updated 10/11/2013 12:40:12 PM ET 2013-10-11T16:40:12

ALL IN with CHRIS HAYES
October 10, 2013
Guest: Xavier Becerra, James Pethokoukis, LaShante Austin, Larry Anderson,
Ben Domenech, Lynn Parramore, James Peterson>

CHRIS HAYES, MSNBC HOST: Good evening from New York. I`m Chris Hayes
and we have a heck of a show for you tonight.

Because tonight, 10 days into the government shutdown, a stunning new
NBC/"Wall Street Journal" poll shows approval ratings for the Republican
Party at historic lows. And at this very moment, a little more than an
hour after their meeting with President Obama broke up with this definitive
sign of a deal or any new path forward, GOP staffers are huddling on
Capitol Hill with plans to stay the night.

House Speaker John Boehner`s strategy of the day, as best we can tell,
was to offer the White House a clean raise the debt ceiling for six weeks,
in the beginning of formal budget negotiations, all while the government
would remain shutdown.

Today`s strategy does not appear to be working. And now, John Boehner
has to figure out what tomorrow`s strategy is.

(BEGIN VIDEOTAPE)

HAYES: Put yourself in John Boehner`s shoes for a moment. Imagine
what it`s like for him to wake up every morning and face the forces that
are assembled against him. One simple goal: to survive another day.

John Boehner must find a way to placate the Tea Party, whose irate
with any talk of negotiations not including Obamacare, the entirety of
American finance capitalism, that has told him he cannot blow through the
debt ceiling.

And then there`s the American people. According to a new NBC News
poll, both the GOP and the Tea Party`s favorability rating that sunk to an
all-time low. And 53 percent of Americans blame Republicans in Congress
for the budget standoff, compared to 31 percent who blame the president.

With those three separate interests in mind, John Boehner`s play is
this.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: What we want to do is
to offer the president today the ability to move, a temporary increase in
the debt ceiling, an agreement to go to conference on the budget.

HAYES: Far-right groups like Heritage Action are falling behind
Boehner`s plan, but amazingly, this is a total reversal of his strategy to
focus on the debt ceiling. Importantly for Boehner, however, the Tea Party
gets to keep on trying to kill Obamacare.

REP. RAUL LABRADOR (R), IDAHO: When it comes to the continuing
resolution, when it comes to the issues dealing with Obamacare, we`re going
to continue to hold our ground.

HAYES: And just looking at the stock market, you can see the lords of
finance are reassured.

UNIDENTIFIED MALE: Stocks taking off. The Dow posting its biggest
point gain of the year.

UNIDENTIFIED MALE: The markets are clearly sniffing a deal.

UNIDENTIFIED MALE: The stock market is telling us in no uncertain
terms that they believe this deal is a foregone conclusion.

HAYES: So the markets rally and the government remains closed
indefinitely. Because for the speaker of the House, as long as the Tea
Party and Wall Street are happy, he gets to survive another day.

While the Republican Party burns to the ground and the American people
are subjected to prolonged, unnecessary misery.

UNIDENTIFIED FEMALE: I live paycheck-to-paycheck and I don`t know
what is going to happen.

UNIDENTIFIED MALE: So I don`t know what`s going to happen on the
first.

UNIDENTIFIED MALE: As of today, I`m not going to be receiving my
school benefits. And without that, that does not pay for me to go to
school.

UNIDENTIFIED MALE: I get WIC and I get food stamps and it`s going to
be pretty tough.

JAMES KUEHL: I already have enough guilt with the PTSD and things
that I`m not over there and someone else is there in my place, and now, I`m
not being appreciated for what I have done here.

(END VIDEOTAPE)

HAYES: A White House statement characterized the meeting with House
leadership as good, even though no specific determination was made on a
path forward. President Obama has repeatedly said he will entertain
negotiations on anything, but only after the government is reopened.

Joining me now is Congressman Xavier Becerra, Democrat from
California, chairman of the House Democratic Caucus.

Congressman, what`s your reaction to the news of the day, in which the
House GOP has essentially offered the six-week clean debt ceiling while the
government stays shutdown and no word so far out of the White House or the
House leadership what the status of that offer is.

REP. XAVIER BECERRA (D), CALIFORNIA: Chris, I think we`ve been
watching this movie for three years now, and it doesn`t have a good ending
anytime. And so, we need to change the video. It`s time to do something
different and it`s time for us to get to work and do our job. We didn`t
get elected to shut down government. We did get elected to put 800,000
Americans out of work. And we certainly didn`t get elected to run the
economy down in the ground at a time when it was finally recovering.

So I think, Chris, our Republican colleagues should know that this is
a time now to stop the game playing and let`s get to work (ph).

HAYES: I want to be clear on the position of the House Democratic
leadership. What is the position of the House Democratic leadership with
respect to a proposal in which the debt ceiling would be raised and that
vote would be in the House, talks would initiate on the budget, while the
government would stay shutdown, and all the misery and cascading problems
that emanate from that would continue.

What is the position of the House Democratic leadership on that
proposal?

BECERRA: Well, first, Chris, we`ve not seen that proposal, because
the Republicans have only talked about a proposal. And who knows exactly
what went down in the White House. What we do know is this: the
Republicans did not offer the president a proposal that would put Americans
back to work and that would guarantee that our economy would not slip into
recession.

And so, because we don`t have that, I`m not sure if the Republicans
are going to put anything in writing. What Democrats have always said, and
there are 200 Democrats ready to vote for a clean budget that lets us
reopen our government and put Americans back to work. And we`re ready to
make sure that we don`t default on our past debts.

