updated 1/8/2013 10:43:10 AM ET 2013-01-08T15:43:10

THE ED SHOW with ED SCHULTZ
January 7, 2013

Guests: Joe Sestak, John Nichols, Val Demings, Jeff Merkley

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

Republicans are whining about President Obama`s choice for defense
secretary. Tonight, I`ll remind them who won the election and why Hagel is
the perfect guy.

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

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Chuck Hagel is the
leader that our troops deserve. He is an American patriot.

SCHULTZ (voice-over): President Obama nominates Chuck Hagel as
defense secretary, and conservatives are fuming.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Positions that he has
taken over the years will be, I think very much a matter of discussion.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: This is an in-your-face
nomination by the president.

SEN. TED CRUZ (R), TEXAS: If Hagel is nominated, it is very
difficult to imagine a circumstance in which I could support his
confirmation.

SCHULTZ: Admiral Joe Sestak and Richard Wolffe are here on the road
to nomination and what this could mean for defense cuts.

Republicans are coming out for the government shutdown.

UNIDENTIFIED MALE: You think that`s a good idea?

UNIDENTIFIED MALE: Yes, I do.

UNIDENTIFIED MALE: You really do?

UNIDENTIFIED MALE: Yes.

SCHULTZ: John Nichols on their backwards reasoning.

McDonnell doesn`t mind another hostage situation for the deficit, at
the expense of the most vulnerable. David Cay Johnston lays out the GOP
fabricated spending problem ahead.

The opposition on gun control reaches heated extremes.

CRUZ: I don`t think the federal government has any business having a
list of law abiding citizens who choose to exercise their right to keep and
bear arms.

SCHULTZ: But for Vice President Joe Biden, an assault weapons ban is
just the beginning.

(END VIDEOTAPE)

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

Today, President Obama nominated a uniquely qualified candidate to be
secretary of defense. Former Senator Chuck Hagel, Republican out of
Nebraska, puts country over party, and is a true independent, an
independent thinker who will speak his mind. Maybe that`s why the
Republicans are crying foul. President Obama nominated Senator Hagel
despite early attempts by Hagel critics to sideline the nomination.

The president praised Hagel for his impressive credentials.

(BEGIN VIDEO CLIP)

OBAMA: He is an American patriot. He enlisted in the Army and
volunteered for Vietnam. As a young private and then a sergeant, he served
with honor alongside his own brother.

When Chuck was hit by shrapnel, his brother saved him. When his
brother was injured by a mine, Chuck risked his life to pull him to safety.

(END VIDEO CLIP)

SCHULTZ: And there is much more. Hagel is a decorated combat
veteran and would be the first enlisted man to serve as secretary of
defense, as well as the first Vietnam veteran to take the post. Hagel
served on the Senate Foreign Relations Committee, and also on the
Intelligence Committee in the Senate.

He led the Veterans Administration. He headed the USO. He studied
under the G.I. Bill, and then helped pass it after 9/11. And he is a
successful businessman who knows the bottom line.

Now, listen to what Republican Senator Lindsey Graham had to say
about his former lunch partner.

(BEGIN VIDEO CLIP)

GRAHAM: Chuck Hagel, if confirmed to be secretary of defense, would
be the most antagonistic secretary of defense toward the state of Israel in
our nation`s history. He has long severed his ties with the Republican
Party. This is an in-your-face nomination by the president to all of us
who are supportive of Israel. I don`t know what his management experience
is regarding the Pentagon, little if any.

So I think it`s an incredibly controversial choice. And it looks
like the second term of Barack Obama is going to be an in-your-face term.

(END VIDEO CLIP)

SCHULTZ: Well, Senator Hagel is a straight talker from the Midwest.
He`ll give you an unvarnished opinion, and very outspoken. But he has
stated his unequivocal total support for Israel, saying critics have
completely distorted his record.

Graham predicted other Republicans would have a hard time with
Hagel`s nomination. And it just makes you wonder what is really behind all
this. Senator Graham complained that Hagel had cut ties with the
Republican Party. But obviously President Obama isn`t under any
requirement to nominate anybody from any party, especially the Republicans
in the first place.

Maybe Republicans don`t like the fact that Hagel won`t be so eager to
get us into another confrontation overseas.

Here is more from the president.

(BEGIN VIDEO CLIP)

OBAMA: He understands that sending young Americans to fight and
bleed in the dirt and mud, that`s something we only do when it`s absolutely
necessary. My frame of reference, he has said, is geared towards the guy
at the bottom who is doing the fighting and the dying.

(END VIDEO CLIP)

SCHULTZ: President Obama needs a person like Hagel who dared to
question the war in Iraq. President Obama also needs someone who can make
the necessary defense cuts. He needs a harder from -- this is certainly
apart from what senator McCain has been saying, because when he left the
Senate, he was all praise. But now, he is saying that he has "serious
concerns about positions Senator Hagel has taken on a range of critical
national security issues in recent years, which we will fully consider in
the course of his confirmation process."

Now the funny thing about this, about Senator McCain is, when he was
preparing to run for president 2006, he was quoted as saying that he`d "be
honored to have Chuck with me in any capacity. He`d make a great secretary
of state"?

