updated 10/4/2013 11:26:59 AM ET 2013-10-04T15:26:59

THE LAST WORD WITH LAWRENCE O`DONNELL

October 3, 2013

ALEX WAGNER, GUEST HOST: Shots ring out on Capitol Hill forcing a
government shutdown to go into lockdown.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: They have no strategy.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: The president`s refusal to work
--

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: He will not negotiate.

CANTOR: -- has led us to this shutdown.

BOEHNER: They will not negotiate.

UNIDENTIFIED MALE: Speaker Boehner is speaker in name only.

UNIDENTIFIED FEMALE: President Obama knows that.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: John Boehner won`t let the
bill get a yes/no vote.

UNIDENTIFIED MALE: He`s not going to do that.

UNIDENTIFIED MALE: What is the responsible of the leadership?

UNIDENTIFIED FEMALE: These limited options that Speaker Boehner has.

UNIDENTIFIED FEMALE: The GOP finds itself more and more in a bind.

UNIDENTIFIED MALE: Who is leading whom here?

REP. MICHELE BACHMANN (R), MINNESOTA: This is about the happiest I have
seen members in a long time.

UNIDENTIFIED FEMALE: Completely diddly unaware.

BACHMANN: We see that we`re starting to win.

UNIDENTIFIED FEMALE: Tell that to John Boehner.

UNIDENTIFIED MALE: Who has no strategy.

UNIDENTIFIED FEMALE: The Republican position hardening a little bit.

UNIDENTIFIED MALE: It`s clear that the shutdown will go on.

UNIDENTIFIED FEMALE: Day three.

UNIDENTIFIED FEMALE: No deal to get the government up and running.

UNIDENTIFIED FEMALE: Of this government shutdown.

UNIDENTIFIED MALE: Meanwhile.

(SIREN BLARING)

UNIDENTIFIED FEMALE: Shots fired near the capital.

UNIDENTIFIED FEMALE: They have confirmed shots were fired. Some offices
are said to be on lockdown. We are told we must stay in our offices under
lockdown.

Pennsylvania Avenue has been closed down.

UNIDENTIFIED MALE: This actually started at the White House.

UNIDENTIFIED FEMALE: This vehicle crashed into a barricade.

UNIDENTIFIED MALE: The driver of that car, the woman shot and killed.

UNIDENTIFIED MALE: We`re told that this is over.

UNIDENTIFIED FEMALE: But this has been a very tense time.

UNIDENTIFIED MALE: It is in terms of the danger over.

(END VIDEOTAPE)

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

Terror in the midst of the shutdown. This afternoon, a female driver with
a child in the back seat tried to crash through a White House barrier,
setting off a police chase down Pennsylvania Avenue and up to the U.S.
Capitol. The Capitol Building was lockdown. Shots were fired and the
suspect was killed.

One U.S. Capitol police officer protecting the nation`s lawmakers without
pay during the shutdown was injured. We will have the latest details
coming up later in the show.

But as day three of the shutdown draws to a close, President Obama is
refusing to bend to the increasingly confused and desperate demand of House
Republican. Quite the opposite, in a fiery speech earlier today at a
construction company in Maryland, the president said he believes
Republicans are now looking for an exit strategy.

(BEGIN VIDEO CLIP)

OBAMA: Just the other day, one Tea Party Republican, called the idea of a
shutdown wonderful. Another said that a shutdown is exactly what we
wanted.

Well, they got exactly what they wanted. Now, they`re trying to figure out
how to get out of it.

(END VIDEO CLIP)

WAGNER: Senate Majority Leader Harry Reid agreed.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: I feel positive that John Boehner
who is basically a nice guy cannot let this go on. He can`t let this go
on.

(END VIDEO CLIP)

WAGNER: Both the president and Democratic leadership maintain there is
only one way out for Speaker John Boehner.

(BEGIN VIDEO CLIP)

OBAMA: I want everybody to understand this. There are enough Republicans
and Democrats in the House of Representatives today that if the speaker of
the House, John Boehner, simply let the bill get on the floor, for an up-
or-down vote, every congressman could vote their conscience, the shutdown
would end to day.

Speaker John Boehner won`t even let the bill get a yes or no vote, because
he doesn`t want to anger the extremists in his party. That`s -- that`s
all. That`s what this whole thing is about.

(END VIDEO CLIP)

WAGNER: Multiple reports indicate John Boehner knows the end is in sight
and is preparing his conference for surrender, at least on the debt
ceiling.

"The New York Times" first reported Speaker John Boehner has told
colleagues that he is determined to prevent a federal default and is
willing to pass the measure through a combination of Republican and
Democratic votes, according to one House Republican lawmaker.

Other Republicans also said Thursday that they got the sense that Mr.
Boehner who held two meetings Wednesday with groups of House moderates
would do whatever is necessary to country did not default on its debt.

Hours ago, "The Washington Post" reported House Speaker John Boehner
sharing Obama administration alarm about a possible debt default, has told
colleagues he will act to raise the federal debt limit if he has to rely on
the votes of House Democrats.