We`re not talking about future spending. We`re talking about the
spending that Republicans and Democrats voted for to now pay for that. We
need to make sure we continue forward and we`re ready to sit down and talk,
as we always he been, about all those issues that we have to deal with to
have a fiscally responsible government.

HAYES: Congressman, you`re a veteran of politics. You know your way
around this game. Have you ever seen an unforced error, a willing self-
immolation, like what the House Republican Caucus has done over the last
two weeks? It is astonishing.

BECERRA: I`ve never witnessed this. And quite honestly, Chris, what
we`re seeing is, a family feud that`s extremely intense in the Republican
Party, where the right and the far right are going at it. And, of course,
the victims of all of this are the 800,000-plus Americans who can`t go to
work tomorrow, an economy that`s recovering, but who knows. Will interests
hike is up because of the way the Republicans are treating the economy?

Let`s put it this way, we talk about banana republics as if those are
the kind of governments we never want to have. I think Republicans are
acting like they`re part of a banana republic and they`re treating America
as if it`s some second class country.

HAYES: Yes, and you know what, I wonder if this -- if you worry, as a
member of congress, a lot of the anger right now, the polling that we have
out at NBC/"Wall Street Journal" tonight shows that the Republicans are
bearing the lion`s share of the blame, undoubtedly, record disapproval of
the Tea Party, huge margins that disapprove of their handling of this, 70
percent of poll respondents think they`re playing politics.

And yet, you as a member of Congress, are tainted by this. If you go
and talk to people in diners and gas stops and subway stops and gas
stations, people are saying this Congress, Congress, the government.

BECERRA: Yes.

HAYES: Do you feel like you are being tainted by ? Is it destroying
the reputation of the institution?

BECERRA: Oh, no doubt. And I can understand the public`s anger, a
pox on all of us. They just want us to get our work done. I wish we could
have them discern who`s really shutting down government, who`s risking the
economy, and who`s not.

But, again, I can`t blame them, because we`re all part of the same
place. Just like car salesman, some of the priests in the Catholic Church,
everyone got tainted. And that broad brush is striking all of those of us
who are in elected office.

And that`s why we had to push to get this done. And perhaps the most
disappointing thing here, Chris, is those Republicans who say they`re ready
to vote for a clean bill to fund the government to get Americans back to
work, but they don`t come forward. And that`s the most discouraging part
of this.

HAYES: It`s cowardice.

BECERRA: We know they`re there, they`re just not coming out.

HAYES: Congressman Xavier Becerra, thanks so much for your time.

BECERRA: Thanks, Chris.

HAYES: And joining me now is Ryan Grim, MSNBC contributor and
Washington bureau of "The Huffington Post".

Ryan, take me through the latest here. We had a very bizarre scene
after that White House meeting. There were no formal press statements by
any of the parties. The House speaker, John Boehner, skedaddled out of
there.

There was briefly a "New York Times" report that the White House had
rejected the offer out of hand, which sent everyone scrambling, sent
futures markets and foreign stock exchanges nose-diving. And now that
looks like it`s been retracted.

So where are we right now?

RYAN GRIM, THE HUFFINGTON POST: The amount of money that changed
hands globally as a response to that "New York Times" breaking alert, you
know, must be in the billions. You know, it was walked back maybe 15
minutes to a half an hour later, but you`re right, it was kind of a surreal
moment, and what we`ve learned that came out of the meeting is that they`re
going to keep talking. Like you said, Republicans are going to work
through the night, but they`re now focused on handling the debt ceiling.

But think about where that puts them. So they had two issues that
they could deal with. They could deal with the government shutting down,
which is hurting people all across the country, or they could deal with a
debt ceiling, which is very much perceived as a Wall Street kind of global
elite issues.

HAYES: Right.

GRIM: Republicans are jumping and handling that, while letting the
government shutdown you know, conceivably, through Thanksgiving.

HAYES: Oh, there is no better illustration of the mechanisms of power
within the American government and the Republican Party than what pressure
was brought to bear. And who is powerful in this country. The women --

GRIM: Right. And that`s potential harm that hasn`t even been done
yet. There is actual harm being done to millions of people a day. And
that wasn`t enough to change it.

HAYES: Here`s a question to you. What do you think, from your
reporting, what is the feeling of Harry Reid, the Senate Democratic
leadership, which is the key player in this, and the White House, about
this idea that you just keep the government shutdown, but past this debt
ceiling increase, because that essentially is some sop that cuts you off
from the potential worst potential cataclysm but you are then negotiating
with the government still shutdown, which the president has reiterated, he
does not want to do?

GRIM: This is one of the most fascinating and least-told parts of
this story, is that the relationship between John Boehner and Harry Reid
and also, importantly, between John Boehner`s staff and Harry Reid`s staff,
is at an absolute low. They despise each other, personally. They don`t
trust each other. You know, they were sniping at each other in the press
recently.

So they`re not working together. You know, they`re talking to other
people to let each other know what they`re going to do. Now, if the House
passes a clean, six-week bill through their chamber, I don`t think the
Senate can allow the government to default, because they`re angry at the
House.

But, you know, Harry Reid had a pretty funny remark today. He said,
look, he basically said, look, I`m going to wait until the House produces
something. He goes, when I woke up, they had three different plans. I`ve
been at the White House for two hours and on the way back, they might have
come up with a few more.

