'The Last Word with Lawrence O'Donnell' for Monday, January 28th, 2013

THE LAST WORD WITH LAWRENCE O`DONNELL
January 28, 2013

Guests: Jonathan Allen, Karen Finney, Ari Melber


LAWRENCE O`DONNELL, HOST: So Republicans do a giant flip-flop on
immigration today, because, you know, they`re running for office for Pete`s
sake.

(BEGIN VIDEOTAPE)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: We went to the
company and said look, you can`t have any illegals working on our property.
I`m running for office, for Pete`s sake, I can`t have an immigrant.

UNIDENTIFIED FEMALE: On the border of compromise on the border.

UNIDENTIFIED FEMALE: Comprehensive immigration reform by the end of
this year.

SEN. CHUCK SCHUMER (D), NEW YORK: This will be the year Congress
finally gets it done.

UNIDENTIFIED FEMALE: Today, a ray of hope, possibly.

UNIDENTIFIED FEMALE: A bipartisan group of senators.

UNIDENTIFIED MALE: Four Democrats and Republicans.

UNIDENTIFIED FEMALE: Will lay out a framework.

UNIDENTIFIED MALE: A plan to deal with immigration.

SCHUMER: This bipartisan blueprint is a major breakthrough.

ANDREA MITCHELL, NBC NEWS: A major breakthrough on immigration
reform.

UNIDENTIFIED FEMALE: It shows momentum on this issue.

UNIDENTIFIED MALE: Momentum is on the side of comprehensive reform.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We welcome movement and
progress.

MITCHELL: Republicans have to deal with the facts of life here.

REP. PAUL RYAN (R), WISCONSIN: When we see an opening, however small,
we should take it.

UNIDENTIFIED MALE: They`re doing this they can read election returns.

SEN. JOHN MCCAIN (R), ARIZONA: I`ll give a little straight talk.
Look at the last election.

UNIDENTIFIED MALE: President Obama did win seven in 10 Hispanic
voters.

UNIDENTIFIED FEMALE: You need Latino voters in this state to win.

MCCAIN: They are natural constituency of ours.

RYAN: Look, immigration is a good thing.

MCCAIN: We are losing dramatically the Hispanic vote.

SCHUMER: We will only succeed if the effort is bipartisan.

RYAN: It`s a system that`s broken that needs fixing.

UNIDENTIFIED MALE: I think Paul Ryan is emerging as a real leader in
the party.

MITCHELL: Ryan made it clear.

RYAN: When we see an opening, however small, we should take it.

MITCHELL: He wants to help revive the Republican Party.

RYAN: The president will bait us. He will portray us as cruel and
unyielding.

UNIDENTIFIED MALE: You can`t fight things you know you`re going to
lose on.

RYAN: We`ve been trying to do immigration since 2004.

MITCHELL: This could have been done in 2007.

UNIDENTIFIED MALE: What were they thinking?

MCCAIN: We are losing dramatically the Hispanic vote.

RYAN: When we see an opening, however small, we should take it.

(END VIDEOTAPE)

O`DONNELL: Exactly one year ago, this week, this is what Republicans
thought voters wanted to hear about immigration.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So if you don`t deport them, how do you send them
home?

ROMNEY: Well, the answer is self deportation, which is people decide
that they can do better by going home because they can`t find work here
because they don`t have legal documentation to allow them to work.

So we went to the company and we said, look, we can`t have any
illegals working in our property. I`m running for office for Pete`s sake.

(END VIDEO CLIP)

O`DONNELL: And just two years ago, just after winning his Senate re-
election, this was John McCain`s position on immigration.

(BEGIN VIDEO CLIP)

MCCAIN: Complete the dang fence.

UNIDENTIFIED MALE: It will work this time. Senator, you`re one of
us.

MCCAIN: I`m John McCain and I approve this message.

(END VIDEO CLIP)

O`DONNELL: And then, on November 6th, 2012, Republicans lost 71
percent of Hispanic voters to President Obama, and literally hours after
that election, Republicans started to talk about compromise on immigration.

(BEGIN AUDIO CLIP)

SEAN HANNITY, FOX NEWS: We`ve got to get rid of the immigration issue
altogether, it`s simple for me to fix it. I think you control the border
first, you create a pathway for the people here, you don`t say you have to
go home. And that is a position that I have evolved on, because you know
what? It`s got to be resolved.

(END VIDEO CLIP)

O`DONNELL: And so, today, immigration became the first order of
business in the new Congress for some Republicans.

(BEGIN VIDEO CLIP)

MCCAIN: First step in what will continue to be difficult, but
achievable. And I don`t think I have to remind anyone the last major
attempt was over six years ago. Now, we will again attempt to commit the
remaining resources needed to secure the border, modernize and streamline
our current immigration system, and create a tough but fair path to
citizenship for those here illegally.

