updated 10/16/2013 12:32:27 PM ET 2013-10-16T16:32:27

THE ED SHOW
October 15, 2013
Guest: Chris Van Hollen, Sherrod Brown, Robert Menendez, Connie Schultz,
EJ Dionne, Joseph Crowley

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: To light a match and throw it and the gasoline
that`s already all over the place.

UNIDENTIFIED MALE: I love the smell of (inaudible) in the morning.

UNIDENTIFIED FEMALE: So why are they doing this to the American
people?

ED SCHULTZ, THE ED SHOW HOST: They don`t want anything to work with
the president staying connected to it.

UNIDENTIFIED MALE: Our top political priority is should be to deny
president Obama a second term.

UNIDENTIFIED MALE: You lose. Good day, sir?

REP. JOHN BOEHNER, (R) OHIO: There are a lot of opinions about what
direction to go.

UNIDENTIFIED FEMALE: Wasting the public`s time. And in this case,
time is money.

BOEHNER: We`re talking with our members on both sides of the isle.

UNIDENTIFIED MALE: Hell, man you can`t fight in here this isn`t a war
room (ph).

UNIDENTIFIED MALE: That really does compromise Speaker Boehner`s
leadership.

UNIDENTIFIED FEMALE: Sabotaging a good (inaudible) coming out of the
Senate .

UNIDENTIFIED MALE: And after all these mess is over, do we really
want to compromise John Boehner`s leader of the House? I don`t think so.

(END OF VIDEO CLIP)

SCHULTZ: My favorite play by play guy over the years has always been
Keith Jackson. He probably called it like this, "We got us a Tea party
showdown tonight." That`s right folks. In this House there actually was
some progress today. We got some breaking new off the top. House
Republicans are putting forward a new version of a bill to keep the
government open and to avoid default which I still think is a very real
possibility. I think we`re going there. I hope not and I`ll tell you why
later.

The virtue (ph) released late this afternoon would keep the government
funded through December 15th and extend the debt limit to February 7.
They`re playing around with the dates a little bit. This plan also
eliminates the special ObamaCare protections for labor unions in the senate
agreement. Well, the labor boys aren`t going to like that. It also
includes the Vitter Amendment. This amendment takes away the government
employer subsidy to help purchase insurance on the ObamaCare exchanges for
Congress, the President, Cabinet Members, and Hill Staffers. John
Boehner`s office said, "A vote is expected on all of this tonight."
Interesting, that last part is what Boehner was for a month ago now he`s
against it.

You know, this is a far cry from their earlier bill this morning. It
stopped the president and the treasury from using extraordinary measures to
raise the debt limit. They`ll do anything to go after the president,
wouldn`t they? It also delayed the Medical Device Tax for two years and
the new bill does not strip the Medical Device Tax. This is a big win for
the president if it goes through.

There is no doubt that this was a day of capitulation for republicans.
Will the Tea Partier revolt tonight? Stay tuned.

Earlier -- in their earlier bill, it received a storm of criticism
from democrats this morning and there was no way that it was going to pass
the senate. After republicans released the first version of their bill
today, Senate Majority Leader Harry Reid warned credit agencies were eyeing
another possible downgrade.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, (D) NEVADA: The debt is here. The deadline is
looming. Great agencies are talking about downgrading us as early as
tonight, again.

(END VIDEO CLIP)

SCHULTZ: That is I think the curve ball that was thrown to Boehner
and the republicans. That took them to the very point. Holy smokes, this
might be the real deal. So there was capitulation on a number of different
measures. And of course the backdrop this public opinion is really
damaging the Republican Party. But there was such brouhaha over the
weekend about veterans. I had and interesting phone call to my radio show
today. A veteran, 57 years old said, "This is the consequences of a
default.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Hey, Ed. I`m a navy veteran and no coward, but I
am truly frightened to the bone right now. The Republican recession of
2008 cost me my 401K. I worked all my life, done the right things, put
money away, the only asset I have left is my house and that`s paid for.
But this -- if we go into default I lose $100,000 in value on my house,
that day. Interest rates for mortgages are going to go up a minimum of
four points. And when that happens, the prices of houses go down. That`s
the only thing I got left.

I`m 57-year-old man. I don`t have a lot of time to rebuild my nest
egg. And these guys are just taking it all away from me and they`re taking
it away on a daily basis. And I`m just thinking at this point, man, you
know, when you take away everything everybody`s got to lose, the
consequences of that to the guys who take it away are not good, they`re
really bad.

(END AUDIO CLIP)

SCHULTZ: Is that the kind of phone call that maybe some of the Tea
Partiers have been taking to their offices in recent days. Have they been
shaking to their bones that maybe this would be the beginning of the end
for them as a party? I don`t know. But I do know this; tonight it`s going
to be a very interesting vote. Will the democrats come onboard and give
Boehner a yes vote on this? Because there are still supervisions in there
that are a little bit shaking, but, for the good of the country, will they
go along and how tough will the Tea Partiers play it tonight? Going to be
interesting.

