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All In With Chris Hayes, Friday, May 10th, 2013

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ALL IN with CHRIS HAYES
May 10, 2013

Guests: Robin Wright, Eli Lake, Neera Tanden, Shikha Dalmia, Deepak
Bargava

CHRIS HAYES, HOST: Good evening from New York. I`m Chris Hayes. And
thank you for joining us tonight.

While President Obama renewed his push for Obamacare implementation
today, you may or may not be shocked to hear what Republicans were renewing
for the 37th time. Yes, the 37th time.

An absolutely horrible week for Jim DeMint and the conservative
Heritage Foundation ends on the most embarrassing note possible. I`ll tell
you why this is such a blow for the far right`s opposition to immigration
reform.

Because it is Friday, we figured out a way to get Ryan Gosling into
the show. You`re welcome in advance.

But we begin tonight with evidence -- real, legitimate, concrete
evidence -- of genuine abusive power by the federal government that sounds
like it was cooked up by Glenn Beck. I`m not kidding. If you sat down
with Glenn Beck over a pot brownie and asked him which nefarious plots the
government was up to, this item from the news would probably be on the
list.

Today, the IRS revealed that it targeted for extra scrutiny Tea Party
groups applying for tax-exempt status. The admission and apology came from
the IRS official who heads up the agency`s division on tax-exempt groups
during a conference today sponsored by the American Bar Association.

(BEGIN AUDIO CLIP)

UNIDENTIFIED FEMALE: They used names like Tea Party or patriots, and
they selected cases simply because the application had those names in the
title. That was wrong. That was absolutely incorrect. It was insensitive
and it was inappropriate.

That`s not how we go about selecting cases for further review. We
select them for further review because they need further review, not
because they have a particular name.

(END AUDIO CLIP)

HAYES: That stark and damaging omission this morning was followed
with a disastrous conference call with the press in which that same IRS
official who did, I thought, a very good job in that statement declared,
quote, "I`m not good at math."

Now, to be fair, the point she was trying to make is while she is a
high-ranking IRS official, she isn`t a lawyer and not an accountant.

But either way, it was an inauspicious capstone to an inauspicious day
for the Obama administration`s IRS. Targeting groups for extra scrutiny
based on ideological trigger words in their names is truly scandalous.

I`m standing before you today as a big time liberal saying, it`s not
OK, guys, not OK.

And to be clear, the IRS insists these reviews were not motivated
bipartisan returns. The screening was part of a broader review of
political advocacy organizations seeking tax-exempt status.

During a big post-Citizens United proliferation of those groups.
That`s true and I hope the IRS doesn`t back off in scrutinizing 504(c)4 of
all political stripes going forward.

But at the end of the day, this is one of those real serious no-nos of
American life. And the First Amendment jurisprudence jargon, it`s what`s
called view point discrimination. And as the ACLU correctly pointed out
today, even the appearance of playing partisan politics with the tax code
is about as constitutionally troubling as it gets.

If we were watching the John McCain/Sarah Palin/IRS targeted groups
that had occupy in their names, anyone sitting here on this network would
be raising hell and rightly so.

For their part, the Tea Party Patriots, presumably one of the groups
that could have been targeted, announced today they explicit reject the IRS
apology, they`re demanding resignations and further investigation, which is
fine. It`s totally reasonable to expect that from them given the gravity
of the news.

But my favorite quote of the day in reaction to this IRS scandal came
from the rival Tea Party Express, telling "Slate`s" Dave Weigel, quote,
"Just like with Benghazi, the truth comes out after the election."

Just like with Benghazi. They cannot help themselves. Even when they
have real evidence of misdeeds and malfeasance, they still want to change
the subject to the fake, ginned up scandal they`ve been pushing month after
month.

They have been given the thing that they clearly want, which is a big,
bad, scary government scandal that everyone agrees, myself included, is
genuinely outrageous, even worthy of further investigation, and their first
instinct is to try to bring the conversation back to their fevered Benghazi
conspiracy theories.

Apparently they sunk so much effort into manufactured Benghazi
outrage, they are physically incapable of backing away from it. So, now,
they`re reviewing an actual real world abuse of power scandal, not as its
own outrage but as a means of supporting their preexisting witch hunt on
Benghazi, which they struggled to turn into a scandal in large part because
they themselves cannot seem to settle on what the scandal even is.

It`s a cover-up. Just don`t ask what`s being covered up.

For example, today`s edition of the pinball back and forth search for
a narrative to the Benghazi scandal saw a renewed focus on the CIA talking
points used by U.N. Ambassador Susan Rice in the immediate aftermath of the
attacks. The reason right was once again going nuts over those talking
points today, nearly eight months after the fact is thanks to a new detail
first reported today by ABC News that those were revised 12 times and
extensively edited before they landed on the Sunday shows.

The edits were reportedly made with, quote, "extensive input from the
State Department", and at least one of those edits was apparently designed
to make it harder for members of Congress to, quote, "beat up the State
Department."

In other words, some people working inside the government and in
politics edited some talking points to protect themselves politically. And
if that is a scandal in Washington, then every single BlackBerry is a D.C.
crime scene.