A spokesman for the speaker issued a statement asserting Boehner`s position
has not changed, which is a clean bill cannot pass the Republican-led
House, but as President Obama pointed out today, Republicans having lost
the Ted Cruz-led fight to defund the Affordable Care Act, don`t really know
what exactly it is they`re fighting for, and how to stop fighting for
whatever it is that may be.

(BEGIN VIDEO CLIP)

OBAMA: One House Republican said, we`re not going to be disrespected. We
have to get something out of this. I don`t know what that even is.

(LAUGHTER)

That was a quote. We`re not going to be disrespected. We got to get
something out of this. And, I don`t know what that even is.

What you get is our intelligence professionals being back on the job. What
you get is our medical researchers back on the job. What you get are
little kids back in the Head Start.

(APPLAUSE)

What you get are national parks and monuments open again. What you get is
the economy not stalling but continuing to grow. What you get are workers
continuing to be hired.

That`s what you get! That`s what you should be asking for! Take a vote,
stop this farce, and end the shutdown right now.

(APPLAUSE)

If you`re working here and ended up that you stopped and said, you know
what I want to get something, but I don`t know -- I don`t know exactly what
I am going to get. I am going to stop working until I get something. I`m
going to shuttle down the whole plant until I get something.

UNIDENTIFIED MALE: You`d get fired!

OBAMA: You`d get fired!

(APPLAUSE)

(END VIDEO CLIP)

WAGNER: Joining me now, David Axelrod, former senior advisor to President
Obama, Steve Schmidt, a former McCain 2008 senior advisor. Both are MSNBC
political analysts.

Gentlemen, thanks for your time tonight.

Steve, I`ll start with you. It`s a similar that I have but what advice,
Steve, would you give to Speaker Boehner at this moment in time?

STEVE SCHMIDT, FORMER MCCAIN 2008 SENIOR ADVISOR: Look, I think what
Speaker Boehner today did is very, very important. This was an important
signal. The first time that he has gone out and been reported that he said
we will not default with certainty to Republican house members. And we
need that certainty around this issue, because the results are so
catastrophic.

So this has been a terrible blunder. A few weeks ago, the president was on
defense over Syria. We`re at a time right now where we could as a party be
talking about all the problems, implementing Obamacare. Instead, what you
see is the president utterly on offense. The polls are totally clear about
the damage being done to the Republican Party, to the Republican brand.

And so, it`s important now, I would say, to Speaker Boehner, as the leader,
as our speaker, to stand up, finally, and, let`s end this. And let`s try
to begin an era whereas Republicans, we capture the spirit of problem
solving conservatism and move away from this very, very, very, very bad and
dangerous path that Ted Cruz has taken us down and that so many of our
elected officials have foolishly followed to the edge of the cliff with the
country in the cab behind it.

WAGNER: David, I want to ask you following on Steve`s somewhat optimistic
analysis that this may be coming to the end, and based on the reporting
that we`re hearing from "The New York Times" and "The Washington Post",
what would you advise the president to do? He seems very much on the
offense, what is critical for him in these next coming days?

DAVID AXELROD, FORMER SENIOR ADVISOR TO PRES. OBAM: Well, obviously the
principle that he is upholding is critical, which is that this is no way to
govern. We can`t hold the government hostage. We can`t hold our economy
hostage, to ideological fetishes.

So, he needs to hold fast on the principle. He also, I think need. He
said that he needs to be available for discussion, for negotiation on
issues within the regular budget process. And that`s what they need to get
back to.

You know, the, the interesting thing, Alex, about this whole story is that
Republicans actually had won at least a temporary victory because both the
Senate and the House Democrats had agreed to a continuing resolution,
temporary spending level at the levels the Republicans had set. And it
would have been shrewd to claim victory and pull out of this fight.

But instead, they set a goal that was never going to be achieved, which was
the gutting of the health care act of Obamacare. And now, they`re in the
fix that they`re in.

So, what the president need to do is hang tough here and see this through,
but then be willing, to help make the process, the process work. And I
know that he is eager to do that.

WAGNER: Steve, to David`s point that the Republicans sort of had what
ultimately they`re going to -- I mean, the "concessions", quote, unquote,
that they will be getting from the Democrats now, they almost had several
weeks ago, the medical device tax repeal was part of the bill passed in the
Senate. That may be the thing that ends up getting Republicans to the
table on a deal to pass a clean funding bill.

The three things mentioned if there is a compromise between Democrats and
Republicans on this is, six months C.R., $986 billion, the repeal of the
medical device tax and Affordable Care Act, 2.3 percent excise tax
basically, and offset of the $30 billion that the medical device tax would
have brought in.

Is that feasibly enough for the House Republicans? I mean, I keep using
the metaphor that Boehner, Ted Cruz and all had promised a steak dinner and
this seems like a bunch of donut holes.

SCHMIDT: Look, at the end of the day, there will be an effort to cling to
anything as you go out and try to communicate to the base why this fool`s
errand has come to an end, and you have a political necessity obviously to
try how to claim some sliver of victory. No matter how, you know, how
detached from your reality it its at the end of the day.

