updated 10/3/2013 4:35:33 PM ET 2013-10-03T20:35:33

ALL IN with CHRIS HAYES
October 2, 2013

Guest: Ben Cardin, Judd Gregg, Barney Frank, Larry Kudlow, Lizzie O`Leary,
Jellani Cobb>


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

And just a short while ago, the president met with the top four
congressional leaders at the White House where he urged the House to pass a
clean continuing resolution and asked Congress to raise the debt ceiling
ahead of the October 17th deadline.

In the last hour, House Speaker John Boehner said he would not bring a
clean C.R. to the floor, while Senate Majority Leader Harry Reid emerged to
say the president will not budge on any Republican overtures aimed at
funding only certain parts of the government.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We have sent over
four different proposals to our Democratic colleagues in the Senate;
they`ve rejected all of them. We asked to go to conference, to sit down
and try to resolve our differences. They don`t want to -- they will not
negotiate.

I would hope that the president and my Democratic colleagues in the
Senate would listen to the American people and sit down and have a serious
discussion about resolving these differences.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I went through a little
litany of things that we would be happy to talk about, or anything else he
wanted to talk about. We said we`ll be happy to talk about discretionary
spending.

We`ll talk about agriculture. We`ll talk about parks. We`ll talk
about health care. We`ll talk about anything that you want to talk about.
And he says no, all I want to do is go to conference on short-term C.R.

We have a debt ceiling staring us in the face, and we wants to talk
about a short-term C.R.?

(END VIDEO CLIP)

HAYES: Senate Democrats have indicated a number of times that those
proposals from the House, these mini-continuing resolutions to fund the
little slivers of the government are dead on arrival. Meanwhile, much of
today`s discussion managed to revolve around the Republican`s favorite new
talking point.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: America goes to war.

UNIDENTIFIED FEMALE: All the national monuments are closed down,
including the World War II memorial on the mall. But the simple barricades
didn`t stop a group of World War II vets.

SEN. RAND PAUL (R), KENTUCKY: Some idiot in government sent goons out
there to set up a barricade.

REP. STEVE KING (R), IOWA: This is a spiteful decision that was
ordered from the White House.

REP. LOUIE GOHMERT (R), TEXAS: This administration thinks this is a
political gain, let`s close the up and make these guys suffer?

HAYES (voice-over): Yes, the GOP`s new message is that Democrats are
working over time to keep veterans out of their memorial.

REP. MICHELE BACHMANN (R), MINNESOTA: We aren`t going to let these
World War II vets used as political pawns, that`s why we showed up today.

HAYES: According to Texas Congressman Steve Stockman, quote,
"Democrats are curb stomping veterans."

And today, Republicans continue to rally to the cause of World War II
vets.

UNIDENTIFIED MALE: To put up barricades to keep them away from their
greatest accomplishments is an absolute sin.

UNIDENTIFIED MALE: It`s un-American and it`s despicable.

UNIDENTIFIED MALE: It`s despicable and mean-spirited what`s being
done.

HAYES: Outrage that the shutdown caused the memorial to be closed for
their visit.

REINCE PRIEBUS, CHAIRMAN, RNC: The Republican National Committee has
put aside enough money to hire five security personnel full-time to keep
the World War II memorial open for veterans and visitors across this
country.

HAYES: The unmistakable irony, of course, is that a the crew that
showed up to gawk at the fire is the same group that lit the match.

BACHMANN: We aren`t going to let these World War II veterans used as
political pawns.

HAYES: And speaking of political pawns, the GOP is moving forward
with a new strategy with gusto.

SEN. TED CRUZ (R). TEXAS: What I`m saying is we should move focus on
areas of bipartisan agreement. So, for example, a continuing resolution
that simply continues the funding for V.A.

UNIDENTIFIED MALE: Who disagrees that we should not open up our World
War II museum?

ANDREA MITCHELL, MSNBC ANCHOR: She said you can`t pick and choose
what part of the government you want to fund -- you know, the government.
You can`t just say this --

UNIDENTIFIED MALE: You can --

HAYES: Rather than pass a bill to fund the government, Republicans
are now trying to fund parts of the government that will make for the best
press releases. A strategy dismissed by the White House.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: It`s a gimmick, and it is
unsustainable, and it`s not serious.

HAYES: And if this sounds familiar, it`s exactly what happened with
the sequester.

UNIDENTIFIED FEMALE: All of the nation`s air traffic controllers
should be back on the job soon after Congress voted to end the furloughs
forced a week ago by the budget-wide spending cuts known as the sequester.

HAYES: Congress ended flight delays, but more than 57,000 kids were
cut from Head Start.

And guess what isn`t going to be one of the GOP`s new mini funding
bills?

UNIDENTIFIED MALE: Head Start services have stopped for about 19,000
low income children. Without them, Florida A&M student Victoria Thomas
will need to find a baby-sitter for her 4-year-old daughter, Faith.

VICTORIA THOMAS, STUDENT: I have to take a student loan to help pay
for that and that puts me more in debt.

HAYES: There is also not a Republican bill to reinstate funding for
women, children and infant on nutritional assistance.

UNIDENTIFIED MALE: For now, federal programs that affects millions of
Americans are shut down, including nutrition benefits called WIC for
roughly nine million pregnant women and new mothers, like Atlanta`s Jakai
Jackson (ph) and her 9-month-old daughter Savannah.

UNIDENTIFIED FEMALE: If I didn`t have WIC, I would basically have to
drop out of school and go to work in order to be able to supply formula and
food for my child.

