updated 1/15/2013 10:17:30 AM ET 2013-01-15T15:17:30

THE ED SHOW with ED SCHULTZ
January 14, 2013

Guests: Jim McDermott, Ruth Conniff, Dan Gross, Dr. James Peterson

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

The GOP is still holding the American economy hostage, and President
Obama says they won`t collect a ransom.

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

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The issue here is
whether or not America pays its bills. We are not a deadbeat nation.

SCHULTZ (voice-over): The president draws a line in the sand for
Republicans.

OBAMA: They will not collect a ransom in exchange for not crashing
the American economy.

SCHULTZ: Tonight, Congressman Jim McDermott`s reaction to the
president`s tough talk on the debt ceiling. E.J. Dionne and Ruth Conniff
on whether the Republicans will actually listen.

One month after Sandy Hook, he has the president`s gun
recommendations.

OBAMA: My starting point is not to worry about the politics.

SCHULTZ: But will spineless Republicans kill reform? One Republican
threatens impeachment if the president signs an executive order on guns.

Gross of the Brady Campaign is here with reaction to the president`s
comments that the NRA is ginning up fear to sell guns.

And former Secretary of State Colin Powell calls out Republicans on
race.

COLIN POWELL, FORMER SECRETARY OF STATE: There is also a dark -- a
dark vein of intolerance in some parts of the party.

SCHULTZ: Dr. James Peterson joins me to discuss the Republican
response.

(END VIDEOTAPE)

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

President Obama took on the single greatest threat to the global
economy today, the Republican Party. The president used the final news
conference of his first term to throw down the gauntlet. After years of
deliberate confusion by Republicans, President Obama set the record
straight on the debt ceiling.

(BEGIN VIDEO CLIP)

OBAMA: Now, the other congressionally imposed deadline coming up is
the so-called debt ceiling, something most Americans hadn`t even heard of
before two years ago.

So I want to be clear about this. The debt ceiling is not a question
of authorizing more spending. Raising the debt ceiling does not authorize
more spending. It simply allows the country to pay for spending that
Congress has already committed to.

(END VIDEO CLIP)

SCHULTZ: And, of course, Republicans tried to trick Americans into
believing the debt ceiling was a blank check or a magic credit card for the
president to go spend whatever he wanted to spend. Of course, the United
States Constitution gives the power to tax and spend to the Congress, and
the Congress alone.

Our current deficit is the result of money Congress has already
borrowed.

President Obama explained to the American people today how Republicans
in Congress are trying to avoid doing their actual jobs.

(BEGIN VIDEO CLIP)

OBAMA: These are bills that have already been racked up. And we need
to pay them. So while I`m willing to compromise and find common ground
over how to reduce our deficits, America cannot afford another debate with
this Congress about whether or not they should pay the bills they`ve
already racked up.

(END VIDEO CLIP)

SCHULTZ: If the American people do not catch on to the severity of
all of this, of defaulting on our debts, the country will be in a dire
situation. President Obama knows this. He believes it. He has proved it
before.

And he is not going to play games with economic stability.

(BEGIN VIDEO CLIP)

OBAMA: So we`ve got to pay our bills. And Republicans in Congress
have two choices here. They can act responsibly and pay America`s bills,
or they can act irresponsibly and put America through another economic
crisis.

But they will not collect a ransom in exchange for not crashing the
American economy. The financial well-being of the American people is not
leverage to be used. The full faith and credit of the United States of
America is not a bargaining chip. And they better choose quickly, because
time is running short.

(END VIDEO CLIP)

SCHULTZ: The president simple and direct. Everybody on the same page
now? Of course not.

Naturally, the Republican leaders decided to confuse and distract one
more time. Senate Republican Leader Mitch McConnell continued to link the
debt ceiling increase to spending. In a statement he said, "The president
and his allies need to get serious about spending and the debt limit debate
is the perfect time for it."

House Speaker John Boehner also ignored his obligation to pay the
nation`s bills and also complained about spending. "The American people do
not support raising the debt ceiling without reducing government spending
at the same time."

They speak so confident, don`t they? It`s almost as if they forgot
all about the spending cuts the president already gave them over a year
ago. Well, let`s try to help them figure it out a little bit with a little
visual and audio assistance.

(BEGIN VIDEO CLIP)

OBAMA: Over the past two years, I`ve signed into law about $1.4
trillion in spending cuts. Two weeks ago, I signed into law more than $600
billion into new revenue, by making sure the wealthiest Americans begin to
pay their fair share.

When you add the money that will save in interest payments on the
debt, all together that adds up to a total of about $2.5 trillion in
deficit reduction over the past two years. Not counting the $400 billion
already saved from winding down the wars in Iraq and Afghanistan.

So, we`ve made progress.

(END VIDEO CLIP)

SCHULTZ: Didn`t President Clinton say it was all about arithmetic?
Republicans can posture on the debt ceiling all they want. They know the
truth.