HAYES: And here`s the -- if a debt ceiling passes in the House and
gets passed in the Senate, you take that off the board, you put the markets
to rest.

But here`s Harry Reid talking about any conversation happening while
the government`s still closed. Take a listen.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: Open the government, let us
pay our bills, we`ll negotiate with you about anything.

REPORTER: They want to negotiate for you reopen the government. Is
that --

REID: Not going to happen.

(END VIDEO CLIP)

HAYES: Is that the White House`s position?

GRIM: That -- I mean, it depends on what you mean by negotiating. I
mean, they were sitting at a table this evening --

HAYES: Right, that`s right.

GRIM: -- talking about stuff.

HAYES: Well, they were talking about talking. I think that was pre-
negotiation. MSNBC contributor Ryan Grim, thanks for your time tonight.

GRIM: Thank you.

HAYES: Joining me now is James Pethokoukis, columnist and blogger at
the conservative think tank, the American Enterprise Institute, a CNBC
contributor and someone I read regularly.

So, it`s a great pleasure to have you on the show, James.

Well, you`ve been a critic of this strategy, from the very beginning.
And I have to say the polling out tonight is pretty remarkable. And what`s
remarkable about it is, you have basically have the following -- three
months of everyone who`s anyone in the GOP center right establishment say,
this is political suicide, please do not do this, do not do this is dumb.
And then the Tea Party went ahead and said, we`re doing it.

And lo and behold, look at the results. I`ll read you some of these
poll results. Who do you think is more to blame for the shutdown,
President Obama, 31 percent, Republicans in Congress, 53 percent, both
equal 13 percent. Using (ph) the Republican strategy, 27 percent believe
they are demonstrating strong leadership, standing up for what they
believe, 70 percent putting their own political agenda ahead of what is
good for the country.

Do you want to scream, "I told you so"?

JAMES PETHOKOUKIS, CNBC CONTRIBUTOR: Listen, if I could take that
just one step further. We got those really just dreadful poll results out,
and if you listen to what some of the House members, who left that meeting
with the president, what they said, the only thing I can conclude is: one,
Obamacare is more or less off the table -- any of these negotiations,
because they didn`t talk about it.

And then, if you listen to Representative Lynn Jenkins after that
meeting, what she said was, listen, we all know the shutdown is causing a
lot of pain out there. We like to get this thing ended as soon as
possible, maybe Monday.

So, listen, they are running to reopen the government. It would be my
expectation at some point next week, you`re going to have Republicans vote
to extend the debt limit, you know, six weeks, and reopen the government.

HAYES: So you are saying right now, your prediction is just a
complete -- is basically a complete declaration, declaring complete, total,
abject defeat and just passing a C.R. and debt ceiling hike and then just
saying, OK, let`s talk about the budget.

PETHOKOUKIS: Yes, I think that`s exactly what`s going to happen. So,
then they`ll have their budget negotiations, which aren`t going to go
anywhere, because there`s still huge disagreement --

(CROSSTALK)

HAYES: That`s right, because there`s the same intractable problems
you have with the super committee, the same intractable problems that
couldn`t be solved to save the nation from sequestration, they`re still
there. None of that has changed by what`s happened here.

What has changed, though, I`d like to get your thought on this, you`re
someone who covers Wall Street, covers financial markets, thinks and writes
about, what kind of pressure do you think was brought to bear on the House
Republican leadership in the last 48 hours as more and more of their
members started saying some truly daft and daffy things about the debt
ceiling?

PETHOKOUKIS: You know what, you know, during the whole TARP debate
back in 2008, Wall Street kept calling Hank Paulson with the exact same
message, this is a catastrophe, you need to do something. The exact same
message that`s coming from Wall Street this time around -- this is a
catastrophe, you have to do something.

And the interviews over the weekend, with some Republican congressmen
who said, listen, it`s not that big a deal. Listen, the debt default would
actually bring stability. Well, today, decisively, Wall Street rejected
that argument. Because when it looked like they were going to avoid a debt
limit problem, the market went up 300 points.

HAYES: Do you think there`s a change in the shift of the balance of
power here, between, you know, for lack of a better word, the Wall Street
wing of the party and the kind of Ted Cruz, animated Tea Party caucus in
the House?

PETHOKOUKIS: Well, listen, I think the fact is that Wall Street has
really had the facts on their side.

HAYES: That always helps in an argument. Yes.

PETHOKOUKIS: It really does. That the consequences, I know you`ve
been highlighting some of the pain the shutdown has caused, but the
consequences from a debt default would be far worse and they would be
global. So that is a very powerful argument.

HAYES: Of course, the problem from a messaging standpoint now that to
do this 180 and say, OK, let`s get the debt ceiling out of our way and
let`s keep t government shutdown, is the point Ryan Grim made, and it`s a
point we`re going to be making throughout the show, yes, I agree, I do not
want us to reach the debt ceiling, it would be possibly catastrophic. We
don`t know. We`ve never done it before.

But what it looks like is you say, OK, when Wall Street calls and
says, don`t do this, you answer the phone and you don`t do it. Meanwhile,
you`ve got the parks shut down, people kicked off WIC, it`s not a very good
image to put forth to the GOP.

PETHOKOUKIS: I think you saw that in the polls. And one thing
Representative Jenkins said after she came out of that meeting was, we know
there`s a lot of pain. They`re hearing it from their constituents. I know
it`s not the entire government, it`s part of the government, but the
Republican congressmen are getting a lot of grief back home about it.

