updated 10/18/2013 10:31:30 AM ET 2013-10-18T14:31:30

THE RACHEL MADDOW SHOW
October 17, 2013
Guest: Louise Slaughter


RACHEL MADDOW, MSNBC HOST: Thanks to you at home staying with us for
the next hour. Happy Thursday.

Last night as the Congress was finally at the very last minute, less
than two hours before midnight, finally taking the votes they had to take
to reopen the government and avert the debt ceiling disaster.

As that was happening last night in Washington, a couple hundred miles
north, one very happy Democrat was taking the stage with such excitement
and such happiness that the stage itself almost could not physically bear
it. This was so great. Watch this.

(BEGIN VIDEO CLIP)

SENATOR-ELECT CORY BOOKER (D), NEW JERSEY: All rise! Thank you,
everybody! Thank you, New Jersey! All rise! Well, this is an
extraordinary night.

(END VIDEO CLIP)

MADDOW: Grabs the microphone, like he`s going to rip it right off the
podium. Who needs a microphone! You guys can hear me, right?! Rarr!

America`s happiest and newest elected official, Cory Booker, who won
the open U.S. Senate seat last night in the great state of New Jersey. And
you know, even though Mr. Booker was not in D.C. yet, for all of the mess
that D.C. just went through, it is hard to not see his election last night
in terms of how messed up Washington is right now and what a trauma they`ve
just put themselves through. It`s hard not to look at his election in
terms of how this trauma may have changed Washington -- how the parties
involved and the players involved may, potentially at least, see themselves
differently from here on out after having survived what we just went
through.

(BEGIN VIDEO CLIP)

BOOKER: There is work to do. You know there`s work to do. When no
matter who you love, gay or straight, still aren`t treated equally under
the law, you know there`s work to do.

When you can have a full-time job in America and work with honor and
dignity, but still live in poverty, you know we have work to do.

When you`re a woman, you know there`s work to do -- when you`re a
woman in America who works the same job as a man, but you can`t get the
same pay, we have work to do.

(CHEERS)

And we have work to do to defend the progress we`ve made to make sure
that anyone with a pre-existing condition, and that no matter how sick you
are, you can still have access to Affordable Health Care, and be free of
financial worry -- we have work to do.

And so let`s get to work!

But I want to end on a personal note. You know, I`ve had a week now
to reflect on this campaign in a way that I did not want or imagine. As
many of you know, this past Thursday, my father died. God, I wish he was
here physically. But I know he is here in spirit.

I want to be clear about what my dad and my mom taught me. They
taught me about self-reliance. They taught me about having an intense work
ethic.

My mom and my dad taught me my very first lessons about what an
incredible privilege it is to be able to call yourself an American.

(END VIDEO CLIP)

MADDOW: The father of Senator-elect Cory Booker of New Jersey died a
week ago today, so just a few days before his son`s election to the U.S.
Senate. He never lived to see his son ascend to this new height in public
service.

That is sadly similar to what happened to President Barack Obama when
his grandmother passed away the day before he was first elected president.
President Obama`s grandmother had played such an important role in raising
him. He was very, very close with her.

You may remember the night before President Obama was elected in 2008,
he was at an outdoor rally in North Carolina, it was this very dramatic
moment, when he`s in the rain, giving this speech, and he had to tell that
crowd that his grandmother had died. This was just the night before the
election.

President Obama, of course, is now in his second term as president and
he has weathered a lot of crises since he has been president. The most
serious of the self-imposed Washington crises since he`s been president
finally ended last night when Congress finally reopened the government and
raised the debt ceiling. The president was able to sign that legislation,
doing both those things, just after midnight.

But then this morning, with the government slowly starting to reopen,
President Obama made remarks at the White House, speaking before some
federal employees who had been furloughed during the shutdown. And he
talked at the White House about what just happened, about what he thinks
ought to be learned about what just happened. And what he hopes happens
next.

And when he made these remarks today at the White House, he sounded a
little bit like 2008 again. He went back to the very first themes, the
very first basic message that he ran on in the first place in 2008. The
message that Washington has to change, that there has to be a more adult
way of handling the governing of the country, that we need to grow up and
prioritize good governance in Washington over everything else that seems to
drive us instead.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But, all my friends in
Congress, understand that how business is done in this town has to change.
And now that the government has reopened, and this threat to our economy is
removed, all of us need to stop focusing on the lobbyists and the bloggers
and the talking heads on radio and the professional activists who profit
from conflict, and focus on what the majority of Americans sent us here to
do.