Listen to John Boehner two years ago.

(BEGIN VIDEO CLIP)

CHRIS WALLACE, FOX NEWS: Do you agree with administration officials
and other economists that defaulting on the full faith and credit of the
United States would be a financial disaster?

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: That would be a
financial disaster, not only for our country, but for the worldwide
economy.

(END VIDEO CLIP)

SCHULTZ: Oh, financial disaster. Apparently this is not a game.

Outgoing Treasury Secretary Timothy Geithner says that we will hit the
debt limit between mid-February and early March. The financial security of
millions of Americans is at stake.

(BEGIN VIDEO CLIP)

OBAMA: If congressional Republicans refuse to pay America`s bills on
time, Social Security checks and veterans benefits will be delayed. We
might not be able to pay our troops or honor our contracts with small
business owners. Food inspector, air traffic controllers, specialists who
track down loose nuclear materials wouldn`t get their paychecks.

Investors around the world will ask if the United States of America is
in fact a safe bet. Markets could go haywire. Interest rates would spike
for anybody who borrows money -- every homeowner with a mortgage, every
student with a college loan, every small business owner who wants to grow
and hire.

It would be a self-inflicted wound on the economy. It would slowdown
our growth. It might tip us into recession. And ironically, would
probably increase our deficit.

So to even entertain the idea of this happening, of the United States
of America not paying its bills is irresponsible. It`s absurd.

(END VIDEO CLIP)

SCHULTZ: If the country defaults on its debt, Republicans will take
the blame for the damage. As President Obama pointed out, the country is
required by law to pay for what Congress spends.

(BEGIN VIDEO CLIP)

OBAMA: Congress authorizes spending. They order me to spend. They
tell me you need to fund our Defense Department at such and such a level.
You need to send out Social Security checks. You need to make sure that
you`re paying to care for our veterans.

They lay all this out for me, and because they have the spending
power. And so I am required by law to go ahead and pay these bills.

(END VIDEO CLIP)

SCHULTZ: Many Republicans are willing to just let it all burn to the
ground.

"Politico" reported more and more House Republicans are planning to
damage the economy. GOP officials said more than half of their members are
prepared to allow default unless President Obama agrees to dramatic cuts he
has already -- he has repeatedly said he opposes.

John Boehner does not have any clout with the Tea Party members of the
Congress. This is the big problem. Here comes Congressman Ralph Hall of
Texas. He`s got a rather radical view of what it means to raise the debt
ceiling.

(BEGIN VIDEO CLIP)

REP. RALPH HALL (R), TEXAS: We made a mistake when we increased the
debt limit the first time, gave this guy all the money to buy votes with.
We shouldn`t make the mistake now.

(END VIDEO CLIP)

SCHULTZ: This thinking is not only inaccurate. It is dangerous.
Economist Paul Krugman explained the mentality of the hostage takers.

(BEGIN VIDEO CLIP)

PAUL KRUGMAN, NEW YORK TIMES COLUMNIST: This is a guy walking into a
crowded room and saying I have a bomb strapped to my chest. And if you
don`t give me what I want, I`m going to blow up everybody, including
myself. And is that a credible threat? Well, there are some pretty crazy
people there. It might be that they`re willing to do it. But by the same
token, Obama cannot give into this.

(END VIDEO CLIP)

SCHULTZ: Fortunately, President Obama showed no signs of giving in
today.

(BEGIN VIDEO CLIP)

OBAMA: What I will not do is to have that negotiation with a gun at
the head of the American people. The threat that unless we get our way,
unless you gut Medicare or Medicaid, or, you know, otherwise slash things
that the American people don`t believe should be slashed, that we`re going
to threaten to wreck the entire economy.

(END VIDEO CLIP)

SCHULTZ: Or to put it more simply.

(BEGIN VIDEO CLIP)

OBAMA: The issue here is whether or not America pays its bills. We
are not a deadbeat nation.

(END VIDEO CLIP)

SCHULTZ: Republicans, oh, they love to talk about American
exceptionalism. How exceptional would you be if you didn`t pay your bills?

Now, they are prepared to diminish our standing in the world over some
radical ideology because they can`t get to the big three through this
process. President Obama dared them to follow through on their threats.
We`ll find out who blinks first.

Get your cell phones out. We want to know what you think.

Tonight`s question, will Republicans lead our country into another
recession by refusing to act on the debt ceiling? Text A for yes, text B
for no, to 622639. We`ll bring you the results later on. You can always
go to our blog at Ed.MSNBC.com and leave the result.

Joining me tonight is Congressman Jim McDermott of Washington, who has
been in the chamber for quite a while and seen a lot. He sits on the ways
and means committee.

Congressman, good to have you with us tonight.

Do you think Republicans will follow through on their threat to take
the country into default? I mean, the president spent a hot of time today
educating the American people and cutting to the chase and being brilliant
on the basics about what the ramifications would be. Your thoughts.

