updated 2/25/2013 1:15:57 PM ET 2013-02-25T18:15:57

THE ED SHOW with ED SCHULTZ
February 22, 2013

Guest: David Cay Johnston, Michael Waltrip, Brandon Davis, Angela Rye,
John Nichols, Michelle Goldberg, David Edelstein

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

Republican lies are infecting the mainstream media. It`s time to get rid of
the virus, don`t you think? I`ll show you how.

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

(BEGIN VIDEOTAPE)

RAY LAHOOD, TRANSPORTATION SECRETARY: It`s going to be very painful for the
flying public. This is a big deal. I think Republicans need to step up
here.

SCHULTZ (voice-over): The White House issues a wake-up call as Republicans
and the right-wing media keep ignoring the facts.

UNIDENTIFIED MALE: This is a problem.

SCHULTZ: The austerity bomb keeps ticking, and Republicans have their head
in the sand.

SEN. RAND PAUL (R), KENTUCKY: I would say balderdash. It`s untrue, unfair,
dishonest, disingenuous. The president is making stuff up.

SCHULTZ: NASCAR steps up to the plate for the families of Sandy Hook
victims. I`ll ask driver Michael Waltrip about the new 26 car he is driving
at Daytona this weekend, and about the message he is sending.

A hundred and fifty FBI agents raid The Scooter Store.

CARTOON CHARACTER: Quick, we have to hold him. And fast!

SCHULTZ: I`ll show you why this is good news for defenders of the big
three.

Plus, the ridiculous bail in the Pistorius trial.

And everybody in the office is making Oscar picks.

UNIDENTIFIED MALE: Everybody?

SCHULTZ: Nate Silver is playing the odds, and I`m playing my gut.

UNIDENTIFIED FEMALE: Don`t waste that power.

SCHULTZ: The Big Eddy picks are coming up.

UNIDENTIFIED MALE: Get that the hell out of here.

(END VIDEOTAPE)

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

We are one week away from devastating federal government spending cuts to
kick in. Republican strategy so far is to keep repeating the lies about the
sequester over and over again to catapult the propaganda.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We`re weeks away from the
president`s sequester, and the president laid out a plan to eliminate the
sequester and the harmful cuts that will come as a result of it.

(END VIDEO CLIP)

SCHULTZ: Speaker Boehner has his members in lockstep behind this talking
point. They insist the president has no plan.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We acted months ago, acted twice last year. The
president actually suggested sequester in the first place, has never put a
proposal on the table.

(END VIDEO CLIP)

SCHULTZ: Now, we expect politicians to lie and leave out details like $1.2
trillion in cuts before any kind of new revenue came in. But when
journalists get involved in the act, it`s really a bigger problem, folks.

You see, "New York Times" columnist David Brooks is a conservative, but he
presents himself as someone who is reasonable and willing to see both sides
of an argument. So it was rather puzzling today when Brooks blamed the
president and Republicans for failing to avoid the sequester.

The columnist wrote, "The president hasn`t actually come up with a proposal
to avert sequestration, let alone one that is politically plausible."

Really? Now, Brooks has paid the right for the most high profile newspaper
in the world, "The New York Times." He should know at least how to use
Google or maybe even pick up the telephone, I don`t know if reporters call
sources anymore. Or at least he should know how to go to the White House
Web site, because if he had he would have seen the president`s proposal.

It is very detailed. It offers a two-to-one ratio of tax cuts to increases.
It is by all measures a compromise.

Well, Brooks was dragged over coals by other journalists today for his
shoddy work. He was forced to issue an apology. He wrote, "The White House
has proposed various constructive changes to spending levels and
entitlement programs. These changes are not nearly adequate in my view, but
they do exist, and I should have acknowledged the balanced and tough-minded
elements in the president`s approach." You think?

This is what Brooks should have written in the first place. But it`s hard
to blame David Brooks alone for spreading these falsehoods, because the
problem is much bigger than just one writer in New York.

Meet Pete Peterson. Peterson is a Wall Street mogul who has spent an
estimated half a billion dollars protecting rich investors at the expense
of the 99 percent of Americans. You see, Peterson is behind the group Fix
the Debt. The group claims spending is way out of control, and we need deep
cuts in the entitlement programs.

The figureheads for Fix the Debt are these guys, the austerity brothers,
Erskine Bowles and Alan Simpson, and -- believe me, they don`t have to
worry about their retirement being lost or their pension or their health
care.

Now, the current issue of "The Nation" magazine reports Peter timed the
launch of this new $60 million campaign to exploit the wrangling over the
fiscal cliff, the debt ceiling and the sequester. The misinformation
campaign has worked. A Bloomberg poll on the size of America`s budget
deficit shows 62 percent of Americans think the deficit is getting bigger,
28 percent of Americans think that it`s staying the same. And get this
number, only 6 percent agree with the truth.

My friends, the deficit is shrinking. The Congressional Budget Office says
the deficit is down to $845 billion. It is projected to be $600 billion
less than when the president took office.

Americans need to break out of this misinformation loop, don`t you think?
If they want to listen to a Republican, maybe they should try listening to
outgoing Transportation Secretary Ray LaHood. He spoke about the sequester
consequences today, including the loss of 100 air traffic controllers.

