updated 2/21/2013 10:57:44 AM ET 2013-02-21T15:57:44

THE ED SHOW with ED SCHULTZ
February 20, 2013

Guests: Debbie Wasserman Schultz, Eric Burns, Rep. Peter Welch, Rep. Jerry Nadler, Rep. Cedric Richmond, Maria Teresa Kumar


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

John Boehner plays the blame game again. It exposes the weak
underbelly of the Republican Party.

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

(BEGIN VIDEOTAPE)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I don`t like the
sequester.

SCHULTZ (voice-over): The outrageous, phony fight to blame the
president reaches new lows.

BOEHNER: I fought to not have the sequester in the first place.

SCHULTZ: John Boehner`s sequester lies are exposed. Republicans
refuse to compromise, and the middle class Americans are nine days away
from getting the shaft yet again.

DNC Chair Debbie Wasserman Schultz weighs in.

A Breitbart hack job drives the right-wing assault on President
Obama`s pick for defense. Tonight, the source of the "Friends of Hamas"
smear been identified. And it is truly a joke.

Plus, disgusting cuts to unemployment cripple the poor in North
Carolina. The pizza man goes on FOX News and calls Obama voters stupid?

And the man who gave the world Sarah Palin is getting destroyed by Tea
Partiers in Arizona.

UNIDENTIFIED MALE: You said build the dang fence where. Is the
fence?

(END VIDEOTAPE)

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

Speaker Boehner`s lies -- well, they are finally catching up with him.
The truth has a funny way of coming back to haunt you, doesn`t it?

Today, President Obama continued to tell the public about the damage
to expect if the automatic budget cuts from the sequester are not averted.
Here is a good reason the president is keeping the pressure on. Polls show
the public will blame Republicans. In the latest survey, a majority of
Americans do not support the Republican priorities in Congress. Those
priorities include cuts, cuts, and more cuts, and a lot of hurt.

But House Speaker John Boehner has been trying to avoid the blame game
by putting the sequester around the president`s neck.

(BEGIN VIDEO CLIP)

BOEHNER: We`re weeks away from the president`s sequester, and the
president laid out no plan to eliminate the sequester and the harmful cuts
that will come as a result of it.

(END VIDEO CLIP)

SCHULTZ: Remember that. He is saying the president`s sequester.

All right. Let`s move on. Boehner`s lackeys in Congress are happy to
repeat the speaker`s talking points.

(BEGIN VIDEO CLIP)

REP. CATHY MCMORRIS RODGERS (R), WASHINGTON: The day that the
devastating sequestration cuts, the president`s sequestration cuts take
effect, and we have yet to hear a plan from the president.

(END VIDEO CLIP)

SCHULTZ: Well, that`s two. First, Boehner, and now, his lackey.

Well, the water carriers over at FOX News, they`re happy to push the
same propaganda.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS: All right. The cuts are not smart. They`re
not fair. They`re going to hurt the economy. But what the president
didn`t mention, that the sequester, that was his idea in the first place.

(END VIDEO CLIP)

SCHULTZ: Not smart, not fair. It was his idea? Let`s keep adding it
up, boys.

Today, John Boehner fired off his latest shot in this blame game. He
took to the pages of "The Wall Street Journal" to accuse the president of
the United States of creating a financial crisis. Boehner said the
president`s sequester is now eminent.

But "The Daily Beast" Web site released some information today to
knock down Boehner`s accusations. You see, back in 2011, Boehner`s office
developed a PowerPoint presentation for House Republicans.

It was a two-step approach, but it actually contained three steps.
First of all, no tax hikes. Of course, that`s typical.

Spending cuts exceeding the debt ceiling increase, and spending caps.
But while pushing those spending caps, Boehner did what? He highlighted a
special trigger mechanism -- sequestration.

Boehner was selling this idea to his caucus as a good way to make sure
that they were going to be able to get the cuts that they really wanted.
Boehner loved the sequester. He said it would be a great way to make sure
spending is cut across the board, and that`s what the Republicans wanted.

When the bill was signed, Boehner told the country, he told everybody
just how much he loved it.

(BEGIN VIDEO CLIP)

BOEHNER: When you look at this final agreement that we came to with
the White House, you know, I got 98 percent of what I wanted. I`m pretty
happy.

(END VIDEO CLIP)

SCHULTZ: Wait a minute now. I thought it was the president`s plan.

See, folks, the lying just keeps coming. Boehner continued his lies
in an op-ed today. He said the president got his higher taxes, $600
billion from higher earners and no spending cuts at the end of 2012.

Well, let`s do a little math for the speaker of the House -- $1.2
trillion is greater than $600 billion. John Boehner should know this. He
did the math before. In fact, he was one of 174 Republicans in the House
of Representatives who voted for the Budget Control Act of 2011.

Those Republicans, what did they get? They got $1.2 billion in cuts
to set up by the sequester by passing the bill.

Then, there was the parting shot today by Boehner. The sequester is a
product of the president`s own failed leadership.

My friends, I present to you tonight that Boehner is not only a liar,
but he could teach a master class in failed leadership. Because, you see,
he is the speaker who just can`t get his caucus to support any of his own
proposed bills. He is the guy who is bringing in members to work really
hard only 126 days this year. He is the elected leader who doesn`t care if
Republicans lose their job and Americans lose their jobs.

