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'The Last Word with Lawrence O'Donnell' for Friday, February 22nd, 2013

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THE LAST WORD WITH LAWRENCE O`DONNELL
February 22, 2013


Guest: Haley Barbour

\EZRA KLEIN, GUEST HOST: I`m beginning to believe a lot of Republicans in
Washington do not know how to use the Internet. Why else would they keep
insisting the president has no sequester plan when all you have to do is
use the Google?

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The GOP`s astonishingly bad message.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Where is the president`s
plan?

Where`s the president`s plan?

You know, where is his plan?

(MUSIC)

BOEHNER: Where are the other ideas?

There was never any plan from the White House.

Where`s the president`s plan?

Put something on the table.

CHUCK TODD, MSNBC ANCHOR: Can you explain the John Boehner message?

UNIDENTIFIED FEMALE: Republicans are not willing to budget.

UNIDENTIFIED MALE: Their ideology blinds them.

CHRIS JANSING, MSNBC ANCHOR: Driven by ideology.

AL SHARPTON, MSNBC HOST: We`re seven days away.

JANSING: The sequester is coming.

UNIDENTIFIED MALE: A self-manufactured crisis.

REP. DEBBIE WASSERMAN SCHULTZ (D-FL), DNC CHAIR: The Republicans consider
the sequester leverage.

UNIDENTIFIED MALE: How long will it take to come to their senses?

UNIDENTIFIED MALE: Rick Scott is realizing what a lot of other Republican
governors are seeing (ph).

GOV. RICK SCOTT (R), FLORIDA: So I bet you`re wondering, where have I seen
that handsome, bald guy before?

UNIDENTIFIED MALE: He has been one of the biggest critics of Obamacare.

SCOTT: We`re not going to implement Obamacare in Florida.

We`re not going to implement this Medicaid expansion.

UNIDENTIFIED FEMALE: Rick Scott now says he`ll expand Medicaid.

ANDREA MITCHELL, MSNBC ANCHOR: He is now joining a group that includes Jan
Brewer.

UNIDENTIFIED FEMALE: Jan Brewer, Rick Scott, Rick Snyder, Brian Sandoval.

TODD: The governors are coming to town.

UNIDENTIFIED FEMALE: GOP governors are accepting the law.

UNIDENTIFIED FEMALE: Why are they doing it?

UNIDENTIFIED MALE: Scott is really stuck in the pit.

UNIDENTIFIED MALE: It`s also about the power of free federal money.

SCOTT: This is going to be devastating for patients.

This will be the biggest job killer ever.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know there will be a lot of
discussion today about the politics of all this, about who won and who
lost.

UNIDENTIFIED FEMALE: Obamacare is the law of the land.

OBAMA: When we look back, we`ll be better off.

(END VIDEOTAPE)

KLEIN: One week from today, the sequester spending cuts go into effect. It
happens.

And if you listen to Republicans in Congress, there`s only one thing
stopping us from replacing the horrible, no good, very bad sequester --
President Obama`s unwillingness to put a plan on the table.

(BEGIN VIDEO CLIPS)

BOEHNER: The president laid out no plan to eliminate the sequester and the
harmful cuts that will come as a result of it. It is incumbent upon the
president and senate Democrats to show us their plan, to stop the sequester
from going into effect.

REP. CATHY MCMORRIS RODGERS (R), WASHINGTON: March 1st, the day that the
devastating sequestration cuts, the president`s sequestration cuts take
effect and we`ve yet to hear a plan from the president. We need the
president to lead. We need him to come forward with his proposals.

REP. PAUL RYAN (R), WISCONSIN: It`s the president who proposed the
sequester. It`s the president who designed the sequester. The president
gave a speech showing that he`d like to replace it but has not put any
details out there.

(END VIDEO CLIPS)

KLEIN: No plan, we need a plan, the president needs to come forward with
his proposals. It is the president who needs to give up the plan.

I don`t know if this is a failure of reading comprehension or Internet
searching capabilities, or both. But here is the plan. It is not a secret,
you just have to type something into the Google, and when you type in White
House sequester plan which is what I think you would choose if you`re
looking for the White House sequester plan, it is the first, also the
second and third. And they`re all from WhiteHouse.gov.

Here is the one page of fact sheet. We printed it out. I am holding the
plan in my hand, $1.8 trillion in deficit reduction. It includes about $1.2
trillion in spending cuts, including hundreds of billions in Medicare cuts
and chained CPI, which will cut Medicare benefits, and includes $600
billion in tax increases, mostly on the wealthy. That`s a 2-1 ratio,
spending cuts and savings, 2-1.

You can read even more of the details right here in the president`s budget
for fiscal year 2013. It`s pages 23 to 46. They`re a little bit boring to
read, I agree. There is a plan, multiple formats. I can look it up on the
Internet. I agree, I don`t want to spend my weekend reading. That is why
the gods invented caffeine, and if you happen to be Speaker John Boehner,
congressional staffers, so they can read it for you.

They can have a drinking game. You do a shot of espresso every time you
come across the word outlay. You`ll be very hyper.

