updated 10/9/2013 11:00:26 AM ET 2013-10-09T15:00:26

THE RACHEL MADDOW SHOW
Date: October 8, 2013
Guest: Paul Rieckhoff, Alan Krueger

RACHEL MADDOW, MSNBC ANCHOR: The harpoon comes into it. Hi, Andy. He
gets up in front of the vote and he throws the harpoon and he hits the
whale, which of course is very, very sad for the whale. But it is exactly
what our whaling boat crew is trying to do. So hooray for them, they have
harpooned the whale.

Now here`s the thing. The harpoon has a rope attached to it and they tie
the rope on to the boat. By virtue of that rope and that harpoon, that
little whaling boat is now essentially tied to a very angry whale which
weighs, what, like 40, 50, 60 tons? And the whale, because it has been
stuck with a harpoon, inevitably takes off swimming.

And because the boat is tied to it, the whale is towing the boat behind it
at speed. The whale has just taken off now across the ocean, dragging our
little 19th century crew in their wooden boat, across the waves, going more
than 20 miles an hour. Our whaling boat is essentially water skiing behind
a wounded, furious, huge creature. A creature that doesn`t look like it
here but in real life is way, way bigger than them.

If that (INAUDIBLE) creature tires out and they are able to complete the
kill, our little crew is going to be the richest crew on the ocean tonight.
They got their whale. But if something goes wrong, like, say, the whale
doesn`t get tired and it runs away with them on this Nantucket sleigh ride
over waves the size of houses, how long can the crew survive that in their
little boat?

And worse, the whale, if it is big enough and strong off, the whale could
decide to sound. When a whale sounds, that means it is diving deep to the
bottom of the ocean. If a whale is tied to a comparatively small whaling
boat and it decides to dive down, down, down to the deepest of the deep
where the giant squid lives and sailors die, if the whale dives deep and
brings that boat with him, all those sailors on the whaling boat are going
to die at the bottom of the sea, which is where the captain comes in.

As that bolt is flying across the ocean at 20 miles an hour, over giant
waves, being dragged through the sea behind 60 tons of righteous whale
fury, our heroic whaling boat captain has one last thing he can do. If he
thinks that whale is going to sound, if he thinks that whale is going to
kill them all by dragging them down, he can use the most important tool
that he has on the ship.

He can use his whale boat hatchet. He can use that as a last resort to cut
the rope if he needs to do it to save their lives. Tucked under the bow of
every 19th century whaling ship was that tool of last resort. It is up to
the captain to wield that hatchet when it is necessary. To decide that
even if it means we`re not getting a whale today, the crew is not going to
die because the whale dragged them to the bottom of the sea.

It was the hope of every scurvy, bow-legged barnacle back, whoever took to
the sea that the captain would cut that rope when the time came.

Do we trust the captain to cut the line? Will he give up the chase even
after all this effort?

How does a simple fable with -- music down. Thank you. Simple fable with
an obvious moral. Do you trust the captain? You would not think of
attaching yourself to something with the size and speed and strength of a
whale without having the means of getting unattached, right? But only the
captain gets to wield that that means of getting unattached. Only the
captain has the hatchet. So you better trust him, right?

You better trust the captain to know just how much risk you can bear on
your little boat before it`s time to stop trying.

(LAUGHTER)

It is time for you to stop trying to get this thing you so badly want
because of the harm it`s going to do to you if you hold on to it. You have
to trust the captain to know how much harm is too much harm and too likely
to be harmed. You have to trust that captain to know when your quest needs
to be over, it`s time to go.

In Washington these past few weeks, that has been the surface level
question, right? Is John Boehner a good enough captain? Does he recognize
that he has the hatchet? Does he know when and how to use it? To stop the
plummet to catastrophe if that is where we are heading?

It`s an interesting question, right? Still unresolved eight days into the
government shutdown. It`s an interesting question about whether or not he
has the captain`s wisdom and judgment on that ship. Will he cut that line
if they need that line to be cut because they`re all going to die if they
don`t?

Interesting fable, right? Simple moral interesting fable. Now we have a
new problem on our ship. Now we have a whole new modern twist that they
never had to deal with on a 19th century whaling ship, which is that the
crew on our ship does not think that the captain has to cut the rope ever,
no matter what. Turns out the crew is bonkers.

The captain sees that the whale is ready to sound, go down to the bottom of
the ocean and drag the whole boat down with them. The captain stands ready
to cut the rope but the whack-a-do crew says no, don`t do it, we would
rather ride this whale all way to the bottom of the sea. We would rather
go all the way to the watery depths because we heard somewhere it will be
no big deal.

Yes, we think we have human gills that`ll work just fine down there. And
we also heard the bottom of the sea is not all that bad a place to be this
time of year and maybe we`ll make friends with the giant squid.

How does it affect the judgment of the captain if his crew is screaming at
him and struggling with him that they don`t want to be saved?

