All In With Chris Hayes, Thursday, May 16th, 2013

ALL IN with CHRIS HAYES
May 16, 2013

Guests: Spencer Ackerman, Howard Fineman, Joan Walsh, Eric Boehlert

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

It was a big day today because Washington has a case of scandal fever.
And today, President Obama showed how he plans to dole out the medicine.

Plus, last night, our guest told us what we can expect in the fight
against sexual assault in the military. Today, we got more shocking proof
that they were right.

And let today be known henceforth as the day Bea Arthur broke the
Internet. I`ll tell you why in #click3.

But we begin with a momentous political event -- I mean a really,
really big deal. Tonight at 6:28 p.m. Eastern, did you feel the earth move
under your feet, did you feel a seismic change in this nation`s politics?
What you would have been feeling was the House of Representatives voting to
repeal Obamacare -- for the 37th time, by a vote of 229-195, with every
single Republican voting to repeal, along with two Democrats.

I have to give it to the House Republicans. Last week, when Speaker
John Boehner announced the vote with this lackluster pitch, I was a little
worried their hearts weren`t in it this time.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We`ve got 70 new
members that have not had 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: You know, and with that, I thought the vote was going to be
some sort of pro forma affair. But you have to hand it to them. They
really left it out on the field. Some poor staffer in Boehner`s office
even had to go down to the Kinkos, the government printer and wheel in 300
pounds of health care regulations on a dolly.

And then, the 7-foot stack of job killing legislation was wheeled out
of the Capitol, so the House Republicans doctor caucus could whip up vote
for the 37th time. They even put a little hat on it while it started to
rain which was nice.

This morning, Michele Bachmann, the Tea Party, held a big press
conference about the IRS, and they also used the opportunity to take shots
at Obamacare.

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN (R), MINNESOTA: The heat will become so hot
that even the president of the United States will be forced to repudiate
his signature legislation.

(END VIDEO CLIP)

HAYES: Eric Cantor got into the game today, resurrecting the old
Obamacare in three words hashtag to celebrate the affair, which prompted
this response from the White House, "It`s the law," with a screen of
Obama`s signature on the bill.

Today, Republicans really pulled out all of the stops but that`s not
made what happened today on the Hill different. What makes this vote today
different from the 36 votes that came before it is that this vote came just
two days after the Congressional Budget Office put out an incredible and
truly explosive report. A report that was almost entirely ignored by a
scandal-obsessed Washington, which said the following, "The budget deficit
will shrink this year to $642 billion, the smallest shortfall since 2008.
Deficits in CBO`s baseline projections continue to shrink falling to 2.1
percent of GDP by 2015."

In English, the deficit is shrinking at a near record breaking rate.
Now, you would think once it came to light that the deficit is shrinking a
such a rapid rate that we hit the vaunted goals even set out by our wise
masters, Simpson and Bowles, that people in Washington who have endlessly
obsessed over the deficit since the Tea Party insurrection would take
notice.

The people who have been saying things like this for the last three
years.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), WISCONSIN: The president and his party leaders in
the Senate are refusing to do anything to address this debt crisis.

UNIDENTIFIED MALE: The important thing is that we have actions that
we reduce these deficits.

SEN. TED CRUZ (R), TEXAS: What I know is spending is out of control.

BOEHNER: Tremendous deficits.

CRUZ: Debts out of control.

UNIDENTIFIED MALE: This does not start paying down our deficit. It
is kicking the can down the road and frankly, we`re out of road.

(END VIDEO CLIP)

HAYES: All right. You would think that those people would all be
pushing to take credit for our incredible deficit reduction, celebrating,
in fact, that there would be press conferences, maybe even a hashtag. At
the very least, you would think it would be front page news in every
conservative Web site.

But no, there was nothing. What makes that nothing this week so very
ironic, of course, is that not only did Republicans essentially ignore the
CBO report but they chose to spend the time they should have been out
celebrating our lowest predicted deficits since 2008 trying once again to
repeal Obamacare. They voted for the 37th time to repeal Obamacare despite
the fact that there is good reason to believe that Obamacare is to credit
for much of the remarkable deficit reduction projected this week by the
CBO.

The deficit reduction Republicans used to hold up as their entire
reason for being, because the biggest driver of our long term deficits is
rising health care costs and -- get this -- between 2009 and 2011, total
health spending grew at the lowest annual pace in the last five decades.

And the argument for passing Obamacare was to bring down health care
costs. Health care costs are coming down.

So why does no one care? No one cares that health care costs are
going down and in turn deficits are going down?

The reason is because the cardinal rule of Washington politics -- and
this is really important. It makes everything make sense, is that when
people talk about deficits, they are actually talking about something else.
No one actually cares about the deficit.

The simple reason why nobody was talking about it today is just
because they don`t care. And if there is one person in Washington -- and
this is the grand, tragic, comic irony of this whole situation -- if there
is one person in Washington who genuinely seems to care about deficits,
well --

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Here`s what you need to
know. First, I will not sign a plan that adds one dime to our deficits,
either now or in the future. I will not sign it if it adds one dime to the
deficit now or in the future, period.