(BEGIN VIDEO CLIP)

BOEHNER: If some of those jobs are lost in this, so be it. We`re
broke. It`s time for us to get serious about how we`re spending the
nation`s money.

(END VIDEO CLIP)

SCHULTZ: So on one hand, they say that the president doesn`t want the
make cuts, but now that we`re coming down to the wire, they`re blaming him
for the sequester when 174 Republicans voted on it. Does it sound like
everything is adding up to you?

John Boehner is coming up empty on the sequester fight. But what he
is counting on, your stupidity. He is hoping you don`t remember the summer
of 2011. He is hoping that you don`t remember the Budget Control Act. He
is hoping that you`ll just forget all of this stuff and it`s this damn guy
Obama who doesn`t know anything about the economy, and we should have
elected Mitt Romney.

But now we`re stuck with this, we got to do these cuts. Excuse,
excuses, excuses.

So hollow, they have an identity crisis over on the Republican side
right now and they just don`t know how to deal with it. So the best way to
deal with it, just lie to the public. We`ll get Hannity to lie, too.
We`ll get all of FOX folks to lie about it. We`ll get some backup that we
need.

And maybe we`ll hoodwink just enough people to blame the president.
We`ll get all these it cuts and pin it on him and say it`s his economy.

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

Tonight`s question: Does John Boehner know the meaning of leadership?
Text A for yes, and text B for no to 67622. You can always go to our blog
at Ed.MSNBC.com. We`ll bring you the results later on in the show.

Joining me tonight, Congresswoman Debbie Wasserman Schultz of Florida,
chairwoman of the DNC.

Congresswoman, good to have you with us tonight.

REP. DEBBIE WASSERMAN SCHULTZ (D-FL), DNC CHAIRWOMAN: Thank you, Ed.
Great to be with you.

SCHULTZ: How do the Republicans get away with this lying? I mean,
they`re banking on the American people being stupid what other conclusion
with can we come to?

SCHULTZ: You know, the further evidence is that here I am in south
Florida, and as much as I love being home with my constituents and my
family, if the speaker and the Republicans in the house are really serious
about reaching a compromise with the president, why aren`t we in session?
Why did they all vote to adjourn last week when Democrats said we needed to
stay in Washington and hammer out a compromise?

We`ve got eight days left, Ed. The clock is kicking. And at the end
of that eight days, you`re going to have 70,000 kids kicked off Head Start.
You`re going to have cuts to education and health care.

I was just at a community meeting in my district where I had
constituents who were concerned about the cutback in hours that the IRS
offices locally have had.

SCHULTZ: Sure.

WASSERMAN SCHULTZ: And you know what the sequester is going to do?
It`s going to shut offices like that down because of furloughs. We need to
make sure that we focus on a balanced approach to reducing our deficit,
heed the president`s call for us to compromise and stop this "my way or the
highway" politics.

And, you know, I think the proof is in the pudding. There are
Republican members of congress who have publicly stated that this sequester
is their leverage so that they can finally get the spending cuts that they
want and to show that they`re serious about spending cuts. Well, this is
going to be serious, all right.

SCHULTZ: OK, here is another line from Speaker Boehner`s op-ed today.
He says the president has put forth no detailed plan that can pass
Congress. Is that correct?

WASSERMAN SCHULTZ: That`s just simply not correct. You know, we`ve
already done $2.5 trillion in deficit reduction of a $4 trillion grand
bargain that Speaker Boehner walked away from. There are significant
spending cuts and revenue in that plan.

You know, what I`d like to know is name -- why hasn`t John Boehner or
any of the Republicans in the Congress named one tax loophole that they`re
willing to close for a wealthy person so that we can reduce this deficit in
a balanced and responsible way? Where is their plan? It`s nonexistent.

SCHULTZ: Where are you going to get new revenue when the Republicans
have drawn a line in the sand? How are you going to do this?

WASSERMAN SCHULTZ: Look, during the entire campaign last year, Mitt
Romney and all the Republican leadership that I heard said they were in
favor of closing loop tax holes. That was one of the few things we agreed
on.

So, you know, why can`t we close the loophole that allows for a tax
break on having a corporate jet? How about ending wasteful oil company
subsidies when they are making hundreds of billions of dollars?

SCHULTZ: Profit.

WASSERMAN SCHULTZ: I mean -- yes. It`s just stunning.

SCHULTZ: There is a lot of fat out there that you could go get in the
tax code, but getting the Republicans to get on board with you on that,
that would mean they would have to work with the president, and I think
that`s part of the equation, too.

Congresswoman Debbie Wasserman Schultz at home getting an earful
tonight from constituents.

WASSERMAN SCHULTZ: It`s unfortunate.

SCHULTZ: Great to have you with us on the program.

WASSERMAN SCHULTZ: Thanks.

SCHULTZ: Now, let`s turn to Karen Finney, MSNBC political analyst and
former communications director of the DNC. Steve Benen with us tonight as
well, MSNBC political contributor and producer for "THE RACHEL MADDOW
SHOW."

Great to have both of you with us.

Karen, you first. It`s hard to believe that this would be a long-term
strategy. But this PowerPoint strategy that has been unearthed from the
summer of 2011 is very telling. What do you make of it?