It should not come as a surprise that Republicans are trying to drive
the new cycle into a frenzy over the full cycle they`ve been trying to
manufacture over these Benghazi talking points for months now. The real
question is, why are they making a big deal over their fake Benghazi
scandal than they are the real scandal over the real scandal of the IRS
admitting to having targeted conservative groups?

And the answer to that question is very telling. The IRS scandal is
an Obama administration scandal, the one that centered around our current
president. The scandal they`re turning around Benghazi, they can center
that scandal around the person threatening to become the next Democratic
president.

Rand Paul tweeting this morning, quote, "Benghazi proves Hillary
Clinton should never hold high office again." Rand Paul doing that thing
where he states the subtext for the whole affair. This is a forward-
thinking big scandal. That`s why Republicans are so attached to it.

(BEGIN VIDEO CLIPS)

SEN. MARCO RUBIO (R), FLORIDA: What I think is s is how many people
are around the administration, including the former secretary of state,
Secretary Clinton, knew this to be the case and moved forward, anyway.

REP. TREY GOWDY (R), SOUTH CAROLINA: And right now, there is a
concerted effort to insulate and protect Secretary Clinton.

MONICA CROWLEY, FOX NEWS: I think Hillary Clinton is, in fact, a
central focus in this scandal.

UNIDENTIFIED MALE: This Jenga tower of lies that Hillary built is all
coming crumbling down.

BRET BAIER, FOX NEWS: Still ahead, what the Benghazi hearing means
for Hillary Clinton`s presidential hopes.

HILLARY CLINTON, FORMER SECRETARY OF STATE: What difference at this
point does it make?

NEIL CAVUTO, FOX NEWS: Well, it could make a very big difference,
especially for someone who could well be the Democratic nominee.

BRIT HUME, FOX NEWS: Participating in a cover-up is very dangerous
stuff for a politician running for high office.

BAIER: But what do you think, do you think Benghazi will hurt
Clinton`s presidential chances?

BILL O`REILLY, FOX NEWS: Hillary Clinton way out in front for the
Democratic presidential nomination in `16 and it`s hers if she wants it.
Right now, the only negative on her current resume is the murder of the
U.S. ambassador in Libya.

RUBIO: You know, I just want to congratulate those like FOX News and
others that have kept on this issue, because this is not about politics.
This is about accountability.

(END VIDEO CLIPS)

HAYES: The fact that Republicans cannot seem to find a genuine
scandal in the Benghazi attacks is not going to stop them from trying. Not
as long as they see it as a potential weapon to be used against Hillary
Clinton.

Joining me tonight, Robin Wright, a joint fellow at U.S. Institute of
Peace and the Woodrow Wilson Center. She`s also the author of "Rock the
Casbah: Rage and Rebellion Across the Islamic World".

And, Eli Lake, senior national security reporter for the "Newsweek"
and "The Daily Beast".

Robin, I want to begin with your reaction to the news today. This
interagency process basically, what seemed to me a classic bureaucratic
battle between the two elements of government, in the State Department and
the CIA wrestling over what was going to be told, each of them it seemed to
me attempting to point the finger at the other, which is if you covered
Washington politics, particularly interagency politics, is a fairly common
and mundane activity.

ROBIN WRIGHT, U.S. INSTITUTE OF PEACE: It`s common, but it also
reflects a basic truth, and that is that the fog of terrorism is as bad as
the fog of war. And to expect within five days to have all the answers
about what happened in Benghazi, who was responsible, was totally
unrealistic.

And this did happen in the climate of other attacks first at the
American embassy in Cairo and later in Tunis at the same period. And this
seemed part and parcel of the controversy over a film by an Egyptian who
was living in the United States that was particularly controversial in the
eyes of Muslims.

And so, in trying to sort out what happened, what was different, who
was responsible for each of the specific attacks, Benghazi got lumped in
with the broader kind of crisis, the alienation over this film. And then
it played out as well in the interagency process which has been plagued
whether Republicans or Democrats are in power.

HAYES: Can you, Robin -- and, Eli, I want to ask you about a great
bit of reporting you had on "The Daily Beast" in a second, but, Robin, do
you think -- I mean, so the thesis here I`m saying, right, is the most
cynical interpretation of events, which really this is just about
tarnishing Hillary Clinton.

And I have to say that there are elements of the story if you get in
to the weeds, it seems like there were decisions that were made that were
maybe not the best decisions in retrospect. It also seems like there was
information that was insufficient or even wrong, but it`s very hard for me
on a good faith to view this as something other than essentially a big
project to go after Hillary Clinton.

WRIGHT: Well, clearly, there was in competence, there was inadequate
security in Benghazi and there wasn`t very good intelligence. But it was
politicized in a way that has actually cost the United States and its
allies any kind of intervention in Libya that has a productive result.
People have lost sight of what`s happening on the ground in Libya as a
result of this focus on the attack in Benghazi, and that`s the last thing
that Chris Stevens would ever have wanted.

He was trying to rebuild Libya and find a positive role for the United
States, in recreating a state ruled by an autocrat for 14 years. And the
tragedy about what`s happening on the Hill is that nobody is paying
attention to the disintegration of Libya particularly over the past week.