(END VIDEO CLIP)

HAYES: All right. Joining me tonight, Ezra Klein, editor of "Wonk
Blog" and columnist at the "Washington Post" and an MSNBC policy analyst.

Ezra, it is great to have you here. I think this combination of the
one-two punch of the Obama care repeal vote a few days after this CBO
report that landed with an absolute thud is so illuminating about
Washington, but also flummoxing.

So, the first question is the politics of this. Genuinely, I am
curious why no one sees that report on either side and ran around all day,
calling attention to it and taking credit for it?

EZRA KLEIN, MSNBC POLICY ANALYST: You know, sometimes I really wonder
if you believe that what we post on "Wonk Blog" drives Washington after
all. We ran around with it.

I think two things are going on. One is that the politics of this on
the right are not really all that deficit focused.

So, the Republicans believe in deficit reduction to the extent that it
corresponds and offers a cloaking device for other significant Republican
goals. So, Paul Ryan --

HAYES: Like cutting spending, for instance, on the part of the budget
that they have been cutting spending on.

KLEIN: You can`t even just say cutting spending. You have to say
cutting spending potentially on Medicare potentially in the long term and
really cutting spending on programs for the poor and other kinds of
discretionary programs.

But they don`t want to cut spending on defense if they can help it.
Their budget doesn`t cut spending on Social Security. And back in the day,
Paul Ryan in the Bush years voted for policy after policy that added
trillions of dollars for deficit.

So, I do think to your maxim about Washington, people, when they talk
about the deficit, are talking about something else.

When Republicans talk about the deficit, they are typically talking
about shrinking social programs. I mean, that is really what they are
looking to do, do premium support in Medicare or block granting Medicare or
all these other things. They are not looking to raise taxes or cut defense
spending, which are, of course, two ways to cut deficit.

On the left, for President Obama and others, this is too much deficit
reduction.

HAYES: Exactly.

KLEIN: They believe that. It is going to 2.1 percent of GDP after
being 10 percent just a year or two ago. That is too quick. It is bad for
the economy. For them to celebrate it would be at odds with our other
goals.

So, I think that on the one hand, Republicans have got in deficit
reduction and they`re not happy because that isn`t what they really wanted.
On the other hand, Democrats have gone in deficit reduction and they`re not
happy because they didn`t want it now.

HAYES: Right. And so, it sits there on the table with no one
claiming credit. But the one -- I agree with, right? I think you and I
are on the same side of the austerity --

KLEIN: I`m shocked to hear that.

HAYES: Right. Yes, this is going to very contentious, but I`m
surprised to find us in agreement.

No, we`re on the same side I think on particularly short-term stimulus
and austerity and just the need for the government to be doing much, much
more to get people back to work particularly in the short term.

But the really interesting thing -- and the place where I`m surprised,
particularly today on the day of the Obamacare repeal vote for the 37th
time, is the mounting evidence that Obamacare really is playing a role in
the long-term projections of deficit reduction.

Here`s just an example of -- this is from the Center for Budget and
Policy Priorities. This is projected Medicare spending which has fallen
$590 billion out in the future since just August 2010. Now, that`s a
fairly large amount. And if you extrapolate that out into the long term it
is even more. That argument that Obamacare is doing that, why is no one
making at argument?

KLEIN: So, two things here.

One, this extrapolation is super important. Whenever you hear about
our deficit problem, our long-term debt problem, it is all long term health
care spending. I mean, if you got that under control we`re pretty much
fine. A lot of that is driven by aging which is harder to get under
control.

But this problem of how much is due to the Affordable Care Act, look,
over the past couple of years, people have been trying to run these
numbers. One reason we`re having very, very slow health care spending
growth is because of the recession. We`ve had a terrible, terrible
recession that does bring health care spending down. That is accounting
for part of the slowdown.

The big mystery is when you get that here. Why is it happening in
Medicare? Medicare is typically not really coming out of people`s pocket,
not the majority of it anyway.

And you`re seeing things in Medicare happen that should have nothing
to do with people`s income. These are retirees, things entirely paid for
my Medicare.

(CROSSTALK)

KLEIN: -- is going down.

HAYES: There they`re pretty insulated from the recession, right? I
mean, this is a pool of people we shouldn`t see being rocked by the same
forces.

KLEIN: So I think what you`re seeing in part is a lot of people who
can`t quite come up with the right mechanism that explains why the
Affordable Care Act would have done this, this quickly.

Now, the mechanism you could put forward is the Affordable Care Act
has signaled in a very clear way, different ways we`re going to begin
paying for medical care in the coming years. Medicare`s already beginning
to chop hospital payments if they have too many preventable readmissions,
it begins to chop hospital payments if they`re not doing the right sort of
value based purchasing, speaking to chop payments if you don`t got to
electronic records.

And you do have a bunch of these different signals that are beginning
to filter into the health care system.

