updated 2/26/2013 11:15:25 AM ET 2013-02-26T16:15:25

THE LAST WORD WITH LAWRENCE O`DONNELL
Date: February 25, 2013


Guests: Ben Domenech, Jonathan Capehart, Nia-Malika Henderson

EZRA KLEIN, GUEST HOST: And the Oscar for best performance for people
who claim to hate the government but secretly cannot get enough of it goes
to -- hold on, this is very exciting -- America.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: These cuts do not have
to happen.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Mr. President, you
got your tax increase.

ALEX WAGNER, MSNBC ANCHOR: With four days until the sequester
deadline.

CHUCK TODD, MSNBC ANCHOR: Both sides are laying the groundwork to see
who bleeds politically.

TAMRON HALL, MSNBC ANCHOR: Who bleeds the most.

UNIDENTIFIED MALE: What does it matter?

KAREN FINNEY, MSNBC POLITICAL ANALYST: Who cares?

UNIDENTIFIED MALE: The idea here is to fix the problem.

WAGNER: Both sides bought into this plan.

SEN. TOM COBURN (R), OKLAHOMA: There is no leadership from the
president.

BOEHNER: The president proposed the sequester.

SEN. JOHN MCCAIN (R), ARIZONA: He came from the White House and the
president`s aides.

BOEHNER: I got 98 percent of what I wanted, I`m pretty happy.

OBAMA: These cuts --

UNIDENTIFIED MALE: Indiscriminate cuts.

UNIDENTIFIED FEMALE: Death by a thousand cuts.

OBAMA: -- do not have to happen.

UNIDENTIFIED MALE: I would look to the states for action.

GOV. JAN BREWER (R), ARIZONA: We know we have to be pragmatic.

GOV. BOB MCDONNELL (R), VIRGINIA: Find another way to do it, and get
it done now.

BREWER: We know that there has to be some type of compromise.

MCDONNELL: You got to set it up (ph) how to get it done.

KRYSTAL BALL, MSNBC HOST: Governors, in general, are going to be very
upset about a lot of these cuts.

UNIDENTIFIED MALE: Let`s put the sequester into perspective.

CHRIS JANSING, MSNBC ANCHOR: Is it a doomsday scenario?

WAGNER: Very, very bad?

JANSING: Are we in for real trouble?

WAGNER: Not so bad?

JANSING: Is the truth somewhere in between?

UNIDENTIFIED FEMALE: This is a runaway train that`s running off
track.

COBURN: The crisis is made up. It`s been created.

UNIDENTIFIED FEMALE: People seem to be oblivious.

COBURN: It`s the only way you`re ever going to get out of both
parties some spending cut.

REP. CHRIS VAN HOLLEN (D), MARYLAND: It`s impossible to move forward.

UNIDENTIFIED MALE: There is bipartisan agreement on thing. This will
very likely happen.

UNIDENTIFIED FEMALE: This is a runaway train that`s running off
track.

UNIDENTIFIED MALE: That is the sound of inevitability.

OBAMA: These cuts don`t have to happen. Congress can turn them off
at any time with just a little bit of compromise.

(END VIDEOTAPE)

KLEIN: If you want to understand the Republican`s problem in dealing
with the sequester, you need to understand that House Speaker John Boehner
is not wrong about this.

(BEGIN VIDEO CLIP)

BOEHNER: We know, and I think the American people agree -- spending
is the problem.

(END VIDEO CLIP)

KLEIN: In a recent Pew Research Center/"USA Today" poll, 70 percent
of voters, 70 percent, say they want Congress`s top legislative priority to
be reducing the deficit. And 73 percent said it is OK if that deficit
reduction is mostly or all spending cuts.

But the problem, the problem for John Boehner is what came next.
Because Pew then asked people, the 70-odd percent of American voters who
wanted deficit reduction or spending cuts, Pew asked them, OK, what do you
want to cut?

And the pollsters very helpfully provided them 19 different categories
of government spending, almost everything we do to choose from -- energy,
unemployment, foreign aid, poverty programs, health care, combating crime,
agriculture, roads, infrastructure, State Department, defense, scientific
research, Social Security, Medicare, food and drug inspection, natural
disaster relief, environmental protection, veteran`s benefits, and anti-
terrorism defense.

You can pick any of those, cut anywhere you want -- 19 categories to
cut, cut, cut.

Well, "Family Feud" time -- guess which of those 19 categories the
majority of people said they wanted to cut? Yes, you got it? OK, time is
up.

The answer is zero. Of the 19 categories, there was not one, not a
single category that a majority of voters wanted to cut. The only category
that came close was foreign aid, 48 percent want to cut foreign aid, 49
percent don`t want to cut foreign aid.

And, by the way, basically from the point of view of the budget it
doesn`t matter. Foreign aid is 0.5 percent of the federal budget, 0.5
percent.

As for the rest of the budget -- 60 percent don`t want to cut the
State Department, 65 percent don`t want to cut unemployment benefits, 71
percent don`t want to cut poverty programs or health care, 73 percent don`t
want to cut defense, 74 percent don`t cut energy, 76 percent don`t want to
cut environmental protection or agriculture, 77 percent do not want to cut
scientific research or anti-terrorism defenses.