Because John Boehner`s crew, his Republican caucus in Congress increasingly
does not want to be saved. They see no risk. Why cut the rope when
everything is going to be fine?

(BEGIN VIDEO CLIP)

REP. JOE BARTON (R), TEXAS: This talk about default by the U.S. Treasury
is nonsense. We are not going to default on the public debt.

(END VIDEO CLIP)

MADDOW: Republican Congressman Joe Barton explaining that it is nonsense
to worry about hitting the debt ceiling. Republican Congressman John
Fleming also does not think there is anything to worry about with the debt
ceiling. He told the "New York Times," quote, "Economists, what have they
been doing? They make all sorts of predictions. Many times they are
wrong, so I don`t think we should run government based on economists`
predictions."

Asked by "Politico" if he`s willing to not raise the debt ceiling,
Congressman John Fleming said that he was willing to not raise the debt
ceiling. He says, quote, "Technically it is not possible to default."

What happens in his mind if we do hit the debt ceiling? In his mind,
quote, "nothing happens," so says Louisiana Republican Congressman John
Fleming.

Florida Republican Congressman Ted Yoho explained his even happier view to
the "Washington Post" this week, saying that if we hit the debt ceiling, it
will be good for us, good for the whole world even. He says, quote, "I
think we need to have that moment where we realized we are going broke. I
think personally it would bring stability to the world markets."

Republican Congress Mick Mulvaney tells the "National Journal" this week,
"We`re not going to default, there is no default."

Republicans Congressman Justin Amash of Michigan says, "Democrats have a
different definition of default than what we understand it to be."

Republican Congressman Tim Huelskamp says, "Nobody thinks we`re going to
default." And here`s Republican Congressman Steve King of Iowa.

(BEGIN VIDEO CLIP)

REP. STEVE KING (R), IOWA: I think that all this talk about a default has
been a lot of demagoguery, a lot of false demagoguery.

(END VIDEO CLIP)

MADDOW: I know. I know. Finding tape of that particular congressman
saying stuff that sounds cuckoo is not exactly like hunting for a white
whale. Not exactly depth. But what he`s saying there, that it is false
demagoguery to worry about default, to worry about hitting the debt
ceiling?

This is increasingly becoming the new Republican normal. That if we hit
the debt ceiling for the first time in history, ah, no big deal, we have
gills.

(BEGIN VIDEO CLIP)

SEN. TOM COBURN (R), OKLAHOMA: There is no such thing as a debt ceiling in
this country, I would dispel the rumor that is going around that you hear
on every newscast that if we don`t raise the debt ceiling we will default
on our debt. We won`t.

(END VIDEO CLIP)

MADDOW: We won`t. Why would we? Senator Tom Coburn of Oklahoma
articulating what is an increasingly normal thing for Republicans to say.

Republican senators from Orrin Hatch to Rand Paul to Richard Burr to Pat
Toomey to Mike Crapo have all articulated a version of the same argument.
They think it is possible to hit the debt ceiling for the first time in
history, possible for us to blow through it but avoid economic catastrophe
anyway because somehow we can skillfully slalom through the debts and
responsibilities and promised payments of the United States government
indefinitely.

That has never been done before. There is no mechanism for doing that.
The Treasury Department, which would be responsible for doing it says that
it cannot be done. Even if it could be done. And estimate from Deutsche
Bank -- Deutsche Bank analysts that was published by "The Washington Post"
today projects that that idea, even if it were possible, even if it were
true, they project that that idea would drop 1500 points off the stock
market straight away.

An analysis by Goldman Sachs says it would reduce the rate of economic
growth in this country by 4.12 percent. And that`s if the magic we won`t
default scheme is even possible, which again it probably isn`t possible.
But Republican Senator Richard Burr says worth getting worked out about all
this is just scaring ourselves. Senator Mike Crapo says it`s one of the
best things that could happen for young people.

Bloomberg News started off the week this week with a long reported piece
that you have to believe was trying to convince Republicans that the debt
ceiling is a real thing. Quote, "Among the dozens of money managers,
economists, bankers, traders and former government officials interviewed
for this story few view a U.S. default as anything but a financial
apocalypse."

Again this is Bloomberg.

Anyone who remembers the collapse of Lehman Brothers a little more than
five years ago knows what a global financial disaster is. A U.S.
government default just weeks away if Congress fails to raise the debt
ceiling will be an economic calamity like none the world has ever seen.

The debt shockwave that threw us into the worst recession since the Great
Depression five years ago that started with the collapse of Lehman, the
collapse of just the first direct tier of debt we`d be talking about with
the debt ceiling next week? Just the first tier? Just what would be
directly affected? That first tier is 23 times the size of the bankruptcy
and collapse of Lehman.

Remember what the Lehman collapse did?