So, while a lot of them haven`t begun yet, it is totally plausible to
say that a significant part of this health care spending slowdown is coming
from the health care system preparing for that. They see these signals in
the future and they are beginning to respond. Really good evidence on that
point is that readmissions, the rate at which folks in Medicare are getting
brought back into the hospital when they shouldn`t be, has dropped 2
percentage points in the last year or two. That hasn`t happened in the
last 20 years.

But I do think you are also seeing just sort of a circuit of wonkish
honesty from folks on the left, which I think is good.

(CROSSTALK)

HAYES: You just said, I was just about to interview him, he said,
there is a plausible case to be made. And basically the standard or
threshold in political advocacy, a plausible case definitely clears that,
right? I mean, if you can -- I`m serious. If you can make a plausible,
not totally dishonest argument which I think there is a plausible not
totally dishonest argument, then you should make it and I am surprised that
outside of the confines of "Wonk Blog" that is not being made. So, I`m
hoping we get to see it made.

KLEIN: I think there`s a bit, but I also think there`s -- you know,
Speaker Nancy Pelosi and other Democrats have begun to make some of these
arguments. I don`t think they`re not totally -- they`re just not getting
covered because there is not much conflict on some level. The repeal vote
didn`t get much coverage either except to get laughed at because it was
pretty laughable.

HAYES: Nancy Pelosi actually made exactly that argument sitting here
at this table this week.

Ezra Klein, editor of "Wonk Blog" at the "Washington Post" -- thanks,
man.

KLEIN: Thank you.

HAYES: You`re not going to believe this. You really aren`t going to
believe this but we have news tonight of yet another Army officer heading
up a sexual assault response program, arrested by the police, this time for
stalking his ex-wife and violating an order of protection. The details and
implications, next.

(COMMERCIAL BREAK)

HAYES: Big, important updates tonight on a pair of stores we`ve been
following.

Police have arrested a total of six people in the Mother`s Day
shooting in New Orleans that took place during a daytime parade. Nineteen-
year-old Akein Scott was charged with 20 counts of attempted second degree
murder.

His 24-year-old brother Sean Scott subsequently arrested on the same
charges. Four others were arrested for harboring the Scotts and
obstruction of justice. Police believe the shooting`s target was the
member of a rival gang.

And in West, Texas, state and federal investigators say the cause of
last month`s fertilizer plant explosion is undetermined. Authorities have
not ruled out intentional sabotage. The explosion killed 15 people,
injured more than 100 and damaged property within a 37-block radius.

We will continue to follow this story here and on our Web site,
allinwithchris.com.

(COMMECIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Everybody in this room has heard from me directly. They`ve
heard from Secretary Hagel and they`ve heard from Marty Dempsey. They all
understand this is a priority and we will not stop until we`ve seen this
scourge from what is the greatest military in the world eliminated.

(END VIDEO CLIP)

HAYES: Moments after President Obama wrapped up his meeting with
Pentagon leaders this afternoon in the White House telling them he was
"ashamed" of their failure to curb sexual abuse in the military, Lieutenant
Colonel Darin Haas, the manager of the sexual response program at Ft.
Campbell, Kentucky, was arrested in a domestic dispute on charges of
violating an order of protection and stalking, then he was relieved of his
post. That makes the third time in the last few weeks that a U.S. service
member who worked in a military sexual assault prevention program has been
investigated for unlawful conduct towards women.

First, there was Lieutenant Colonel Jeffrey Krusinski, the head of the
Air Force`s sexual assault prevention office who was charged with sexual
battery for groping a woman in a park lot. Then, just the other night,
Sergeant First Class Gregory McQueen (ph), the sexual assault prevention
coordinator at Ft. Hood, was accused of abusive sexual conduct and
pandering. And sandwiched between those two incidents was a Pentagon
report showing that as many as 26,000 military members were sexually
assaulted last year.

Hours before the meeting at a White House, Democratic Senator Kirsten
Gillibrand from New York was on the show last night, was part of bipartisan
group of lawmakers who proposed legislation to remove sexual assault cases
from the military`s chain of command.

(BEGIN VIDEO CLIP)

SEN. KIRSTEN GILLIBRAND (D), NEW YORK: It`s time to change this
system that has been held over since George Washington that is simply not
working today for the men and women who are serving, and when any single
victim of sexual assault is forced to salute her attacker, clearly, our
system is broken.

(END VIDEO CLIP)

HAYES: Today`s meeting between President Obama, Defense Secretary
Chuck Hagel and Chairman of the Joint Chiefs of Staff Martin Dempsey was
designed to present out and relay the message we`re all committed to doing
whatever is necessary to end the epidemic of sexual abuse in the military.
But the subtext of today`s White House meeting, and this is really
important and we kind of discovered it last night on air, during our show,
is that the resistance to changes necessary to crack down on sexual
predators in the armed forces, they`re not a partisan difference between
Democrats and Republicans. Rather, an institutional fight between Congress
and the Pentagon. And the president called today`s meeting, it appears, to
try and play the role of mediator.

Still there is the question of how difficult will it be to get this
done politically. A question Anu Bhagwati, a former Marine Corps veteran
and now executive director of Service Women`s Action Network tried to
action for us on last night`s show.