(END VIDEO CLIP)

O`DONNELL: Senator John McCain and three other Republican senators,
Marco Rubio, Lindsey Graham and Jeff Flake, are now joining four Democrats
on a bipartisan plan to overhaul immigration laws that will allow the 11
million estimated illegal immigrants currently living in the United States
to have a path to citizenship.

(BEGIN VIDEO CLIP)

SCHUMER: This bipartisan blueprint is a major breakthrough -- a tough
but fair path to citizenship for illegal immigrants currently living in the
United States. That is contingent upon securing our borders. On day one
of our bill, the people here without status who are not criminals or
security risks will be able to live and work here legally.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: This will be a tough pathway
but it will be fair. It will be one in which those who have come to this
country to achieve the American dream will come forth, must register with
the government or they will lose their opportunities.

(END VIDEO CLIP)

O`DONNELL: The senators insist they can do this without threatening
American jobs.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), ILLINOIS: For making sure that the amount of
illegal immigrants that are -- amount of legal immigration that is allowed
in the United States is based on the state of our economy. We are going to
enshrine in here the principle that when there are job openings, Americans
get the first grab at it.

(END VIDEO CLIP)

O`DONNELL: Senator Schumer says he has spoken with President Obama
and that the president supports the bipartisan plan. President Obama is
flying to Nevada tomorrow to push the issue there. There was a flash of
the old straight talking John McCain today when he was asked why
Republicans are suddenly ready to compromise so much on immigration.

(BEGIN VIDEO CLIP)

MCCAIN: One, as I have stated before elections, elections. The
Republican Party is losing the support of our Hispanic citizens. And we
realize that there are many issues in which we think we are in agreement
with our Hispanic citizens. But this is a preeminent issue with those
citizens.

(END VIDEO CLIP)

O`DONNELL: Today`s developments left one right-wing Republican
observer completely dumbfounded.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO HOST: If the Democrats think their position on
immigration, let`s use that for example, is the right one, and if the
Democrats` position is what is getting all that support from Hispanic
voters, what I don`t understand is why would the Democrats want to give up
some of those voters to the Republicans? Can somebody help me out here?

(END VIDEO CLIP)

O`DONNELL: I don`t know, Rush, sounds like you`re beyond help, but
I`ll give it a try.

What you are seeing is not a compromise on immigration. You are
seeing Republicans surrender on immigration. And you are seeing Democrats
accept that surrender, because -- and this will be the hardest part for
Rush Limbaugh to understand -- the Democrats actually mean what they say
about this issue. They actually do want to reform the system.

And yes, during the last campaign, Democrats were politically lucky
that Republicans were doing everything they could, every day, to drive
Latino voters to Democrats. But the now victorious Democrats actually want
to govern on this issue. They actually want to make the system better.
Not just exploit the issue to win campaigns.

And that is something that Rush Limbaugh is never going to understand.

(BEGIN VIDEO CLIP)

LIMBAUGH: What I don`t understand is why would the Democrats want to
give up some of those voters to the Republicans? Can somebody help me out
here?

(END VIDEO CLIP)

O`DONNELL: Joining me now to help me out here, MSNBC`s Krystal Ball
and Steve Kornacki, and Victoria DeFrancesco Soto, a fellow at the
University of Texas and NBC Latino contributor.

Krystal, can you help Rush Limbaugh here? I mean, what happens -- and
what do you think the Republican calculation is about what happens to
Latino voters and Hispanic voters going forward in elections, assuming
something like that package actually does get legislated.

KRYSTAL BALL, THE CYCLE: Well, I think the sense is for Republicans
is that they have to do something with this issue. They have to get it off
the table if they have any hope in moving forward from the 71 percent loss
that you pointed out that President Obama won with the Latino voters.

And they basically have two options, right? If they participate in
the negotiations, like they are -- they can push it to the right, they can
try to make that pathway to legal status to citizenship as long and drawn
out as possible. Or they cannot negotiate, which has been the position in
the past. Get killed politically, or if something does pass without their
help it will be purely on Democratic terms.

And, you know, the pathway to citizenship will be much shorter and
much more to the left than they have participated in the process. And I
think Republicans have to recognize at this point that they`ve lost
opportunities along the way in the health care reform debate, in losing
their moment to strike some sort of a grand bargain that if they had come
to the negotiating table to work with Democrats, they could have pushed
things more to the right and more with their liking.

O`DONNELL: Steve Kornacki, what strikes me about this story is not so
much the particulars of immigration at the moment, but the politics of 21st
century Republicans, what we`re seeing in John McCain, for example, is a
very strange wandering through this subject, where he began years ago, like
George W. Bush, living in the border state, Arizona, Texas, having
experienced, being much more liberal on immigration. And then when he is
running for reelection, to hold on to his Senate seat, he has to be one of
these thoughtless Republicans just talking about building a dang fence.