Something must have happened between 2006 and today to change John
McCain`s mind. Maybe it was Hagel`s opinion on Sarah Palin. Hagel said,
"I think it`s a stretch to say that she`s got the experience to be
president of the United States". He actually was one of the first
Republicans to come out and question that selection.

Certainly, no Republican should be questioning Hagel`s
qualifications, unless you want to go back and look like a bunch of
hypocrites. They weren`t complaining about Dick Cheney`s qualifications as
defense secretary under Bush 41, even though Cheney had managed to get five
deferments from serving in the Vietnam War.

Chuck Hagel served in the Vietnam War, in the same unit with his
brother Tom, as the president pointed out.

How can Republicans question Hagel`s qualifications?

Today, Senator Hagel accepted President Obama`s nomination and
immediately focused on the troops.

(BEGIN VIDEO CLIP)

FORMER SENATOR CHUCK HAGEL (R), NEBRASKA: These are people who give
so much to this nation every day, with such dignity and selflessness. This
is particularly important at a time as we complete our mission in
Afghanistan and support the troops and military families who have
sacrificed so much over more than a decade of war.

(END VIDEO CLIP)

SCHULTZ: When does a man`s resume become outstanding? Two
committees in Congress dealing with the military, foreign policy and also
on the intel committee. Also, a combat veteran. Vietnam vets ought to
love the fact that someone from their era is now going to be in this
position.

I think he`ll get confirmed because the standard is Dick Cheney, who
took less than a week to get confirmed after John Tower didn`t cut it under
Bush 41.

This should be a slam-dunk. In fact, you could easily make the
argument that this is one of the best selections ever when it comes to
qualifications for secretary of defense.

Get your cell phones out. I want to know what you think. Tonight`s
question: are the Republicans opposing Chuck Hagel for partisan political
reasons? Text A for yes, text B for no, to 622639. You can always go to
our blog at Ed.MSNBC.com. We`ll bring you results later on in the show.

Joining me now is Joe Sestak, former three-star admiral of the United
States Navy and former congressman from Pennsylvania.

Joe, great to have you with us tonight.

JOE SESTAK, FORMER U.S. NAVY THREE-STAR ADMIRAL: Good to be with
you, Ed.

SCHULTZ: How qualified is Senator Hagel to be the defense secretary?

SESTAK: Absolutely qualified, both as a man and as a statesman.

Look, here is an individual, Ed, like you just mentioned who served
our country selflessly in Vietnam. But he also understood throughout his
entire career, whether it was Vietnam or his position in Iraq that it`s
about America before it is about being a partisan.

SCHULTZ: Why it is an issue then?

SESTAK: You know, Ed, I think it`s because they`re not used to
somebody who puts America over party. I mean, this is a man who thinks
through what the cost will be if our nation goes to war.

I`ll never forget being with us, just the two of us, and Ambassador
Crocker sitting in front of Prime Minister Maliki in Iraq -- four of us for
a meeting that went over hour and 15 minutes. And there Senator Hagel
candidly told that prime minister -- you know, you have to understand
because you, prime minister, are unable to get the Sunnis and Shias to come
together and put your authority to work, that the cost of this war is too
great for America.

SCHULTZ: So, you start with --

SESTAK: Our national security fabric can`t sacrifice because of
this.

SCHULTZ: You saw firsthand, he is a "tell it like it is" kind of
guy.

SESTAK: Absolutely.

SCHULTZ: Can he take the Defense Department and the Pentagon through
the transitions financially that we`re going to have to see if we`re going
get our financial house in order?

SESTAK: Yes, he can. The first reason is, I`ll never forget when
Admiral Border, the first admiral enlisted man to ever become chief of
naval operations, what a shot in the arm that was for the troops out there.

And second, here you have an individual who comes in and was a
warrior in a war that really had divided our nation. And yet he did his
duty.

That alone is going to then be melded with a keen understanding, Ed,
of the new types of warfare. This is a man who not only can take the
experiences of Vietnam to understand what the cost of war is and at times
has to be done. But the benefits have to be more than the costs.

But second, he took from that lessons, those lessons of Vietnam, that
warfare changes over time. He understands the new domain of warfare. That
is it`s not just about how many ships you have or how many planes. He
understands that this whole area from his foreign intelligence advisory
board work --

SCHULTZ: Sure.

SESTAK: -- have taken it and turned into knowledge to be able to do
warfare with more efficiency at less cost. He is kind of steward of our
military we need to bring us a more strong military even at less cost by
the new domain of warfare, not by holding on the a Cold War military.

SCHULTZ: All right. Admiral Joe Sestak, we appreciate your time
tonight here on THE ED SHOW. Thanks so much.

SESTAK: It`s great to be with you on this issue.

SCHULTZ: Let`s turn now to Richard Wolffe, MSNBC political analyst
and vice president, executive editor of MSNBC.com.

How big a political fight is this going to be?

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: It`s going to be huge,
because you`ve got a bunch of Republicans who are down on their luck, who
don`t like the sight of a popular, and yes, he is a popular president, a
president who is exerting the normal authority of the newly elected
president to pick his own cabinet.