Republicans in Congress increasingly say they are not worried and that
apparently is starting to worry the president of the United States.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I want to talk about this
for a minute because even though people can see and feel the effects of a
government shutdown, they`re already experiencing it right now, there are
still some people out there who don`t believe that default is a real thing
and we`ve been hearing that from some Republicans in Congress that default
would not be a big deal.

So let me explain this. If Congress refuses to raise what`s called the
debt ceiling, America would not be able to meet all of our financial
obligations for the first time in 225 years.

Now the last time that the Tea Party Republicans flirted with the idea of
default two years ago, markets plunged, business and consumer confidence
plunged. America`s credit rating was downgraded for the first time. And a
decision to actually go through with it, to actually permit default,
according to many CEOs and economists, would be -- and I`m quoting here --
insane, catastrophic, chaos.

These are some of the more polite words. Warren Buffett likened a default
to a nuclear bomb, a weapon too horrible to use. Nobody in the past has
ever seriously threatened to breach the debt ceiling until the last two
years. And this is the creditworthiness of the United States that we`re
talking about. This is our word, this is our good name. This is real.

When I hear people trying to downplay the consequences of that, I think
that`s really irresponsible. And I`m happy to talk to any of them
individually and walk them through exactly why it`s irresponsible.

(END VIDEO CLIP)

MADDOW: If you stay tied to the harpoon rope, while the harpooned whale is
diving to the bottom of the sea, you will die at the bottom of the sea.

Republican members of Congress are not convinced. The harpoon is set, the
rope is tied on and it turns out next week the whale is diving and it`s
really deep water. The Republicans increasingly have decided not just that
they don`t want to cut that rope, but that they don`t need to.

If you are Captain John Boehner, holding the whale boat hatchet looking at
that rope right now, what do you do?

Joining us now is Alan Krueger. He`s an economics professor at Princeton
University, the former chairman of President Obama`s Council of Economic
Advisors.

Professor Krueger, thanks very much for being with us.

ALAN KRUEGER, FORMER CHAIRMAN, OBAMA COUNCIL OF ECONOMIC ADVISORS: My
pleasure.

MADDOW: I`m sorry that I -- had to introduce you with a long story
involving people in fishing -- fishermen outfits and a whale. But the
point we`re trying to dramatize here is sort of denialism about the
consequences of breaching the debt ceiling. Do you think the denialists
have a point? Or do you think that a breach of the debt ceiling would be
catastrophic?

KRUEGER: You know, this is reckless. Mistakes happen, accidents happen.
The closer we get, the more likely we are to have this kind of an accident.
And I was thinking when I was listening to your piece, Alexander Hamilton
must be rolling over in his grave right now.

I mean, to think that you would threaten to default or to say we go over
this debt limit, where the Constitution says, you know, you shouldn`t put
the debt -- public debt in doubt, that they`re playing this reckless,
irresponsible game. And that they`ve done it before, it`s not the first
time. It`s -- as the president said, it`s irresponsible.

MADDOW: If we did breach the debt ceiling, obviously we don`t know how
long it would last for or how quickly we`d be able to respond to any shocks
that it created in our own economy and around the world, but do you have
any sense of -- or can you give us some sort of layman`s terms any sense of
the potential magnitude of the impact as compared to, say, what we went
through in 2008 and 2009?

KRUEGER: Well, the potential is catastrophic. You know, if it goes -- if
we go past October 17th for some length of time, it`s going to lead to
uncertainty about whether our obligations will be met, it will cause a very
sharp contraction in the amount of money the government is paying out to
private sector contractors or helping the Defense, to Social Security
recipients.

And the contraction, some estimates I saw are as high as 16 percent for the
quarter, which is --

MADDOW: Wow.

KRUEGER: You know, about double the worst of the great recession.

MADDOW: That`s astonishing. We have heard that if Congress doesn`t allow
the U.S. to pay its debts and if we do this, there will be the kinds of
consequences that you just described and those numbers are almost
impossible to get your head around. We just have never seen anything like
that, not just in modern times. We`ve just never seen anything like that
as a country.

As an economist, do you ever worry that sometimes when predictions are so
dire nobody can even afford to believe them?

(LAUGHTER)

That if you predict some sort of mild downturn, people can absorb that? Or
when you`re predicting some catastrophic or apocalyptic that people just
can`t hear it and they turn to other more comforting theories?

KRUEGER: Well, you have to hope that cooler heads prevail. And what I
worry about is, you know, what I described was just the effects of
contraction because the government would be spending less. But you could
find the financial markets all freeze up. You could have a run on money
market funds.

And the closer we get to that date, the more likely we run that risk. And
if we stay over, you know, the debt ceiling for any length of time, I think
we`re going to see extremely adverse effects for the economy.

MADDOW: The president today talked about why he does not think he should
and maybe think he can act unilaterally to go around Congress to raise the
debt ceiling under his own authority as president. Obviously that`s a
legal question, a constitutional question, and in some cases, in some ways
a political question.

But as an economist, do you have a view on whether or not the president has
that ability and whether or not it would actually save us from the worse
consequences if we didn`t do it?