Isn`t John McCain`s travels here the kind of a road map of how things
have gone very strange in the Republican Party on this?

STEVE KORNACKI, THE CYCLE: It`s an eight-year journey, the high point
was 2004 general election when George Bush got 44 percent of the Hispanic
vote, he came within, I think its` 53 percent for Kerry, and Karl Rove, in
the Bush White House, in the wake of 2004 election, said they were then
going to move on comprehensive immigration reform and they were going to
cement Hispanics, or a large chunk of that Hispanics, as sort of what Rove
called the Republican majority.

And it wasn`t just John McCain Senate primary challenge in 2010, it
was the Republican presidential primary in 2008. You remember John McCain
came into that as the heir apparent, the guy who would finish second to
Bush in 2000. This was going to be John McCain`s nomination in 2008, and
his campaign practically imploded in the summer of 2007 because of his
support for what his opponent at the time, his chief opponent on the right,
Mitt Romney, called McCain-Kennedy. He linked the immigration reform bill
to Ted Kennedy. It became totally off limits in Republican primaries.

And yes, you are now seeing a return to normalcy in a sense that a guy
like McCain, and guy like Lindsey Graham, they now feel safe coming out and
supporting something like this. I still think it`s an open question when
you look at the House side, when you look at the safe Republican House
districts is it still safe for these people to come out and say they
support comprehensive immigration reform and not have to worry about
primary challenges, I still think that`s an open question.

O`DONNELL: Victoria, take us through the elements of the plan, the
Democrats like saying it`s tough but fair, they like to emphasize the
toughness because they are suspected of being too soft on this. But it
does include a path to citizenship and that phrase, "path to citizenship,"
that concept became absolutely forbidden in Republican politics recently.

VICTORIA DEFRANCESCO SOTO, NBC LATINO CONTRIBUTOR: You know, what we
had been seeing up until this morning was the Senate bill was only going to
include legal status. So they went the whole nine yards and said we are
going to include citizenship. But the toughness side of that fairness is
beefed up border security.

Another interesting part here is getting tough on these states, we
know that close to 40 percent of undocumented or illegal, pick your term,
folks in this country are as a result of visa over-stays.

What we also see is tougher enforcement of the employers. Why do
illegal immigrants come here? Because there are jobs and there are people
who are willing to hire them. So the key here is to go after these
employers and not just say, hey, you can`t hire undocumented folks. But
having an E-Verify system and also hefty fines.

And the argument that some of the Republicans are going to put forward
is, well, we`re not going to allow citizenship until we enforce the
borders. But here, President Obama can really put forward a check list and
say record number of deportations? Check. Record number of dollars spent
on the border? Check. Net migration to Mexico to zero? Check.

So I think that the president is in a very good position of showing
the toughness that balances out the fairness.

O`DONNELL: There were some very striking political moments today in
the senator`s appearance. I want to go to a spot where Chuck Schumer
talked about John McCain, almost a flashback of him working with Ted
Kennedy on this subject.

Let`s listen to what Chuck Schumer had to say about John McCain.

(BEGIN VIDEO CLIP)

SCHUMER: I want to say he has been in the glue in our group, his
wisdom, his strength, his courage, his steadfastness, and many other
adjectives that I`ll skip at the moment, have really been inspiring to me
and I think all of us. And I really want to just say -- want me to go on?

(END VIDEO CLIP)

O`DONNELL: Krystal, it`s John McCain 3.0 or 4.0 -- I don`t know, this
is an amazing flashback when John McCain used to, on some issues, cooperate
with Democrats.

BALL: Very chummy there, and a quick turn about, because as you
pointed out, and as Steve was talking about, he moved to the right on
immigration, to try to win his Senate primary back when he was running, and
then recently, he`s been taking out his political grudges on Susan Rice and
being very aggressive there. So, now, he is back to the maverick John
McCain, when he used to be the guy you could count on to looking at acting
in a bipartisan manner towards actual governance.

O`DONNELL: And here is the other striking political moment. John
McCain explains what he thinks will be necessary to pass this bill,
including what he calls the leadership of President Obama. Let`s listen to
this.

(BEGIN VIDEO CLIP)

MCCAIN: I am confident the majority of both houses, led by the
president of the United States, who made this a major campaign issue, that
we will succeed. But we`re not going to get everybody on board.

(END VIDEO CLIP)

O`DONNELL: Steve Kornacki, nothing proves more strongly than that,
that elections do have consequences.

KORNACKI: You know, I can`t help but thinking the case of John
McCain, though, you`re looking a little bit at legacy protection, legacy
enhancement there.

I mean, his reputation as a maverick in the early part of 2000 I think
was always a bit over sold, what it really reflected was the guy was a
sore loser. We`ve seen that in the wake of the 2002 election. We saw that
in the wake of 2000 election. He was a very conservative member of the
Senate who happened to lose to George W. Bush and he took out all the
grudges of George W. Bush, and therefore it made him this mavericky liberal
for a few years.