HAYES: Eli, you have a piece on "The Daily Beast" today about the
CIA`s role in essentially vetting the local militia that was tasked with
providing security for the facility that was attacked. You have a quote in
it that I thought was fascinating, because there is kind of a spy games
aspect to this whole thing and a hard-to-put-your-finger on bit
misdirection that seemed to shroud the whole thing from the beginning, and
what it essentially comes across in your article is a line in which you
have someone saying, this was a CIA operation with a diplomatic cover.
This was CIA operating a facility with diplomatic cover. This was not
actually really a consulate.

ELI LAKE, THE DAILY BEAST: Yes, well, that`s right, because the CIA -
- there were more CIA officers in the actual so-called alleged consulate an
there were real State Department employees. And I think that that`s
important.

But let`s go back to what you`re saying. I mean, if I could provide
some epistemic opening.

HAYES: Sure. Yes, please? What`s that?

LAKE: I do believe that -- scandal is a pejorative word, but I think
in the fog of terrorism, to use Robin Wright`s fine phrase, why did the
administration cling tie story about a protest in a video when Gregory
Hicks just told Congress under oath that he told Hillary Clinton at 2:00
a.m., when she called him for that 2:00 a.m. phone call that it was an
attack and it was terrorism, and almost everybody on the ground believed
that. I think that deserves scrutiny.

HAYES: Here`s the thing I love about -- here`s the thing I love about
the talking points. The point you made, which is the point that was --
this was the first scandal before we got to the Africom decision not to
send the Special Forces helicopter, before we got to the emails to the
editing of the talking points, the first scandal was Susan Rice misleading
the American people into thinking it was a spontaneous protest inspired by
the video.

And what I find so fascinating about the actual talking points today
in the email traffic is that the first item in the talking points basically
says that. It says this was -- came about from spontaneous protest
inspired by the U.S. embassy protests in Cairo. And that one element which
was agreed to by everyone internally never gets denied by anyone, right?

So that actually lets off the hook the first theory of what the
scandal was here. Just to be clear.

LAKE: Fair enough, I mean, but I have a question. Why did the CIA or
whoever wrote that first briefing say that when it looks like nobody in
Libya thought that there was ever a protest and nobody in Libya believed
that this was anything but a terrorist attack.

And in the original reports, you know, were murky, and I agree, there
is a fog of terrorism, but if you don`t know much in the aftermath as I
think a fair point to make, why go with one kind of theory over another?
We`re trying to figure it out.

HAYES: But, Eli, that`s exactly my point and that`s what I find
fascinating about it. Look, I have no brief for anyone -- I mean, the
entire thing read to me was state and CIA literally warring over who was
going to beholding the bag on this, right?

LAKE: Sure.

HAYES: That was really what it looked like to me.

But what was so fascinating is you say in the fog of terrorism, you
don`t know what`s going on. What happens in the course of these talking
points is they go from more information to less information, and I could
see myself making the judgment that, yes, when there is real confusion
about what`s true, say less rather than more because you`re going to have
to defend what you say.

LAKE: But, Chris, with all due respect, I think this administration
and other administrations, to be fair as well, when there are attacks like
this, they have gone out of their way to, in many ways, try to minimize it.

I find that to be actually kind of a paradox, because I find Obama
talks like a comparative religion professor but acts like Eric Prince in
Blackwater in the sense that he has an enormous kind of secret war
throughout the Muslim world. But when he talks about these things and when
there is a kind of attack, you know, we often hear -- you know, I would
call it a kind of sugar-coated version of things.

HAYES: That`s, Robin, what you just said there strikes me as kind of
the core here, the burning flame of this, was always this idea that somehow
this was underplayed because there was not the initial invocation of al
Qaeda or jihadist. There was a famous Mitt Romney moment when he said it
was never an act of terror and yet he said it was an act of terror.

But to me seems to be the elemental thing driving this from the
beginning, that there was some rhetorical mistake here. I don`t actually
quite understand why that matters.

WRIGHT: Well, look, the CIA had intelligence that there were al Qaeda
cells that were in Benghazi. And the attempt to kind of cover it up
concerns us all. I mean, why not put that on the table, that there could
have been many different theories?

And the Obama administration did corner itself by sticking to one
version of events. And that`s a problem for everybody now, and it`s going
to come to haunt, I think, Hillary Clinton in 2016, and it`s a real tragedy
because there are a lot of other issues out there. We`re getting so caught
up in the past --

HAYES: But it`s going to haunt her, that`s a self-fulfilling
prophecy. It`s like saying that Whitewater haunts her, right? It`s going
to haunt her because people are going to talk about it, but you have to
actually nail down what it is the thing that she did that was wrong, and I
still haven`t been given a persuasive case of what that is.

WRIGHT: Well, and one of the issues is how far does the chain of
command go up? Clearly, the buck ends with her, but at what point was she
brought into it? At what point did she know what was going on? At what
point did she know -- what -- al Qaeda cells were operating in Benghazi?
To what point?

I mean, the fact is there was a lot of incompetence inside Libya as
well. The fact the duty officer was watching his favorite television show
and missing two calls from Chris at a time when he was under attack, there
is a lot of things that have come out of this testimony that people haven`t
paid enough attention to. You can share the blame with a lot of different
players, not just at the CIA or the State Department in Washington, but
what was happening in Libya, too.