Impress your friends with all of your cool facts about dish funding. But
don`t say the plan doesn`t exist because I`m holding it. It is right here.

The president`s plan to replace the sequester is a real thing. The problem
is not that it does not exist. The problem is that Republicans don`t want
to agree to it. They don`t want to agree to eliminate some tax deductions,
in order to come to a compromise with them. Instead the Republicans say the
president should agree to the Republicans all spending cuts, no new
revenues plan, and that will also, by the way, go easy on defense.

Their argument -- their argument is that Republicans won the House, despite
getting fewer votes than the Democrats. And the Republican plan is the only
plan that can come to a vote and pass that chamber. And a lot of pundits
have bought into this argument.

Ron Fournier writes in "The National Journal", quote, "President Obama
makes a credible case that he has reached farther toward compromise than
House Republicans, but knowing who is at fault does not fix the problem."

To loosely quote Billy Joel -- you may be right, Mr. President, but this is
crazy.

Fournier goes on to say, "White House officials and liberal commentators
will push back, they say it`s naive if not outright stupid, to think
Republicans would want to talk to Obama, the conversations wouldn`t do any
good. I contend it`s not any smarter to believe the president`s agenda
would be passed without breaking gridlock, or that Washington is the only
place for two wrongs make you right, somebody has to be the grow-up here,
let it be the president."

That`s not the problem with Fournier`s argument. The problem with
Fournier`s argument is the idea that the president should move away from a
popular plan because a minority party won`t compromise on it. I mean, this
is getting a little bit perverse.

What it says in essence is that the boundary of what is politically
acceptable, the bar for which we set, for the people who win elections, is
the bar set by the party who`s agenda lost them the election.

Democratically, it`s a completely perverse way to view the system and it
can`t possibly be right, I don`t think.

But I`m going to find out, because joining me now is Chris Hayes, host of
MSNBC`s "UP WITH CHRIS HAYES" and the man who will tell me, is this right?

CHRIS HAYES, HOST, MSNBC`S "UP WITH CHRIS HAYES": You`ll be surprised and
shocked, I`m sure, to know that I think it`s ridiculous. I think it
perfectly illustrates the problem of searching for the center.

Jonathan Chait wrote about this in terms of Simpson-Bowles 2.0, which is
that there is for fixed point in American discourse in the center. And
obviously, the center is calculating the distance between two points, and
if the right keeps moving in one direction then all you do to find the
center is keep chasing it. In some ways, that`s already happened.

I mean, the amount of revenue that is plausibly on the table now has been
vastly reduced, as you have pointed out, as you pointed out in your
conversation with David Brooks today, we`re talking about a very small
amount of revenue, just numerically in terms of where the balance is
between cuts and revenue, it`s already happened. And what it is, it
continues to reward the intransigence and obstruction.

There`s a reason I think that the Republican Party continues taking this
line, even though polling shows it`s unpopular, and it looks a little
ridiculous when they say things like the president is unplanned, because
what they are losing politically, they are gaining substantively.

KLEIN: Well, I think there`s something to that. I also think in fact that a
lot of people watching just don`t not read these things and actually just
think a plan came out --

HAYES: Right.

KLEIN: -- because obviously if it did, would Republicans not be saying this
anymore?

HAYES: Right.

KLEIN: The other thing, though, that I thought was fascinating in this kind
of laced to what Fournier said, is this sort of like what I think Jean
Hilly Cato (ph) calls this call of the presidency thinking, that if only
the president would come up and give this one kind of speech, the speech
that`s kind of slightly different than the one he is giving now. Or if he
would slightly tweak his agenda, then somehow Republicans would come to the
table.

But what we`re saying and what I think is true, and the big part of this
here is that Republicans don`t want to come to the table. They want to just
move the table. It`s a strategy. This isn`t some -- there`s now something
the president can do to force them to move. They actually have to want to.
If they`re going to want to, it has to come because there are consequences
to not moving.

HAYES: Yes, there`s no -- there is nothing more overrated I think than
presidential leadership. And this is like the classic example where
everybody is going to sit around and call for presidential leadership. He
has put out a proposal. They`re negotiating.

I mean, the thing that is the craziest to me about this whole situation,
with the sequestration, is the fact that people are always moaning about
how we need bipartisanship. And right now, there is broad bipartisan
agreement that sequestration is a bad idea.

So, let me tell you what? Right a one line bill that repeals sequestration.
That`s bipartisan. Both houses can pass it, the president can sign it, and
we have the wonderful kumbaya moment that everyone in the respectable
center has been asking for. It will be a grand bargain. It will be a deal
between the two sides, that everyone has wanted and fetishized for so long.

It`s so obvious, that is the deal that should be on the table because
everybody thinks the sequestration is a bad idea.

KLEIN: I would take the deal, but they don`t believe that. They -- I mean,
the truth with sequestration is nobody likes it. I mean, the reason it
might happen is they like it better than the other things. I mean, they
prefer it to the alternatives, including the no sequestration alternative.