HAYES: Yes.

James Pethokoukis from the American Enterprise Institute -- thanks a
lot.

PETHOKOUKIS: Thanks.

HAYES: Coming up --

(BEGIN VIDEO CLIP)

REP. STEPHEN FINCHER (R), TENNESSEE: A special place with me, being
connected so heavy in ag, steel farming some. When I go home, I don`t get
to do a lot of physical labor, but I`m still around and many, many friends
and relative who is still farm. And it does have a special place.

(END VIDEO CLIP)

HAYES: That was Congressman Stephen Fincher, Republican from
Tennessee. And what he doesn`t say there is even when he`s not farming,
the government is paying him lots of money to do it. That`s helped earn
him a place in our new special ALL IN feature, "These are the people who
are running our country."

You do not want to miss this one. Stay with us.

(COMMERCIAL BREAK)

HAYES: You know by now we love hearing from you on Facebook and
Twitter. For tonight`s question, I want to ask you to play armchair
psychologist, which is always fun. What piece of advice would you give to
House Speaker John Boehner? Tweet your answers to @allinwithchris or post
at Facebook.com/allinwithchris. I`ll share a couple after the show.

So, stay tuned. We`ll be right back.

(COMMERCIAL BREAK)

HAYES: Speaker John Boehner may feel like he`s up against the wall
every day, but he is at least getting a paycheck. There are nearly 500,000
people who are not. They are on day ten.

And the latest Republican offer seems to assume that those people will
be furloughed for at least another six weeks. Think about what would
happen to your household if you went the next six weeks without a paycheck.
That`s not to mention the toll this shutdown continues to take on the thing
we often refer to simply as the government.

For instance, the Nuclear Regulatory Commission has now temporarily
closed, due to the government shutdown, 3,900 employees furloughed, on-site
inspectors, and a small emergency response staff remain on duty. According
to the NRC chairman, guess that`s reassuring.

Meanwhile, the furlough-challenged USDA is investigating a California-
based poultry producer, because in three of its four plants, there is
evidence of salmonella, this after a recent salmonella outbreak. Hope the
shutdown doesn`t hamper that investigation.

There are also, by the way, private sector workers temporarily out of
work, because their employers relay on government contracts, their numbers
could easily reach the thousands and there is no guarantee that they will
receive back pay.

Joining me now is LaShante Austin, who works at the Statue of Liberty,
Larry Anderson from the Service Employees International Union which
represents workers at the statue of liberty.

And LaShante, you`re a furloughed worker, if I`m not mistaken, right?

LASHANTE AUSTIN, WORKS AT THE STATUE OF LIBERTY: Yes, I am.

HAYES: OK, you`re a single mom. What do you at the Statue of
Liberty?

AUSTIN: I do security. We screen all the visitors going into the
Statue of Liberty.

HAYES: So, you`ve been working there for a while, and my
understanding is you guys got whacked by Sandy. There was a long period of
time you were out of work because of the storm.

AUSTIN: Yes, we were out of work for nine months. All of the
equipment and everything got destroyed.

HAYES: So when you were out of work, were you getting a paycheck,
were you on unemployment?

AUSTIN: I was on unemployment, but it, you know, it wasn`t enough to
pay all of the bills. So we were behind back then and then here comes
July, and we`re out of work again. I mean, went back in July --

HAYES: You came back in July, and you get a few months under your
belt, getting your paycheck, doing your job, screening visitors, people are
coming, and now this.

AUSTIN: Now this, yes. Yes.

HAYES: What does this mean for your family? You`re going to miss a
paycheck, another one, three, four?

AUSTIN: Well, I`m not going to be able to pay for bread, got to put
food on the table. I can`t tell the bill collectors, you know, sorry, the
government is shutdown, I can`t pay you, you know? They have a job to do.
They`ve got to collect their money. And you know, it gets hard.

HAYES: So what are you going to do about the rent?

AUSTIN: At this point, I`ve applied for unemployment. I`m not sure
if I`m going to get that money. So I really don`t know.

HAYES: How long can you take this?

AUSTIN: I really don`t know. It`s -- it`s hard. It gets stressful.
You really don`t know wt`s going to happen.

HAYES: How do you feel about congress right now?

AUSTIN: I just wish they`d come to an agreement so that we can all
move on and get pack to work.

HAYES: You represent a bunch of workers that are in LaShante`s
situation. People have an image of government workers, that they`re sort
of, you know, they`re somehow vultures on the taxpayer, that they`re making
lots of money, they`re pulling down paychecks, they`re pushing papers
around. What do the workers you represent, what are the kinds of work
they`re doing? And what are their economic conditions?

LARRY ANDERSON, SERVICE EMPLOYEES INTL. UNION : Our local represents
largely janitors, office cleaners, security officers, food service workers,
apartment house workers. We have nearly a thousand members who work
cleaning or securing federal facilities, like the National Archives, the
Department of Labor, like LaShante`s site.

These folks can make $14, $15 n hour, $19 an hour, or less. It
depends on the location. Folks working hard, doing the basic work that
keeps the offices and the government running and people who cannot, like
LaShante said, get by without getting a paycheck. People are struggling to
make it even at those wages, week to week, and we really need the
Republicans to wake up and do their job, like LaShante has been doing her
job, to people can get to work.

HAYES: Republicans turn around and they say, look, we in the House,
we passed a bill to open up the national parks, Head Start, WIC, whatever
you want. We open up these small parts of government that are hurting
people. We`re not heartless. What do you say to that?