HAYES: House Republicans are also not going to be funding programs to
feed children after school.

UNIDENTIFIED FEMALE: Did y`all eat today?

UNIDENTIFIED GIRL: No.

UNIDENTIFIED FEMALE: Six-year-old Janika got fed when she got home.

But the same could not be said for every other child at the Oak Haven
Branch Boys and Girls Club.

UNIDENTIFIED FEMALE: Because the government shut down, our food meals
are not delivered.

HAYES: So, yes, World War II vets should get to see the memorial, and
children should be able to attend Head Start, and poor women and infants
and children should get nutritional assistance, and there is an easy way
for John Boehner to do all of it -- just bring a clean C.R. to the floor.

(END VIDEOTAPE)

HAYES: The House has now in fact voted on two piecemeal funding
bills, that has voted to fund national parks and museums and to fund the
National Institutes of Health, almost entirely long party lines with
Republicans voting to pass these measures in an obvious and latest stunt.

All part of the strategy, Senate Majority Leader Harry Reid has made
clear he will continue to reject it.

Joining me now with more on this is Senator Ben Cardin, Democrat from
Maryland.

Senator, why don`t you want the parks to be open?

SEN. BEN CARDIN (D), MARYLAND: Chris, I want all government to be
opened. I`m concerned about the 124,000 Marylanders that have been laid
off, that are federal workers, 800,000 around the nation.

These six months ago, the Democrats passed the budget in the United
States Senate. We asked the Republicans to go to conference with us. They
refused, they refused.

We reached October 1, the regular orders to pass the regulation to
keep government functioning at its current level, the Senate did that. And
these reckless Republicans have caused the government shutdown.

HAYES: Let me tell you what Republicans are thinking right now. I`ve
been talking to a few of them. They think, OK, we`re now in this
government shutdown and maybe the press won`t be as bad as we thought it
would be, but we`re gong to end up heading toward this debt ceiling in a
about two weeks, and coming up quickly.

And they think, they really think, the president will cave and you and
your Senate Democratic colleagues will cave. That if they stay strong on
this and they start asking for things, you are going to come to the
bargaining table and hammer out a deal and they`ll have a victory they can
come away with. Are they right?

CARDIN: No, they`re not right. We`re not going to negotiate with a
gun at our heads. We`re not going to give in to this type of extortion.
All it does is caused additional problems. Let`s use the regular,
legislative process.

We want government open. We want all of government open. This is
costing the taxpayers billions of dollars. It`s hurting our economy. It`s
hurting our nation.

People who rely upon services, you talked about Head Start -- how
about the services that are being provided in the research our national
intelligence agencies that don`t have their full compliments? It is
ridiculous -- pass the bill we sent.

And the tragedy here is that if John Boehner would put the Senate
resolution on the floor, we believe the votes are there to pass it.

(CROSSTALK)

HAYES: And if you`re wrong about that, of course, he -- there is a
very easy way to disprove that to show that you`re wrong, which is to bring
it up for a vote.

CARDIN: Absolutely, bring it up for a vote. Let democracy prevail.
But quite frankly, the Republicans are happy about the circumstances we`re
in, and they`re trying to use extortion-like practices to get an agenda
moving forward that should be done in legislative process.

HAYES: Do you worry you`re going to face backlash from your
constituents given how many federal government employees there are in the
state of Maryland?

CARDIN: You know, Congress doesn`t look good on this, it is a sad day
for all of us. But I tell you, the federal workers don`t want to go
through another crisis in two weeks when they`re told there is no more --
or they can`t pay our bills. They don`t want to go through another round
of sequestration.

They know that we`ve got to get this resolved. They want us to stand
firm and not negotiate the way the Republicans want us to.

HAYES: Senator Ben Cardin of Maryland, thank you so much.

CARDIN: Thank you.

HAYES: Joining me now is former Senator Judd Gregg, Republican from
New Hampshire. He was in office during the last government shutdown.

And what we`re hearing Senator Gregg, is we`re hearing, increasingly,
Republicans now think, well, we`re in this now, but we`ve got until the
debt ceiling and we can use the debt ceiling to extract concessions.

Should Republicans vote to raise the debt ceiling no matter what on
October 17th?

JUDD GREGG (R), FORMER U.S. SENATOR: Well, I don`t think you can use
the debt ceiling, but it is a point of negotiation. Clearly, you can`t
default on the debt. That would be really traumatic for the markets. And
in the end, it would traumatic for the country, because a lot of -- the
economy would be affected by it.

HAYES: So if that`s true, I have heard this response from other folks
who say, you can`t default on it but it is a point of negotiation. But I
don`t understand, those two things don`t follow to me.

GREGG: Well, they do follow, Chris, if you follow the history of the
elective government which we function under. The debt ceiling for years
has been used as a point of negotiation. In fact, the president voted
against the debt ceiling and voted and spoke rather aggressively against
voting for a debt ceiling increase.

HAYES: How would you have felt --

GREGG: This is not an unusual event, Chris.

(CROSSTALK)

HAYES: In 2007, if Nancy Pelosi and had the Democrats refused to vote
for a debt ceiling increase, unless the war in Iraq was drawn to a close,
would that have been a responsible thing to do?

GREGG: That was not a hypothetical I was confronted with, Chris. If
you want to make hypotheticals up, why don`t you stick with history?
History is the debt ceiling has always been used as a point of negotiation.

(CROSSTALK)

GREGG: By the way, Chris, I never voted against the debt ceiling
increase. I never voted against the debt ceiling increase when I was in
the Senate, whether it came with President Clinton or whether it came with
President Bush or President Obama.