You know, look -- when, when this, when this moves forward over the next
two weeks, as you approach this, this line of default, everybody knows now
that we can`t cross that line. The speaker has signaled it. I think it`s
an important moment. So what this will now do is play out over the next
couple of weeks.

But the American people, the polls are very clear on this, are not taking
the Republican side of the argument. The Republicans entered into this
without a strategy how to get out of it. And when you enter into things,
without a strategy to get out, you usually get out in a messy way. That`s
what is going to happen to Republicans in this.

WAGNER: Speaking of that, David, getting out in a messy way -- you talk a
lot about political kabuki theater. And that is most certainly what is
happening on the national stage right now. But part of that would seem to
be, giving Republican is a way to save face through all of this. And the
medical device tax may be a legislative way of saving face.

But given how aggressive and on offense the president has been, I think
much to the delight of many of the members of his base, does he at some
point need to tailor that message, and how does he do that in a way where
Republicans don`t feel like they have lost entirely? That would seem to
beep so sort of a peg of this that remains fuzzy?

AXELROD: Well, I think that`s a real challenge because, yes, he has been
very strong on this principle. And the principle is, no negotiations at
the point of a gun. So, he can`t, he can`t relinquish that position.

On the other hand, he, I`m sure, recognizes that the speaker and those who
may want to resolve this are in themselves a very difficult position to
move forward. So, you have to offer something. But it can`t be within the
context of the current standoff.

I think the position that we are willing to talk about all these things,
once the -- once the standoff ends and the gun is put away, the bombs are
put away, and we return to a normal negotiating stance is the best that he
can do. I don`t, I think it is very tough for him to say we are not
negotiating and then.

WAGNER: And give anything up.

AXELROD: And then negotiate.

Let me say one other thing, Alex. Steve really are articulated powerfully
a position I`m sure a lot of Republicans hold. But what this whole
controversy has uncovered is what is effectively a civil war within the
Republican Party, and the Republican Party has a choice to make whether
they want to be a national party that can win national elections, and take
the White House, and -- or do they want to be a regional factional
ideological party.

And, you know, how this ends may begin to shape that debate. It`s probably
going to rage right into the 2016 presidential race. You`ll see center
right Republicans like Steve Schmidt and then you`ll see the Cruz
Republicans battling it out throughout that campaign.

WAGNER: And I would say, Steve, just in closing, I mean, are you
confident? Peter has talked moderates who are waiting in the wings
prepared to make a maneuver here to effectively save the American economy
and it is being held hostage by members of their own party do. Do you
think they triumph in the end here? Do you think that we are seeing end of
the Tea Party having a stranglehold on the GOP?

SCHMIDT: Look, I think there is a big fight yet to come. What`s important
to remember though is that no matter how well the Republican brand goes,
the members driving this are insulated from public opinion. Moderates who
will decide control of the House are not.

So they`ll decide whether there is a Democratic majority, or a Republican
majority. And people who want to purge them out of the House should
remember that control of the speakership resides with them.

WAGNER: David Axelrod and Steve Schmidt, thank you both as always for
joining me tonight.

AXELROD: Good to beep with you.

WAGNER: Coming up, a microphone catches Mitch McConnell and Rand Paul
going over the Republican strategy for the government shutdown. Chris
Hayes and Steve Kornacki will join me to talk about the epic failure of
Republican branding, policymaking and messaging.

Plus, the latest details on a car chase that ended in a deadly shooting on
Capitol Hill.

And less than 24 hours after Wendy Davis officially announced her run for
governor of Texas today, pro-life conservatives are out with an attack ad
against her. Planned Parenthood`s Cecile Richards joins me.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JON STEWART, COMEDY CENTRAL: Stop trying to photo-op your way out of
responsibility for this catastrophe (EXPLETIVE DELETED).

CANTOR: All of us here sitting at a table waiting for the Senate Democrats
to join us so we can begin the resolve our differences.

STEWART: I mean, look at these guys. They look like a focus group for a
high-fiber breakfast cereal.

(LAUGHTER)

You`re kidding. Actually that group looks like the Republican
Congressional Committee for women`s health issues.

(END VIDEO CLIP)

WAGNER: Remember the RNC plan to bring in more women and minorities. Yes,
that plan, what happened to it? Chris Hayes and Steve Kornacki join me,
coming up next.

(COMMERCIAL BREAK)

WAGNER: What once was old is new again. The Republican Party pre-2012 is
back. How easily members of the Grand Old Party have forgotten the lessons
they say they learned not one year ago today.

Here is RNC Chair Reince Priebus just 6 1/2 months ago.

(BEGIN VIDEO CLIP)

REINCE PRIEBUS, RNC CHAIRMAN: The perception that we`re the party of the
rich, unfortunately, continues to grow. The report minces no word, and
telling us that we have to be more inclusive. I didn`t need the report to
tell me that we have to do -- we have to do a lot better job and do a lot
more to make up ground in minority communities with women and young voters.
It`s not just what you say. It`s how we say it.

