updated 10/3/2013 2:12:21 PM ET 2013-10-03T18:12:21

THE LAST WORD WITH LAWRENCE O`DONNELL
Date: October 2, 2013

Guests: John Harwood, Steve LaTourette, Sam Stein

ALEX WAGNER, GUEST HOST: Government shutdown, day two. President Obama
meets with congressional leaders to do what Republicans refuse to do to the
American people -- listen. It`s just too bad John Boehner and Mitch
McConnell have nothing worthwhile to say.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are not going to engage
in serious negotiations.

UNIDENTIFIED MALE: Of a quick fix are fading.

CHRIS JANSING, MSNBC ANCHOR: It doesn`t look good for a quick end to the
government shutdown.

OBAMA: Am I exasperated? Absolutely, I`m exasperated.

JANSING: This could drag on for weeks.

UNIDENTIFIED FEMALE: I`m terrified.

UNIDENTIFIED MALE: We`re already done to the bare minimum.

SEN. TED CRUZ (R), TEXAS: The House of Representatives has offered
compromise.

UNIDENTIFIED MALE: The Republican Party is in denial about who caused it.

REP. PAUL RYAN (R), WISCONSIN: We want to sit done and get this done.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: It`s about fairness.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: Come and talk to us.

UNIDENTIFIED MALE: The president has to talk to people.

BOEHNER: My goodness. They won`t even sit down.

UNIDENTIFIED MALE: He hasn`t communicated.

BOEHNER: And have a discussion.

UNIDENTIFIED MALE: He never got it.

UNIDENTIFIED MALE: I`m a man. I`m sensitive.

BOEHNER: All we are asking for is a discussion.

UNIDENTIFIED MALE: I need to feel loved. I need to be desired.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: It`s not that kind of a system.

ANDREA MITCHELL, MSNBC ANCHOR: The president has called John Boehner.

UNIDENTIFIED MALE: The leaders of the House and Senate will heading to the
White House.

UNIDENTIFIED FEMALE: It is an opportunity for the people to sit in the
room.

MITCHELL: Frustration is mounting across the country.

OBAMA: I think this time it`s different.

CHUCK TODD, MSNBC ANCHOR: This is a political war.

OBAMA: The Tea Party Republicans have taken it to a whole new level.

SEN. HARRY REID (D-NV), MAJORITY LEADER: Tea Party driven.

TODD: Members of the Tea Party.

REID: Cruz led.

PERINO: They wanted to shut down government.

OBAMA: Am I exasperated? Absolutely, I`m exasperated.

PERINO: So much is at stake.

STEPHEN COLBERT, COMEDIAN: Who need the FDA?

JON STEWART, COMEDIAN: No biggie.

COLBERT: Just send me your drugs. I`ll test them for you.

MITCHELL: It is day two of government shutdown.

UNIDENTIFIED MALE: Day two of the government shutdown.

JANSING: This could drag on for weeks.

(MUSIC)

(END VIDEOTAPE)

WAGNER: I`m Alex Wagner, in for Lawrence O`Donnell.

Day two of the shutdown. President Obama`s position is clear. He is not
negotiating with Republicans on opening the federal government or paying
the country`s bills.

CNBC chief White House correspondent John Horowitz snagged the first
interview with the president since the shutdown. John will join me next.

But, first, here is President Obama in his own words.

(BEGIN VIDEO CLIP)

OBAMA: The message I have for the leaders is very simple. As soon as we
get a clean piece of legislation that reopens the government. And there is
a majority for that right now in the House of Representatives.

JOHN HARWOOD, CNBC: No negotiation until after that?

OBAMA: Until we get that done. Until we -- make sure that Congress allows
Treasury to pay for things that Congress itself already authorized, we are
not going to engage in a series of negotiations.

(END VIDEO CLIP)

WAGNER: Tonight, the president held his ground in an hour-long meeting at
the White House with Boehner, Reid, McConnell and Pelosi.

(BEGIN VIDEO CLIPS)

BOEHNER: They will not negotiate.

REID: The president of the United States was very, very strong, strong,
strong.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The president continues to
maintain privately the position he has had publicly, which is he does want
to negotiate about the continuing resolution to operate government or over
raising the debt ceiling.

(END VIDEO CLIPS)

WAGNER: But President Obama emphasized that while he is going to hold
firm, this is not a fight he wants to have.

(BEGIN VIDEO CLIP)

HARWOOD: As you try to appeal to those other Republicans you think you
could work with, I wonder about your tone lately. I have heard from you --
an increasing amount of exasperation and edge, even mockery some times.
You said one time, recently -- keep hoping a light bulb goes off. It gives
the impression that you think that your Republican opponents are either
craven or stupid or nuts?

Is that what you think? And if you think so, does it help your cause to
let people see that out loud?

OBAMA: John, I think it is fair to say that during the course of my
presidency, I have bent over backward to work with the Republican Party and
have purposely kept my rhetoric down. I think I`m pretty well known for
being a calm guy. Sometimes, people think I`m too calm.

And, am I exasperated? Absolutely, I`m exasperated because this is
entirely unnecessary. I am exasperated with the idea that unless I say
that 20 million people -- you can`t health insurance, these folks will not
reopen the government. That is irresponsible.