REP. JIM MCDERMOTT (D), WASHINGTON: My thought is that they seem to
be this time headed for a real trauma. I voted no on the last bailout, Ed,
a couple of weeks ago because I knew that the real fight was going to come
on this debt ceiling. And they think that this is the way. Now, it`s like
handing the keys to a John Deere tractor to a 6-year-old and let him try
and drive it.

These guys, they have no idea what they`re doing to the economy. And
they will wreck it because they think that that way they`ll get their way
on some other things. It is simply -- you can`t -- if the facts made any
difference, the president would win the day totally.

But the facts don`t -- it doesn`t make them move at all. They simply
believe that if they are tough enough and bring enough chaos, they will get
what they want. And they don`t understand what they`re asking for. It is
really scary to me.

SCHULTZ: Well, it`s scary to a lot of Americans, because it will hurt
a lot of people. But why would they do this? Do they want the big three
that bad? Do they want sequestration that bad? Do they really want these
cuts to hit?

Because if you look at the cuts, if we go down that road, it`s going
to hit the Pentagon pretty hard. And that`s, of course, their core. They
don`t want to let that go.

MCDERMOTT: They want to make the president look like he can`t run the
country. That`s what the bottom line here is. Nobody wants to say that.
But that`s what it`s about.

If they were serious about Medicare, if they were serious about
Medicaid, if they were serious about Defense, they could sit down and have
the regular order in the Congress and have committee hearings, and actually
make some sensible cuts.

Every one of us knows there are sensible ways to deal with the deficit
and the debt of this country. But you do not get it by threatening people
to burn the house down as a way of making them come to the table. That
simply won`t work.

SCHULTZ: Are you confident President Obama will stick to his guns?

MCDERMOTT: I am.

SCHULTZ: This is it. You are?

MCDERMOTT: I`m absolutely -- he`s been burned by these guys enough
times. It`s like going to the county or like Charlie Brown and Lucy and
the football. He`s said I`m going to kick the football and Lucy keeps
jerking the ball away.

The Republicans have jerked the ball away from him again and again.
This time he is not going to do it. He is much smarter now than he was two
years ago.

SCHULTZ: What about Harry Reid over the weekend and some Senate
Democrats who communicated with the White House on Friday, saying do what
you have to do. What`s your response to that?

MCDERMOTT: Well, my belief is that the president should use every
power that is vested in him by the Constitution. And I personally think
that there are ways in which he can say I am going to maintain the credit
of this country. I`m going to borrow the money. If they want to fight me
over it, then go to the Supreme Court and fight it out there.

I don`t think the president can be responsible and let this country go
into the tank when you`ve got the whole economy of the world in very shaky
shape today. You can`t -- you`re not playing with little stuff here.
You`re playing with the whole world economy. And I think the president
knows that. And he will do what he has to do.

SCHULTZ: Congressman Jim McDermott, good to have you with us tonight
on THE ED SHOW -- 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.
And, of course, we always want to know what you think.

Coming up, President Obama put a human face on the people who will be
hurt most by radical Republicans. E.J. Dionne and Ruth Conniff join me to
explain the damage that will happen if we go to default.

(COMMERCIAL BREAK)

SCHULTZ: Members of Congress are already knocking down the
president`s gun legislation. They don`t even know what is in it. They
have no clue. That`s what burns me is that when lawmakers go out and say
we don`t have the votes. You don`t even know what it is.

Let`s continue the discussion. Dan Gross of the Brady Campaign on
that, and the ginned up fear from the right wing on firearms in this
country.

And later, former Secretary of State Colin Powell calls out the
radical intolerance of the Republican Party. Dr. James Peterson weighs in
on those comments.

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 are coming right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Raising the debt ceiling does not authorize us to spend more.
All it does is say that America will pay its bills. And we are not a
deadbeat nation.

(END VIDEO CLIP)

SCHULTZ: Well, Mr. President, it all depends on who you are talking
about. Radical Republican lawmakers are ready to really trample all over
American citizens in order just to get what they want. The Republican
crusade on the debt ceiling will harm all of these folks.

Let`s go through them tonight, anyone on Social Security. That means
if you`re on Social Security and you live on that fixed income, you won`t
get the check.

How about veterans? I thought -- you know, this is what confuses me.
Veterans and troops. I always thought the Republicans supported the
troops. Remember those signs, "We support the troops"? Maybe not anymore.

If you`re a business owner, the government may default on your loan.
That`s right. Right here -- you need that money to continue to meet
payroll. Of course, that will certainly hurt employment in this country.
And that`s really what the Republicans like.

Do you have a mortgage? Oh, yeah, your rate could go through the
roof, depending on how the concentration of wealth in this country is with
the five banks that control most of the money. What do you think they`re
going to do?

And if you have a student loan, got to pick on the students too -- if
you`re a student loan recipient, real good chance you`re going to be paying
more.

People who keep us safe every day will not get a paycheck, like food
inspectors, air traffic controllers, workers -- you know, nuclear
management professionals. Ah, that`s not that important, is it?

