updated 9/19/2013 3:01:12 PM ET 2013-09-19T19:01:12

THE LAST WORD WITH LAWRENCE O`DONNELL

September 18, 2013
Guests: Sam Stein, Dean Baker, Nia-Malika Henderson, Jonathan Cohn, David
Sirota

LAWRENCE O`DONNELL, HOST: The federal government is updating contingency
plans for a shutdown because today, House Speaker John Boehner caved in to
Ted Cruz and the Tea Party.

(BEGIN VIDEOTAPE)

TAMRON HALL, MSNBC ANCHOR: Republicans announced today they are ready to
shut down the government.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We`re going to continue to
do everything we can.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: In the week, we will unveil a
plan.

BOEHNER: To repeal the president`s failed health care law.

ANDREA MITCHELL, MSNBC ANCHOR: And the Republicans are going to hold
Obamacare hostage.

UNIDENTIFIED MALE: The GOP`s obsession --

MITCHELL: To funding the government.

UNIDENTIFIED MALE: With repealing Obamacare.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I`m tired of it and I
suspect you`re tired of them, too.

CHRIS JANSING, MSNBC ANCHOR: President Obama is again calling on Congress
to do something.

UNIDENTIFIED FEMALE: The tension is certainly building.

BOEHNER: There should be no conversation about shutting the government
down.

MITCHELL: What`s going on here?

UNIDENTIFIED FEMALE: There are some mixed signals happening here.

UNIDENTIFIED MAL: Let`s start with some tough love, all right? Ready for
this? Here it goes --

UNIDENTIFIED MALE: John Boehner is a speaker in name only.

UNIDENTIFIED MALE: Boehner has given up, said I can`t control my own
caucus.

UNIDENTIFIED FEMALE: He`s got a caucus he can`t lead.

UNIDENTIFIED MALE: This is fantasy politics.

UNIDENTIFIED MALE: I think he`s really given up.

UNIDENTIFIED MALE: With real world circumstances.

OBAMA: It`s irresponsible.

UNIDENTIFIED MALE: This month (INAUDIBLE)

BOEHNER: The fight over here has been won.

UNIDENTIFIED FEMALE: This has become the theater of the absurd.

UNIDENTIFIED FEMALE: Can`t you see the smile on my face?

UNIDENTIFIED FEMALE: They`re walking on shards of glass.

UNDENTIFIED FEMALE: I am so happy.

UNIDENTIFIED FEMALE: They`re going to get bloodied on this one.

HALL: Obamacare is the law.

UNIDENTIFIED FEMALE: It is the law.

UNIDENTIFIED FEMALE: I think we really have a shot at this.

MITCHELL: What`s going on here?

JANSING: Are we headed for a government shutdown?

BOEHNER: We`re going to continue to do everything we can.

CANTOR: In the coming week, we will unveil a plan.

OBAMA: To repeal the president`s failed health care law.

UNIDENTIFIED MALE: This is the step they`re going to take.

UNIDENTIFIED MALE: The GOP`s obsession with repealing Obamacare.

BOEHNER: The fight over here has been won.

UNIDENTIFIED FEMALE: The rest of the country eagerly awaits the finale of
this preposterous exercise.

(END VIDEOTAPE)

O`DONNELL: House Speaker John Boehner gave into Tea Party demands and
announced that House Republicans will vote on a continuing resolution to
fund the government past the September 30th deadline and defund Obamacare.

(BEGIN VIDEO CLIP)

BOEHNER: We`re going to continue to do everything we can to repeal the
president`s failed health care law. This week, the House will pass the
C.R. that locks the sequester savings in and defunds Obamacare. The fight
over here has been won. The House has voted 40 times to defund, change
Obamacare, to repeal it. It`s time for the Senate to have this fight.

(INAUDIBLE)

BOEHNER: I`m not going to predict what the Senate is going to do or not
do.

(END VIDEO CLIP)

O`DONNELL: Of course that`s not enough for Ted Cruz, who knows that the
Senate will not pass a bill that defunds Obamacare.

"Today`s announcement that the House will vote to defund Obamacare is
terrific news. Harry Reid will no doubt try to strip the defund language
from the continuing resolution. And right now, he likely has the votes to
do so. At that point, House Republicans must stand firm, hold their ground
and continue to listen to the American people."

There is Ted Cruz predicting that Harry Reid will pass his version of the
continuing resolution without the part that defunds Obamacare. But Harry
Reid can only do that if Ted Cruz and refuses to filibuster.

House Republicans understand that. And they don`t like Ted Cruz saying
that after Harry Reid successfully beats Ted Cruz in the Senate that House
Republicans must stand firm, and hold their ground and continue to listen
to the American people.

Republican Congressman Sean Duffy of Wisconsin tweeted, "House agrees to
send C.R. to Senate that defunds Obamacare. Senator Ted Cruz and Senator
Mike Lee refuse to fight, wave white flag and surrender.