And one of the things I kind of wonder about it when I look at it,
sequestration gets in a huge amount of defense cuts. Somehow the
Republicans convinced themselves this is a really good idea for them. But I
don`t at all understand why it is something that Republicans are preferred
to say what liberals will prefer to fund the government, by cutting $600
billion out of the defense. That is something liberals might be able to get
taxes in another deal. They could never get the defense cuts if not for
sequestration and if not for Republicans basically signing on to this weird
mechanism they created.

HAYES: Yes. I mean, there`s a definitely a case to be made, a liberal case
to be made that the bad things about the sequester are worth the cost,
because it`s a one-time opportunity of actually shifting the baseline of
defense spending, which has proven to be remarkably resilient, post-2001.
And, you know, Howard Dean has made the case. Matt Yglesias of "Slate" was
making that case on Twitter today.

I ultimately am in the strong anti-austerity camp, which is that we have 8
percent unemployment. We should not be cutting anything. And I don`t think
it is a worthwhile price because it`s real jobs on the line. We should just
get rid of the sequester.

But I understand that case and I also think you`re right that in some ways,
Republicans have overlooked this massive aspect of it in telling themselves
that they`re going to be OK with this.

KLEIN: Chris Hayes of "UP" -- we`ll see you tomorrow morning at 8:00 a.m.
Thank you, my friend, for joining me.

HAYES: Lot of fun.

KLEIN: What do Obamacare and Charlie Sheen have in common? The answer is
Aztec. Joy Reid will join me next.

And a new status symbol in D.C. Why you want to be hacked by the Chinese
government. Don`t worry, I`m going to explain it.

(COMMERCIAL BREAK)

KLEIN: You see this guy right here? This very bald guy right here? Do you
know who he is? He is one of the most important people in health care right
now. Even among people with hair. If you change the channel, you may not
find out who he is. You don`t want that, do you?

(COMMERCIAL BREAK)

KLEIN: You know what is terrible? When you get a letter from your insurer,
saying your premiums have gone up 10 percent or 20 percent or 25 percent,
it is awful.

But here is good news. It is happening way less frequently. In the 15
states where they make data on rate increase as public, double digit rate
increases have fallen from 74 percent of all the rate increases in 2009, to
35 percent in 2012. And in 2013 so far, it is only 13 percent.

So what happened, what happened between 2009 and 2013 that could have done
that? Well, one big thing that happened you may have heard about, is that
Obamacare passed and Obama created something called the rate review
program.

And that means that if the health insurance company wants to increase your
premium more than 10 percent, they have to submit that rate hike to
regulators for review. They can`t just jack your rate way up. They actually
have to justify it. And they often don`t want to have to do that.

Now, is that drop entirely due to Obama care? No, probably not. We had a
recession, too.

But Obama has had a major influence, and it is another bit of bad news for
the law`s opponent. Since the law passed, they had been hoping that
something, anything, would come in and ruin it -- an election, a Supreme
Court ruling, huge rate hikes, anything. That has not happened.

To paraphrase Charlie Sheen, Obamacare is kind of #winning.

And another opponent, a big opponent, gave up this week. Florida`s Rick
Scott, was a Tea Party-backed former hospital executive who ran for
governor largely on his opposition to Obamacare. His state led the Supreme
Court challenged to the law.

Last summer, after the Supreme Court ruled in favor of Obamacare, Governor
Scott said this in the provision of the law that would expand Medicaid.

(BEGIN VIDEO CLIP)

SCOTT: The federal government can`t afford this. We can`t afford it. It
doesn`t make any sense to do this expansion.

(END VIDEO CLIP)

KLEIN: Then the presidential candidate, who opposed Obamacare lost the
election bad. And two days later, the person who had the most control over
congressional opposition to Obamacare said this.

(BEGIN VIDEO CLIP)

BOEHNER: It is pretty clear the president was reelected. Obamacare is the
law of the land.

(END VIDEO CLIP)

KLEIN: And this week, Rick Scott was sounding an awful lot like Speaker
Boehner.

(BEGIN VIDEO CLIP)

SCOTT: But regardless of what I believe or anyone else, a Supreme Court
decision and the election last November made the president`s health care
mandates, the law of the land. We will support a three-year expansion of
our Medicaid program under the new health care law, as long as the federal
government meets their commitment to pay 100 percent of the cost during
that time.

(END VIDEO CLIP)

KLEIN: Rick Scott has become the seventh Republican governor to accept
Barack Obama`s Medicaid expansion, along Tea Party favorites like Ohio
Governor John Kasich and Arizona Governor Jan Brewer.

What we`re seeing today is that nearly three years after it became law,
Republicans are becoming exhausted with fruitlessly opposing Obamacare. So
much so that last night, a leading Republican thinker said this.

(BEGIN VIDEO CLIP)

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think it is honorable to say I
will take the money, because the people of my state are paying the federal
taxes, are subsidizing people in other states. Or you could argue the other
way and say I still want to keep up a fight. You know, but if enough states
stay out, it will collapse. I`m not sure that is a real prospect.

(END VIDEO CLIP)

KLEIN: It is honorable to make peace with Obamacare, getting into collapse
is not a real prospect.