(END VIDEO CLIP)

WAGNER: Indeed, it is not just what you say, but how you say it. And
yesterday, this is how the Republican Party chose to deliver its message.

But what substantively is the GOP`s message. In the months following the
2012 election and the news conference held by Reince Priebus, Republicans
have stalled immigration reform in the House of Representatives. They have
held up and just barely passed the Violence Against Women Act. They have
cut $40 billion from food stamp programs. They have passed a bill banning
abortions at 20 weeks. And floated a proposal aimed at groups against
marriage equality.

But no policy plank has been more important to Republicans and more
foundational to their governing agenda than the repeal of the Affordable
Care Act, something they have tried to do over 40 times. And now that
their efforts have failed, could it be it is time for Republicans to take
some advice from Senator Elizabeth Warren.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: In a democracy, hostage tactics
are the last resort for those who can`t win their fights through elections,
can`t win their fights in Congress, can`t win their fights for the
presidency, and can`t win their fights in the courts. For this right-wing
minority, hostage-taking is all they have left, a last gasp of those who
cannot cope with the realities of our democracy.

The time has come for those legislators who cannot cope with the reality of
our democracy to get out of the way.

(END VIDEO CLIP)

WAGNER: Joining me now is Chris Hayes, host of MSNBC`s "ALL IN WITH CHRIS
HAYES", and host of MSNBC`s "UP", Steve Kornacki.

Gentlemen, thank you for joining me this evening.

STEVE KORNACKI, UP: Sure.

WAGNER: I would say at the outset of this conversation, because I believe
in a two party system. three party system. having more than one party.
That said, Chris, what do you make of Elizabeth Warren`s contention this is
a party in its last dying breaths and that some of these legislators if not
many or most of them should step aside.

CHRIS HAYES, ALL IN: Look, I do think that the, the trends, the trend both
demographically and politically are bad for the Republican Party. I think
Democracy Core put out this really fascinating document today in which did
focus groups with Tea Party like base Republicans.

One of the things that came through, their sense of embattlement, peril and
they`re increasingly isolated in a world that is -- in a country that is
more and more dominated by the Obama coalition, which is this kind of
multiracial, younger coalition. And I think that that is part of what
plays into the politics you see from the Republican Party which are
increasingly minoritarian. They are the tactics, the messaging, the
approach of a group of people that views themselves as a weird kind of
small bulwark against the masses opposed to a party that is channeling mass
opinion.

WAGNER: Steve, what happens after this shutdown and the debt limit fight
are over? And Obamacare is still the law of the land, and the exchanges
are up and running. I mean, repeal, repeal, repeal has been the mantra of
the GOP, to the detriment of any other real, tangible policy prescriptions.
Where do they go from here?

KORNACKI: Yes. Well, I am going to organize one of the office betting
pools like for the super bowl. Pick the date the Republicans will hold
their final vote in Congress in history and repeal in the people.

(CROSSTALK)

KORNACKI: I got 2029 right now in the poll. But, no, I think the point
is, when you listen to Reince Priebus there from, you know, seven months
ago, whenever that was, diagnosing big picture, the problem with the
Republican Party, in the big picture what the way out is, every single
elected official in the Republican Party on Capitol Hill right now
basically lives in a world where they can`t afford politically to think of
the big picture, because they`re haunted by it. If you have to reduce it
to one thing, I would say is what happened in September 2010 in Delaware,
when Christine O`Donnell who was a total, absolute political gadfly, who
had to go on television --

WAGNER: I`m not a witch.

KORNACKI: -- denied she was witch, beat the man who had been the governor
of the state of Delaware, sole congressman of the state of Delaware, and
she beat him in the Republican primary. There wasn`t a single Republican
officeholder who doesn`t remember that and all the other primaries like
that the last three years and say, if I cast one "wrong vote", quote-
unquote, that`s me.

HAYES: We saw, quickly, we saw this on the vote before the shutdown in
which there was all this, rumor, Peter King, we got 24, 25 moderates who
want a vote on a clean C.R., and the bill comes up. I think it got six
votes, two of them moderates, four of them were people who thought not
conservative enough, that sort of tells you everything you need to know
about where the party is going.

WAGNER: But it`s not just -- I mean, the primary challenge is real, and
Christine O`Donnell represents a line in the sand. But there was a
fascinating interview between Ezra Klein and Robert Costa, who is
incredibly well-sourced conservative, writes for conservative media. And
Ezra asks Robert, you know, how did the Republican Party get to this place?
Robert says the outside groups, for example, Heritage, Club for Growth,
don`t move directly, but they create an atmosphere of fear among members.
And so many of these members now live in the conservative world of talk
radio, and Tea Party conventions, and FOX News invitations.

And so, the conservative strategy of the moment no matter how unrealistic
it may be catches fire. Members begin to believe they can achieve things
in divided government that most objective observers would believe is
impossible.

HAYES: And the best example of this, if you want to look, and people say,
well, the parties are the same, or, compare the fight now to the fight on
Capitol Hill in 2007 when Nancy Pelosi became speaker of the House after a
huge mandate to end the Iraq war, 2006. Democrats come in. They win on
the Iraq war.