(BEGIN VIDEO CLIP)

LAHOOD: This requires compromise. This requires Republicans stepping
forward with some ideas about how to keep essential services of government
running at the level that people have been accustomed to. This is not
rocket science.

(END VIDEO CLIP)

SCHULTZ: Well, it`s not rocket science. But, folks, it is just as serious.

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

Tonight`s question, will Republican lies prevent a deal on the sequester?
Text A for yes, text B for no to 67622. You can go to our blog at
Ed.MSNBC.com. We`ll bring you the results later on in the show.

Joining me tonight David Cay Johnston, professor at Syracuse University
College of Law and Pulitzer Prize-winning journalist.

David Cay, great to have you onboard with us again tonight.

Why did these groups like the Fix the Debt outfit want Americans to think
that the deficit is just out of control?

DAVID CAY JOHNSTON, SYRACUSE UNIVERSITY COLLEGE OF LAW: Oh, it`s central to
their whole marketing campaign. They represent very wealthy people like
Pete Peterson who want all the benefits of living in America. And, by the
way, where are the Pete Peterson factories and the Pete Peterson payroll
people. They`re just financial speculators at Blackstone.

They want lower taxes because it`s crucial that they`re making huge
fortunes while not doing anything productive. So they`ll do anything they
can to argue we are in terrible trouble if we maintain government services
that actually help real businesses do business like airlines and food
companies.

SCHULTZ: I guess when I look at the numbers that are playing out right now,
you have to have the question, is deficit reduction an urgent problem that
needs to be faced? Because it seems like the president`s plan wants to take
care of this over time. That if we, you know, mind our P`s and Q`s
financially, and don`t go off into war and not pay for `em, that we are
strong as a nation, and our economy is strong enough to recover from this
piece by piece.

What about that?

JOHNSTON: Well, this is where I would be critical of the president, Ed. I
think we would have faster economic recovery if we weren`t laying off
police officers and firefighters and school teachers all over the country.
If you look at the Reagan era, one of the things Reagan did was a huge
ramp-up when the economy was in trouble of government employees.

But without question, the deficit is coming down to where it should be,
which is slightly above spending or a balanced budget. It`s going in that
direction.

The president has had the smallest growth in discretionary spending in
numerous presidents as opposed to the big spender George W. Bush who came
ahead of him.

SCHULTZ: Dave, stay with us.

I want to bring in Steve Benen, MSNBC political contributor and writer for
the "Maddow Blog".

Steve, good to have you with us tonight.

Why are mainstream journalists repeating this lie about President Obama not
having a plan to replace sequester?

STEVE BENEN, MSNBC POLITICAL CONTRIBUTOR: Well, I can only speculate about
what David Brooks and others are thinking. But I think that in all
likelihood, what we`re seeing here is a problem in which there is a forced
equivalence between left and right and Democrats and Republicans, it
doesn`t really exist.

I think for many pundits who are so eager to strike, to avoid any sense of
bias or any sense of maybe one side is more responsible for problems than
the other, that they have to say that both sides are always to blame,
regardless of the facts, regardless of the circumstances.

And so, we see pieces like the one we saw in "The New York Times" today
where the president is getting blamed even though he is not ultimately
responsible and hasn`t done any of the things that he is accused of doing.
As a consequence you hear a lot of pundits saying things like the deficit
is getting worse when it`s getting better. That spending is up when it`s
down, that all steps in terms of the fiscal debate are underway are just
completely detached from reality. It`s very frustrating to watch.

SCHULTZ: Well, the Budget Control Act, the president did sign it. But a
bunch of Republicans voted for it to get it to his desk. There is shared
responsibility here.

But the thing that is so frustrating is that the lies are out there by
conservative media saying that it`s all the president`s fault. The fact is
they are so draconian, it was a movement to try to get these two sides
together so we wouldn`t be at this point right now.

So the point is here, Steve, did Democrats and the White House lose the
message game on the deficit?

BENEN: I don`t think so. I think that if you look at the polling that came
out this week in particular, we said to president and the Democrats in
Congress have a real advantage when it comes to public perception and
public attitudes here, that the president has produced a balanced approach
where there is a combination of spending cuts and new revenue from closing
tax loopholes. I think that reflects the fact that they have actually done
a fairly good job in winning over the American mainstream.

It`s Republicans who are really suffering, however. There`s ample polling
data this week that shows Republicans are on the wrong side of the American
mainstream when it comes to the sequester, when it comes to spending, when
it comes to compromise. And so, when you look at this larger arc, I think
it`s fair to say that when it comes to the message war, Democrats are
coming out ahead.

And that matters, of course, next week. Republicans are thinking that if
they go through with this and the sequester hits, then they`ll be able to
say, well, this is the White House`s fault. It`s the Obama sequester
talking point they`ve been so fond of.


But all available evidence suggests that the public will blame Republicans,
not Democrats, if this happens next week.

SCHULTZ: All right. Let`s hear from transportation secretary, outgoing
Transportation Secretary Ray LaHood. He was explaining today why this is so
important. Here it is.