Republican Congressman Tim Griffin of Arkansas tweeted, "So far Senate Rs
are good at getting Facebook likes and town halls, not much else. Do
something."

And Republican Congressman John Fleming of Louisiana said this.

(BEGIN VIDEO CLIP)

REP. JOHN FLEMING (R), LOUISIANA: Ted Cruz and Mike Lee have been asking
for the fight, the conservative base have been asking for the fight. So,
we`re going to give them the fight.

(END VIDEO CLIP)

O`DONNELL: In this morning`s meeting of Republican House members, "The
Hill" reports that John Boehner said this about his critics. "People say a
lot of things about me," Boehner told GOP lawmakers in a closed door
meeting, according to two people who attended. "People outside this room.
People inside this room. I just let that -- roll off my back."

President Obama met with business leaders today who are worried that House
Republicans could hold the debt ceiling hostage to defund Obamacare.

(BEGIN VIDEO CLIP)

OBAMA: Just flip the script for a second and imagine a situation which a
Democratic speaker said to a Republican president -- I`m not going to
increase the debt ceiling unless you increase corporate taxes by 20
percent. And if you don`t do it, we`ll default on the debt and cause a
worldwide financial crisis. Even though that Democratic speaker didn`t
hatch the votes to force through that particular piece of legislation, they
would simply say, we will blow the whole thing up unless you do what I
want. That can`t be a recipe for governing.

(END VIDEO CLIP)

O`DONNELL: Joining me now is Sam Stein, White House correspondent for "The
Huffington Post", Dean Baker, an economist and co-director of the Center
for Economic and Policy Research, and MSNBC`s Ari Melber.

Ari, the House Republicans have grown impatient with Ted Cruz`s posturing.
Boehner there saying in his statement, it`s time for the Senate to act.
And then we saw all the tweets.

ARI MELBER, THE CYCLE: Yes, and it`s really interesting. I mean, on the
one hand, if you`re watching at home and keeping score, how serious can a,
quote-unquote, "civil war" be when waged on Twitter and Facebook and
they`re accusing each other of sucking up too much to conservatives on
Facebook.

On the other hand, what we are seeing is this famous big fight that they
want. They`ve all want to fight. But nobody wants to be the closing
pitcher, right? Nobody wants to be there in the ninth inning, when as your
lead pointed out. They know how this ends. Everyone knows how this ends.

In fact, even if you stipulated that you could get a bill out of both
houses, this president would obviously veto a bill that tried to take back
his signature domestic achievement.

So, given that they know that, what we`re seeing is earlier cracks than
people expected, because they`re all really nervous about being the one
pitching when they lose.

O`DONNELL: Sam Stein, we saw the president speaking today about the debt
ceiling issue. But the first stage of this going to be the continuing
resolution to fund the government. Debt ceiling comes after that. Where
is the White House in terms of strategizing their moves at this point? Is
this something that they just kind of have to watch, watch while the
crazies work it out?

SAM STEIN, THE HUFFINGTON POST: Yes, with respect to the legislation.
It`s widely assumed that the White House would sign on a continuing
resolution, short term length that kept funding the at $988 billion level,
which is basically locked in sequestration levels, which is not their
preferred course, but they`re not going to throw a hissy fit over it
because they recognize that the debt ceiling fight is more important.

And, you know, with respect off to the health care law. Ari is right, even
if somehow, miraculously, Ted Cruz were to filibuster for a dozen days,
convince Harry Reid to pass something that defunded Obamacare, the
president would veto it. And the other thing, really important to note is
that throughout this all, if you shut down the government, the health care
continues to be the law of the land. It continues to be funded.

This is what is causing Senate Republicans to say this is a stupid
strategy, because this bill, this law is going to be enacted any way. So,
we are waiting for all this kabuki theater to play out, including the White
House. And then make their move with respect to the debt ceiling.

O`DONNELL: Ted Cruz was just on Sean Hannity`s show. Let`s listen to him
pretending to be happy about this situation.

(BEGIN VIDEO CLIP)

CRUZ: Today`s announcement is a big, big deal. You know, a few weeks ago,
early in the Obamacare defund fight, every gray beard in Washington said
there`s no chance of this going forward. And today is a victory for House
conservatives that stuck their neck out, that endured a lot of criticism.
And today is a victory for Speaker Boehner.

And I agree with Mike, I commend House leadership for listening to the
American people. They did their job. They stood up. And this is a bold
decision.

And I look forward to working with Mike to fight in the Senate to support
this decision for us to succeed and defunding Obamacare.

UNIDENTIFIED MALE: All right.

(END VIDEO CLIP)

O`DONNELL: Dean Baker, how do you see this playing out sequentially from
the continuing resolution through the debt ceiling?

DEAN BAKER, CENTER FOR ECONOMIC & POLICY RESEARCH: Well, to my mind, there
is little doubt that we will see, you know, a continuing resolution pass.
My guess is you don`t get a shut down of the government. I`ll be shocked
if you actually see us come against the debt ceiling.