And the first thing that happens is George Bush says, oh, we`re going to
surge. We`re going to send more troops in there. And the base goes nuts.
And they say you have to defund this war.

And at that point, there were two parallel tracks. There was the
supplemental and the regular budgeting process. She could have held the
regular budgeting process hostage to the supplemental, and the base want
herd to do it more than anything, justifiably so, I think. They wouldn`t
do it, but that is the relationship the Democratic Party has to its base,
embodied in that. We`re seeing the exact reverse in the moment happening.

WAGNER: In fact, you and Ezra mind melded on that in terms of, you know,
he asked Robert, is it because the liberals are more responsible to the
American democratic project.

And Robert says in response, these conservatives don`t face consequences
for taking hard line positions. They`re able to redraw their districts.
So they have many more conservative voters. The members get heat from the
press, but they do not get heat back home.

And you have to wonder, Steve, we are seeing Tea Partiers getting cheered
in their home districts for the government shutdown.

KORNACKI: Right. I mean, because I think what Chris is saying there is
absolutely true, again about the picture trends of American politics and
the American demographics, about the country moving in the direction of
what the Obama coalition is and what it represents. But I don`t want to
overstate that, because there are 217 Republicans right now who come from
districts last year. The House of Representatives, you need 218, majority.
They got 217 who went from Mitt Romney last year, whose districts from Mitt
Romney last year.

In all of the demographic and cultural changes we`re talking about big
picture across the country they`re not happening in those districts. So,
we can talk about Breitbart and FOX News, and talk radio, the sort of last
throes of the conservative resistance, they`re the dominant voices, they
set the terms of debate. They set, the cultural terms in 217 of the 218
congressional districts that Republicans need for a majority in the House
right now.

WAGNER: Do have a bet on what year the Republicans start actually
proposing feasible policy changes?

KORNACKI: I told you --

WAGNER: 2029?

KORNACKI: 2029 is my big year. Lot of stuff is going to happen.

HAYES: I`ll say this, 2013. Feasible policy change that they propose is
austerity. In fact, they proposed it in 2011 and they have gotten it.

Austerity is a policy. I mean, austerity they have gotten, they have
achieved. So, it`s not -- you know, people talking about nihilism. It`s
about something and they`ve been getting a lot of them.

WAGNER: And under the radar, I think, to a large degree.

Chris Hayes and Steve Kornacki, thank you as always for your time tonight.

Coming up, Capitol Hill lockdown after a car chase and the gunfire. A
congresswoman who was in the lockdown joins me coming up next.

And her filibuster as a state senator put a stop to an extreme abortion
bill in Texas. Now, Wendy Davis says she is running for governor. Cecile
Richards will join me to discuss the Lone Star State.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. STENT HOYER (R), MINORITY WHIP: At the outset I know I joined the
majority leader in expressing our gratitude to the capitol police.

(APPLAUSE)

REP. ERIC CANTOR (R-VA), HOUSE MAJORITY LEADER: Mr. Speaker, I want to
thank the gentleman for yielding and concur with his thanks to the capitol
police.

(END VIDEO CLIP)

ALEX WAGNER, MSNBC ANCHOR: Around 2:20. p.m. eastern this afternoon,
Capitol Hill went on lockdown after the sound of gunshots rang out.
Lawmakers were ordered to shelter in place and tourists outside the capitol
were instructed to lie on the ground.

We now know this incident began at the White House when a woman in black
car with Connecticut plates tried to ram a barricade at the 15th and e
street entrance. No shots were fired at the White House according to the
secret service. The woman was pursued by secret service and Capitol Hill
police. And in a video obtained by NBC news, you can see the car
surrounded by police office herbs have their guns drawn. And shots are
fired as the suspect speeds away.

(VIDEO CLIP PLAYING)

WAGNER: One Capitol Hill police officer was hurt in a crash during the
chase D.C. firefighters had to use rescue tools to free the 23 veteran
officer from the mangled wreckage of his car. Capitol police chief Kim
Dine says he spoke to the officer and he is doing fine. The suspect w shot
and killed by Capitol Hill police.

Joining me now is NBC news justice correspondent Pete Williams.

Pete, we know who the suspect is.

PETE WILLIAMS, NBC NEWS JUSTICE CORRESPONDENT: Well, right. That`s right.
Law enforcement officials and congressional authorities tell us that they -
- the woman in the car has been identified as a 34-year-old Miriam Carey, a
dental hygienist from Stanford, Connecticut.

Tonight, local police and federal law enforcement officials are searching
her home in Stanford. They sent a bomb squad. They have also searched her
car. They are now talking to people who knew her. The big question here,
what was her motive? Why did sunny come to Washington in the first place.
Why would she going to Capitol or to the White House when this all began?
Why did she drive when she run off in her car? Why did she head for the
one place in Washington where there are more police on the street than
anywhere in town and that`s around the U.S. capitol. Why did she not stop
her car when repeatedly told by the police and secret service to stop.
When they fired at her car at one point, when she got up near the capitol,
all of this is a mystery. And of course, all of, very troubling. But
officials say that, she did not have a gun. All of the shots that were
fired in this incident were fired by, the U.S. capitol police and secret
service.