Anyone invested in the stock market. Is your 401(k) right here? Is
your retirement here? Is your kids` education right there, your college
fund, your pension?

Yes, the global markets will also take a nosedive. You can count on
it. The radical behavior will not just be for Americans, but the American
people do not send elected officials to Washington to do this kind of harm.
Is this why you sent your elected official to go to Washington to allow
something like this to happen?

And I`m asking Republicans tonight -- is this really what you want the
country to do?

Look. The bottom line is this. We`re at a crossroads in America.
The right wing wants the big three so bad, this is the conversation they`re
willing to have. And this may be the direction they`re willing to go to
make sure that they can get the cuts they want, because they want that
government cut right down into the bathtub.

I`m joined tonight by MSNBC contributor and "Washington Post"
columnist E.J. Dionne, and Ruth Conniff, political editor of the
"Progressive" magazine.

Great to have both of you with us tonight.

E.J., you first.

Who would get hit the hardest? I mean, if we were not to pay our
bills, who gets hit the hardest and the soonest, actually? Sooner than
anybody else?

E.J. DIONNE, THE WASHINGTON POST: I`m glad what you did what you just
did, because I think one of the problems with this debt ceiling fight is
that it`s such a ridiculous idea on its face that Congress has to vote
again to say we`ll pay our bills, that most Americans figure it must be
more spending. And it isn`t.

So it`s really good that President Obama went out there today and is
continuing to hit at this and say this is not about more spending. It`s
about saying we`re going to pay our bills. And because no Congress has
ever been crazy enough to do something like this, to say we won`t increase
the debt ceiling, we don`t fully know what the damage is.

You`re right in that list. If the government can`t pay its bills, all
those people get hurt. But on top of that, what maybe most damaging to
most Americans, especially people out of work, is the damage this will do
to the American and the global economy.

The rest of the world is counting on our economy right now to keep
growing so the world economy can keep growing. When Newt Gingrich says
this is a bad idea to use -- hold the country hostage to the debt ceiling,
when Newt Gingrich looks like a moderate and a statesman, I think the
Republicans ought to rethink their strategy.

SCHULTZ: Ruth, how badly would this damage the economic recovery? I
think it would totally wipe it out. It would probably bring from what I
could see unemployment to levels that we haven`t seen even back when we had
the economic problems in the start of 2009. It would be worse than that.

What do you think?

RUTH CONNIFF, THE PROGRESSIVE MAGAZINE: It would be a complete
disaster. And both sides have acknowledged that, that I think the
president put it really well today when he said that the Republicans are
essentially saying if we don`t get 100 percent of what we want, we`re going
to blow up the economy. And nobody doubts that it would blow up the
economy.

But also what they`re pushing for is deep cuts that will hurt that
very same list of people you started the segment with. You know, they want
cuts to Social Security, to Medicare, to veterans benefits --

SCHULTZ: Sure.

CONNIFF: -- to unemployment, and to help for the hungry. And I think
the context that we need to see this in as we hope as progressives to shore
up the president`s commitment to say no to those damaging cuts in exchange
for not blowing up the whole economy is that the deficit as a percentage of
GDP has been on the decline.

The whole focus on deficit and debt is misplaced in a fragile economic
situation, in a place where as Bernie Sanders has put it on this show so
effectively, you know, we`re looking at 15 percent real unemployment.
We`re looking at people who are really living on the edge. Why on earth
are we putting these priorities in the order we`re putting them, protecting
the wealthy, protecting the lowest corporate tax rates since the 1970s and
looking at deep cuts that are going to hurt these people?

So I hope, and I think there is some sign today --

SCHULTZ: Yes.

CONNIFF: -- that the president is talking about really holding the
line on that.

SCHULTZ: Well, I think the president is going to hold the line. He
was pretty strong about that today. GOP pollster Frank Luntz was asked on
FOX News the Republican failure to win over Americans with their rhetoric
on spending. Here it is.

(BEGIN VIDOE CLIP)

UNIDENTIFIED FEMALE: Do you believe the error is smaller government,
the objective should be more effective and efficient government. Why are
those words so important?

FRANK LUNTZ, GOP POLLSTER: Because the American people don`t care
what the size of government is. They do care what types of services
government gives. And quite frankly, how much government takes.

(END VIDEO CLIP)

SCHULTZ: And also, whether the government pays its bills or not.

But E.J., this is all in the arena of the Republican mantra that they
want to make sure that they drive home to the American people that
government doesn`t do anything well, that we must privatize almost
everything we can get our hands on. Isn`t that really what it`s about?

DIONNE: Well, you know, somebody tweeted today, I have forgotten who
it was, that President Obama talked today as if he just won an election.

And guess what? This issue was on the table. And the American people
decided, no, they don`t believe, we don`t believe as a people that all
government is useless. We expect a lot of things of government.