Eighty-one percent -- 81 percent don`t want to cut roads and
infrastructure, 82 percent do not want to cut Medicare or anti-crime
programs, 83 percent don`t want to cut food and drug inspection, 84 percent
don`t want to cut natural disaster relief, 87 percent don`t want to cut
Social Security, 89 percent don`t want to cut education, and 91 percent
don`t want to cut veteran`s benefits.

And there, there in one poll is the Republican`s problem in dealing
with the sequester. And that is why the White House increasingly feels it
is well-positioned in the showdown, because t dirty little secret about
America, is that we like government. Government is like the America`s
friend with benefits, or maybe it`s frenemy with benefits.

We don`t say we love it. We don`t even really say we like it like
that. We wouldn`t hold its hand in public. We tell it all the time, we
want a little bit of space, but damn if we don`t want to keep it around.

In fact, in that same Pew poll, in defiance of we must reduce the
deficit now histrionics, a majority of people said they actually want to
increase spending in two categories -- 53 percent want to spend more on
veteran`s benefits, and 60 percent want to spend more on education.
Education, which by the way, gets hit pretty hard by the sequester.

Now, maybe we need to change or relationship status rather than our
policies, because the American people actually seem to like the services
the federal government provides. And they approve of the spending the
federal government does to provide the services, rightly or wrongly they
approve. That is the reality. And that is the problem that the
Republicans are facing.

The House Republicans did pass a plan to replace this year`s sequester
with other spending cuts. It passed the House in December. It would
abolish the defense cuts and move the $1.2 trillion cuts entirely, entirely
to the discretionary spending side.

Now, for the record, almost every one of those 19 categories Pew
polled are discretionary, and the categories that aren`t discretionary,
Medicare, Social Security, and Medicaid are also categories where
congressional Republicans want to see reduced spending. Cuts to
entitlement programs -- Medicare, Social Security, Medicaid -- that is what
John Boehner wanted from the White House in exchange from the tax revenue
increase in the grand bargain. That is a Republican plan. It is a top
priority.

And that is why if you listen to the debate very closely, if you
listen to what John Boehner is actually saying, you might hear President
Obama talking a lot about his alternative. But you hear the Republicans,
you hear John Boehner talking a lot about number one, how the sequester was
Obama`s idea. They very cleverly called the Obama-quester.

And two, how they don`t mind at all. They`re totally willing to let
this happen. It`s their leverage. They can -- they can handle it. No
problem.

What you don`t hear all that much of, and I read a lot of these press
releases, what you don`t hear all that much of lot of is a lot of detail
about what is House Republicans would prefer to cut.

And that`s because what it is easily prefer to cut is not popular to
cut.

Joining me now are Steve Kornacki and Krystal Ball, co-hosts of
MSNBC`s "THE CYCLE". It is good to have you both here. Thank you.

BALL: Thanks, Ezra.

STEVE KORNACKI: Thanks.

KLEIN: Steve, I have to start because I was watching TV all last
night. Who are you wearing?

(LAUGHTER)

KLEIN: Sorry.

KORNACKI: This was a $12,000 sweater that NBC has generously
provided.

BALL: This is actually new, because what he was wearing earlier, we
deemed unacceptable. So, this is actually the upgraded look.

KLEIN: You do have a stylist.

BALL: We`re trying, we`re trying.

KLEIN: So to give you a real question here, Steve, there is cognitive
dissonance here. I mean, this is one of the central problems in American
government. As I say, people are -- they don`t like government in theory,
but they like it in practice. And this creates a certain amount of
incoherence I think in the public sphere when we try to deal with problems
like the sequester, right?

KORNACKI: Right. The only way I can square all of the polling data
that you sort of put there, were overall, what`s the top issue facing the
country that Congress has to act on? And the answer is, you know, the
deficit. And then you start saying, where are the cuts going to be going?
And nothing unpopular.

I think there`s a tendency on the part of most voters to conflate the
idea of the deficit as a problem with the idea of the economy as a problem.
That`s why I don`t think it`s a coincidence that three times in the last 30
years, the deficit has scored as sort of the top priority issue. Early
`80s recession under Reagan, early `90s under Bush, the start of the
Clinton presidency, and now, you know, late 2008 to the present day, they
have coincided with economic downturns.

And there is a classic moment, and others have made this point, but I
don`t think it has been made enough of. There`s a classic moment from the
1992 presidential debate, Bush, Perot, Clinton, in a town hall debate in
Richmond, Virginia, and a woman got up and she asked the candidates, she
said, how has the deficit personally affected you? What she actually meant
was how has the economy personally affected you?

So, really, and Reagan was the classic example of this, too, from his
first term. The deficit started skyrocketing in his first two years, that
coincided with 10 percent unemployment. The unemployment begin to crash in
`83 and `84, even as the deficit get skyrocketing. Mondale, the Democrats
say, oh, we got the perfect issue to run against here, it`s the deficit,
it`s getting higher and higher. Mondale said, I`ll raise taxes to fight
the deficit and lost 49 states.