I mean, these are losing propositions. It`s bad politics. It`s horrible
policy. And you know end of the day, this is all about keeping people from
getting health care, which is not going to be terrible popular either.

So, you know, I think it`s a lot of theater, a lot of high tension. But I
will really be shocked if we see either a government shut down and very
much shocked if we get to this debt ceiling.

O`DONNELL: Talk about the poll seal for, for a moment, Dean Baker. I
mean, we`ve already spent a lot of time on the politics here. But I do
want you to also concentrate on policies involved, both in the Republican
proposals on -- when they say a continuing resolution, they want to fund at
a lower level than we are funding now, even leaving the Obamacare piece
aside.

BAKER: Yes. What`s important to understand, the economy has been growing
very slowly. And a big part of that story has been cutbacks at the
government level. That`s exactly the opposite of what we need right now.
We get the story that, you know, they like the private sector. That`s
wonderful. I like the private sector, too.

But no one in the private sector invests because politicians like them.
They invest, they hire people when they see the demand. They`re not seeing
it.

And a big part of the story right now is the cutbacks of federal, state,
local level. So, they`re putting in further cut backs, with both have the
effect of cutting things like the National Institutes of Health, cancer
research, other things, you know, direct provision of services. But also
slowing the economy, throwing people out of work.

So, that`s not a good story. But then, on top of that, their end goal its
to prevent people from getting health care, lot of confusion about
Obamacare, no doubt. A lot of people are scared, they think the death
panel will be running into their house. But I think everyone knows that
once people see it, they`re going to like it. And I think that has the
Republicans terrified.

STEIN: I think Dean is right on this account. I think the health care law
and defund effort is a Trojan horse in some respects because what it`s
allowing, what forcing us to do is serve -- put our concentration over here
while we`re getting these continuing resolutions which are going to make
sequestration levels extended.

What we`re going to end up with is, you know, for a matter of months, are
going to end up with $988 billion bill, that will be reduced to $967
billion. And basically everyone across the board says that`s unacceptable.
This is -- you can`t govern at this discretionary spending including a lot
of House Republicans. That`s what we are going to get while our attention
is focused on this very sort of kabuki theater Obamacare fight.

O`DONNELL: Let`s listen to Ted Cruz`s non-answer to Sean Hannity`s
question about how he was going to convince Harry Reid to defund Obamacare
in the Senate.

(BEGIN VIDEO CLIP)

CRUZ: The answer is we have got to win. We have got to respond to the
American people. There`s a series of steps. The first step, and what Mike
and I have devoted every waking moment for the past several months to
doing, is motivating and energizing the American people. Sean, we have
seen, in just in a matter of weeks, over 1.3 Americans go to
dontfundit.com.

(END VIDEO CLIP)

O`DONNELL: So, Ari, he has one third of one percent of the American
population going to dontfundit.com. That`s a start.

MELBER: Well, look, Lawrence, everyone in politics knows the
dontfundit.com primary is important. It`s just not as the important as the
national re-election of this president who ran on Obamacare, ran on his
record.

So, that`s the problem they obviously have. Not only has Harry Reid is not
moving as a political matter. But we have a way to check in with the
American people. We had that reelection of this incumbent president. And
just to put a face on some points that Dean was making. You know, we`ve
talked about coming together as a country with some of the horrific stuff
that we saw happen this week. We talked about mental health and mental
health registries.

The current funding cuts take $49 million out of community health programs
for mental health issues around the country. Jim Comey, the new FBI
director, who was Republican prosecutor, said the first thing he looked at
when he was taking over the FBI was how grave the sequester cuts were. And
that he is going to have how to shut down the FBI for 10, 15 days a year,
headquarters and field offices. And he said that they have a plan in place
where if there`s a terror attack on one of those days, God forbid they`ll
call the FBI back in.

I mean, this is madness. And so, there`s been a lot of lip service from a
lot of people in politics, including a lot of Republicans this week. We
have to fund mental issues. We have to fund our security. We have to look
at the FBI agents who hit the streets immediately at the Navy Yard and
actually pay tribute to them so they get paid for their jobs. Not just pay
lip service.

O`DONNELL: Sam Stein, you have written extensively and in detail about
some of the thing that are happening under the sequester that are hurtful,
that people aren`t aware of. But it seems to me nothing short of a
government shut down would get widespread attention to just how bad that
situation is.

STEIN: Yes. I mean, a government shutdown will be so immediate and
dramatic in some respects that people would recognize the harm that comes
when you just basically stop the government spigot. The debt ceiling will
be 10 times worse. But I think you are right. You hit an important point,
which is that we`ve largely pushed to the side discussion of the
consequences of these spending cuts.

The good news for people who want to reverse them is that they will
compound on each other. They will get worse. For instance, we talked to
federal public defender`s office that is looking at approximately 90 days
of furloughs in the forthcoming year because of sequestration. Think about
it, 90 days. That`s almost four months of work that you`ve won`t be paid.