Let`s face it -- the American people don`t see every issue the same
way. But that doesn`t mean we can`t make progress. And when we disagree,
we don`t have to suggest that the other side doesn`t love this country or
believe in free enterprise or all the other rhetoric that seems to get
worse every single year. If we disagree on something, we can move on and
focus on the things we agree on.

(END VIDEO CLIP)

MADDOW: The president in his remarks today also spoke directly to
federal workers, who had been furloughed during the shutdown and are now
coming back. He told them, "Thank, thanks for your service," he said.
"Welcome back. What you do is important," he said. "It matters. Don`t
let anybody else tell you differently."

That was a real priority message actually today for the
administration, to welcome back people who work for the federal government,
to tell them how much they`re appreciated, to apologize that they had to go
through this, to talk about how valued and important their work is.

The White House chief of staff, Denis McDonough, is out in front of
the White House on the sidewalk today, hugging people and welcoming them
back.

Vice President Joe Biden went to the Environmental Protection Agency
and he brought muffins with him. He hugged everybody. There he is with
the EPA administrator, Gina McCarthy.

The cabinet officers all went out and greeted people as they came back
today. With Vice President Biden specifically, you do sort of get the
feeling like maybe he wants to show up at everybody`s workplace with
muffins every day, but at least he made sure to do it today.

From the president, though, in addition to the welcome back message
and sticking up for what those workers do every day, saying that the
government does important work. The president also had some not harsh
words, I would say, but some bluntly admonishing comments for the people
who made this shutdown and this brinksmanship happen -- for the Republicans
in Congress who voted for the shutdown and who voted last night to not
reopen the government, to go ahead and hit the debt ceiling to try to get
their way.

(BEGIN VIDEO CLIP)

OBAMA: Let`s work together to make government work better. Instead
of treating it like an enemy or purposefully making it work worse, that`s
not what the founders of this nation envisioned when they gave us the gift
of self-government.

You don`t like a particular policy or a particular president, then
argue for your position. Go out there and win an election. Push to change
it. But don`t break it. Don`t break what our predecessors spent over two
centuries building. That`s not being faithful to what this country is
about.

(END VIDEO CLIP)

MADDOW: That is not being faithful to what this country is about.
It`s almost like the president`s words there are harsher than the tone with
which he delivered them, right? I mean, it`s kind of a kick in the teeth
to tell somebody, you are not being faithful to this country in what you
have done. That is a heck of an accusation, particularly for somebody
whose job is in public service. Not being faithful to the country?

So, it`s a big deal that the president said it, but in tone, he said
it sort of less with anger than with resignation.

If you`re looking for the anger, the anger is coming from other
Democrats.

Massachusetts freshman Senator Elizabeth Warren today sent out an e-
mail that was picked up on "Huffington Post" and widely republished.

Her e-mail said, "I`m glad that the government shutdown has ended and
I`m relieved that we didn`t default on our debt. But I want to be clear, I
am not celebrating tonight. Yes, we prevented an economic catastrophe that
would have put a huge hole in our fragile economic recovery, but the reason
were in this mess in the first place is that a reckless faction in Congress
took the government and the economy hostage for no good purpose."

"According to the S&P index, the government shutdown had delivered a
powerful blow to the U.S. economy. By their estimates, $24 billion has
been flushed down the drain for a completely unnecessary political stunt.
The Republicans keep trying to cut funding for the things that would help
us build a future, but they are ready to flush away $24 billion on a
political stunt?"

She closes, "So I am relieved, but I am also pretty angry. I hope we
never see our country flush money away like this again. Not ever. It is
time for the hostage-taking to end. It`s time for every one of us to say,
no more."

That anger from Elizabeth Warren in the Senate echoed last night on
the House floor by the top Democrat in the House, Nancy Pelosi.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), DEMOCRATIC LEADER: My colleagues, do you
think that your recklessness was worth $24 billion to our economy? This
recklessness is a luxury the American people cannot afford.

(END VIDEO CLIP)

MADDOW: The big question mark in Washington, of course, sort of since
the end of the Bush administration, but particularly right now, the big
question in Washington, is what happens to the Republican Party now? Right
now, the question is, what happens to them immediately after this political
disaster that they put themselves through and that they put the country
through.

That is the big question understandably, because it is absolutely
unpredictable in terms of what happens to the Republican Party next. The
civil war in that party is unresolved, and fascinating, but also
unforeseeable in terms of its outcomes.

That said, what`s happening on the Democratic side is maybe just as
interesting, even if it`s not getting as much attention. Nancy Pelosi was
the Democratic speaker of the House. She would be Democratic speaker of
the House again if the end results of this political disaster the
Republicans just had is that they lose the House to the Democrats in 2014.

