borrow more and more. We`re on
track to have our debt rise faster than our economy can grow.

Now, that spells trouble in the long run. And we don`t know how long
the long run is.

So, Simpson-Bowles, Domenici-Rivlin, the gang of six, everybody has
said do two things at once. Don`t worry about the current deficit. It`s
easy to finance. But, worry about the long run deficit, and get some
things in place now that will solve that problem.

And I believe that would help the economy grow. Once the whole world
and American voters could see that their government was functioning and had
a serious plan to get us back on a sustainable budget track, don`t you
think they`d start spending and investing and doing the things that we want
them to do?

KLEIN: I also want to ask you on that, about the thing that I find to
be the biggest mystery of this conversation. We do talk about deficit
reduction. We talk about what you`re just saying there, about the effect
it could have on the confidence.

And we talk about it a lot. We don`t do a lot on it. But we talk
about it a lot.

Actually doing anything on jobs, despite we`re at 7.8 unemployment, a
crumbling infrastructure around us, and a lot of that is in the
construction sector, has essentially gone out the window. You don`t hear
politicians talk about it in a serious way or put forth serious ideas.
Even the president did pretty much forget the American Jobs Act during the
campaign.

Why do you think that is?

RIVLIN: I think it`s partly because the investment in infrastructure
and other kinds of spending got a bad name, and for good reasons. They`re
associated with a "bridge to nowhere", or things that don`t work.

The Simpson-Bowles commission actually had a good phrase, and that was
"cut and invest", do less of the things that we don`t need to do that are a
low priority. And save that money and invest it now in things that work.
Now, that`s partly infrastructure. I think it`s partly education and
training. It`s partly science.

But we`ve got to be really careful in what we do. And that is the
thing that is really hard to liberals to think about. They think spending
more is good. Spending better is more.

KLEIN: Let me ask you, you told me a few -- about a week ago we talk
and you said they would get a fiscal cliff deal, I was more skeptical, you
were right, they got it in the end. So, we`re going into the fight that is
probably going to be backed by the danger of the debt ceiling.

What do you think is going to happen on the other side of it? Look
into your crystal ball.

RIVLIN: Oh, I don`t know, we shouldn`t have the debt ceiling. The
government should pay the bills that the Congress has voted to pay, right?
We don`t need that.

In my world, I think I would advise the president to just ignore the
debt ceiling. Go ahead, paying the government`s bills while trying to
negotiate a deal for the longer run deficit reduction.

But, the president is a constitutional lawyer. He is more worried, I
think that he might do something illegal, and he is not likely to defy the
courts.

KLEIN: No more debt ceiling -- I like the sound of that. Alice
Rivlin, thank you very much for being here tonight.

RIVLIN: Thank you, Ezra.

KLEIN: Coming up, if you thought John Boehner`s 112th Congress was
the absolute worse, we now have numbers to back up your case.

(COMMERCIAL BREAK)

KLEIN: Just how terrible was the 112th Congress? It was the worst --
so bad, I`ll show you why, by the numbers next.

And there was one person who works in the White House who deserves a
bit more credit than he gets. I`ll tell you who that is, coming up.

(COMMERCIAL BREAK)

KLEIN: In the spotlight tonight, on January 3rd, the 112th Congress
of the United States of America finally ended. Thank God. It was not a
moment too soon to properly appreciate just how bad the 112th Congress was,
consider the record of the direct predecessor, the 111th. They were around
from January 09 to January 2011 and they passed the stimulus, the
affordable care act or better known as Obama care these days, the Dodd-
Frank financial reforms, the Lily Ledbetter fair pay act. That Congress
ended don`t ask, don`t tell in the Armed Forces. They agreed to the 2010
tax deal, which agreed in return for the tax passage of the middle class
stimulus.

The laws passed by the 111 Congress were controversial, particularly
among Republicans. But they were also big, bold initiatives if not always
fully equal to size of our problems, they surely perched on the outer edge
of congress` capacity to deliver solution.

You can love the 111 or hate them but they governed. They did their
job. No Congress in recent history has a record of productivity anywhere
near what they had.

What is the record of the 112th, well, it almost shut down the
government, it almost breached the debt ceiling and almost went over the
fiscal cliff. Which, by the way, it helped design in the first place. It
cut a trillion dollars of discretionary spending in the budget control act,
and then it scheduled another trillion spending cuts, everybody thinks was
a bad idea in the automatic sequester. It achieved nothing of not on
housing, stimulus, guns, tax reform, infrastructure, climate change or
really anything.

