updated 2/19/2013 1:31:25 PM ET 2013-02-19T18:31:25

THE ED SHOW with ED SCHULTZ
February 15, 2013

Guests: Martin Smith, David Cay Johnston, Rep. Jerrold Nadler, Rep. Sheila Jackson Lee, Rep. John Garamendi, Derrick Pitts, Hakeem Oluseyi


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

Meteors crashing into earth. Congress goes on vacation again? And
Elizabeth Warren is the new sheriff in town.

All that and Rachel Maddow joins us tonight.

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

(BEGIN VIDEOTAPE)

SCHULTZ (voice-over): Just like the meteor, slamming into Russia,
Elizabeth Warren is already banging heads in the Senate.

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: The question I really want
to ask is about how tough you are.

SCHULTZ: We`ll show you how the new sheriff of Wall Street is
outclassing her fellow freshmen, and how the new cop on the beat means
trouble for big banks.

Ten years after George W. Bush dragged the country into war in Iraq,
and explosive new documentary narrated by Rachel Maddow details the trail
of deception like never before. Rachel joins me to preview the film
tonight.

Plus, the big congressional panel on John Boehner`s decision to go on
vacation before we go off another cliff.

It was the biggest meteor blast in 100 years.

So how did we know about an asteroid the size of a swimming pool but
not a meteorite the size of a house?

(END VIDEOTAPE)

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

Progressives finally have something to be hopeful about when it comes
to Congress.

Now, the 113th Congress kicked off in a pretty disappointing fashion.
There could have been meaningful filibuster reform. There was a way around
the gridlock.

But, of course, Harry Reid caved. That`s another story in itself. So
nothing has really changed.

All you have to do is look at the Chuck Hagel situation in the Senate
to see just how bad everything is right now. But I want you to imagine
liberals, just imagine what it would be like if we had 60 senators like
this.

(BEGIN VIDEO CLIP)

WARREN: I`m really concerned that too big to fail has become too big
for trial. That just seems wrong to me.

(END VIDEO CLIP)

SCHULTZ: It sure does. Newly elected senator from Massachusetts,
Elizabeth Warren, is doing what she promised to do. She is ready to lead
the way on accountability for the financial industry, and for good reason.

You see, the Federal Reserve says the 2008 financial collapse cost
this country 38.8 percent of its net worth. Despite the massive fraud and
recklessness of the banks, the number of executives prosecuted for this
crisis -- zero. Before today, there is no accountability.

Now, the Frank/Dodd financial regulation bill was watered down and not
fully implemented. Senator Warren used her first banking committee hearing
to take on the regulators who were supposed to be enforcing the laws.
Instead, they take some money and turned a blind eye.

(BEGIN VIDEO CLIP)

WARREN: I know there have been some landmark settlements, but we face
some very special issues with big financial institutions. If they can
break the law and drag in billions in profit, and then turn around and
settle, paying out of those profits, it isn`t much incentive to follow the
law.

(END VIDEO CLIP)

SCHULTZ: Settlements without trial also mean no testimony from
banking witnesses. There is no way to actually figure out really what went
on. Warren put the regulators on the spot.

(BEGIN VIDEO CLIP)

WARREN: The question I really want to ask is about how tough you are,
about how much leverage you really have in these settlements. And what I`d
like to know is tell me a little bit about the last few times you`ve taken
the biggest financial institutions on Wall Street all the way to a trial.

(END VIDEO CLIP)

SCHULTZ: Ooh, this ought to be good. Please proceed, government
regulators.

(BEGIN VIDEO CLIP)

THOMAS CURRY, COMPTROLLER OF THE CURRENCY: We`ve actually had a
fairly -- a fair number of consent orders. We do not have to bring people
to trial or --

WARREN: Well, I appreciate you say you don`t have to bring them to
trial. My question is, when did you bring them to trial?

CURRY: We have not had to do it as a practical matter to achieve our
supervisory goals.

(END VIDEO CLIP)

SCHULTZ: And Senator Warren wasn`t done making her point.

(BEGIN VIDEO CLIP)

ELISSE WALTER, SECURITIES & EXCHANGE COMMISSION: We look at the
distinction between what we could get if we go the trial and what we could
get if we don`t.

WARREN: I appreciate that that`s what everybody does. So the
question I`m really asking is can you identify when you last took the Wall
Street banks to trial?

WALTER: I will have to get back to you with the specific information.

(END VIDEO CLIP)

SCHULTZ: I think they all need water on that panel. What do you
think? The government has acted cowardly when it comes to the big banks,
no doubt about it. Deals are cut and civil cases get settled out of court.
The banks don`t have to change any of their behavior. You and I get stuck,
or could get stuck.

Warren wants to stop this entire cycle, and the banks aren`t real
happy about it. "Politico" received a number of anonymous comments from
banking executives slamming the senator from Massachusetts. They called
her questions shameless grandstanding. "She should act accordingly if she
wants to be taken seriously. One said Warren is an "extreme fringe
freshman senator."