Then, he won the 2008 Republican nominations, swung all the way back
to the right, and then he`s been taking on all these grudges on Obama since
2008. But I think you have a guy here, you know, his term is going to be
up in 2016. He`s going to be 80 years old.

I think this is an issue that at a certain level he really does care
about and I think he really looks at a little bit. You know, I`m going to
leave the Senate probably in 2016, what`s my long-term legacy beyond being
a sore loser, holding grudges -- well, here`s something worth fighting for.

O`DONNELL: Krystal Ball, Steve Kornacki, and Victoria DeFrancesco
Soto -- the teleprompter didn`t get that right, Victoria, just want you to
know that.

SOTO: No worries.

O`DONNELL: Thank you all for helping me to out tonight.

BALL: Thanks, Lawrence.

SOTO: Thanks.

KORNACKI: Sure.

O`DONNELL: Coming up, President Obama and Hillary Clinton do "60
Minutes" together last night, what`s that all about.

And we are now two days from knowing who Governor Deval Patrick will
appoint as the next senator from Massachusetts. It`s really very simple.
The governor will appoint Barney Frank or he will make a big mistake.

And it`s all over for Sarah Palin at FOX News and now, no one is sorry
to see her go. Sarah Palin, the presidential candidate who never was, is
in tonight`s rewrite for possibly the final time.

(COMMERCIAL BREAK)

O`DONNELL: Hillary Clinton did not do a "60 Minutes" interview with
President Obama last night in order to silence her talk of running for
president. She, of course, knew one of the questions would be: are you
running for president?

Hillary and Obama`s excellent adventure is coming up.

And what losers look for in a leader is next.

(COMMERCIAL BREAK)

O`DONNELL: On Saturday, America`s most recent losing vice
presidential candidate who will never be president, spoke at "The National
Review" summit where he offered demoralized conservatives this advice on
the future of the Republican Party.

(BEGIN VIDEO CLIP)

RYAN: We have to be smart. We have to show prudence. What do you
mean when I say that? Prudence is good judgment in the art of governing.
We have to find the good in every situation and choose the best means to
achieve it. We have to make decisions anchored in reality and take
responsibility for the consequences.

You know, the prudent man is like the captain at sea. He doesn`t
curse the wind. He uses it to reach his destination.

(END VIDEO CLIP)

O`DONNELL: The next day, the man who ran on the self-deportation
ticket for president found a way to come out in support of comprehensive
immigration reform.

(BEGIN VIDEO CLIP)

RYAN: I think there is a balance between respecting the rule of law
and adhering to the reality of the day. And I think Marco Rubio probably
touched on it, I support and agree with the principles that he laid out
about earned legalization, making sure that you`re not rewarding people for
cutting in line, but making sure that we can fix this problem.

DAVID GREGORY, NBC NEWS: Do you see that getting done this year?

RYAN: There are a lot of Democrats in Congress, who once and for all
want to solve this mess, the broken immigration system, many agree with
that. So, hopefully we can actually get it now.

(END VIDEO CLIP)

O`DONNELL: Joining me now, Steve Schmidt, former senior adviser to
the McCain 2008 presidential and an MSNBC political analyst, and still with
us, Krystal Ball.

Steve, I tried to have the staff assemble today a reel of you saying
repeatedly throughout the year that the Republicans have to stop alienating
the Latino vote the way they were. They have to stop fighting the
demographics of the electorate the way they have been. It was inevitable
that they had to make a move in this direction, wasn`t it?

STEVE SCHMIDT, MSNBC POLITICAL ANALYST: Look, absolutely, and in
2016, the electorate will be 2 percent less white than it was in 2012,
which is 2 percent less than it was in 2008. And that trend will continue.

So, this is a matter of survival for the Republican Party, we can`t be
a national party and we have no hope of winning presidential elections
unless we can compete for the Hispanic vote in the country.

O`DONNELL: And, Krystal, this is what people started -- I mean, we
showed this earlier, you know, Sean Hannity, day after the election, OK,
let`s move on immigration, he was leading a chorus that erupted, all by the
way, echoing at that point, Steve Schmidt, who had been saying it quite a
long time, it took them an election night loss to figure out how right
Steve was.

BALL: Well, that was exactly right, and the problem was that Mitt
Romney felt he had to move so far to the right, self-deportation, saying
he`d veto the DREAM Act to win the primary, which I`m not sure was
ultimately true. And I don`t know that Rick Perry was really that much of
a threat to him. But he felt he had to move so far to the right that he
really couldn`t come back to any sensible or reasonable position for the
general election.

So, they were left hoping they could hold together this coalition of
white people and be able to win one last time with that. Obviously, as
Steve pointed out, that is no longer going to be possible.