(BEGIN VIDEO CLIP)

LAHOOD: I would describe my presence here is one word -- Republican.
They`re hoping that maybe I can influence some of the people in my own
party.

(END VIDEO CLIP)

SCHULTZ: David, is there a chance some Republicans can talk sense to the
rest of this party, or is this going to happen?

JOHNSTON: I think we have to consider the possibility, Ed, that the
Republicans out in the field and the Republicans on Capitol Hill belong to
two different parties. Some of the polls are showing a majority of
Republicans are opposed to what the leadership is doing on the Hill. And,
of course, that`s trying to deal with the Tea Party people who are at the
core of this.

SCHULTZ: You know, some Republicans say the sequester cuts won`t be so bad.
I mean Rand Paul is out there saying it`s the least thing that we can do.

Steve, is he right or wrong?

BENEN: You`ll be surprised to know that I think Rand Paul is wrong. I think
this notion that the sequester cuts will be meaningless.

Look no further than John Boehner. John Boehner himself has said that this
will be a disaster.

Orrin Hatch, Republican from Utah said this week talking to a local
newspaper that he thinks this will be a disaster.

I think that even Rand Paul when it comes to his rhetoric on the sequester,
is part of a very small minority of even Republicans, because I think
there`s a bipartisan agreement that this is a real problem, that the
American mainstream, regular folks, are going to feel a real pinch, and
it`s going to do harm to the economy, the military and public needs.

I think Rand Paul is in the minority on this one.

SCHULTZ: Of course, the end of March is certainly going to do something as
well. They`re going to have to figure out what to do with the budget there.
In fact, I want to put it to both of you. What happens when we`re
approaching another deadline at the end of March and this time to avoid a
government shutdown?

JOHNSTON: Well, Ed, as I said on the show some time ago, I think we`re in
for two years of the craziest behavior we`ve ever seen in Washington. Not
until we get another election are we going to get some sort of sensible,
thoughtful, how do we develop the commonwealth necessities for creating
private wealth and making business work when you have a group of people who
don`t seem to understand any of the fundamentals that the economy depends
and has a foundation in the services government provides, like air traffic
control and food safety inspection.

SCHULTZ: Steve, your thoughts.

BENEN: I think that`s right. But I would just add that Republicans a little
wary about 2014 midterms. I think they realize that if there`s a government
shutdown and the public blames them, that John Boehner`s majority is very
much in doubt, and it could be eliminated.

So I think that that fear may just possibly prevent a government shutdown
in March.

SCHULTZ: All right. David Cay Johnston, Steve Benen, good to have you with
us tonight on THE ED SHOW. Appreciate your time.

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

Coming up, NASCAR is paying tribute to Newtown, Connecticut, with a special
26 car at this week`s Daytona 500. Driver Michael Waltrip and team owner
Brandon Davis are here next to talk about it.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Ted Cruz is channeling Joe McCarthy again, and Rand Paul says the
president is being dishonest about the sequester. The big panel takes on
the latest right-wing conspiracies.

And Hollywood is rolling out the red carpet for this year`s Oscars coming
up Sunday night. I`ll tell you who I think will win it. And why the Academy
has already made a serious mistake.

Don`t forget you can listen to my radio show on Sirius XM Radio, Channel
127, Monday through Friday, noon to 3:00 p.m. Share your thoughts with us
on Facebook and on Twitter using #EdShow.

We`re coming right back.

(COMMERCIAL BREAK)

SCHULTZ: Thanks for stay with us tonight.

The shooting massacre at Sandy Hook Elementary School renewed an intense
debate on gun control in this country. And on Sunday, the tragedy will take
center stage at NASCAR`s biggest race of the year, the Daytona 500.

Two-time Daytona champ Michael Waltrip will be driving this tribute car
instead of the usual 200 miles per hour billboard. Waltrip`s team changed
the car`s number to 26 to honor the 20 first graders and six adults gunned
down in December. This paint job encourages fans to send a text to donate
$10 to the Sandy Hook School support fund operated by the United Way.

NASCAR`s chairman donated $50,000 to the fund after the Waltrip made this
emotional visit to Newtown earlier this month.

I`m joined now by NASCAR driver Michael Waltrip and Brandon Davis, the
owner of Swan Racing, who are getting ready for Sunday`s race in Daytona
Beach, Florida.

Michael, congratulations on qualifying yesterday. Great to have you on THE
ED SHOW tonight.

As well as you, Mr. Davis.

MICHAEL WALTRIP, NASCAR DRIVER: Well, we really appreciate it. Yesterday
was a lot of pressure to put that number 26 text Newtown to 80888 Toyota
into the field. It was a big deal for our team and that community to know
that they`re going to have something to cheer for coming on Sunday in the
great American race. And we couldn`t be prouder to represent the community,
and we couldn`t be prouder for the NASCAR family rallying around this great
cause.

SCHULTZ: Michael, why did you turn your car into a tribute to Newtown?

WALTRIP: Well, Mike Helton, who is a NASCAR president, had a friend who
lived in the Daytona Beach area, and his friend`s son, his grandson was in
school that day when the tragedy occurred. And Hans Relik (ph) is the
gentlemen`s name. And he asked Mr. Helton, could you get some of the first
responders a pit tour? Show `em the racetrack so they can come down and
enjoy the Daytona 500.