You see, folks, these fat cats, they are running scared.

It`s a far cry from what Senator Dick Durbin said back in 2009 on THE
ED SHOW.

(BEGIN VIDEO CLIP)

SCHULTZ: You believe the banks own the Senate and you can`t get this
done?

SEN. DICK DURBIN (D), ILLINOIS: I will tell you that at this point in
time, it`s an uphill battle for me to get 60 votes in the Senate.

(END VIDEO CLIP)

SCHULTZ: Senators like Elizabeth Warren make it a lot easier for Dick
Durbin to get the momentum he needs to stop this behavior. This is what
the 2012 elect was all about, wasn`t it? Now compare Senator Warren with
her most -- with the most talked about counterpart on the other side of the
aisle and what he is working on.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), TEXAS: It may be that he spoke at radical or
extreme groups or anti-Israel groups and accepted financial compensation.
We don`t know.

(END VIDEO CLIP)

SCHULTZ: Oh, yes, Senator Ted Cruz of Texas. He is too busy playing
Joe McCarthy these days.

Elizabeth Warren is fighting for the people who were screwed by the
rich bankers.

Now, which one do you want on your side? And this is how we have to
think, liberals. Just think what it would be like if we had 60 senators
like Elizabeth Warren.

That`s what this election was all about. It`s a marathon. It`s not a
sprint. We have more elections coming up, no doubt about it.

But the behavior of the Republicans right now, and what they`re
focused on is not the folks who got the shaft back when the market crashed.

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

Tonight`s question: will Senator Warren get Congress to hold the big
banks accountable for the financial crisis? Text A for yes, text B for no
to 67622. You can always go to our blog and leave a comment at
Ed.MSNBC.com. Of course, we`ll bring results later on in the show.

I am joined tonight by Martin Smith, producer for "Frontline." And
David Cay Johnston also with us, professor at Syracuse University College
of Law and a Pulitzer Prize-winning journalist.

Gentlemen, great to have you with us tonight.

Martin, you first. You covered this story for "Frontline."

Is there any chance that a senator that aggressive, continually asking
questions and keeping it in the media could make a difference?

MARTIN SMITH, PBS "FRONTLINE" PRODUCER: Well, it`s better than no
senators asking those questions there is a possibility. But this is a
conversation that has been in the background for some years now. This is a
conversation that it`s long overdue that somebody put very simple questions
to the regulators.

You know, she did not tell them what they should be doing. She asked
a very remarkably simple question. Tell me about the last time you took a
Wall Street bank to a trial. And they were incredibly flat-footed.

In the past, there have been some efforts. But in the early days
after 2009, 2010, there was the sense that, you know, the Justice
Department is working on this and it`s going to take time. But nothing
happened.

SCHULTZ: David, do these out-of-court settlements and penalties have
any impact whatsoever changing the behavior of the banks?

DAVID CAY JOHNSTON, SYRACUSE UNIVERSITY COLLEGE OF LAW: Oh, they
certainly have the impact of saying it`s profitable to lie, cheat, and
steal. I mean, we know there were fabricated documents to justify loans.
There were lies made to the investors who purchased the securities which in
many cases were public pension funds. And there is plenty of grounds to
view criminal actions.

But she wasn`t even asking, Ed, about criminal actions. She was
simply asking about taking someone to civil trial.

SCHULTZ: She is the talking about simple bank operations, not being
aggressive from a judiciary standpoint, but being aggressive from an
operational standpoint to get them on the record just about how they
operate. And they were very coy about it. Oh, by the way, I got to get
back to you on that.

Martin, that just underscores everything you did in your documentary,
doesn`t it?

SMITH: Well, you know, Elisse Walter was credibly flat-footed on that
answer. Actually, in July, the SEC, she was a commissioner at the SEC, had
taken a banker to court on a civil case.

It was thrown out. He was mid-level. The jury says we don`t want
these mid-level guys. On a rather remarkable jury note, they said it
should be executives who are being held to account. It was remarkable that
she couldn`t even come up with the one trial that they had gone forward
with.

SCHULTZ: Your thoughts, David Cay, on the Justice Department. Have
they done their job?

JOHNSTON: No, absolutely not. You know, last year, Bill Black, the
regulator who was responsible for a thousand felony convictions of high-
level people in the S&L crisis was supposed to testify in Congress. He
came to Washington, and the morning of the testimony, they said they didn`t
want to hear him.

The importance of Elizabeth Warren is she is going now as a senator in
a position to ask the questions that haven`t been asked. And as Martin
said, simple questions.

SCHULTZ: Here is Senator Warren as she explained the impact of
bringing cases to trial during the hearing.

(BEGIN VIDEO CLIP)

WARREN: There are district attorneys and U.S. attorneys who are out
there every day squeezing ordinary citizens on sometimes very thin grounds
and taking them to trial in order to make an example, as they put it.

(END VIDEO CLIP)

SCHULTZ: Martin, why is the government afraid of going to trial
against the banks? She points out they`re too big to go on trial. That`s
pretty much it, isn`t it?