O`DONNELL: Steve, it was striking during the Republican primary to
see Newt Gingrich, for example, who made a plea for humane treatment in
here, and for consideration about families and family unity, kinds of
issues that you would -- he framed it in a way that you could imagine
appealing to conservatives. And he pretty much got booed by the Republican
primary debate audience when he tried that.

But it seems that the McCains of the world were watching that and
realized that if this election goes the other way they`re obviously going
to have to find their way back to where you know, John McCain used to be.

SCHMIDT: There is no doubt between 2007 and 2012, just recently as
November, this was an issue that as a Republican, if you went out and
talked about you have to solve this problem, that we have to deal in a
compassionate way with the people that are here already, that you`d be
booed out of the room. And so, after another loss, this is a mathematical
issue, it is pretty simple to look at it.

I think the people of the party have an interest of winning elections
because if we don`t win elections, we have no ability to advance the
conservative agenda at all. That`s going to require us doing a much better
job with Hispanic voters who fell from over 27 percent from over 40 percent
mark that they were at with George W. Bush as recently as 2004.

O`DONNELL: Steve, is this issue won in a Republican migration towards
the center? Is there an issue two and three that they have to move on?

SCHMIDT: Well, I think if you`re a Republican you look at the last
couple of years and just had this almost primal scream after the 2008
debate, where so many of the rhetoric and party flirted on the loony
fringe. And I think whether it is the Bobby Jindal speech or Paul Ryan
speech where he talks about that we have to be grounded in reality.

You`re now starting to see where the Republican leaders in government
articulating positions opposite of the conservative entertainment complex.
That they`re saying, look, we can`t let the talk radio guys drive us off
the right ledge here and render us uncompetitive and unable to win national
elections. We`re going to have to have an appealing modern message and I
think you`ll see this play out over the next four years and you`ll see
there are people working to get issues done like immigration, who will
probably not survive primary challenges. And maybe that Republican who
wins that primary challenge, of course, is defeated as we`ve given up five
U.S. Senate seats in the last two election cycles.

So I don`t think that that story is entirely played out yet. But
you`re starting to see the leaders of the party, you know, starting to push
back a little bit on the craziness that we`ve dealt with over the last four
years.

O`DONNELL: Steve Schmidt and Krystal Ball, thank you both for joining
me tonight.

And, Steve, before you go, the congratulations are in order, a new
member of the family there.

SCHMIDT: Thank you.

BALL: Congratulations, Steve.

O`DONNELL: Isabel Violet, what is it now, Steve? Two girls, now and
one boy?

SCHMIDT: Two girls, one boy. That`s our little girl, nine days old
now.

BALL: Congrats.

O`DONNELL: That`s fantastic. Congratulations, Steve.

SCHMIDT: Thanks.

O`DONNELL: Thank you both.

Coming up, Hillary Clinton`s exit interview with President Obama on
"60 Minutes." That`s going to be next.

And you`ve seen the last of Sarah Palin as a paid political pundit on
FOX News. FOX News dumping Sarah Palin gets them both in tonight`s
rewrite. That`s coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: You talked about Ronald Reagan
being a transformative political leader. I did not mention his name.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Your husband did.

CLINTON: Well, I`m here. He`s not.

OBAMA: OK. Well, I can`t tell who I`m running against sometimes.

CLINTON: I was fighting against those ideas when you were practicing
law and representing your contributor, Rezco, in his slum landlord business
in inner city Chicago.

OBAMA: No, no, no.

CLINTON: He is very likeable. I agree with that. I don`t think I`m
that bad.

OBAMA: You`re likeable enough, Hillary, no doubt about it.

(LAUGHTER)

(END VIDEO CLIP)

O`DONNELL: Well, that was then. In the Spotlight tonight, this is
now.

(BEGIN VIDEO CLIP)

OBAMA: I was a big admirer of Hillary`s before our primary battles
and the general election. Her discipline, her stamina, her thoughtfulness
--

I think everybody understands that Hillary has been one of the most
important advisers that I`ve had. I consider Hillary a strong friend.

CLINTON: I mean, very warm, close -- I think there is a sense of
understanding that, you know, sometimes doesn`t even take words.

(END VIDEO CLIP)

O`DONNELL: Joining me now, MSNBC`s Karen Finney, who served as Deputy
Press Secretary to Hillary Clinton, and as press secretary during Clinton`s
first Senate campaign, and "Politico`s" Jonathan Allen, who is co-authoring
a book about Hillary Clinton`s 2016 prospects.

Karen Finney, what do you know to be the truth here about Hillary
Clinton`s feelings for President Obama? And explain to us, if you can, how
these people can get over what we showed in that first clip of that, when
they were both running against each other for president.

KAREN FINNEY, MSNBC POLITICAL ANALYST: You know, I`ll tell you,
people don`t realize it, but obviously there -- the club of people who have
been either president or First Lady is very, very small. So in many ways,
Hillary Clinton is one of the few people, her husband being another one,
close to this parent who really understands in a very visceral, personal
level what it is to be president, what it is to try to raise children in
the White House, what it is to try to make the decisions on a daily basis.