ANDERSON: I say we have a Congress, we have a constitutional system
that functions. There was obligations incurred. They need to meet their
obligations, they need to step up, they need to do their job, they need to
stop walking on regular people who are suffering because they are playing
games in Washington for their own political, tactical reasons.

This is America. We don`t treat people that way. They need to step
up and do the right thing.

HAYES: What are you telling your friends and family about this
situation? How do you explain the fact that you are now not working?

AUSTIN: You can`t really explain it. You know, because we`re regular
people. You know, we live day to day, paycheck to paycheck.

So, it gets hard. You can`t really explain that, you know, I can`t do
this, because I don`t have money to go out or --

HAYES: You`re not the only one who can`t explain this. Basically no
one can explain why the heck the government is shutdown right now.

LaShante Austin and Larry Anderson, thank you both for your time. I
really appreciate it.

AUSTIN: Thank you.

ANDERSON: Thank you.

HAYES: We`ll be right back with #click3.

(COMMERCIAL BREAK)

HAYES: Coming up, as promised -- tonight, we`ll present another
chapter in our ongoing saga, "These are the people who are running the
country," where we go in-depth on the members of Congress who are holding
the government hostage until they get their way about whatever it is
they`ve decided they want today.

But, first, I want to share the three awesomest things on the Internet
today.

We begin with the overindulgent food flight of fancy, comedian Patton
Oswald, a #click3 favorite, often has fun at the expense of our collective
appetites, notably in a bit about the Black Angus Steakhouse, where he
remembers a ridiculously over the top menu.

(BEGIN VIDEO CLIP)

PATTON OSWALD, COMEDIAN: At Black Angus, we`ll start you off with our
appetizer platter, featuring five jumbo deep-fried gulf shrimp, served on a
disc of salted butter, with 15 of our potato bacon bombs and a red bowl of
pork cracklings with our cheese and butter dipping sauce.

(END VIDEO CLIP)

HAYES: And there it is, every ingredient in Oswald`s bit brought to
life by Eric James (ph) and Blumenstein who made every menu item in
Oswald`s routine, including the bacon and cheese soup with five heads of
iceberg lettuce, as well as the bottomless trough of fried dough. But this
one was the master stroke.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MAN: Because then we`ll bring out our 55-ounce he-man
steak slab, served with a deep-fried pumpkin stuffed with buttered scallops
and 53 of our potato bacon balls.

(END VIDEO CLIP)

HAYES: And there was this one, labeled the gravy pipe in considering
this was a bachelor party, we don`t even want to know what this was used
for. The second awesomest thing in the Internet today, a change-up for
face swaps. You know what face swaps are. Two faces, each one get swaps,
become a staple of the viral culture in which we live. So much so that
anyone with even basic photo shop skills can do a pretty good face swap.
Sort of lost the spark. And that`s why it was refreshing. They`ll bring
us 40 face swaps that don`t even make sense. And yes, these are some truly
bizarre mind-bending face swaps that turn the genera in on itself, like
this guy with his dog, normally (INAUDIBLE) nope, this photo shop did a
full shirt swap as well.

You`re treated to a surreal world of things that don`t belong in the
place. And sometimes just random objects replacing people`s smiles. So
whoever the twisted photo shoppers were, who made these face swaps, we`re
glad they`ve breathed new life into a time waster we`ve always loved. And
the third awesomest thing on the Internet today, there`s nothing like the
honesty of a toddler, I can tell you firsthand. A red-it user posted a
YouTube video of a parent making a covert recording of potty training,
three-year-old. The result is Internet gold.

(BEGIN VIDEO CLIP)

UNIDENTIFIED BOY: Holy! That pro will overflow the toilet. I ate so
much food. That pro will overflow the toilet. I don`t even know why I ate
that much food. I will not eat that much food again. Ugh!

(END VIDEO CLIP)

HAYES: You can stop the recording there as the little tyke begins
with the itinerary of what he ate. Any parent can probably relate to this
moment. But we should all be happy young people of the world will gain an
understanding of their dietary limits. And you can help keep this guy away
from Black Angus. You can find all the links for tonight`s click three on
our website, all in with Chris.com. We`ll be right back.

(COMMERCIAL BREAK)

HAYES: As we promised you we would every night of the shutdown, we
are back with another installment of our new "All In" feature, where we
take a closer look at the very small group of men and women in Congress who
have shutdown the government. Now, after last night`s installment, I said
this. Tune in next time when we take a look at California Congressman Doug
LaMalfa, who received millions of dollars in farm subsidies while
supporting billions of dollars in cuts to food stamp benefits.

Well, after little digging around today, we decided to take a look at
another congressman who done the exact same thing, and is arguably even
more hypocritical. A man who made national Republicans downright getting
when he improbably beat 22-year democratic incumbent John Tanner in 2010.
Ladies and gentlemen, in tonight`s installment of these are the people who
are running the country, I bring you republican Stephen Fincher,
congressman from Tennessee`s eighth district.

(BEGIN VIDEOTAPE)

REP. STEPHEN FINCHER (R), TENNESSEE: Hi, I`m Congressman Stephen
Fincher from Frog Jump, Tennessee.

HAYES (voice-over): Frog Jump, Tennessee, a tiny town about 75 miles
north of Memphis that nurtured the views of Steve Fincher, a man who spent
his years before Congress far away from politics. He was a farmer, he was
part of a local gospel circuit, singing with the family foursome.