SMITH: That`s absolutely what it seems to be. We asked. I asked
Lanny Breuer, chief of the criminal division at the Justice Department,
about some comments he made about deferred prosecution agreements that he
said that he had lost sleep at night, worried about the consequences, the
collateral damage that would result from charging a bank with criminal
fraud.

So, you know, if there is -- if we need an admission that these banks
are too big to fail and too big to jail, that was it.

SCHULTZ: David, what impact in dollars could actual regulation have
on the banks? I mean, they`re going to make a profit. They have always
made a profit. But this is the greedy fast lane. I mean, what impact
could it have?

JOHNSTON: The important issue, Ed, is that we have artificially
depressed interest rates to prop up these banks. The bankers today were
telling "Politico" and the "New York Times DealBook," oh, we`re perfectly
robust and healthy, there is nothing wrong with our books. Yes, because
you`re getting a massive subsidy from the federal government that is
effectively transferring money from savers to prop up these banks.

That`s the real impact to our economy. That`s why pension funds are
in trouble.

SCHULTZ: Yes.

JOHNSTON: That`s a real fundamental problem here.

SCHULTZ: But we can put on the table both you experts. We`ve got a
senator from Massachusetts who is -- should we say unspoiled and ready to
do the work of the people on the banking committee. Fair enough?

JOHNSTON: Oh, absolutely.

SMITH: Absolutely.

SCHULTZ: It`s going to be fun. Martin Smith, David Cay Johnston,
great to have you with us tonight.

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

Ten years ago, the Bush administration lied us into a war. Rachel
Maddow and David Corn are here to preview their new special that will make
you really look at this story in a whole new different way.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: In tonight`s ED SHOW, congressional panel has drawn a line
in the sand on the big three. You`re going to want the hear this. Wait
until you what Nancy Pelosi is saying about all of this.

We have unbelievable footage of the 10-ton meteor that caused a
thousand injuries and cut a perfect hole in a Russian lake. Hey, maybe we
could fish out of that one. That`s coming up.

And Rachel is going to be here, along with David Corn. That`s coming
up. Stick around. That`s coming up.

And, of course, 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)

(BEGIN VIDEO CLIP)

REPORTER: Hans Blix reported that his teams found no weapons
inspection and sees sign Iraq is starting to cooperate. In a further slap
at Powell, Blix contradicted U.S. intelligence that Iraq has hidden weapons
from the inspectors.

HANS BLIX, U.N. WEAPONS INSPECTOR: In no case have we seen evidence
that the Iraqi inspectors knew in advance that the inspectors were coming.

(END VIDEO CLIP)

SCHULTZ: That, believe it or not, happened 10 years ago this week.
Ten years since the U.N. weapons inspector Hans Blix told the U.N. his team
searched for WMD in Iraq.

They weren`t coming up with anything. They didn`t have much of
anything. He said it right there, you heard it. It was 10 years ago, this
week, a massive anti-war global protest was being held with millions of
people taking to the streets from New York to Sydney. None of it
ultimately mattered.

Our government was determined to go to war. The Bush administration
was basically propping up anyone with any kind of credibility on the
matters of national security to go out and make the case. We now know
there was no case to war with Iraq. But we are hearing from key players
now. The landscape is really changing on this story.

For the first time, we`re hearing people come forward about how the
Bush administration forge ahead with their plan, and how they got away with
it. It`s all part of a new MSNBC documentary airing this Monday night,
9:00 Eastern Time, narrated by our own Rachel Maddow called "Hubris:
Selling the Iraq War." It`s based on a book by the same name, Michael
Isikoff and David Corn.

In this excerpt, Vice President Dick Cheney makes his case in a speech
to veterans of foreign wars.

CENTCOM commander Anthony Zinni was there and said he couldn`t believe
what he was hearing.

(BEGIN VIDEO CLIP)

DICK CHENEY, FORMER U.S. VICE PRESIDENT: Simply stated, there is no
doubt that Saddam Hussein now has weapons of mass destruction. There is no
doubt that he is amassing them to use against our friends, against our
allies, and against us.

GEN. ANTHONY ZINNI (RET), FORMER CENTCOM COMMANDER: I had a seat at
the stage next to the lectern where he was speaking, and I literally bolted
at that.

CHENEY: With our help, a liberated Iraq can be a great nation once
again.

RACHEL MADDOW, MSNBC HOST (voice-over): Vice President Dick Cheney`s
speech to the Veterans of Foreign Wars is the opening salvo of the Bush
administration`s effort to sell to the American people what White House
insiders call "The Product".

CHENEY: Thank you very much.

ZINNI: It was a shock. It was total shock. I couldn`t believe the
vice president was saying this, and doing work with the CIA on Iraq WMD,
through all the briefs I heard at Langley, I never saw one piece of
credible evidence that there was an ongoing program. And that`s when I
began to believe they`re getting serious about this. They want to go into
Iraq.