And so, my expectation is that, if and when John Boehner makes the decision
to put a bill on the floor, only thing holding it up. It could happen in
the next 10 minutes. And that vote takes place and government reopens, and
if and when they vote and to make sure Congress pays our bills on time, so
America does not default on costs that already accrued, then I`m prepared
to have a reasonable, civil negotiation around a whole slew of issues, and
that`s reflected not just by my word but my deeds over the last four years.

(END VIDEO CLIP)

WAGNER: Joining me now, CNBC`s John Harwood.

John, congratulations on the interview.

HARWOOD: Thanks, Alex.

It was -- it was a big moment to talk to the president. I was struck by
the fact that he really feels a sense of grievance about the situation that
he is in. He said he is welling to negotiate on a budget deal with
Republicans, but drew a hard line on not doing that, until after they open
government, after they raise the debt limit. It`s going to be hard to get
them to cross the line.

But he said that this is a fever of crisis governance that needs to be
broken and he is trying to break it right now.

WAGNER: Yes, just like pinprick was word of the day during the Syria
situation. Exasperation seems like to be the word of the week, if not the
next two weeks, if not the next month.

I wonder what you think of his comments. He has bent over backwards to
work with the Republican Party. He seems the chapter in his life, his
presidency seems very much over compared to 2011.

HARWOOD: Well, it is so different. Remember the sort of whip saw you had.
When he came in 2009 and 2010, he had overwhelming Democratic majorities,
and did he try to get Republican votes for example on the stimulus, on the
financial regulation bill on health care? Yes, he did and he hung out hard
for that to try to get people like Olympia Snowe and Chuck Grassley and
other people with him.

He couldn`t get it. And because he had the vets to pass the things with
his Democratic majorities, that`s the way that he chose. And, Republicans
felt stiffed even though he had reached out to them.

Now that they have won the majority, in 2010 and held it in 2012, they`ve
gone very hard after him and he`s kind of sick of it.

WAGNER: John, I want to play one more clip from the interview where you
ask him about Wall Street, and you talk the attitude that financial sector
has had during this entire debate. Let`s take a listen.

(BEGIN VIDEO CLIP)

HARWOOD: Wall Street has been pretty calm about this. The reaction, I
would say, generally speaking, has been Washington fighting, Washington
posturing, yada, yada,yada.

OBAMA: Yes.

HARWOOD: Is that the right we to look at it?

OBAMA: No. I think this time it`s different. I think they should be
concerned. Democracy is messy. When you have a situation in which a
faction is willing, potentially to default on U.S. government obligations,
then we are in trouble.

(END VIDEO CLIP)

WAGNER: John, what`s your sense here? Is this, the president is
legitimately concerned we are going to default on our debts or he is trying
to gin up Wall Street support, so that Wall Street convinces the GOP that
this is something they need to tackle and deal with?

HARWOOD: Both. I think he is concerned that as the difficult as it`s been
for Speaker Boehner and the Republicans to get out of the cul-de-sac that
they have marked into the spending bills, that it`s going to be very
difficult to do it on the debt limit.

I think that most people in Washington like people on Wall Street think end
of the day that rationality is going to prevail. And this unbelievable
self-inflicted wound will not be inflicted by the Congress. But I think he
is a alarmed enough about it, that he is trying to mobilize some allies,
and people who hatch got the checkbooks to make an impression on members of
Congress.

It doesn`t make an impression on rank-and-file members. They`re in, two to
one, Republican districts. You know, Barack Obama, got a third of the vote
in the districts. They may not respond to Wall Street. But leadership
responds business donors and the president is trying to get -- to encourage
the leadership to cut off the renegade members who won`t go along.

WAGNER: In short, money talks.

HARWOOD: It does talk.

WAGNER: CNBC`s John Harwood, thanks again. And congrats again on the
interview, John.

HARWOOD: Thanks, Alex.

WAGNER: Joining me now is former congressman from Ohio, Steve LaTourette,
president of Main Street partnership and MSNBC.com executive editor Richard
Wolffe, author of the new book, "The Message: The Reselling of President
Obama."

Steve, I want to go to you first.

With some new reporting we`re hearing from "The National Review`s" Robert
Costa, who says, the headline is, "Boehner to GOP: Grand bargain is in the
works." News that John Boehner has been talking to his caucus about a,
quote, "grand bargain" that may include chained CPI, delay in Obamacare,
but bigger, reforms around earned benefit, entitlement programs.

Is this, to your mind, does this seem feasible? Can John Boehner sell
anything to his party at this point?

STEVE LATOURETTE (R), FORMER U.S. CONGRESSMAN: Well, I think, wittingly or
unwittingly, this shutdown is going to take at least two weeks to sort out.
That puts it right up against the debt limit, the middle of October.

And so, as a result, I do know, and it`s not just John Boehner and the
Republicans. There are negotiations going on at all levels of government
where people would prefer to do this once, rather than doing it twice, once
on the government shutdown and once on the other.

And, you know -- the president says he is not going to negotiate. I`m
going to tell you now that both sides painted themselves into a corner.
And there is a way forward without the violation of Obamacare, that the
president could throw up things like the Keystone Pipeline, chained CPI,
and medical device tax, and other things that would not violate his pledge
not to negotiate on Obamacare, but could get us out of it.