And I actually thought that little segment you showed from Frank Luntz
is very revealing, because Republicans for years have thought that saying
the word "small government" was the popular way to go. And the fact that
Frank Luntz, their favorite language maven, is telling them they shouldn`t
use small government anymore I think tells us a lot about the shift in
public dialogue in the fact that the American people are saying we don`t
want this way of talking about government anymore.

SCHULTZ: Ruth Conniff, Speaker Boehner is at the mercy of the
extremists in his own party who seem willing to throw the country into
chaos. Do you believe, or do you think that Boehner would put his
leadership position at risk to prevent this? I mean, when I say
leadership, we`re to the point where they actually pay attention to what
the guy says. I mean, is he reaching that level of irrelevance?

CONNIFF: Yes, I mean, I think E.J. is absolutely right. The majority
of the people in the country had really weighed in on this fundamental
ideological issue.

The problem, of course, is the Republicans, after redistricting, a lot
of them are sitting in safe seats where they`re more worried about a
primary challenge from a far right Republican than they are about being in
sync with the American people. That`s the real problem we face, because
they are so clearly completely out of step with where most Americans are.

SCHULTZ: Yes.

E.J. Dionne, Ruth Conniff, great to have you with us on THE ED SHOW
tonight. Thank you.

Coming up: reasonable gun measures and the do-nothing Congress. We`ll
call out the representatives who say they won`t pass a law to protect
America`s school children.

And today, President Obama spoke out about the fear-mongering by
opponents of any new gun measures. Dan Gross of the Brady Campaign will
join me.

Stay with us. We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: Thanks for staying with us tonight. Today marks the one
month anniversary since a gunman murdered 20 first graders and six adults
at Sandy Hook Elementary School. Now in the past month, here is what we
have gone through. Gun sales have absolutely skyrocketed. The NRA has
refused to compromise. The vice president of the United States has
conducted a wide ranging search for solutions.

Today, President Obama renewed his call for common sense gun measures.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Are there some sensible
steps that we can take to make sure that somebody like the individual in
Newtown can`t walk into a school and gun down a bunch of children in a
shockingly rapid fashion? And surely we can do something about that.

(END VIDEO CLIP)

SCHULTZ: The president mentioned the need for stronger background
checks. He wants to regulate high capacity clips. He is calling for a
meaningful assault weapons ban. Vice President Joe Biden, he met with him
today, also with the House Democrats to get their input. But other
congressional members say that they don`t believe any gun control bill will
pass. Really?

Senators Kelly Ayotte, also Chuck Grassley and Angus King all say that
they`re just willing to listen. And Representative Phil Gingrey of Georgia
agrees. Now these are the people who get to vote on any kind of gun
measure. But they`re just waiting around, waiting to be impressed I guess
with what somebody is going to show up with.

Senator John McCain took it a step further, saying Congress should not
and will not vote on an assault weapons ban. Isn`t that encouraging? He
thinks it`s just not going to happen. So why go ahead and bother? You
mean to tell me we can`t even go back to where we were?

Senator Joe Manchin of West Virginia went on CNN to talk about
bipartisanship yesterday. He ended up taking a totally partisan stance on
an assault weapons ban.

(BEGIN VIDEO CLIP)

CANDY CROWLEY, CNN ANCHOR: Can I just get a yes or no possibly. An
assault weapons stand alone ban.

SEN. JOE MANCHIN (D), WEST VIRGINIA: An assault weapons stand alone
ban, on just guns alone, will not in the political reality that we have
today -- will not go anywhere. It has to be comprehensive, Candy.

(END VIDEO CLIP)

SCHULTZ: Let`s have an up or down vote on that. I`m not so sure
about that. Senator Manchin is shutting down the debate before it`s even
started. It looks like Congress might not have the courage to act on
anything. So today the president talked about his alternatives.

(BEGIN VIDEO CLIP)

SCHULTZ: I`m confident that there are some steps we can take that
don`t require legislation and that are within my authority as president.

(END VIDEO CLIP)

SCHULTZ: And here is the level headed and bipartisan response.
Representative Steve Stockman is threatening to impeach the president of
the United States if there is any new gun control laws out there. His
official website says "come and take it," meaning his guns.

Senator Rand Paul made the same threat.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: But one that wants to infringe on the
Second Amendment we will fight tooth and nail. And I promise you, there
will be no rock left unturned used to stop him from usurping the
Constitution.

(END VIDEO CLIP)

SCHULTZ: These people are freaking out about a law that`s already
passed. Congress approved the assault weapons back in 1994. The world did
not come to an end, and the Second Amendment is still alive and survived
through it all. So here we are, exactly one month since the latest mass
shooting, 20 young children dead, six staffers and adults are gone. And
Congressional members are already saying no to meaningful change.

They predict that there just aren`t enough votes for anything. Today
for the first time, the parents of those six, seven and eight-year-old kids
spoke publicly about what they want Congress to do.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Things must change. This is the time.