And that`s all it took for Mike Helton`s brain to go to work and start
trying to figure out how he could do more than that. He called me up and
said we love to put Newtown to 80888 on your car and have you represent the
community. And Brandon Davis, our car owner, was kind enough to allow us to
put the livery of the Newtown, Connecticut, town and the school colors on
the race car.

But before we wanted to announce to it the world to tell everybody what we
were doing, we took that trip up to Newtown and visited with first
responder, teachers, even some of the victims` families. And indeed, it was
quite an emotional moment. And from that day until now, I left part of my
heart in Newtown.

And I`m so thankful we`re able to get that car in the show. It was lot of
pressure for our team to get in. We`re in now. And we`re going to celebrate
Sunday. And hopefully give those folks in Newtown three hours or so of joy,
something that they can sort of take a break from the tragedy and enjoy
seeing their car on the track.

SCHULTZ: Brandon Davis, what kind of reaction are you getting from fans?
What kind of reaction do you think you`re going to get on Sunday?

BRANDON DAVIS, OWNER, SWAN RACING: We`ve had a very good reaction so far.
One of the things that really surprised me when we were in Newtown
unveiling the car, Michael and I and Brian Franz (ph), the local fire and
rescue were there, of course, the first responders. And they mentioned to
us that they had a Daytona 500 watch party every year. And they were very
excited that now they`re going to be on the car.

And I`m very happy to support that everyone I know across the country is
behind this. And I hope everyone, whether they`re a NASCAR fan or not, gets
behind Newtown and texts Newtown to 80888.

SCHULTZ: I have to ask you, Michael, the shooting in Newtown renewed the
gun control debate on many fronts in this country. Of course, the Sandy
Hook parents have spoken in favor of regulations such as background checks
and maybe some other things. Where do you come down on this issue at all,
or does that matter?

WALTRIP: We are here to race cars, and any time our community is hurting,
we rally around the races. It`s how we heal ourselves. And if you think
about the healing process that the town of Newtown and the folks from Sandy
Hook are faced with, this runway is very long -- years and years of therapy
and counseling and just trying to heal these folks and make them -- try to
return to some sort of normalcy. And we don`t know what all that`s going to
entail and what all it could encompass.

And so, we`re here to race our car do, what we do best, celebrate the
event, the Daytona 500 with the wonderful tribute and an honor to the folks
in Newtown. That`s as political as we`re going to be because we`re just
thankful that it`s been received so well by the town and how happy they are
they`re going to have a car on the track.

SCHULTZ: Sure. And obviously, Brandon, the United Way says the Sandy Hook
School Support Fund has raised over $9 million so far. Where do you hope
the money will go?

DAVIS: I hope that it goes to helping the families that need it. And they
need as much help as they can possibly get. Not just the money, but
support. And they need to know the rest of the country is behind them.

I know there has been a lot of controversy over this, after this incident
across the country. And this, we`re hoping to pull everyone together to get
behind the families that are in need, because they`re going to need it for
a long time.

SCHULTZ: Michael Waltrip and Brandon Davis, you`re doing great things for
Newtown, Connecticut. The town certainly needs it. I know they appreciate
it. Best of luck to you, gentlemen, in the big race coming up on Sunday.
We`ll all be watching. Thanks so much.

WALTRIP: We really appreciate it. And the fact that you had us on tonight
helps us to spread the word. So you`re doing great things too. Thank you.

DAVIS: Thank you very much.

SCHULTZ: You bet.

And coming up, the FBI takes down The Scooter Store scam. I have the
details on how much Medicare fraud has cost you and how the government is
fighting back.

And the right-wing smear machine kicks into high gear. The panel tackles
the latest conspiracy theories from Rand Paul, Ted Cruz and others. It`s
all coming up.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

It`s the same old story. In an effort to cut spending, Republicans want to
raise the Medicare eligibility age. Currently, the minimum wage is 65 years
old. Now, if Republicans had their way, they`d push it to 67 years old.

Two additional years could really devastate seniors, 270,000 seniors would
become uninsured. The solution to our budgetary problem isn`t cutting
benefits and breaking a promise made to our seniors. We need to cut down on
the rampant fraud.

You might be surprised to learn just who is ripping off the government
these days.

(BEGIN VIDEO CLIP)

NARRATOR: Imagine one scooter or power chair that could improve your
mobility and your life. One Medicare benefit that with private insurance
may entitle you to pay little to nothing to own it. One company that can
make it all happen.

UNIDENTIFIED MALE: Your power chair will be paid in full.

NARRATOR: The Scooter Store.

(END VIDEO CLIP)

SCHULTZ: Oh, the old Scooter Store. Well, they`ve spent years convincing
patients to buy motorized wheelchairs, telling them the government will
pick up the bill, not a problem.

But former employees told CBS news the company`s strategy was to bulldoze
doctors into writing prescriptions so people would get the chairs whether
they need them or not?

Well, on Wednesday, federal and state agents paid a little visit to The
Scooter Store, raided the joint headquarters in an alleged fraud
investigation. The inspector general of HHS released a report finding that
industry-wide, 80 percent of Medicare payments for power chairs, they are
made in error.