We`re entering a whole new world here, a world where Republicans slowly
come to accept the existence of Obamacare and try to begin to buy into.

Rick Scott, for instance, used a Medicaid expansion as leverage with the
Obama administration, he got the OK on the experiment he wants to run in
Florida in which Medicaid would deliver to more private insurers. That is
how the fight over Obamacare ends and the work of the healthcare form
continues, that is how Obamacare actually #wins.

Joining me now is MSNBC`s Joy Reid.

Joy, was this always predictable. Did it have to go this way once the
election was over? Did the opposition begin to fold?

JOY REID, THEGRIO.COM: Absolutely, yes, Ezra. The white flag of surrender
was ready, for Rick Scott to whip out for time for the proverbial Voldemort
folds to Harry Potter moment.

Yes, of course, he was going to take the money, because, look, Florida is
one of the states that has super abundance of Medicaid patients and has
hospitals. You take University of Miami`s hospital, for instance, they
would literally collapse, financially if they didn`t take this money, which
is again 100 percent of -- the federal government paying 100 percent of the
cost in the first years. And the reason for that is that Florida has about
1.3 million uninsured people.

And the deal that hospitals across the country, as you know made, in order
to support the Affordable Care Act was that they would forego federal money
that helps to subsidize indigent patient`s care. And they would forego that
money because of Medicaid deal. But along comes the Supreme Court, which
says, you know what, states can opt-out of the Medicare portion which would
have left hospitals high and dry.

And Rick Scott was a former hospital executive. Remember, he had that
company that did the huge Medicaid-Medicare fraud. He is a former hospital
executive, hospital industry lobbyists were coming to him and other
Republicans, saying we`re going to go bankrupt. You`re going to take the
money. So he was always going to take the money.

KLEIN: And in that way, it`s almost a bit of a return to form to this bill,
I always just think it`s amazing, the Republican opposition, given that so
much of it is architecture had its origin on the Republican side. I mean,
the individual mandate, exchanges. It does run through private insurers,
not a single-payer.

You know what? I think a lot of Republicans, including Scott, this sort of
Medicaid privatization idea and you`re seeing others begin to talk like
this still are saying, well, maybe we can actually make something of it.
Maybe we can try to build on this in the future. And getting constructively
engaged in that seems to me to be the big win here for the Obama
administration, even if they don`t agree, once they begin to try to build
on Obamacare, as opposed to get rid of it. That`s a really sustainable
place for the law.

REID: No, I totally agree with you, and, you know, Florida is one of the
states that opted out of running the exchange. So, the federal government
will run it is not really a perfect deal for patients. They get to run this
experiment on having Medicaid patients have to run their care through HMOs.
Now, that is, as anyone who`s ever had an HMO know, not a perfect deal, but
it does avoid this problem of about 935,000 Floridians who would neither be
able to qualify for Medicare, nor be able to qualify for the exchanged
subsidies who would have basically had no money but still be getting
treated at these hospital.

So, it`s sort of a win-win, you get a little privatization, but you get
hospitals being able to get compensated to the tune of about $33.6 billion
for caring for the poor. That`s actually a pretty decent deal.

KLEIN: Joy Reid, thank you for bringing the health care wonkery tonight.

REID: Thank you.

KLEIN: So give me two minutes and you will be the coolest person at the
party this weekend. When everybody says they won`t get what happens when
you -- I don`t want to say next. I don`t want to ruin the surprise what
will come next. But you need to know it. And it involves an awesome story
about bird poop.

(COMMERCIAL BREAK)

KLEIN: Sometimes when I host these shows I come to the morning meeting with
ideas that are important, I think, they`re important ideas. But they`re not
obviously good TV ideas. They`re the kind of ideas where the producers kind
of make gagging noises and begin preemptively checking the ratings. That`s
when I cut a deal, you let me talk about what I want to, and I`ll keep it
very short. I promise, like two minutes or less short.

That is how the Ezra Klein challenge was born. Can I tell you really
important and maybe little complicated things in under two minutes?

I believe I can. I`m excited in fact to try. And today, today, I`ve got a
good one for you. I want to tell you how a sequester actually works, like,
if you`re the literal person in charge of making those cuts we`re hearing
about, what do you? How do you do it?

It all comes down it appears to three little words, but before we get
there, can I get my clock? Oh, there`s my clock.

All right, go.

The sequester is set to go into effect on Friday. It`s one week from today
and make big spending cuts across the board. But not -- and this is really
important -- not everything. It can`t cut Social Security. It can`t cut
Medicaid. Medicare beneficiaries are spared, food stamps and Pell grants,
but pretty much everything else takes a big hit.

Now, the weird thing about the sequester, the thing that makes it a really
dumb way to cut spending is we don`t get to choose what the cut. You can`t
decide farm subsidies aren`t as important as education. And so, they get
more cuts. You just have to spread across everything except those few
programs I named, they`re totally protected.

So, the sequester -- big cuts, no real choosing between them. You`re with
me so far?