If that was the case, John Boehner would muster votes necessary to get him
out of it.

WAGNER: Richard, I want t follow on what Steve just said -- there are
things the president can give the Republicans, Keystone, medical device
tax. He seems to think of this moment in the grand, sort of arc history
bending towards or away from justice as it were. And that if he does
anything, if he concedes anything, even if it`s the Keystone Pipeline,
which a lot of people think he is going to approve anyway, it would set a
precedent for other presidents, Republican, or Democrat, and by virtue that
he must not do it.

I mean, how firm do you think he stays here?

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: I think he`s learned a lot from
the last experience. You`ve got to understand that the last debt ceiling
crisis was the lowest point of his presidency. And he was more angry,
according to his aides, that he had ever been at any other time. They
could see it in the polls. More importantly he felt it himself.

He looked weak. He didn`t get anything out of it. They all looked bad.
Republicans looked worse. But he stewed over this. He has learned those
painful lessons.

So, this isn`t just about -- his ego. I don`t believe he`s painted himself
into any corner. I think he is looking at them, at the Republicans, and
saying, I am not going to rescue you from yourselves any more. You have
done this. You`ve got to get yourselves out.

And then, and then, listen to what he said to John Harwood, then we can
discuss all those things. But if he offers up, this has been his problem
with negotiations -- offering up concessions before a negotiation has
gotten him precisely nothing. They have to come to the table in a
rationale way, and yes, there`s going to be a whole bunch of stuff on the
able.

Obamacare is all they`re asking for right now. They`re not saying let`s go
for chained CPI. They`re not saying let`s bring down deficits. They are
not talking about deficits right now.

They`re just saying Obamacare. And that`s what doesn`t hold any
credibility.

WAGNER: Steve, I want to ask you about because so much has been made of
Obamacare. And it is clear the Republicans really don`t like Obamacare,
the Affordable Care Act, whichever moniker you choose.

But at the end of the day, it is now, it is, it is enacted. The exchanges
are up. You know, it is law of the land and there seems to be -- and we
are only in day two of the shutdown -- that Republicans are backing away, a
little bit from this idea of repeal, and trying to replace that indignation
with talk of a grand bargain, chained CPI, Keystone, whatever it is,
because perhaps not a winning strategy to talk about the repeal of
Obamacare anymore.

LATOURETTE: Well, a couple things. First to Richard`s observation -- the
reason we find ourselves here, partially, is that in August of 2011, trust
was destroyed between the president and John Boehner. They both accused
each other of walking away from the grand bargain. I know which side I
pick in that. But I know the president was mad.

This Obamacare business has become a lightning rod. It was in the 2010
elections. The Tea Party backed candidates hope to catch lighting in a
bottle going into 2014.

And I think it was John Harwood made an excellent point, that you have to
remember that the audience that some of these people are talking to, 70
percent, Republican districts. I mean, they`re not trying to reach you on
MSNBC. They`re not trying to reach independent voters --

(CROSSTALK)

WAGNER: The moderates in their own party -- I mean, they`re trying to
reach their --

(CROSSTALK)

LATOURETTE: That`s right. I was chairman of the squish caucus for 18
years in the Republican Party. So, they`re not trying to communicate with
me.

But they believe that by holding their ground, they can be re-elected in
the 70 percent districts. Republicans maintain the majority in the House
of Representatives, and that`s the end game.

WAGNER: Richard, I want to ask you, because you just wrote a book about
Obama White House. Nancy Pelosi was asked if the president would raise a
debt ceiling on his own and he sort of said, no, and backed away from
answering more fully that question.

Do you think he is prepared to the (INAUDIBLE), do you think he will risk
impeachment or threat of impeachment and raise the debt ceiling? Do you
think he`s that convicted about this?

WOLFFE: No. I don`t think he will. I think they`ve got a clear legal
reading on this, that he does not currently have the power to do that. You
can change the law and place it. Congress has budget setting power. But
the idea that they have both budget-setting power and debt ceiling power is
going to have to be revisited at some stage.

I do think, just to pick up this last point, they only have power -- these
Tea Party Republicans, because their leadership gives them the power.
There are not enough of them without the complicity of the leadership.

WAGNER: Right. I think it`s 15 percent of the party, which represents 2
percent of the public. Don`t quote me on this.

Former Congressman Steve LaTourette and our very own Richard Wolffe --
thank you both for joining me tonight.

LATOURETTE: Good to be with you.

WAGNER: Rush Limbaugh woke up to the government shutdown and, quote, "felt
such relief." Why Rush and other conservatives think the effects of the
shutdown are no BFD. That`s coming up.

And Rick Perry thinks Obama care is a criminal act. Another oops moment.

He once got a medal of honor from President Obama for heroism. Now, he has
one more mission -- our dysfunctional Congress.

(COMMERCIAL BREAK)

WAGNER: For many Americans, the government shutdown has had an immediate
impact. But as Jon Stewart points out, it seems some conservatives remain
totally oblivious.

(BEGIN VIDEO CLIP)

STEWART: To the Republicans, all that adds up to a big, I don`t know, I`m
just not feeling it. In fact, if there is one sound bite that utterly
expresses this world view, it`s this one right here.