(END VIDEO CLIP)

SCHULTZ: And joining me now, Rachel Maddow, narrator of the
documentary, "Hubris: Selling the Iraq War," which premieres Monday at 9:00
p.m. Eastern on this network. And David Corn of "Mother Jones" magazine,
who co-authored the book.

Great to have both of you with us.

MADDOW: Thanks, Ed.

SCHULTZ: Rachel, the people coming forward, going on record will
change a lot of people who were thinking, well, we really did the right
thing.

MADDOW: Two things have been happening in the 10 years since we were
led into this war from the political right. And one is the idea that it
wasn`t that much of a mistake. You see that still happening in politics
this past week in Capitol Hill, right? People defending the Iraq war as if
it were the right thing to do, but also, this idea that we were all in bed
together, that we all made the same wrong decision together as a nation,
that there was no dissent, and that we all believed that Saddam had weapons
of mass destruction.

I`m so glad you played that footage of what was going on 10 years ago
today with those global worldwide protests about going into Iraq. We
didn`t convince the war. They didn`t convince enough people in the United
States to call it a nation going to war, but because it was our war leading
the deception campaign, we went.

And I don`t think we`ve appreciated how big a deal that was for us as
a country, how big a deal that was for the world. We`ve been so close to
it for so long, it`s 10 years. It`s time to step back and realize what
that was.

SCHULTZ: Will it change how we view confrontations in the future?

MADDOW: I think it already is changing that, you know? I mean, you
see people right now, even in the Obama administration, leaking stuff to
the press trying to make it seem like this is stuff going on with WMDs in
Syria, which means we have to go to war with Syria.

And the response is, you know what? The intelligence has not been
confirmed. We`re not going to run with that. There`s going to be some
pushback on that.

I do think there is a higher bar. I do think that we elected Barack
Obama in part because he was on the right side of the Iraq war debate. But
the revisionist history on why we went to Iraq and who got us there, that
is an active campaign right now.

SCHULTZ: David Corn, what have we learned?

DAVID CORN, MOTHER JONES: Well, I think Rachel is right. The bar has
been raised, because we learned that the government pulled what Larry
Wilkinson in the film, he was chief of staff to Colin Powell at the time.
He calls it a hoax.

That`s a pretty big word to use. That the campaign to convince this
nation to go to war, a war that led to the loss of almost 5,000 American
lives and over probably 100,000 civilian Iraqi lives was a hoax. So, I
think we learned to be careful when people tell us there is a threat at
hand.

But at the same time to be a little less optimistic about it, a lot of
people who got us into the war, a lot of the neocon drum majorettes and
cheerleaders, Dick Cheney and others, when they come out today and say
something, they`re still accorded a fair degree of respect. They haven`t
been laughed out of town or tar and feathered and chased away because of
what they have done. There hasn`t been a full accounting or full
consequences applied.

And so that means, as Rachel points out in the film itself, that this
could happen again under another set of circumstances in the not too
distant future.

SCHULTZ: Well, let me tell you, when I was in high school, the
Vietnam War was raging. And when the war ended, we all thought, well,
gosh, as a country, we`ll never do that again. Guess what? That`s why
this documentary is so critically important for the generation following us
to consume this and to understand how we were lied into this.

What about that, Rachel?

MADDOW: I think, you know, Ed, one of the things that ends up being
important is the way that we describe to one another, even if it`s not
formal history, just our oral history about how we describe that as a
country. And I think when you get down to the case that was made about why
we had to go, it turns out that it was, as David puts it, a hoax. The case
about why we had to go turned out not to be true. It was maintained to us
as if it were true. And that has to be seen as an original sin for why
that war ended up being a bad idea.

We all respect the people who serve. We all thank and frankly love
the troops who went there, because their country asked them to. But the
grounds on which they were asked to go were false. And that has to be the
way that we tell this story forever, so we don`t do it again.

SCHULTZ: And, David, the media role in this, there was a lot of
promotion, a lot of flag-waving, and not critical questions. Or is that an
overstatement?

CORN: No, not at all, Ed. At the time, I was raising questions about
the intelligence, you know, 10 years ago to today. And it was a very
lonely position. Even liberal columnists were out there going along with
this. And "The New York Times" with reporting by Judy Miller was basically
reinforcing the propaganda from the administration.

It became sort of an echo chamber between the administration and a lot
of voices in the media, many of whom who have still not apologized and
still have their very well compensated perches in our media political
culture. So, this stuff can`t happen -- or let me put it another way, Ed.
It`s much more difficult to pull off a hoax like this if you have skeptical
or just good reporters out there putting this stuff to hard questions.

SCHULTZ: A right.

CORN: And that didn`t happen at the time. That made it a lot easier
for Dick Cheney and George W. Bush to make the statements like we just
heard Dick Cheney say that had nothing to do with the truth.

SCHULTZ: All right. Rachel, looking forward to your show at 9:00
tonight after this one. David Corn, thanks for joining us. Appreciate it.

"Hubris: Selling the Iraq War" premieres Monday night 9:00 p.m.
Eastern here on MSNBC.