This is where things get a little weird. The law says, and I`m quoting
here, that the same percentage sequestration, shall apply to all programs,
projects, and activities within a budget account. But how do you define
programs, projects and activities? That`s the catch. It is not defined
anywhere.

You see how it gets complicated. Take medical research. As my "Post"
colleague Dylan Matthews, you could say every grant is a project, every lab
using the grant is a program. And every employee is an activity. Or, or,
or, you could say that all cancer grants collectively are the project. Each
type of cancer you`re researching is the program and each grant is an
activity.

You want to see how crazy this gets? The last time we had a sequester was
1991. A guy named Barry Anderson was helping to implement it. And he tells
this story. There was a program the Commerce Department for nautical
navigation. And within that, there`s a project to approve buoys, and then
you finally get down to the activity, that word "activity", which is the
buoy itself.

And Congress said, you can`t remove those buoys, so somebody from Commerce
saying, I have to go as low as I can, what do I do with the buoys? So, I
asked, do you do anything at all with the buoys? And they said, twice a
year, we send somebody to scrape off the bird poop. So I said scrape 5
percent less poop.

Done.

Stop the clock there. Four seconds.

So this sequester, three words no one hugely understands, programs,
projects and activities, but when you hear them, when you think about how
we`re going to do it. Think about a government in 1991 where an actual
government official is telling somebody to scrape 5 percent less bird poop,
that is what this country is coming to.

Republicans would not let George W. do it, but times have changed for
Republicans. And immigration reform might have a bipartisan chance of
passing under President Obama.

Former Governors Ed Rendell and Haley Barbour both join me next.

And later, the FBI has a problem with -- I am not kidding here -- sexting.

(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: I thank the members
of the Senate and members of my administration who worked so hard on the
border security immigration reform bill. I am sorry, the Senate was unable
to reach agreement on the bill this morning. Legal immigration is one of
the top concerns of the American people and Congress`s failure to act on it
is a disappointment.

(END VIDEO CLIP)

KLEIN: June 28th, 2007, was a sad day in the second term of George W.
Bush`s presidency. That was the day that President Bush`s hope to pass the
comprehensive immigration reform bill died on the Senate floor. The effort
became months early with a very strong bipartisan effort led by senators
John McCain and Ted Kennedy, McCain, Kennedy and Bush together, one bill.

First part, president Bush lobbied hard, spoke to the press and you
personally called law makers to try to win their support on the
legislation, but the bill died anyway. And it died mainly because of a huge
back lash on the right. And leading that back lash were the Rush Limbaugh`s
and the Sean Hannity`s, and even this guy.

(BEGIN VIDEO CLIP)

BILL O`REILLY, FOX NEWS ANCHOR: American is run primarily by white
Christian men. And there is a segment of our population who hates that.
Despises that power structure. So they, under the guise of being
compassionate want to flood the country with foreign nationals, unlimited,
unlimited. To change the complexion, pardon the pun, of America.

(END VIDEO CLIP)

KLEIN: That was nearly six years, and another president in his second term
is trying yet again to get the legislative branch to pass an immigration
bill.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Send me a comprehensive
immigration reform bill in the next few months and I will sign it right
away. And America will be better for it. Let`s get it done. Let`s get it
done.

(END VIDEO CLIP)

KLEIN: And again, there has been bipartisan support at the beginning, Marco
Rubio, and John McCain on it, among others. And yet again, though, the
outrage is beginning to rise on the right even before the state of the
union.

Rush Limbaugh was attempting to force the Republican party`s right wing to
fall in line. Although, he didn`t at the time, he seemed optimistic about
the chances.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: I mean, thanks to Obama now you have
amnesty, unless you get convicted of a major felony. So, I don`t know that
there is any stopping this. I -- I mean, it is up to me and FOX News, and I
don`t think FOX News is that invested in this. But there is not -- I don`t
think there is any Republican opposition to this of any majority
consequence of any size.

(END VIDEO CLIP)

KLEIN: But he is getting backup for this. Senator John McCain at his home
for a town hall, some of the folks who showed up were not at all happy.

(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 is too damn bad is
a gun, that is all that will stop them.

SEN. JOHN MCCAIN (R), ARIZONA: The border is 2,000 miles long, sir, I will
give you expert information that means you are talking about two million
soldiers. If you`re looking up the constitution of the United States, we
are not allowed to have a militia on the borders because that is what the
founding fathers wanted. Your problem is with them, not with me.

UNIDENTIFIED MALE: Most of the people that come across the border are
illiterate, they don`t speak English and they`re dependent class. Cut off
their welfare and all they do (INAUDIBLE).

MCCAIN: The overwhelming majority of them are not on welfare.

UNIDENTIFIED MALE: You said build the fence, where is the fence?

MCCAIN: This is a wealth of experience. I`ve had enough, you have had
enough, sir, you have had enough time, pal.

(END VIDEO CLIP)

KLEIN: And now we have this news from Republican congressman Bob Goodlott
who chairs the house Judiciary Committee.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Do you favor an ultimate path to citizenship for these
people?