(BEGIN VIDEO CLIP)

ANU BHAGWATI, SERVICE WOMEN`S ACTION NETWORK: We`re dealing with
habit and tradition. It is military deference has become -- it`s almost
like a physical habit, right, where we assume that military leadership
always knows best when it comes to issues in the military. It absolutely
does not know best. There should be no politician, Democrat or Republican,
who even hesitates to support this kind of legislation.

(END VIDEO CLIP)

HAYES: Joining me tonight, Spencer Ackerman, senior "Wired`s"
national security blog, "The Danger Room." He goes to work every day in
the Pentagon.

And, Spencer, I want to ask you first -- how is the Pentagon just from
a simple PR perspective with the latest news out today, how are they
handling this internally? In your interactions with them as a reporter who
covers this beat, are they panicked about this? Are they aware will is a
story building here, that they really are going to have to get out ahead
of?

SPENCER ACKERMAN, THE DANGER ROOM: Exceptionally panicked, Chris.
This is way beyond what -- even after Lieutenant Colonel Krusinski was
arrested, Pentagon officials thought would simply be a couple of days
story. They come out with another report on sexual assault. Chuck Hagel
comes out and says that he expects the chain of command all throughout
different services to make some institutional changes and it`s gone.

But clearly this had is cresting. The idea that, all of a sudden,
there is a third official, a third now 2nd officer, third official in
charge in some way of sexual assault and prevention in the military
arrested on u unrelated charges is setting people into a state of panic.

HAYES: That`s interesting to hear because I have not got a sense so
far about what`s happening inside that building.

And the second question then becomes, so if they are in a state of
panic, what is the plan right now? What is the thinking inside the
Pentagon? Because we`ve talked a lot to the activists trying to change the
Pentagon, we`ve talked to lawmakers. What is the thinking inside the
Pentagon about whether there is a problem and what to do about it?

ACKERMAN: They definitely recognize that there is a problem. They
say that endlessly. What they`re actually not willing to do is the step
that you hear Congress contemplating, which is to take prosecuting sexual
assault outside of the chain of command. There would be a sea change for
the military. Chain of command is everything in the military.

As much as Hagel has said in his last press conference about this,
that it remains a top priority of his tenure at the Pentagon to remove the
stain of sexual assault from the military, it is a step he`s not yet
contemplated. He`s advocated editing some aspects of the way the Pentagon,
the way the military chain of command handles it in particular, amending
something called Article 60, to make it more difficult for officers in the
chain of command to reverse sexual assault convictions.

But removing prosecutions from the chain of command is really kind of
where the rubber meets the road institutionally in this emerging
conflagration between the military and Congress.

HAYES: Do you -- where -- and where do you see the White House in
this? Because I thought the meeting today was so interesting. If you`re
the White House, this is -- this is a difficult -- the politics of this are
going to be extremely difficult to manage because the outrage is growing.
It is bipartisan and it is entirely justified.

And at the same time, there is an institutional bureaucratic culture
at the DOD that is not an easy thing to just overturn.

ACKERMAN: After the meeting an administration official told me the
message Obama wanted to convey behind closed doors is this has to be fixed
and it has to be fixed immediately. You didn`t hear him say anything about
specific steps taken in his remarks today after the meeting. He stopped
short of advocating for prosecutions on sexual assault to be removed from
chain of command. He seems to be delegating that to Hagel and to chairman
of the Joint Chiefs of Staff, General Marty Dempsey.

HAYES: In getting these news stories, the thought that`s occurred to
me -- don`t know if you can answer this, but I`m going to ask it anyway --
what exactly -- there seems like there are actually a fair amount of people
apparently employed in the armed services whose full time jobs or are
tasked with prevent being sexual assault, sexual harassment, responding to
them.

What are those jobs, what do they consist of and are they effective at
all?

ACKERMAN: You know, it`s a great question. It is an underexplored
question. A lot of what the jobs are is education and outreach about what
constitutes sexual assault. And to some degree, Pentagon officials when
they put out their last report about two weeks ago or so, about incidences
of sexual assault, credited those positions with expanding the aperture,
the understanding of sexual assault in the military, to the way in which
now 26,000 cases are estimated according to a private confidential
questionnaire that service members fill out.

To some degree, they`re careful about how they phrase it because this
is a very touchy issue. They view that the rise of understood sexual
assaults, sexual assault incidents, to be something of a healthy situation
in the sense that now, service personnel recognize because of this outreach
they believe that there have been instances of sexual assault they might
may not have characterized previously.

HAYES: So, when we`re seeing the 35 percent increase year over year,
there`s some thinking there that the outreach and educational efforts are
making people feel more comfortable, even in the context of an anonymous
survey of answering and naming what happened to them as sexual assault.

ACKERMAN: Yes, but what you don`t see is a commensurate rise in
reported sexual assault incidences.

HAYES: Exactly.

ACKERMAN: And you definitely do not see a commensurate rise in sexual
assault convictions. That`s a situation where the Pentagon now starts to
feel that they really do still face and enormous trust deficit.