John McCain lets the cat out of the bag on the real reason he is
blocking Chuck Hagel. That`s next.

While John Boehner is working on his tan or his golf game or tee time
or whatever, our congressional panel is here working tonight. Keep it
right here. We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

Tonight, I bring you a rare moment of transparency in politics.
Senator John McCain went off script yesterday when he admitted Republicans
put grudges ahead of our national security when they filibustered the
nomination of Chuck Hagel for defense secretary.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: To be honest with you, Neil, it goes
back to there is a lot of ill will towards Senator Hagel because when he
was a Republican, he attacked President Bush mercilessly, at one point said
he was the worst president since Herbert Hoover, said that the surge was
the worst blunder since the Vietnam War, which is nonsense. And was very
anti-his own party and people. People don`t forget that. You can
disagree, but if you`re disagreeable, people don`t forget that.

(END VIDEO CLIP)

SCHULTZ: All right. Let`s break this down.

(BEGIN VIDEO CLIP)

MCCAIN: To be honest with you, Neil, it goes back to there is a lot
of ill will towards Senator Hagel because when he was a Republican --

(END VIDEO CLIP)

SCHULTZ: Because when he was a Republican. Did you catch that? When
he was a Republican.

Because Chuck Hagel lost his Republican card when he didn`t just
blindly march in lockstep with the Republican Party. What`s next?

(BEGIN VIDEO CLIP)

MCCAIN: He attacked President Bush mercilessly, at one point said he
was the worst president since Herbert Hoover.

(END VIDEO CLIP)

SCHULTZ: Well, what are the numbers? George W. Bush did leave office
as one of the most unpopular departing presidents in the history of the
country, with a final approval rating of 22 percent. There is a reason.

(BEGIN VIDEO CLIP)

MCCAIN: Said that the surge was the worst blunder since the Vietnam
War, which is nonsense.

(END VIDEO CLIP)

SCHULTZ: Hagel`s only mistake here is his refusal to be a head-
nodding war hawk. Hagel has been to war. He knows what it`s all about.
He is a two-time Purple Heart recipient who served our country in Vietnam.
And he had the nerve -- think about that -- to go against the Republicans.
He had the nerve to question a surge that would cost our country over a
thousand American lives.

We keep hearing about a Republican effort to rebrand the party. But
all I`m seeing is the same unprecedented obstruction. This is the first
time a filibuster has been used against a defense secretary nominee. And
it all boils down to a personal grudge? This is pretty vindictive
politics, isn`t it?

Senator McCain, whatever happened to country first?

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), MINORITY LEADER: The Republicans are poised to
shut down government. Republicans are poised to let sequestration go
forward.

(END VIDEO CLIP)

SCHULTZ: The country is on the verge of a disaster, and Republicans
are taking a vacation. The big Congressional panel weighs in on today`s
big sequester developments.

And we knew about an asteroid the size of a swimming pool that sailed
past Earth. How did we ever miss this massive meteor exploding in Russia?
We`ll have all the answers from all the angles ahead.

(COMMERCIAL BREAK)

SCHULTZ: Thanks for watching tonight. A massive budget crisis is
looming. And the only people who can fix it have gone on vacation. Feel
like you`re a taxpayer who is getting screwed right now? Eight five
billion dollars in spending cuts are scheduled to take effect on March 1st.
These are brutal cuts to defense, Head Start, food safety, mental health
service, NASA, and small business assistance, and disaster relief.

That`s just to name a few. The list goes on and on. With the looming
deadline, and every American depending on Congress to come up with a plan,
here is what the Republicans did today.

Congressional members -- Congressional members took a half day and
left Capitol Hill this afternoon and said we`re out of here. Congress is
in recess for the next 10 days and will not address the budget crisis until
February 25th.

Every House Democrat and four Republicans voted against the recess.
And it was obvious Leader Nancy Pelosi was frustrated when a reporter asked
just how much more is she willing to compromise.

(BEGIN VIDEO CLIP)

PELOSI: I appreciate your question and the good faith in which it has
been offered. The Republicans are poised to shut down government. The
Republicans are poised to let sequestration go forward, which is --
sequestration, you know what that word means? What it means to the
American people is unemployment, no jobs.

Republican party in the Congress is dominated by anti-government
ideologues. And they will forever, forever want to reduce taxes on special
interest, make cuts in the education of our children and the care of our
seniors and the rest, because they do not believe in government. And bless
their hearts, they act upon their beliefs. And that`s what they believe.

(END VIDEO CLIP)

SCHULTZ: Speaking of beliefs, 106 House Democrats are now asking the
president not to approve any cuts to Social Security, Medicare, or
Medicaid. Let`s turn to our congressional panel tonight with three of the
106 Democrats who were signing on to that letter to the White House today.

Congressman John Garamendi is with us tonight from California. Also
Congresswoman Sheila Jackson Lee of Texas and Congressman Jerry Nadler of
New York. Great to have all of you with us tonight. How serious is the
threat to Medicare, Medicaid and Social Security?