And he was on the government dole. Since 1995, Fincher and his wife
have received federal government payments of almost $3.5 million for their
farm, but the taxpayer dollars flowing into the Fincher household did not
stop him from mounting a David and Goliath battle against the scourge of
big government.

FINCHER: We are forgetting that the administration that we have in
office now thinks that the federal government knows best and they`re the
answer. They`re not the answer.

HAYES: And he made good on that promise by voting to cut $40 billion
from the food stamp program. And to justify it, he cited scripture.

FINCHER: I looked at second the Thessalonians 3:10, for even when we
are with you, we gave you this rule, the one who is unwilling to work shall
not eat.

HAYES: This was once part of the same bill in which Fincher voted for
farm subsidies, he benefited from as a sitting member of Congress. Last
year alone, he pocketed more than $70,000 from farm subsidies, which is
nearly double his state`s median household income. In fact, his income
last year was $174,000, and that`s before the subsidies. In 2012, he won
re-election nearly 70 percent of the vote. And the reason why the
congressman justified his vote against food stamps --

FINCHER: We have to remember, there`s not a big printing press in
Washington that just continually prints money over and over and over.

HAYES: There is, in fact, just that. Located on C Street and 14th
Street, a short walk from the capitol. Unlike farm subsidies, Congressman
Fincher presumably has no use for ObamaCare subsidies, which is why it was
no surprise that when the letter was circulated this summer, demanding that
John Boehner use the threat of a government shutdown to defund ObamaCare,
he lent his support as a co-sponsor. That`s how he became one of the
people who is running the country.

(END VIDEOTAPE)

HAYES: Tune in tomorrow night for our next installment, and believe
me, each one of them is a very special snowflake.

Coming up, one of the most pathetic records of dysfunction in this
country`s history is about to be broken. I`ll tell you what it is, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BILL CLINTON (D), FORMER U.S. PRESIDENT: Announcement of the plan
allowed the president to sign legislation reopening the entire federal
government with funding for all agencies.

This plan illustrates what we have been saying all along. That you
can balance the budget in seven years, and protect Medicare, Medicaid,
education, and the environment and provide tax relief to working families.

(END VIDEO CLIP)

HAYES: That was Bill Clinton, officially announcing the federal
government was headed back to work, after a shutdown lasting a record
setting 21 days. That sad record is now in peril, as Republicans seem to
be pursuing a strategy of essentially indefinite shutdown. Their latest
plan would raise the debt ceiling for six weeks, while the country
continues to suffer the mounting consequences of having a massive chunk of
their government rendered inoperable. This is really quite something, from
the party that cast itself as champion of American exceptionalism. The one
whose 2012 presidential nominee wrote a book, arguing the case for American
greatness.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: I believe in America.
I believe in the freedom and opportunity, and the principles of our
constitution that have led us to become the greatest nation in the history
of the earth.

(END VIDEO CLIP)

HAYES: Today`s GOP`s motto is less we`re number one, and more,
embrace the suck. You can see the roots of this in the 2012 campaign, when
Mitt Romney dismissed dangerous levels of income inequity in this country,
by insisting, it`s only fine to talk about those things in quiet rooms. It
spread from the GOP the entire D.C. to political culture, which is
seemingly accustomed itself to unacceptably and abnormally high levels of
an employment. A country with more than 11 million people out of work and
very little coming out of Washington designed to get them back on the job.

And you can see it growing throughout this year, when the GOP
successfully convincing Americans to make peace with sequestration, a cut
to government spending that was originally designed to be so painful to
Americans that neither party would ever accept it. Now, on top of endemic
inequality, joblessness and austerity, the GOP is pitching the country on
the idea of getting accustomed to the federal government just being
shutdown indefinitely.

Instead of dealing with the most pressing problems this country faces,
America`s lawmakers are simply trying to figure out how to authorize
funding for meat inspectors and cancer trials. This is the normalization
of diminished expectations. And it is being led by the party that has long
claimed ownership of the idea of American greatness. So how do they
respond when challenged on their tactics?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MAN: We`re not French.

(END VIDEO CLIP)

HAYES: At least the French can keep the lights on.

Joining me now is Ben Domenech, publisher of The Federalist, the web
magazine, senior fellow of the Heartland Institute for conservative think
tank. Lynn Parramore, senior editor of AlterNet and MSNBC contributor
James Peterson, director at Africana Studies at Lehigh University, founder
of Hip Hop Scholars. Great to have you all here.

We have to start with this polling, because I think it connects
precisely to this kind of bizarre age of diminished expectations that we
live in, and then I think the GOP, from a strictly, like messaging
standpoint, is doing a terrible job on. I mean, here`s the American views
of the parties if the new NBC poll. Negative, it`s 40 percent for the
Democrats, 39 percent are positive, essentially split. Republican Party
right now is at 53 percent negative and 23 percent positive, that`s 30
points underwater. Ben, you`ve written a lot about kind of reforming the
party. What -- I cannot tell. What is this party`s message to the middle
class right now in this moment?

BEN DOMENECH, THE HEARTLAND INSTITUTE: Well, I don`t think that the
party could answer that question for you themselves. You know, partially
from the fact that they have essentially accepted an approach that tried to
get into this normal Washington game of trading, you know, austerity on one
hand for benefits and changes to law on the other. They`re not actually
presenting a holistic sort of approach that would speak to the needs of the
middle class and that would also speak to the sort of rising inequality
that you`re talking about. And frankly, you know, in the context of the
sequester and the other things that you mentioned, you know, they look very
much like a party that is seeking a point of leverage that doesn`t exist,
essentially.