REP. BOB GOODLOTT (R), VIRGINIA: I do not, people have a pathway to
citizenship right now. It is to abide by the immigration laws. And if they
have a family relationship, they a job skill that allows them to do that
they can obtain citizenship. But simply, someone who broke the law and came
here and say I will give you citizenship now, that, I don`t think is going
to happen.

(END VIDEO CLIP)

KLEIN: I want everything to be clear. He chairs a committee in the House
that is going to have to help write the bill, he chairs the house so that
is important there.

But pushing back in the other direction and good news for immigration
reformers, there is an agreement on what the guest part of the immigration
bill should look like between big business and organize a labor, the
chamber of commerce and the AFLCIO say they agreed on three main criteria,
a new worker visa program, a new federal bureau to study labor shortages
and better information about jobs for native-born workers. So the big
question, can the deed get done this time? Or are we doomed again to
failure?

Joining me now are the two co-chairs and bipartisan policy centers task
force on immigration reform, Pennsylvania governor and MSNBC political
analyst, Ed Rendell, and former Mississippi governor and former RNC
chairman, Haley Barbour.

Governors, it is good to have you here tonight.

Governor Barbour, I want to begin with you, what needs to be done to
protect the somewhat fragile consensus that you and governor Rendell or
that Marco Rubio and John McCain and Chuck Schumer have began to build?

HALEY BARBOUR, CO-CHAIRMAN, IMMIGRATION TASK FORCE: Well, first of all, we
have to secure the border. And to have a secure border is essential if
you`re going to win the support of the American people. If you have Alan
Simpson, the senator who led the fight in 1986 when we passed the last big
immigration reform bill, he will tell you the failure was that afterwards,
they did not do what they promised to be the first thing to do. And that is
to have a secure border and a way to deal with people who came here legally
on visas, and make sure they left on time.

But that, a legalization process for those of the 11 million who are here
today, who have -- who work, who have not committed crimes. Who are -- who
pay their taxes. And then finally, and there has to be other improvements
in the legalization part, I should add like h1 visas are very importance,
guest worker program, very important.

But finally, at the end of the day we have got to have a consensus where
people are willing to support this, and everybody knows they`re not going
to get everything they want. He is not going to get everything he wants,
I`m not going to get everything I want. That is the way that American
politics and government works.

KLEIN: Governor Rendell, on the question of how we secure the border, in
the last couple of years as you know we have thrown a quite a bit of
resources on it. We actually hit a lot of targets we set up in George W.
Bush`s proposed immigration bill, even though, the rest of the bill didn`t
pass.

Now, that doesn`t mean we have full control over every inch of the border,
but what do you think needs to be done from here that would give people the
sense of security or the sense that enough has been done that we can now
move on to the path of citizenship.

ED RENDELL (D), FORMER GOVERNOR, PENNSYLVANIA: Well, Ezra, let me make two
quick corrections. Haley and I are two of four co-chairmen. We have been
joined by Condoleezza Rice and Henry Cisneros, and those two very small and
popular Americans.

And secondly, Rush Limbaugh couldn`t be more wrong, because President
Obama`s administration has deported more illegals than anyone in recent
history in the United States. So to say that they have been weak on it is
wrong.

Look, there have to be measurable. First of all, there has to be e-verify.
Haley and I and all of us agree on that.

KLEIN: That is an employment verification system, right?

RENDELL: Right, so somebody who comes in with a visa, we track them. And
when the visa is up, if they`re not working, boom, we find them and go off
them and track them down and say it is time to get out.

Of those 11 million illegals that are with us today, a significant number
of them came here on visas. I think the, Haley, correct me if I`m wrong,
but I think it is estimated at almost 40 percent of the 11 million actually
entered legally with visas and just stayed over their welcome or their
allotted time.

And secondly as far as border security goes there are parts of the border
that are functionally secure. There is no question about that. Law
enforcement will tell you that not all part of the border. And we have to
have measurables. The key - the devil is in the details. There has to be
measurables that everyone agrees on that could be in the bill, could be
objective, could be transparent. And if that happens, I think then, if we
get a good, strong border security allotment with measurables, then we can
go to the chairman of the committee and say OK, we got border security.
That is what you wanted. That is the main issue, we`re not going to be able
to do this without some reasonable path to citizenship. Let`s make it a
tough, difficult path but let`s make it an attainable path.

KLEIN: Governor Barbour, how significant do you think the agreement between
the chamber of commerce and the AFLCIO is in pushing this?

BARBOUR: Well, I haven`t seen it. But that they were able to reach an
agreement is significant. Of course, everything we`re talking about, we are
talking principles and ultimately you have to get down to the devil being
in the details. But, there are two things that are undeniable.

There are 11 million people here illegally. And we are not going to put
them all in jail. We are not going to deport them all. I mean, it is just a
fact. Secondly, our economy needs workers, we are in a global battle for
capital and labor. And if we`re going to have economic growth, which is the
thing we need the most in this country today. If we`re going to have
economic growth after a deep recession and a very, very flat recovery, we
need this labor. We not only need the high skill h-1b labor in the
technology world and science world that you hear so much about. We need
agriculture labor. We need low-skill labor.