KRUEGER: You know, I think most economists would agree that we would be
better off without the debt ceiling. That`s a position that Alan
Greenspan, for example, took, so it`s not really a left-right type of
issue. The debt ceiling is an unnecessary constraint. Congress orders the
administration to spend a certain amount of money and sets tax rates and
orders the administration to collect a certain amount of revenue.

That implies a certain amount of borrowing. So that`s what determines the
deficit, not the debt ceiling itself, so that the debt ceiling in my view
and the view of, I think, most economists is an unnecessary constraint.

Now the Treasury Department has said that they have not been able to find a
legal and responsible way to get around this constraint and, you know,
that`s going to be up to the lawyers and Secretary Lew and the president to
decide what to do if we do pass this point, in my view, this point of no
return.

They`re faced with just horrible options and just think about all of the
uncertainty caused by whatever choice they make. If they do what some
Republicans have been calling for, which is to pay bond holders, to some
extent, you know, foreign bondholders, and then not pay federal
contractors, not pay federal workers, not pay disability insurance
recipients, I don`t think that that will go by unchallenged.

So I think there will be a tremendous mess on our hands which will take
quite some time to resolve and would cause really a financial collapse.

MADDOW: I used to think that that was an -- it would be an easy way out
for the president to unilaterally find some way to do this because of those
consequences you just described. I no longer think there is any way to do
this other than through Congress getting its act together.

Alan Krueger, Princeton economics professor, former chairman of President
Obama`s Council of Economic Advisors.

Professor Krueger, thanks very much for being here. It`s nice to have you
here.

KRUEGER: Thanks for having me.

MADDOW: All right. There were members of Congress, congressmen and
congresswomen, who were arrested today. But not for any dereliction of
duty. These particular Congress people wanted to get arrested today in
Washington and it turns out to be kind of an amazing piece of tape and kind
of an amazing story.

That story is coming up. And I think I have to thank the whaling boat crew
for having done that. Thank you very much, guys. It was very good.

(LAUGHTER)

(COMMERCIAL BREAK)

MADDOW: Hey, so eight members of Congress got arrested today in
Washington. It was not a corruption sting or anything like that. No,
that`s the New York state legislature you`re thinking of.

No, these eight members of Congress today got arrested at a protest in
Washington, D.C. Even though everything in national politics right now
feels like it has come to a halt because of the government shutdown and the
looming debt ceiling deadline next week with its threat of total economic
apocalypse, even though all that is still going on, today in Washington
there was a big, colorful, boisterous crowded reminder of the opportunity
cost of our Congress doing nothing right now other than lurching from self-
imposed crisis to self-imposed crisis.

Back in June the Senate passed a comprehensive immigration reform bill for
our country then that bill went to the House where Republicans are
furiously ignoring it to death. They are not saying they will kill it,
they are just ignoring it. Killing it by their inaction and hoping that
the Latino community, in particular, does not notice them killing it.

The Republican Party just this week announced that it hired seven new
people to try to engage the Republican Party with Latinos. They call them
their Hispanic engagement staff. They hired seven new people.

Well, today among the peaceful sit-in protesters outside the Capitol were a
bunch of members of Congress who were all Democrats calling for immigration
reform to finally, finally, finally be brought up in the House where the
Republicans have let it languish. Calling for immigration reform to pass
the House along with hundreds of other protesters.

And then one by one the eight Democratic members of Congress submitted
peacefully to the police to be arrested in an act of civil disobedience.
With a loud applause and cheers from their fellow protesters, it was
Congressman Al Green who was arrested first, followed by Congressman Joe
Crowley, then Congressman John Lewis was arrested. You can see him there.
Jan Schakowsky, the congresswoman from Illinois, was arrested. Then Raul
Grijalva. Then Keith Ellison then Charlie Rangel there. Then Congressman
Luis Gutierrez.

Eight members of Congress in all got handcuffed and led away today -- under
arrest at this protest.

Politics have survived the government shutdown. There was fury and anger
and multiple arrests today over what the Congress is not doing while they
instead struggle to just try to get things back open.

But there was also widespread fury today not just in Washington but really
across the country over some things that the government usually does that
they have stopped doing right now because of the government shutdown.

The interview tonight is somebody who`s here live in studio and it is on a
subject of such national outrage and upset today that it very nearly
unified the entire country. For once, something horrible, but it brought
the whole country together. That story is coming up. Stay with us.

(COMMERCIAL BREAK)

MADDOW: The war in Afghanistan turned 12 years old yesterday, which means
we`re now at the start of year 13 of that war. We have never before as a
nation had a government shutdown at a time of war. Never. And so we are
on new ground here. We do not know exactly how the shutdown is going to
affect our troops who are fighting the war. How it`s going to affect the
immense and complicated government infrastructure that supports them while
they are fighting that war.