HAYES: Robin Wright of the U.S. Institute of Peace and Eli Lake of
"Newsweek" and "Daily Beast" -- have a great weekend, both of you. Thanks
a lot.

WRIGHT: Thank you.

LAKE: Thank you.

HAYES: If the Republican outrage over Benghazi seems redundant to
you, wait until you get a load of what John Boehner announced today. It`s
deja vu all over again for the 37th time. That`s next.

(COMMERCIAL BREAK)

HAYES: Following up on a story, or more accurately, a national
movement we`ve been keeping in our eyes. In Detroit, Michigan, today,
workers staged what may be the largest strike by fast food employees in
American history. Our own Ned Resnikoff has a report on this massive job
action at our Web site, allinwithchris.com, including -- you definitely
have to check out this out -- the incredible story of what happened when
one store tried to hire replacement workers.

The Detroit workers are demanding the right a form union and base pay
raised to $15 an hour. Organizers say they plan to continue the strikes
throughout the summer, and you can bet we will be following them.

Stay with us.

(COMMERCIAL BREAK)

HAYES: Today, President Obama was out touting the concrete benefits
of the Affordable Care Act in honor of Mother`s Day.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: For three years now,
this law has provided real and tangible benefits to millions of Americans.
Women in particular now have more control over their own care than ever
before.

(END VIDEO CLIP)

HAYES: The president`s speech came just a day after Speaker John
Boehner announced yet another repeal vote for Obamacare. This one for all
the new guys.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We have 70 new
members that not have the opportunity to vote on the president`s health
care law. Frankly, they`ve been asking for an opportunity to vote on it
and we`re going to give it to them.

(END VIDEO CLIP)

HAYES: Well, then, just get it done. Boehner, however, was not done
handing out red meat yesterday. He and Minority Leader McConnell
respectfully declined to recommend members to the Independent Payment
Advisory Board, a group mandated by the ACA to contain Medicare spending,
lovingly referred to by those on the right as Obama`s death panel.

Now, if it strikes you as odd or comical or even in kind of a way sad
and pathetic that the House is taking up Obamacare repeal for the 37th
time, take a moment to put yourself in their shoes. The last four or five
years, Republicans, particularly those in the House, have had two main
objections. To destroy Obama and make sure he is a one-term president, a
ship that has now sailed, and to impose austerity on the United States, a
battle they basically want.

But they quite literally need a reason to go to work in the morning,
what few days they do actually go to work which are diminishing. So,
they`re left clinging to killing Obamacare and they can`t simply stop aside
from Benghazi. It`s all they have left.

Joining me now, Neera Tanden, president and CEO of Center for American
Progress. She previously served as senior advisor for health reform at the
Department of Health and Human Services.

Neera, do you got a bet place on this, Obamacare repeal vote, how is
it going to go down? Is there a lot of suspense in Washington, D.C.?

(LAUGHTER)

NEERA TANDEN, CENTER FOR AMERICAN PROGRESS: You know, I have this
funny feeling it might pass the House, but oddly enough, I don`t think the
president is going to sign it. Although --

HAYES: OK. In all seriousness, the IPAB thing to me drives me nuts.
I know it`s a little wonky, the Independent Payment Advisory Board --

TANDEN: I`m happy to wonk out.

HAYES: So, let`s do, then, because it`s an important item and it also
I think reveals something politically that drives me crazy. There are lots
of talk about long-term deficits in Washington. Oh, long terms deficits,
they`re the problem, red ink as far as the eye can see. And they`re driven
by our health care spending.

And the Independent Payment Advisory Board is a really interesting way
of trying to get some experts together who compare different ways that
treatment is given and say, hey, this works and this doesn`t, and this is
what we`ll pay for, and this is what we won`t, and that -- which is a cost
containment method, has been the thing Republicans have gone at as hard as
anything in the bill.

TANDEN: And it`s not just the IPAB.

I mean, the great irony of the Affordable Care Act is that Republicans
who championed for decades ways to save money in the health care system
turned it around on a dime and called all efforts to save money in health
care during the Affordable Care Act rationing health care.

And not only that, death panels, the whole panoply of language that
they could use to destroy these efforts to control cost. One could argue
that it`s in service of a broader strategy to dismantle Medicare itself. I
mean, these efforts in the Affordable Care Act save money but they maintain
Medicare.

And instead what Republicans have argued for is to have premium
support on other strategies that actually undermine the Medicare program
and take away these actual initiatives that will not -- will maintain
Medicare as it is but save money for everyone else.

HAYES: I want to read from this letter because I think it does a good
job of distilling down what the problem that Republicans say they have.

We write to respond to your March 29, 2013, requesting we submit the
names of the individuals to serve on the Individual Payment Advisory Board,
which created the patient, blah, blah, blah. Because the law will give the
IPAB`s 15 unelected, unaccountable individuals the ability to deny seniors
access to innovative care, we respectfully decline to recommend
appointments.

And what this says to me and I think this is really interesting. What
this puts them on the record as, is every senior on Medicare should get any
treatment no matter how it costs and no mater how ineffective, in
perpetuity, forever, amen.