Congresswoman Jackson, over the next 13 day, it`s a very critical
time. Your thoughts?

REP. SHEILA JACKSON LEE (D), TEXAS: Absolutely. You know, I was on
the floor of the House and making a comment about this pending tragedy, and
indicated that those who have Social Security and Medicaid and Medicare,
they actually earned it. They paid taxes. And they actually earned it for
their time of need, for Social Security and Medicare.

And I was blasted by those who said earned it? Well, I`m concerned
because they did earn it. They worked and they deserved it. And now with
this pending crisis, we know that as sequester comes and there are across-
the-board cuts, and there is an attitude of looking for any dollar they can
find, there is rumor that what the Republicans are looking for is not to
address solvency for Social Security, but really to end it as we know it,
to cut Medicare and to cut Medicaid.

So I see it, Ed, as a very serious proposition. And the letter we
sent to the president was to hold the ground on anything that would
jeopardize Social Security for the American people, CPI and all of that.

SCHULTZ: So congresswoman, that really prompted the letter, these
kind of rumors that they`re going for the jugular on the big three, and
they really want to privatize this stuff.

JACKSON LEE: That`s all they talk about.

SCHULTZ: John Garamendi, how do you get a solution when you`ve got an
attitude like that?

REP. JOHN GARAMENDI (D), CALIFORNIA: It`s going to be very, very
difficult. We have to find the middle ground. We do have a proposal that
we put forward. It`s basically 50/50, end tax breaks for those companies
that don`t need it and make wise cuts not in the area of Social Security or
Medicare or Medicaid, but in other programs that are clearly less
efficient, ineffective, or just not needed now.

We can do that. The Republicans are absolutely refusing to allow such
a measure to come to the floor of the House for a vote. And quite possibly
the Senate will also require 60 votes, and the Republicans will stop it.
They`re headed towards another manufactured disaster.

SCHULTZ: How many jobs, Congressman Nadler?

REP. JERROLD NADLER (D), NEW YORK: Well, the sequestration -- the CBO
estimates the sequestration would destroy between 700,000 and a million
jobs, just by all these cuts. And it`s a completely unnecessary cut.
We`ve already cut the budget. People don`t talk about this. We`ve cut the
budget deficit from 2009. It was over 10 percent of the economy, of GDP.
This year, it`s about seven percent. Next year it`s going to be five
percent.

We have cut it in half, the fastest reduction in deficits since World
War II. And frankly, it`s too fast. We should not be doing any cut at
this point because cuts at this point in the economy will cost us jobs.
And the real problem we is a jobs crisis, not a deficit crisis.

SCHULTZ: One word from all of you. Do you think this could walk us
back into a recession if this were to happen?

NADLER: Without question.

GARAMENDI: No doubt about it.

JACKSON LEE: Without a doubt.

SCHULTZ: House Speaker Boehner does not sound like he is willing to
compromise. Here is what he said yesterday.

(BEGIN VIDEO CLIP)

BOEHNER: The sequester will be in effect until there are cuts in
reforms that put us on a path to balance the budget over the next 10 years.

(END VIDEO CLIP)

SCHULTZ: Sheila Jackson Lee, how do you deal with that?

JACKSON LEE: You know, Ed, I don`t know why we can`t be truth-sayers,
if you will. We`ve already cut over a trillion dollars. Congress has
already cut over a trillion dollars. The federal employees have already
taken 103 billion dollars out of their salaries and contributed to the
deficit. The economy is growing. The president has indicated that we have
an opportunity for innovation and growth.

And I believe that that is our pathway forward. If the speaker does
not want to come back to the table of compromise and address how we can
both bring down the debt and grow the economy, then all we`re going to be
facing is a recession.

SCHULTZ: Sure.

JACKSON LEE: And that seems to be what their direction is, is that
they`re willing to slash and burn as opposed to finding the right pathway
of securing revenue, which we have attempted to do and balance and bring
down the deficit. And they won`t do anything with revenue. Nothing at
all.

SCHULTZ: John Garamendi, where is the sense of urgency here? What
are you doing on vacation?

GARAMENDI: Well, we`ve been told not to be in Congress. Speaker
Boehner controls the agenda, controls the calendar for the House of
Representatives. And he sent us home. The Democrats, I think all of us
today voted not to go home, but rather to stay and work next week. And he
said no.

SCHULTZ: All right. President Obama was in Chicago today. He is
pushing hard for something to get done on gun violence in this Congress.
Congressman Nadler, what are your hopes?

NADLER: Well, I think it`s too much to hope that we`ll get everything
done that we need to get done. But I think it`s realistic to hope that
we`ll get a thorough background checks, which would mean that felons and
mentally ill people would not be able to get ahold of firearms. I think
that is achievable.

The assault weapons ban, banning high capacity magazines, I can`t see
the Republicans going with those, though we ought to attempt it. But
certainly the background checks I think is achievable with any kind of good
will.