KLEIN: But we usually do, and I think this is a great point, that
deficit concerns come up in periods of economic hardship. But it`s not a
good time to come up. We shouldn`t be running high deficits when the
economy is growing, but it hurts the economy to cut the deficit quickly
while the economy it weak.

And so, Krystal, this seems to be the real danger of the sequester
fight. This is not a cliff or a debt ceiling breach or government
shutdown. It`s going to hurt, but it may not that badly.

But it will hurt the macro economy in ways, maybe people don`t even
realize it`s coming from the sequester. It will take growth out. It will
take people having jobs out. And soon enough, we`ll be seeing shrinking,
but it wouldn`t be directly relatable back.

BALL: That`s exactly right. And it was interesting last week, there
was some polling asking people how much have you heard about the sequester
from Pew. And 72 percent of people said they either heard only a little
about the sequester or nothing at all. It hadn`t really sunk in to people.
It wasn`t real to them.

And I actually think that is changing now this week. The president is
obviously making a concerted push to do exactly what you`re saying, make
this real to people, make them be able to trace the impact back to this
policy specifically, by releasing state by state estimates of what is going
to happen, the agency estimates.

And I was looking at some of the local papers in Virginia, where I`m
from. And they are now all running big stories about how this will impact
their regions, specifically. That`s the sort of thing that will get
people`s attention.

And let`s face it, if the sequester really does go through and isn`t
altered where you don`t restore funding and defense in particular, they are
going to see changes that will be noticeable in a lot of communities.

KLEIN: And, Steve, why did the White House wait so long to launch a
real public education campaign around the sequester? I mean, a lot of
people were complaining inside the government, inside the Democratic Party,
that they weren`t actually having the agencies going out saying here is
what will be hit the worst. They weren`t releasing things like state by
state, they kind of waited until last week.

Why do you think that was?

KORNACKI: I wonder if part of it was fatigue, because they went
through all those -- from really the middle of last year, through the
election, certainly intensifying after the election with the whole fiscal
cliff fight. And I wonder if there was a sense that people needed a break.
And I think there also might have been a recognition that at this point,
you know, if you look at what the Republicans have to fall back on right
now, you know, obviously the problem is the House, you have Lindsey Graham
talking about the flexibility on revenue, but you don`t have any indication
in the House that there`s any flexibility. All you have, Boehner and the
Republicans falling back on that as well.

Twice in the last Congress, we voted for sequester replacement plans.
But, of course, if you put, the last time they put that bill on the floor,
I think the margin was 215 to 209. So, I think he recognized if he put
that plan up right now he probably couldn`t even get it in the House right
now.

So, I think there`s probably a recognition on the White House`s part
that the Republicans don`t have anything from the House side to propose at
the moment, either.

KLEIN: So, then, I keep wondering about this, Krystal. What do you
think ends up being the end game? There are not serious negotiations going
on right now. I don`t think there`s going to be some kind of huge market
reaction that forces a quick renegotiation. It isn`t clear to me actually,
aside from the sort of ongoing public relations war, what actually happens
legislatively to force any kind of action in the near future.

BALL: I certainly don`t see it happening before the end of this week.
I mean, Republicans, they basically want some form of cuts. So they would
prefer apparently to have this sort of meat cleaver approach, than to have
any kind of compromise with revenue. They feel like that`s a better deal
for them.

And Democrats feel like we don`t want to shift the defense cuts over
to social programs like Medicare and Medicaid instead. That`s not the
better a deal for us.

Obviously, both sides are doing more sort of public negotiating of
their positions rather than coming together to work out a deal. So I don`t
see it happening this week.

KLEIN: Steve Kornacki, and Krystal Ball, I think both for joining me
tonight. And we will make sure more people know about the sequester next
time they get polled.

BALL: Thanks, Ezra.

KORNACKI: Thanks.

KLEIN: Next up, I don`t understand the Republican`s position on the
sequester, and I don`t mean the political one we just talked about. The
policy position, what they actually want to get done.

So I have asked a very smart Republican policy wonk to come here and
explain it to me.

And there was something amazing at the Oscar last night, something so
short you probably missed it. The shortest nominated film ever, and you
will see the whole thing, the entire thing, right here. So, get some chips
and guacamole and get back here.

(COMMERCIAL BREAK)

KLEIN: I`m curious. If you were negotiating a deal and got
everything you wanted or on the other hand, you get part of one of the five
things you want -- wouldn`t you go with everything you almost wanted deal?

This is why I don`t understand the actual Republican position on the
sequester. It makes no sense at all to me. But somebody is going to try
to explain it, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I stand by those commitments, to make the reforms for smart
spending cuts. But we also need Republicans to adopt the same approach to
tax reform as Speaker Boehner championed just two months ago.

BOEHNER: The president says we have to have another tax increase in
order to avoid the sequester. Well, Mr. President, you got your tax
increase. It`s time to cut spending here in Washington.

(END VIDEO CLIP)

KLEIN: I don`t understand this debate. I don`t understand the
Republican position on the sequester. And I don`t mean the politics and
the polls.