WAGNER: And speaking of the secret service, Pete, we are learning that a
secret service agent sustained injuries?

WILLIAMS: Well that`s right. When this all began at around 2:15, this car
driven by the woman hit a security barrier at one of the check points that
ring the White House. Now the White House is not near that checkpoint.
This is one of the outer perimeter check points. But for reasons that
aren`t clear, she drove off at a very high speed, pursued by uniform secret
service officers. The secret service says that she actually struck one of
the officers with her car. They were trying to get her to stop. And they
put these little portable barriers around her car. According to witness
she`s just gunned the engine, flattened that barrier, the agent was
actually flipped up on to the hood of her car, rolled off. As she then
took off, up Pennsylvania Avenue blasting through red lights, going about
80 miles an hour and heading for some reason, as I say, towards the capitol
which was so heavily secured.

WAGNER: NBC`s Pete Williams. Thanks for the update.

WILLIAMS: You bet.

WAGNER: Now, let`s bring in the Congresswoman Tulsi Gabbard, Democrat of
Hawaii. She was on the hill as well when the shooting occurred.

Congresswoman, thank you for joining us. If you could tell me where you
were and what you saw and heard this afternoon?

REP. TULSI GABBARD (D), HAWAII: We had just finished voting during the
first round of votes today on the House floor. I had gotten back to my
office for a few minutes before getting ready to leave for another meeting
when one of my staff members came in started shutting the doors and locking
the windows and saying we had been placed on lockdown. We were told to
shelter in place and at that time started hearing the loud speaker go off
with the capitol police issuing instructions to everyone to take shelter in
place and for anyone who its outside near the capitol to take cover.

At that point we started making phone calls, taking accountability of which
staff were in my office and those who were not there, making sure that they
were in a safe place and thankfully everyone was.

WAGNER: You know, in these situations there are always stories of heroism
and bravery, the role of the capitol police and the secret service cannot
be understated. That said, we are in the middle of a government shutdown.
And while those officers were not furloughed, they will not be getting paid
until after the shutdown.

Tell me in the halls o f Congress is there indignation or anger about the
fact that this is not the way things should be?

GABBARD: Well first, I do want to say how much I appreciate and how much
today has highlighted the selfless service and heroism of these capitol
police officers, the secret service agents, FBI, D.C. metro police,
firefighters all the first responders who converged on the scene instantly
and made this incident into a very short event, keeping as many people safe
as possible. They have done an outstanding job. And I think it does
really highlight the service that all our federal employees provide. They
are public servants and the role is essential. And I think it puts things
into perspective about what is important when we are looking at these
situations where people are faced with the life and death situation.

WAGNER: Yes. And it is certainly unfortunate that it is disaster or
calamity that frequently reminds us of the role of the federal government
and importance of civil service. I guess I would ask you, one of the
things that we heard about when we heard of the report of the shooting were
that many of the congressional offices are understaffed. That 75 percent
of the, staff is gone. And as someone in Congress standing in the halls of
Congress right now, in what other areas are you feeling the shutdown? Are
you aware of how it has made life difficult?

GABBARD: Well, you know, I think the capitol police have consolidated
their resources during this time. You will see sometimes lines lining up
all the entrances to the office buildings are not open. But like you said
also, offices like mine have only kept essential staff on board. We are
done to a skeleton crew which means we had constituents who flew all the
way from Hawaii, brought their family and brought their kids here to visit
our nation`s capitol. The places that they could visit were limited.
Capitol tours are canceled. And things that are very meaningful for a lot
of people have been completely shut down and in a basic way.

WAGNER: Congresswoman Tulsi Gabbard, thanks for joining me tonight.

GABBARD: Thank you very much. Aloha.

WAGNER: Aloha.

Coming up, Wendy Davis announced that she is running for governor and
conservatives are already on the attack.

(COMMERCIAL BREAK)

WAGNER: Almost 200,000 people have signed a move-on petition demanding
that members of Congress receive no pay as long as the stalemate in
Washington continues. You can find a link to it on the last word face book
page.

Some members of Congress are donating their salaries during the shutdown
including Senator Al Franken, who is donating his salary to Second Harvest
Heartland which comb battles hunger in Minnesota. But not North Carolina
tea party Republican Congresswoman, Renee Ellmers. Remember that name,
Renee Ellmers. Congresswoman Ellmers supported the shutdown but is keeping
her pay explaining to a North Carolina TV station, quote "I need my
paycheck, that`s the bottom line."

Meanwhile, some restaurants in Washington, D.C. are offering deals to
government workers. Celebrity chef Brian Voltaggio from Bravo`s top chef,
tweeted that his restaurant range is offering government workers a free
pizza. He then tweeted forgot to mention, members of Congress not eligible
until you get your shiz together.