KAREN FINNEY, MSNBC POLITICAL CONTRIBUTOR: Well, it is very telling.
But, you know, Ed, one of the things we have learned about this Republican
Party for some time now is they are very comfortable speaking out of both
sides of their mouth.

I mean, here you have on the one hand they`re saying we know part of
the reason we lost. We`ve got to get out there and talk about working
people and talk about middle class people, and yet on the other side, as we
just were hearing from the chairman of the Democratic Party, they refuse to
name even one cut that would impact some of those higher earners. They
refuse -- you know, they refuse to accept the fact that we need more
revenue. It`s not just -- we can`t cut our way simply to where we need to
be.

SCHULTZ: It is their dishonesty.

FINNEY: It is.

SCHULTZ: They had 174 Republicans vote for this, and now they`re
trying to hang it on the president.

FINNEY: That`s right. And to quote Hillary Clinton, at a point, even
though they all voted for it, and, you know, he was part of -- Boehner was
part of selling it, who cares?

SCHULTZ: Yes.

FINNEY: The point is at this point, get back to the table and come up
with a plan, with a deal. The president has said, "I`m willing to meet
with you."

SCHULTZ: Steve, if they say no revenue, where do the Democrats go
from here?

STEVE BENEN, TRMS PRODUCER: I think they don`t go anywhere. I mean,
at this point, the process has stalled. There are no talks, there are no
back channel productions. There is no progress at all in terms of reaching
a resolution and we`re really only eight days away.

Democrats really cannot just cave and give Republicans everything they
want, even though I think they`re facing some pressure from the political
establishment to try and do that in order to work something out.

But I think at this point, all evidence suggests they`re going to push
into March. That the sequestration cuts are going to happen, and --
because they really have no choice, there is no compromise on the table.
There is no opportunity to really work out a deal with Republicans who
refuse to negotiate or accept any concessions.

And with that in mind, I think the consensus among Democrats that I
talked to on Capitol Hill today is that the sequester will happen.
Hopefully, that will ratchet up the pressure some more. They`ll be able to
return to maybe some state of negotiations in early March before the severe
damage really kicks in.

But at this point, there`s no hope of any kind of resolution between
now and eight days from now.

SCHULTZ: This is a sample of how some in the conservative media are
blaming the president.

(BEGIN VIDEO CLIP)

STUART VARNEY, FOX NEWS: He will inflict maximum pain on us, the
taxpayer and the economy, if we go through with just a 2 percent cuts in
spending.

UNIDENTIFIED MALE: But why doesn`t do something about it?

(END VIDEO CLIP)

SCHULTZ: Dishonesty is all over the place, Karen.

FINNEY: It is. And, again, they`re not talking about how we got
here, which was the Budget Control Act. And how did we get to the Budget
Control Act? Because John Boehner couldn`t control his caucus.

I mean, don`t forget, that`s how we got into this mess in the first
place. As you pointed out, talk about a lack of leadership, my goodness.

SCHULTZ: Steve, isn`t this what the Republicans have wanted all
along? Across-the-board cuts. I know they`re very concerned about defense
spending and defense projects, because it`s in the backyard of a lot of
these Republicans. But across-the-board cuts is really what they wanted
all along, because this is going to force the Democrats to possibly go
after the big three.

What about that?

BENEN: I think there is something to that. I mean clearly their
hopes all along were that the sequester, as damaging as it is, gives them
the cuts that they want without any real revenue. The president was able
to get $600 billion or so in revenue towards the end of last year.

But at this point, Republicans are thinking no more revenue, no more
compromising, and they want a deal that has 100 percent cuts, zero percent
revenue. And the sequester, for all its ills, and for all the damage it`s
going to do the military, to the economy, to public needs, this neat meets
the Republicans` test which is more they want than anything else, which is
spending cuts and taking the capital out of the economy at this very
fragile time.

SCHULTZ: I`d like to see the speaker say that there was never really
any PowerPoint. That was just somebody playing with the electronics in the
office.

FINNEY: Oh, it`s coming.

SCHULTZ: Yes, I hope so.

Karen Finney and Steve Benen, great to have you with us on THE ED SHOW
tonight. Thanks so much.

Remember to answer the question at the bottom of the screen, we always
love to get your input on everything. And, of course, follow us at Twitter
@EdShow and on Facebook. We want to know what you think.

Last night, we told you how Republicans used whacked out Web sites to
make real decisions. Tonight, here we go. Round two: another unbelievable
story about a joke, how a joke becomes a Republican talking point.

We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, THE ED SHOW congressional committee is back
tonight. They`ll tackle Boehner`s big lie and more.

And the man who made Sarah Palin a household name faces the wrath of
the monster he created. More on John McCain`s really rough town hall
meeting ahead.

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)

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

Last night on this broadcast, we told you about how elected officials
are peddling rumors to further their right wing agenda. Oh, we`ve got
another dandy for you tonight.

Another completely made-up hit job is making the rounds. And it comes
from "Breitbart News" editor-at-large, Ben Shapiro. Now, Shapiro knows the
scoop when he sees one. Last year, he told America about -- all about a
nefarious hug that President Barack Obama gave a professor some 20 years
ago.