UNIDENTIFIED MALE: If you believe the Democrats, it`s time to go out and
buy (INAUDIBLE) and get in your survival bunker. But at the end of the
day --

(LAUGHTER)

STEWART: Ha-ha, ha-ha, ha-ha, ha-ha, (EXPLETIVE DELETED)you!

(END VIDEO CLIP)

WAGNER: Up next, what happened to compassionate conservatism?

(COMMERCIAL BREAK)

WAGNER: Under the last Republican president, the GOP was all about
compassionate conservatism. But, today, compassion or really the basic
notion of empathy seems to have no place in the grand old party. Case in
point: spend even ape little time in the conservative media world where the
shutdown is -- eh, no big deal.

(BEGIN VIDEO CLIPS)

RUSH LIMBAUGH, RADIO HOST: So I got out of bed and I was, I was, I -- I
have to admit I got out of bed and I was -- I was a little worried.

UNIDENTIFIED MALE: Surely you can`t be serious.

LIMBAUGH: So I went to the wall plate and I hit the button for the
blackout shades. And they begin to open.

UNIDENTIFIED MALE: I am serious.

LIMBAUGH: And then I hit the button for the solar shade. And they begin
to open.

UNIDENTIFIED MALE: And don`t call me Shirley.

LIMBAUGH: Then I got the courage to actually walk to the window.

CHARACTER: I feel strangely calm.

LIMBAUGH: I looked out there, you know what I saw?

CHARACTER: Yes?

LIMBAUGH: I saw blue sky.

CHARACTERS: Meh.

LIMBAUGH: I felt such relief. I can`t tell you my friend, yes, I saw a
blue sky.

CHARACTER: But the TV gave me the impression that --

CHARACTER: We said, meh. M-E-H. Meh.

LIMBAUGH: School kids, I found out still going to get breakfast, lunch,
snack, ecstasy, whatever else they get, all of the welfare checks, and all
of the food stamp cards, are still usable.

CHARACTER: Failure, yes, ma`am, that`s an easy one.

UNIDENTIFIED FEMALE: Another thing that GOP leadership needs to do is
remind the public this is not Armageddon.

CHARACTER: Failure, F-A-I-L-U-R-E, failure.

UNIDENTIFIED FEMALE: This is a pinprick. It is not the end of the world
if there is a partial government shutdown.

UNIDENTIFIED FEMALE: You know what I always say? Who cares?

SEAN HANNITY, FOX NEWS: Maybe I`m just one of the few people, I`m just not
-- this doesn`t impact me mentally.

UNIDENTIFIED FEMALE: (INAUDIBLE), so what?

HANNITY: I`m not afraid of a couple of weeks of government being shutdown.

UNIDENTIFIED MALE: Although for most people it might be inconvenience.
You are not really going to see a lot of the stuff happening.

CHARACTER: Yes, ma`am, the word is insecure. Yes, the word I am well
acquainted with.

UNIDENTIFIED MALE: Well, if it has to do with the national parks and stuff
look that.

CHARACTER: I can`t (INAUDIBLE) show is over. Nothing t see. Show is
over. Oh, my God, a horrible plane crash. Hey, everybody get a load of
this flaming wreckage. Come on, turn around, don`t be shy.

(END VIDEO CLIPS)

WAGNER: Joining me now is "THE LAST WORD" senior why the shutdown actually
sucks for America correspondent. "The Huffington Post" political leader and
White House correspondent, Sam Stein.

Sam, you grabbed the golden chalice this morning. You did something that
we in cable news call owning the day. You had a great back and forth with
Bill Kristol on "MORNING JOE". He is, of course, the conservative -- not
"MORNING JOE", but Bill Kristol is the conservative editor of "The Weekly
Standard", I would look to like to play for America and our audience what
exactly transpired this morning.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Shouldn`t we Republicans know going into a fight like
this we are running of a hill and we`re not going to -- sadly, we`re just
not going to within that national debate on the government shutdown?

BILL KRISTOL, WEEKLY STANDARD: Look, yes, if I were the dictator of the
Republican Party. I would have said a little too steep a hill. It`s maybe
imprudent. I don`t think it`s the end of the world. Let`s see what
happens, we`ve only started blaming people. I mean, I don`t think the
world is going to end.

SAM STEIN, THE HUFFINGTON POST: I just, idea this is not the end of the
world. They`re finding the three most important agencies, maybe in your
world, it`s not the end of the world. For these people who are affected by
the cuts, it is sort of comparable to the end of the world.

(END VIDEO CLIP)

WAGNER: Sam, it`s shocking to me how incredibly crass conservatives have
been over this government shutdown? Does it surprise you?

STEIN: Well, no in one respect because -- from a political perspective
they don`t want this shut down seem like a big deal. Obviously,
ideologically, they`re in favor of smaller government. So, if there is
smaller government they want to show it works and it doesn`t matter.

But it`s not crass, it`s more unimaginative, it`s more uninformed. Rush
Limbaugh was there and he said something to the extent of kids will still
get to go to school. Still get their meals.

I mean, literally hours after he said that, it was reported that 3,000 kids
on Head Start preschool are going to be thrown out the rolls because of
shutdown. It doesn`t take a big search to find the news. It`s right
there. You can Google it.