We already talked about the polling doesn`t seem to look so good for
the Republicans. What matters more than that, the puzzling, underlying
position, the policy doesn`t make a lot of sense given their budget goals.

As I understand it, Republicans have five basic goals in the budget
talks and have for sometime now. Number one, they say is cut the deficit.
Number two, cut entitlement spending. Number three, protect defense
spending and possibly even increase it. Four is simplified the tax code by
cleaning out deductions and cleaning out loopholes. And five, five is,
always, of course, lower tax rates.

Now, the White House is able to cut a deal with Republicans that
accomplish one, two, three, four. It won`t lower tax rates but it will do
all the other things.

Republicans won`t entertain that deal. They`re saying, no, no, we
prefer the sequester through goals one through four.

And so, that means, instead, the sequester will happen and Republicans
will get less deficit reduction than they would get in a larger deal. They
won`t touch entitlement spending really at all. They will see defense
spending get an incredibly big cut. Though get no cleaning of the tax
code, and, of course, no tax cut.

So, rather than striking a deal with the White House and accomplishing
four of their five, they`re accomplishing part of one, one, and badly
hurting another for a net zero? So what exactly is the Republican policy
strategy here? What am I missing?

Here to answer that is Ben Domenech, a co-founder of "RedState", and
editor of excellent conservative morning newsletter, "The Transom."

Ben, thank you for joining me.

BEN DOMENECH, CO-FOUNDER, RED STATE: Great to be with you.

KLEIN: What am I missing?

DOMENECH: I think what you`re missing is a number. And I think that
number is 158, which is the number of House Republicans who have shown up
since 2006 out of 232 today. And of those Republicans, I think if you look
at what is priority for them, their priority list actually doesn`t include
that number three in your list.

It doesn`t include protecting defense spending, which I think goes
back to the miscalculation that the White House made, that the president
made when this whole process started -- which is an assumption I think
founded reasonably on the actions that came in the previous decade, from a
lot of Republicans who currently occupy leadership, which is basically
those Republicans who are interested in defending defense spending, who
have been, you know, preaching, you know, for the past several years how
much it was important to protect that, to isolate it away from any cuts.

And those Republicans, while they still occupy the leadership and they
still hold positions of power don`t necessarily represent the interest of
the base, for whom the fiscal crisis, for whom the financial crisis is
really their equivalent of 9/11 now. It`s really the single moment that
really affects all of the ways that they analyze policy.

KLEIN: I`d buy -- I buy that the new generation of Republicans
doesn`t care that much about defense spending. I think you`re right about
that.

But going back to the sequester.

DOMENECH: Sure.

KLEIN: That leaves one, two, three, and four, there is no doubt you
can get more deficit reduction, more total money shaved off the deficit if
you go to the bigger deal, if you include tax increases. I mean, there is
no doubt the two sides can come together on more money. The president`s
offer currently I believe is about $1.8 trillion, which is significantly
larger than what is in the sequester alone.

And then second to that, they also believe very strongly, the key is
entitlement spending, not all spending is created equal. That`s Medicare
spending, Medicaid spending, Social Security spending.

The White House would be able to get into those programs. But they
are not without going outside of the boundaries of the sequester. So what
about the rest of that?

DOMENECH: I think the problem with that is that you have to have an
assumption of competence on the part of these conservative -- the
conservative base of the Republicans as a whole, when it comes time to
negotiate with the White House, they`ll come out with a better deal. And I
think that frankly the base now believes that Republicans are incapable of
doing such a thing. After the experience with the fiscal cliff and
everything that came before, they have their doubts about the ability of
Republicans to negotiate any better situation.

And I think the second part of this, there`s really skepticism I think
on the part of the base right now, about the willingness of Republicans to
cut in any real sense. And any negotiation that backs off from the
sequester, would, I think, be read as a retreat from cuts, a retreat from,
you know, being willing to reduce to size and scope of government. And I
think that because of that, there`s an unwillingness on the part of
conservatives, both in the House and leadership among the Republican Party
to do anything along those lines, because that will be sold as a retreat
from any willingness on their part to be really fiscally conservative.

We saw the effect that had on their brand over the course of the
previous decade under George W. Bush. It really, you know, laid the seeds
for everything that came in the form of the Tea Party.

KLEIN: But wasn`t what happened in the previous decade, that they
made a bunch of decisions around spending because they wouldn`t touch
taxes, and blew up the deficit? I mean, that was at least part of the
narrative.

DOMENECH: Sure.

KLEIN: But beneath that I think is this other question, when they are
looking at a deal like this, when they`re saying, you know, we don`t
believe that our leadership can come to a better deal, they don`t have to
undo the sequester until a deal is done. It just seems to me, underneath
all this is the weird decision to treat all spending in the tax code as a
tax increase and not be willing to break this pledge.

DOMENECH: But, Ezra, is your problem is that the sequester exists or
is it just what that the cuts are not smart enough? I think that from the
perspective of, you know, a lot of conservative base, they don`t buy the
difference between the smart cuts and the dumb cuts. That is very
important here within Washington.