UNIDENTIFIED MALE: Doing nothing is no longer an option. We have let
this happen too many times. If we want real change, we have to think, we
have to talk, and we have to act differently.

UNIDENTIFIED MALE: I would respectfully request that every parent in
this country who hears these words simply pause for a moment and think.
Ask yourself what is it worth doing to keep your children safe?

(END VIDEO CLIP)

SCHULTZ: Don`t you think this subject is a lot deeper than maybe the
people of West Virginia or the people of North Dakota or South Dakota? Do
you think there are pockets in this country that should rule exactly how
the Senate votes on this? Where is the moral obligation to do something
about gun violence in this country? Doing nothing is not an option
anymore.

Those parents want all of us to make meaningful change. No more
politics. Congress needs to find the courage and to get it done. And the
spineless thing to do is to run around on talking head shows saying that we
don`t have the votes. Get them.

Coming up, gun owning radicals are drumming up the fear and turning a
profit at the same time. The president confronted the problem today.
We`ll confront the fear tactics, next.

(BEGIN VIDEO CLIP)

OBAMA: It obviously is good for business.

(END VIDEO CLIP)

SCHULTZ: The president calls out the NRA for scaring up gun sales.

(BEGIN VIDEO CLIP)

OBAMA: Ginning up fear on the part of gun owners.

(END VIDEO CLIP)

SCHULTZ: Dan Gross of the Brady Campaign reacts, next.

The Beltway media blames Washington gridlock on a lack of partying.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You and your staff are too insular, that you
don`t socialize enough.

(END VIDEO CLIP)

SCHULTZ: I`ll set the record straight tonight.

And former Secretary of State Colin Powell doesn`t mince words on the
racist strain in the Republican party.

(BEGIN VIDEO CLIP)

COLIN POWELL, FORMER SECRETARY OF STATE: There is also a dark -- a
dark vein of intolerance in some parts of the party. They still sort of
look down on minorities.

(END VIDEO CLIP)

SCHULTZ: I`ll ask James Peterson if Powell`s remarks will make a
difference.

(COMMERCIAL BREAK)

SCHULTZ: And we are back. Today, President Obama addressed a real
element of the conversation about guns when he was asked about the long
lines at gun shows since the Newtown shooting. Here is what he had to say.

(BEGIN VIDEO CLIP)

OBAMA: Those who oppose any common sense gun control or gun safety
measures have a pretty effective way of ginning up fear on the part of gun
owners that somehow the federal government`s about to take all your guns
away. And there is probably an economic element to that. It obviously is
good for business.

(END VIDEO CLIP)

SCHULTZ: The president nailed it. He knows any new legislation is
going to be a tough sell.

(BEGIN VIDEO CLIP)

OBAMA: Even the slightest hint of some sensible, responsible
legislation in this area fans this notion that somehow here it comes, and
that everybody`s guns are going to be taken away.

(END VIDEO CLIP)

SCHULTZ: Fans the emotions. I mean, we`ve seen extremists come out
of the woodwork over the past few weeks. But the so-called leadership at
the NRA bears I think a lot of responsibility. Here is NRA Vice President
Wayne LaPierre in February.

(BEGIN VIDEO CLIP)

WAYNE LAPIERRE, NRA VICE PRESIDENT: All that first term lip service
to gun owners is just part of a massive Obama conspiracy to deceive voters
and hide his true intentions to destroy the Second Amendment during his
second term.

(END VIDEO CLIP)

SCHULTZ: Let`s turn to Dan Gross, president of the Brady Campaign to
Prevent Gun Violence. Dan, good to have you with us.

DAN GROSS, BRADY CAMPAIGN TO PREVENT GUN VIOLENCE: Good to be here.

SCHULTZ: The rhetoric, it is absolutely wild on the right side. And
the president addressed that today. I was rather surprised that he went so
far as to say that there are people out there that are going so far as to
say this is a total attack on the Second Amendment. How correct is he?
How spot-on is the president with this whole conversation?

GROSS: One hundred percent Spot-on. I mean, it`s the strategy of the
gun lobby to drum up fear, to perpetuate the fact that this is a debate
that doesn`t exist in mainstream America. There is an extraordinary
disconnect between what the American public wants, what the American public
supports, things like universal background checks, that are supported by 74
percent of NRA members, 82 percent of gun owners, because they know that
this has nothing to do with the Second Amendment.

But yet the gun lobby says that, you know, we`re coming for your guns.
We want to take away the Second Amendment. And you know, the motivation at
the end of the day, like the president points out, is an economic one.

SCHULTZ: What do you say to these lawmakers who are running around on
shows saying that they don`t have the votes?

GROSS: Yeah.

SCHULTZ: I mean, how do they know?

GROSS: Yeah.

SCHULTZ: Doesn`t that somewhat cower? Aren`t they just covering
their political backsides?