So, these things are getting worse, which will amplify the political
pressure. But that`s all down the road and that`s not being discussed in
the context of these budget discussions.

O`DONNELL: Ari Melber, Sam Stein and Dean Baker, thank you all for joining
me tonight.

STEIN: Thanks, Lawrence.

MELBER: Thanks, Lawrence.

BAKER: Thanks for having me on.

O`DONNELL: Coming up, what would shutting down the government mean for
Republicans in the next congressional campaign.

And in the rewrite, the politically bravest thing said in Washington today.
Send us your guesses as to who you think showed the greatest political
bravery in Washington today. You are going to be shocked by this. I was
shocked when I saw this video. It`s coming up. Be prepared for it.

(COMMERCIAL BREAK)

O`DONNELL: We`ve got breaking news tonight in Colorado. According to
Colorado Oil and Gas Conservation Commission, an oil tank damaged by the
flood, the massive floods in Colorado, has spilled an estimated 5,000
gallons of oil into the South Platte River. We will have more on the
situation, coming up.

(COMMERCIAL BREAK)

O`DONNELL: Some Republicans are worried that a government shutdown or a
fiscal crisis involving the debt ceiling could damage the Republican
Party`s chances of keeping control of the House of Representatives in the
next election.

So, House Speaker John Boehner wants to stop all that crazy talk about
shutting down the government.

(BEGIN VIDEO CLIP)

OBAMA: There should be no conversation about shutting the government down.
That`s not the goal here. Our goal here is to cut spending and to protect
the American people from Obamacare. It`s as simple as that. There`s no
interest on our part in shutting the government down.

(END VIDEO CLIP)

O`DONNELL: Boehner ally, Congressman Tom Cole, a former chairman of the
Republican Congressional Campaign Committee has said this, "The only way
Republicans will lose the House is to shut down the government, or default
on the debt. Shutting down the government is not in the best interest of
the American people and it makes you look politically irresponsible."

And as reported here last night. Yesterday`s "Wall Street Journal"
editorial said that shutting down the government is the one event that
could reinstall Nancy Pelosi as speaker. Mr. Obama could spend his final
two years going out in a blaze of liberal glory.

Joining me now is co-host of MSNBC`s "THE CYCLE", Krystal Ball, and from
"The Washington Post", Nia-Malika Henderson.

All right. Krystal, I`d like to respect the speaker`s wishes. He said
there should be -- there should be no conversation about shutting down the
government. We`ve got a few minutes.

KRYSTAL BALL, THE CYCLE: Right.

O`DONNELL: Let`s talk about shutting down the government.

BALL: We have to talk about something.

O`DONNELL: Yes. So, there is Boehner trying to shut it down and I want to
show you something that Mike Lee just said on FOX News. Senator Mike Lee.
Because he is echoing, he`s trying to echo this thing about no talk about
shutting down the government. It doesn`t quite work the same way. Let`s
listen to what Mike Lee said.

(BEGIN VIDEO CLIP)

SEN. MIKE LEE (R), UTAH: I want to applaud House Speaker John Boehner who
did the courageous thing today and stood with the American people. We now
need to stand with him and with the people.

What I propose from the very outset that we agree that we would fund
government and defund Obamacare. I have never wanted a shutdown, never
called for a shutdown. I want to avoid a shut down.

What I was saying is that we ought to fund every other priority in
government. Ted and I and others are willing to fund even programs that we
don`t like, as a compromise gesture in order to avoid having to fund
Obamacare.

(END VIDEO CLIP)

O`DONNELL: Nia, he`s never wanted a shut down. And he wants to avoid a
shut down. But there he is talking about a shut down.

NIA-MALIKA HENDERSON, THE WASHINGTON POST: That`s right. And, you know,
Newt Gingrich was asked by "The Washington Post" earlier today, and one of
the things that he advised to Republicans, of course, after his -- him
famously shutting down the government in, and it costing them at the voting
booth.

He said this is exactly what they should do. They should act like they
don`t want to shut down the government. They should say that as many times
as they can. And that certainly, what you hear from Boehner and Lee and a
lot of folks. It`s not about shutting down the government. It`s about all
these other things that they cast as reasonable, right?

Defunding Obamacare, which is Sam said earlier, isn`t going to happen and
actually has nothing to do with the continuing resolution. But I think,
you see, reasonable Republicans on the Senate side, and even in the pages
of "The Wall Street Journal" as you quoted there saying this is ape sure
fire turkey for the Republicans, shutting down the government.

O`DONNELL: And, Krystal, they continue to play with the notion of fooling
around with the debt ceiling. If the continuing resolution doesn`t work,
Peter King today reacted to the situation. I want to listen to what he
said.

(BEGIN VIDEO CLIP)

REPORTER: Do you think it`s a good idea?

REP. PETER KING (R), NEW YORK: We can`t let the government shut down. We
can`t be kamikazes. And we can`t be General Custer (ph).

(END VIDEO CLIP)

O`DONNELL: We can`t be kamikaze is basically his way of quoting "The Wall
Street Journal" lead editorial yesterday which referred to them as
kamikazes.