HAYES: What do you mean by that?

DOMENECH: I think that essentially, you know, you had the leadership
advancing the idea that they should fight on the debt ceiling. You had
conservatives advancing the idea that they should fight on government
shutdown. Neither of these points are actually strong in terms of
leveraging anything going forward, and I think that you compare it back to
sort of the points where it was leveraged effectively under Reagan and
under H.W. Bush, and in both of those cases, there was a committed
leadership that had a message going forward that they were strongly behind.
They`ve been all over the place.

HAYES: And yet, and amazingly, you know, the idea that we are in this
horrible jobs crisis in the country continue to be, which if you were Karl
Rove, if you were counseling the Republicans on what their best political
tactic is, is that this recovery is not producing gains for ordinary
working people, which it should, and we never talk about that.

LYNN PARRAMORE, SENIOR EDITOR, ALTERNET: That`s right. And you know,
I like to call this the new abnormal. Because, really, what is normal
about so many -- about talking about cutting government spending when we
have so many unused resources in this country, when we have so many people
out of work. What is normal about a fallen service member`s family not
being able to get death benefits, about the CDC not being able to respond
to a salmonella outbreak. These things might be normal in I don`t know,
Guatemala, but not in the United States.

HAYES: We will going to get angry in rightly angry e-mails from
Guatemala, we are and will deserve it.

(LAUGHTER)

I want to talk about how we rebel against the kind of normalization of
this. Because I do think it`s very dangerous. I think the sequestration
particularly has sent this really awkward present. We`ll get to that right
after this break.

(COMMERCIAL BREAK)

HAYES: Earlier in the show we asked you what bit of advice you would
give House Speaker John Boehner. We got a lot of answers posted to our
Facebook and twitter pages, like, Fitsuh Simmons from twitter, advises the
speaker to just let go and have a good old cry. Marc Cook from Facebook
asked, "Why is you keeping your job more important than me keeping mine?"
Andy J. Holland from Facebook who says, "You need more fiber in your diet."
Thanks, we`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MAN: And one of the reasons for that, Martha, I think,
is that the shutdown has turned out to be, you know, much less about --
much less to do about -- than people thought. I mean, it`s about, by one
calculation, it`s only about 17 percent closed. And so you see some
conspicuous signs of it in national parks and so on, which you can tell the
administration is trying as hard as it can, to make as difficult as
possible, but it`s just not that big a deal, as it turns out.

(END VIDEO CLIP)

HAYES: All right. NBC poll, have you or your family been affected by
the shutdown? Yes, have been affected, 31 percent. No, have not been
affected, 68 percent. We`re back.

And here with us, Ben Domenech, Lynn Parramore, James. And James, I
think one of the things that`s fascinating about this poll is the amount of
people that say they are being affected because what happened in
sequestration, when we kind of ran this experiment the first time, was
there was a lot of coverage of the effects of it and we covered and it
affected people, it affected researchers and it affected people in head
start. It affected people. But it was sort of out of sight, out of mind.
It did not move public opinion. That is not the case here.

JAMES PETERSON, MSNBC CONTRIBUTOR: It`s not. And I think what we
have to kind of acknowledge here, and I believe that that our political
spectrum has been moving steadily to the right. The kinds of things that I
think as a public we`re willing to tolerate now are really, really
indicative of that. Like, we talk about austerity, but I`m not sure if
people understand what that means. Some of the sequestration cuts Chris
also will over time, you know, they will take more effect. Especially when
we move into next year.

Same thing with the shutdown. The longer we stay shut down, the more
effect and more impact it will have. And at the end of the day, you know,
I don`t know if there`s any rhyme or reason on the other side, right? I
think you`re searching for like a rationale to it or some kind of like
reasoning behind what they`re doing. And the reason why there isn`t that
is because it`s a fragmented party. And the special interests are
controlling certain parts of it. And they`re, essentially, sort of
entitled to the votes and to the policies of particular --

DOMENECH: I think the rhyme and reason is that what you`re seeing as
a party that has lost the ability on the part of elites, of respected wise
men, of sort of elected officials and of traditional groups to sort of be a
moderating force within the party, and to, at the same time, you`ve had the
growth of institutions that can outweigh them, even surpass them --

PETERSON: You mean money?

DOMENECH: Essentially, Ted Cruz doesn`t care what people who are sort
of outside of the -- who are in the typical sort of republican hierarchy
think of him, because he has a massive following of people who will give
him small dollar donations that will offset all of it. And one of the
things that I think that that speaks to, is you talk about this being
abnormal, I think this is going to become the new normal, because of the
degree of distrust that we see --

PETERSON: That, to me, is unfortunate.

HAYES: And this is the nasty part of this whole thing. Is that I
think at the end of the day, in the short-term, you can say the Democratic
Party from a political perspective is winning this battle. I think the
polling shows us, the president is winning this battle. I think anytime,
frankly, you have a guy who gets elected by a few hundred thousand voters
which is John Boehner, and a guy who got, you know, whatever, 55 million
people to vote for him, like the guy who got 55 million people to vote for
him is going to win.

DOMENECH: At least in the polls. At least in the polls.