And the 112th was not just unproductive in comparison with its
predecessor, it was just unproductive. It was unproductive compared with
any Congress since 1948, when scholars began to keeping tabs on the
congressional productivity.

When it ends, the 112 congress, will it passed about 220 public laws.
That is, by far, the least of any Congress on record. The second least
productive Congress on record, that would be the 104th, and when you look
at that that was also a Congress in which Republicans won a big mid-term
election and tried to grind wash into a halt, in order to defeat a sitting
Democratic president. That was in fact Newt Gingrich`s Congress after the
1994 election.

But that congress, (INAUDIBLE), they passed 330 laws. Almost 50
percent more than the 112th. Of course, raw productivity statistics can
mislead. After all, the 112th congress`s laws were particularly
worthwhile, or has been a period of political calm in economic growth. The
slow rate of legislating may even be a good thing.

In this case, however, the data misleads another way. The 112th
Congress was not only unproductive, it was terrible counterproductive,
lawmakers created artificial deadlines and cliffs and curves, consequences
and catastrophic events that were intended to spur them to act. Like Wylie
Coyote, when his endless supply of acne products, when the 112 set a trap
the only sure bet it would explode in its collective face, forcing leaders
to construct yet another hair trigger legislative contraption that they
would again, fail to evade.

The near shutdown of the federal government in early 2011 was the
first of the self-divagated disasters, the near breach of the debt ceiling
in 2011, in August 2011, was the most damaging to the economy. And the
fiscal cliff was by far, the dumbest.

But in each case, Congress mainlined fear and uncertainty into a weak
economy, already plagued by too much of both. In that way, the 112th ended
exactly as it began. By creating a mess it could not clean up. The
resolution such as it is, of the fiscal cliff, just sets up another fight
in the weeks and months ahead over the debt ceiling, and over
sequestration. There will be continued fear and uncertainty over the
impending battle will be the legacy to the nation`s economy. Thank you
very much, guys.

As a result of such good works, the 112th Congress was appropriately
the least popular Congress since pollsters actually began to keep score.
According to Gallup, the 112 approval rating fell to 10 percent in February
of 2012, and then, felt a 10 percent again in August of that year. Those
are the lowest readings in Gallup`s 38 years in asking the questions.

When another polling firm, Rasmussen, asked Americans in March 2011,
how they felt about the U.S. becoming a communist country, 11 percent said
they would approve.

So, congratulations, 112. You were at multiple points in the tenure,
you were less popular than communism, there was a theory in their effort to
grind the U.S. to a halt, in making Congress a destructive force. It was
the American voters who blamed the parties in charge of the White House,
leading to President Obama`s clear and overwhelming defeat. Yet
Republicans were so mistrusted by the end, that despite the two years of
the government, and a weak economy, Obama was reelected by a margin of five
million votes, and Democrats won more votes than Republicans for House and
senate seats as well.

But unfortunately, the polarization in Congress are probably long-term
political trends, and there is no evidence that they will lift any time
soon, so the 112th Congress was surely one of the most broken and
incompetent and dysfunctional in our history. While we are happy they are
gone, the worst may be yet to come.

Joining me now is Thomas Mann, director of governmental studies at
Brookings Institution and Norm Ornstein, a resident scholar at the American
Enterprise Institute. They are also the co-authors of the book "it is even
worse than it looks."

So gentlemen, I`m happy to have you here. You are congressional
scholars, and I am not.

So Tom, let`s begin with you. I`m a wrong? Give me a grade on the
112th Congress. Am I missing their great achievements? Am I being too
hard on them?

THOMAS MANN, CO-AUTHOR, IT IS EVEN WORSE THAN IT LOOKS: Yes, no
question about it. Worst Congress ever. There is no way to dress it up.
There is no way to pretend they really did something important or kept from
doing something harmful. They were just awful.

KLEIN: And Norm, one of the things that -- you guys just wrote an
article call tonight five myths of the 112th congress, one point you make
is you say speaker John Boehner was not the worst part of it. He gets a
lot of blame, but he was not really the guy the blame for what happened.
Explain a little bit about that you are thinking of that.