You know, you`ve got to remember who the people are who are the most
vocal against Chuck Hagel. They were once Chuck Hagel`s friends. John
McCain, Lindsey Graham, they were the original band of mavericks. Not only
did they say nice things when he was leaving, they went out on the campaign
trail together.

I mean, if they think he is a turncoat, what do they think Joe
Lieberman is?

It`s a joke. They`ve lost their minds. They lost over Susan Rice.
They`re doing it all over again.

SCHUTLZ: Here is more from Senator Lindsey Graham. I want to just
play this.

(BEGIN VIDEO CLIP)

GRAHAM: I`ll have a hard time voting for anybody to be secretary of
defense who believes that the surge was a foreign policy blunder. I`ll
have a hard time supporting anybody for secretary of defense who believes
that the Iranians are misunderstood, we should just negotiate with them,
not sanction them.

(END VIDEO CLIP)

SCHULTZ: They`re really focusing in on some of the things that he
has said in the past, including a gay slur over a decade ago. Do these
things matter in confirmation?

WOLFFE: First of all, Lindsey Graham is treated with a lot of
respect as some kind of national security expert. But it is quite possible
to be pro-Israeli and also not for a rush to war with Iran. It is not
incompatible.

In fact, many people in Israel think that it`s quite legitimate to
not want to go to war with Iran. Why that has become a litmus test for
people like Lindsey Graham is not clear.

Chuck Hagel, for his criticism of the war in Iraq, for being opposed
to the surge, he voted for the war in Iraq. So, I -- you know, there is a
lot of exaggeration going on here after all these years, after the invasion
of Iraq, after 9/11 -- the idea that there is nuance in our foreign policy
should be embraced. There is no litmus test. This is not the day after
9/11.

SCHULTZ: I mean, at the end of the day, no Democrats are going to
contest this, the way the Republicans are. I mean, in the era of
obstruction, the Democrats may have a question or two. But they`re all
going to be on board.

WOLFFE: I think they`re going to hang together, yes. Absolutely.

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

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

Coming up, tax breaks for the rich and famous. We found some
loopholes that I think is going to make your blood boil a little bit.
Let`s get into the devil in the detail. Find out why Republicans are
refusing some obvious reforms, next.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Republicans are misleading the public on the real impact of
a government shutdown. John Nichols on the GOP misinformation campaign,
coming up.

And later, after one of the least productive sessions of Congress,
Democrats are taking action to fix the filibuster. Senator Jeff Merkley
joins me to discuss his plan for reform.

Don`t forget you can listen to my radio show on Sirius XM Radio
channel 127 Monday through Friday, noon to 3:00 p.m. 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 and thanks for staying with us.
OK, let`s have this big discussion about tax reform.

Nancy Pelosi says that Congress is done negotiating on tax rates.
But not tax revenue. And there is a difference.

Republicans have said they`d support tax reform, until yesterday.

(BEGIN VIDEO CLIPS)

MCCONNELL: We`ve resolved the tax issue now. It`s over. It`s
behind us.

And now, it`s time to pivot to the single biggest threat to our
country.

The tax issue is finished, over, completed.

(END VIDEO CLIPS)

SCHULTZ: Really? It`s over, all done. Really?

The American people do not agree. The latest poll shows 54 percent
want to cap tax deductions at $50,000 a year -- that would be a heck of a
debate. Thirty-six percent do not, 10 percent -- well, they don`t know.

So, let`s clear up a few things with a few examples. Companies get a
tax break for doing, what? Shipping American jobs overseas.

Now, Democrats tried to turn this around. They tried to kill this
initiative, and, of course, Republicans refused.

There is another idea, kill or reduce oil subsidies. The biggest oil
companies share $20 billion tax breaks every year. And closing this
loophole seems pretty obvious, doesn`t it?

We give a tax break to the wealthiest yacht owners in America. Yacht
owners get a special deduction every year. And only the wealthiest 3
percent own rigs like that one.

If the Republicans were really serious about the budget, there is an
even quicker way to free up more than a trillion dollars. We could tax
capital gains at the same rates as personal income. We can stop letting
companies defer taxes on offshore profits. And we could refuse to give tax
cuts to the wealthiest traders on worthless assets.

Those three tax reforms alone would give us more than $1.6 trillion
over 10 years. Now, of course the Republicans are going to say holy
smokes, we can`t do that. It`s going to kill the economy.

But Republican leadership has taken all of these tax reforms off the
table.

Now, if you follow the money, it`s easy to see why. The biggest
companies in America got $223 billion in tax breaks. In turn, those
companies donated $216 million to congressional campaigns over the last
four elections. You be the judge.

Let`s turn tonight to David Cay Johnston, Pulitzer Prize winning
journalist and author of "The Fine Print."

David Cay, great to have you with us tonight as always.

DAVID CAY JOHNSTON, AUTHOR, "THE FINE PRINT": Good to be here.