HAYES: Which strikes me as commendable and precisely the exact thing
that everyone should do, particularly the majority party that knows the
thing has to be passed, right?

GREGG: Well, in the end it will be passed. It will be inexcusable
were it not passed.

But it is a point. You know, we`ve got to do a function -- our
government is not functioning in regular order any longer and hasn`t been
for a long time. You know there was a reference for a budget being passed.
But the budget has not been passed the last four s, this the first time one
got out of both Houses. And they couldn`t get the conference on it for a
lot of reasons.

But the simple fact is our government now is functioning under this
aberrational system where you basically have these run-ups to events that
force action, whether they`re continuing resolutions or debt ceilings.
Now, the debt ceiling is sort of the ultimate event that can`t be used. I
have said all along, we can`t take a hostage, we shouldn`t take a hostage
you can`t shoot as a party, and I`ve always said that. The debt ceiling
falls in that category.

But that doesn`t mean there is not an opportunity to discuss what is
causes the debt ceiling to go up. Well, why do you have to increase the
debt ceiling? Because the government is spending a lot more money than it
should, like a household that continues to spend more than it takes in,
sometime you are going to have to pay the piper through some sort of
significant action. And so, it`s appropriate to discuss the reasons for
why we`re having to increase the debt ceiling.

HAYES: Former Senator Judd Gregg, thank you so much for joining me.
Appreciate it.

GREGG: Thank you.

HAYES: Joining me now is former Congressman Barney Frank, Democratic
from Massachusetts.

And I want your respond to what Senator Gregg just said about the
reason the debt ceiling needs to be raised, is because the government is
spending more than it`s taking in. Am I wrong in that that is absolutely
the norm throughout the entire 20th and 21st century that nine years out of
10, probably, that has been the case about the federal government?

BARNEY FRANK (D-MA), FORMER U.S. CONGRESSMAN: Well, a couple of
things. First of all, I think you make a very good friend. I sympathize
with my friend, former Senator Gregg. He is a responsible man. He and I -
- the last time we faced a crisis it was totally bipartisan. When the
Democrats were in control, it was 2008, George Bush came to us, Judd Gregg
and I were among those who crossed the party divide to get things done.

But when you put to him there is an inconsistency between
acknowledging you have to raise the debt limit and use it as inconsistent
tool, you`re absolutely right. Why would I negotiate for something that
you told me you once said we have to do?

But the last point about the debt it is true. We reached a point
where we probably have more debt than it`s healthy. But I wanted to make a
point about this -- I did not vote for the Iraq war, I voted against it, $1
trillion of that debt. I didn`t vote for the George Bush prescription drug
program, again, hundreds of billions on the debt. I didn`t vote for those
large tax cuts for the very wealthy, some of which we`ve undone.

So, I`m going to bet you, if you look at my record next to John
Boehner`s, he voted to incur more debt than I did.

So, I want to puncture this hypocrisy of some of these conservatives.
If you vote for the George Bush tax cuts, you voted for the war in Iraq, I
did vote for the war in Afghanistan, but believe it is time to end that.
The debt is much more at the feet of the conservatives unless they want to
disclaim any responsibility for Medicare.

HAYES: So here is my idea, I want to throw a demand into the mix, as
someone who is a veteran legislator. I like your thoughts on it. My new
demand is that they should just -- the president should say I`m not going
to find anything unless he gets rid of the debt ceiling statutorily
altogether. That this is basically a doomsday machine that we are coming
closer and closer to using and we had our Cuban missile crisis, to use the
analogy in 2011, and eventually somebody is going to push the button.

FRANK: I agree that we should get rid of it, although I am not in
favor of the president borrowing Republican tactics. I appreciate you`re
using that rhetorically in a good way. But, you know, can I speak about
the constitutionality of all this?

The Republicans in the House have a right to try to repeal the health
care bill that they didn`t like. What you don`t have a right to do is if
you don`t have the votes. If you didn`t win as they didn`t win in the 2012
election, they lost seats in the House, and lost the presidency, they lost
seats in the Senate.

They can try to repeal it. But the way our Constitution works, if a
bill is law you only get to repeal it if you get the votes to repeal it.

Taking a hostage, you know, these are the unarmed Somali pirates of
America. I don`t want the president doing that either. But I will say
this, and let`s give credit to a former leader Dick Gephardt --

HAYES: He did it.

FRANK: He had the Gephardt Rule which made the raising of the debt
ceiling automatic when the budget was passed. It`s obviously a phony
issue.

But I do want to go back and stress again, I don`t want anybody who
voted for the war in Iraq, the Bush tax cuts, these agricultural subsidies,
the Bush prescription drug program. They are worth trillions of dollars on
the debt. If every Republican had voted the way I had voted we wouldn`t be
anywhere near the debt limit right now.

HAYES: Former Congressman Barney Frank, noting Paul Ryan, of course,
was the deciding vote on the Medicare Prescription Drug Benefit. Love to
point that out -- thank you for your time tonight.

All right, coming up --

(BEGIN VIDEO CLIP)

REP. MARLIN STUZMAN (R), INDIANA: The best thing the Senate could
have done on the first C.R., they could have stripped everything out and
moved the spending level number higher and say this is what we`re going to
do, this is our proposal, and then drop back down later and say, you know,
we were here, now we`re down to here.

But they haven`t been negotiating at all. And so, it`s like, why
should we keep negotiating with ourselves?