Get your cellphones out. I want to know what you think. Tonight`s
question, do you trust republicans to keep us from the country`s first ever
default? Text A for Yes, text B for No to 67622. You can always go to our
blog at ed.msnbc.com. We`ll bring you the results later on in this show.

Now, late this afternoon, the president brought in leadership on the
democratic side from the senate and from the house. And I thought that
this was somewhat of a no ransom moment. This has been very fluid. It`s
almost like the sausage-making season. We think it`s going to taste good
but we`re not sure. In that meeting late this afternoon was Congressman
Chris Van Hollen of Maryland who is -- who met with President Obama and
house democrats. Congressman, great to have you with us tonight.

REP. CHRIS VAN HOLLEN (D) MARYLAND: Good to be with you Ed as always.

SCHULTZ: Where are we? What was this meeting like was with the
president? Was this a no ransom moment? Was this a whole dealigned
moment? Where are we congressman?

VAN HOLLEN: Well, it`s a very productive moment. The president
indicated that he thought they`d been making progress in the senate on a
bipartisan basis that that effort had been, you know, coming together.
What we`ve seen on the house side and our clock is the democratic caucus in
the house is not fooled at all, is a deliberate effort once again by the
reckless Tea Party faction to try to shut down the government and defaults
on our debt.

That`s exactly what`s going on here. It`s a deliberate effort to
undermine and torpedo the progress in the senate because you continue to
have members of the house caucus who think that it`s a good idea if the
United States defaults on its debt despite the terrible consequences you
just talked about. And I thought that was a really important case to show
because it shows the -- this is an impact on millions of Americans. We`re
already beginning to feel the damage. We need to stop that now. Pass a
bill to keep open the government, pay our bills.

SCHULTZ: OK. So, the democrats tonight are here. Open up the
government, pay the bills, set a date, get a conference committee
appointed, and let`s get to work on a budget. That basically is where the
democrats are right now. You`d vote for that.

VAN HOLLEN: Well, that`s exactly right Ed.

SCHULTZ: OK.

VAN HOLLEN: As you well know, exactly, that`s where we are.

SCHULTZ: OK. Now, what is in there that you don`t like from what you
know the republican proposal on the house right now?

VAN HOLLEN: Well, there are number of things but the overriding issue
here Ed is a continued effort by House Republicans to try to extract
demands by threatening that United States will not pay its bills. We`ve
been very clear that you cannot go down that road of political and economic
blackmail, because if you start that process, every time the United States
faces that issue of paying its bills on time, somebody is going to try to
attach something on the way (ph).

SCHULTZ: So what guarantee that you have ...

VAN HOLLEN: Specifically.

SCHULTZ: . do you have congressman that`s not going to happen again?
What guarantee do you have it won`t happen again?

VAN HOLLEN: Well, I`ll tell you one thing that will guarantee that it
does happen again is if you feed the beast. In other words, if you start
adding these extraneous provisions now. So what we`re saying here in the
house Ed is stop it. You cannot bring down the full faith in credit of
United States by trying to attach these extraneous provisions. And if you
let it happen this time around, it will certainly -- they`ll certainly try
it again. Now, very specifically here in the house, their proposal would
take away from the secretary of treasury their ability to take what are
known as extraordinary measures in order to try and prevent a future
default.

So, the next time we come up against the debt ceiling, the republican
proposal would make it impossible for the secretary of treasury to take
those measures to prevent default. So .

SCHULTZ: That`s a nonstarter from the democrats?

VAN HOLLEN: Yeah. Well, anyone who is for that is for dramatically
increasing the risk that next time around, the United States defaults with
all the negative consequences on millions of Americans and on the entire
American and world economy. So, that is absolutely a nonstarter.

SCHULTZ: OK. This just in -- Fitch rating service has maintain its
triple A rating for the United States but places it on negative watch
siding the prolonged congressional negotiations over a hike to the
borrowing limit. This is getting very serious. This is exactly what Harry
Reid was talking about earlier today. Will that news -- is there any news
that will shake the Tea Party to reality?

VAN HOLLEN: Well, unfortunately Ed, we`ve been hearing from those Tea
Party Republicans over the last weeks and they`ve been very open about it.
They actually think going into default is a good idea and they have this
theory as you know that somehow it will be OK because United States will be
able to pay our debts to the Chinese government and to all the band
holders. Of course that would be at the expense of all the folks on social
security, all the folks who rely on Medicare, our troops in the field. So
republicans continue to push this notion that somehow it would be OK even
though it would be terrible not only for all those Americans but it would
immediately undermine the credit rate in United States .

SCHULTZ: Yeah.

VAN HOLLEN: . as you`re hearing, just in anticipation of that
possibility .

SCHULTZ: Sure.

VAN HOLLEN: . of going over the cliff. Imagine if we actually did.
So the damage is already being done. That should be very clear to people.

SCHULTZ: And so tonight, we can expect a very tough conversation
amongst democrats when it comes to the treasury and the power of the
president to take extraordinary measures. This is the big sticking point
at this hour for the democrats. That`s what I get from Chris Van Hollen,
correct?