So I think when they -- I believe that their friendship is very
sincere, because it is part of the reason that you see presidents -- former
presidents become friends after they have left the White House, because
again, there are only a few people who really understand what that is
really like and what the challenges are really like.

So I think it is a sincere friendship. And I also think that, you
know, a lot of times with these things, to be perfectly honest, it is the
staff that is a lot nastier to each other and holds the grudges a lot
longer than the principles themselves.

O`DONNELL: Yeah, that is what they said last night. Let`s listen to
what Hillary last night said about running for president.

(BEGIN VIDEO CLIP)

CLINTON: Obviously, the president and I care deeply about what is
going to happen for our country in the future. And I don`t think, you
know, either he or I can make predictions about what is going to happen
tomorrow or the next year.

(END VIDEO CLIP)

O`DONNELL: I think she could have made a prediction about what is
going to happen in her career. There is the Ready For Hillary PAC, has
already been launched. Its mission is to support Hillary Clinton when she
decides to run for president.

I don`t say if, I say when. Jonathan, I think this is done. I think
she`s running.

JONATHAN ALLEN, "POLITICO": Yes, there was hardly a Sheman-esque no
there, Lawrence. Obviously, that decision doesn`t have to be made for a
while. And there is a lot of things that happen between now and them. But
I think if you talk to people around who are her, increasingly they think
2016 is the likelihood. And a lot of them are banking their futures on it.

O`DONNELL: Karen, the people I have been hearing from include
fundraising contributors that they have had, the Clintons have had in the
past, especially Hillary Clinton in her Senate campaign, presidential
campaign. And they indicate they`re getting all the signals they need to
start gearing up.

FINNEY: Yeah. Well, you know people can also read signals how they
want to read them. Look, I think there is no question there are many, many
people -- we saw it last week, frankly, when she was testifying on the Hill
-- who definitely want Hillary Clinton to run and want her to be the
Democratic nominee.

And I think there are some folks who may be getting a little bit ahead
of themselves, because I actually believe her. I know people are going to
say this makes me naive. I actually believe her when she says, let me
just, you know, finish this job and rest and kind of figure out what comes
next. But, I mean, you know, think about it, since she -- her husband
became president in 1992, it has been nonstop for her in terms of her life
in the public eye.

So we`ll see. But hey, it never hurts to have a little money in the
bank when you`re trying to make a decision.

O`DONNELL: Jonathan, one of the things that may force her hand sooner
than she might like is that Andrew Cuomo wants to run for the presidency,
obviously. And he uses the same donor base. And he has to go to appeal to
those people. And he has to start his fundraising for that from zero. The
money he has raised from gubernatorial campaigns can`t be used. He has to
raise federal money.

So those Hillary and Andrew contributors, especially concentrated in
New York, need to know from Hillary when Andrew comes asking for money,
Hillary, what should I do?

ALLEN: He may find it harder to raise money before she has made a
decision not to run, if that is her decision, because people will stay on
the sidelines. They will be looking -- Karen was talked about signals
before -- for red lights, green, perhaps yellow lights from the Clintons
that say yeah, do what you want, but not really.

So look, obviously her fundraising base is a national fundraising
base. He starts in New York and then builds out from that. Certainly, he
will look at what she is doing. I think that is also true of Martin
O`Malley, the governor of Maryland, Joe Biden, obviously. There has been a
lot of talk about him, lately. He brought in folks from New Hampshire for
the -- for the inauguration. Obviously, the first of the nation primary
state.

So there is a lot going on in terms of the talk about 2016 for
Democrats. But I don`t think any of these folks really have to make a
decision, certainly not for the next year, probably not the next two years.

O`DONNELL: Karen Finney and Jonathan Allen, thank you both for
joining me tonight.

FINNEY: Thank you.

ALLEN: Take care, Lawrence.

O`DONNELL: Andrea Mitchell will interview Secretary Clinton this
Wednesday, on "ANDREA MITCHELL REPORTS." You can see it on MSNBC at 1:00
pm Eastern on Wednesday.

Coming up, we are now two days away from knowing who the next senator
from Massachusetts will be. The latest on that coming up.

And in the Rewrite, the entirely predictable end of the Sarah Palin
phenomenon.

(COMMERCIAL BREAK)

O`DONNELL: The governor of Massachusetts has a big decision to make
this week, the question of who he will appoint to fill John Kerry`s seat
when John Kerry is confirmed as secretary of state. The governor has said
he will announce that decision Wednesday. And guess what the governor is
scheduled to do after he announces that decision? Come on this program and
talk to me about it.