HAYES: We`re going to stay on this. And Spencer Ackerman, thanks for
your great work tonight. I really appreciate it.

If there`s anything that could cause businesses to make improvements
to safety standards, you would think it`s an accident that killed more than
1,100 people. But several major American companies, ones that you know,
won`t sign on to the new standards. I`m going to tell you who they are,
next.

(COMMERCIAL BREAK)

HAYES: As the worst disaster in the history of the garment industry
continues to unfold in Bangladesh, a who`s who list of well known American
brands say they won`t sign on to a new agreement that would improve safety
standards for workers. Over 1,100 people have died following the collapse
of the Rana Plaza, which held several garment factories in a suburb of the
capital city of Dhaka.

As we have reported on this program, Rana Plaza was built on a swamp
without proper permits. And according to the country`s chief engineer,
three of its stories were added illegally. People knew Rana Plaza was
unsafe before it collapsed. Yet, thousands of people came to work that
day, many pressured by their employers regardless of the dire conditions.

In the aftermath of the tragedy, Bangladesh now finds itself mired in
complete, total social and political upheaval. Earlier this week, reports
of as many as 300 factories near Dhaka were temporarily shuttered due to
worker unrest.

And there are a few good stories to report here. Late last week, a
woman was pulled out of the rubble alive after being trapped for 17 days.
"I never dreamed I`d see the daylight again," she told local TV. She`s one
of the lucky ones.

The righteous and deserved rage from all corners of Bangladesh and
around the world has intensified pressure on clothing retailers, prompting
some global brands to sign on to a landmark, groundbreaking international
safety pact. The plan requires companies to have rigorous independent
inspections and to help pay for fire safety upgrades, like adding fire
escapes, which many factories still lack.

More than two dozen European retailers and brands have signed on to
the agreement, including H&M, but only two American companies. Abercrombie
& Fitch as well as PVH Corporation, the parent company of Calvin Klein and
Tommy Hilfiger have joined them in signing on. From the signs of it, other
major U.S. clothing chains, from Walmart to Gap to Target, won`t be
supporting the effort any time soon.

Why? Well, the retailers believe the agreement would give labor
groups and others the powers to take them to court. Matthew Shay of the
National Federal Retail Federation says "the accord exposes American
companies to a legally questionable binding arbitration provision, a
process that serves only the unions, not the workers they represent."

Gap says it won`t join the pact as long as it is legally binding. As
Scott Nova of the Workers Right Consortium puts it, "Gap`s demand is that
the agreement be made unenforceable and therefore meaningless. What Gap
wants is the right to renege on its commitments when it wishes."

In a country like Bangladesh, which is massively dependent on the
garment industry, this kind of split among retailers could undermine the
effectiveness of any kind of safety pact. In the meantime, Walmart has a
different solution. That company says its factory monitors would conduct
in-depth safety inspections at 100 percent of its Bangladesh facilities and
make them public. In other words, the company will go it alone and conduct
its own inspections.

If that sounds like a good idea to you, I would hasten to add the
following. Rhana Plaza (ph) itself conducted its own inspections as well.
In fact, the day before the building collapsed, the owner of Rhana Plaza
brought in an engineer to take a look at a few troubling developments in
the building`s infrastructure. Here`s what he found.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This video filmed by a local television channel
shows large cracks in the walls of the building, which housed garment
factories and a shopping center, that may have hinted at the disaster to
come.

(END VIDEO CLIP)

HAYES: Those are cracks in the building that the engineers saw before
it collapsed. As "the New York Times" reported, the engineer examined
three support pillars and concluded the building needed to be closed
immediately. The owner of Rhana Plaza disagreed with that assessment. And
the next morning, people reported to work and the building collapsed.
Self-inspection didn`t seem to make much of a difference.

Now there is a clear moral case for these companies, Gap and Walmart
and Target and others, to take the most basic measures -- not only in
Bangladesh but in factories all around the world, to just ensure the basic
safety of the workers, to prevent them from being crushed to death. Keep
in mind, we`re not even talking about wages here. We`re just talking about
making sure a building doesn`t fall on top of you and kill you.

Thousands of people, moms and dads, brothers and sisters, neighbors
and friends and loved ones -- there is an obvious and irrefutable moral
case for these companies to do that. But even if these companies don`t
care about that, there is a business and reputational case for these
companies to take enforceable serious measures as well, because if and when
another horrible tragedy like this happens in another factory churning out
clothes for Gap or Walmart or any other American brand we all know and
wear, if it turns out they had a chance to fix the problem and didn`t take
it, and there are more deaths and disaster, then the blood on their hand is
going to stain every last shirt they sell.

(COMMERCIAL BREAK)

HAYES: The Washington scandal coverage bonanza isn`t going away any
time soon, so President Obama has settled on an interesting way to deal
with it. He is going with the Jedi mind trick approach. And amazingly, it
is kind of working. That`s coming up.