That is the position that is embodied in those words.

TANDEN: Yes. While at the same time they want to dismantle the
Medicare program and turn it over to private insurers who will shift costs
to seniors. I mean, it`s not -- one could argue that it`s actually in
service of a broad strategy undermining Medicare because it`s not really
about actually giving seniors more choices in Medicare.

I mean, the irony of this whole thing is the IPAB itself actually
moves it out of government bureaucrats making this decision and gives it to
experts, doctors, consumers, you know, patient advocates to actually look
at why there is too much spending in the Medicare system. So, it`s --

HAYES: OK. I want to ask you this question. If we got in a time
machine to two or three years ago when you were inside the administration
and we had an interview off the record, we weren`t on television, but you
were being honest --

TANDEN: I`m always honest.

HAYES: Of course, you are. Yes, of course.

So if I said to you then, look ahead three years, where are you going
to be politically? Where is this bill going to be politically in terms of
people`s recognition of its tangible benefits? Would you -- are we where
you thought we would be? Are you below?

Has the bill not seeped into the American consciousness as much as you
thought it would, or is it about where you thought it would be?

TANDEN: Well, you know, at the time that we went through the
Affordable Care Act, it was entirely clear that there were public ends
launching the full effect of dismantle the law. What we`ve seen over the
last couple of years is that when they haven`t been able to use politics,
they`ve used the courts to try to dismantle the law. Now, their essential
strategy is to create so much confusion that people won`t enroll in the
health care exchanges in the coming months.

So at the time I`m perhaps a little surprised that Republicans have
been so dogged for so long. I did think perhaps they would revert to their
previous position of supporting things like reducing health care costs, et
cetera, but they were a party that gives you death panels is really a party
that`s going to commit to assaulting the law for long term, and that`s
going to be a challenge for all of us who believe in making this law work.

We have our work cut out for us, but we definitely have the
opportunity now to inform people about what the exchanges are. The meat of
the law is actually coming on now. What`s really -- the rubber is hitting
the road over the next couple months. Everything else has really been, you
know, small steps compared to what`s about to happen which is really the
premise of coverage to 30 million Americans, if not more. And that`s why,
you know, we really have to roll up our sleeves and kind of try and get
through the fog that the conservative opposition has created.

HAYES: Neera Tanden of the Center for American Progress -- thank you
so much for your time tonight.

TANDEN: Thank you.

HAYES: Up next, I`ll tell you why a bill just passed by Republicans
is dying to be turned into 30-second attack ads against every single one of
them who voted yes. That`s coming up.

(COMMERCIAL BREAK)

HAYES: Yesterday the Republicans, with very little fanfare, took a
vote that strikes me as complete and total political suicide. The vote was
on the Full Faith and Credit Act, which is a Republican attempt to
essentially strengthen their bluffing position in their latest effort to
blow up the economy by threatening to slam through the debt ceiling.

In order to take off the edge of warnings that default will bring
about financial apocalypse, the Republicans are saying, no, no, no, not
financial apocalypse.

(BEGIN VIDEO CLIP)

REP. TOM MCCLINTOCK (R), CALIFORNIA: There is one thing that could do
even more damage than delaying payments on our other bills, and that is the
threat of a default on our sovereign debt. This measure takes that threat
off the table.

(END VIDEO CLIP)

HAYES: Oh, but not true. Even if this bankruptcy-like payment scheme
worked as Republicans claim, the country would still go into default, which
is why economists have called possible efforts to pay some creditors over
others the financial market equivalent of that Hieronymus Bosch painting of
hell. And why Congressman Chris Van Hollen called the just passed Full
Faith and Credit Act a "hair-brained idea."

But it gets worse. What we`ll do if we blow through the debt ceiling,
according to Republicans, is simply prioritize who gets paid. Here`s how
Republicans want to prioritize who gets paid: Social Security recipients
and bond holders. And then if there`s any money left, which there wouldn`t
be, that could go to everyone else, everyone else being, you know, active
service duty members, veterans, Medicare recipients, food safety
inspectors, nothing important, mind you.

But House Speaker John Boehner is not concerned about the political
ramifications.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: As Democrats have suggested, you`re basically
choosing to pay China before you pay U.S. troops?

REP. JOHN BOEHNER (R), HOUSE SPEAKER: Listen, those who loaned us
money, like in any other proceeding, if you will, court proceeding, the
bond holders usually get paid first. Same thing here.

UNIDENTIFIED MALE: And you`re not worried about the politics of this.

BOEHNER: No, not at all.

(END VIDEO CLIP)

HAYES: The bond holders get paid first. To which House Minority Whip
Steny Hoyer correctly said, "just yesterday Speaker Boehner admitted this
bill means the United States will voluntarily act like a bankrupt
corporation and pay China before we pay our troops."

Democrats are calling it the Pay China First Act, which is actually
sort of uncomfortably xenophobic for my tastes, and also a little
misleading. It`s not just the Chinese who own American bonds. Most debt
is, in fact, held by ourselves, including state and local governments.
however, nearly 50 percent of public debt is held in the form of external
debt, China being the biggest holder.

As you can see, there`s oil exporters, Caribbean bankers centers and
Russia. Still the 30 second ads really do write themselves, right?