Now, you see from 2009 to 2012, government auditors found that The Scooter
Store overbilled Medicare by as much as $108 million. It`s estimated that
Medicare fraud costs taxpayers an estimated $60 billion to $90 million each
year. The Obama administration has made it a top priority to cut down on
health care fraud.

For every dollar spent on investigating health care fraud over the past
three years, the government has recovered $7.90. When Republicans tell you
that gutting Medicare benefits is the only way to cut spending, make sure
you remind them about the old Scooter Store, and tell them to crack down on
the waste, fraud, and abuse before they come after seniors.

(BEGIN VIDEO CLIP)

PAUL: I would say balderdash. It`s untrue, unfair, dishonest, disingenuous.
The president is making stuff up.

(END VIDEO CLIP)

SCHULTZ: Up next, the big panel on the sequester truthers coming out of the
woodwork and the sequester scare from senator Ted Cruz.

Plus, the controversy over today`s bail decision in the blade runner trial.

And then there is the other Oscar, 48 hours until Hollywood`s biggest
night. I`ll tell you who should be taking home the hardware.

(COMMERCIAL BREAK)

SCHULTZ: Thanks for watching the "Ed Show."

Tonight, Congress is still in recess, but the right wing smear machine was
hard at work again today. And we have several examples, but let`s start
with senator Rand Paul of Kentucky, who is spending his vacation telling
FOX News viewers the looming budget crisis is really not a big deal. In
fact, senator Rand Paul says that the president is lying.

(BEGIN VIDEO CLIP)

PAUL: I would say balderdash. It`s untrue, unfair, dishonest, disingenuous.
The president is making stuff up.

(END VIDEO CLIP)

SCHULTZ: Making stuff up. Rand Paul says he is not worried about $85
billion in budget cuts between now and September 30th, even though his own
party leaders say sequestration threatens the nation`s security, military
readiness, and the economy.

Now, senator Paul wants us to believe sequestration is a good thing, and
the president is just overreacting.

(BEGIN VIDEO CLIP)

PAUL: The sequester is a slowdown in the rate of growth of government. It`s
the least we can do for the president to use this histrionics is really, I
think, beneath the presidency.

(END VIDEO CLIP)

SCHULTZ: Let`s get some reactions tonight from our panel. Michelle Goldberg
joins us of "Newsweek" and "the Daily Beast." John Nichols of the
Washington correspondent of "the Nation" magazine. And also with us
tonight, political strategist Angela Rye.

Great to have all of you with us tonight.

Is the president overreacting? Let`s just say that Rand Paul is spot-on.

John Nichols, is the president overreacting?

JOHN NICHOLS, WASHINGTON CORRESPONDENT, THE NATION MAGAZINE: He absolutely
is not overreacting. The sequester is austerity. It is -- it`s not slowing
the rate of growth. Our population is growing. Our needs are growing. If
you slow down the amount of spending you`ve got at a time when you have
growth and population, you are making severe cuts.

And the sequester is really the first installment on an austerity agenda
that poses huge threats according to government and private sector analyses
to our employment rate, to our potential for growth.

So, no, the president is neither lying nor is he being, you know,
histrionic or overboard.

SCHULTZ: Angela, what is the Republican strategy here?

ANGELA RYE, POLITICAL STRATEGIST: I don`t know what the Republican strategy
is, but it looks to me like there is not one. They are saying different
things. They are reacting on different points and none of them make sense
to me.

At the end of the day, when you talk about sequestration or across the
board cuts, as they are commonly know, we are talking about things that
impact the lives of real people. They want to see small government.

Well, small government doesn`t work when you have a large population.
Whether it`s food inspectors or health care programs, or cuts to education
programs that are vital to the success of our country, we are talking about
a magazine massive issue here.

It is not about there is no dream or nightmare really is what sequestration
would be all about. It`s not fate. This is a real issue. It deserves real
attention. We cannot continue to have these piecemeal solutions that
continue to put us in a crisis governance mode. We just can`t do it
anymore.

SCHULTZ: And Michelle Goldberg, what are we seeing the Republicans do here?
They`re calling the president a liar. They`re saying he doesn`t have a
plan. They`re saying this all his fault.

MICHELLE GOLDBERG, NEWSWEEK, THE NATION MAGAZINE: Well, they`re doing a
bunch of different things, right? I mean, on the one hand you have some
Republicans like Rand Paul saying the sequester is no big deal, that if it
went into effect it would slow the rate of government, which is kind of
their entire reason for being.

At the same time, you have other Republicans saying this isn`t our fault.
This is all Obama`s idea. They want the get as far away from any
responsibility for the sequester as they can. You know, I think kind of
depends on how much they have drunk their own cool aid. And that`s a battle
that you see within the Republican Party.

The people who are true believers in the tea party ideology, it maybe
people like John Boehner who are willing to humor it, but at the end of the
day kind of know that a lot of these policies if enacted will be
catastrophic and that the Republicans will be blamed for them.

SCHULTZ: What do you think, John? Are they just going to go with these --
this sequester, hit the deadline, let it start to peel on the economy a
little bit and continue to blame the president? Do they think they can turn
the numbers in their favor with this strategy?