(END VIDEO CLIP)

HAYES: A Republican congressman seems to think Senate Democrats
haven`t compromised. But they`ve done that. They have basically adopted
the Republican platform of 2012, seriously. I`ll explain in just a minute.

(COMMERCIAL BREAK)

HAYES: CNBC`s Larry Kudlow has strong feelings about the deficit, I
have strong feelings about the deficit. We`re going to share our feelings,
next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REID: We need to reopen the government, and the key to that still
remains over in the House of Representatives. It`s a Senate-passed clean
bill.

SEN. CHARLES SCHUMER (D), NEW YORK: Open the government by putting a
clean continuing resolution funding bill on the floor.

(END VIDEO CLIP)

HAYES: So, there is a key central fact that underlies this entire
GOP-manufactured crisis, that has to do with that phrase you just heard,
the one you keep hearing, the clean continuing resolution, or clean C.R.

The clean C.R. is a C.R., continuing resolution, that isn`t trying to
defund Obamacare or delay its implementation, just one that does what it`s
supposed to do, fund the government for a temporary period of time without
any added nonsense.

But what`s left out of this discussion is the number attached to the
clean C.R., which is, if you`re going the fund the government, how much
should the government get? What is the budget, because it`s a budget bill?

To put this number in context, let`s start out with what the Obama
administration asked for when they released their budget --
$1,203,000,000,000. That was the Obama target for the budget.

For comparison, this was the 2011 debt limit compromise, a budget of
$1,066,000,000,000. And here`s the 2014 Senate budget put together by
Senate Democrats, it`s lower still. Now, let`s look at the Senate
continuing resolution. That`s the level of spending that Democrats in the
Senate had voted for and are calling on the Republicans to pass.

It is even lower. It`s $986 billion. That, that you see, 986, that
is the clean C.R. that Democrats are asking the House Republicans to
accept.

So, we`ve come a long way, obviously, from the Democratic preference
of the Obama budget or even the original Senate budget.

And then this -- this is what that clean C.R. is astoundingly close
to, the 2014 Ryan budget of $967 billion, the Ryan budget.

(BEGIN VIDEO CLIPS)

REID: This year`s Ryan budget turns out looks like last year`s Ryan
Republican budget. I wasn`t the only one that said gee whiz, not again.

UNIDENTIFIED MALE: There are many reasons to oppose the Ryan budget.

SEN. DICK DURBIN (D), ILLINOIS: Paul Ryan`s budget is March madness.

(END VIDEO CLIPS)

HAYES: OK, the very thing that the president of the United States ran
against when he won re-election. That`s the Ryan budget.

So, the spending level that Democrats ha already agreed to, that they
are begging Republicans please to accept is essentially Ryan budget
spending levels. And the reason the levels are so low is it actually uses
existing sequestration as a base line.

The Democrats have not just compromised. They have adopted the
central policy of their vanquished enemy.

Joining me now is Larry Kudlow, host of "The Kudlow Report" on CNBC.

And, Larry, isn`t this -- from your perspective, isn`t it a good news,
isn`t this a good thing that the base line now includes the sequestration
spending which everyone when this was proposed said was preposterously low?

LARRY KUDLOW, CNBC: Well, I always thought it was a good idea, I may
not have agreed that it was a perfect idea. But I will give the Democrats
and I will give Mr. Reid some credit for holding down to that $986 billion.

You`re right. By the way, the original number was $967 billion. But
the Democrats are getting some religion on this spending issue. And I
think as the government takes a smaller share of GDP, the private sector
will produce more economic growth, which is my real goal.

HAYES: Do you think that the differences that we`re talking about
here are really going to have an impact in how much businesses are
spending?

KUDLOW: Well, I think over a period of time the answer is yes. I
mean, look, a lot of people make the argument, it may not be a perfect
argument, but when businesses look at large and burgeoning deficits, they
know darn well at some point, they are going to be taxed to pay for it.
And so they hold back.

One of the weakest parts of this weak recovery is business and
investment spending, which regrettably is the greatest job producer we
have. It is really still below its peak in 2007.

Why is that? I don`t know everything about it. But I think fear of
tax increases. Fear of regulatory increases. And yes, the unknown of
Obamacare has held business back, it has held hiring back.

HAYES: You know, there has been a lot of talk on the right and from
observers -- I see you talk about this uncertainty. Precisely the point
you made about uncertainty about future, uncertainty about Obamacare
implementation, uncertainty about taxes -- the uncertainty is the thing
that is keeping money on the sidelines. But if that`s the case, isn`t that
the worst thing you can possibly do, arrange for a series of recurring
crisis in which the outcomes are always uncertain.

Aren`t you -- if you believe in uncertainty as the Republicans say
they do -- isn`t this the worst way to get government and get business
money back into the economy?

KUDLOW: Yes, look, I`m not thrilled at what is going on here. I
don`t like continuing resolutions. I worked in Ronald Reagan`s budget
office. I was associate director of OMB. I`m familiar with this stuff.

No, I don`t like C.R.`s, I never have. I think Judd Gregg put it
right, you need some kind of regular orderly process. This is very
suboptimal, very suboptimal.

HAYES: If you -- if we end up a week from now, a week and a half in
which Republicans and Democrats are having conversations that look like the
ones they are -- the government is still shutdown and we`re creeping
towards that October 17th deadline, do you anticipate business leaders,
major banks, financial industry having a kind of "come to Jesus" moment
with John Boehner and Ted Cruz about the importance of raising the debt
ceiling for the stability it needs to provide for the global economy?