GROSS: I would take a step back, look at Sandy Hook. Every day in
our country, 32 people are murdered with guns, 90 die. To just dismiss the
exploration of solutions because, for political reasons that the votes
aren`t there, is shameful. And it also doesn`t represent, even in rural
America, even in red state, what the overwhelming majority of gun owners
and NRA members even think.

SCHULTZ: So you`re disturbed by lawmakers who are drawing conclusions
about what will pass and what won`t pass?

GROSS: Yeah, before the facts are there, before we have the
opportunity to demonstrate that there are things that we can do respectful
of the Second Amendment to prevent tragedies. Everybody, gun owners and
NRA members, are mothers and fathers and decent Americans. And we all just
want to live in a safer nation.

I would contest that any lawmaker that is patently dismissing any
exploration of the solutions is doing a disservice to their constituents.

SCHULTZ: If I heard it once, I heard it 10 times over the weekend.
First we get their resume. We`ve all owned firearms. We all go hunting.
My whole family does it. And I`ve said that on this program too. But it`s
almost like it`s political cover for them, like don`t attack me, NRA, you
extremists out there. I`m a good guy. And by the way, we don`t have the
votes.

GROSS: Right.

SCHULTZ: It`s like code.

GROSS: We need to change that equation. The only way we can change
that equation is by making the voice of the American public heard. I would
turn to every person watching this show, every person who is watching every
other network, which is what we plan to do when these recommendations are
announced. Make your voice heard with your Congress people in support of
these solution.

Let them know that there is an extraordinary disconnect between what
they`re doing, taking the party line of the leadership of the NRA, and
people are dying every day.

SCHULTZ: What is in the recommendations? What can you tell us?

GROSS: I can tell you what the administration has said publicly. I
can tell you what they communicated to us in this meeting, which is, you
know, that they`re committed to listening to the American public.

SCHULTZ: Will it make any difference?

GROSS: Undoubtedly. You at look at something like background checks,
which will be in there. Every day in our nation, 40 percent of all gun
sales don`t require background checks, which means convicted felons,
dangerously mentally ill are buying guns.

SCHULTZ: You know what is in there, but you don`t want to tell us
tonight because tomorrow it`s going to be announced? But you think what is
in there is going to make a difference?

GROSS: I`ve heard what they announced is the consensus. And it will
make a huge difference. And I would start with background checks, in terms
of the big opportunity to make a difference. But all these other proposals
will as well.

SCHULTZ: OK, Dan Gross, thanks for coming in tonight.

GROSS: Thanks, Ed.

SCHULTZ: I appreciate it.

The media are criticizing President Obama for not socializing enough.
But the gridlock in Washington has nothing to do with tee times. Stay
tuned.

(COMMERCIAL BREAK)

SCHULTZ: Well, it`s the media elites at work. The Washington, D.C.
media has ramped up their long-standing criticism of President Obama for
not socializing with Republicans. At his press conference today, the
president was actually asked about being too insular and not socializing
enough. Here is part of his response.

(BEGIN VIDEO CLIP)

OBAMA: Most people who know me know I`m a pretty friendly guy. And I
like a good party. You know, if you think about, let`s say, myself and
Speaker Boehner, I like Speaker Boehner personally. And when we went out
and played golf, we had a great time. But that didn`t get a deal done in
2011.

(END VIDEO CLIP)

SCHULTZ: The president`s social schedule is actually part of the
national discussion going on in Washington, D.C. today? Very important,
huh? There is a whole list of serious issues facing this country right
now, like, you know, jobs, unemployment, the debt ceiling, maybe the war in
Afghanistan could have gotten a word today, or a question are we really
getting out.

And the D.C. media, they`re concerned about who is at what cocktail
party, and what everybody is wearing and stuff like that, and how come
you`re not talking to more people. Meanwhile, the president said he puts
out invitations to the White House all the time.

(BEGIN VIDEO CLIP)

OBAMA: We invite folks from Congress over here all the time.
Sometimes they don`t choose to come. And that has to do with the fact that
I think they don`t consider the optics useful for them politically.

(END VIDEO CLIP)

SCHULTZ: Ah-ha. You can`t get your picture taken with the president.
That`s not good. Boehner has turned down invitations to five state dinners
in a row. Mitch McConnell and three other Republican senators turned down
an invitation just to watch the movie "Lincoln" over at the White House.
It might have embarrassed them a little bit.

These snubs are nothing new from Republicans. It`s dangerous
politically for Republicans to be seen at the White House. And there is
always a Tea Party candidate close by, waiting to primary anybody who works
with this president. The problem is, in Washington, it`s not a lack of
dinners or parties. The problem is the fringe Republican party who refuses
to work with this president and obstruct everything. And it just might
look bad at home, you know.

Tonight in our survey, I asked you, will Republicans lead our country
into another recession by refusing to action debt court of appealing?
Eighty nine percent of you say yes; 11 percent of you say no.