John Boehner says he cares about seniors. Then why did he vote to
send checks to Saudi Princes instead of Medicare recipients?

Or Eric Canter voted to pay China before our own troops. Whose side
is he on anyway?

Or Paul Ryan, he wants to send barrels of cash to Russian fat cats
while you eat tainted Mad Cow beef burgers. Tell Paul Ryan those aren`t
our values.

My favorite thing about this bill is this: I have never seen a purer
distillation of the base of the Republican party than this bill. I mean,
think about the Boehner quote, right? Just like any bankruptcy proceeding,
the bond holders get paid first. That should be the motto for the
Republicans in the midterm elections. Bond holders get paid first.

Who is the Republican base? It`s old folks on Social Security and
bond holders. If you want to talk about what is the modern Republican
party, it is a creature of a demographic base based on Social Security and
a financial base of bond holders. That is the party we`re talking about.
And they just went to the floor of the United States House of
Representatives and said, you know what? When the bleep hits the fan, our
two groups are getting taken care of. So screw the rest of you.

We`ll be right back with Click Three.

(COMMERCIAL BREAK)

HAYES: When Jim DeMint resigned from the Senate to lead the Heritage
Foundation, some pundits declared him one of the country`s most powerful
conservatives. But today, it`s the resignation of this man that has DeMint
and Heritage reeling, and right wing opposition to immigration reform on
the ropes. That`s coming up.

But first, I want to share the three awesomest things on the Internet
today, beginning with a film making the rounds online, following its debut
at TedX Sydney. It`s called "First Taste," created by the film Sachi,
Sachi and Heckler. It shows children sampling different types of foods for
the very first time.

The foods range from anchovies to olives, while the reactions vary
from pleasantly surprised to downright terrified. Add slow motion
technology and some intense orchestration and this becomes the most
dramatic lemon tasting you have ever seen.

And while the majority of these on-camera assessments are unmistakably
kid-like, I`m guessing most adults would have the same reaction if they,
too, were force-fed Vegemite.

The second awesomest thing on the Internet comes from the website
Deadspin. I love this. This map shows that your state`s highest paid
public employee is most likely a college football coach or a basketball
coach. In fact, only ten states in the nation, shown here in blue, have
top earners who do something other than coaching sports.

The blogger Rubin Fisher Bound (ph) collected data from media reports
and state salary databases. He found the highest paid active public
employees include 27 football coaches, 13 basketball coaches and one hockey
coach, in New Hampshire, of course. The bulk of the money for these
salaries comes from the revenues the teams generate. It`s a fascinating
look at the world of college sports and the power and influence coaches
have to draw big salaries.

And the third awesomest thing on the Internet today a page from
Twitter fan Hillary Quiotic (ph), who simply says, "dude, this." This is
referring to the Ryan Gosling meme to end all Ryan Gosling memes. Far
surpassing all the "hey, girls," or any of Gosling knock off memes. Paul
Ryan Gosling, anyone remember that one?

This is Ryan Gosling won`t eat his cereal. These are a series of six
second looping videos. And the title just about explains it all, doesn`t
it? As "Entertainment Weekly" puts it, "just a spoonful of cereal slowly
inching towards Gosling`s beautiful but also sometimes tortured face on a
television screen."

Creator Ryan McHenry says the idea came to him from watching the film
"Drive" and eating cereal. A simple concept but the results are simply
amazing, however. It does prompt the question, if Ryan Gosling won`t eat
his cereal, why didn`t he just offer it to that poor kid suffering through
a lemon.

You can find all the links for tonight`s Click Three on our website,
AllInWithChris.com. We`ll be right back.

(COMMERCIAL BREAK)

HAYES: Oh, what a week of right-wing politics this has been,
especially for the right wing Heritage Foundation. The week ends with a
classic Friday noon after news dump -- or I should say eugenesis dump,
which is of course when organizations release bad news on a Friday with the
hope that we`ll all just forget it over the weekend.

The Heritage Foundation today accepted the resignation of Jason
Richwine. He, of course, is the co-author of the now infamous Heritage
study which kicked off this week to great fanfare, a report that argued the
proposed immigration reform bill would cost -- are you ready for this -- a
whopping 6.3 trillion, with a T, dollars. Or in the words of Richwine,
represents the lifetime fiscal costs of unlawful immigrant households after
amnesty.

Now the Heritage Foundation thought the study could sink the
immigration reform bill. That is until Republicans who supported the bill
summarily rejected the study, calling it a political document, and wildly
overblown, as we covered on the show. But it turned out the most
controversial thing about the study wasn`t that crazy 6.3 trillion dollar
number. It was the past writings of the study`s co-author, Jason Richwine.
The crafty Dylan Matthews over at the "Washington Post`s" Wonkblog actually
went back and pulled Richwine`s doctoral dissertation from Harvard, titled,
"IQ And Immigration Policy," which is summarized thusly: "the average IQ of
immigrants in the United States is substantially lower than that of the
white native population. The difference is likely to persist over several
generations. The consequences are a lack of socioeconomic assimilation
among low-IQ immigrant groups, more underclass behavior, less social trust,
and an increase in the proportion of unskilled workers in the American
labor market."