VAN HOLLEN: Well, that`s right.

SCHULTZ: OK.

VAN HOLLEN: Our view is this is a prescription for default .

SCHULTZ: OK.

VAN HOLLEN: . and keeping the government shut.

SCHULTZ: OK. So quickly, what are the chances of Boehner bringing up
the senate bill if that passes?

VAN HOLLEN: Well, of course, that`s always been the question whether
the speaker will finally stand up to the Tea Party caucus and exert some
real leadership.

SCHULTZ: Yeah.

VAN HOLLEN: And at the end of the day, that`s what`s going to have to
happen in order to prevent the default because as we`ve been saying, there
are lot of members in his caucus who have said they want to see that
happen. So, he needs to stand up to them, make it very clear the dangers
for the country, and as I say, step up because so far, his sort of approach
has been feeding the beast thinking that, you know, maybe at some point,
they`ll be satisfied. All they get is hungrier and bigger.

SCHULTZ: OK. Thank you Congressman Chris Van Hollen. And Nancy
Pelosi, my thought I had that, I guess I don`t. Let`s bring in Senator
Sherrod Brown of Ohio. I appreciated congressman for joining us tonight.
Senator, what`s the latest out of the senate at this hour?

SEN. SHERROD BROWN, (D) OHIO: Well, when we woke up -- when America
woke up this morning they saw Harry Reid and Mitch McConnell, the leaders
of the democratic and republican caucus has conferences in the senate
coming together on an agreement and it looks they were very close to that
agreement. John Boehner then let it be known that he was unhappy with it
in those negotiations while they`re still in the works but it`s delayed at
a bit. We`re still hopeful that Senator McConnell and Senator Reid can
come together. We can vote on something tonight or tomorrow morning
getting to the house, but, ultimately, it rests (ph) with Speaker Boehner.
He`s got to decide, as Congressman Van Hollen pretty much said, he`s go to
decide to see the speaker of the far right wing of the Republican Party.

SCHULTZ: Yeah.

BROWN: One faction of one party in one house or he is a speaker the
United States of America.

SCHULTZ: OK. Mitch McConnell stalled today, can you trust the guy?
Here, all of a sudden, Boehner comes up with the proposal and then
McConnell did take a step back from all of this when he was working so good
with Harry Reid. Is McConnell still stalling and talk to three?

BROWN: Well, I don`t know if he stalling. I hope it`s only a hiccup.
It`s only (inaudible) of a delay when that clock is ticking on something so
very, very important to our economic future and our reputation as a nation.
I`m still hopeful that McConnell does the right thing here. I know he`s
faced with a difficulty tea primary -- tea party primary in Kentucky. We
know what that makes politicians do sometimes, how fearful some can be.
But I believe that in the end, McConnell will do the right thing, work this
out with Reid, senate to the house, and it`s up to John Boehner to show
some leadership.

SCHULTZ: OK. So, is it still 50-50 on default in your opinion?

BROWN: Yeah, I .

SCHULTZ: Where are we? I mean, you think Boehner is going to move to
protect the country`s credit? Nancy Pelosi says that she believes new
legislation put forth by house republicans, is speaker Boehner giving
republicans one last chance to resist which Pelosi says is unfortunate
because time is ticking, your reaction to that.

BROWN: Yeah. Leader (ph) Pelosi is right. I`ve been on the phone a
lot this week talking to business people in Ohio. Most of them are
republicans but leaders of various kinds of businesses from banks, they`re
running research institutions to entrepreneurs to all sorts of businesses
and they`re pretty scared but they`re beginning I think to put a lot of
pressure on John Boehner to do the right thing and he -- I mean, this is --
this maybe his speakership on the line.

SCHULTZ: OK.

BROWN: This is the country`s economy on the line and the country`s
reputation on the line.

SCHULTZ: It does -- Senator, doesn`t sound like whatever deal
McConnell and Reid come up with is going to be a problem for a yes vote
that will override the stupidity of Ted Cruz getting the way again then
what .

BROWN: I think if McConnell and Reid come up with something and I
think they`re very close they`ll get overwhelming support .

SCHULTZ: OK.

BROWN: . if not unanimous from democrats close to and a number of a
lot of republicans .

SCHULTZ: Yes.

BROWN: . so we`ll have an overwhelming vote in the Senate. And
Boehner has got to decide does he want to do the right thing or does he
want to keep playing games .

SCHULTZ: And so .

BROWN: . but Chris Van Hollen said a minute ago, some of them really
do -- they really do buy into this prioritization. You pay off some of the
Chinese bond owners in Wall Street and a few pitch (ph) in funds and you
made delay social security a little bit but we`ll through this. No. I
mean, this is a high risk terrible idea in lurching from manufacturing
crisis from one to another. It`s terrible for our country that`s why the
president and the senate and house democrats to stop (ph) together on this.

SCHULTZ: OK, Senator Sherrod Brown, great to have you with us
tonight. I appreciate your time. It`s going to be an eventful night. No
question about it. Thank you so much.