Elizabeth Warren, she`s only in her first year in the Senate, but, of
course, she has a huge national profile. She`s already considered to be a
top tier presidential prospect for the nomination for the Democratic Party
in this cycle or the next.

Then, there`s the party`s newest Household name, Cory Booker, who
built himself a huge national profile, just as mayor of Newark, New Jersey.
But who as we speak, is on his way to Washington to join the United States
Senate.

But you look at Nancy Pelosi with her experienced exasperation on the
House floor. You look at Elizabeth Warren with her stated fury. You look
at Cory Booker with his trademark earnestness and optimism. You look at
President Obama with his continuity between his message of hope in 2008,
which is now the same message, but delivered more with resignation and
weariness in 2012, 2013.

If you look at what these Democrats are saying, in contrast with the
absolute civil war on the right, where they are tearing each other down,
disagreeing with each other, not just tactically, but on substance, and
none of them, none of them are pulling each other along.

You look at these guys in contrast to what`s happening on the
Republican side, and these Democrats, these different quadrants of the
Democratic Party, they are all singing from the same playbook. Not only
are they not blaming each other, not trying to one-up each other, they are
all making the same case in the same way. They`re all making the case for
government that works well, because what government does is important. And
when you mess up government, it messes with the American people.

And because of that shared conviction, you hear them all, all at
different emotional timbers, right, but all making the same point, in
denouncing and deriding those in Washington and those in our politics
broadly, who wont government not to work, who are out to undermine it and
damage it and destroy the American people`s faith in it.

(BEGIN VIDEO CLIPS)

OBAMA: And we hear all the time about how government is the problem.

BOOKER: Every time you turn on the TV, you see it. Pundits tell us
how little regard we have for Washington, for Congress. How cynical we
have become about the work being done in our nation`s capital.

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: For years now, we`ve heard
a small minority in this country rail against government.

(END VIDEO CLIPS)

MADDOW: That is the place from which Democrats pivot to their
position, to their vision. That is what all Democrats agree has been the
problem in the way things have been up until now in our politics.

Republicans told you that government is the problem. It`s not.
Government that has to work.

Republicans control the overarching narrative about Americans in our
government for the last 30 years. Even Democratic President Bill Clinton
won the presidency by accepting that Republican narrative and running
against government, right?

Saying that even as a Democrat, he would shrink government he would
get government out of people`s way. Government needed to be reinvented.
Let`s contract everything out. Let`s shrink the government. Government`s
bad.

The Republican Reagan-era narrative that government is an evil that
must be minimized and undermined and above all else, derided for political
aim, seems to be done now.

The Republicans are in a lot of different places right now and the
drama over there is kinetic and fascinating, but for the Democrats right
now, we are at just as interesting a moment. The evil of government era is
over.

And Democrats right now, politically, have the luxury of both unity
and clarity of vision. With Democrats knowing what they want to do, which
is to preach that good governance and technocratic good stewardship of the
federal government is an appropriate way to repay the American people`s
trust in electing you. With the Democrats in agreement on that, good
governance in a way that is not overtly ideological.

With Democrats unified behind the idea that government is OK, with
that luxury, is there anything they can do to help the other side? Is
there anything they can do try to build a two-party state, where both sides
make sense. Where the arguments get better?

Is there anything that the Democrats can do from their position of
luxury, of unity and clarity to help the Republicans find some of it of
their own, after this disastrous and embarrassing spectacle of infighting
and incoherence and how it played out publicly to the nation`s detriment
over the last three weeks?

A one-party state is not a good thing. Can the Democrats make the
opposition more constructive, or at least can they make the non-anarchist
wing of the Republican Party start winning some of those intraparty fights.

Joining us now is NBC News presidential historian Michael Beschloss.

Mr. Beschloss, Michael, it`s great to see you. Thanks for being here.

MICHAEL BESCHLOSS, NBC NEWS PRESIDENTIAL HISTORIAN: Thank you,
Rachel. Great to see you.

MADDOW: Is there a precedent in the modern history where one party
had it together in terms of their mission and their unity in such a way
that they started to feel like it was in their interest to try to help the
other party along?

BESCHLOSS: Well, I think that`s right, because I think that from
Democrats` point of view, if you`re right, that the Democratic ideology
that government may be actually better than all these anti-government
people are saying, the ship may be coming in, in that case, what you
benefit from is a fair fight in a fair system. And no one benefits when
you have a system where you`ve got a group of people -- as you`ve had
during the last two weeks, who feel so angry and so powerless. You know,
power corrupts, but sometimes lack of power corrupts even more, that they
do what they did for the last two weeks in causing this government
shutdown.