You can do what we do, which is basically scour the local newspapers. We
did this for all 50 states. Scour the local newspapers, to steep what was
happening. You just Google the state name, and government shutdown, and
you get a sense the impact is far more widespread that you would know,
whether you are listening to conservative media, whether you`re listening
to national media.

We just don`t get the totality of this, inside Washington, D.C.

WAGNER: I guess, I use the word crass because I think on some level you
would expect, politicians of either stripe, to be at least presume, to
assume the mantle of concern for the poor and working class or the fact
that women who need to feed their children are not getting some subsidies
to help with food. That children are going to be kicked off head start.
There is not the pretention of caring about the people.

STEIN: Yes, they had that. They do have that when it is in their
political -- self interest. So for instance today -- there was a mad rush
among politicians to say, we need to fund the National Institutes of Health
because stories emerged yesterday that 200 -- people were, not going to be
-- accepted to clinical trials including 30 kids with cancer.

So, every politician ran to, to embrace the NIH and restore its funding.
For the past eight months, the NIH has been gutted by sequestration, 700
grants have been denied for projects that include cancer research. We
could be developing great cancer therapies. Not funding it.

It is, it was in this moment when the politics lined up that suddenly
people found the empathy for this institution that has been struggling for
almost a year now.

WAGNER: And to that point, I think we should show a graphic that appeared
on other hours of this channel today, but is an important one, that shows
just how far we have moved. I mean the Senate, the Senate continues
resolution to fund the government is a massive compromise.

Look at that. At the top, the original budget from President Obama, and
down at the bottom, is 986 billion, the Senate version of the continuing
resolution. The goal posts have been moved far right ward and nobody is
really even talking about that.

STEIN: I know. It`s sort of the lost story here which is that, obviously,
the president has compromised, a funding level, at least in the short term,
that would prove in many respects crippling to his domestic agenda. If
that is not a compromise, I need to be told again what the definition of a
compromise is.

WAGNER: Yes, the president`s -- the Senate`s budget or their continuing
resolution is lower than the original Paul Ryan budget.

STEIN: Yes.

WAGNER: That is something worth remarking on.

Sam Stein, thank you as always and thanks for your time tonight.

STEIN: Thanks, Alex. Take care.

WAGNER: Coming up, is enforcing Obamacare a criminal act? Rick Perry
makes yet another oops statement.

And a new generation of leaders emerges to perhaps stop the madness in
Congress.

(COMMERCIAL BREAK)

WAGNER: In the spotlight tonight, the insatiable Republican appetite to
repeal the Affordable Care Act. It has been nearly 48 hours since the
nation`s health insurance exchanges went on line and the U.S. government
shutdown began. But a faction of the Republican Party is continuing the
fight against providing Americans access to health care.

Texas governor Rick Perry added his own two cents during a campaign event
in New Jersey yesterday. Saying quote "if this health care law is forced
upon this country, the young men and women in this audience are the one
whose are really going to pay the price. And that I suggest to you reaches
the point of being a felony toward them and their future. That is a
criminal act from my perspective to put that type of burden on them -- a
felony, a criminal act, and a burden."

Perhaps Rick Perry has a different understanding of what the word mean as
is usually the case with Rick Perry. Some of the burdens, these criminal
acts, include, the 3.4 million young adults who are now insured under their
parents` plans. The 36 percent of young adults who are now eligible to
receive subsidies. And the nearly 30 million women who can now receive
free preventative care and contraceptives.

Indeed the actual benefits of Obamacare continue to be revealed as millions
of Americans get better acquainted with the new law, making the GOP
strategy and facing a legislative agenda on Obamacare`s repeals seem
perhaps not the savviest strategy.

Today, Grover Norquist, a fierce critic of President Obama, denounced the
guy who led the Republican Party into this fight to begin with.

Ted Cruz said he would deliver the votes on defunding the ACA and he didn`t
deliver any Democratic votes. He pushed house Republicans into traffic and
wandered away.

Joining me now, the University of Pennsylvania`s Dr. Zeke Emanuel, who
served for as special advisor for health policy in the Obama
administration. He is also an MSNBC contributor.

Zeke, it is always good to see you.

DOCTOR ZEKE EMANUEL, MSNBC CONTRIBUTOR: It is great to be on the show.
Thank you.

WAGNER: Zeke, so there were nearly five million unique visitors to the Web
site healthcare.gov in just 24 hours. We have talked a lot about glitches.
But, what does the traffic tell you about the program?

EMANUEL: There is a lot of curiosity. And a lot of people want to find
out what it is about, what it means to them. And so, I think that`s all
good news. I think it exceeds everyone`s expectations within the first 24,
48 hours.

It is slow and it`s very difficult and frustrating and I hope that doesn`t
turn off people. And that things can be fixed over the next few days, but
it does tell you that the underlying interest of people is quite high.

Let me say, in response to that comment by Governor Perry. You know, I
want out to California to shop on their Web site and see what kind of rates
young adults could get. And the 30-year-old who makes 17,000 or 18,000
dollars a year, can get insurance the silver plan for a moderate amount of
interaction with doctors, five, six prescriptions a year, $39 per month.
It`s just amazing amount of coverage. And if he thinks that is a burden,
he really does need to go back to kindergarten to figure out what those
words mean.