Next, it`s a real wake-up call for the Republican party. But it`s not
a wake-up call if nobody answers to the call, if you know what I mean.
Colin Powell says that the GOP has an identity crisis, identity problem,
and they need to do something about it. Will the Republican party heed the
warning? Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: And in the Big Finish tonight, Republicans have spent years
alienating minorities through their destructive policies and acceptance of
racially charged language. Now the country`s first African-American
secretary of state, retired General Colin Powell, says his party has an
identity problem and must change in order to survive.

(BEGIN VIDEO CLIP)

POWELL: I think what the Republican party needs to do now is take a
very hard look at itself and understand that the country has changed. The
country is changing demographically. And if the Republican party does not
change along with the demographic, they`re going to be in trouble.

(END VIDEO CLIP)

SCHULTZ: Powell went on "Meet the Press" to express his support for
President Obama`s nominee for defense secretary, Chuck Hagel. Powell used
the appearance to call out the GOP`s race baiters, the Sarah Palins and the
John Sununus of the party, and asked leaders to put an end to the racist
talk.

(BEGIN VIDEO CLIP)

POWELL: There is also a dark -- a dark vein of intolerance in some
parts of the party. What do I mean by that? What I mean by that is they
still sort of look down on minorities. How can I evidence that? When I
see a former governor say that the president is shucking and jiving, that`s
a racial era slave term.

When I see another former governor, after the president`s first debate
where he didn`t do very well, says that the president was lazy -- he didn`t
say he was slow, he was tired, he didn`t do well. He was lazy. Now it may
not mean anything to most Americans, but to those of us who are African-
Americans, the second word is shiftless, and then there is a third word
that goes along with it.

Birther, the whole Birther movement -- why do senior Republican
leaders tolerate this kind of discussion within the party?

(END VIDEO CLIP)

SCHULTZ: I`m joined tonight be Dr. James Peterson, director of
Africana Studies and associate professor of English at Lehigh University.
Professor, I was sitting home yesterday watching this. And I thought, you
know what, He is doing the Republicans a huge favor. Who else can tell it
like it is from that position of credibility and impact.

DR. JAMES PETERSON, LEHIGH UNIVERSITY PROFESSOR: No doubt, Ed. He
really is. And listen, you on this show, and I`ve been on this show
talking about these things throughout the entire presidential election
season. We documented it and wrote about it and spoke about it on TV, each
one of these incidents.

But for it to come from General Powell and for Republicans to be table
o hear, I think it does help. I mean, at the end of the day here,
minorities are no longer the minority anymore. The coalition of these
voters that we`re talking about is actually becoming the majority here. So
hopefully the Republican party will heed General Powell`s words.

SCHULTZ: So do you expect any change at all? Polls show that
minorities would be open to voting Republican if the party moderated, you
know, became moderate on some policy positions. What is holding them back?

PETERSON: What is holding them back is the Tea Party caucus in the
Congress. It`s also their affection for some of these sort of really
extreme right wing media leaders, folk like Limbaugh and Glenn Beck and
what Sarah Palin has tried to become over the last couple of years. Their
affection for those and that kind of sensationalized leadership, in
conjunction with the policy folks who are obstructionists in the Congress,
have put them in this really sort of separated and stratified position.

SCHULTZ: Here is what the general had to say, former secretary of
state -- here is what he had to say about voter I.D. laws.

(END VIDEO CLIP)

POWELL: And so when we see that in one more generation the minorities
of America, African Americans, Hispanic Americans and Asian Americans, will
be the majority of the country, you can`t go around saying we don`t want to
have a solid immigration policy. We`re going to dismiss the 47 percent.
We are going to make it hard for these minorities to vote, as they did in
the last election.

What did that produce? The court struck most of that down. But most
importantly, it caused people to turn out and stand in line, because these
Republicans were trying to keep us from voting.

(END VIDEO CLIP)

SCHULTZ: Now, of course, Marco Rubio, senator from Florida, took
issue with it. Do you see any other Republicans coming out, condemning
these kinds of laws like Powell just talked about?

PETERSON: Well, listen, no one has the kind of strength of conviction
that General Powell does when it comes to critiquing the Republican party.
Part of that is because he`s not really in politics the way some of these
folk are. But there has to be a reckoning in the Republican party. They
have to deal with everything that he has laid out here, because the
demographics are the destiny for that party.

Unless they want to become obsolete, they are going to have to pay
attention to the issues that Colin Powell laid out for them on "Meet the
Press" yesterday.

SCHULTZ: It doesn`t sound like you think the Republicans are going to
take any of his advice.

PETERSON: Well, there is no suggestion that they will, Ed. The proof
will be in the pudding. Either they will or they won`t. But, again, a lot
of other folk have been talking about these things for a long time. You
hope that it coming from a Republican general as respected as Colin Powell
will hopefully have some impact. But my sense is I wouldn`t hold my
breath.

SCHULTZ: James Peterson, good to have you with us tonight.

PETERSON: Thanks, Ed.

SCHULTZ: That is 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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