BALL: Right. Well, here`s what`s really devastating for them, is the fact
that you have the government shutdown possibility. Not only do you have
possibility of an actual government shutdown, but in terms of 2014, you
also have this very nasty infighting within the Republican Party which
creates a lot of apathy and a lot of anger within their base, making them
less likely to show up.

And then even if you get past that, then you have this debt ceiling battle
as well, which they have gone to the mat over before. So, the American
people are not going to believe this is somehow the president`s fault, or
somehow the Democrats fault, or they didn`t want to shut down the
government, they didn`t want to default on the debt, when they`re the party
that time and time again has forced us into this position and has
essentially blackmailed the president to try to get everything they want.

O`DONNELL: This no conversation about shutting down the government is the
funniest Republican talking point I`ve ever seen. No, I mean, it`s right
here as one of their talking points. They`re talking about a thing they
shouldn`t be talking about. Here is Marco Rubio.

BALL: First rule is government shutdown.

O`DONNELL: Here`s Michael Rubio`s statement and you can see it`s just
taken directly from a talking points list. He says, just like Boehner,
"There should be no conversation abut shutting down the government" --
which he then goes on to converse about.

"That`s not the goal here. Our goal here is to cut spending and protect
the American people from Obamacare. It`s simple as that. There`s no
interest in our part in shutting the government down."

So, Nia, his statement begins and ends with "we don`t want to shut down the
government". What they don`t say is -- OK. What do you do when your
proposal to defund Obamacare is defeated?

HENDERSON: That`s right. I mean everything they`re doing -- right now,
the talk in Washington is that this will in fact lead to a government shut
down. We`re coming up. We have two weeks until September 30th. And the
talk out of the House, obviously, is tying that CR to Obamacare. So, I
mean, I think in a lot of ways, this obviously is symbolic. It has no
substance. No real chance of passing.

I do think ultimately, it would -- even if they shut down the government, I
think it would in some ways, gin up the Republican base. And we`ll just
have to see what happens here.

O`DONNELL: Krystal Ball, and Nia-Malika Henderson, thank you all, both of
you for joining me tonight.

BALL: Thanks, Lawrence.

HENDERSON: Thank you.

O`DONNELL: Coming up in "The Rewrite", the person who said the politically
bravest thing that anyone said in Washington today. It is someone who I,
to put it mildly, usually disagree with. He is a Republican, a Tea Party
Republican.

And I heard him say this I was shocked. I was shocked in a good way by
what he said today. You will be too. He said things that no other
Republican would dare to say.

You are going to have to see this to believe it. It is coming of in the
"Rewrite."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. ELIJAH CUMMINGS (D), MARYLAND: Republicans have taken more than 40
votes in the House floor to repeal Obamacare and replace it with absolutely
nothing.

(END VIDEO CLIP)

O`DONNELL: Well, not exactly nothing. In the spotlight tonight,
Republicare. A group of Republicans has finally come forward with their
Obamacare alternative. It was unveiled by the Republican Study Committee
in the House of Representatives, the new proposal would, of course, fully
defund Affordable Care Act and replace it with health expansion accounts,
medical liability reform and the elimination of restrictions on purchasing
insurance across state lines. Authors of the proposals said they would
push for a vote on the House floor, although they acknowledge the bill
stands no chance of passage with Obama in the White House and Democrats
controlling the Senate.

Joining me now is Jonathan Cohn, senior editor of "The New Republic."

Jonathan, when I read that I think -- well, I`m not sure that plan would
stand any chance of passage in the Republican House of Representatives.

JONATHAN COHN, THE NEW REPUBLIC: Yes, I don`t know that it would either.
And I think it is really important to remember, you hear people talking
about, this is the Republican alternative plan. Well no, this is a
Republican alternative plan. It is a proposal, some of them, have cooked
up. We have no idea if it has support in the House. And it probably
wouldn`t get support in the house.

And I`m really -- I think that really tells us something, you know. For
three years now, they have been voting to defund, to repeal, to get rid of
Obamacare, a program that will, you know, lead to 25 to 30 million people
getting health insurance. All right, kinds of consumer protections for
people who have insurance. And as far as we know, as far I am concern, the
official Republican position is to take that away and replace it with
nothing. So, you know, until the actual house Republicans volt for
something, they really don`t have an alternative.

O`DONNELL: So, the three proposals in there, medical savings accounts,
that`s not something that anyone who can`t currently afford health care
does not get enabled to afford health insurance through medical savings
account.

COHN: Right. And you know it is important, they have said, you know, have
medical savings account. And then they have a big deal that they have
these tax credits. If you hear them talk about it, they will say, you
know, we have tax credits we are going to offer people. And it doesn`t
that sound great.

But, what they don`t tell you, is that it is like most Republican tax
breaks, you know. This is basically a tax break that overwhelmingly favors
the wealthy. It is not going to, provide a lot of help for the people who
are really struggling today to get health insurance, the poor, the working
class, the middle class. This is a plan that is tilted much more toward
the rich.