WAGNER: One can argue that Rick Perry should probably go back to
kindergarten regardless.

But Zeke, in terms of the fixes, I mean, you just brought up the fact that
some of the Web sites are slow and cumbersome which is think on some level
it is to be expected. If anybody has seen a Web site launch these things
happen.

But there are other sort of bigger ticket issue that had been sort of
bandit about in Congress -- the Medical device tax is one. Folks talking
various delays. And I asked you as someone who played a pivotal role in
drafting of this legislation. How easy is it to make fixes to living
legislation. That`s to say, programs that are already in, in effect in
place, or, or live as it were. How hard is it to make amendments?

EMANUEL: Well, we should distinguish two kinds of amendments. Repealing
the device tax is simply tossing a favor to a particular interest group.
We should remember that the drug companies for example, have way more, have
put in way more in terms of taxes than the device people. And you don`t
hear any complaints from Pfizer or Merck or Lily. They think it is their
duty that they are going to make more money because more people are
insured. The device people, on the other hand, had never played ball on
this, never supported health care reform, and they shouldn`t get any
special treatment for whining it seems to me.

Then there are other fixes which is in the drafting of a 900-page bill
there are going to be some problems in it, some inconsistencies. That`s
the first part. And the second part is there are things that now four
years later everyone agrees, while we should do it a little differently.
We should make some changes to say, improve the rapidity with which we
transform the delivery system change, how we pay doctors.

Those things are usual in legislation and they are very common. And I
think fixing up the bill, the mistakes that are in the bill, and saying,
well, you know we should have gone further here, are things that we should
do.

And the funny thing is, behind the scenes when you talk to legislative aide
and senators, they all agree with it. They all say, yes, we really need to
do that, but politics is preventing us from doing it.

WAGNER: Dr. Zeke Emanuel, sometimes America just need a doctor to tell
them that a tickle in the throat is not going to put them in the grave.

Thank you as always for joining me.

EMANUEL: Thank you, Alex. Take care.

WAGNER: Today`s " New York Daily News" asks the GOP what did you do for
our country.

Coming up first veteran to be elected to Congress talks about growing
frustration with dysfunctional Congress, congressional dysfunction, and
making room for a new generation of leaders.

(COMMERCIAL BREAK)

WAGNER: Tomorrow, Texas state senator Wendy Davis who led the filibuster
against a Texas law restricting reproductive choice is expected to announce
that she is running for governor. A new poll by the group, Texas Lyceum,
asked respondents to choose any hypothetical matchup between Texas
Republican attorney general Greg Abbott and Senator Wendy Davis.

Abbott leads Davis, 29 percent to 21 percent with 50 percent of voters
saying they remain undecided. In the same poll of Texas voters, 50 percent
say President Obama is doing a good job, 47 percent disagree.

Up next, could the worst Congress ever bring fresh blood to the halls of
Capitol Hill. That`s next.

(COMMERCIAL BREAK)

WAGNER: Have I told you Chris Matthews was once a police officer, would
you believe it? Believe it. It is part of the story he tells in his new
book, "Tip and the Gipper." In this, the second part of Lawrence`
interview with Chris, we find out what makes Chris Matthews tick.

(BEGIN VIDEOTAPE)

LAWRENCE O`DONNELL, MSNBC ANCHOR, THE LAST WORD: Chris, I want to talk
about this guy right here. That is Chris Matthews --

CHRIS MATTHEWS, MSNBC ANCHOR, HARDBALL: Yes. You can tell he is a cool
guy.

O`DONNELL: Very cool guy. In Swaziland, as Peace Corps volunteer you.
You say in the book that that experience changed the course of your life.

MATTHEWS: Well, I was in a graduate school progress trying to get a Ph.D n
economics (INAUDIBLE). I had a good full ride and everything. I had one A
status. I went to Montreal with a friend of mine. I just made a list of
stuff.

I thought teaching high school. I thought of that vista. I thought of all
the things I could do. I go on as I become public information officer in
the army, and sign up like I did. And different options I could go become
a finance officer like a room in the army. I didn`t like the war. And I
didn`t want to take a job that wasn`t risky to say I was in the army. I`m
not holding it against anybody. But I didn`t want to pretend that I was in
the military and not have a fighting role.

So, I said, my point is right positive (ph). So, I finally got this option
to go in the Peace Corps in Swaziland. I turned down some other options.
I was crazy. I said I don`t care. I am not going to Venezuela. I`m not
going there. I`m not going to Afghanistan. I`m going to Africa. And I
always wanted to go to Africa.

And so, got this job. And I had a 120 Suzuki, pretty heavy motorbike, a
nice bike, and I would ride around middle of nowhere, speaking Zulu, which
I can speak some, teaching business to small traders, these African guys,
about 50-years-old. Some fought in the war, actually, World War II for the
Brits. And I established this sort of father/son relationship with all
these guys. And I had gone in villages, never seen some body look like me,
anybody look like me. And I walk in there, all speaking Zulu, these little
villages and I just came and say, look I am here to help you learn -- your
government sent me. (INAUDIBLE). I work for your government. I`m coming
here to teach you business. And I sit down. I open cash books. I explain
how to do this. I try to get the guys set up in business. And it was an
amazing experience. And after that, it was very easy to knock on doors on
Capitol Hill. It was a lot easier to ask for a job, I think, if you had
done that kind of thing.