Now, citing unnamed sources, Shapiro alleges that defense secretary
nominee Chuck Hagel have made financial ties to a group called "Friends of
Hamas". Pretty explosive stuff. The story published on February 7th, got
picked up by some right-wing blogs, including "The National Review Online".

Senator Rand Paul weighed in on it.

(BEGIN AUDIO CLIP)

HUGH HEWITT, RADIO HOST: Let me bring up one piece of information
that Ben Shapiro at Breitbart put out today, which is one of the foreign
funders behind Senator Hagel that he has not yet disclosed formally is
something called "Friends of Hamas". If that is in fact true, Senator,
would that lead you to vote against Mr. Hagel?

SEN. RAND PAUL (R), KENTUCKY: You know, I saw that information today
also, and that is more and more concerning. With each day, there are new
things coming out.

(END AUDIO CLIP)

SCHULTZ: Well, we got a problem, Houston. "Friends of Hamas" does
not exist. The group was made up by "New York Daily News" reporter Dan
Friedman as a joke.

Friedman said he was asking a Republican aide on Capitol Hill about
rumors that Hagel had spoken to controversial groups.

(BEGIN VIDEO CLIP)

DAN FRIEDMAN, NEW YORK DAILY NEWS: So I was trying to follow up on
that. And I was -- I spoke to a Republican aide on the phone, and I asked
about that. And I threw out the example of "Friends of Hamas".

(END VIDEO CLIP)

SCHULTZ: Friedman was making a joke, but the aide apparently passed
along the information, and Shapiro ran with the story. And believe it or
not, he is standing by it. "The story as reported is correct. Whether the
information I was given by the source is correct, I`m not sure."

What a journalistic standard.

Shapiro`s story is still posted on Breitbart.com with no correction or
clarification.

Let`s bring in Eric Burns tonight, Democratic strategist and founder
of Bullfight Strategies.

Eric, good to see you. Good to have you with us tonight.

ERIC BURNS, BULLFIGHT STRATEGIES: Thanks for having me back, Ed.
It`s great to be here.

SCHULTZ: You have got United States senators, in this case, Rand Paul
and the conservative media talking about made-up stuff to try to make the
case against somebody who is probably going to be on the president`s
cabinet.

How big a problem is this?

BURNS: I think it`s a serious problem, Ed. It`s one thing, and it`s
bad enough, and we`ve seen the effects of folks like Breitbart.com or FOX
News pushing, you know, false stories, asking a debating question and
running with it.

But to really have senior staff for United States senators, most
likely somebody from the Senate Armed Services Committee peddling knowingly
false information is a very serious problem because isn`t just a run-of-
the-mill story. This is a confirmation hearing for the secretary of
defense. The world is watching. Our foreign policy is going to be
affected by this hearing and by this appointment.

SCHULTZ: Yes.

BURNS: I think it`s something that when I was on the Hill as a
communications director, I never would have dreamed of passing on this kind
of information. I think there needs somebody to look into this. Who was
this staffer?

SCHULTZ: Seeing how it gets in the conversation culture of the
country. That sound clip we just played of Hugh Hewitt, who thinks he is a
big academia kind of dude, he said Hagel had not disclosed it yet, meaning
that he is accepting this as gospel that yes, that Chuck Hagel does have
ties with groups that are very questionable with the United States.

I mean, this should be a credibility issue across the board. But the
right wing media doesn`t play by those rules, do they?

BURNS: No, they don`t. In fact, this is their favorite kind of
tried-and-true tactic as you ask a question, you make a statement with a
question mark on the end of it, and then you use that to pillory folks and
say, you know, what`s your answer to this? You`re not going to answer
this? Aren`t you going to disclose this?

We`ve seen this throughout this hearing, this confirmation process
with Senator Hagel. And it`s actually delayed this confirmation for a
month, when we actually need, you know, Senator Hagel on the job as the
secretary of defense.

And so, it`s a very serious problem. It`s not just a partisan issue.
I mean, this is about the core integrity of the functioning of government.

SCHULTZ: What does it mean for Hagel, do you think, quickly?

BURNS: I think it means that Hagel should be confirmed absolutely.
This is over and they need a vote to confirm Hagel as secretary of defense
as soon as they come back into session.

SCHULTZ: All right. "Wired" magazine reports that Senate Minority
Leader Mitch McConnell asked the Pentagon to get to the bottom of what he
called a very troubling story. "I`m writing on behalf of a constituent who
has contacted me regarding Guantanamo Bay prisoners receiving post-9/11
G.I. Bill benefits." The constituent wrote to McConnell about this
disturbing information After reading an article on "The Duffel" blog.

It turns out that "Duffel Blog" reports on all kinds of stuff, like
Syria hosting Iraq war reenactors. In other words, it`s satire, folks.

And now, McConnell`s office is defending its actions? They put out a
statement saying "Senator McConnell`s office is hyper vigilant about
finding answers to the questions raised by his constituents." How do you
make that up, Eric?

BURNS: That`s a ridiculous statement from Senator McConnell`s office.
Yes, Senate offices, House office, they get a lot of request for
information. But they also -- they do have the internet in those offices.
They can -- the staff can Google things, and they can look to see if
they`re true or not.

I just can`t imagine any senate staffer looking at that story and, you
know, with what that constituent was requesting thinking, yes, we need to
send this on to the administration to have someone really look into this.
It`s absurd.