BROWN: Sure.

SCHULTZ: Remember to answer tonight`s question at the bottom of the
screen share your thoughts with us on Twitter. I think we`re going to
default. I think the Tea Partiers have still got Boehner by the jugular.
It takes character to break one of those.

We`ll have more on the breaking new from Capitol Hill, that`s coming
up next. Plus the GOP is sending in the clones, the Palin blueprint of a
candidate could be coming to your state.

(COMMERCIAL BREAK)

SCHULTZ: Time now for the Trenders in the social media world. This
is where you can find us, Facebook, Twitter, and of course on our blog at
ed.msnbc.com and this is where you can find me on the radio SiriusXM
Channel 127, noon to three. I think I`ve lost 10 pounds since that
picture.

All right, the Ed Show social media nation has decided and we are
reporting. Here are today`s Top Trenders voted on by you.

(BEGIN VIDEO CLIP)
SCHULTZ: The number three Trender, Personal Foul.

UNIDENTIFIED MALE: The NFL that represents the nation`s capital has
maintained its name. Ask yourself what the equivalent would be if directed
toward African Americans, Hispanics, Asians, it`s an insult, a slur.

SCHULTZ: Glenn Beck, you`re seeing red over the Redskins debate.

UNIDENTIFIED MALE: What about white? Yeah, I mean, can we at least
be thrown in as people of a race (ph)?

UNIDENTIFIED MALE: Bob Costas is trying to make us hate each other
even more. Where does that arrogance come from? That arrogance came from
manifest destiny, it came from the government.

UNIDENTIFIED MALE: (Inaudible).

UNIDENTIFIED MALE: The number two Trender, Pawn Stars

GOV. SARAH PALIN, ALASKA: We think it`s a (inaudible) that our
military is being used as political continent (ph), political game. So,
people are being used as pawn.

SCHULTZ: Palin coaches (ph) the Tea Party agenda at the World War II
Memorial.

PALIN: The Commander in Chief, the president today he could be here
today standing up and saying (ph), "Yes, we will carry down this
barricade." The shutdown priority reflects that lack of respect, really
they reflects a lack of valor coming from our Commander in Chief. And the
good guys are those who want their country back.

SCHULTZ: And today`s top Trender, Jersey Fresh.

UNIDENTIFIED MALE: Where is he from? Where does he live?

UNIDENTIFIED MALE: Lonegan went to a home, the Booker campaign says
their candidate has lived in for seven years. Well, Lonegan claimed that
it wasn`t Bookers home Lonegan based his charge on this just released video
produced by a prominent conservative conspiracy filmmaker.

SCHULTZ: The Garden State Tea Partier hopes to go from house senator
to a U.S. senator.

UNIDENTIFIED MALE: And I`m going to join those groups of concerns
that we (ph) can stand up for constitutional rights living in government
and against ObamaCare.

UNIDENTIFIED MALE: Lonegan is now failing (ph) Booker by just 10
points.

UNIDENTIFIED MALE: You know, he don`t know.

UNIDENTIFIED MALE: Reagan accept the (inaudible) government
republican take over of the U.S. senate in 2013.

(END VIDEO CLIP)

SCHULTZ: I`m joined tonight by Senator Robert Menendez of New Jersey,
a member of the Senate Finance Committee. Senator, lots to talk about
tonight, but first let`s start with New Jersey politics, I mean, if you
listen to the tape and see this man`s presentation you think that Steve
Lonegan is the Ted Cruz of the north. How dangerous is his thought process
for what we need to accomplish in this country?

SEN. ROBERT MENENDEZ, (D) NEW JERSEY: Well, we don`t need another
senator of that thinking. Look, I think Lonegan is running for Rush
Limbaugh`s job not the late Frank Senator -- Senator Lautenberg`s job. And
he is totally out of the mainstream of New Jersey thinking this is the
ultimate Tea Partier someone who doesn`t believe in the federal
government`s role and creating opportunity and education, in Medicare, and
all of those essential things that in America we`ve come to understand can
create opportunity for every citizens and help them fulfill their hopes and
dreams and aspirations.

SCHULTZ: Are you surprised that he has closed the gap on Cory Booker
to 10 points?

MENENDEZ: Well, I mean, you know, there are variety of polls out
there, many of them have higher double digits than most. The reality is
this is a very unique election in New Jersey history. I`ve been involved
in New Jersey a long time. We have a special election in the middle of the
week, we never had Wednesday election and a few weeks before all of the
state house raises including the governor`s raised (ph). So, this is a
very unique election. The bottom line is I`m sure Cory Booker is going to
win. He`s going to win by double digits.

SCHULTZ: Senator, you bring an interesting perspective to this
because you spent a number of years over on the house side. I think you`ve
got a good insight certainly of what is going on in this 11th hour before
we hit default. I mean, I think we`re headed for default. Why would I be
wrong in my thinking, your thoughts?