This program, which has become the de facto campaign headquarters for
the Appoint Barney Frank for Senator Campaign. Let`s see what the governor
announces on Wednesday. We`ll talk more about that on the show tonight.
And the Rewrite is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

O`DONNELL: The greatest newspaper in America, indeed, the greatest
newspaper this country has ever had, "the New York Times," jumped the shark
today with its page-one political coverage of Sarah Palin under the
headline "Recent Moves by Palin Hint at Candidacy."

(END VIDEO CLIP)

O`DONNELL: "New York Times" reporters and headline writes were not
the only ones fooled by Sarah Palin pretending to think about running for
president.

(BEGIN VIDEO CLIP)

DICK MORRIS, FOX NEWS CONTRIBUTOR: I think she has always had
frontrunner status. The person who was the vice presidential nominee last
time almost automatically has frontrunner status, if they did a good job,
which she did.

(END VIDEO CLIP)

O`DONNELL: Wow, that guy is crazy. And to think he actually became
famous by being Bill Clinton`s trusted adviser before becoming a Fox News
performance artist. Of course, Sarah Palin did not do a good job of
running for vice president. And as I have pointed out relentlessly during
the always silly Palin for president media bubble, there is, in fact,
nothing worse for your political future than losing in the vice
presidential slot, no matter how well you perform as a losing candidate.

If losing in the vice presidential slot conferred frontrunner status
for the party`s next presidential nomination, then Dan Quayle would have
been the frontrunner for the Republican nomination in 1996, which of course
he was not. And then, according to the Dick Morris theory, in 2000, the
runner for the Republican nomination should have been Jack Kemp. And then,
of course, the frontrunner for the Democratic nomination in 2004 would have
been this guy, who of course ran in the primaries and lost, badly.

Then, of course, the frontrunner for the democratic nomination in 2008
would, of course, have been John Edwards.

Losing vice presidential candidates don`t just lose that election.
They lose their political futures. That is why I always called Sarah Palin
"the most recent losing vice presidential candidate who will never be
president," while most everyone else was taking seriously the possibility
that she would run for president.

And some were even taking seriously the possibility that she could
actually win the presidency.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, FORMER MAYOR OF NEW YORK: My guess is yes. I believe
she is going to run for president. She sounds to me like somebody who is
running for president.

SEAN HANNITY, FOX NEWS ANCHOR: Governor, lot of people -- last time I
spoke to you, I was asking, you know, where are you in this process of
making your decision? And you said you wanted to assess the field. The
field has changed quite a bit. Where are you today?

SARAH PALIN, FORMER GOVERNOR OF ALASKA: Still assessing the field,
because I know it is still going to change, the lineup. People are going
to come and go before that legal deadline is imposed on us to have to make
the decision. So I`m still not ready to make an announcement.

KARL ROVE, FOX NEWS CONTRIBUTOR: Well, I`m not much of a gambler, but
I`d put a little bit more money that she gets in than she doesn`t, because
the schedule she has got next week in Iowa, it looks like that of a
candidate.

(END VIDEO CLIP)

O`DONNELL: As happened with Donald Trump`s fake public contemplation
of running for president, the political media`s willingness to believe it
ran so high, and my insistence that Palin would never run became so adamant
that cooler heads wondered what I would do if I turned out to be wrong, a
possibility that never actually occurred to me.

(END VIDEO CLIP)

O`DONNELL: OK, let me just say it again, she is not going to run, and
she is a joke.

MARK HALPERIN, "TIME MAGAZINE": What will you do if she runs -- will
you --

O`DONNELL: I`ll resign my position immediately as the --

HALPERIN: You know what, if she runs, I think you should have to eat
a large pepperoni pie from that horrid place they went yesterday.

(END VIDEO CLIP)

O`DONNELL: Mark Halperin, whose brilliant book "Game Change" remains
the best profile of Sarah Palin yet written, was, of course referring to
the day when the two biggest Republican charlatans of the campaign season
got together in New York for what was surely the emptiest conversation ever
held over Times Square pizza.

Remember the world in which the political media hung on every Sarah
Palin Tweet, every ridiculous Facebook post? Remember when a lot of you
actually feared she would not just run for president, she might actually
win?

It seems now like a far-off world, the world in which the political
media took Sarah Palin seriously. And now she has lost even the slightest
connection to political relevance since Fox News last week unceremoniously
dumped her from their paid players list.

It is all over for Sarah Palin now. We won`t miss her as a political
pundit. But let`s remember this about Sarah Palin. Unlike a lot of other
pundits who are still on a lot of the payrolls in the political news
business, Sarah Palin never once fell for the idea that Sarah Palin could
actually run for president.

(BEGIN VIDEO CLIP)

O`DONNELL: The most recent losing vice presidential candidate who
will never be president --

She is not running for anything. She knows she will never be
president.

There is no chance of it. There is absolutely no chance of it.

She is not running for president.

Pretending she is a potential presidential candidate, which of course
she isn`t.