Up next, Wendy Davis is running for governor in Texas. The lone star
state`s Cecile Richard joins me next.

(COMMERCIAL BREAK)

WAGNER: Tonight on the stage where she received her high school diploma,
Texas state senator Wendy Davis officially announced that she will run for
governor of Texas.

(BEGIN VIDEO CLIP)

WENDY DAVIS (D), TEXAS SENATE SENATOR: Thirty-two years ago, I walked
across this stage, the granddaughter of farmers from Mule shoe, Texas, who
could only afford to rent the land that they farmed. I had no real idea
what the future looked like. But today I see it pretty clearly. It`s
staring right at me.

(APPLAUSE)

DAVIS: It`s you, it`s all of you. And all of you deserve to have your
voices heard because our future is brightest when it is lit by everyone`s
star. And that`s why today I am proud to announce my candidacy to be the
48th governor of this great state.

(END VIDEO CLIP)

WAGNER: Davis shot to Democratic political rock star status after caring
out a marathon filibuster against a bill restricting abortion rights in the
state. A new poll find in a hypothetical matchup between Wendy Davis and
Texas` Republican attorney general, Greg Abbott, Abbott leads Davis by just
eight point, 29 - 21 percent. Fifty percent of respondents are undecided.

Joining me now is Cecile Richards, the president of Planned Parenthood and
daughter of former Texas governor, Ann Richard.

Cecile, it is always a thrill to see you. There is no person I would
rather talk to about this than you as daughter of Ann Richard, as a
daughter of the lone star state and as someone who is fighting for women`s
reproductive freedoms.

Earlier today you tweeted. 24 years ago, Ann Richards announced, for
governor of Texas with my daughter Lily today. We cheer Wendy Davis. Hash
tag, team Wendy. You know the state. What is it going to take for Wendy
Davis to get as the support of that large chunk of undecided voters in the
state?

CECILE RICHARDS, PRESIDENT, PLANNED PARENTHOOD: Well, Alex. It is great to
be with you. And this is, as a Texan, I am proud today, of Wendy, the
state. And the thought that she can repeat history which I think she can
and will. What we are seeing, this is a race that looks incredibly close.
And what Wendy offered today, obviously, her personal biography is amazing,
what she has done in elected office. But Wendy is really offering up to
open up government to all the people of Texas much like mom did 24 years
ago. And I think there is going to be an outpouring of grassroots support.
Not only from women but folks across the state of Texas who are really
frankly ready for a change. That`s what she is promising. And it is very,
very exciting to think we can be part of the movement.

WAGNER: I want to talk a little bit about the thing that made Wendy Davis
famous released on the national state which is the abortion restriction
law, HB2 which bans abortions after 20 weeks which places restrictions on
medications, requires doctors to have admitting privileges and requires
abortion clinics to have surgical center stations. I know portions of the
law are going to effect on October 29th, and planned parenthood in Texas is
suing the attorney general for parts of the law. Can you tell us a little
bit more about that?

RICHARDS: Certainly. We sued last week, planned parenthood along with
some of our colleagues, because this is a bill we believe is clearly
unconstitutional. But I think the important thing about this is as well
is, you know, what happened this summer is this was a -- you saw an
outpouring of opposition. The polls show 80 percent of Texans oppose what
happened in the state legislature, supported by not only Governor Perry,
but by Greg Abbott as well literally taking away access to reproductive
health care for millions of Texas women. This came on the heels of course,
of dozens of women`s health centers that had to shut down over the last
several years.

All of this, in a very sort of anti-woman environment in the state
legislature, by Governor Perry. That`s what was happening this summer. I
think that Women have had enough in Texas. They`re ready for change. And
I really do believe that`s what is fueling a lot of the energy. Again, not
just women, but women are really ready for a change in the state of Texas.

WAGNER: It is almost as if nationally and in Texas they have forgotten the
suffrage movement and that women have the right have the right to vote. I
mean, this law in Texas would restrict 22,000 Texas women from having the
right to choose. You look at that and then you look at the conscience
clause, that the Republicans in Washington are trying to insert into the
debate over a clean bill of funding for the government. And I have to ask
you, Cecil, this is a football that we toss back and forth all the time.
Why is this still an issue?

RICHARDS: I don`t understand, Alex. It was incredible. Actually, this
last weekend to see in the midst of all the issues the government is
dealing with. That in fact the House of Representatives would pass yet
another time, a bill to restrict women`s access to birth control.

This is -- it is extraordinary. But the thing that is important about all
this, and again, for planned parenthood, and speaking now on part of the
planned parenthood action fund, this is bad for women`s health, but it also
bad politics.

You know, we saw the presidential election, the biggest gender gap ever.
We are seeing how the Virginia Governor`s race where these issues are
being, actually really, in the public discourse. We are seeing Terry
McCullough leading by 18 to 24 points in that women`s voters. And I think
women have had enough in the state of Texas as well.

WAGNER: Cecil, I don`t know. I hope that one day we can have a
conversation celebrating the fact that the Republicans and conservatives
have given up on what is certainly not a winning strategy. But that day
may be a few, a few months or years from now.