MENENDEZ: Well, Ed, I certainly hope not. And, as a member of not
only just the finance committee but the Senate Foreign Relations Chairman,
I can tell you globally this is rattling marketplaces across the globe.
Today, China put out an editorial, this is an example of why we have to de-
Americanize the world, you know, Mexico`s consequences of our neighbor to
the south a rattling based upon what we`re doing here. And this is true,
you know, across the corners of the globe.

And so, it`s almost unthinkable except that here 30 somewhat hours
before default you have republicans in the house playing with fire. We had
-- I`m shocked and stunned at the, you know, betrayal of what was going to
be a bipartisan deal here in the senate by Speaker Boehner. And, I see
that (inaudible) just put out a tweet that said vote against the proposal
he`s going to bring to the House floor which is probably never going to
pass in the Senate. So with 30 somewhat hours away, I can understand why
you feel we may default. I think it would be terrible for our country and
have real consequences to everyday people here in the United States.

SCHULTZ: So, you think the Tea Party is going to hold the line
tonight that they`re going to be enough radicals over there that will say
no to Boehner? Despite what the Senate does, there`s been some progress
over there and working in good faith but of course this afternoon, Mitch
McConnell said, "Hold on a second, Harry Reid. Let` see what John
Boehner`s got." Well, what he`s got is a day of capitulation but now
you`re telling us the Heritage foundation is saying to the Tea Party,
"Don`t vote for what Boehner`s going to put out there." We`re still right
where we where 24 hours ago if that`s the case, Senator.

MENENDEZ: Yeah, we are except that ultimately the Tea Partier`s
torpedo Boehner`s effort, then that should liberate Mitch McConnell to
finalize the deal he had with Harry Reid. He was on the verge of making
Harry Reid pass it in the Senate, send it over to the House, and Boehner`s
got to say here`s our last chance before default. And I think the
consequences to the country are enormous. I hope he realizes the
consequences they`ve already done to their party but more importantly to
the country. It`s already costing us more money just on the speculation of
default and our standing in the world is not acceptable.

SCHULTZ: Senator Robert Menendez, great to have you great to have you
with us tonight sir. I appreciate your time.

MENENDEZ: Thank you.

SCHULTZ: Thank you. Up next, Ted Cruz holds an underground meeting
with the secret`s out now. And later, a right wing pastor lands in
tonight`s pretenders for his attack against me and mischaracterization of a
conversation we had. But next, I`m taking your questions. Ask Ed Live is
just ahead. Stay with us.

(COMMERCIAL BREK)

SCHULTZ: Welcome back to the Ed Show. We love this segment. Love
hearing from our viewers in our ask Ed Live segment. Our first question
tonight comes from Steve Wallace. He wants to know, "Do you think this
country is heading for another recession or great depression if we
default"?

I know that the economy is going to take a real hit. You`re going to
see corporate belt-tightening like we`ve never seen before. You`re going
to see a lot of nervous people, a lot of nervous bankers. Money is going
to get tight. Interest rates are going to probably go just (inaudible)
double digits. Unemployment is going to up. It`s going to be real
economic hardship. All of the progress that we have made in recent years
clearly is going to be wiped out. And, who can judge exactly what the
international reaction is going to be if we`re nothing but a dead beat
nation? And it`s probably heresy for me to talk about this, but I`m going
to do it anyway.

You know, I`m also a radio talker and these right wing talkers across
America who were saying, "Yeah default, it doesn`t matter." What the hell
do they think is going to happen to the advertising market? I think it`s
going to be devastating for many talkers in the electronic media if we go
down this road.

Our next question is from Darlene Hemmingsen. She wants to know, "Do
the republicans really think America is dumb enough to believe they aren`t
at fault here?" Yes. Again, they are ideologically driven. They look at
the big generational picture. They want a Tea Party American and they`re
stupid enough to bring us one. Stick around Rapid Response Panel coming up
next.

(COMMERCIAL BREAK)

SCHULTZ: Welcome to the Ed Show. Thanks for watching tonight. It`s
looking like a deal could be close, but don`t be fooled again. The Tea
Party Republicans who started this mess aren`t exactly calling it quits,
case and point. The country`s primary hostage takers Senator Ted Cruz of
Texas, according to roll call Cruz and 15 to 20 top house conservatives
held a so called secret meeting in the basement of a Capitol Hill
(inaudible) Tortilla Coast late Monday night. That`s right.

Cruz probably discussed the faith of our nation over some Tex-Mex with
the likes of Congressman Louie Gohmert and Congressman Steve King. They
would have gotten a way with the whole secret part of it if they weren`t
spotted by their own majority whip Kevin McCarthy. It wasn`t immediately
clear what the group actually discussed and whether it would have affected
the chances of a deal. But the fact that they met with Cruz at all, I
think speaks volumes.

Joining me tonight Rapid Response Panel Syndicated Columnist and
Parade magazine contributor Connie Schultz and also EJ Dionne of the
Washington Post, great to have both of you with us.