Piece by piece the Congress and the administration have been trying to
shove together piecemeal fixes to the problem of the government being shut
down. Fixes that will at least try to alleviate the worst of the impact in
the troops on the field.

This weekend Defense Secretary Chuck Hagel said he found a way to recall to
work hundreds of thousands of civilian employees for the Pentagon who had
all been sent home last week without pay. Congress also passed something
they called the Pay Our Military Act which they thought might handle all of
the other means of support for members of the military and their families
that had been shut down by the shutdown. But apparently they were wrong.

Apparently they had not figured out a way around trying to protect -- a way
to protect our members of the military and their families from the effects
of the shutdown.

Apparently what they thought was a good shield was not a good shield. It
didn`t work at all.

This was Andrea Mitchell`s report on just how wrong they were for the
"Today" show early this morning on NBC.

(BEGIN VIDEOTAPE)

ANDREA MITCHELL, NBC NEWS: Out of all the outrage in Washington over the
government shutdown, this one really hits home. The families of five U.S.
troops killed over the weekend in Afghanistan got a second call from the
government. That the government cannot pay their death benefits, the
immediate benefits to help with funerals and flights to meet their loved
ones` coffins because of the government shutdown.

Far from the furloughs on the front lines, Marine Lance Corporal Jeremiah
Collins worked Saturday, one of the most dangerous government jobs there
is, on patrol in Afghanistan. The 19-year-old was killed in Helmand
province. Back home in Milwaukee, a mother`s grief.

Collins was one of five U.S. service members killed in Afghanistan over the
weekend. On Sunday, four U.S. troops were killed in an IED attack. They
died on the 12th anniversary of a war which has claimed more than 2,100
members of the U.S. military.

But unlike those killed before, these service members` families won`t
receive the $100,000 so called death gratuity, typically wired to families
within 36 hours to help with the immediate expenses like the funeral, until
survivor benefits are paid.

No money either to fly the family to Dover Air Force Base in Delaware for
the dignified return of their loved ones` flag-draped coffin.

UNIDENTIFIED FEMALE: Washington may be shut down, but it`s still asking
people to go to war. When people realize that they can serve and fight for
their country, but that their families will get an IOU until the shutdown
is over, I think they`re just shocked.

MITCHELL: Shannon Collins still shocked back in Milwaukee. She can`t wait
for Washington. She`s already grieving.

Officials say that the law passed last week to pay civilian members of the
military during the shutdown does not allow this immediate death benefit to
be paid to families of the fallen. A senior official told me that he is
disgusted by the dilemma. And the Pentagon is hoping for a way to correct
it perhaps as early as today.

(END VIDEOTAPE)

MADDOW: There were few answers about this today, but plenty of outrage
coast to coast and across the political spectrum. This is apparently part
of what happens when you shut down the entire federal government, which is
outrageous no matter who shuts down the government and no matter why they
shut it down. Everybody agrees today that this, if nothing else, this has
to be unacceptable. Everybody agrees.

So, will it be fixed? I know how to figure out the answer to that
question. And that`s the interview tonight, next.

(COMMERCIAL BREAK)

MADDOW: Marine Lance Corporal Jeremiah Collins went off to boot camp just
a few weeks after graduating from Milwaukee`s Hamilton High School last
year. He was on his first tour of duty in Afghanistan when he was killed
on Saturday while on patrol from Camp Leatherneck in Helmand province.
He`s 19 years old.

This week, his mother was told that due to the government shutdown, she
will not receive he benefits that military families are given to bury their
loved ones.

(BEGIN VIDEO CLIP)

SHANNON COLLINS, MOTHER OF LANCE CPL. JEREMIAH COLLINS: For the sacrifice
that our kids are making, at the age that they`re making them, I don`t
understand how this can be a benefit that`s withheld. I will not -- I
won`t ever understand it. With the benefits in limbo, I think that in the
end the government is hurting the wrong people.

(END VIDEO CLIP)

MADDOW: Hurting the wrong people. The shutdown of course is hurting
people across the board. But when you cannot take care of the families of
fallen soldiers, I think everybody agrees with we have hit a new low.

Joining us now for the interview is Paul Rieckhoff. He`s founder and
executive director of Iraq and Afghanistan Veterans of America. And full
disclosure: my buddy.

Paul, it`s nice to see you.

PAUL RIECKHOFF, IRAQ AND AFGHANISTAN VETERANS OF AMERICA: Good to see you,
Rachel.

MADDOW: For most civilians, the idea of military death benefits is kind of
a new -- kind of a new concept. What does that -- what does that mean for
the families in these circumstances?

RIECKHOFF: Well, it`s a crisis benefit that`s cut to them usually in the
first couple of days, usually in the first 36 hours. It was actually
originally 1,500 and we advocated to increase it to $100,000. So, that
money go to the family, right away, helps them with travel, helps them with
miscellaneous expenses, and it gets them money immediately.