But first, I want to share the three awesomest things on the Internet
today, beginning with a catchy little ditty Twitter fan Seth Mercer tells
us about, the gay country song that supports gay marriage. It`s called
"Just Two Men Who Dosido," written by Robert Gould (ph) and composed by
Robert Artello (ph), animation by Alec Salsberg (ph)

(BEGIN VIDEO CLIP)

(SINGING)

(END VIDEO CLIP)

HAYES: -- download the song with a donation to marriage equality.
The animated video is chock-full of well drawn details. And the message is
refreshingly not subtle.

(BEGIN VIDEO CLIP)

(SIGNING)

(END VIDEO CLIP)

HAYES: The second awesomest thing on Internet today, Bea Arthur in
her birthday suit. A painting of Bea Arthur naked, which sold for 1.9
million dollars at Christie`s. The "Jezabel" headline noting, "Not Safe
For Work." That`s because the full painting looks like this, except we
made it safe for television by covering her breasts with the heads, of
course, of Betty White and Rue McClanahan.

Bea Arthur, who died in 2009, was the star of -- and of course --

(BEGIN VIDEO CLIP)

(SINGING)

(END VIDEO CLIP)

HAYES: And of course we can`t forget "The Golden Girls." The artist
in question was Brooklyn`s John Curran (ph). When "the Daily Beast" social
editor tried to post the painting on Facebook, he got booted. Amazingly,
it is not the only painting of Bea Arthur naked. This is a genre. This
one was done by Chris Zimmerman, which we made safe with two Estelle Getty
heads, to make up for her omission from the earlier painting.

And the third awesomest thing on Internet today, President Obama`s
cover up, specifically frequently asked questions about President Obama`s
umbrella marines from "New York Magazine." When the rain started falling
during the president`s press conference with Turkish Prime Minister
Erdogan, two Marines had them covered.

Let`s turn to the FAQ; question, did Obama make any sort of jokes to
lighten the mood at all when he asked for those umbrellas? Yes, he made
three sort of jokes.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, we got a couple
of Marines. They`re going to look good next to us.

I`ve got a change of suits, but I don`t know about our prime -- our
prime minister.

To you guys, I`m sorry about it.

(END VIDEO CLIP)

HAYES: Question, does this happen often? Answer, no. And it isn`t
nearly as odd as this, President Ronald Reagan in sweat pants on Air Force
One on his way to Iowa circa 1984. Don`t look at that image. Thank you
Reddit, University of Texas in Austin. This is almost certainly the single
greatest outfit in the history of the American presidency.

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

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How do you feel about comparisons by some of your
critics of this week`s scandals to those that happened under the Nixon
administration?

OBAMA: Well, I`ll let you guys engage in those comparisons. And you
can go ahead and read the history, I think, and draw your own conclusions.

(END VIDEO CLIP)

HAYES: That was President Obama taking the inevitable are you a
disgraceful scandal ridden criminal or what question from the White House
press corps this morning, during a joint appearance alongside the prime
minister of Turkey. That line of questioning was bound to happen in this
scandally week of scandals, because the mere mention of the word scandal in
Washington has a magical brain melting effect.

Once the Beltway starts talking scandal, everyone collectively loses
all ability to apply critical thinking and reasoning skills. Suddenly, no
one can distinguish the facts and consequences and implications behind any
particular scandal. All anyone cares about or -- is how scandalously
scandalous the scald-gate of scandals is.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: Which officials knew about
the scandal?

REP. JOHN BOEHNER (R), HOUSE SPEAKER: My question is, who`s going to
jail over this scandal?

UNIDENTIFIED MALE: By the way, it is a scandal. And John McCain
yesterday said it was a cover-up.

PAT BUCHANAN, CONSERVATIVE COLUMNIST: Similar to the cover-up in
Watergate.

UNIDENTIFIED FEMALE: I was in the White House during Watergate. I
know all about cover up.

MCCONNELL: It actually could be -- could be criminal.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I don`t -- I`m not saying
this is Watergate. It is probably more like Iran-contra.

(END VIDEO CLIP)

HAYES: Wow, that`s judicious. When it is scandal time in Washington,
it is time to talk mindlessly and ceaselessly without any actual
information about criminality and jail time, and of course to revel in all
the best scandals of yesteryear. But that doesn`t actually serve any
purpose, other than narrow partisan ones, because there are three sets of
events that took place that are not created equal, not to each other or to
Watergate, events that may or may not be bad for the country from a policy
perspective, that may or may not involve corruption, that may or may not
comprise severe breaches of the public trust.

The details of those three very specific sets of circumstances are
being completely obliterated and obscured right now by the word scandal.
The grand irony of it all is that in this week of scandalous scandal
overload, the least attention, of course, is being paid to what is very
likely the most scandalous thing to have happened. That`s partly because
of Scandal-gate fever and partly by the White House` own design.

I think it is high time we engaged our own patented secret scandal
decoder glasses to find out why. Joining me tonight from Washington is
Howard Fineman, NBC News political analyst and the editorial -- yes, you`ve
got them. Awesome. We Fed-Exed those. We got them to you. The editorial
director of the "Huffington Post" media group.

With me here at the table, Joan Walsh, editor at large for "Salon" and
author of "What`s the Matter with White People," which is a good people.
And Erin Boehlert, senior fellow at Media Matters.