NICHOLS: From what I hear, talking to Republicans and Democrats, there is a
view within the mainstream of the Republican party. Not the Rand Paul
fringe, but the mainstream, that they should let the sequester go forward
on the theory that they need to tell their base that they are standing up
to Obama.

When the president stepped up and said we have to do something, the base
immediately said oh, no, if the president wants it, we don`t want it. It
appears that even some of the supposedly more sensible players in the
Republican party are willing to let the sequester happen, willing to let
the pain happen.

SCHULTZ: Yes.

NICHOLS: To satisfy their base.

SCHULTZ: Michelle, who pays the political price on this, once it all plays
out?

GOLDBERG: Well, I would like to think that the Republicans will pay the
political price. And it seems likely, I mean, given the kind of popularity
ratings of the Republican party and of Congress more generally. And it
seems that you can`t quite -- you can`t say as some of them are trying to
say that the sequester isn`t a big deal, but all of the pain from it are
going to be Obama`s fault.

When people start feeling these cuts in their real lives as they`re going
to, it`s going to be pretty obvious who it`s been that has been willing to
kind of shut down the government or derail the economy in order to force
these austerity measures.

SCHULTZ: I mean, we have gone from Boehner in the summer of 2011 saying he
got 98 percent of what he wanted to all of the sudden this is all the
president`s fault and say, we`re at this point right now. They don`t know
what they want. They are an unguided missile, the way it sounds
politically, and they`re searching for an identity and they`re going to let
it go through because they`re winging the whole thing.

Let`s talk about another member of the tea party smear team. Rookie Texas
senator, Ted Cruz, is reportedly accusing Harvard law school of harboring
communists. The New Yorker posted this story today, quoting a speech Ted
Cruz gave while he was campaigning a couple of years ago.

Cruz reportedly said the communists were members of the Harvard law faculty
while he was there between 1992 and 1995. Cruz refused to comment on the
speech today. Senator Cruz was recently criticized for making some
unverified allegations against Chuck Hagel last month.

Angela, what about this? Is Cruz just trying to make a name for himself
with the tea party, or is he really on a witch-hunt?

RYE: I mean, senator Cruz is a rebel without a legitimate cause. I don`t
know what is going on with him. But every time you turn around, there is
some new hyperbole that he is spewing. And today, to see him talking about,
you know, the president is the most radical president ever, I`m sorry, but
I want to know what the definition of radical is, because to me, radical is
a president who would come up with a mass communications campaign to
deceive the American public into believing there are weapons of mass
destruction. I hardly see anything that President Obama has done as
radical.

SCHULTZ: Senator Barbara Boxer loosely compared Ted Cruz to Joe McCarthy.

John Nichols, your thoughts. That a fair comparison?

NICHOLS: Sure it is. When you suggest that there are communists on a
faculty, and then when you`re pressed about it you don`t answer the
questions, you play around with it, that`s McCarthyite tactics.

Now, the one thing that is really important, though, is not focus so much
on Ted Cruz, but to focus on the leadership of the Republican party. In the
1960s and the 1970s, William F. Buckley and Barry Goldwater and Ronald
Reagan called out members of their own party when they went to fringe
arguments, when they went to extremes, when they made claims that were not
legitimate.

The problem with Ted Cruz is not Ted Cruz. It is the leaders of the party,
Mitch McConnell, John Boehner and others who don`t call him out for
languages like this.

SCHULTZ: Michelle, do you think the Republican leadership will do that?

GOLDBERG: I can`t see what they will have to gain from it. I mean, you have
seen a little -- a few attempts to rein in ted Cruz. You know, McCain
called him out. Lindsey Graham called him out for some of his outrageous --

SCHULTZ: Mitch McConnell has got his own problems to worry about without
calling out Ted Cruz, wouldn`t you think, Michelle?

GOLDBERG: But, part of it is that the party is that the leaders of the
party, even very conservative leaders are so incredibly cowed by their
base. You know, for a long time you had a party that very adroitly whipped
up the frustrations and paranoia and suspicions of their base. They`re no
longer controlling the base. The base controls them. And so there is not
much leverage they have over it.

SCHULTZ: They have just enough control to screw things up so legislatively
nothing gets done. That`s about where they are right now.

Let`s talk about another Texan representative Louie Gohmert and his bizarre
claims about guns and Sharia law. Here it is.

(BEGIN VIDEO CLIP)

REP. LOUIE GOHMERT (D), TEXAS: We have some people who think Sharia law
ought to be the law of the land and forget the constitution. But the guns
are there. The second amendment is there to make sure all the rest of the
amendments are followed.

(END VIDEO CLIP)

SCHULTZ: What about that, Angela?

RYE: Well, first and foremost, I want to say that America is a land of
laws. We have the United States constitution. We have got the United States
code, and we have states and municipalities that have laws that are enacted
on a regular basis. Sharia law is not one of them.

The disrespect to Islam notwithstanding, this is highly problematic there
are no facts given in the opinions that they constantly, you know, put out,
they get air time. I`m trying to understand the standard for obstruction of
justice at this point. This is illegitimate points they consistently make,
and they get air time and space in papers for this. It`s just outrageous to
me. It really is.