So, this is a whole new level of stupid. I mean, this is outrageous and I
hope this shakes America to help them understand that the government may be
shut down, but we`re a country at war. I mean, we never had a shut down
during a war.

So, our community is under tremendous pressure right now and they`ve
already been under pressure for the last decade. So, we`re seeing it
across our community, active duty, veterans, and military families. It`s
severe and it`s getting worse by the hour.

MADDOW: We saw an announcement from the V.A. spokesperson yesterday about
the regional centers or V.A. benefit centers being shut down, the G.I. call
center being shut down. That came as both very bad news and as somewhat of
a surprise, because a lot of the V.A. was insulated from the worst effects
of the shutdown, specifically because you guys advocated for and won
advanced funding for the V.A.

So the V.A. essentially funded a year in advance of all the other agencies.
Did you do this because you wanted the V.A. to be insulated?

RIECKHOFF: We wanted to be insulated from the annual budget fight. We
never knew a shutdown was coming. So, it`s had that positive impact. But
that only covers health benefits. It doesn`t cover -- sorry, emergency
health coverage and health care, it doesn`t cover the benefits of the
administration. It doesn`t cover the G.I. bill, it doesn`t cover all the
paper work processing that`s going on right now.

So, it only covers the section of the V.A. Nine thousand V.A. workers were
furloughed today. The G.I. bill hot line is down, regional offices are
closed and veteran`s organizations all around the country are absorbing
that impact. We have seen calls to our education support line quadruple in
the first couple of days.

MADDOW: Wow.

RIECKHOFF: They`re coming to us. They don`t know what`s happening. They
don`t know if their next G.I. bill check is coming. The next disability
check is coming.

I was with five national guardsmen in my office tonight -- in our office
here in New York. Three of them just had their reserve drill cancelled
this weekend. That`s training so they`re not going to be as ready for war.
But that`s also about $400 in their pocket that`s going right now.

We`ve got a frequently asked questions section on our Web site. We
continue to update it as we get information from DOD and V.A. every couple
of hours. And we appreciate it, folks. Check it out. Spread the word
because there`s a lot of confusion right now across the --

MADDOW: In terms of the G.I. bill thing, I notice when -- I know that you
guys were telling everybody through your web site and through the means
that you contact people through social media and everything that people can
place calls reopen. Just think about the timing of that, we`re in early to
mid-October.

RIECKHOFF: Yes.

MADDOW: What that means is for people who are using G.I. Bill benefits to
go to school, it`s sort of awkward to get the money move around and to get
those benefits to the bursary at your schools so you can pay for books and
all those things. Now people get no help.

RIECKHOFF: Yes, it`s a couple of hundred thousands people who have just
started school or turning new page in their life. They`re doing the right
thing and they don`t know if they`re going to get their next check. But
also, the Department of Defense, just now, I think in the last few hours,
confirm they`re actually going to pay their troops on October 15th.

So, this is, you know, a real time crisis within our country that I don`t
think folks are really understanding. And we`re not getting involved in
partisan battles here. We`re talking about practical realities and what
are impacting our veterans and troops right now on the ground.

So, Washington`s got to find a way to at least protect this group of people
who are literally in harm`s way right now.

MADDOW: The thing that is -- this is not just true about veterans and
military issues, but I feel like it is most acutely true for those issues.
We are learning that you can`t just break things and pick up the pieces up
one by one and try to make it seem whole for the parts of it that hurt the
most. I mean, they all thought and they sort of advertise when they were
shutting down the government -- don`t worry, we took care of the troops, we
took care of the veterans, they`ll all be fine. We`re just going to shut
down parts of the government that we don`t like. They have not been able
to put it back together.

RIECKHOFF: Well, for our members, and we got about 200,000 around the
country, 15 percent of them work in the government. They`re veterans who
have come home and are now working in the government. Many of them are
defense contractor who were already hit by sequester and now they`re going
to be hit by the shutdown and maybe hit again by the debt ceiling.

So, this is, you know, a tumultuous situation over and over again for the
group of folks who have been sacrificing for the last decade. So, this
should be a wakeup call for all Americans. We have got to fix this and we
have got to recognize what damage it`s doing to our people who are in
harm`s way and who are fighting on our behalf.

MADDOW: Is it frustrating to you to see members of Congress express chest
pounding outrage about this story today, to see members of Congress go down
to the World War II Memorial and express chest pounding about how sad they
are that the World War II Memorial is closed, along with the rest of the
national parks, when those same members of Congress are responsible for the
shutdown?

RIECKHOFF: Yes, but our veterans and military are America`s favorite
political chew toy.

MADDOW: Yes.

RIECKHOFF: Both parties do this. And both parties are doing it now. And
they love to hold us up as the first group that`s getting impacted and
still not deliver for us.

They know it resonates with the American people. But they`re talking and
not delivering. The American people have got to demand that they deliver
for our veterans, our military and our families right now, because I`m
going to go back to the office and our inboxes are full, our phone lines
are going to be full and our case workers are working overtime.