OK, let`s -- I want to begin with -- we`re going to work our way
through this. I really think that like there is this tornado blowing and
no one is seeing or thinking clearly. That goes for Democrats and
Republicans, in many ways. Folks are kind of -- had their heads spun
around.

Let`s talk about Benghazi first. Here is my take on Benghazi. It is
what we like to call in the business a nothing burger. There is nothing
there. And I think the -- well, OK, here`s 91 percent of very
conservatives in the United States say it is worse than Watergate.

Howard, you were sitting at Chris Matthews yesterday in what was my
favorite -- probably my favorite 10 minutes of television all week. And
I`m not saying that facetiously, which was you and David Corn and Michael
Isikoff and Chris with papers spread out before you reading e-mails,
looking for nuggets. But do you agree there is nothing here?

HOWARD FINEMAN, HUFFINGTON POST MEDIA GROUP: Well, I can go based on
the product of all that frantic attention that we paid to those e-mails
yesterday. What I came up with in looking through them, pawing through
them on the air in real time, was that this was, in fact, a bureaucratic
Rondelai (ph) going on, where everybody was trying to shape things based on
their institutional imperatives. And more important to me, at any rate,
was the CIA being very, very cautious about naming any groups, talking
about al Qaeda, anything like that, because the general counsel of the CIA,
for one, was saying, hey, wait a minute, there are and will be ongoing
investigations here. Let`s not prejudice them. Let`s not signal anything.
Let`s cool it here for investigative reasons.

So it wasn`t Hillary Clinton`s State Department. It wasn`t Ben Rhodes
at the White House. It wasn`t, lord knows, David Axelrod saying we got to
cover this thing up for political purposes. There was nothing. There was
none of that. To me, that was the significant thing.

HAYES: And it wasn`t Susan Rice, who was not even on the e-mail
chain!

FINEMAN: Susan was not even part of the deal.

HAYES: That`s the biggest scandal of this whole thing, is that she
got trotted out and send out on this huge public shaming over a set of
talking points she delivered was that she was not -- her staff wasn`t on
the -- as far as I can tell, was not on the e-mail.

JOAN WALSH, "SALON": No, they were really prepared for Congress, if
you read it. And they were handed off to her. So that`s one scandal. The
other scandal is what Howard alludes to. State was sort of left holding
the bag -- and this was all Hillary Clinton`s doing -- when this is all
about the CIA and possibly another -- not scandal, but a really interesting
set of questions surrounds what was going on at the compound. And there
were 30 CIA operatives and seven State Department employees.

HAYES: It was not -- this is very important. It was not a diplomatic
outpost. It was a CIA outpost with diplomatic cover. That -- I think what
you see in those e-mails is State being like oh, no, you don`t, CIA. Oh,
no, you don`t put this on us. This was your facility that you have to
defend.

WALSH: And God knows what went on before that.

ERIC BOEHLERT, MEDIA MATTERS: I mean, the whole talking points issue,
I mean, President Obama called it a side show, which was being incredibly
generous. I mean, this story -- the fact that we are talking about it
eight months later, the crafting, the editing of basically a PR release for
members of Congress, is amazing. And that`s based on very bad reporting in
the last week.

HAYES: Yes, thank you. On Friday, when it was like e-mails obtained
-- well, no, actually not e-mails obtained. E-mails shown to Republican
congressional staffers who have an ax to grind, who then paraphrased them.

BOEHLERT: Who passed them on to the press, passed them on to Jonathan
Carl of ABC News and passed along inaccurate summaries, which then led to
this image that the White House was playing politics.

(CROSS TALK)

WALSH: Which appeared in quotes, paraphrases that appeared in quotes.

HAYES: Here to me signals that the White House itself thinks there`s
nothing there and nothing to worry about it, they poured fuel on the fire.
They looked at the news cycle. They looked at a news cycle in which
they`ve got the IRS, they`ve got the DOJ, the AP and they`ve got Benghazi.
Yesterday, they said, you know what, here`s 100 e-mails.

(CROSS TALK)

FINEMAN: I think that`s called in firefighting, building a backfire.

HAYES: That`s exactly right. They built a backfire. And the other
thing is the President himself -- I love this -- unprompted said the word
Benghazi today. He`s just like, come on, let`s talk about it more.

Hold that thought, Howard, because I want to finish this and also talk
about the other two, the IRS and the AP/DOJ, and where they are sort of
substantively and politically, right after this break.

(COMMERCIAL BREAK)

HAYES: I`m here with Joan Walsh of "Salon," Eric Boehlert of Media
Matters and Harold Fineman of the "Huffington Post." And we are taking
stock of the week of scandal, what we`re calling scandal-gate here at ALL
IN WITH CHRIS, and scandal management.

So here I want to go from what I think is the least serious to the
most serious. Then we`ll get to the Goldilocks one, that`s just right in
the middle, the IRS. So the most serious by far to me is the story about
the Department of Justice having secretly subpoenaed the phone records of
the Associated Press for two months, 20 different phone lines, including
the homes of some reports. Carl Bernstein calling it outrageous and
totally inexcusable.