SCHULTZ: Congressman Garamendi, do you agree with that?

GARAMENDI: I don`t know. But what I do know is we need to vote. The
president said it. We said it on the floor when he gave his State of the
Union Address. Let`s vote. Put the bills on the floor and let`s see where
the votes are.

But I`m afraid that that`s not going to happen. Clearly Speaker
Boehner is refusing to bring bills to the floor. In fact, since we came
into session on January 6th, there has been virtually nothing that has been
done other than the Sandy legislation. Beyond that, it`s just been marking
time.

We need to put these things and put them up for a vote and see where
it goes.

SCHULTZ: All right, Congressman John Garamendi, Congresswoman Sheila
Jackson Lee and Congressman Jerry Nadler, thanks for being on our
Congressional panel tonight on THE ED SHOW. Appreciate it so much.

Earlier today, an asteroid the size of an Olympic swimming pool just
missed the Earth. I`ll show you what a smaller meteor did in Russia this
morning. This is amazing stuff, amazing video. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: They gave their lives to protect the precious children in
their care. They gave all they had for the most innocent and helpless
among us. And that`s what we honor today.

(END VIDEO CLIP)

SCHULTZ: President Obama wiped tears away as he honored the six
educators killed in the Sandy Hook Elementary School shooting today at the
White House. And many of you are talking about it on social media.

On Facebook Susan Noble writes "every one of them deserved that honor.
They are true heroes."

Elain Fletcher says "President Obama is a good man and a father and he
does care about all who have died because of guns."

And Fran Vanhousen says "real men cry."

Go to our Facebook page right now and join the conversation. And
don`t forget to like THE ED SHOW when you`re there.

Tonight in our survey, I asked will Senator Warren of Massachusetts
get Congress to hold the big banks accountable for the financial crisis?
Seventy eight percent of you said yes; 22 percent of you said no.

The skies over Russia looked like a scene from a disaster movie this
morning. I`ll show you the very real wreckage next. It ain`t a movie.

(COMMERCIAL BREAK)

SCHULTZ: And we are back. When I see the videotape of this, all I
can say is I wish I was there. I wish I could have seen this. This scene
roughly 900 miles east of Moscow, Russia, this morning. A 10-ton meteor
streaked through the sky with a blinding flash at a speed of 33,000 miles
per hour.

The meteor shattered into pieces at about 25 miles above the ground
and created a massive sonic boom, startling many Russians.

(BEGIN VIDEO CLIP)

(FOREIGN LANGUAGE)

(END VIDEO CLIP)

SCHULTZ: Literally hundreds of people caught this on tape. The
shockwave damaged an estimated 3,000 buildings in western Siberia,
shattering roughly one million square miles of glass. One piece of the
meteor is thought to have crashed into a frozen lake, leaving this hole in
the ice.

In other space news, an asteroid the size of an Olympic swimming pool
passed right past the Earth earlier today. It was the closest recorded
pass by an asteroid ever, closer than some of the satellites up there.
We`re going to have a whole lot more on the asteroid and the Russian
meteor, next.

We have our deep space panel standing by. They`ll bring us all the
crazy details of today`s out-of-this-world event. Stay tuned. You`re
watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ: And in the Big Finish tonight, it was a very big finish for
a meteor the size of a bus as it passed over a city in central Russia
during morning rush hour today. Now, imagine this as you drive to work. A
flash in the sky becoming more distinct until it is obvious you are
witnessing a rare phenomenon.

People saw a streak of light as a meteor passed through the Earth`s
atmosphere, moving at a speed of 12,000 miles per second, and bursting into
a fireball. I wish I could have seen it. Meteors are usually small and
burn up completely as they hurdle towards the Earth`s surface. We even
have a nickname for them, called shooting stars.

Today`s meteor seemed much more imperfect and was captured by dozens
of amateur videos. One thousand people were injured, most of them
suffering cuts from flying glass. The damage and the injuries were the end
result of a sonic boom.

(BEGIN VIDEO CLIP)

(FOREIGN LANGUAGE)

(END VIDEO CLIP)

SCHULTZ: The blast was strong enough to blow out windows, doors. A
local school teacher said that kind of light doesn`t happen in life, only
at the end of the world. City administrators said "we thought an airplane
had crashed."

Children were sent home, and there was a general state of confusion
until local officials said that there was no threat to human life. A Zinc
factory seems to have suffered the greatest damage, part of the wall
crumbling; 3,000 Buildings were damaged. All this from a meteor the size
of a bus.

Joining me tonight Derrick Pitts, chief astronomer at the Franklin
Institute in Philadelphia. Also with us tonight, joining us Hakeem
Oluseyi, who is a Science Channel expert and professor at Florida Institute
of Technology.

Great to have both of you with us tonight, gentlemen. Kind of a
different day at the office, wouldn`t you say?

HAKEEM OLUSEYI, SCIENCE CHANNEL EXPERT: A great day.

SCHULTZ: And exciting too, because we`ll learn a lot from this, I
would imagine. Derrick, how rare is this meteor both in size and in
impact?