You know, I don`t think that this was a meeting of capitulation. I
think that this was a meeting, "OK, what are we going to do now to put
President Obama in the corner? What are we going to do now to tarnish
him?" And I think Ted Cruz probably said, look, I`m going to do everything
I can stop into the senate. I want to know if you guys are going to back
me up, how strong are you in the house? Connie what do you make in this
meeting? What does that mean if anything?

CONNIE SCHULTZ, PARADE MAGAZINE COLUMNIST: I think they don`t have a
secret meeting at a basement. I`m sure afraid the wall (ph) not going to
hold. And you certainly don`t try to do it without, you know, without the
notice of leadership unless you`re afraid you`re not going to be able to
carry this road (ph).

SCHULTZ: EJ, your thoughts. I mean, for a senator to meet with 15 or
20 top conservatives in the house to round them up. What do you make of
it?

EJ DIONNE, WASHINGTON POST COLUMNIST: At times (ph) like an old Robert
Ludlum novel the Tortilla Coast arrangement. And I think the first thing
is it`s very foolish to think you can have a secret meeting in one of few
restaurants right near the Capitol on Capitol Hill. And secondly, I think
it`s clear and as you said earlier in the show, these Tea Party folks just
going to (ph) vote, no, no, no, and no which is why it`s still astonishing
to me that Speaker Boehner didn`t finally say, "All right this is over.
There`s a deal being done in the senate and, you know, Mitch McConnell is
hardly going to agree to some (inaudible) legislation." Why he couldn`t
move instead of putting us through another day of this is crazy to me.

SCHULTZ: I mean, if Speaker Boehner bring something to the floor that
is not advantageous to the ideology of the Tea Partiers, aren`t they going
to -- Connie complain that Boehner is actually stubbing them in the back
and put them in that position in the first place?

C. SCHULTZ: I don`t really care what they`re going to complain. I
want Speaker Boehner to actually be a leader. You know, it`s totally
embarrassing for me because he comes from my great state of Ohio.

I think he`s going to have to make a decision and stay with Senator
McConnell. They`re either going to cave to the far right extremist in
their party or they`re going to lead. Those are really the two options.

SCHULTZ: How does this obstruction play in the buckeye state right
now? He would not bring the continuing resolution to the floor for a clean
vote. He seems to be abstinent throughout. How is this play in Ohio?

C. SCHULTZ: Everywhere I go, I`m in the city of Cleveland now. And
everywhere I go around the state I`m asking people what they think of this.
When I`m at the airport last week I`m talking to people and the thing that
troubles me the most about this is the far right and Speaker Boehner right
now are willing to cultivate a climate of fear in this country.

It`s not rage in so (ph) many people as fear. We want to believe.
Even if we disagree with our leaders, we want to believe that they put
their country first. And that`s what concerns me as I look at these people
now is the fear in their own voices about what`s going to happen to their
lives. You know, what`s going to happen to interest rates.

Look, we always pay our bills. It`s inherently American about us.
That`s the thing we always believe. Remember the bonds, your grandma
bought. I had bonds when I graduate from high school that my father had
gotten for me. You believed in that America came through, that America
paid its bills.

And this is scaring people and I can`t imagine how we`re far right,
right now. It`s strategies to any kind of successful exit for themselves
on this, because they`ve got people really (ph) upset right now in the
state.

SCHULTZ: EJ, if Ted Cruz filibusters -- he and the Tea Party I think
I may respectful be really responsible for self inflicted worldwide
economic crisis. I mean, if they (ph) obstructs anymore, do they totally
owned it -- no questions asked?

DIONNE: I think they owned already. And this is just kind of make it
worst. And by the way, amen to the great Connie Schultz for what you said
about America is a country that pays its debts. They are in deep trouble
there. We`ve talked about their polling numbers before. And if they
actually takes steps that we can -- our credit rating that lead maybe even
not a default but to a lowering of our credit rating, those numbers are
going to crater (ph) even more.

SCHULTZ: Yeah.

DIONNE: I find it hard to understand why they couldn`t look at what
was going on and say "OK, we push this far enough" and I`m still hoping
that McConnell if this things fails in the House so go back and say "All
right let`s do this deal and Boehner will finally feel he has to put it on
the floor in the national interest."

SCHULTZ: You know, we`ve just heard from Senator Robert Menendez and
he brought it up because it happens since we`ve been on the air on here at
the top of the hour that the influential outside rightwing special interest
group, the Heritage Action is now connecting with members of congress and
telling them to vote no on the plan. The leadership is going to bring to
the floor tonight.

I mean, to me that tells me that Cruz and these Republicans in a close
meeting last night, a secret meeting what we`re saying exactly with the
Heritage Foundation -- with the Heritage Action Group is doing right now.
I mean, Connie, how else could we read that?

C. SCHULTZ: Well, that`s exactly right. And I have one question for
Cruz and his colleagues. Who do you answer to? Do you answer to the
people you represent? Do you represent your government? Do you represent
the people of America or are you going to represent these far right boys?
And let`s be clear on this, this is bullying, and we know how most
Americans feel about that.