NORM ORNSTEIN, CO-AUTHOR, IT IS EVEN WORSE THAN IT LOOKS: Well, we
always talk about the failed leadership here. But, leadership requires
followers. And Boehner had a problem. Boehner at heart he was a
legislator, he would have liked to have done more than they did. But if
you don`t have people who are willing to follow you, and that is because he
has people who are way off on the fringe. They are not conservatives
anymore as they are radicals. And they has a bunch of others who are far
more concerned about the club for growth and the primary challenge, and
they are about any threat they can come from a leader. So, we have
sympathy for Boehner that comes out in the article.

KLEIN: Now, there was one view of the 112th, which is said, it was
just very bad. People did a bad job. There was for this moment. This
group of tea party radicals and that will abate either in this coming
congress or going forth. And there is another view which is subscribe to a
bit more that we`re seeing the long one effects of party polarization of
house district that are very uncompetitive, and then, those people who are
more radical moving up to the senate. That these are long run trends and
will get worse as we go on.

Tom, where do you come down?

MANN: Well, I tend to agree with you on the latter. The seeds of
these problems were planted decades ago, it is just now that they`re full
blossom. And they`re a God-awful blossom at that.

But Ezra, there is one thing that could -- could prove more
encouraging. And that is if the Republican Party takes serious its growing
political marginalization in presidential elections and Senate elections
and their brand, relative to the Democratic Party, in the perception now of
the public that they are the extreme party that won`t compromise, out of
fear of survival over the long haul, set apart the house and those
protecting safe districts.

They don`t want to be marginalized, as they are. They want to regain
the White House and maybe some other voices will come forward. And maybe
the outside community, including the business, will start to speak up and
say nonsense. Stop with the hostage-taking and the brinksmanship, we`re
not going to support up.

KLEIN: So what are those changes that it takes to happen? Five, the
popular vote in five of the six last presidential elections. It has been a
very bad year for them particularly this year. And if Boehner began the
session by saying he would no longer negotiate directly with President
Obama, and both Boehner and McConnell said they`re going to try to repeat
the debt ceiling prices or brinksmanship they attempted in 2011. So, if it
has not happened yet, why should anybody they be optimistic it will happen
soon.

ORNSTEIN: You know, you can only be cautiously optimistic here
because so many of the forces that you talk about are going to continue.
You know, the primary challenges, the fact that these people are in
homogenous echo chambers, they don`t listen to reason will make for some
problems, but you got some leaders out there who justice Tom said they
don`t want to have everything blow up in their faces. And with a business
community that was absent without leave when this debacle occurred in 2011,
or a portion of seeing itself, as a wholly owned subsidiary of the
Republican Party, now taking a different role. And with even people like
Newt Gingrich saying, hold on here. Don`t do this. We may see some
difference. There are areas you can find common ground now that Barack
Obama is no longer going to be a one-term president. But it is going to
take another couple of election defeats I think, before you get some
serious change. And we`ll see what happens in this mid-term coming up.

KLEIN: Well, let me ask you about President Obama, one criticism, he
is just not LBJ, that he is not good at working with congress. And if he
was, we wouldn`t seeing this. Could President Obama be better at working
with the congress in the second term and how much blame do you put on him?

MANN: Almost none in this respect. I think it is one of the silliest
criticism that gets the attention of the press and of commentators, more
generally. Leadership is contextual. You have to have a negotiating
partner if you want to make a deal. And Republicans decided with Obama`s
inauguration. They would be opposed to everything, even when he gave them
what they themselves supported. That made such negotiations impossible.
And it is a caricature of the past, but the present context is different.

KLEIN: Tom Mann and Norm Ornstein, authors of "it is even worse than
it looks." Here is to hoping. It is better than we expect.

Thank you very much.

Coming up, if your friends tell you no politician can get anything
done in Washington, we have the perfect comeback. The politician that is
getting almost everything done these days and why. We`ll reveal their name
coming up.

And later, I will explain why I check the work of one person in the
White House every day. One person, my favorite member of the White House
is coming.

(COMMERCIAL BREAK)

KLEIN: For all the talk about people in Washington not working, there
is one politician who is really, really working. We are going to tell you
who it is next. And after that, you will meet my very favorite person in
the White House.

(COMMERCIAL BREAK)

KLEIN: After decades on Capitol Hill, and four years in the White
House and a lot of appearances in the news magazine "the Onion," vice
president Joe Biden has developed a certain public image. You have
probably heard the phrase before "Joe Biden being Joe Biden."