SCHULTZ: You can`t believe anything the Republicans are saying on any
issue these days.

Eric Burns, great to have you with us tonight. Thanks so much.

A brand-new radical Republican governor makes heartless cuts his first
order of business. That is next.

President Obama is talking about his fix it first plan as a major road
falls apart in Arizona. I`ll show you which Republican might need to ask
the president for help.

THE ED SHOW congressional committee weighs in. Stay with us. We`re
coming right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Thanks for staying with us
tonight.

Take a look at this guy. North Carolina`s newly elected governor, Pat
McCrory, ran a textbook Republican campaign, by the way. Talked about
smaller government, bigger cuts and all this stuff, and he won.

McCrory is the first Republican governor in North Carolina in more
than 20 years. McCrory has only been in office for six weeks, but he is
already passing textbook Republican legislation. For instance, on Tuesday,
he signed a law that will simply gut North Carolina`s unemployment
insurance program. Oh, he is a hero now.

But McCrory`s Republican colleagues will tell you that it really
should be called a reemployment rather than an unemployment bill, because
the Republican textbook says that, well, people on government assistance,
you know, they`re just lazy.

But let`s take a look at the numbers. The United States unemployment
rate is 7.9 percent. North Carolina has the fifth highest jobless rate in
the nation right now with 9.2 percent unemployment. That`s more than
400,000 people.

The law, which takes effect on July 1st, will cut the current maximum
weekly benefits from $535 a week down to $350 a week. That`s a real cut.

Currently, an unemployed worker can collect from 26 weeks. Under the
new law, it`s down to as little as 12 weeks.

Now, the average unemployed worker in the United States has been out
of work 35 weeks. Under the new law, about 170,000 long-term unemployed
workers will lose out on federal extended benefits.

Now, according to the study by the Labor Department, every dollar we
spend on unemployment benefits, $2 are pumped back into the economy. This
is not -- this is a loss not just for the unemployed, but for local and
state economies. And of course, McCrory promised fiscal restraint.

This is what fiscal restraint looks like for Governor McCrory, 13,200
dollar pay hikes for his cabinet secretaries. His cabinet makes a combined
number of 1.1 million dollars, an eight percent increase from his
Democratic predecessor.

This is what you voted for, North Carolina, next book conservative
economics.

(BEGIN VIDEO CLIP)

OBAMA: Instead of us affecting military readiness and a whole range
of other things that are really important to our security and our
prosperity, we should be focused on programs that we know don`t work.

(END VIDEO CLIP)

SCHULTZ: The president continues to press Republicans to stop the
sequester. The big congressional panel tells how cuts will hit their
districts next.

Plus, the pizza man tells us what is wrong with America.

(BEGIN VIDEO CLIP)

HERMAN CAIN, FORMER PRESIDENTIAL PANEL: We have a severe ignorance
problem.

(END VIDEO CLIP)

SCHULTZ: We`ve got the ignorance expert`s greatest hits.

And John McCain helped create the Tea Party monster, and now it`s
turning on him.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You said build a dang fence. Where is the fence?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SCHULTZ: Thanks for staying with us tonight. If Republicans refuse
to take action within the next nine days, Americans are going to start to
feel the pain of sequestration in a very local way. Today, the president
played that angle. He gave eight separate local interviews to television
stations about the looming budget cuts.

(BEGIN VIDEO CLIP)

OBAMA: Instead of us cutting education, instead of us cutting mental
health programs, instead of us affecting military readiness and a whole
range of other things that are really important to our security and our
prosperity, we should be focused on programs that we know don`t work, waste
in government, and some of these tax loopholes that we could close that,
frankly, only benefit the well off and the well connected.

(END VIDEO CLIP)

SCHULTZ: When those 85 billion dollars in spending cuts take effect
March 1st, everything from food safety to airline safety is going to be
squeezed. For instance, every city with an airport is going to feel the
pain. The FAA and the TSA plan to furlough 4,700 workers, which will add
at least an hour to the security line.

I bet you`re looking forward to that.

For the northeast, serious problems. Some families would face a much
colder winter. In Vermont, the Heating Assistance Program could lose 177
million dollars, risking 46,000 families living in poverty. In New York,
communities are just getting back on their feet in the wake of Superstorm
Sandy. But sequestration could carve five percent out of that relief fund.
That`s a loss of 800 million dollars meant for 10,000 homes and businesses
throughout the area.

In states like Louisiana, the Republican defense cuts could hurt the
most. The Army is bracing for 58 million dollars in cuts to Louisiana
military bases, which add up to taking 113 million dollars out of the local
economy and costing almost 4,000 jobs.

Our congressional panel tonight, let`s turn to it. We`re bringing
people in who are going to feel the pain of sequestration on a local level.
I`m joined tonight by Congressman Peter Welch of Vermont and also with us
is Jerry Nadler of New York.

Gentlemen, good to have you with here.

REP. PETER WELCH (D), VERMONT: Good to be here.

SCHULTZ: Congressman Welch, in your area, this is going an immediate
affect to families that are on this fuel assistance program. What about
that?