KUDLOW: Well, I just don`t want to put Mr. Cruz and Mr. Boehner in
the same boat on this point. But I will say this -- business leaders are
worried. Look, they`re at the White House today, had a lot of financial
leaders. Lloyd Blankfein of Goldman Sachs was very strong on this.

Sure, they don`t want to risk any problem with the debt ceiling, they
don`t want to risk any abrogation of American obligations. That would be,
you know, a disaster. So, yes, nobody wants this.

But at the same time, I believe there is no free lunch. And, you
know, having gone through these things way back in the 1980s, it is not
unusual for debt ceiling debates to be accompanied by spending debates.
It`s just not unusual. Judd Gregg made the same point to you a few moments
ago.

HAYES: Right. Usually, what we`ve seen -- in some ways, the orders
is usually reversed, which is there is a budget conversation. There`s a
budget hammered out, and the debt ceiling gets worked into.

We`re seeing something a little different in the order here, but I
hope you`re --

KUDLOW: No, I agree with that. You`re exactly right, what`s missing
here -- sort of break the novel that since I`m a growth guy -- look, I`m a
Reagan supply side. What I want to see is the series of tax reform, pro-
growth tax reform bills which can be revenue neutral, particularly business
tax reform. OK, that is what is missing. And that would give this economy
some torque.

Mr. Obama sometimes plays lip service to it. I hope he is serious,
because the economy needs to grow much, much faster.

HAYES: You and I are on the same page about the economy needed to
grow.

Larry Kudlow, host of "The Kudlow Report" -- great thanks.

KUDLOW: Thank you.

HAYES: You can catch Larry`s show on CNBC, weeknights, at 7:00 p.m.
Eastern.

And we`ll be right back with #click3.

(COMMERCIAL BREAK)

HAYES: Coming up, have you ever seen one of these charts in a
doctor`s office? We saw this one in the twitter stream of a former Bush
White House press secretary along with some attacks on Obama Care. They
gave us all on number 10 pain face. I`ll explain next.

(BEGIN VIDEOTAPE)

But, first, I want to share the three awesomest things on the internet
today. We begin with the world of popular culture of coming to grips with
the government shutdown; but, the mess continued in Washington, a nation
turned its lonely eyes to the internet.

They found solace from such political scientist says, Britney spears
tweeted, "Go call the police, go call the governor, someone tell congress
to get to work, Bxxch," which is apparently a promotion for her newest and
barely notable single. Gawker provided this helpful comment from Ryan
Gosling and came up to explain the shutdown, while BuzzFeed went with mean
girls post parable shutdown character like Ted Cruz. Conan O`Brien used
the occasion to furlough his own staff.

(BEGIN VIDEO CLIP)

CONAN O`BRIEN, T.V. TALK SHOW HOST: What are your duties?

UNIDENTIFIED FEMALE SPEAKER: My duties are to help you and assist you
in your life.

(LAUGHING)

O`BRIEN: Seriously? To assist me in my life?

UNIDENTIFIED FEMALE SPEAKER: In your work and personal life.

O`BRIEN: Would you say that you are essential personnel?

UNIDENTIFIED FEMALE SPEAKER: No, I wouldn`t say that.

(END VIDEO CLIP)

HAYES (voice-over): My favorite reaction to the Wu-tang clan, "The
U.S. government shuts down, WTF!," which answers two questions. How does
Wu-tang think about the shutdown? And, wait! Wu-tang is on Twitter?

The second awesomest thing on the internet today, Boogie down De
Blasio. This frontrunner to be the next mayor of New York is still in the
process, introducing himself to voters. So, it is intriguing to find Bill
De Blasio`s wedding video on the "New York Times" website today. 1994
event featured all the traditional trappings of matrimony including a
toast; this one delivered by former Mayor David Dinkins, the sharing of the
wedding cake between bride and groom, the customary first dance between the
newly married couple.

And, well, yes, whatever this is. It is not exactly break dancing and
it is not cramping, but it sure makes a hell of a gift. Look at them go.
All in all, it is pretty endearing, and De Blasio should not worry. He is
still not the worst dancer to hold the office of New York City Mayor.
Isn`t that right, disco Rudy?

The third awesomest thing on the internet today, I will take face pong
for 2000, Alex. This headline, Jeopardy contestant penalized for saying
Seinfeld Character`s name wrong does not properly sum up the amount of fail
in this clip, with the category is about characters from Classic T.V.
shows.

ALEX TREBEK, HOST OF JEOPARDY: Seinfeld, Julie-Louis Dreyfuss.

FEDELITO, CONTESTANT: Elaine.

TREBEK: No. Rich.

RICH, CONTESTANT: Louis Venice.

TREBEK: No. Oh, we`ll accept that.

FEDELITO: Yes.

TREBEK: OK. It is Elaine, not Eleine.

HAYES (voice-over): Let your head spin over that one for a second.
Here, we`ll play it again.

TREBEK: OK. It is Elaine, not Elene.

HAYES (voice-over): So, I see, Elaine, not Elene. Well, I think we
all deserve to know exactly who the judge was that made such a terrible
call.

DENNIS NEDRY, STAR OF SEINFELD: You present an interesting dilemma.
I should have known.

(END VIDEO CLIP)

HAYES (voice-over): Boy, it is sad to see what has become a one great
institution like "Jeopardy." I wonder if there is a book out there on the
subject. You can find all the links for tonight`s Click 3 on our website,
allinwithchris.com.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

HAYES: We`ve seen all sorts of right-wing troll reactions this week
as the Obama Care website has gone live, lots of harping on the glitches,
rooting for failure, that sort of thing. There is one statement in
particular; I think is worth calling out. It comes from Dana Perino.