You know, if you feel that the wave is coming your direction, you
benefit by having a system in which the fights are fought fairly because
you`re likely to win.

MADDOW: In the speech this afternoon, it`s been a theme for him all
along, but I think he articulated it most fully this afternoon. President
Obama said, our Founders didn`t envision treating government like an enemy.
Nobody envisioned treating government, in such a way to actually,
purposefully make it worse in order to capitalize on people`s
dissatisfaction with it.

Has the country seen that type of antipathy toward government like we
have today, in other times?

BESCHLOSS: Sure, there are periods in which people are angry, the
slavery period. You can go all the way through American history, where
there are big issues that people get very angry about. Although, in
general, they have not gone to the huge dysfunction that we`ve seen the
last the two weeks, where everything just stops and there`s no negotiation
and no talking.

You`re absolutely right. And so is the president. That`s what the
Founders wanted. They couldn`t have reviled government, because, Rachel,
remember how hard Americans fought to get our government to get this system
in the first place.

You know, we have lived in a system in the colonies where we were
under the rule from London. Finally, we had a system that functioned. You
know, why would anyone execrate that?

MADDOW: In terms of the balance of power in Washington, I think in
generic terms, it`s all a good thing if the other side is split and you`re
unified. You said after President Obama was inaugurated for the second
time, that he probably only had six months to get anything done, and then
he wouldn`t able to. Does this change that?

BESCHLOSS: I think I was not too wrong. If we had this conversation
at month six in July, I think we would have said that I was maybe not too
wrong there. I think he may have a little bit of a chance, because, you
know, given what`s happened the last two weeks, it may be like the breaking
of a fever.

You know, all these Tea Party Republicans kept on saying, you know,
you led us do what we want and we`ll show you, we`ll actually get what we
want and reduce the size of the government. It was obviously a dismal
failure. Most Republicans even agree with that. So, that`s happened.

So, now, it`s almost as if this second term is beginning all over
again, in an atmosphere which I think the moderates, the non-Tea Party
Republicans are actually strengthened in Congress.

MADDOW: That is exactly what it feels like to me. I feel like this
is the start of, if n the start of the term, at least the start of
something. This feels like day one of something, in a way that previous
crises have not made me feel that way.

So, it`s interesting --

BESCHLOSS: We feel exactly the same way. And I think the president
talked that way when he appeared this morning.

MADDOW: Fascinating.

NBC News presidential historian, Michael Beschloss, it`s always great
to have you here, Michael. Thank you very, very much.

BESCHLOSS: Thank you, Rachel. Great to see you.

MADDOW: All right. It turns out this whole problem that we have,
where we have a debt ceiling crisis every time we`ve just started to forget
about the last one, turns out there is a way to prevent it. If you were
alive before 1995, you have been alive to experience the soothing calm that
this cure instills. We can do anytime we want.

And that story is coming up.

(COMMERCIAL BREAK)

MADDOW: New poll numbers out just tonight in the Virginia governor`s
race. The new poll tonight from NBC and Marist has the Republican in the
race, ken Cuccinelli, trailing his Democratic opponent by eight points.

Ken Cuccinelli is further behind now in this same poll than he was
last month. And it is not just this poll. Attorney General Ken Cuccinelli
has not led the Virginia governor`s race in any poll since July.

Virginia voters have now said in more than 20 consecutive polls that
they would pick Democratic Terry McAuliffe over Ken Cuccinelli, especially
Virginia women. The poll released today shows Mr. Cuccinelli still losing
among Virginia women. This time, the gender gap is 20 points. There`s
just an amazing gender gap in this race.

It turns out radical social conservatism has consequences.

(BEGIN VIDEO CLIP)

KEN CUCCINELLI (R), VIRGINIA ATTORNEY GENERAL: Really, given that God
does judge nations, it`s amazing that abortion has run as far and foully as
it has without what I would consider to be a greater imposition of judgment
on this country. Who knows what the future holds.

(END VIDEO CLIP)

MADDOW: Ken Cuccinelli speaking just last year, wondering why God
hasn`t yet unleashed more of his wrath upon us as a nation, as punishment
for abortion being legal in the United States. He says, "Who knows what
the future holds, though."

Well, while we are awaiting that word from our heavenly sponsor, Ken
Cuccinelli`s opponent in the governor`s race has decided to make the most
of the Ken Cuccinelli God`s wrath for abortion basement tapes.

And in keeping with the same theme, the Terry McAuliffe campaign today
released this.

(BEGIN VIDEO CLIP, POLITICAL AD)

UNIDENTIFIED FEMALE: I`m very troubled by Ken Cuccinelli.