O`DONNELL: So, you go to Washington and you start off.

MATTHEWS: Hitchhiked through Africa. Did crazy stuff you wouldn`t
normally do.

O`DONNELL: And you have been back.

MATTHEWS: A lot.

O`DONNELL: Africa changes you. It is not a place you can walk away.

MATTHEWS: Well, they always say, that if you go to Africa, you always
comeback. But it changed me. I think of a book called "Born in Africa" in
a weird way because I from being -- my four brothers basically stayed in
Philadelphia. I broke out went to Washington started knocking on doors. I
want to be Ted Sorenson, as I said in the book, I want to be a writer. It
took me awhile but ended writing speeches for the president, but it took a
while.

And I think, it really got me out of my -- my grandmother from (INAUDIBLE),
with an Irish accent, she was the protestant in the family, Presbyterian,
just like Mrs. Doubtfire. I Grew up with that. She came up. Used to
stare men the eye. It was Africa wasn`t it? Eerie old world thing. And I
thought about this, the great thing about the Peace Corps is like being an
immigrant because it is very much like the immigrant experience. You go to
a different culture and have to live there and fit in two years. So, you
get a little sense of what it is look to come here from Europe.
Interesting, or anywhere.

O`DONNELL: When you got to Washington, your first job is a cop?

MATTHEWS: Well, that fits us doesn`t it? I don`t know whether it is a
classic.

O`DONNELL: you are in lock step with this Irish --.

MATTHEWS: I came right into this thing. I went to see this young guy, the
Kennedy guy, who was a top aide to a liberal senator from Utah of all
places. Times have changed. Wonderful guy. Bobby Kennedy guy and Ted
Kennedy guy. And maybe do a little, how this tricky staff work, figuring
out tax law and helping out with some important person. He said I got a
job for you, capital cop. What you do work in the office in the daytime
and you work as a cop at night which a lot of people did like (INAUDIBLE),
when Harry Reid. Reid of course the leader, capital cop. And you had 38
special and you had some training. And you ended up, you ended up doing
hiding in the capital building all night and reading a lot. It was a good
job because you would look. Also nice to, to tourists and all.

But I loved that job because I met a lot of southern guys and West Virginia
guys that you normally wouldn`t meet in the north. Real guys taught me a
lot about life.

O`DONNELL: You have a great passage in the book here on page 225 about
working on Capitol Hill. And I think anyone who has done it, know this
passage just speaks to us so perfectly.

Time zips by on Capitol Hill. Looking back, I think it must be because I
never escaped from the intensity of what I was engaged in for long enough
to actually feel the passage of time.

MATTHEWS: You know what that is like?

O`DONNELL: Yes.

MATTHEWS: And my wife, Kathleen read that, the queen read that and she got
mad. She said you weren`t thinking about us , the family? The trouble is
you are so in to it. More than ever than what we do now. You are so
totally in the boss, to making him look good, and worrying about Reagan is
doing, what Tip need to do the next second. You are on watch. You are on
watch 24/7. I mean, your cousin and I, your chief counselor, (INAUDIBLE),
the great man dedicated the book to.

O`DONNELL: That`s beautiful.

MATTHEWS: Kurt (ph) and I would be talking back and forth them, Saturdays.
What did you see in the times? What did E.J. Dionne write? What is going
on? Did you hear Reagan said on radio today? Constantly on watch. So
that Monday morning when he showed up, the boss. He would say, what did
you hear?

(CROSSTALK)

MATTHEWS: Anything special. Anything I need to know. And sometimes, we
let them down. We didn`t know something of there is a mutiny at work or
something. We didn`t catch sometimes. But that, that thing about losing
time, I tell you. It`s a dangerous thing. And the older people work on
the capitol. Say I`m working at 5:30. I`m leaving then. I`m not sticking
around here because I have to find a life somewhere. I am going home.

O`DONNELL: It is one of the things that makes us always understand why
people leave. I have never said to somebody why are you leaving a job in
the house or in the Senate. It`s this kind of a burn out quality to it and
you probably won`t easily establish a life as long as you are working.

MATTHEWS: No. And I think it hurts your family. I think you become --

O`DONNELL: That line, they left because of family reasons. Turns out to
be true. Minimum of half the time.

MATTHEWS: Yes.

O`DONNELL: I mean, it is a cover for something.

MATTHEWS: But you know what people don`t understand. And somebody was
making fun today of the (INAUDIBLE) like "Newsroom" and "West Wing," you
are Ernest, everybody worked Ernest. Everybody I worked with was real.
There is no cynics around. I`m sure there is a hokie (ph) congressman
somewhere, where the people work for just for the money. But we didn`t
work for Tip for the money. We were completely dedicated to him and we
were very respectful, the guys working for Reagan. And when we worked for
then.