And when they shut down the government, that overflow demand goes somewhere
and right now, it`s going to community based nonprofits around the country.

MADDOW: In terms of how this gets fixed, one of the reasons I wanted to
talk to you, Paul, is I feel like you`re not only somebody who`s lived it
and who has a pretty good analysis of how veterans get use in the politics,
but you have been able to turn that into some really concrete advocacy
wins. For example, the size of the debt benefit is because of your
advocacy, the advanced funding of the V.A. is because of your advocacy.
The new G.I. bill is because of your advocacy. IAVA and other veteran
service organizations have absolutely figured out how to turn all of this
emotional shrapnel laying around the country that`s about you guys but not
of you guys into concrete gains for your community.

Do you as a practical political guy see a way out of this?

RIECKHOFF: Yes, maybe we`re the reason they`ll resolve this. Veterans and
military should be the folks who we can all rally behind.

And you brought up another important point about all these wins. Look, we
are also making progress on the backlog.

MADDOW: Yes, finally.

RIECKHOFF: You reveal the backlog, we finally removing the backlog,
helping the V.A. remove the backlog by about 30 percent. That stopped.
The mandatory over time is gone. They`ve shut the regional office. They
can`t even continue to develop the new digital electronic processing
system. That`s shut down.

MADDOW: Yes, the systems that let them say they have the backlog cleared
by next year, they`re not working on that.

RIECKHOFF: They have thrown a giant wrench in all that. So, any of the
progress is now going to be reset, it`s going to be delayed, it`s going to
be stalled, and that`s going to impact literally millions of folks around
the country.

MADDOW: Well, the emotional impact and the political impact of the way
this is affecting military families and veterans is something that`s
impotent unless it`s s turned into action and the people that are going to
turn it into action are you guys.

RIECKHOFF: Actually, more importantly, it`s going to be the American
public. That`s who it`s going to be. We are small in number, we need
everybody to step up and get behind us.

MADDOW: But you guys have figured out a way to turn it into practical
action when people are mad, or people are sad, or people are having their
emotional feelings that --

(CROSSTALK)

RIECKHOFF: Yes.

MADDOW: So your leadership here is need more than ever.

Paul Rieckhoff --

RIECKHOFF: Thank you, Rachel. Appreciate it.

MADDOW: -- of Iraq and Afghanistan Veterans of America -- thanks for being
here, Paul.

RIECKHOFF: Thank you, as always.

MADDOW: All right. Teenagers, you`re immature, that`s not me. That`s a
state Supreme Court ruling that will chap your hide and it has nothing to
do with the shutdown. And that story`s coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REPORTER: Do you believe this will be one the most important, if not the
most important, economic decisions you will make in the remainder of your
presidency?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is definitely one of the
most important decisions I will make in the remainder of my presidency.
The Federal Reserve chairman is not just one of the most important economic
policymakers in America, it`s -- he or she is one of the most important
policymakers in the world. And that person presumably will stay on after
I`m president.

So, this, along with Supreme Court appointments, is probably as important a
decision as I make as president.

(END VIDEO CLIP)

MADDOW: As important as Supreme Court appointments. Well we have some
late breaking news to report tonight. Is that we now know who the next
chair of the Federal Reserve is likely to be.

The current Fed chair, of course, is Ben Bernanke. He was appointed Fed
chair by George W. Bush in 2006. He was then reappointed by President
Obama in 2010. Now, we know that when his term expires in January, the
person who will take over for him in all likelihood will be this person,
Janet Yellen.

Janet Yellen is currently the vice chair of the Federal Reserve. Tonight,
we have learned that President Obama intends to officially nominate her as
Ben Bernanke`s successor as chairman of the Federal Reserve.

The news was first reported tonight by "The Wall Street Journal", and just
a few moments later, the White House confirmed it, and said that the
announcement will come at a White House event tomorrow afternoon at 3:00
Eastern.

If she is confirmed by the Senate, Janet Yellen would make history as the
first woman ever to head up the Federal Reserve. Ms. Yellen, the second
woman to head up a bank in the developed world.

Her nomination became more of certainty recently when President Obama`s
former top economic adviser Lawrence Summers withdrew his name from
consideration last month. Lawrence Summers potential nomination as
chairman of the Fed drew lots and lots of opposition particularly from the
political left. His withdrawal from the process under that pressure left
Janet Yellen as President Obama`s most likely choice.

Chair of the Federal Reserve is a big, big, big, high-profile position. We
have only had two Fed chairs over the last 25 years. Alan Greenspan, and
Ben Bernanke, and they both became household names. This is a
consequential position among consequential positions. And Janet Yellen is
set to join the list if she is confirmed by the U.S. Senate.

But again, the news confirmed tonight by the White House, President Obama
will officially nominate Janet Yellen to become the next chair of the
Federal Reserve tomorrow 3:00 p.m. in the East Room of the White House. Set
your DVRs now.