WELCH: It`s tough. You know, the price of fuel is going up and the
temperature is going down. And it`s really tough on a lot of families.
And we depend on getting some help for low income heating assistance. And
in fact, that budget was cut even before the sequester in the state
legislature, with very little money. And Governor Shumlin is trying to
fill the hole.

So this is going to be very, very painful for a lot of low income
families. It`s going to be painful for folks at the airport, when the
lines are longer. It`s going to be painful for some folks who work in
defense-related industries in small peaceful Vermont. So this is a big
deal for us.

SCHULTZ: Congressman Nadler, what will you lose if Republicans fail
to act by March 1st?

REP. JERRY NADLER (D), NEW YORK: We`ll lose about 878 million dollars
in Sandy aid, you know, to get some of our people back on their feet, to
get the city back on its feet. We`ll lose about 10 million dollars in
homeless services and 10 million dollars in home heating assistance each.
We`ll lose about 75 million dollars, I gather, from support for the New
York City Housing Authority to keep -- to maintain those buildings.

SCHULTZ: Are your districts ready for these cuts? What about that,
Jerry?

NADLER: No, not at all. The city and the state are both scrambling
and struggling to keep up the city and state share. We depend on the
federal money. And a sudden cut -- these have been cut back before. I
mean, the budget has been cut substantially in the last couple of years. A
huge budget cut on top of this in home heating assistance and certainly in
Sandy aid would be disastrous.

SCHULTZ: Sure. Congressman Welch, what do you think is going to
happen? What is the solution here?

WELCH: Well, the solution is that we don`t act so stupid. I mean,
this is really a dumb move. It`s not as though we can`t handle getting the
deficit under control by doing some of the things the president mentioned.

SCHULTZ: But the Republicans say no more revenue. The Republicans
have drawn the line in the sand, no more revenue. So where does that leave
the Democrats?

WELCH: Get rid of the loopholes. You know, in the fiscal cliff
legislation, we put in a paragraph at the 11th hour that gave Amgen about
500 million dollars in increased reimbursements for Medicaid -- a Medicare
drug. I mean, there`s loopholes in there that just have no basis
whatsoever, in the budget. And it costs an immense amount of money.

Instead, what we`re doing is shifting the pain down to the states.
Jerry`s state with Sandy and our state with home heating assistance in a
tight budget, it`s really going to be rough. But the point is it`s
unnecessary. And at the macro level, at the big level, it`s just a very
weak way for the United States to present itself in the world.

We can deal with our problems if we use our head. And we`re not doing
that.

SCHULTZ: There is going to be local problems and everyone is going to
feel it. These Republicans are going to feel it in their backyard when it
comes to defense contracts. And speaking of local problems, Senator John
McCain did not support the president`s Fix It First Plan during the State
of the Union Address.

But this might change McCain`s mind about funding for the nation`s
infrastructure. A 200-foot-long section of U.S. 89 near Phoenix literally
dropped four feet this morning. The Department of Transportation says the
sudden buckling of the road is not weather-related. And they expect the
road is going to be shut down for an extended period of time.

We have got bridges, gentlemen, in this country, in your backyard,
Jerry Nadler, that no doubt have got to have some attention.

NADLER: We have 78,000 structurally deficient bridges in this
country. I think what we ought to do is put a sign at the beginning of
every bridge that says, this bridge is structurally deficient, proceed at
your risk, and see what political pressure developed to start fixing our
bridges.

The American Society of Civil Engineers says we have a 2.2 trillion
dollar -- 2.2 trillion dollar backlog of just getting our roads and
highways and bridges and water systems up to a safe, reasonable level. And
this kind of cutback that we`re doing now, this sequester, besides being
stupid, because it`s across the board and nondiscriminating, is -- and
besides being unnecessary, is absolutely harmful for all the specific
reasons we`re talking about. But also, it will take so much demand out of
the economy that the estimates are it will cost at least a million jobs, at
least a point in economic growth, and probably about a point in the
unemployment -- increased unemployment.

And we should simply scrap it. You know, we`ve reduced the deficit
from 10.1 percent of GDP to seven percent. And it`s going down to five
percent. That`s enough for the moment. Concentrate on unemployment.
Concentrate on getting the economy back in shape. Worry about the long-
term deficit problem after we`ve got the economy in shape.

SCHULTZ: Well, if you believe that Powerpoint presentation that
Boehner put together in the summer of 2011, this has all been part of the
plan. Let`s bring in the conversation Congressman Cedric Richmond of
Louisiana.

Congressman, good to have you with us. What is this going to do to
your area, Cedric? Congressman, what is it going to do to your area?

REP. CEDRIC RICHMOND, LOUISIANA: Well, it kills our area, to tell you
the truth. In fact, part of the area where it hurts Louisiana the most in
terms of the Army Corps of Engineers, which of course is doing our coastal
restoration and protecting the infrastructure that protects our families
and citizens.

But if we can`t dredge the Mississippi River, then the rest of the
country can`t get their goods to market. So the cost of our goods are
going to go up. So our farmers and everyone else who produces goods from
manufacturers or farmer, they`ll be at a competitive disadvantage in
getting their goods to market.

So you`re talking about almost a 250 million dollar cut to the Army
Corps of Engineers. And it`s those things that are just mind-boggling, and
to me lack common sense. Because what we should be looking at is what kind
of return we get on every dollar we spend. So if you`re talking about
early childhood education, are you talking about the Army Corps of
Engineers and dredging, those are both things that give you a phenomenal
return on your investment.