You may remember Dana Perino as the White House press secretary during
the final years of the Bush administration. Last night, Perino stepped in
it on Twitter, which happens from time to time, with this attack on the
affordable car act. "Offering Obama Care in 150 languages is absurd. If
someone can`t speak enough English to fill in forms, what will they explain
to a doctor?

The gobsmack responses came fast and furious from former Obama deputy
press secretary, Bill Burton, "So, English should be prerequisite for
getting a health care. To all in favor, pour me coffee. Nuts! What is it
with these people whining their gibberish about `help me, I am sick, blah,
blah, blah." Perino hit back, tweeting, "After the haters spent a week on
a charitable hospital ship in Africans instead of Caucasian, I`ll accept
their lectures on compassion." Exactly, haters.

Wait, what? If we looked into what she was referring to and it turns
out it is actually this really great thing, tremendous. In August, she was
on board with mercy ships, which runs floating hospitals in Africa that
performs surgeries and offer treatment to hundreds of thousands of people,
who can`t afford it. And, people getting health care they couldn`t afford
is a great thing.

Perino tweeted throughout her trip, putting up pictures of kids with
cleft lips, and posing with children who come to the hospital for medical
care. Then there were this one, a photo of a sign that patients on a Mercy
ship used to describe their level of pain to medical staff. You have
probably seen a sign like this in every hospital you have been to.

The reason it has little smiley and frowny faces is so that people can
communicate across language barriers, which is, of course, precisely the
reason why the Obama Care help is going to be available in 150 languages.
To be clear, the main healthcare.gov site is available only in English and
Spanish. There are also limited online instructions available and 13
others including Gujarati and Tagalog.

But, the department of health in human health services is offering a
call center that can answer Obama Care questions in many more languages as
much as 150, something that seems particularly reasonable. If you consider
that in New York City for example, there are 138 languages spoken in the
borough of Queens alone. Now, Perino is not alone, this kind of jingoism
is standard fare on Fox.

(BEGIN VIDEO CLIP)

BILL HEMMER, FOX NEWS HOST: 150 different languages are available --

DANA PERINO, FOX NEWS HOST: Yes.

HEMMER: And, if you want to make a phone call.

PERINO: We can test that out --

HEMMER: Where has that happen?

PERINO: -- we could try to call in --

HEMMER: I got an idea --

PERINO: -- and ask if they can answer our questions in --

HEMMER: How about English?

(END VIDEO CLIP)

HAYES: How about English? Dana Perino should know better, creating
the scaffolding for a program like Obama Care, requires a tremendous amount
of work on a part of the completely anonymous, unpraved, much reviled civil
service. But, ones you had to go out and find a Tagalog speaker, who could
help a Filipino woman who has a precondition, now to get a health insurance
exchange and actually get health care may be for the first time.

And, those people who are doing this work, the hard work of trying to
make health care available to as many as people as possible, they have had
their pay frozen for three years, and now they`re being furloughed. This
is what gets lost in the overall conservative reaction to the Obama Care
glitches as they perversely delighted in people having problems signing up
for health insurance.

There are hundreds of thousands of people who are working to make
government work well for people, even the ones who don`t speak English.
And, making government work well for people should not simply be the domain
of one political party or one place on the ideological spectrum. You were
there, Dana Perino. You should know better.

(COMMERCIAL BREAK)

HAYES: The GOP has two demands, the nation must cave to in order for
them to agree to re-open government. Americans seem to understand one of
them, got a major part of Obama Care. What they might not understand is
the other demand, which is basically a right wing e-mail forward come to
life.

(BEGIN VIDEOTAPE)

HAYES (voice-over): Have you heard the one about how congress is
exempt from Obama Care?

(BEGIN VIDEO CLIP)

ELISABETH HASSELBECK, FOX NEWS MORNING TALK SHOW HOST: The
president`s health care law is supposed to apply to everybody, but now
President Obama`s office of personnel and management has decided that
congress and their staff will receive extra benefits that no other American
gets. How fair is that?

SEAN HANNITY, FOX NEWS HOST: You get a special subsidy as a
congressman. Why do you think you are above the American people?

ERIC CANTOR, (R) VIRGINIA 7TH CONGRESSIONAL DISTRICT: Why are the
members of congress exempt from the pains of Obama Care?

DENNIS ROSS, (R) FLORIDA REPRESENTATIVE: Why is the president carving
out an exemption that doesn`t exist in the law and only members of congress
and their staff are the beneficiaries or it.

UNIDENTIFIED FEMALE SPEAKER: Every member of congress that voted for
Obama Care should be forced to be under that system.

(END VIDEO CLIP)

HAYES (voice-over): Republicans are working overtime trying to make
this particular lie stick. Why? Because to tell the truth would mean
admitting this was something republicans accidentally set in motion in the
first place.

You see, four years ago, Senator Chuck Grassley decided to pull a
stunt to derail health care reform. Grassley, said congress should be
treated like the rest of the country when it comes to health care. And, so
he inserted a provision that required all members of congress and their
staffs to give up their existing employer-provided health insurance and
sign up for the affordable care acts new exchanges.

It was a silly stunt, designed to cause democrats to fall. But, it
passed with bipartisan support. And, so, now, the federal health insurance
employer contribution to their employees on the congressional payroll would
now have to end. But, here is the problem. While most house lawmakers
earn nearly $175,000 a year, the majority of the folks who work for them
earns only between $30,000 and $60,000 a year.