Viewers of this program have known for quite a while that Palin is not
running for president.

She`s not running.

She will never run for president.

Palin fraud, as I see it.

Palin will never run for president.

Sarah Palin is not running for president.

As I have said before, Sarah Palin is not running for president.

Palin bulletin, Sarah Palin is still not running for president.

I have been saying no chance of running for president.

She will never run for public office.

And she still isn`t running for president.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is ABB your philosophy, sir?

DEVAL PATRICK (D), MASSACHUSETTS: What does that mean?

UNIDENTIFIED MALE: Anybody but Barney?

PATRICK: No, don`t be like that.

UNIDENTIFIED MALE: This is a chance for you to make history. Are you
going to make history?

PATRICK: Well, I`m going to make an appointment of someone I am
confident will be a good steward of the interests of the people of the
commonwealth for the four or five months until the people elect their
permanent representative.

UNIDENTIFIED MALE: And she has promised not to run in the election.

PATRICK: Nice try.

(END VIDEO CLIP)

O`DONNELL: John Kerry is on schedule to be confirmed as secretary of
state Tuesday. Massachusetts Governor Deval Patrick says he is prepared to
announce Wednesday who will temporarily fill John Kerry`s Senate seat.
Governor Patrick`s appointed senator would fill that Senate seat until a
special election is held on June 25th.

The governor is lucky enough to have a highly experienced former House
of Representatives committee chairman who has volunteered to be the interim
senator. Barney Frank has publicly offered his services in the Senate to
the governor. And here is Deval Patrick being asked about that 11 days
ago.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Does Frank have any chance at getting the job at
this point? Or has he totally annoyed you at this point?

PATRICK: No, he hasn`t annoyed me. He is a compelling candidate. He
is a -- a compelling candidate, I mean, for that appointment. He is a
fabulous congressman, and would make a great senator. And fortunately, we
have a few others on the list who are also compelling.

UNIDENTIFIED FEMALE: Are you close to making a decision? Have you
narrowed it down to one or two people?

PATRICK: I`m close, yes.

UNIDENTIFIED FEMALE: Have you approached the person that you`re
thinking about?

PATRICK: We`ve talked. I should say my team has talked with I think
all or most of the candidates.

(END VIDEO CLIP)

O`DONNELL: Here is what Barney Frank had to say about all of this
tonight.

(BEGIN VIDEO CLIP)

BARNEY FRANK, FORMER CONGRESSMAN: I want to respect the governor`s
prerogative on this. I expressed interest in it. I had not previously
been interested, Ed. I was ready to sort of relax and, frankly, make a
little money here doing some things, making speeches and writing a book.
And then I saw the important decisions that are coming up. So I expressed
my interest in doing it.

(END VIDEO CLIP)

O`DONNELL: Joining me now, MSNBC`s Ari Melber. Ari, I have some
breaking news for you. I want you to include this as a factor in your
analysis. Governor Patrick is going to announce his choice on Wednesday.
And after doing that, he has committed to coming on this program with me to
discuss that choice.

Could he possibly be coming here to tell me why he chose someone other
than Barney Frank, which will make absolutely no sense to me if he does
that?

ARI MELBER, "THE NATION": Well, you showed the interviewer asking if
he was going to make history. I guess it would make some sort of history,
to follow your reverse engineering, if he comes to Barney Frank campaign
headquarters on what would be a disappointing day here at THE LAST WORD.

O`DONNELL: Well, that was Andy Hiller (ph) asking him -- and using
she, indicating that he suspects -- local Boston reporter suspects that it
is a woman candidate. And I guess the history would be the first woman
senator from Massachusetts. But the women mentioned have absolutely -- one
is a former chief justice, Massachusetts, with absolutely no legislative
experience.

It would be a very peculiar sacrifice of experience if you chose
anyone other than Barney Frank, because there is no one in the mix who has
actual experience in legislating in Washington.

MELBER: Yeah, I mean, I think Judge Marshal`s name has been floated.
And there are judges who have gone on to be big effective senators, George
Mitchell being, of course, a classic example. But it is not common.
Barney Frank and you have outlined I think a very substantive case. And to
most who watch politics from a distance, it does make sense that if you
have a big job with limited time, you would want someone with experience,
in the same way that you want somebody who has played in the minors,
usually, before you call them up to the majors, particularly if they`re
only going to be in for a few games.

O`DONNELL: Ari, you know why George Mitchell was able to go from
being a judge to being a very effective senator, quickly? Because, like
you and me, of course, he used to be a Senate staffer before he ever went
off into his judicial career.

MELBER: People always tell me that Lawrence O`Donnell and Ari Melber
remind them just of George Mitchell.

O`DONNELL: Yes, exactly. Same guy. Ari Melber gets tonight`s LAST
WORD. Thanks, Ari.

"THE ED SHOW" is up next.

END

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