SCHULTZ: All right, Michelle Goldberg, John Nichols, Angela Rye, great to
have you on "the Ed Show" tonight. Appreciate your time.

It was an emotional day in court for Olympic star Oscar Pistorius. Up next,
the latest on today`s controversial bail hearing in the blade runner trial.
That`s coming up next.

And Oscars.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back.

Nancy Pelosi said today Democrats will use the minimum wage issue to win
back the house in 2014. And many of you are talking about that on social
media.

On Facebook, Amy Riley Sommer says $9 is a lot better than 7 .25 an hour
but living off $9 would still be a challenge.

Fredrick Stevens writes more money to the workers means more tax money. It
also means more spending which causes more manufacturing and more jobs. All
good.

Karen Hebertus says maybe we should put Congress on minimum wages. Let`s
see how they would fare on it.

You can go to our Facebook page right now and join in on the conversation.
And don`t forget to like "the Ed Show" when you`re there.

Still to come, I`m picking my favorites for Sunday night`s academy awards.
See how my picks are going to stack up against the experts.

Stay tuned. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: And we are back. After four days of combative hearing, world
famous athlete, Olympic athlete Oscar Pistorius has been granted bail. Also
known as the blade runner, Pistorius is accused of murdering his girlfriend
in South Africa on valentine`s day. Pistorius is facing one count of
premeditated murder. Earlier today, a magistrate released the double
amputee on bail, set at $112,000.

Michelle Kosinski of NBC has the latest details from South Africa.

MICHELLE KOSINSKI, NBC NEWS CORRESPONDENT: Hi, Ed. Right, this finally did
happen. After four tense days of arguments, and when it was finally read
out, Oscar Pistorius sobbed, broke down, his body shaking. And even though
you might say that this was fully expected, the judge really kept everyone
guessing. I mean his ruling lasted two hours.

In it, he criticized prosecutors, saying that their witness, this chief
police investigator presented flawed evidence. Some of the things he said
were just wrong, you should have done more work on the case. But that
doesn`t mean that the state`s case is not strong.

Then, he criticized Pistorius, saying he had problems with his account of
what happened early that morning, saying if he felt so vulnerable, so
scared as he claimed that he had to grab his gun and start shooting, not
knowing who was in that bathroom, why did he rush right into the danger?

But ultimately, he ruled that Pistorius was not a flight risk, not a danger
to the community, and released him on bail. Pistorius has to surrender his
passports, his guns, can`t use drugs or alcohol, can`t return to the scene
of the alleged crime, which is his house. Needs permission to leave his
town, and will have to check in with police twice a week - Ed.

SCHULTZ: That was NBC`s Michelle Kosinski reporting from Pretoria, South
Africa.

Tonight in our survey, I asked will Republican lies prevent a deal on the
sequester? Eight four percent of you say yes, 16 percent of you say no.

Coming up, I will tell you why I`m actually pulling for a Republican on
Sunday night. David Edelstein of "the New York" magazine is here to preview
the academy awards.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: And in the big finish tonight, the Oscars are Sunday night, and
everyone in the office is making their predictions, right? Your office is
like ours? OK. Well, I`m going to give you mine in just a moment.

The odds makers are going with "Argo." In-trade give it an 85 percent
chance of winning. It also is the pick of Nate Silver of 538.com. "Argo"
portrayed the rescue of six Americans during the Iran hostage crisis back
in 1979.

"Zero Dark Thirty" depicted the ten-year hunt for Osama bin Laden. And the
movie actually sparked a Senate investigation.

One of my favorites, "Lincoln," of course, was possibly one of the best
political movies I think ever made.

Then there was "Silver linings` playbook," a truly funny, unusual, and
moving film about a man with bipolar disorder.

Of course, every year there are movies and actors who are sadly overlooked.
Ladies and gentlemen, I give you the campaign.

(VIDEO CLIP PLAYING)

SCHULTZ: After cam Brady`s baby-punching incident, Marty Huggins has jumped
11 points in the polls.

Joining me tonight is David Edelstein, chief film critic of the "New York"
magazine and contributor for CBS Sunday morning.

Do I have a shot at this? I probably shouldn`t hold my breath.

DAVID EDELSTEIN, CHIEF FILM CRITIC, THE NEW YORK MAGAZINE: I think it`s a
terrific performance. And I definitely think that you really nailed the
sort of gravity of the moment and the lightheartedness. I`m just talking
out my butt here. I have no idea.

SCHULTZ: Believe me, I can do it for 20 minutes as well.

(LAUGHTER)

SCHULTZ: David, great to have you with us tonight.

EDELSTEIN: I am very happy to be talking about an Oscar that didn`t kill
somebody either tonight.

SCHULTZ: What do you think?

EDELSTEIN: Tonight.

SCHULTZ: Best picture?

EDELSTEIN: Well, best picture, everybody is saying "Argo," you know. And
they`re saying "Argo" because Ben Affleck, right, didn`t get nominated for
best director. So his loss is the movie`s win. See, it`s kind of funny any
like that in Hollywood. It`s not so much artistic merit, it`s who can we
award. Who really needs it? Who needs the bucking up?