Yet their bosses voted to embrace this thing, which everyone
recognized as something terrible, and that includes house speaker John
Boehner. But, you wouldn`t know it this week, would you?

(BEGIN VIDEO CLIP)

JOHN BOEHNER, (R) OHIO 61ST AND CURRENT HOUSE SPEAKER HOUSE SPEAKER:
Why don`t they make sure that every American is treated just like we are?

(END VIDEO CLIP)

HAYES (voice-over): Publicly, Boehner has been defending this
provision, privately; behind the scenes with other lawmakers he had been
trying to kill it. We know it, because Harry Reid called him out on it
this week, leaking e-mails to politico that showed John Boehner working to
protect the same health care payments to congressional staffers he is
ripping on the floor.

A good boss should try to look out for his employees, but Boehner had
to decide between being a good boss and doing the right thing, and doing
what it takes to keep the lie going, which is why at the 11th hour on
Monday, John Boehner and the house republicans tried to push through a
provision forcing their staff to pay hundreds of dollars a month more for
health care.

Sorry about that, guys, something that started as a stunt to fire up
the base was actually turned into a policy that congressional republicans
used to push the government into shutdown. This is what you get when you
try to govern from stunt to stunt.

(END VIDEOTAPE)

HAYES: I will be joined by a panel to discuss ridiculous republican
stunts in just a minute. We will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY, (D) MASSACHUSETTS 68TH AND CURRENT U.S. SECRETARY OF
STATE: We allow you if you choose to, you don`t have to, but we give you
broader competition to allow you to buy into the same health care plan that
senators and congressmen give themselves. If it is good enough for us, it
is good enough for every American. I believe that your health care is just
as important as any politician in Washington D.C.

(END VIDEO CLIP)

HAYES: That is John Kerry back in 2004, running for president,
proving this talking point about comparing American`s health care to the
health care members of congress has been with us for a while. Today, you
will never guess what members of congress seem to endorse John Kerry`s 2004
platform.

Before I get to that, joining me now is Lizzie O`Leary, correspondent
and fill-in host for American Public Media`s wonderful marketplace program.
Political scientist, Jacob Hacker, who worked on the affordable care act,
and Jelani Cobb, associate professor of history at the University of
Connecticut.

Mr. Darrell Issa today, all right? "We need to replace Obama Care,
but how can we make sure that all Americans have access to health care
without breaking the bank. Idea, we can give all Americans access to the
same health insurance options that members of congress and government
officials have. We should give every American access to the health care,
don`t you think?" What do you think?

JACOB HACKER, POLITICAL SCIENTIST: Well, we know it sounds like a
great idea. So, I`m glad that republicans have finally, you know, figured
out that they`re supportive of Obama Care. I mean it is a remarkable
development, because if you look back to when this debate began, when Chuck
Grassley pushed this idea, it was really seen as a way to derail Obama
Care.

Now, it is back, of course, also as a way to derail Obama Care but has
real consequences, and what people should understand is that the federal
employees health benefit actually was a key model for the affordable care
act.

HAYES: Yes, I mean that is the point. This is -- right, Lizzie? I
mean we`re not dealing with something that is so -- like the way that
federal employees get their health care is actually pretty similar to this
exchange-based model.

LIZZIE O`LEARY, AMERICAN PUBLIC MEDIA: Right, it is very similar to
the exchange-based model. And, actually, it is a model that not just
federal employees but a lot of companies use and are starting to use, as
well, where they are saying, "We are going to give you a set amount of
money and then you can go shopping and --

HAYES: Right, exactly.

O`LEARY: -- pick what is right for you. Yes, I think I watched
people like you have a moment of Glee that Darrell Issa says that. But --
I know you`re going to get mad at me saying this, we still have to watch
this whole thing and see how it actually works or if it works.

HAYES: You`re saying the affordable care act?

O`LEARY: Yes.

HAYES: Yes. No -- I mean I agree. Look, I`m a part of -- I was
going back and forth with a conservative friend of mine today about,
precisely, saying let`s run the experiment. If this is a disaster, if it
is bad, if it makes people lives worse then democrats should pay a huge
political price for it, because they passed this bill. And, if it doesn`t
work, then yes, like -- yes, let`s make - right?

JELANI COBB, UNIVERSITY OF CONNECTICUT HISTORY PROFESSOR: This is the
kind of posturing. I mean when I first saw it, it reminded me of
congressman Howard Smith with the 1964 civil rights act where he injected
the language of sex, so there could be no discrimination along the lines of
race.

This is what this bill is about. He injects the language of sex, and
people think that it is a great kind of liberal gesture, but it is actually
a gesture of to tank it and many others believed it was a gesture to tank
it as it turned out to actually make it much more popular. So, what
happens if people in congress said, you know, this is working out pretty
well for me?

HACKER: Well, that is the other thing, right? I mean from the
perspective of what I call social distance, right? It is not the worsening
of the world that members of congress have to deal with the thing they are
implementing, right?

I mean it makes a lot of sense. I mean -- but we should keep in mind
that for congressional staffers this would be a serious cost for them.
And, this is not to -- the affordable care act offers subsidies for people
who don`t have health insurance through people who like congressional
staffer, who get health insurance from their employer.

Well, small employers can actually go into these exchanges. But, the
administration basically said, if federal employees are going to go in, if
staffers are going to go in, then they have to get, you know, the support
that they used to get. --

HAYES: Right, I mean --

HACKER: -- And, so I think it is really worth understanding that this
is really a bad thing.

HAYES: They`re voting for a pay cut.