But we just have this approach that our Republican colleagues are
trying to initiate.

SCHULTZ: Sure.

RICHMOND: It just lacks common sense. And that`s the frustrating
part.

SCHULTZ: Congressman Richmond, what about the military cuts in your
backyard? These are going to be pretty devastating. There is a big
military presence in Louisiana.

RICHMOND: We do. I mean, we have an extreme amount of shipbuilders
and other people who work on government contracts and work for our
military. So it`s just what you try to do is use common sense and cut
where you can cut, raise money where you can raise money. And our
colleagues have just refused to sit down like adults and plan out how we`re
going to run the country.

So we just have cliff after cliff created by our Republican colleagues
that raise the anxiety of American citizens at a time that we shouldn`t be
doing this. We have people out of work. And we have infrastructure
collapsing. We could put people to work fixing what is already broke.

SCHULTZ: Congressman Peter Welch, Jerry Nadler and Cedric Richmond,
great to have you gentlemen with us tonight on the Congressional panel.
Thanks a lot.

A John McCain town hall gets ugly. We`ll show you the dang tape,
next.

(COMMERCIAL BREAK)

SCHULTZ: And we are back. Well, it looks like Mr. 999 is back in
action. Fox News has announced that Herman Cain will be their newest
contributor. In a statement titled "Awww, Shucky Ducky", Cain said that he
was very excited about the opportunity to be another voice for the
intelligent thinkers on Fox.

The pizza man paid a visit to Bill O`Reilly last night and said this
about the 51 percent of Americans who voted for President Obama.

(BEGIN VIDEO CLIP)

CAIN: We have a severe ignorance problem with the people who are so
mesmerized by his popularity that they`re not looking at the facts.

(END VIDEO CLIP)

SCHULTZ: Herman Cain is calling the majority of Americans severely
ignorant. Pretty sharp words from a man with a record like this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So you agreed with President Obama on Libya or
not?

CAIN: OK, Libya.

If you don`t have a job and you`re not rich, blame yourself.

We need a leader, not a reader.

When they asked me who is the president of ubkei-beki-beki stan stan,
I`m going to say, you know, I don`t know.

I`ve got to go back and see. I got all this stuff twirling around in
my head.

I don`t believe racism in this country today holds anybody back in a
big way.

I am the Koch Brothers brother from another mother.

We`ll have a real fence, 20 feet high, with barbed wire, electrified.

Specifically, what are you asking me did I agree or not disagree with
Obama?

Stupid people are running American. I was criticized, you shouldn`t
call people stupid. Why? They`re stupid.

(LAUGHTER)

(END VIDEO CLIP)

SCHULTZ: He`s got a lot of things twiddling around in his head.
Hannity, he is your perfect guest. I`m glad to see that Fox News has added
another intelligent thinker to the team. A recent PPP poll shows a record
46 percent of voters do not trust Fox News. But I`m sure the pizza man
will improve those numbers.

Tonight in our survey, I asked you does John Boehner know the meaning
of leadership? Four percent of you say yes; 96 percent of you say no.

If you think John McCain is off the rails, wait until I show you what
his constituents are saying. That`s coming up.

(COMMERCIAL BREAK)

SCHULTZ: And in the Big Finish tonight, Senator John McCain is forced
to battle the monsters he helped create. At a town hall meeting, the
subject of immigration produced some extreme reactions from the crowd.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Why didn`t the Army go down there and stop them?
Because the only thing that stops them, I`m afraid to say and it`s too damn
bad, but is a gun. That`s all that will stop them.

(END VIDEO CLIP)

SCHULTZ: This was not an isolated incident. Here is another
constituent`s opinion.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They are going to be on welfare? They are going
to be on Food Stamps?

MCCAIN: Again --

UNIDENTIFIED MALE: You know. What is going to happen is --

MCCAIN: Again, sir, you`re not telling these people the truth. They
wash -- they mow our lawns. They care for our babies. They clean -- those
people do, sir. So you`re wrong again. But go ahead.

(END VIDEO CLIP)

SCHULTZ: McCain even found himself confronted with his own words.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You said build a dang fence. Where is the fence?

MCCAIN: In case you missed it, I showed you.

UNIDENTIFIED MALE: That`s not a fence.

MCCAIN: That`s not a fence? It`s a banana. We have put up a banana
with about 600 million dollars worth of appropriations.

(END VIDEO CLIP)

SCHULTZ: Of course, the constituent was referring to the ads Senator
McCain ran two years ago when he was running for reelection to the Senate.

(BEGIN VIDEO CLIP)

MCCAIN: Complete the dang fence.

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

(END VIDEO CLIP)

SCHULTZ: Back then, McCain wasn`t talking about the human face of
immigration. He was talking about this.

(BEGIN VIDEO CLIP)

MCCAIN: Drug and human smuggling, home invasions, murder.

(END VIDEO CLIP)

SCHULTZ: Now Senator McCain is having a tough sell.

(BEGIN VIDEO CLIP)

MCCAIN: You want to round up 11 million people and send them back to
their country? You`re not going to do that. They`re not going to do that.
They`re not going to do that, though.