We looked up to them like Kenny Duberstein and Jim Baker, you know, some of
them were our friends, Mike Deaver (ph). We were friend with the guys. We
look up to them. I even, as we argued with them like David Gergen. We
fight with them all the time but we respect them. And in fact, sometimes
we are friends with them. And it is all this common commitment to making
government work. And people outside of Washington think it is leviathan,
are monsters. It is a lot of people trying to do their jobs.

(END VIDEOTAPE)

WAGNER: You can watch more of Lawrence`s interview and find out whether
Chris Matthews misses working on Capitol Hill, I have a hint, I have an
idea. Just go to the "Last Word" face book page.

Coming up, could the worst Congress ever actually end up giving us better,
smarter candidates capable of real governance, former Democratic
congressman and Iraq war veteran Patrick Murphy joins me.

WAGNER: Is the current Congress so far off the rails that it might
actually encourage better people to serve their country? That`s next.

(COMMERCIAL BREAK)

WAGNER: On September 15th, 2011, President Obama gave the Medal Of Honor
to Afghanistan was veteran Marine Sergeant Dakota Meyer for risking his
life to rescue both American and Afghan soldiers during an Ambush in 2009.
At 23, Meyer one of the youngest recipients of the honor and first living
marine to receive the medal since the Vietnam War.

Two years later it looks as though government chaos may be inspiring a new
generation of leaders. Just one minute after the government shutdown early
Tuesday morning, Dakota Meyer tweeted this.

Congress, 2016, Potus, 2024.

Later that day he tweeted, I want to thank everyone for the overwhelming
support and encouragement about my decision to pursue elected office.

Today, Dakota Meyer officially confirmed to a local Kentucky newspaper that
he is considering a congressional run in 2016. Saying, it is something I
have always been interested in. It was my dream to serve this country in
the military. And now it is my dream to serve this country in politics.

Joining me now, the first Iraq war veteran to serve in congress, former
Pennsylvania congressman Patrick Murphy.

Thank you, as always, Congressman, for joining us.

I want to talk to you first about the news of day here which is Veterans
seem to have become pawns in all of this shutdown talk and debate. Today,
RNC chair Reince Priebus offered to pay for security guards to keep the
World War II memorial open. Members from both sides of the aisle have
greeted the World War II vets decrying the shutdown, but while all this is
happening, VA facilities are going to remain open but a prolonged shutdown
could drastically slow down Veterans disability claims.

That seems like the ultimate irony here. A lot of this is pomp and
circumstance. And when it comes to caring about the veterans, there is no
there, there.

PATRICK MURPHY, MSNBC CONTRIBUTOR: Alex, you are absolutely right. I wish
Reince would pay the salaries of the 20,000 VA claims adjudicators that had
been working overtime that cut down the backlog, 30 percent this last six
months. So, instead of cutting down the backlog, you know what is going to
happen, because of folks like Reince Priebus and all the knuckle heads in
Congress who shut down the government, the backlog will go up, 2,000 claims
every day that they are out, that they are furloughed, until laid off.
It`s a disgrace how they`re treating our veterans. And, over 800,000
families that aren`t going to have a paycheck right now.

WAGNER: Congressman. I have got to ask you about Dakota Meyers`
announcement. And we talk a lot about the way the Republicans have really
vilified public service. And I think there is something distinctly
honorable. I mean, let`s set aside all politics and sort of partisan
questions here.

But the idea of serving your country in the military and serving your
country in the halls of Congress, do you think the dysfunction in
Washington actually encourages people to go in and fix things. And
specifically, I mean, answer that question from the veteran perspective.

MURPHY: Yes. Absolutely, Alex.

I believe public service is a noble calling. And whether that public
service is through the military or whether it is through a political public
service. I will tell you that one of my best friends in Congress was a
Republican. We served in the army together. His name is Tom Rooney from
Florida. I love that guy like a brother. And we didn`t vote, every, you
know, he was a conservative Republican. And listen, I was a Democrat.

But the fact is this, we always tried to put our country first. And that
pure public service is what we need in Washington because down in
Washington, as you know, Alex, there are far too many that are completely,
it is all about them. It is completely selfish, not selfless.

WAGNER: And before we let you go, you have written about the fact that you
lost your seat basically because of your vote on Obamacare. What do you
make about the current argument in Congress, the thing that we must do in
order to continue funding the government is to defund the nation`s health
care law?

MURPHY: Yes. You know, it is interesting. Decade after decade, there
were tens of thousands of Americans that died prematurely because they
didn`t have access off to health insurance. In 2010, alone, Alex, when we
passed the health care law bill 26,100 Americans died prematurely. That is
immoral.

How could I, as a catholic, as an American, look the other way. Listen I
have blue cross & blue shield, before I was in Congress, while in Congress,
and by the way, it wasn`t gold plated like they say. And I still blue
cross & blue shield now.

I was one of the lucky ones. But how about the 30 million Americans that
don`t have it? You saw people, through the millions all over the country,
entering the exchange and finally to have a chance be with health insurance
and not precluded because they have preexisting conditions or because they
couldn`t afford it.

WAGNER: Former congressman Patrick Murphy gets tonight`s "Last Word."
Thanks as always.

I`m Alex Wagner, in for Lawrence O`Donnell. You can catch me every
weekdays here on MSNBC at 12;00 noon eastern.

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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