SCHULTZ: There is a lot of different places we could go. But what
do you think Congress can get done on this? And let`s take -- and we`ll
have this later on in the show too. Let`s just say they do the filibuster
rule, and we can actually get something done in the Senate. What would be
the most logical thing for Congress to move on?

JOHNSTON: I think Congress should immediately stop all of these
unlimited deferrals for executives. If you`re an executive, you can make
$100 million and have the company invested for you, but pay no taxes on it.
At the time you earn it, while all the rest of us, we have to pay taxes on
our income as we earn it. And we should stop this carried interest
business on Wall Street, where the rate now will be 20 percent instead of
the rate it should be, which is 39.6.

Those two things alone would put tremendous fairness into the system,
Ed.

SCHULTZ: What would it do to the economy? What is your prediction?
Would it slow the economy? Would it hurt jobs?

JOHNSTON: I don`t think paying your taxes hurts the economy. It
induces fairness. There will be all sorts of claims that, oh, Wall Street
will collapse if we make executives on Wall Street making tens of millions
of dollars a year pay their taxes as they earn their money. But I don`t
think it would have any significant effect on anybody except the speed at
which their wealth grows.

SCHULTZ: So what we`re seeing here is Republicans in the next 60
days making entitlements the focal point of what`s wrong with the economy
in our country, instead of labeling exactly what loopholes that they would
go after. And this is something Romney talked about. And to follow up,
the Republicans have yet to identify any loopholes, correct?

JOHNSTON: This is class warfare waged by the Peterson crowd against
most Americans.

The two -- the things they call entitlements are two or three things
you paid for with special taxes -- Social Security and Medicare. You pay
for those you. You pay a tax for them. They shouldn`t be taken away from
you, and they shouldn`t be limited. There may be some adjustments we need
to make, particularly with Medicare.

The third one is Medicaid, which is health care for the poor. And
it`s astonishing. The Republicans think we can`t afford health care for
the poor.

Portugal affords health care for the poor. Turkey affords health
care for the poor. Cuba does.

But the Republicans say, no, we can`t afford that. We need to stop
calling these entitlements and we need to recognize that these are paid-for
benefits, at least in the case of Social Security and Medicare.

SCHULTZ: What do you think a quarter cent -- I guess you could say
sales tax, transaction tax, activity tax on Wall Street would do?

JOHNSTON: This is called the Tobin tax. And I think a tax on
transactions could be very beneficial. Now, you`ll be told by Wall Street
they`ll just move all the trading out of the country. Of course, they`d
lose a lot of legal protections here in the U.S.

Another thing to do, however, would be to put a very high tax on
these instant trades in and out. With all this borrowed money and
speculation, which some studies are showing is having a serious negative
effect on ordinary investors like you and me.

SCHULTZ: But what we have set up here is a system of lobbyists who
maneuver these lawmakers to a point where these -- to a position where
these loopholes are never going to get changed. I don`t mean to sound
negative on it, but this is the heavy lift.

So, the first start is for the Democrats to tell the Republicans as
Nancy Pelosi has done, we`re not done with revenue. I mean, that`s where
you have to start. And then you have to start throwing out examples.

Or is there a better way to do it?

JOHNSTON: No, I think you have to go after these loopholes.

You have to keep talking about, gee, Republicans, if the deficit is
the big boogie man, the big problem out there, then we have to close this
deficit. And why are you going after the poor instead of people who own
yachts, independent oil and gas companies, places that have huge amounts of
wealth and don`t need subsidies?

SCHULTZ: David Cay Johnston, great to have you on THE ED SHOW.
Thanks so much.

Coming up, as we count down to another debt ceiling deadline, more
Republicans come out in support of a government shutdown. The GOP`s
misinformation campaign continues. John Nichols joins me with that
discussion.

And later, the White House has a tough road ahead on gun control.
Now, the administration is getting pushed back from some Democrats. I`ll
talk with Val Demings, former chief of police in Orlando, Florida.

Stay tuned.

(COMMERCIAL BREAK)

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

GOP lawmakers continue to publicly root for a debt ceiling-triggered
government shutdown, basically with no regard for the potentially
devastating consequences. With the debt ceiling deadline likely coming in
mid- to late February, their misinformation campaign continues.

(BEGIN VIDEO CLIP)

CRUZ: I think we have to be prepared to go so far as to shut the
government down if we don`t get some serious policies to stop the out-of-
control spending to tackle the debt and to get economic growth going again.

REP. MATT SALMON (R), ARIZONA: I was here during the government
shutdown in 1995. It was a divided government. We had the Democrat
president of the United States, we had a Republican Congress.

I believe that government shutdown actually gave us the impetus as we
went forward to push to work some real serious compromises.

BOB SCHIEFFER, CBS NEWS: So you think that`s a good idea?

SALMON: Yes, I do.

SCHIEFFER: You really do?

SALMON: Yes. I think it`s about time.

(END VIDEO CLIP)

SCHULTZ: Fear-mongering. Let`s be absolutely clear on this. Not
raising the debt ceiling is not the same as a partial government shutdown.
Raising the debt ceiling isn`t about future spending, it`s about past
spending approved by Congress.