SCHULTZ: Of all the pictures I saw this year, when I came out of "Lincoln,"
a week later I went back and saw it again, I was so impressed with it. Both
times I left the theater thinking how can that not win? I just had that
feeling. Does "Lincoln" have a great shot at getting best picture?

EDELSTEIN: You know, I thought so. But maybe it just wears its gravitas too
loudly, you know. Maybe just people, you know, came out of it awed, and now
they just think back and go I don`t really want to see that again. I don`t
want to think than movie. I don`t know. I don`t know. I loved it too. I
loved it a lot more than I loved "Argo."

SCHULTZ: Best actress, I like Jennifer Lawrence. I thought she was terrific
in "Silver Linings Playbook."

EDELSTEIN: Well, I think she is definitely going to win. Jessica Chastain I
thought had a great shot. But then, "Zero Dark Thirty" got caught up in all
the torture stuff, and we know that despite what that movie says, torture
does not work. And if you can point to anything to prove that, it`s that
"Zero Dark Thirty" will not win an Oscar.

SCHULTZ: Is this a tough year to pick tough actor?

EDELSTEIN: No. Hugh Jackman`s got it in a lock, absolutely. Ha, ha, just
kidding. Of course it`s Daniel Day-Lewis, of course.

SCHULTZ: Really?

EDELSTEIN: I can`t even remember who else is in the category, I`m afraid, I
know.

SCHULTZ: Bradley Cooper! Bradley Cooper.

EDELSTEIN: He`s great.

SCHULTZ: When I was watching him, it was this is just this guy being this
guy. It was like there was no script at all. It was just--

EDELSTEIN: I don`t know if he would like to hear you say that since he is
playing a lunatic. But, you know, every time this time of year, I get
really sad in a way. You know, all these people do these great things. And
we have to view everything these days through a prism of a competition, you
know. Some of my favorite performances of the year, didn`t get nominated.
But what the hell, let`s talk about the guys who did.

SCHULTZ: Best supporting actor?

EDELSTEIN: Well, everybody says De Niro. And you know why? Because De Niro
was out there campaigning. He was pressing the flesh. He was, you know,
whereas Tommy Lee Jones who I thought had the best chance is kind of widely
regarded as a sour puss.

SCHULTZ: Does that matter?

EDELSTEIN: Of course it matters. You`re not going to talk to me about art,
are you? We`re talking about politics here. It`s all about politics, I`m
afraid, I`m afraid.

SCHULTZ: So it`s really not who the best is. It`s really maybe who they
like and De Niro knows that?

EDELSTEIN: I don`t want to minimize the fact that these people have great
tastes by and large, and they pick very worthy people. But no, in the end,
what makes the difference is how much money you pay on the campaign. Yes,
they have political -- they have awards consultants. They have their own
James Carville. They have their own war rooms, you know.

They really do it out there. They spend the money to get to lobby these
voters, these few thousand white over 55 male predominantly liberal voters
and get them into this camp.

SCHULTZ: What performance this year was a real letdown? What were you
expecting to be really good and it didn`t do very well?

EDELSTEIN: You know what? I don`t want to bad-mouth people.

SCHULTZ: Yes, yes.

EDELSTEIN: I just want the say -- I want to say that I`m disappointed that
Matthew McConaughey, who gave such an electrifying crazy performance in
"Magic Mike" wasn`t recognized. Here is a guy who gets such a bad rap, you
know. People think he is a space cadet. He is so wonderful. He is such a
wonderful actor.

Rachel Wise in a movie nobody saw called "the deep blue sea." All these
people, my heart kind of breaks for them. Poor actors, they are always
getting rejected.

SCHULTZ: Well now, for best director, you like Ben Affleck, right?

EDELSTEIN: He is not going to win because he is not nominated. He can`t
win. Impossible. Unless he is a write-in.

SCHULTZ: Then the biggest ever side of the year.

EDELSTEIN: Yes. Yes. Him and Kathryn Bigelow for the torture thing. And
yes, definitely. He definitely deserved a nomination. It`s not my favorite
movie.

SCHULTZ: David --

EDELSTEIN: A wonderful, wonderful director. A tad crazy. And well known for
being a bit of a jerk himself. And maybe he has a ways to go. He is one of
my favorite directors in Hollywood, by the way. I love the guy. I don`t
care how crazy he is as long as he is talented. But he is not going to win.

Spielberg I think may win. And the reason he may win is he know who he had
going to bat for him? Bill Clinton.

SCHULTZ: That`s big.

EDELSTEIN: They called out the big dog. So it may happen. It may happen.

SCHULTZ: David Edelstein, great to have you with us.

EDELSTEIN: Thank you.

SCHULTZ: Thank you. Looking forward to a big Sunday night show.

That`s "the Ed Show." I`m Ed Schultz. "The Rachel Maddow show" starts right
now.

Good evening, Rachel.

RACHEL MADDOW, MSNBC HOST, THE RACHEL MADDOW SHOW: Good evening and happy
weekend to you.

SCHULTZ: You too, my friend. Thanks.

MADDOW: Thanks a lot. Thanks to you at home as well for joining this hour
on a Friday.

END

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