KLEIN: Really?

DOMENECH: I don`t think they see it as being all that critical,
especially when it is sort of the question is the world going to collapse
if we rewind to what government spending was at the beginning of the month?
I think that it`s more along the lines of a conversation between the
leadership in the Republican Party and their conservative base,
understanding that if they retreat in any way, if their view is retreating
in any way from holding the line on spending cuts of this nature, even if
they are stupid, in the parlance of Washington, then I think they will be
viewed as being cowardly on one of the few issues that they still can go
back to their base and say, you know, we can actually speak with some
authority on this because we don`t want government to be as big as the
president does.

KLEIN: If you`re right that the House Republicans no longer believe
in the difference between the smart and dumb spending cuts, that is I think
is the scariest I`ve heard in the debate.

(CROSSTALK)

KLEIN: Ben Domenech, thank you very much for coming out tonight.

DOMENECH: Pleasure to be with you.

KLEIN: Remember this guy? This guy right here could ruin our
economic recovery. If you give me two minutes, I will explain it all to
you. Bunga, bunga is next.

(COMMERCIAL BREAK)

KLEIN: It is time now, it is time for the favorite part of the show,
the one where I get two minutes to explain, whatever I want, even if the
producers think it will be bad for ratings.

But how bad can this one be for ratings? It is about this guy.

(BEGIN VIDEO CLIP)

SILVIO BERLUSCONI, FORMER PRIME MINISTER OF ITALY: You are so good I
am almost forced to invite you for some bunga, bunga. Yes, you are pretty
enough, you could come.

(END VIDEO CLIP)

KLEIN: The bunga, bunga, who is that? Who is bunga, bunga? And why
do you need to know about him today?

Well, let`s get the clock.

OK, that is Berlusconi, the former prime minister of Italy, the guy
who made the words "bunga, bunga" an international catch phrase. They
refer to his parties. The guy who got thrown out (ph) of office because
the European banks and global financial markets basically said they would
stop giving Italy any money if they didn`t kick him out of office. That is
rare thing, he was really not like.

But his successor, an economist by the name of Mario Monti, he was
like by the financial markets. He was up for doing austerity, played by
the rules, he worked well with Europe. The problem is that voters didn`t
like him that much, those pesky voters.

Over the last 24 hours, Italy has had an election, and the winner is
nobody. Monti`s coalition, they didn`t win. Berlusconi, currently facing
trial in Italy for paying for sex with a minor, currently facing that
trial, his coalition didn`t win a majority, but they did OK. And then
there is a third major party, kind of a protest led by, I`m not kidding
about this, a comedian blogger, who has sort of pro-welfare state, anti-
Europe agenda. He actually wants every kid to get a tablet computer. They
did really well but they didn`t win either.

Now, Italy is a bit weird. The cabinet, their executive branch, it
has to be approved by both the house and the senate. But it doesn`t like
any one group would be able to muster those votes. And the parties hate
each other, so they probably can`t join together either. That means Italy
will probably have to hold another election in the coming months.

So why should you care? Well, remember the whole Europe crisis thing
we were really worried about in 2011 and 2012? It`s calming down, right?
But the key troubled countries, the big ones like Italy become
ungovernable, that`s the kind of thing that can make it flare up again.
And if it flares up again, that could hurt our economy bad, at a time when
we`re already dealing with the sequester and plenty of our own troubles
here.

As Citibank`s Stephen Englander (ph) wrote, "this is the first
European election in which voters, at least from the perspective of the
European -- the E.U., didn`t do the right thing. Instead, they gave
surprising support to politicians who reject austerity, and in some cases
the Euro. This could become a major problem if it proves contagious."

Done. And by the way, yikes.

Next up, Wayne LaPierre goes after Diane Feinstein. No surprise on
that. But what is surprising is a court`s decision about concealed
weapons. A hint? Wayne LaPierre hates this decision.

Developments in the gun control debate are coming up next.

(COMMERCIAL BREAK)

KLEIN: In the Spotlight tonight, Wayne LaPierre continues his
political charm offensive. Usually, if you are a special interest group
that finds its agenda increasingly unpopular and under assault from
powerful legislators, you go into friend-making mode. You say you`re
excited. You`re looking forward to sitting down together and trying to
come to solutions. You say you are open to all ideas and you want to give
them careful study.

You say you`re working with Congress. You just want to make sure
everyone takes the time to do this thing right. You don`t do that because
you want to help or because you`re just a peachy person. You do it because
you want to win, and that`s how you win, without creating huge enemies who
make you lose.

That is not what the NRA is doing right now. NRA boss Wayne LaPierre
went after Dianne Feinstein on Saturday over the assault weapons ban she`s
pushing. Feinstein took some time today to clarify LaPierre`s remark.

(BEGIN VIDEO CLIP)

WAYNE LAPIERRE, NRA VICE PRESIDENT: We are now facing the single most
devastating attack on the Second Amendment that this country has ever seen.