Default would cause an immediate financial collapse with long-term
national and global consequences. It`s estimated the 2011 standoff
increased the nation`s borrowing cost by $1.3 billion in that year alone.
It amazes me that the people using the debt ceiling as leverage to reduce
the deficit don`t seem to mind playing another billion dollar game of
chicken.

President Obama said he would not negotiate over the debt ceiling.
It looks like some Republicans might already be backing off this fight
overall.

But in "The Wall Street Journal", in an interview, John Boehner,
House speaker, called the debt bill "one point of leverage", but also
acknowledged it`s "not the ultimate leverage".

So where are they going with all of this?

I`m going to John Nichols tonight, Washington correspondent for "The
Nation" magazine.

John, good to have you with us.

It`s a game of chicken that they are playing on Sunday`s "Face the
Nation." Senate Minority Leader Mitch McConnell dodged a series of
questions about his stance on the debt ceiling and leverage. Let`s take a
look.

(BEGIN VIDEO CLIP)

MCCONNELL: What I`m willing to say is if the president won`t lead us
here in the direction of reducing this massive spending addiction that we
have, then we have to use whatever leverage we have. And there are some
examples of leverage coming along -- the debt ceiling is one of them --
that hopefully would get the president engaged, even though he seems
unwilling to do it on his own.

(END VIDEO CLIP)

SCHULTZ: John, what about that? I mean, they`re going to use --
this is leverage just because they can. Your thoughts.

JOHN NICHOLS, THE NATION: Well, they`re playing with fire. Let`s be
clear about that. And the president and Democrats should call them out on
it quickly, because the fact of the matter is that the crisis that occurred
in 2011 as regards the reaction of those who rate debt as well as the
markets began before we actually hit the trouble point.

The interesting thing is that things got so bad, Congress and the
president finally did have to sort it out. But this game, again, will
cause huge, huge problems for working Americans.

The debt ceiling fight is very, very different than the fiscal cliff fight.
The fiscal cliff fight was something where we could anticipate a lot of
problems coming if we went over it. The debt ceiling fight is very, very
different. It will, if it goes to the crisis the republicans talk about
creating, initiate a broad meltdown as regards our economy.

And it runs the risk of putting people out of work.

SCHULTZ: So many comparisons being made to what happened in the `90s under
Newt Gingrich. The world economy is a lot different right now. I know
that your "Nation" magazine has done a lot of reporting on this. But who
would be affected the most? Who would survive and who wouldn`t?

NICHOLS: Well, small businesses would be devastated by this, because you`d
see a locking up of capital at very, very rapid rate. And anybody who
relies on a line of credit could end up in really big trouble: farmers,
working folks who -- anybody trying to get a mortgage. You would see a
very, very quick impact.

And the problem is also the instability of a situation like this,
especially at a point when our economy is just beginning to get rolling,
starting to really show some signs of moving in the right direct.

SCHULTZ: Sure.

NICHOLS: -- some key manufacturing hiring. This would be a terrible thing
to do to it, much worse again than going over the fiscal cliff.

SCHULTZ: Isn`t President Obama`s leverage right now knowledge, that the
people grasp exactly the severity of this? I mean, first of all, for every
family in America, from what I can see, food prices would go through the
roof. You think they`re high right now? You start messing around with
that commodities market, you start messing around with what is going on in
the Heartland as far as food production and credit, you would see an
instant -- I think an instant --

NICHOLS: It`s possible.

SCHULTZ: -- increase in food prices in this country. So where is the
leverage for the president as you see it?

NICHOLS: I think the president`s leverage is slightly different. I think
his leverage is the fact that people clearly identify who is playing with
fire here. The president is saying look, we have to do this. We have to
follow the law. Our Constitution says that we must respect our debts and
pay them. They must be taken care of.

And so the president needs to just keep talking about that. As long as the
Republicans are identified as the people creating this crisis --

SCHULTZ: Sure.

NICHOLS: -- then the president has a lot of leverage with them. So it
really is a case of the bully pulpit.

SCHULTZ: Well, true. And what about Republicans risking the support of
Wall Street businesses? This would have a major impact on what would
transpire on Wall Street. And of course we know how connected the
Republicans are to that. Why would they go down that road?

NICHOLS: Well, because they have created almost a fanaticism within their
-- not merely within their ranks in Congress, but within their base, their
core voters. Right wing talk radio goes on about this all the time. This
is the flip side, Ed, of the theory that government can`t do anything
right, that government doesn`t matter, that government gets in the way,
that government is the problem. That mantra is repeated again and again
and again.

SCHULTZ: Sure.

NICHOLS: So that an awfully lot of their base believes that shutting down
the government or going -- not raising the debt ceiling, something like
that, won`t have any bad effect because government is so useless.

SCHULTZ: So here is where we are as I see it.

NICHOLS: They`ve been led into a fantasy.

SCHULTZ: Here`s where we are as I see it. Republicans are saying you give
us entitlements or we`re going to do this. That`s really what it measures
down to right now, where we are early in this conversation, less than 60
days away.

John Nichols, great to have you with us tonight. Thank you so much.

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

Voices rise up against having a gun control discussion.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: That`s way -- way in extreme of what I think is
necessary or even should be talked about.