(COMMERCIAL BREAK)

MADDOW: First thing you need to know, this has nothing at all to do with
the federal government shutdown. It would probably be the top politic
story in the country right now if the shutdown were not happening.

All right. Here`s what is going on. January 2011, the state senator in
Nebraska named Lydia Brasch introduced legislative bill, 690. This is
Senator Brasch discussing the bill on the floor of the state legislature in
Nebraska.

LB 690 was an anti-abortion bill, specifically it`s what the anti-abortion
side calls a parental consent bill. It said that if somebody under the age
of 18 in Nebraska wanted to have an abortion, she would have to get written
permission from a parent or guardian or she couldn`t have it.

Previously, you had to notify your parent or guardian. But you didn`t need
their written permission. But Senator Brasch`s bill would change that,
said blocking a young woman from getting an organization unless she could
get written consent, quote, "is the best option for young women`s safety,
well-being and peace of mind." Young women`s safety, well-being and peace
of mind. That was the idea.

Senator Lydia Brasch`s bill said that you cannot get an abortion without
written consent from your parents. And it soared through the Republican-
dominated Nebraska state legislature. She introduced it in January, 2011.
By May, it passed, 41-6.

And that very same day, Nebraska`s Republican governor signed it into law.
When it was signed into law, the anti-abortion group Americans United for
Life, they were ecstatic. Nebraska`s new parental consent law based on
Americans United for Life model legislation, they`re very, very psyched to
get the bill passed in Nebraska. Of course, they`re psyched to get bills
like this passed all over the country.

Well, this past weekend, two years after the bill became law, the Nebraska
state Supreme Court issued their first verdict in a case under this new
antiabortion parental consent law. This is the headline from the "Obama
World Herald". Nebraska Supreme Court rejects foster child`s abortion
request.

Five out of the seven judges on the Nebraska Supreme Court, quote, "refused
a 16-year-old foster child`s request to get an abortion without parental
consent." The 16-year-old girl is unnamed in the court case because she is
a kid. Her identity has been protected.

But as a kid, living in Nebraska, she has not been protected. She cannot
get parental consent for her abortion because her parents no longer have
the right to be considered her parents. A Nebraska court dissolved their
parental rights because they physically abused and neglected their
daughter.

And it was during the hearing where the 16-year-old girl`s parents were
getting their parental rights stripped by the state, because they abused
her, it was during that hearing that the teenager told the court in this
confidential proceeding that she was pregnant and that she felt she could
not have the baby. She told the court that she wanted to have an abortion
because she did not have the financial resources to support a child, or she
said, quote, "to be the right mom that I would look to be right now."

The district court judge hearing her plea looked this young woman up and
down and asked her whether she knew that, quote, "when you have the
abortion, it is going to kill the child inside you." Then he ruled she
would not be allowed to have the abortion.

With no parents available to give written consent, even if that made sense
in this case which it doesn`t, that judge decided that he would decide to
whether or not she would be allowed to have an abortion. And he decided
she would not have one. He ruled that the young woman had not shown she is
sufficiently mature and well-informed enough to decide on her own whether
to have an abortion.

And so, the state of Nebraska will instead force her to give birth to a
child, even though she doesn`t want to, because they say she is too
immature to choose not to.

That was the district court ruling in her case. Now, the Nebraska state
Supreme Court has upheld that judge`s ruling. Thus, forcing the 16-year-
old girl to give birth by order of these state judges even though she does
not want to give birth.

Abortion is legal in Nebraska, but not for her, because she was beaten up
and neglected by her family. And so, now, the state decides what she gets
now, and the state has decided she can`t have that particular choice.

We spoke to the attorney who was representing this young woman at the
center of the story today. Her attorney Katherine Mahorn (ph), she told us
today there will be a meeting in Nebraska next week to try to determine the
next step forward in this case, specifically to decide whether or not to
further appeal this decision. And what that might mean in very practical
terms for her young client.

Time, of course, is of the essence here. The girl at the center of the
case is now more than 4 months pregnant. She was only ten weeks pregnant
when the state of Nebraska first denied her permission to have an abortion.

She was 10 weeks pregnant when she started asking. They have just finished
saying no. And now she is more than 4 months pregnant.

We asked her attorney tonight, what her client think as but this latest
ruling from the state Supreme Court on her case. The attorney told us that
she has not yet discussed what this ruling means with her client. The
attorney told us today, quote, "She is busy. She is a high school
student."

And an American state is forcing her to give birth against her will on the
ground that as a high school student, she is too immature to have an
abortion, but not to immature to be forced to become a mother.

We`ll bring you updates on this case as we get them.

If the government shut down were not going on in Washington right now, this
would be one of the biggest political stories in the country. You
otherwise may not have heard about it.

Watch this space.

That does it for us tonight. We will see you again tomorrow night.

Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL".

Thanks.


END


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