O`DONNELL: And, the other part of it the allow -- this would be a universe
in which they have repealed everything any one has ever heard in Obamacare.
That`s all gone. And now they say their basic version of health care
reform is to allow health insurance approximately to be sold across state
lines. What would that new market look like?

COHN: So, you know, the analogy here is to the credit card industry. If
you remember, credit card industry, once upon a time, credit cards were
sold all over the country. And then, there were a few states that said we
will get rid of regulations on credit card. And all the companies that
sell credit card went to those states.

Well, ,today insurance regulation is predominantly done by the states. And
some states have pretty good regulations, some states don`t. Well, in a
world that Republicans imagine under this plan, you would see insurers go
to the states that have the least regulations now.

Now, you hear regulations. What does that mean? Well, regulations are
things like making sure that, you know insurance plans cover maternity,
making sure they have diabetes coverage, making sure they cover
rehabilitation, and prescription drugs. They are basically the kinds of
protections that most of us think insurance ought to have.

And basically, this is a back door way to get rid of the regulations and to
really, reduce health insurance, to something that is very skimpy and that
people with any reasonable medical needs would find really doesn`t take
care of their bills.

O`DONNELL: And it would enable companies to offer what look like fairly
cheap relatively cheap health insurance programs because they actually
wouldn`t be offering any real benefits and that they could have
astronomically high deductibles, for example. And that may not be
instantly obvious to someone who is desperately trying to find some kind of
health insurance they can afford.

COHN: That`s right. I mean, you know, one of the great things about
Obamacare is that it does sort of provides some kinds of standardization.
When you are shopping for insurance, you know what you are getting, you
know, there will have standard benefits. You can compare the plans.

You know, in this world, you know, you might go shopping for a plan like
you said. You might say, wow, this a great deal. Look how cheap it is.
Then you get sick and you suddenly discover that, oh God, it has this huge
deductibles or there are whole categories of medical care that just aren`t
covered.

This is what the Republican plan would open us up to. This is a plan to
deregulate health insurance, to take away even though protections exist,
not to mention ones that Obamacare is going to add.

O`DONNELL: You know, I want to stress as we kind of complete this
discussion of the elements of it which include this theoretical medical
malpractice reform somehow that isn`t much specified. But that doesn`t
help provide health insurance to anybody by reforming, civil court
litigation.

But, what we started with is the point that this scrooge-like package of
coal, which, all most nothing in it, is still something that many house
Republicans would find to be too much for them to vote for. They don`t
want to intrude in this territory even to that extent.

COHN: Yes, it is really pretty remarkable. This is a pretty minimalist
plan, you. But it would help some people. I even think there is a case
they are now doing this some kind of smart malpractice reform makes sense.
I actually think that`s something, you know, Democrats and Republicans were
serious about they would find with. But this is, this is, there are
Republicans who can`t even tolerate doing this much. It is really quite
remarkable.

O`DONNELL: Jonathan Cohn, thanks very much for joining using me tonight.

COHN: Thanks for having me.

O`DONNELL: Coming up, in tonight`s episode of the bravest thing said in
Washington today, the words of Rand Paul. Yes, Senator Rand Paul showed
just astonishing political courage today and we will show you what he said.
Be prepared to be shocked as I was.

(COMMERCIAL BREAK)

O`DONNELL: The junior senator from Kentucky is suddenly a fashion star.
There he is in a new "Vogue" magazine. Spread "Vogue" informs us that his
pants are from Brooks brothers and his shirt, shirt he is wearing right
there, is of course, Polo Ralph Lauren. The accompanying article is
entitled could Republican Senator Rand Paul win the White House? My answer
to that question is absolutely not and I will explain why next in the
rewrite.

(COMMERCIAL BREAK)

O`DONNELL: In the rewrite tonight, Paulism. First, Ron Paul and now Rand
Paul have pushed ideas that no one else in the Republican party supported.
Here is Ron Paul in 2008 at a Republican presidential primary debate
talking about the Iraq war.

(BEGIN VIDEO CLIP)

RON PAUL (R), FORMER PRESIDENTIAL CANDIDATE: In 1952, we Republicans were
elected to stop the war in Korea. 1968, we were elected to stop the war in
Vietnam and tragically we didn`t stop it very fast, 30,000 more men died.
So, when I talk about these long term stays, I think, how many men are you
willing to let die for this?

For something that has nothing to do with our national security. There
were no Al Qaeda there. Had nothing to do with 9/11 and there was no
threat to our national security. They never committed aggression. It
unconstitutional. It was undeclared war.

(END VIDEO CLIP)

O`DONNELL: There he is at the Reagan library, saying that to Republicans.
That is part of why Ron Paul lost in that campaign. He was saying things
that Republicans did not want to hear. He also said plenty of things that
Republicans did want to hear. But no Republican candidacy could possibly
survive the things that Ron Paul said that the Republican party was not
ready to hear.