(END VIDEO CLIP)

SCHULTZ: But Vice President Joe Biden`s task force wants more than the
assault weapons ban. We`ve got the details on the latest measures ahead.

Dick Cheney`s right hand man is back in the mix. David Addington pushed
for extralegal powers for the Bush administration, but now has a surprising
new mission.

And filibuster reform may be in reach.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D), MAJORITY LEADER: Senators Merkley, Udall, Harken and
Whitehouse made the majority`s case for change. They have made compelling
arguments for reform.

(END VIDEO CLIP)

SCHULTZ: Senator Jeff Merkley gives us the latest, next.

(COMMERCIAL BREAK)

SCHULTZ: And we are back. Attitudes may be changing, but the White House
has a heavy lift on its hand when it comes to gun control. A task force
led by Vice President Joe Biden is looking to reinstate the assault weapons
ban. And as the "Washington Post" reports, broader gun control measures
are also on the table, regulations that would require universal background
checks for firearm buyers, track the movement and sale of weapons through a
national database, strengthen mental health checks and stiffen penalties
for carrying guns near schools or giving them to minors.

Those proposals, still under consideration, are getting considerable
pushback from lawmakers on both sides of the aisle. One freshman Democrat,
Senator Heidi Heitkamp of North Dakota, is calling them extreme.

(BEGIN VIDEO CLIP)

SEN. HEIDI HEITKAMP (D), NORTH DAKOTA: What I hear from the administration
and if the "Washington Post" is to be believed, that is way in extreme of
what I believe is necessary or should even be talked about. And it`s not
going to pass.

(END VIDEO CLIP)

SCHULTZ: Senate Minority Leader Mitch McConnell agrees with Heitkamp.
McConnell suggests that he will stall on any kind of legislative action
because, in his mind, gun control is not a top priority.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: The biggest problem we have at
the moment is spending and debt. That`s going to dominate the Congress
between now and the end of March.

(END VIDEO CLIP)

SCHULTZ: Senator Chris Murphy of Connecticut, who has spent a lot of time
with the families of Newtown, Connecticut, in the past month, called out
McConnell`s timetable.

(BEGIN VIDEO CLIP)

SEN. CHRIS MURPHY (D), CONNECTICUT: I don`t think we should wait three
months to get this done. I think we should get it done now. And I frankly
think if we did that, it would save lives.

(END VIDEO CLIP)

SCHULTZ: Congressman Rick Nolan of Minnesota made the case for responsible
gun owners, curbing assault weapons is just plain common sense.

(END VIDEO CLIP)

REP. RICK NOLAN (D), MINNESOTA: I`m a hunter, believe in Second Amendment
rights. But you know what? I don`t need a assault weapon to shoot a duck.
And I think they ought to be banned.

(END VIDEO CLIP)

SCHULTZ: So where do we go with gun control? Let`s bring in Val Demings,
former chief of police of Orlando, Florida. Great to have you with us,
Val. I I appreciate your time.

VAL DEMINGS, FORMER CHIEF OF POLICE, ORLANDO, FLORIDA: Thank you, Ed.
It`s great to be here.

SCHULTZ: We see the urban and rural divide when we hear from senators from
the middle of the country and lawmakers from the middle of the country, and
what we hear on the east and west coast. Senator Heitkamp calls the
measures being considered by the White House extreme. Do you agree?

DEMINGS: I tell you what, I come to you tonight as a 27-year law
enforcement officer, but not only that, I come as a mother of three sons.
I think what is extreme is 20 precious, innocent, very beautiful children
being gunned down and killed in an elementary school.

SCHULTZ: And that, of course, has changed the attitudes of a lot of people
in this country. But as Heitkamp says, they don`t have the votes. And she
doesn`t think it would pass. So what do attitudes mean if you can`t get
the votes?

DEMINGS: Well, you know, I know that mayors and police chiefs and sheriffs
all over this country deal with gun violence every day. But what we saw in
Newtown a couple of weeks ago really should be a game changer. And Ed, if
we don`t do something now -- and you talk about extreme. If we don`t do
something now, I don`t think we will ever have an opportunity for change.

A ban on assault weapons, I think that`s a no-brainer. A ban on high
capacity magazines, having a national database where you can check criminal
histories as well as do mental health checks, those things are not extreme.
When we look at what has happened in the United States of America, I think
those things are a step, a major step in the right direction.

SCHULTZ: Are lawmakers missing a leadership opportunity here? I mean,
should lawmakers in rural states be having conversations with constituents
about responsible gun ownership?

DEMINGS: I really think they should. I did a lot of work as the police
chief with Mayors Against Illegal Guns. And we were always talking about
keeping guns out of the hands of convicted felons and out of the hands of
people who are mentally ill. We need to get serious about mental health in
this country, make mental health counseling available.

But this is a discussion that certainly rural areas -- lawmakers from rural
areas should participate in. But this should be a national discussion.
And when we talk about the priorities in this country, I don`t think
anything could be more of a priority after 20 innocent, precious children,
and then six people at a school trying to protect them have lost their
lives.