Yesterday, in the swearing in before the senators of the 103rd
congress, Joe Biden was being Joe Biden. This is something we know in TV
very well. We rely on it. Joe Biden plus a camera equals amazing.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: I don`t want to hand
shake, Mom. Good to see you. You got a smile that lights up the room.

They say the southern belle, you have done good. You have a smile
that lights up the whole chamber.

UNIDENTIFIED FEMALE: Thank you.

BIDEN: Hey, Mom, how are you? I`m Joe Biden, come on, Mom, take a
chance, ruin your reputation here. Would you take a picture of this
quickly. How are you guys? Good to see you. Guys other than my mother,
the finest woman I have ever known. You are going to be frisked.

UNIDENTIFIED MALE: That is a democrat, I know.

BIDEN: Need any help on your pics, let me know. Look at that guys.
He is still working out. Anybody else want to be sworn in as a senator
today?

(END VIDEO CLIP)

KLEIN: Anybody else want to be sworn in as a senator today? That is
kind of lose your body at the bar , though Joe Biden, as should actually
say, doesn`t drink, but that loose style is an odd mixed opinion on the
vice president. As of last month, his approval rating stood at 54 percent.
The latest CNN poll, with 40 percent disapproving of the job Joe Biden is
doing. Only five percent had no opinion.

And in a "Washington Post" Pew research poll from a few months ago,
they did word descriptions of VP. Describe him in one word. You got words
like good, and honest, and great, and courageous. They were mentioned.
But, so were words like loser, clown, embarrassment and incompetent.
Opinions like clown and embarrassment have come to define at least the
negative side of the Joe Biden public image. So much so that the onion has
created a spoof Biden who washes his chance ham shirtless in the White
House driveway. And yes, maybe Biden is a bit -- he has a goofy side, but
incompetent? No, the difference between Biden`s public persona, and his
private skill set, reminds me of the old "SNL" sketch about the two sides
of President Reagan.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Well, thank you, Mr. President.

UNIDENTIFIED MALE: Well, I hope I have answered your questions as
best I could, given the very little that I know. Good-bye, and god bless
you.

UNIDENTIFIED FEMALE: Thank you, Mr. President.

UNIDENTIFIED MALE: Thank you very much. OK, get back in here, all
right, let`s get down to business, I`m only going to go through this once
so it is essential you pay attention. Now, any questions?

UNIDENTIFIED MALE: Mr. President, you`re still going so fast, there
is a lot about the Iran-Nicaragua operations. I just I don`t understand.

UNIDENTIFIED MALE: And you don`t need to understand. I`m the
president. Only I need to understand.

(END VIDEO CLIP)

KLEIN: For the entire hour, so far, we have been telling you, we were
going to introduce you to the most productive politician in Washington.
But the truth is, we have already. It is Joe Biden. There is arguably
never been a more effective vice president not in modern history. You
could make maybe a case for Dick Cheney`s influence on President Bush. But
being really at persuading the president to make really bad decisions like
enter into a war with Iraq; that is kind of a funny definition of
effective.

Joe Biden has been instrumental in getting legislative victory after
legislative victory for the Obama administration. It has been widely
reported at this point that he played the pivotal role in brokering the
fiscal deal with Mitch McConnell, which the White House sees as a big win.

But you may already forgotten that Joe Biden was in instrumental in
negotiating the passage of the stimulus. President Obama then put him in
charge of overseeing how stimulus dollars were spent. And the lack of
scandal or corruption on that bill, a bill with that much money has been
remarkable. Cop Joe did a great job.

And then, when the White House needed somebody to work with Mitch
McConnell in 2010 on the tax compromise, we`re also getting Democrats on
board, again, Joe Biden was the closer, he got that brought in from the
bull pen. After that, deal was struck. "The New York Times" reported that
senator Mitch McConnell of Kentucky and a single staff member had slipped
into the ceremonial office of Joe R. Biden Junior to try to hash out the
compromise directly with the vice president. That is what Mitch McConnell
does to get the sizzling, is go directly to the president.

In reviewing (INAUDIBLE) latest book, "the price of politics," the
"Daily Beast" pointed out quote "Biden helped compromises on the 2011 at
debt limit. And he laid groundwork for the repeal of the ban on gays in
the military. And ratification of the arms control with Russia.