In other words, Richwine has decided that immigrants just aren`t as
smart as us native whites. And if you`re confused by what he means by
immigrants, don`t worry. He goes on to clarify. "No one knows whether
Hispanics will ever reach IQ parity with whites, but the prediction that
new Hispanic immigrants will have low-IQ children and grandchildren is
difficult to argue against."

So yes, that precipitated further investigation into what else
Richwine had been writing over the years. Yahoo! News` Chris Moody dug up
a couple of pieces Richwine wrote in 2010 for the white nationalist
magazine AlternativeRight.com. In an article entitled "Model Minority?,"
Richwine pushed back on the notion that some conservatives have hyped up
the crime rate among Hispanics, writing, "he is wrong when he says that
Hispanics are now more criminal than whites. Hispanics are, in fact,
substantially more likely than whites to commit serious crimes. And U.S.-
born Hispanics, in particular, about two and a half times more likely."

This discovery precipitated a huge backlash by conservatives. The
"Washington Post`s" Jennifer Rubin, of all people, wrote that it`s an
unpleasant reminder that sincere opponents of reform should distance
themselves from the collection of extremists and bigots who populate
certain anti-immigrant groups.

Then there was this super-awkward exchange when Heritage Foundation
Vice President Mike Gonzalez went on Univision radio yesterday to defend
its study and its co-author, Richwine.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Are you standing by his premise that Hispanics
have low IQ?

MIKE GONZALES, HERITAGE FOUNDATION VICE PRESIDENT: No, that`s not our
position.

UNIDENTIFIED MALE: OK. So why is he an author in your study?

GONZALES: He did the number crunching, as I said.

UNIDENTIFIED MALE: So you have someone who is a racist, obviously,
right, who is part of your study. You`re accepting his work. Therefore,
you`re accepting his intellectual framework, right?

GONZALES: We do not accept the work that he did before arriving here.

UNIDENTIFIED MALE: Are you going to fire him or are you standing by
him?

GONZALES: We really -- you know, I don`t want to comment on that.

(END VIDEO CLIP)

HAYES: Well, spoiler alert, if you had DVRed this week`s right wing
unraveling, tonight Jason Richwine is no longer employed by the Heritage
Foundation.

But for immigration groups, the story isn`t going to end there. The
Center for Community Change came out today and called for Jim DeMint
himself, the head of Heritage Foundation, to resign in the wake of this
scandal. Wait a second. The Heritage Foundation is a big organization,
and it`s not like DeMint has the time to go around and hold a press
conference explicitly supporting the study Richwine co-authored.

(BEGIN VIDEO CLIP)

JIM DEMINT, HERITAGE FOUNDATION PRESIDENT: We contend, particularly
after this study, that amnesty is unfair to those who come here lawfully
and those who are waiting. It will cost the American taxpayer trillions of
dollars over the next several decades. And it will make our immigration
problems worse.

(END VIDEO CLIP)

HAYES: If your playing six degrees of white nationalist, that means
you`re getting to Jim DeMint in just two steps.

Up next, I`ll talk to the leader of the group trying to make sure
DeMint is the next person to tender his resignation. And we`ll hear from
someone who thinks the Heritage Foundation threw Jason Richwine under the
bus. Stay with us.

(COMMERCIAL BREAK)

HAYES: A correction to last night`s commentary about how the amount
of carbon you`re putting into the atmosphere rivals the Pliocene Era of
three to five million years ago. Here`s part of the correspondence I
received today -- I really love this. "Thanks for your excellent coverage
of carbon build-up and the crisis of global warming on last night`s show.
As a paleontologist, I appreciated your comments on the warm Pliocene. But
lest some climate change doubters protest that if Woolly Mammoths can make
it in the hot Pliocene, why worry now about polar bears, I felt compelled
to mention that the prehistoric elephant you most likely meant and pictures
I think in the first painting you showed was the Pliocene Stegadon, not a
Woolly Mammoth.

Those hairy beasts evolved later in the Pleistocene and were true Ice
Age mammals. Too bad, because I loved your riding Wooly Mammoths under
water comment. Sincerely, Lynn Havzal (ph), Eastbrook, Maine. Thank you,
Lynn.

If any of you want to contact us, you can go to our Facebook page or
on Twitter at AllInWithChris. Don`t forget to use the hash tag #INers,
like this viewer Christina, who says, "it`s quite possible I`m a wee bit
obsessed." Her obsession manifesting as Sharpie graffiti in tribute to our
hash tag. Well done. And we`ll be right back.

(COMMERCIAL BREAK)

HAYES: Right now I want to bring in from Washington, D.C., Deepak
Bargava, the executive director of the Center for Community Change, a
nonprofit policy organization that is leading the charge to have Jim Demint
fired from the Heritage Foundation. And joining me from Detroit is Shikha
Dalmia, senior analyst at "Reason Magazine."

Shikha, I want to start with you because you`ve been writing a lot
about immigration from the perspective of someone I`d say who is broadly in
the center right coalition and watching this civil war, if that`s the right
metaphor, unfold between different aspects of the conservative coalition
over comprehensive immigration reform specifically as a policy, and
immigration more broadly as a kind of touchstone issue.