SCHULTZ: But then you have a leader in the Senate on the Republican side,
Mitch McConnell, saying that gun control is not his top priority. Do you
believe it is a top priority of the Obama administration? I mean, keeping
out in front of the public obviously is going to be a big part of this
happening. And of course ramping up pressure on lawmakers to make the
change.

We have also seen the National Rifle Association in recent week take some
very aggressive steps to protect their backyard, so to speak, the way
they`re trying -- giving clinics to arm -- to teach teachers in some states
such as Ohio and Utah how to use firearms and this discussion of firearms
in schools. So how does the Obama administration, in your opinion, make
sure that this is a top priority and that the Mitch McConnells of the world
can be politically overrun?

DEMINGS: I do believe that this is a leadership moment. I think it`s a
leadership moment for our president. I`m pleased that the steps that he
has taken with the Biden group. I think they are headed in the right
direction. I believe they have a good panel of experts, which includes law
enforcement officers from around the country.

But it is a leadership moment. And it`s really, Ed, not a Republican
issue, it`s not a Democratic issue. It is an American issue. People die
in this country every day of gun violence. But like I said, what happened
in Newtown really should be, if we want to exercise common sense, a game
changer.

SCHULTZ: Can we get a bipartisan solution on gun control?

DEMINGS: I believe that constituents, people all over this country -- when
you look at polling, the majority of people in this country feel that we
should have stricter gun regulation. We would hope that the leadership
comes out of Washington, D.C. But if not, I think constituents need to
speak up and make their thoughts known, mothers and fathers and sons and
daughters all over this country.

We all have a role to play. The NRA, everybody who has an interest in this
-- and we all should -- has a role to play. But the answer is not more
guns. The answer is not more guns.

SCHULTZ: OK. Val Demings, I appreciate your time on THE ED SHOW tonight.
Thanks so much for your expertise.

He was the Bush administration`s head cheerleader on torture. And now
David Addington has landed himself a cushy now job at Jim Demint`s Heritage
Foundation. I`ll explain next.

(COMMERCIAL BREAK)

SCHULTZ: And we love hearing from our viewers on Twitter and our Facebook
page. Many of you are commenting on the football helmet presented to
Secretary of State Hillary Clinton on her first day back to work after a
concussion and blood clot scare.

On Facebook, Diana Vance writes "get all the rest you need, Hillary. We
want to elect you in 2016."

Sherman Glover comments "be careful, Hillary, and wear this."

And Mark Johnson admires Clinton`s great sense of humor. "She is tops in
my book, next president, exclamation point."

Keep sharing your thoughts and like us on Facebook and on Twitter using the
hash tag #EdShow.

Coming up, Senate Democrats owe to it the president to take action on
filibuster reform to get something done in this chamber. Senator Jeff
Merkley on his plan to fix the filibuster, pretty common sense, coming up
next. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: He was so extreme, he was often called Cheney`s Cheney. As
counsel and chief of staff to the former vice president, David Addington
was the Bush administration`s chief advocate for torture. Addington
believed that wartime presidents should be granted extraordinary powers,
and was widely considered to be the driving force behind the Bush
administration`s embrace of enhanced interrogation techniques and
electronic surveillance.

Back in 2006, David Iglesias of the "Washington Post" described Addington
as the Bush administration`s ideological enforcer. "Most mornings during
the first term, he would join the staff meeting in the White House
Counsel`s Office and take potshots at anyone he regarded as insufficiently
committed to the president`s agenda. It was very surprising if anyone took
a position more conservative than David. And this was a very conservative
office. Recalls one former colleague, he was the hardest of the hard-
core."

Turns out this hardest of the hard-core right wingers just landed a cushy
new job at Jim Demint`s Heritage Foundation. It`s what "New York Times"
columnist Paul Krugman calls wingnut welfare, getting a better job --
better paying job in the private sector after you screwed up in the public
sector. As "Politico" reports, Addington will head the conservative think
tank`s legal department.

Here is the real kicker. Addington, the guy who wrote the book on pushing
the limits of executive power, will be the Heritage Foundation`s top
watchdog on government overreach. Addington told "the Wall Street Journal"
he will focus on over regulation by the federal government, and believes
the Obama administration had taken some questionable steps, such as recess
appointments of executive branch officials opposed by Senate Republicans.

My friends, you can`t make this stuff up. What a reversal.

Tonight in our survey, I asked you are Republicans opposing Chuck Hagel for
partisan political reasons? Ninety nine percent of you said yes; one
percent of you said no.

Senate Democrats are sick of Republicans abusing the filibuster at the
expense of the American people. Oregon Senator Jeff Merkley has a plan for
filibuster reform. He joins us next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REID: The Senate is not working as it should. That`s why in the last
Congress, I made plain that Democrats would do something to fix those
issues. The beginning of a new Congress is customarily a time that the
Senate addresses changes to its rules.

(END VIDEO CLIP)

SCHULTZ: By abusing the filibuster, Senate Republicans have been
shamelessly holding America`s progress hostage. The 112th Congress was the
least productive since the 1940. Something to be proud of, right? With
the Senate Republicans using the filibuster over 380 times. Now Senate
Democrats want action.