(END VIDEO CLIP)

SCHULTZ: Folks, this didn`t happen in a vacuum. Long before this
week`s angry crowd, and long before the Tea Party, presidential candidate
John McCain put Governor Sarah Palin on his ticket.

(BEGIN VIDEO CLIP)

SARAH PALIN, FORMER GOVERNOR OF ALASKA: Our opponent is someone who
sees America as imperfect enough to pal around with terrorists who targeted
their own country.

(BOOING)

(END VIDEO CLIP)

SCHULTZ: Let`s turn to Maria Teresa Kumar, president and CEO of Voto
Latino and MSNBC contributor. Maria, great to have you with us here
tonight.

MARIA TERESA KUMAR, PRESIDENT, VOTO LATINO: Thank you.

SCHULTZ: The shift of McCain, does it help or hurt the argument? He
has vilified and demonized undocumented workers in the past. Now he seems
to want to embrace them. And it`s amnesty, is what it sounds like.

THERESA KUMAR: Well, he has basically gone back to his old McCain.
And I think part of the reason is that, if folks remember, he actually
helped introduce the 2007 comprehensive immigration reform. And Senator
Flake was actually one of the other members, also from Arizona.

And then politics got a little ugly, and he decided that the anti-
immigrant rhetoric was going to win him into office.

SCHULTZ: And people won`t forget that.

TERESA KUMAR: They`re not forgetting it. But I think what is
happening is he said it best. The Latino community came out in record
numbers, and he realized that the Republicans have a Latino vote problem.
In Arizona, Ed, do you know that there are 400,000 unregistered Latinos
that are eligible voters? I mean, he sees the electoral map. He knows
that he needs the Latino vote.

And I applaud him that he is actually going around and basically
dispelling the myths that often come associated with undocumented people.

SCHULTZ: Well, he is at odds with the very person that he put on the
ticket and her alike. At a town hall, McCain tried to explain a path to
citizenship after paying a fine and moving to the end of the line. But
this is what he heard.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Now you are proposing that we suffer the
indignity of rewarding these same law breakers amnesty. Despite however
you choose to phrase it.

(END VIDEO CLIP)

SCHULTZ: This is a problem, isn`t it?

TERESA KUMAR: Well, I think also it`s a messaging problem. Because
what most folks don`t realize is that we`re hearing one or two people right
now at his townhalls, very similar to -- trying to create myths and lies of
what actually happens.

Sixty four percent of individuals that are undocumented in this
country, Ed, have lived here for more than 10 years. What does that mean?
That means that these people are already members of our communities.
They`re going to school with our children. We`re going to church with
them.

So these are not strangers to America. And what McCain is doing, he`s
going out front and center and, again, trying to dispel this myth. I do
caution, though, the American people, is that if we don`t have more people
coming out and dispelling these lies, we`re going to have chaos like we did
when congressional members went and started talking about health care
during the --

SCHULTZ: You don`t need that kind of mix-up.

TERESA KUMAR: We don`t.

SCHULTZ: A lengthy year battle back and forth and all the detail. I
got you on that.

Here is McCain`s remark on President Obama. Listen to this.

(BEGIN VIDEO CLIP)

MCCAIN: So far the group of us that has been working on it have not
had any problem from the White House. And we believe that there is a good,
strong possibility that we come up with a plan and a proposal that most
Americans would support.

(END VIDEO CLIP)

SCHULTZ: Well, most Americans aren`t most Republicans. And this is
going to be the problem. A path to citizenship is viewed by the Republican
and the right wing, who get in and mix all this stuff up, the caucus that
Boehner of course can`t control, and Mitch McConnell, for that matter --
they`re against a path to citizenship.

So how is this going to play out?

TERESA KUMAR: I think that`s why -- one of the reasons why the
president`s proposal that was actually finally put on paper and leaked
actually put a stake in the ground. Now, if we don`t have a path to
citizenship, let`s have an honest conversation with Americans, basically
saying by not having a path to citizenship, we`re creating 11 million folks
that are living in this country that basically all of the sudden become
stateless.

We don`t want that. We don`t want two Americas.

SCHULTZ: How do you know John McCain is sincere? How do you that he
really doesn`t care if immigration reform passes? But he is home right now
knowing that the demographics aren`t going to work against him if he wants
to run again.

TERESA KUMAR: Exactly right. Well, first of all, you can only take a
person`s word, right? So right now, his heart and the fact that he is
going out front and center. But he also recognizes that anything short
within the Latino community, that doesn`t have a path to citizenship, is
going to send a loud and clear message that the Republican party wasn`t
with them, period.

SCHULTZ: Well, it would it seems to me that the Voto Latino followers
would recognize rhetoric when they hear it.

TERESA KUMAR: And they`re tough. They`re tough.

SCHULTZ: Is McCain serious? Would you evaluate him as serious
tonight when it comes to a path to citizenship?

TERESA KUMAR: The only reason I believe that he is serious is that,
if you recall, Marco Rubio had actually, in the beginning, proposed
piecemeal legislation. He basically brought -- McCain brought Rubio
together and said no, we need a pathway to citizenship. He was the first
Republican to say that.

SCHULTZ: OK, Maria Teresa Kumar, great to have you with us tonight.
Congratulations on the growth of your organization.

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

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

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