So I`m curious what your reaction is to the news tonight that Jason
Richwine has parted ways with Heritage?

SHIKHA DALMIA, "REASON MAGAZINE": Well, you know, my feelings on
immigration is I think more the better. I think we should let everybody
in, so long as they don`t pose a criminal or public health threat. That
said, I think the Heritage Foundation has thrown Jason Richwine under the
bus, as you mentioned, because he didn`t do anything wrong over here as far
as they are concerned. He was not cagey about his work. He was -- the
title of his dissertation is "Immigration and I.Q."

He was at the American Enterprise Institute before he was at Heritage,
where he had participated in panel discussions where he had very open and
clearly articulated what his views were. And he had written for various
websites describing his position on immigration and IQ and how IQ should
inform it. He was brought in, I imagine, at Heritage, because of his
expertise on this issue.

So I don`t understand what he has done wrong. I think the broader
issue over here is the culture of inquiry at Heritage, where such views are
legitimate.

HAYES: Deepak, why are you -- why are you guys now training your fire
on Jim Demint in the wake of this news?

DEEPAK BARGAVA, CENTER FOR COMMUNITY CHANGE: Yes, well, the issue
isn`t that there is one white supremacist with a PHD in America. There
actually are plenty. I guess this guy`s mentor was Charles Murray of
infamous Bell Curve. So he has kind of a dubious parentage.

HAYES: Yes, Charles Murray -- let me just stop you right there,
because Charles Murray Tweeted today, "thank goodness I was at AEI when I
wrote the Bell Curve." And then talking about how brave they were to
publish it. So continue.

BARGAVA: Yes. So the issue isn`t that he was fired. The issue
really was that he was hired knowingly by Heritage with these views way out
of the mainstream, by the pillar institution of modern conservatism in
America. This wasn`t just some obscure study off to the side. This was
Jim Demint`s coming out party with the new Heritage -- the new muscular
Heritage.

So for them to have done this and then to have resisted and waited
days and days, to take the appropriate action, and then in the cover of
darkness, without fully owning up to the reprehensible nature of the view,
I think it`s just shameful. And I think Jim Demint is the person who
should be held accountable.

HAYES: OK, let me push back here, because I`ve done a lot of
reporting on this issue. And I`m going to play Devil`s Advocate on behalf
of the -- what they call themselves, immigration restrictionists. And the
immigration restrictionists say you liberals, you always try to caricature
us as racists. And we`ve got -- there are tons of Latinos who want to
restrict immigration more heavily, and there`s tons of Asian Americans.
There`s tons of African-Americans. This is not about race. And you
liberals just want to jump at any opportunity you can get to try to paint
us as racists because you are afraid to talk about the real issues, which
is how many people we should let in.

What do you say about that, Deepak?

BARGAVA: Oh, let me be totally clear, it is absolutely possible to
have a view that is against this immigration bill or other immigration
bills and not be a racist in America. Absolutely possible. It is also
true that there is a deep vein of racial animus that has animated the
passions on the other side on this issue for decades, that has been kind of
at the fringes of the discourse that you see at town hall meetings, letter
to the editors, talk radio.

And in a way, what this has illustrated is how deep that vein goes.
It is not everybody who opposes immigration, but a big driver in this
debate has been racial animosity. And this shows that it`s not just fringe
groups on the outside. It really penetrates up to the conservative
establishment itself in American.

HAYES: Shikha, from the perspective of this kind of intra-
conservative, intra-center right discussion, debate about immigration, who
is winning this fight and what do the resignation today say about the
viability intellectually within the conservative movement of the
restrictionist case?

DALMIA: You know, to go back to your first question, it is true that
it is possible to make a non-racist restrictionist case. You know, not all
restrictionists are racist, but too many racists are restrictionists. And
I think that`s where the problem is over here.

From my point of view, I had huge problems with the Heritage Study.
This was, by the way, not a new study. This was an updated version of an
old 2007 study. And its methodology has always been, you know, highly
disputed.

So one of the things that they don`t do is do dynamic scoring, which
means that they count the tax burden of immigrants, but they don`t count
their economic productivity, which is, you know, by Heritage`s own
standards a very flawed methodology. They count as American-born children
of Hispanics as costs, but then they don`t factor in the taxes that they`re
going to contribute when they grow up.

And I think what this -- in this view -- in my view, this is a
fortuitous side effect of this whole controversy, is that this Heritage
study has become largely irrelevant to the immigration debate. And so I`m
more hopeful that we`ll get a better bill, because we don`t have to be
distracted by the study anymore.

HAYES: Deepak, do you have any -- hold out any hope of a meeting with
Heritage to talk all this over, or any response from Demint?

BARGAVA: Well, I think they`ve chosen to go into a bunker, which is
really unfortunate. I mean, I think this is actually going to be a very
pivotal moment of the immigration debate. The original heritage study in
2007 played a key role in bringing down immigration reform. It was taken
very seriously. The Republican establishment embraced the arguments, the
data.

So this time the Republican establishment has run away from the report
as fast as possible.

HAYES: Shikha Dalmia and Deepak Bargava, thank you very much. That
is ALL IN for this evening. "THE RACHEL MADDOW SHOW" starts now. Good
evening, Rachel.

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

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