Dianne Feinstein, herself, commented that she has had her gun ban
legislation in her desk for over a year, waiting for the right time to
introduce it. Really? Waiting for an unspeakable act to occur, so the
American people could be persuaded to buy her political agenda?

See, it is not about making our kids or our streets safer. It is all
about their decades-old agenda.

SEN. DIANE FEINSTEIN (D), CALIFORNIA: What I said is that we have
been working on this for a year. It is a rather complicated piece of
legislation, because it exempts 2,200 hunting, sporting weapons, by make
and model. And that took some work of staff and consultation with real gun
experts to be sure that we could be correct on all counts.

So it was not a bill just quickly slapped together. It had some
thoughtful consideration.

(END VIDEO CLIP)

KLEIN: LaPierre and the NRA made Senator Feinstein into their latest
villain. In the March edition of the magazine "America`s First Freedom,"
the cover story signals her out, while also warning of on the dangers of
background checks. Quote, "the gun bun lobbies, their political allies and
the media enablers looked at Newtown and saw the opportunity for which they
had been waiting. Murdered children and their teachers have been turned
into the political pretext for gun registration. Rather cynical, isn`t
it?"

Well, yes, actually, that argument is quite cynical. But there are
Republicans, despite 85 percent of Americans who say they favor background
checks, who remain unconvinced.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don`t think we`re that close to a deal. And
there absolutely will not be record-keeping on legitimate, law-abiding gun
owners in this country. And if they want to eliminate the benefits of
actually trying to prevent the sales to people who are mentally ill and
criminals, all they need to do is create a record-keeping. And that will
kill this bill.

(END VIDEO CLIP)

KLEIN: The NRA magazine also warns its readers, in scary all caps,
that background checks will lead to government taking all of your guns
away. "Registration, confiscation, extinction, each step makes the next
step much easier." It must be true, because if it wasn`t true, they
wouldn`t have written it in all caps. That is what I have learned from my
e-mail over the years.

Now the next likely recipient of the NRA`s ire, probably both Senator
Patrick Leahy and the 10th Circuit Court of Appeals. Senator Leahy, who
chairs the Judiciary Committee, has released several gun violence
prevention bills to be marked up by a Senate panel on Thursday. Included
in those bills, Senator Feinstein`s assault weapons ban.

Republicans are likely to push that session for a week under committee
rules. Meanwhile, the Senate will hold its first hearing on an assault
weapons ban on Wednesday.

As for the 10th Circuit Court of Appeals, today in Denver, it ruled
there is no Second Amendment right to carry a concealed firearm in public.
The NRA was involved in that case, firing -- filing a brief in favor of
concealed carry, a brief which apparently didn`t convince the court of
anything.

The NRA might need to work on that friend-making capability, because
whatever it is doing now is not working all that well.

Joining me now is "Washington Post" columnist and MSNBC political
analyst, Jonathan Capehart, and national political reporter for the
"Washington Post," Nia-Malika Henderson. I am happy to see you,
"Washington Post" colleagues..

NIA-MALIKA HENDERSON, "THE WASHINGTON POST": That is right.

JONATHAN CAPEHART, "THE WASHINGTON POST" We`ve taken over.

KLEIN: Jonathan, LaPierre almost seems like he was invented by the
gun control lobby. If he didn`t exist, they would have had to create him
to carry on this campaign. Because if you watch him, you do not think this
is a sober group of people you want having significant power in the
American political system. He makes the NRA look terrifying.

CAPEHART: He makes the NRA look terrifying. But you know what? The
message that he has been spreading since Newtown has been working for him,
has been working for the NRA. It is frightening I think for the American
people to hear what he has to say, the fear-mongering in all of the
speeches that he`s made since Newtown.

But then the flip side is we then hear the following day or the next
week that they`ve had the best fundraising numbers that they have had in a
long time. And on top of it, you hear about gun sales going through the
roof. So yes, if he didn`t exist, we would have to make him up. He is
this lightning rod for both sides. I mean, both sides get benefit from it.

KLEIN: But is that actually working for the NRA? Because this is
what I always wonder. I mean, you have a lot of groups in American life
who manage to fundraise off of being extreme. And there is always going to
be a real difficulty in pushing this through Congress.

But he is creating and this strategy is creating a lot of enemies, a
lot of people who might have wanted to drop this at a certain point, and
now are more dedicated to the cause.

HENDERSON: Yes, I am always skeptical when groups or candidates say
that they`re fundraising. I mean, Herman Cain said the same thing, right,
that he had his best fundraising week ever after that scandal. But I do
think that the NRA, which is embodied now by Wayne LaPierre, is the
Democrats` best friend. Because he is so far to the right of most NRA
members, he`s so far to the right of where most Americans are, he makes the
case for them.

In many ways, the Democrats, Dianne Feinstein, he makes them look
reasonable. And you see Republicans maneuvering around the NRA, backing
background checks, not wanting to go down what they would call the slippery
slope of doing -- registering firearm owners. I think if you`re a
Democrat, you want Wayne LaPierre out there as much as possible because he
just spouts these ridiculous theories about the government wanting to take
your gun, or in a hurricane, you want to have an assault weapon, because
you need to fire off against the raging folks in Brooklyn, who are coming
over the border.