(BEGIN VIDEO CLIP)

BIDEN: And of course, it was Biden who in the president`s words got a
bit over his skis on gay marriage. And in doing, arguably hastened the
president endorsing the idea, bringing gay marriage to a wider political
consensus, so go ahead and smile and laugh when you see Joe Biden being Joe
Biden.

(END VIDEO CLIP)

KLEIN: But holy mackerel, don`t forget for a minute that this is also
the man who arguably deserves more credit than anyone else save the
president for getting the White House`s legislative agenda done.

(COMMERCIAL BREAK)

KLEIN: If someone asks me the question of who my favorite person in
the White House is, and I go to kind of weird, boring part, and so does
happens. I got somebody you thought you would pretty much never see, but
whose work you see every day.

Pete Souza, the official White House photographer. I am a Pete Souza
fan going way back or at least still he put up his flicker fee back in 2009
where he puts up his pictures from the White House, and they`re great
pictures. They are fascinating.

And this week he put up his favorite photos of 2012. And with those
photos he left his own thoughts and descriptions of the photos, what he was
thinking, and how he captured it. And which one the president thought was
great. We thought you would like to see a few of them too to know why Pete
Souza is so great.

And speaking by the way of people who is amazing work you see every
day, but who you actually ever see, the man you will hear reading the photo
captions. He is a last word producer named (INAUDIBLE). He who puts
together the shows open every single day. And like Pete Souza, his work is
awesome. So, with his help. Here are some of the White House photographer,
Pete`s best photos of 2012.


(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: January 24th, one of the most memorable moments
was when the president hugged congresswoman Gabrielle Giffords as he walked
out on to the floor in the chamber to deliver his annual state of the union
address.

February 7th, kids will be kids. After the president had welcomed
Lauren Flemming, march of dimes national ambassador and her family in the
office, her brother, Corvin Flemming started to play with the president`s
telephone. Fortunately, he was not able to get through to a head of state.

April 24th, we were back stage at the University of North Carolina in
Chapel Hill for the president`s appearance on late night with Jimmy Fallon.
The president let out a big laugh as he was being briefed by the producers
and Mr. Fallon on the slow jam the new segment.

June 15th, we had just arrived at the helicopter landing zone in
Chicago, and instead of walking right to the motorcade, the president and
first lady walked passed their vehicle to the edge of Lake Michigan, to
view the skyline of their home town.

September 5th, back stage at the convention, the president watches as
former president Bill Clinton delivers his nomination speech, before
surprising the crowd with an on-stage appearance together.

September 14th, the president takes the hand of the secretary of state
after his remarks at the ceremony, marking the return to the United States
of Jay Christopher Stevens, the U.S. ambassador to Libya, Sean Smith,
information senator, and security personality, Glenn Doherty, and Tyron
Woods, who were killed during the attack on the U.S. consulate in Benghazi.

October 26th, the president pretends to be caught in spider-man`s web,
as he briefed Nicholas (INAUDIBLE) just outside the oval office. Spider-
man had been trick-or-treating for an early Halloween with his father,
White House aide Nate Tamaron (ph) in Eisenhower executive office building.
I can never commit to calling any picture my favorite, but the president
told me this was his favorite picture of the year when he saw it hanging in
the west wing a couple of weeks later.

November 6th, the president and close friends were watching election
results in a Chicago hotel. The president had warned everyone that it
could be a very late night. And yet only a few minutes later, the networks
projected that he had been reelected and the president embraced the first
lady, while in the background, daughter, Sasha hugged one of her cousins.

December 14th, the president reacts as John Bernam (ph) briefs him on
the details of the shootings at Sandy Hook Elementary School in Newtown,
Connecticut. The president later said during in a TV interview that this
was the worst day of being in office.

December 21th, after returning early from his Christmas vacation, the
president with the vice president meets in the oval office with Congress to
discuss the fiscal cliff.

(END VIDEOTAPE)

KLEIN: You can see all of Pete Souza`s newly released photos on the
show`s Web site, thelastword.MSNBC.com. You can vote for your favorite on
our facebook and Google plus pages.

That is "the Last Word" tonight. I`m Ezra Klein, in for Lawrence
O`Donnell. You can read my work at oneblog.com (ph).

"The Ed Show" is up next.

END

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