And now, five years later, Paulism is running rampant in the Republican
party. At least on the matter of military interventions in the Middle
East. Rand Paul isn`t the only Republican opposed to a strike in Syria.
Many Republicans in the House and Senate found their inner peace nick when
President Obama proposed striking Syria. Now, they did it for a variety of
reasons including cynical political posturing. But one of the reasons was
Paulism. The anti-war component of Paulism.

We know already that like his father before him, Rand Paul will never be
president. And like his father before him, Rand Paul will never be on a
Republican presidential ticket not even in the vice presidential slot
because Rand Paul, like his father before him, just says too many things
that Republicans disagree with especially conservative Republican primary
voters.

Rand Paul does everything he possibly can to please those people. He slams
Obamacare as hard as every other Republican, every chance he gets. But
every once in a while, Rand Paul`s libertarianism, finds him in agreement
with liberalism as happened today in a Senate Judiciary Committee hearing.

What you are about to hear Rand Paul say is absolutely extraordinary. What
he said is all true. His reasoning is simple common sense. But virtually
every word you are about to hear can and will be held against him in the
court of Republican presidential politics. What you are about to hear is
the politically bravest thing said in Washington today.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: If I told you that one out of three African-
American males is forbidden by law from voting, you might think I was
talking about Jim Crow 50 years ago. Yet today a third of African-American
males are still prevented from voting because of the war on drugs.

The war on drugs has disproportionately affected young black males. The
ACLU reports that blacks are four to five times more likely to be convicted
for drug possession. Although surveys indicate that blacks and whites use
drugs at the same similar rate.

The majority of illegal drug users and dealers nationwide are white. But
three-fourths of the people in prison for drug offenses are African-
American or Latino. Why are arrest rates so lopsided? Because it is
frankly easier to go in to the urban areas and make arrests than it is to
go into suburban areas.

Arrest statistics matter when applying for federal grants. Doesn`t take
much imagination to understand easier to round up, arrest and convict poor
kids than it is to convict rich kids. The injustice of mandatory minimum
sentences is impossible to ignore when you hear the stories of the victims.

Edward Clay, 18-years-old was a first time offender when caught with less
than two ounces of cocaine. He received ten years in jail for a mandatory
minimum sentence. Weldon Angelos, who the chairman mentioned, was 24-
years-old and was given 55 years in prison for selling marijuana.

There is no justice here. It is wrong and it needs to change. Federal
judge Timothy Lewis recalls a case where he had to sent a 19-year-old to
prison for conspiracy. What was the conspiracy? The young man was in a
car where drugs were found.

I don`t know about you, and this is judge Lewis, I`m pretty sure one of us
might have been in a car in our youth at one point in time where there
might have been drugs in the car.

(END VIDEO CLIP)

O`DONNELL: You just heard a Republican senator quoting an ACLU report on
how the war on drugs visits disproportional suffering on black men, an ACLU
report. You just heard a Republican senator say, quote "there is no
justice here." You just heard a Republican senator quoting a judge saying
I`m pretty sure we have all been a car at some point in our youth where
someone had drugs. What other Republican senator would say that?

But Rand Paul wasn`t finished. He improvised something that wasn`t in his
written statements, something about President Obama that his Republican
rivals for the presidency will never let him forget.

(BEGIN VIDEO CLIP)

RAND PAUL: Imagine this. And I`m glad the president has great compassion
because he has admitted, like a lot other individuals who are now elected
to office, that one time he made mistakes as a youth. And I think what a
tragedy it would have been had gone to prison.

What a tragedy it would have been if America wouldn`t have gotten to see
Barack Obama as a leader. I just don`t know why we can`t come together and
do something about this.

(END VIDEO CLIP)

O`DONNELL: What a tragedy it would have been if America wouldn`t have
gotten to see Barack Obama as a leader. Rand Paul`s words.

As soon as Ted Cruz heard that he wrote in his head a 30-second attack ad
against Rand Paul using that sentence.

(BEGIN VIDEO CLIP)

RAND PAUL: What a tragedy it would have been if America wouldn`t have
gotten to see Barack Obama as a leader.

(END VIDEO CLIP)

O`DONNELL: The Republican attack ad against Rand Paul are not going to put
that sentence in context. But even if they did, the context would be Rand
Paul saying that it is a national tragedy. That one out of three African-
American males is forbidden by law from voting. The context would be Rand
Paul`s view of the cruelty of the war on drugs.

Rand Paul`s not going to win that round when this quote comes up in a
Republican presidential primary and he has the to know that. He had to
know that, when he said it today.

Rand Paul will continue to give false hope to the Tea Party about repealing
or defunding Obamacare. Rand Paul will continue to say things that are
untrue. And as we have pointed out on this program, he will say things
that are ludicrous. And he will say politically cowardly things. But
that`s not what he did today. Senator Rand Paul said the politically
bravest thing that anyone said in Washington today.