CAPEHART: You know, gangs.

HENDERSON: That is right. So I think, you know, keep him out there.
I think he does some good for folks who want to move forward on some of
these gun rights legislation.

KLEIN: And speaking of moving forward on it, I mean, the effort to
get universal background checks -- because as many as a third of gun sales
now do not have background checks when they`re private sales -- has been
stalling a bit. You heard Senator Coburn saying that keeping a registry
would be a deal killer on the bill. You`re having Joe Manchin -- Senator
Joe Manchin from West Virginia, sort of the lead Democrat on this, is
having trouble finding a Republican who will work with him.

Where do you think that goes?

CAPEHART: Well, you know, I quite frankly -- you know what, I, quite
frankly, don`t know. But I do think it is good that there are going to be
hearings this week on all of these bills. I think there is a difference
between background checks and then what Tom Coburn is talking about,
personal registration. There are stories in our paper and other papers
talking about these deals that are coming together.

But when Coburn sort of threw cold water on it, it wasn`t so much
about background checks. It was on this narrow issue of will there be a
registry of personal information. If they can get over that hurdle, which,
if you listen to folks, that is apparently a huge hurdle for some Democrats
and some Republicans to get over, then we could see something along the
lines of background checks.

I think assault weapons, though, is probably going to be a bridge too
far for quite a few people, Democrats and Republicans.

KLEIN: Assault weapons has always looked very, very tough to me. But
I do want to stay on this issue of background checks for a minute, because
this kind of registry that we are talking about, one thing that has
happened that`s been really damaging in the gun control space has been the
NRA and the gun rights activists` effort to constrict the amount of data.
It is very difficult right now, for instance, to see who -- which stores
are selling the guns that end up in illegal crimes because we can`t get
that trace data.

That stuff I think is a very, very big deal. And the fact that we
don`t -- I have to register to do -- I think at this point I have to give
them my driver`s license to get Sudafed. The idea that I can get firearms
without having to be registered for that seems remarkable to me.

HENDERSON: Right. And even if you get a background check, that
doesn`t even stay in the national registry. It disappears within 24 hours.
But I think it is a bridge too far, at least at this point, for trying to
make a deal. Because there is this fear mongering and the slippery slope
argument.

But you`re exactly right. I think this idea -- I think the NRA will
make the argument that there needs to be a national registry around people
with mental illness, but not -- definitely not for people with firearms,
which seems sort of an odd thing. But I think, you know, this is going to
be a debate that goes on.

The assault weapons ban is dead. You talk to the White House, they
don`t even mention it. They talk about gun trafficking and they talk about
the background checks. But in some ways, I think the assault weapons ban
will give these moderate Democrats in these states like North Carolina, if
they are able to go to the Senate floor and say they`re against this, that,
in some ways, does them some good in these states like North Carolina and
Arkansas.

CAPEHART: And gives them the political cover to vote on other issues
that are further down the chain, but are still helpful.

HENDERSON: Yes, exactly.

KLEIN: And this will be one of the things that I`m interested to see,
whether or not we get a reprise. Right now, the White House has been
sticking out to let these coalitions build. But give it a vote refrain we
were seeing a few weeks ago.

Nia-Malika Henderson, Jonathan Capehart, it`s great to see you both.
Thank you for coming out.

HENDERSON: Thank you, Ezra.

CAPEHART: Thanks, Ezra.

KLEIN: What is different about our military spending? And why I
think the defense cuts in the sequester, if done well, could in certain
ways be a good thing. That is next.

(COMMERCIAL BREAK)

KLEIN: After the Korean War, the military budget, it fell by 43
percent -- by 43 percent. After the Vietnam War it fell by 33 percent, by
a solid third. After the Soviet Union fell and the Cold War ended, the
military budget fell by 36 percent. This is a pattern of military spending
in America. It goes way up in times of war, but then -- and this is
important -- it falls right back down after, in times of peace.

Now, over the past decade, we have been at war and our spending has
consequently gone way up. I want to tell you these numbers because I think
they are absolutely astonishing. In 2001, under President George W. Bush,
the military budget was 287 billion -- 287 billion. In 2012, after
accounting for the military budget and the war spending in Iraq and
Afghanistan, it was about 700 billion -- 700 billion, way more than double.

Now, here is something else kind of amazing: that is a bigger increase
in total in spending than we saw for either the Vietnam War or the Cold
War. And here is where it left us. We`re spending more than China, the
UK, France, Japan, Indian, Saudi Arabia, Germany, Brazil, Italy, South
Korea, Australia and Canada, combined.

Let`s think about that. We are spending more on our military than the
next dozen high spenders combined. Our wars, now, however are ending.
Officially the war in Iraq is already over. The war in Afghanistan is
drawing down. Osama bin Laden, of course, is dead.

Typically, at this moment, spending drops by somewhere between 33
percent and 43 percent. Now think about that. Think about that while you
listen to these warning about the military after the sequester.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I cannot understate the amount of damage these
cuts would do to our military. They would essentially hollow out our armed
military forces.