HAYES: Yes. Barack Obama is a better politician and a more appealing
person than --

DOMENECH: There`s also a century of politics that has taught the
American people that when government shuts down, Republicans hate
government and Liberals love government. And so, you end up in the
situation where the natural blames is always going to go towards the party
that is hating government, being anti --

(TALKING OVER EACH OTHER)

HAYES: Right. And I think, that`s why, let me just say this. I
think that`s why it was such a preposterous farce for them to try to pull
money and start passing this mini crisis, where we want to fund the WIC, we
want to fund head start, it`s like you have not accrued the reputational
capital to be able to pull that -- oh, that`s right, that`s right, of
course, the Tea Party caucus loves WIC. We all know that. Clearly that`s
what they`re going to go to the barricades --

PETERSON: This is also people disconnecting from politics in certain
ways. Right? Because how can you not be cynical when a few days ago,
people were saying, no, you can`t default on the debt, there`s no way, it`s
not possible. Now we`re sort of in this chicken race with the president to
try to figure out how we can resolve the problem. So, obviously --

PARRAMORE: And the bottom line is really the economy. I think people
are figuring out this is not good for the economy. Although I said to
myself this afternoon, you know, some of these Tea Partiers don`t even
understand how the female reproductive system works, so asking them to
understand the global economy maybe is too much. But it is the economy.
You don`t pull back on government investment at a time when the economy`s
very weak.

DOMENECH: You talked about the new normal, don`t you think that
there`s an acceptance on the American people`s part of this bad economy,
that they`re sort of coming around to the idea that there`s nothing better
out there.

HAYES: Let me just hang a lantern on that. That is a profound point
and it plays in all sorts of bizarre ways. Because it always struck me in
the 2012 election that Mitt Romney was doing best when he was critiquing
the nature of the Obama recovery. Even if you don`t think Barack Obama is
actually responsible for it, his best message was always, there`s a lot of
people out of work, a lot of people long-term unemployed, wages aren`t
rising, but he could never convincingly make that case or stick with it.

DOMENECH: He had no policy answer.

PETERSON: At the same time, Chris, we haven`t been able to make the
case that this government has been shedding jobs since the first time since
we`ve had a recovery and a recession if that`s been the case.

HAYES: Yes, right, 600,000 down, by the way.

PETERSON: The new normal is that Americans are disconnected from the
political system because the Congress is not representative of Americans.

PARRAMORE: And yes, and let`s be frank here. In the 2010 elections,
a lot of people were frustrated the recovery hasn`t come to their
neighborhood yet and they thought, what has government really done for me,
and the Democrats do hold some responsibility for that. You know, we`re
reaping the rewards --

PETERSON: I believe that the Democrats were more representative of
the coalition that re-elected President Obama, which is more progressive on
almost every issue in the Democratic Party, then yes, you would have better
levels of engagement in terms of politics.

DOMENECH: I feel like Democrats are offering a solution that says,
look, we don`t necessarily know how to make this recovery better, so we`ll
going to try to make your life suck less. But Republicans on the other
side are saying, this recovery sucks, but we don`t actually have a policy -
-

PETERSON: We know how to make it better. Democrats know how to make
it better, there`s just too much obstruction and too much disconnection
between the government and the American people.

PARRAMORE: But at the heart of this is, let`s lower taxes for rich
people. I mean --

HAYES: That is part of what`s going to be the fight that`s getting
set up.

PETERSON: Yes.

HAYES: But here`s the thing that particularly was perverse today.

PETERSON: Which is absurd by the way.

HAYES: Here`s what perverse today. You had the polling, 75 percent
saying wrong track, which Chuck Todd pointed out I thought really astutely
horrible today. He said, that`s the highest number we`ve seen since
Lehman. And what we`re seeing is basically a political great recession.

PARRAMORE: Yes.

HAYES: Like we are in this --

DOMENECH: They were the most unpopular Congress in 2011, and the most
unpopular Congress in 2012, and they`re the most unpopular Congress today.
You can only go from 14 to 12 to 10 in terms of approval.

PETERSON: They`re unrepresented --

HAYES: Right. But at the same time, here`s what perverse, here`s
what`s really perverse. The fight switched from the debt ceiling to the cr
today, because the financial leap called John Boehner and said, do not do
this, and here, take a look at the stock market rally. You have this huge
rally --

PETERSON: Just on the hope.

HAYES: On the hope that it would happen. And so, here`s what
happened. Is Lashante came into our studio and there`s no one is
delivering her from this. What ended up happening was, when push came to
shove, Wall Street got John Boehner to go up there and be like, I`m not
going to do this.

PETERSON: And that`s the problem. The medical device tax.

HAYES: Yes! You had a great tweet on this. You said, we need a more
populist party which is in touch with the needs of the middle class. OK,
here`s chained CPI, the benefit cut and the medical device tax. That`s
like everything. And that`s why, to get to the final point I was thinking
there, in the long-term, whatever short-term gains there are for the
Democrats here tonight, in the long-term, what this does is it erodes
people`s sense of any kind of representative institution.

(TALKING OVER EACH OTHER)

PARRAMORE: Which is the strategy, right? It`s a strategy of
attrition.

HAYES: Cynicism and disgust.

(TALKING OVER EACH OTHER)

PETERSON: And ultimately it`s going to play as a vindication of model
partisan approaches to policy. That`s the only point where you actually
see significant policy.

Ben Domenech from the Heartland Institute, Lynn Parramore from
AlterNet, MSNBC contributor James Peterson. Thank you very much. That is
ALL IN for this evening. "THE RACHEL MADDOW SHOW" starts right now on the
second.

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

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