O`LEARY: They are voting for a pay cut. And --

HAYES: Your boss voting for a pay cut for you. That is what is
happening. I`m your boss --

O`LEARY: The discrepancy between what a member makes $175,000 a month
and --

HAYES: And, also -- for a great majority of these people, what a
member makes is not the main source of their income or wealth, in fact,
half of them are millionaires.

COBB: And, let`s be honest here. They are being put -- If the
staffers are being put in the position of kind of a freelance graphic
designer, who doesn`t have an employer, technically they`re right, because
the government will shutdown, anyway.

(LAUGHING)

HAYES: Right.

COBB: It is kind of preempted --

HAYES: It is all coming together.

COBB: It is used to state the fairs.

HACKER: It is coming together. I mean, look. Let`s just be clear
about this, these all are essentially futile efforts to try to head off
this bill. And, what the republicans are doing in a sense is drawing all
the attention away from the early launch from the affordable care act.

Actually, not sure that is a bad thing for the administration. But,
this is a reflection of a very extreme position, and we`re going to face it
again on the debt ceiling, and I just don`t think we should forget about
the real consequence of this for the economy and we are talking about, I
think, like $1.2 billion being pulled out of the economy each week.

HAYES: In terms of the cost?

HACKER: Yes. Yes.

HAYES: I want to play some sound of Karl Rove because a fascinating
thing has happened to me in the last 36 hours. The story as we headed
towards the shutdown; thus, political story was, the republicans are
fighting with each other. And, I couldn`t believe the quotes that were
coming out.

First it was anonymous aides, then people on the records saying Ted
Cruz is a maniac, like saying all sorts of things and they are all at each
other`s throats, because they think this is a terrible strategy we are
keeping. Now, the strategy has been chosen, and here is -- who do we have
to do -- Nunez, did he say this? Here is Karl Rove, warning republicans
away from the strategy, and then here he is after the strategy is in
pursuit. Take a listen.

(BEGIN VIDEO CLIP)

KARL ROVE, AMERICAN REPUBLICAN POLITICAL CONSULTANT: We wouldn`t be
able to pay for anybody in government, because the congress has provided no
funding for any part of the government and everything will be shut down.
And, I think that is a horrific outcome for the republicans. I don`t
understand why the president did not take what the house got last night. I
don`t understand why Harry Reid didn`t take what the house offered him last
night. This is going to make the democrats look out of touch and
intransigent and ugly.

(END VIDEO CLIP)

HAYES: Here is the logic of this, being described by Ralph Nunez on
supporting GOP leadership. Now, that we`ve made the jump, lit ourselves on
fire, we have to stay together.

HACKER: Yes.

HAYES: Right?

HACKER: I mean they lit themselves on fire and they are falling Into
American economy. I mean -- Grover Norquist said that you know that Cruz
had caused the house republicans to wander into traffic and abandoned them.
I mean, when Grover Norquist thinks it is an extreme move. I think that is
pretty revealing.

HAYES: But, to me what was interesting was an amount of sort of
solidarity today coming from the right. Like I was not hearing those kind
of quotes as much. The Grover Norquist stood out, precisely because --
this was the political story.

O`LEARY: Well, I`m going to be on the other hand, right -- which is -
- On the other hand, you get nothing if you`re fragmented. You get nothing
if you`re turning on each other. If you`re turning on each other, that
generates stories that are all about that. If you stand together, it
generates stories about Harry Reid and World War II veterans.

HAYES: Right.

O`LEARY: And you --

HAYES: If you kick the shiny soccer ball it generates stories about
that. He have you go and pull up stunts like pulling out a check to pay
for the security guards at the World War II Memorial.

COBB: Once upon a time, though, the party leadership was actually the
group that people had to conform to.

HAYES: Right.

COBB: Where it is going in the exact opposite direction now. So,
people can form into a minority of the Republican Party. So, there is
unity -- but, sure, unity in marching in the wrong direction.

HAYES: But, here is the thing that is troubling and worrisome about
to me about the unity, and Lizzie, you covered Capitol Hill. You have also
covered financial markets. Is that -- the unity means, if they`re getting
more unified it means they`re getting more unified in the run-up to the
debt ceiling fight.

O`LEARY: And, that is what worries me and that is what has me
jittery. I mean I don`t like that idea going toward October at this point.
And, your viewers should know, we have already hit the debt ceiling, right?
OK, we hit it in May.

HAYES: Right.

O`LEARY: And, they`re just -- they are moving money around, that is
fine.

(LAUGHING)

HAYES: At a certain point they run out of gimmicks.

O`LEARY: At a certain point, they run out of gimmicks. I think and a
house aide told me today, they think their members will fall in line around
the debt ceiling.

HAYES: Wait, wait, wait, fall in line on the side of --

O`LEARY: Fall in line on the side of --

HAYES: Voting to increase it.

O`LEARY: -- voting to increase it.

HAYES: OK. OK.

O`LEARY: However --

HAYES: Right.

O`LEARY: I think that is a big "if".

HAYES: It is a big "if." And, you know what? Everyone thought they
were going to fall in line on not pursuing this strategy. And, I have to
say like that is the thing that has me genuinely worried.

I didn`t think we would be here. I really didn`t think we would, but
here we are. Lizzie O`Leary from American Public Media; political
scientist, Jacob Hacker and Jellani Cobb from the University of
Connecticut. Thank you so much for your time. That is "All In" for this
evening. The "Rachel Maddow" show starts right now, with Steve Kornacki
sitting in for Rachel, tonight. Good evening, Steve.

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

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