Senators Tom Udall, also Jeff Merkley and Tom Harkin have introduced a
resolution to overhaul the Senate`s filibuster`s rules. The cornerstone of
their plan is the talking filibuster. It would require senators to speak
publicly on the Senate floor about why they are blocking legislation.

Currently senators can filibuster by simply telling their leader they
object to the bill. The proposal would also speed up executive and
judicial nominations. It would eliminate filibusters to establish a
conference committee with the House and on motions to proceed.

And make no mistake, these are not major changes, and the filibuster would
still be around and be very useful to the minority. The new Congress has a
lot on their plate to get done with the budget, tax reform and entitlement
talk. And without reform, it`s going to be back to business as usual with
for filibuster-abusing Republicans.

I think Senate Democrats owe to it the president of the United States to
change the filibuster rules and to move the country forward. Majority
Leader Harry Reid hinted he might be on board last week.

(BEGIN VIDEO CLIP)

REID: Democratic Senators Merkley, Udall, Harkin and Whitehouse made the
majority`s case for change. I commend these passionate leaders. They have
made compelling arguments for reform.

(END VIDEO CLIP)

SCHULTZ: For more, let`s turn to senator Jeff Merkley of Oregon who
introduced the filibuster reform. Senator, good to have you with us
tonight. Is this the ticket to ending obstruction?

SEN. JEFF MERKLEY (D), OREGON: Well, it won`t end it, Ed. But it
certainly takes us a step in the right direction. We need to end the use
of the filibuster getting to a bill. And we need to end the use getting to
a conference committee. Those are outrageous applications.

But moreover, the secret, silent filibuster on a bill itself, the one that
you never see, when you just see a quorum call, that is what has been
killing important legislation, be it the president`s jobs bill, be it the
pay equity, the DREAM Act, the Disclose Act, you name it, all out of sight.
It has to end.

If people say they want more debate, they need to come to the floor of the
Senate and debate, make their case before their colleagues and the American
people.

SCHULTZ: Is Harry Reid going to move on this? Do you have the votes to
make this happen?

MERKLEY: Harry Reid have the votes for the package that he puts together
when he asks for the votes. I hope it has all four of these elements. I
want to make sure it has the talking filibuster, because that is the heart
of this issue.

Yes, we need to do the motion to proceed. And yes, we need to do
conference and reduce the hours on judge nominations. But we really need
to have the case made that if you vote for more debate, you actually
debate. Folks can see what you`re doing and say you`re a hero or you`re a
bum.

SCHULTZ: Well, we have seen a session of Congress where there just hasn`t
been any debate, where there is a lot of senators that obviously haven`t
even been to the floor to make the case in a strong pitch to advocate for
anything because it`s been filibustered.

I mean, it`s all about getting reelected at this point, and not really
working for a living. That`s the perception that is out there. So this
talking filibuster, do you think that they could turn right around and make
this applicable, where it would actually give us the things that you said
have been filibustered in the past, that these bills would move forward and
we would make some progress?

MERKLEY: I think on a number of these issues, they`re very popular with
the American people. So if they actually see the obstruction in process,
they have a chance to weigh in with their home state senator and say what
are you doing? Why are you voting against cloture? This is outrageous.
You`re killing this bill.

Right now, folks don`t feel accountable for killing the bill because you
can`t see them, and their citizens don`t know what they`re up to.

SCHULTZ: Senators McCain and Levin introduced a bipartisan proposal on
filibuster reform. What is wrong with their plan as opposed to the one you
have?

MERKLEY: You know, it completely misses the point of taking on the secret,
silent filibuster. And the reason why is this is the issue that the
Republicans are loving. They love the fact they can kill the bills without
taking public responsibility.

Now they talk about transparency. They talk about accountability. When it
comes down to it, they don`t like accountability or transparency. And so
the deal that they negotiated doesn`t include the talking filibuster. And
that`s just a deal that is -- I wouldn`t say it`s completely window
dressing, because it does a couple of important things. It takes other
elements out of the plan that Tom Udall and I put together.

SCHULTZ: Sure.

MERKLEY: But it certainly doesn`t get to the heart of it.

SCHULTZ: But senator, this is the linchpin for the 113th, isn`t it? Or
it`s going to be business as usual?

MERKLEY: It is extremely important. Because otherwise, how can you debate
and decide issues if you`re just being paralyzed? As you noted, there has
been -- and actually the number is higher now -- more than 390 filibusters
during the last six years that Harry Reid has faced. That`s just compared
to one that Lyndon Johnson faced in six years.

And since each of those procedurally can take up a week of the Senate`s
time, you just quickly see the calendar is eviscerated. You simply can`t
get appropriation bills done. You can`t get authorizing bills done, let
alone have a long, lengthy important debate on a major issue facing
America.

SCHULTZ: Senator Jeff Merkley, Oregon, good to have you with us tonight.

MERKLEY: Great to be here.

SCHULTZ: This has to go through or the 113th has a chance of being just
like the 112th. Let`s follow it. I hope it goes through.

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

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

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