DERRICK PITTS, CHIEF ASTRONOMER, FRANKLIN INSTITUTE: If we`re talking
about meteors, Ed, what we find is that meteors of this size coming this
far down into the Earth`s atmosphere are actually on the rare side.
Something like this might happen every 50 to 100 years. Whereas the
typical shooting stars that most people see in the evening sky, we can see
10 of those per hour on any regular clear night. And a meteor shower might
show as many as 120.

So something like this actually is quite rare to be seeing.

SCHULTZ: Is the speed, is the size pretty normal for shooting stars?
Does this -- we just happened to catch this one on tape, the Russian
citizens.

PITTS: Well, in fact, the way we really ought to classify this is
more like a small asteroid than it is really a meteorite. This is an
object that seems to come from the asteroid belt. So it is actually on the
large side for something that we would see, although not really that large
for an asteroid itself, even a small asteroid.

But it`s the interaction with the Earth`s atmosphere, what it could
possibly do if it strikes the surface of the Earth. What it did just
passing through the Earth`s atmosphere that really makes the difference.

SCHULTZ: Hakeem, address the noise, the noise factor, the sonic boom
to the effect of a bomb.

OLUSEYI: Yes. So if you have an object that moves through a medium
like the air at faster than the speed of sound, then what happens is that
the air molecules don`t know how to get out of the way, right? So if you
look at a boat or a ship passing by through the water, it leaves a wake.
And so any object that passes through the atmosphere is also going to leave
a wake of pressure waves.

So what happens is when you move faster than the speed of sound, the
molecules in front don`t get out of the way until that pressure and that
energy build up in front. And it leaves a cone that we call the Mach Cone.
And when that cone passes over your place on the ground, that`s when you
have a sonic boom.

And that`s all that built-up energy that is passing over you.

SCHULTZ: And meanwhile, we have an asteroid about the size of a
football field passing by the Earth today. Hakeem, how rare is that? And
you know, how lucky were we?

OLUSEYI: Well, you know, if you ask about things from space hitting
Earth, it`s incredibly common, right? Something like two tons of material
from space fall to Earth every day. But if you compare how frequently
things occur as a function of their size, then as they get bigger, they
become rarer.

So if you look at events that are big enough to, say, wipe out a city,
you may expect once per century to come to Earth. And the latest one that
we know of is an object that hit in Russia in 1908, known as the Tunguska
event. So it`s not that common, but it`s common enough that we should be
concerned.

SCHULTZ: Derrick, put it into perspective for us, this asteroid.

PITTS: The asteroid that we saw come by us today, the thing we have
to really be concerned about is the fact that the orbit of this asteroid
actually intersected with the orbit of the Earth. And what we want to
avoid is having the Earth and the asteroid intersecting at the same point
at any time.

There are lots of asteroids out there. This isn`t the only one. Many
of them cross the Earth`s asteroid. It`s just a question of whether the
Earth and the asteroid can be on the same orbit at the same time. We hope
to avoid that as often as we possibly can. It will definitely ruin your
day.

SCHULTZ: Derrick, how did we miss the meteorite?

PITTS: There are two instances in which we can detect these objects.
In the case of the asteroid that flew past the Earth 17,000 miles away, we
could detect that because we`re looking at the asteroid against a dark
night sky. That`s how these things are detected, mostly optically at
night, using telescopes surveying the sky.

The meteor, though, the small asteroid came out of the daytime sky.
So it`s against a bright sky lit by the sun. So that makes it very, very
difficult to see. And also, the small size, that didn`t help us either.

SCHULTZ: Hakeem, what are the chances of us seeing something like
that, I mean in a lifetime? How rare is this?

OLUSEYI: It`s really small, right. If this were to happen in the
daytime in the bright daylight in a -- over the ocean, which is most of the
Earth, no one would see it, of course, right? So a lot of the Earth is
uninhabited. So the fact that we saw it and the fact that it was captured
on camera is amazing.

SCHULTZ: Derrick Pitts and Hakeem Oluseyi, thank you so much for
joining us tonight. I appreciate it.

OLUSEYI: It`s a pleasure, Ed.

SCHULTZ: You bet.

PITTS: Thank you for having me.

SCHULTZ: And that`s THE ED SHOW. I`m Ed Schultz. "THE RACHEL MADDOW
SHOW" starts right now.

You know, Rachel, the Russians must have thought they were getting
bombed or something. I mean, the videotape, and so many people that caught
this is just absolutely amazing. It`s really pictures we`ve never seen
before.

RACHEL MADDOW, MSNBC ANCHOR: The pictures are -- the fact that there was
so much video of it is amazing. But, Ed, there is actually at least one
Russian politician who is a truther on this matter and who says it wasn`t a
meteor at all. He has another theory. We`re going to be featuring him
later on in the show tonight.

SCHULTZ: Sounds great. Have a great night. Thanks.

MADDOW: Thanks, man. You too. Appreciate it.

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

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