DIONNE: And one good thing, Ed, if this goes down tonight is I think
that totally freeze up McConnell to go right back and say "The House can`t
do this. We`re going to make a deal in the senate and just jam it into the
house."

SCHULTZ: Well, that gives the Republican Senators some cover when
they go home. They can say "We know Washington got problems but it`s not
my fault." I mean, heck, I voted to make sure -- I mean, the Republican
Senators say "I voted to keep the government open and also raise the debt
ceiling, the problems is over in the House."

I mean, they`re looking for political cover. I`m not saying that it`s
not the right thing to do. But the fact is they said -- there`s a number
of different benefits here from McConnell and his caucus if they go along
with Harry Reid at this hour. And, frankly -- your thoughts?

DIONNE: No, I think that`s right. I think McConnell made a political
judgment as I was hoping John Boehner would that this thing is costing them
and costing them, and costing them. It just wasn`t worth pushing more. We
got plenty of time to argue about budgets after we get over this crisis and
that`s what we should be arguing about.

SCHULTZ: And finally, Connie, there`s been a lot of conversation
everywhere that Boehner is just doing all this to protect his speakership.
I`d like a good Ohio take on that.

C. SCHULTZ: I don`t know what kind of speakership he think he`s got
that this is what he`s going to do to protect it. I can`t imagine he even
enjoys this job anymore. And in fact that he very surprise if he want to
keep it.

SCHULTZ: OK, Connie Schultz, EJ Dionne, great to have you with us to
the Ed Show. Thank you so much.

DIONNE: Thank you, Ed.

SCHULTZ: We`ll have much more on these very fluid (ph) negotiations
at the White House. Keep it right here on MSNBC in the Ed Show.

COMMERCIAL BREAK)

SCHULTZ: In pretenders tonight, we`ve got the doctor of delusion,
Chaplain Gordon James Klingenschmitt. The chaplain also known as doctor
chaps joined me here on the Ed Show and argued what he believed was the
Christian case against ObamaCare.

(BEGIN VIDEO CLIP)

SCHULTZ: Is that the moral position of a Christian to take healthcare
away from people because that`s what your party wants to do, sir?

GORDON JAMES KLINGENSCHMITT, CHAPLAIN CORPS OF THE U.S. NAVY: Well,
the moral case is that you`re living on fairy dust and empty promises
because that hasn`t happened yet.

SCHULTZ: It hasn`t been implemented completely, sir.

KLINGENSCHMITT: Can you show me one government (inaudible).

SCHULTZ: It starts on October 1st where people can sign up for the
exchanges.

UNIDENTIFIED MALE: If I may .

KLINGENSCHMITT: So all of the sudden he admits it hasn`t happened
yet.

(END VIDEO CLIP)

SCHULTZ: Well, the chaplain`s sites figures on ObamaCare which has
not been fully implemented. In a new (inaudible), chaps is coming after,
yours truly -- me -- saying that he won the debate on health care and
morality.

(BEGIN VIDEO CLIP)

KLINGENSCHMITT: I went into the lions den on MSNBC debated Ed Schultz
on ObamaCare. Ted Cruz is right, Michele Bachmann is right. Mr. Ed
Schultz, I just proved that maybe you`re the one and David Cole (ph),
you`re the one by calling me a liar, you are now bearing false witness
against your neighbor.

(END VIDEO CLIP)

SCHULTZ: Doctor Chaps, come on now. There`s no debate here. Once
the Affordable Care Act is fully implemented, more people will receive
healthcare than ever before in America. Deception and mangled numbers
aligned Doctor Chaps with Michele Bachmann and Ted Cruz perfectly. But if
Chaps believes he aligns himself with Christ, he could keep on pretending.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to the Ed Show, we`re following breaking news
for the folks who take a shower after work. Now, late breaking news at
this hour and we`re saying this business just a moments ago when this is
the case. The House Rules Committee has postponed the new house debt limit
deal, "subject to the call of the chair." The bill was postponed right
after the Heritage Action Committee told congressional members to vote no
on the plan. This is absolutely stunning.

So, what has happened here is that the House Rules Committee is
saying, "No, we`re not going to vote on this thing tonight." And the
Heritage Action fund has really grabbed the Tea Partiers and involving them
by saying, "Vote no on this."

So, it`s really up in the air right now is to how this is all going to
unfold. For more let`s turn to Congressman Joseph Crowley of New York who
is on the Democratic Leadership team. Congressman, this is the latest,
just moments ago what do you make of it? What does it mean?

REP. JOSEPH CROWLEY, (D) NEW YORK: Well thanks Ed, great to be back
with you.

SCHULTZ: You bet.

CROWLEY: What it really means is I think Americans have even more
questions as to who is actually running the Republican House of
Representatives right now.

SCHULTZ: So, will there be a vote tonight, Congressman?

CROWLEY: Well, there`s still a chance that we will have a vote but
clearly this is been a set back once again for the republican caucus. And
so, it makes me seem just where the rules will be called back in and it`s
quite possible we can have a vote later tonight.