Now what we know so far is that the Eric Holder says he recused
himself from this. This is part of a leak investigation about a story that
appeared in May of 2012. Eric Holder recused himself. The White House
said they had nothing to do with it. So I think that -- at this point,
we`re taking at face value. We may learn more. But at this point, we`re
taking at face value. But the actual conduct here I think is just
profoundly chilling and troublesome, and shows complete disregard for the
department`s own guidelines about how they`re supposed to go about doing
this.

Joan, you`ve been on the same page with me.

WALSH: Right, right. They had other options. They could have and
should have gone to AP. This was not a secret investigation, where they
would be blowing their cover. This was a well known investigation. It was
another scandal, the leak scandal. And so they went farther than they had
to go. They went more secretly and they are -- this comes in the context
of them being incredibly tough on whistle blowers, prosecuting more whistle
blowers than all presidencies combined.

So there is a pattern here. And it is troubling that this is the
scandal that`s getting the least attention.

HAYES: Yes, Howard, it is getting the least attention, which is so
fascinating to me, because it has the least partisan legs. Because Ted
Cruz is like, yes, you got to go after leakers. There is no delightful
partisan gains to be made by Republicans beating them up over this.

FINEMAN: Right. And I think perhaps the press corps is over thinking
it by assuming that people out in the country don`t really care that much.
It is something involving politicians and the press and who cares. This is
one where I think, whatever the polls might say and whatever the level of
interest among voters out in the country, it`s a profound matter and
profoundly disturbing.

As Joan said, they sought too much. They didn`t do it in the right
way. They insist that they took all reasonable measures, which is what the
Justice Department guidelines call for, to find the information they wanted
before they did what they did. We`re taking that at face value. I`m not
necessarily ready to take their word for it, number one.

HAYES: They also blew up the reporting ability of the AP. Right now,
if you are someone out there who is a source, who knows about, say, a
serial sexual predator on an Army base, for instance, and you want to blow
the whistle on them, and you don`t want it to be traced back to you, you
got to think twice before you`re going to call up your local AP reporter.

FINEMAN: I can`t imagine any possible justification for basically
loitering on the street corner, so to speak, by getting all the toll
records of phone calls from the AP`s main phone lines in the Congressional
Press Galleries.

HAYES: In the Congressional Press Gallery.

FINEMAN: It is outrageous. It`s absolutely outrageous. I agree with
Carl.

HAYES: I hope that we`re going to -- there -- there can be -- I mean
the deputy attorney general, Jim Hole, is the one who ordered this. And I
think there should be recriminations for him, if it is true it did not go
above him.

All right. Now we turn to the Goldilocks. I was going to grill you
on the Media Matters talking points, but you`re getting off because of
time.

FINEMAN: Too bad.

HAYES: Yes, I know. I do want to touch on the IRS, because it does
seem to me to fall somewhere in between. And the reason it falls in
between here is that the conduct itself, at the level that we know about
it, was genuinely bad conduct, wrong, and also threatening in a way that I
think is really profound. I disagree with my colleague, Lawrence
O`Donnell, who does not take that view. You can tune in tonight at 10:00
p.m. to hear it.

But it also seems to me that, so far as we know so far, genuinely a
product of the bureaucracy from below. Eric?

BOEHLERT: If you talk about this urge for scandal coverage in
Washington -- I was watching another news channel and the on-air Chiron,
the headline, it says, "IRS Hounded Conservative Groups."

(CROSS TALK)

BOEHLERT: I`m not sure anyone showed up at these Tea Party member`s
door and banged on the door and hounded and things like that. And this
talk about being Nixonian, I mean, this is what Fox and the right wing is
pushing, Nixonian action. Richard Nixon, if you go to the archives, talked
to his attorney general, the number on law enforcement officer in the
country, and told them to send immigration and IRS after Otis Chandler`s
family, who owned "L.A. Times" because he hated Otis Chandler. Direct to
the attorney general. That is paranoia. That`s an enemies list.

This is nothing compared to that, no matter what the right wing media
wants to talk about.

HAYES: In fact, one of the themes I think we`re seeing here, which is
kind of the opposite of Nixonian, is a real kind of arms-length
relationship between the Department of Justice and the White House, and the
White House and the IRS, which is --

WALSH: That`s appropriate. Which is the way it is supposed to work.

HAYES: Quickly, Howard?

FINEMAN: I`ll just say, let`s see what the rest of the story, is if
there is a rest of the story. I`m withholding judgment on this Goldilocks
one.

HAYES: Yes, no, I think you are right. I think there are some more
questions to be answered as well about how exactly far up this went. But
so far, my judgment -- from what we`ve seen so far, is that this was a
product of the bureaucracy. This was not a top-down order to go after
conservatives.

(CROSS TALK)

HAYES: Joan Walsh of "Salon," Eric Boehlert of Media Matters and
Howard Fineman of the "Huffington Post," thank you. That is ALL IN for
this evening. "THE RACHEL MADDOW SHOW" starts now on the button. 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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