Cecile Richard, thank you, as always, for joining us.

RICHARDS: Great to see you, Alex, thanks.

WAGNER: Some tea party Republicans are being cheered back home for
shutting down the government. Further proof that all politics is local.
That`s coming up.

(COMMERCIAL BREAK)

WAGNER: Montana`s Democratic Lieutenant governor John Walsh says he is
running for the U.S. Senate in 2014. Walsh will run to replace Democratic
Senator Max Baucus who is retiring in 2014. Democrats have held the seat
for decades and the seat could help determine control the Senate.

Up next, why all politics is local.

(COMMERCIAL BREAK)

WAGNER: The phrase all politics is local has an MSNBC connection. It was
made famous by the former boss of our very own Chris Matthews, speaker of
the House Tip O`Neill. Chris just wrote a box about the former speaker`s
working relationship with President Ronal Reagan called "Tip and the
Gipper."

Last week Lawrence sat down with Chris to talk about the book in part three
of their historic interview, they talk why Tip O`Neill was right, all
politics is local.

(BEGIN VIDEOTAPE)

LAWRENCE O`DONNELL, MSNBC ANCHOR, THE LAST WORD: Tip was the congressman
from my, the congressional district, that my mother grew up in North
Cambridge. Everybody always says North Cambridge because they need to
distinguish it from the Harvard section of town, right?

(CROSSTALK)

CHRIS MATTHEWS, MSNBC ANCHOR, HARDBALL: You are a hybrid. St. John`s.

O`DONNELL: I find myself.

MATTHEWS: Did you have any nicknames like booger Reid. All the nicknames.

O`DONNELL: All the nicknames around tip any office.

MATTHEWS: My roommate. Phil downy, friend with crazy nicknames.

O`DONNELL: Yes, yes, so I was a kid. Don`t think I was 10 years old.
Found myself at a table with Tip O`Neill. where we ordered the same thing.
He said, what do you want? I ordered strawberry ice cream. He had the
same thing. That was his lunch as far as I could tell.

MATTHEWS: That`s what I would once have lunch. What happen was I would go
eat a sandwich or something. And he would come in the room and say want a
sandwich because he wants somebody to have lunch with. I get down to with
the House members. And I would sit with them and I would say I don`t have
another one. So, I get an ice cream bowl. And then he would say things to
get so, clever the way he would talk and say, don`t you dine at noon? He
was, out having dinner at Italian restaurant. Don`t you drink? I said no.
I`m trying to get rid of it. But he says, can`t you take the stuff. I
mean, it is just the Irish thing, pushing, constantly pushing.

O`DONNELL: So, this produced my one Tip story, the one time I met him.
You are sitting there, we are having ice cream. My father sitting right
there. Tells my father this story. He says, you know, at the banquets in
Massachusetts. At the time Tip has the two biggest stars in the United
States Senate as his senators. Edward Brook, Republican only black senator
in the United States senator. And of course, this guy, Teddy Kennedy. He
says at the end of everyone of this banquets in Massachusetts, there is a
big line people trying to get Ed Brooks autograph, there is a big line,
people trying to get Ed Brook`s autograph. There is an even longer line of
people trying to get Ted Kennedy`s autograph. And after they do that,
everyone of them comes up to me to get a favor.

MATTHEWS: Good job.

That`s right, they come to me for jobs or favors. And they would say, I
wouldn`t think to ask the senator. The government building where they work
and they go to him for jobs and stuff and they go to the other guys for
autographs.

O`DONNELL: But he never.

MATTHEWS: He didn`t mind that.

O`DONNELL: Right. He was never confused by his position in this
constellation?

MATTHEWS: No, he likes favors. He liked his snow button you would get as
a kid if you done your party work. If you got to work for the party, you
got the shovel snow. He accepted that idea of favors and looking out for
people.

And I think that is why he and Reagan were different. Reagan was not a bad
guy at all. But he did not have the personal experience of dealing with
people every day with dribble, the people that didn`t get Social Security,
the people with disability, people with education problems, when kids that
couldn`t go to good colleges. He would deal with all the time. Kids are
going to drop out school. Reagan didn`t have the experience every day. I
think Reagan, had he had that experience would have ended much more like
Tip. So, I think that was the difference.

(END VIDEOTAPE)

WAGNER: For more of the interview, check out the "Last Word`s" facebook
page.

I`m Alex Wagner in for Lawrence O`Donnell. You can always catch my show
"Now" which airs weekdays on MSNBC at noon eastern.

Chris Hayes is up next.

CHRIS HAYES, MSNBC HOST, ALL IN WITH CHRIS HAYES: We begin tonight with a
terrifying, extraordinary scene at the capital today when shots were fired,
the Capitol Hill went into lockdown and law enforcement, including Capitol
Hill police, the secret service, and the FBI went into full response mode.
This is just part of the scene, captured by Arabic language TV channel
Alhura. A female suspect traveling in her car with a child tried to breach
a White House barrier and is later almost stopped near the capitol.

(VIDEO CLIP PLAYING)

END

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