SCHULTZ: OK, so what does it mean when it says, "Subject to the call
of the chair?" This means -- as I understand these means if they haven`t
decided whether they`re going to have a vote or not.

CROWLEY: That`s correct. It really means whether or not the speaker
will actually call for a bill to go through the rules committee and they
make it 20 (ph) to the floor tonight. So, really is it`s still in the
republican speakers -- his power to determine whether that bill come to the
floor or not.

SCHULTZ: What do you make of the Heritage Action Group telling
members to vote no on it?

CROWLEY: It`s really remarkable. I think it really -- this is really
demonstrates completely in many respects to Civil War that`s taking place
within the republican caucus. For everything they add to the bill to
sweeten it to get more or most (ph) of the vote for it. It actually it
gives reason for them not to vote for it as well all the factors within the
caucus.

So I think Mr. Boehner has a difficult time getting despite anything
through right now in the House. And quite frankly, I think unless we go
back to what the senate is working on, anything we do in the House opposite
(ph) what the senate is talking about doing is a vote really to miss the
deadline our debt ceiling.

SCHULTZ: Congressman, what we`re seeing happen in America right now,
I think is economic terrorism. We all know exactly what the heck is going
to happen if we default. Interest rates are going to go nuts, belt
tightening is going to take place, unemployment`s going to go up, money is
going to be hard to get, it`s going to shrink our economy, we`re going to
lose all of what we have gained in the 43 months in the private sector.
This is economic terrorism as I call it.

The other thing is that it seems to be nothing more than a legislative
coupe de tat. I mean, this is basically a bunch of people saying, "No,
we`re not going to run government anymore in America. The hell with it."

CROWLEY: And you`re talking quite frankly, Ed, about the government
aspect of it. Well, what this really means to individuals as well (ph) as
high interest rates for their home mortgages, higher interest rates for the
students loans, a real impact on their spending power. And so what this
really -- can really turn into unfortunately is putting us back into a
recession and maybe even in production (ph).

SCHULTZ: Sure.

CROWLEY: And it`s irresponsible. It is irresponsible and it`s
reckless.

SCHULTZ: So the Heritage Action folks and the hard right wingers know
that what`s going to be put on the floor tonight in the House is a very
good chance of passing. Is that a fair assumption?

CROWLEY: I think that they were assumption unless they stepped in
(ph) and would pass and that was against every interest as well.

SCHULTZ: OK. So, why do republicans -- you know, if this is a
nuthouse, no offense I know you`re a good guy and everything else, I`m
sorry, have to work there. But this is -- if by the moment these people
change, but one thing has not changed. They had been very consistent on
wanting to take down this president. Tell us, what was the demeanor of the
president today in the meeting that you had with him?

CROWLEY: The president was very resolute. I think he believes in the
stances that he has taking that his government -- our government will not
be blackmailed by individuals who are simply looking for a political gain -
- gainsmanship. You don`t play with the full faith and confidence of the
United States and you don`t shut down the government of the United States
of America for gainsmanship and to politics. And that`s unfortunately what
they`ve been doing.

SCHULTZ: So, who do you think is more powerful? Are we going to find
out tonight, the Heritage Foundation, Heritage Action or Speaker Boehner?

CROWLEY: Well, I quite frankly at this point is a (inaudible). As
anyone`s guessed what will happen tonight. But what I can tell you is that
unless something is done our government will continue to be shut down, and
if our debts go unpaid, forget about Finch (ph), forget about what we`re
hearing so far. This`ll be catastrophic not only for the United States but
for the world as well.

SCHULTZ: Well, what do you make of Finch (ph) tonight in putting us
in the negative column?

CROWLEY: Well .

SCHULTZ: On the negative watch as what they call it for triple A
rating, yes.

CROWLEY: It`s certainly something we expected. I think, but really
why? Why is this happening? Why are we doing this to ourselves? For
what -- what is the end goal? What do they want? The reality is
republicans don`t know what they want because .

SCHULTZ: Yes.

CROWLEY: . it keeps changing. Yes, first I`m going to do. Undo
ObamaCare or the Affordable Care Act that it was about the budget. Now
it`s about something else. Everyday it`s something different that they
were negotiating or trying to negotiate on. In the end, what we have to
do, Ed, is open up government, pay our debts and we could talk about these
other issues afterwards.

SCHULTZ: Tonight, if it doesn`t work in the House, we`re heading for
default I would say. And I mean I think what the Heritage Foundation, the
Heritage Action Groups, speaks volumes about where this people have been
all along. They just will not give in. They want to take this president
down.

CROWLEY: It`s not time to go home. This is the time to do the job
the American people has .

SCHULTZ: Yes.

CROWLEY: . sent us to do and put country ahead of politics.

SCHULTZ: Congressman, good to have you with us tonight. Joe Crowley
in New York .

CROWLEY: Thank you.

SCHULTZ: . on the Democratic Leadership Team. That`s the Ed Show,
I`m Ed Schultz. Politics Nation with Reverend Al Sharpton starts right
now. Rev?

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

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