And so, if we want to see our economy grow, we not only have to be more
productive we have to have a larger work force. And our work force is not
growing fast enough for us to have the kind of growth that we have you got.
Hundreds of thousands if not millions of jobs in America that are sitting
here empty today, because there is nobody to do the jobs. Some of those
highly skilled, some of them not.

KLEIN: Governor Rendell --

RENDELL: That is why this agreement, the agreement is so important, because
we`re not going to make this work economically for the country without a
reasonable and responsible guest worker program. And to get the chamber and
the AFLCIO to agree on a program is a huge step in the right direction, no
question about it.

And Haley`s point at the high end, anyone who graduates from a American
University, college with an BA or an MBA or PhD or a masters in science,
math, whatever, should be given the right to get a green card and work
their way to citizenship and staying here. They`re entrepreneurs. They
start businesses. We want them to start the businesses here.

KLEIN: Governors Haley Barbour, and Ed Rendell, two of the four co-chairs
of the bipartisan policy center and immigration task force, thank you both
for being here tonight.

BARBOUR: Thank you, Ezra.

RENDELL: Thanks, Ezra.

KLEIN: Coming up, the sexy messages you would not expect to find on the
blackberries of FBI agents.

And next, the Chinese computer hackers that are not re strained by the
great firewall of China.

(COMMERCIAL BREAK)

KLEIN: Coming up -- actually, no, no, I`m not going to do coming up next.
I`m not going to do a tease about what is next, even if it involves hacking
and sexting. Instead, I`m going to show you this.

This is a bucket full of sloths, baby sloths in a bucket, a bucket of them.
How can you stop watching after sloths in a bucket?

(COMMERCIAL BREAK)

KLEIN: You see this building right here? This building is in China. It is
right off of the Tang road on the outskirts of Shanghai. It is surrounded
by totally normal businesses, restaurants and massage parlors. There`s a
wine importer, if you are feeling classy.

But, this building is one of the most dangerous buildings in the world
right now. This building is a headquarters of people`s liberation army
unit, 61398, which is the Chinese`s army elite computer hacking unit.

According to "the New York Times," the group`s focus is on companies
involved in the critical infrastructure of the United States. It is our
electro co-power grid, the gas lines and water works. According to the
security researchers, one target was a company that had remote access to
more than 60 percent, 60 percent of oil and gas pipelines in north America.

The unit was also among those that attacked the computer security from RSA
whose computer codes protect government data bases. Yes, government data
bases, China`s hackers love getting into the government data bases right
now.

As (INAUDIBLE) report in "The Washington Post" start asking the experts in
which powerful Washington institutions have been penetrated by the Chinese
Hackers spies, and this is the usual answer. Almost all of them. Almost all
of them means more than you may think. We are not just talking about the
White House and the federal reserve. We are talking about almost all the
big law firms, the think tanks, the news organizations like "The New York
Times," human rights groups, contractors, congressional officers, NBCs,
federal agencies.

The Chinese are hacking everybody in Washington, anybody in Washington. It
is almost the status symbol in Washington right now to be hacked by the
Chinese. If you are not being hacked by the Chinese probably don`t really
matter.

The main reason the Chinese and the Russians are hacking us, pretty
obvious. America spends more on its military than the next 13 tops spending
nations combined. We spent about five time with the Chinese do. And if
spending that much for a very long time.

You can`t get into a conventional war with America. We will destroy you. So
China and others are looking for what they can do, they are looking to see
where they can become strong and we are weak, in case they ever feel they
need to use that.

And at one place is our digital infrastructure, much of which is not run by
the army, but by private companies. They may not be able to bomb us, but if
they can knock out our financial markets and we shut down our energy grid
and make is impossible air traffic control systems to work, will cause
chaos, at least.

But that is not the reason they are hacking law firms and think tanks in
Washington D.C. According to the post that Chinese intelligence services
are eager to understand how Washington actually works. Hackers often are
searching to the unseen forces if might explained how the administration
approaches and issue, expert say with many Chinese officials presuming
reports by think tanks or news organizations are secretly the work of
government officials, much as they would be in Beijing,

So that is it then, that the Chinese look at Washington and at us, they
think there must be a way in which what you`re doing makes sense. Some
document, some were a plan, a map, a strategy that is buried in the
computer that is kept locked in a basement of some think tank. Because in
China, in China, there would be, in China someone would be in charge. There
would be a plan somewhere, part of it would be a multi-year plan, it would
be at least partially followed. If it wasn`t being followed, somebody would
have come up with a new plan.

But that is not how they work in Washington. If it looks like what we do
doesn`t make a lot of sense it is because much of what we do doesn`t make
sense. What the Chinese hackers are looking, what they are trying to find
is the great myth of Washington. When I call the myth of scheming. You see
it all over. If you have been "house of cards" on Netflix, and I have been
watching it a lot of "house of card" on Netflix, it is all about the myth
of scheming.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I know what I have to do.

UNIDENTIFIED FEMALE: Good.

UNIDENTIFIED MALE: We`ll have a lot of nights like this. Making plans. Very
little sleep.