(BEGIN VIDEO CLIP)

RAND PAUL: What a tragedy it would have been if America wouldn`t have
gotten see Barack Obama as a leader.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

O`DONNELL: Today, the center for humanist activism launched free thought
equality fund Pac. The first non-theist political action committee to have
a full time paid staff according to their Web site. They will be
supporting candidates who identify as humanist, atheist, agnostic, and who
share our goals of protecting separation of church and state and defending
the civil liberties of secular Americans.

They also say they are willing to support religious candidates who strongly
support the separation of church and state.

Up next, we have breaking news about the environmental impact of the
Colorado floods.

(COMMERCIAL BREAK)

O`DONNELL: Tonight, Colorado residents are continuing to recover from what
has been described as biblical floods that drenched 17 counties and took
the lives of six people. About 200 residents are still missing statewide.
And one catastrophe modeling firm estimates that damage to residential
property will cost $900 million, while damage to commercial and government
properties will cost $1 billion.

As the water begins to recede, state officials are now turning their
attention to the environmental impact of the floods, particularly in
counties with oil and gas wells. According to the Colorado gazette, hard-
hit Weld county has the highest number of active oil and gas wells in the
state at 20,554 more than a third of the statewide total of 51,228. Yuma
county to the east has the third highest number of active wells at 3,343.

And, in breaking news tonight, the Colorado oil and gas conservation
commission reports that a damaged oil tank spilled 5,200 gallons of oil
into Colorado`s Platte River.

Joining me now, Colorado Resident and salon.com columnist, David Sirota.

David, Colorado, based on what I have been reading, wasn`t prepared for
this at any level including the governmental.

DAVID SIROTA, COLUMNIST, SALON.COM: I think that is a fair statement in
the sense of what we are doing regulatory and what we are not doing
regulatory. When you look at debates that have been going in Colorado
about where to site fracking wells, where to permit oil drilling, the
entire conversation about severe weather events in the era of climate
change has not been happening.

O`DONNELL: They do no worse case scenario modeling. According to what I
read in your piece, they don`t do any even bad case scenario, never mind
worst case.

SIROTA: That`s right. And I think when you look at a lot of the west, the
west has become essentially an energy colony. That the energy industry
dictates orders to the governments in the west. And, you know, people
forget that Colorado is one of the biggest natural gas reserves in the
entire world not just the United States.

And so, here you have a situation where you got $4 billion worth of energy
investment, energy fossil fuel development investment on a flood plane in
the era of climate change. And now, months after the government
accountability office said that individuals in the government need to be
looking at climate change and are not looking at climate change when making
permit decisions. Only months after that happened, guess what president?
We have a climate-enhanced, the climate change intensified flood hitting in
the middle of energy country now. And now, you have got, as you showed,
the breaking news of oil spills and major river ways.

And here is the thing. This shows that what we are talking about here is
not just a situation that affects one city or, a couple of counties. The
south Platte River which you just mentioned, that goes all the way out to
Nebraska. That goes all the way out to the, and filters into the water
aquifer which serves much of the middle of the country.

O`DONNELL: And now this flood with all these oil and gas development, and
fracking develop, these water wastes and this flood waters are picking up
all of this sludge now, all these silt, and sending it down river.

SIROTA: That`s exactly tight. So, we are talking about not just again the
Denver area. We are talking about an entire region. Here is a critical
point. You mentioned a couple 5,000 gallons of oil. In the context of the
gulf oil spill that doesn`t sound like pretty much. But in the west, a
relatively small amount of oil by those comparisons scan can have a huge
impact because it is affecting freshwater, drinking water, in an area that
despite the flood this week is a typically parched area.

So, we are talking about an area where the population is growing and where
water is a huge issue and where officials in the government aren`t properly
regulating where the energy situations are being cited. And now, you have
got climate change coming in with severe weather to create, again, not just
an instant or a couple of week kind of disaster, but a disaster that if you
contaminate the ground water, creates a question of everything from
drinking water to toxic contaminants on agriculture lands.

O`DONNELL: You wrote about some officials having (INAUDIBLE) attitude
about these possibilities. A few weeks ago, before this flood, have they
made different noises now?

SIROTA: Well, I think so. I mean, I think you are seeing the regulators
looking a little bit flat-footed and are now saying we`re going to be on
top of this. Not, the problem is that, that they didn`t learn the lesson
early on. They were saying, when we, when were -- there was a debate in
Fort Collins should w allow fracking near the Poudre River. And then, a
flood hits, and guess what? If you sight a fracking site too close to the
river, you may have contamination.

The hope is, this is my hope as somebody who lives in the region, the hope
is that we will learn from this and better regulate this industry in the
future.

O`DONNELL: David Sirota, thank you very much for joining us tonight.

SIROTA: Thank you.

O`DONNELL: Straight from Colorado. Straight from the site.

Thanks, David.

Chris Hayes is up next.

CHRIS HAYES, MSNBC HOST, ALL IN WITH CHRIS HAYES: Good evening, from New
York. I`m Chris Hayes.

END

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