REP. JOHN BOEHNER (R), HOUSE SPEAKER: And the president laid out no
plan to eliminate the sequester and the harmful cuts that will come as a
result of it.

UNIDENTIFIED MALE: That we are convinced would hollow out the force
and inflict serious damage to the national defense.

(END VIDEO CLIP)

KLEIN: All right. If the sequester goes into effect, the full cut to
the defense budget, including the sequester, will be about 31 percent.
Think about that. During the War on Terror, the defense budget increased
by more than it did during the Cold War or the Vietnam War. And the cut to
the defense budget, even with the full sequester, will be less than it was
after either of those.

It kind of puts all the doom saying in perspective, doesn`t it? Now,
sequestration is a really stupid way to cut the defense budget. I`m not
arguing that point. It is brain dead. But that 500 billion dollar cut,
that level of cut is not necessarily a stupid cut to make to the defense
budget. And making a 500 billion dollar cut to defense is not necessarily
a bad way to reduce the deficit.

Here`s something I don`t understand: when the Democrats talk about tax
reform, when they say they want to replace the sequester and almost all the
defense cuts with revenues, what they are saying specifically is they want
to limit what are called itemized deductions for the rich. Now those
words, that is kind of policy term, right? It doesn`t mean much to most
people.

But when you hear that, here is what you should be hearing politicians
say: they want to limit tax subsidies for rich people to donate to charity,
to pay their state and local taxes and to buy homes. That is what those
itemized deductions are about for the rich. They`re the charitable
deduction, the home mortgage interest deduction and the state and local tax
deduction, overwhelmingly.

And we are talking about cutting them for rich people when we talk
about adding revenues now. That is the Democratic position. That is what
President Obama wants to do in a sequester compromise. And the Republican
position to that -- their response is absolutely not. They completely
prefer the sequester to that.

I don`t understand either side`s position here. I don`t understand
why liberals would prefer to fund the government through a mechanism that
hits charities, the housing industry and high tax states than by cutting
defense spending. And I don`t understand why Republicans prefer to cut
defense spending than to hit charities, the housing industry and high tax,
mostly blue states that are getting subsidized through what they would
think of as distortionary changes to the tax code.

Now look, the sequester is bad policy, terrible economic policy. I
would like to get rid of it all together. But if we keep it, we absolutely
have to give the agencies the ability to make decisions about how to make
those cuts. But if we did that, and we can`t get rid of it, if we gave
agencies that discretion, then if you gave me a choice between 500 billion
by cutting defense spending and 500 billion by cutting spending on homes
and charities and state and local taxes, I think I would take the defense
cuts.

Every other time we have ended our wars, we have brought defense
spending way down. If this time is different, if we allow ourselves to get
trapped in a mindset of being in a permanent war and requiring the
permanent hike in defense spending that that would require, well, that is a
dangerous thing, and not just because of the budget.

You probably missed something unprecedented at the Oscars, the
shortest short ever nominated. But you cannot miss this. It is so cool.
And it is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Here are the nominees for the best animated short
film.

UNIDENTIFIED MALE: "Adam and Dog," Min Q. Lee, "Fresh Guacamole,"
Pes, "Head Over Heals," Timothy Reccart (ph) and Fola Cronin O`Reilly,
"Maggie Simpson, and the Longest Daycare," David Silverman, "Paperman,"
John Carrs (ph).

UNIDENTIFIED FEMALE: And the Oscar goes to "Paperman".

(END VIDEO CLIP)

KLEIN: It didn`t win its category, but the animated short "Fresh
Guacamole was a game changer at last night`s Oscars. And don`t tell me you
don`t have time to watch it for yourself. Because "Fresh Guacamole" is the
shortest work ever to be nominated for an Oscar. It is only one minute and
36 seconds long.

The film was made for less than 100,000 dollars. It took two months
to shoot, and another two months to edit, for a minute 36. And coolest of
all, it was produced without any computer effects at all.

So here now for you to witness one of the coolest films nominated at
this year`s Oscars is the film, "Fresh Guacamole," by Pes.

(BEGIN VIDEO CLIP)

(CUTTING SOUNDS)

(END VIDEO CLIP)

KLEIN: And I just have to say before we go, it is really such an
honor to be guest hosting THE LAST WORD this week. And there are just I
think so many people I have to thank.

I mean, of course Lawrence O`Donnell, the host of the show, Izzy
Povitch (ph), his senior executive reducer, Greg Cordick (ph), the
executive producer, the guests, my supporting cast. You`re all stars to
me.

I would like to thank Phil Griffin, the president of MSNBC, of course
for the opportunity. The producers of the team in New York, the crew here
in D.C., Melissa Riers (ph) who always makes the trip down, Alice, the
makeup artist, my mom, a fan from way back. It is her birthday tomorrow.
Thank you. Happy birthday, mom. My dad, my grandparents, my wife. No,
I`m not done, guys. I`m not.

I need to thank the "HARDBALL" folks for giving us their office space.
And Pizza Pizza, they delivered all the pizza. We couldn`t have done it
without you.

END

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