UNIDENTIFIED FEMALE: I expected that. It doesn`t worry me.

UNIDENTIFIED MALE: I better get to work.

(END VIDEO CLIP)

KLEIN: Lots of plans, no sleep, moody lighting. This is the most pervasive
of all Washington myths, that politicians in Washington are seemingly
ruthlessly effectively scheming all the time. That everything that happens
fits into somebody`s plan. But it doesn`t.

Maybe what happens began as a scheme, but soon enough, everyone in this
town, from interns White House, congressional spangles, to interns,
everyone is at best reacting to what just happened a moment ago, and at
best, failing to react to what just happened a moment ago. And always,
always, in all cases, they`re doing it with less information than they
need. That is the main thing I learned as a reporter and political adviser
in Washington, no one can carry out a complicated plans.

All parties and all groups, they`re just - they are fractious and they are
bumbling, and everyone always thinks everyone else is efficient and
ruthless, people are very good at recognizing disarray and a confidence on
their side of the aisle, but they always think the other side is
intimidating completely disabled by human vulnerabilities.

But they`re not, everybody is just screwing up all the time. They`re
trying, but they are screwing up. And in a way, that is the strength. Human
beings like to think otherwise. But, we are not very good planners, at
least not one matched up gets the on and inspiring complexity of reality.

I almost feel bad for the Chinese hackers. In unit 61398, their junior
analysts sitting in the basement, tasked with picking through the reams of
boring e-mails from every low-ranking think tank, trying to figure out what
matters, and what does it get the connections to unlock the code.

But they`re missing our actual real strength. The real reason that
Washington fails day to day, but works over the years. It is because we
don`t stick to originally, the plans, it is because we don`t rely on some
grand design. That way when it all falls apart as it always does, as it
always will, that way when it all falls party, we`re still OK.

There is a good -- coming up next, a good chance the text messages on the
Smartphone of FBI agents are sexier than the messages that they would find
if they were snooping through your text messages on your phone.

That is next.

(COMMERCIAL BREAK)

KLEIN: So now we know, now we know government is run by people who screw up
all the time. But you know what is scary? You know who else screws up all
the time? The Federal Bureau of Investigations is an agency`s not a mess.
For secrecy and with power from its (INAUDIBLE) headquarters on
Pennsylvania, with secret special agents who is sole mission is to protect
and defend us from the bad guys.

In the movie, FBI agents are the ones doing the scheming and the planning
figuring out the most intelligent way to catch the criminal. In 1935, FBI
inspector WH Drane Lester (ph) who also edited the bureau`s official
magazine. They apparently have an official magazine, wrote, those initials
also represent the three things which he add bureau and it representatives
always stand, fidelity, bravery, and integrity, the only bravery and
integrity.

Well, the FBI is office of professional responsibility or OPR is tasked
with making sure the agents fill the integrity part of that model. On a
quarterly basis, the OPR sends a staff-wide e-mail, detailing some of the
some of the cases of employees behaving a little bit badly. Basically, it
is a moment to say please stop doing all the following dumb stuff. You`re
an FBI agent.

Just recently, one of the quarterlies was released. And it turns the super
secret FBI is in fact, staffed by a lot of human beings. And some of them
are kind of jerks. One of the most popular offenses, sexting. People are
always sexting in the FBI on their work phone.

Case in point, one employee violated offense code 3.6 and issue used a
government-issued blackberry, to send some of a very not safe for your
government job, is actually expose the messages to another employee during
work hours. That worker is suspended for five days.

Another text savvy employee e-mailed a nude photograph of herself to her
ex-boyfriend`s wife. That got her a 10-day suspension. These juvenile
offenses has turned the OPR into kind of the parental unit of the FBI, just
scolding un-really agents and taking away their cell phones.

Candice will, the OPR assistant director told CNN, we have seen a rash of
sexting cases and nude photo cases. We are hoping to get the message out in
the quarter list will teach some people you can`t do this stuff. When
you`re given an FBI blackberry, it is for an official use, it is not to
text a woman in another office that you found attractive or you send a
picture of yourself in the state of undress, the state of undress.

But some of the cases n leaked document are a bit more serious. One
employee was dismissed for purchasing and viewing child pornography.
Another found on the surveillance camera using a stolen debit card. One
agent knowingly dated and later married a drug agent/dealer. She was
dismissed. And one agent decided it was idea to wire a colleague`s office,
and not just any colleague, the supervisor. She tried to FBI the FBI, and
she got FBI`ed. That person is fired.

According to FBI, about 1045 employees were disciplined between 2010 and
2012 and 85 lost their jobs.

Now, I don`t know if this will make you feel any better or worse but the
FBI agent`s association president told CNN that the ratio of disciplinary
issues among the FBI are among the lowest in the federal government and the
private sector. And that may mean that the FBI agents are better behaved. I
hope so. But it may just mean that being FBI agents, they`re better at not
getting caught.

That is THE LAST WORD for Friday. I`m Ezra Klein in for Lawrence O`Donnell.
Go to my work at whatblog.com or follow us on twitter,
twitter.com/ezraklein.

END


END

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