UNIDENTIFIED FEMALE: He tried to change Virginia`s divorce laws.

UNIDENTIFIED FEMALE: To prevent women from getting out of a bad
marriage.

UNIDENTIFIED MALE: Ken Cuccinelli denies climate change exists. And
he used taxpayer dollars to investigate a UVA professor doing research.

UNIDENTIFIED FEMALE: And Cuccinelli tried to ban common forms of
birth control.

UNIDENTIFIED FEMALE: Even the pill.

UNIDENTIFIED FEMALE: Even the pill.

UNIDENTIFIED MALE: Ken Cuccinelli is just way too extreme.

UNIDENTIFIED FEMALE: Way too extreme.

UNIDENTIFIED MALE: Way too extreme.

UNIDENTIFIED FEMALE: Way too extreme for Virginia.

(END VIDEO CLIP)

MADDOW: The race for Virginia governor is expected to be close, even
if only for structural reasons. Virginia holds off off-year elections,
which tends to make for a low turnout.

So, yes, the Democrats is ahead in the Virginia governor`s race, but
low turnout always tends to favor Republicans. So, it`s probably going to
be close. A few thousand votes here or there is likely all it would take
to sway this race.

And so, naturally, Virginia Republicans have now arranged for a
massive voter purge right before the election. With just weeks to go
before the McAuliffe/Cuccinelli race, the Republican-dominated Virginia
state board of elections has declared that 57,000 Virginia voters should be
purged off the rolls, immediately, before this election that everybody
thinks will be decided by not all that many votes.

As we`ve previously reported, Virginia Democrats have been suing to
try to stop the purge. Interestingly, in some counties, local boards of
elections have refused to go ahead with the purge until after the election,
so they can make sure they have time to do it right. These are even local
Republican officials who are saying no to the purge.

But meanwhile, whether or not you get purged sort of depends on where
you live. In some counties, notably in the county with more Democratic
voters in the state than any other, the purge has steamed right ahead,
quietly continued. In court filings this week, we learned that nearly
40,000 Virginia voters already have had their names erased from the rolls,
40,000 registrations gone in a snap. Democrats are suing to have those
people un-purged, but who knows?

Republicans in Virginia control the state board of elections, because
the current governor is a Republican and he gets to appoint a majority of
his party to the board. Republicans also control all of the local county
boards of elections, most of which have been busy purging Virginia voters
off the rolls before this election.

But Republicans control more than that. Now that Virginia Democrats
are suing to try to stop this purge of tens of thousands of voters by the
Republicans, right before the election, guess who`s fighting on the other
side of the legal fight? Guess who is defending that voter purge in court.

That would be the office of the top legal official for the
commonwealth of Virginia, the attorney general. The attorney general`s
office advises the state board of elections, both before the vote, during
the purge, and also later, during the election, if there are problems in
the election itself, or in the way the votes get counted or in who gets a
ballot and who doesn`t.

By the way, that would be a ballot that just happens to have the
attorney general`s own name on it.

Mr. Cuccinelli is the first attorney general in 30 years in Virginia
to not step down from the attorney general job, because he`s running for
governor. So his office will be on Election Day and already is now in
court litigating the circumstances of his own run for governor.

What could possibly go wrong?

(COMMERCIAL BREAK)

MADDOW: As a senior member of the Obama administration, he was
instrumental in the repeal of "don`t ask, don`t tell." He made a bold
public case for why the U.S. should find a way to declare an end to the war
on terror. He made the first public push for the administration to be more
open about drone strikes on some of the most important and sensitive issues
facing the Obama administration, this guy has been the tall poppy. He has
been the one willing to stick his neck out before anybody else.

He left the administration right after the election, went back to
private life, but now as of today, he is coming back in a big and
unexpected way that basically nobody saw coming. And that story is
straight ahead.

(COMMERCIAL BREAK)

MADDOW: The president signed the bill to not hit the debt ceiling
after midnight Eastern Time last night, which means that we really went to
the brink. It took until the actual day that the Treasury Department said
we would start to risk defaulting before the Congress got it together to
stop that from happening.

The last time we got this close to this particular kind of disaster
was 1979. I was 6. In 1979, the president was a Democrat, Jimmy Carter.
Both houses of Congress were controlled by Democrats.

But Republicans, even though they were in minority, Republicans found
a way to do in 1979 what they just did last night, which is to bring us to
within a day of hitting the debt ceiling. Republicans in 1979 forced a
down to the wire fight over the debt ceiling that year, trying to use it as
leverage for an amendment to the Constitution that they wanted.

That fight in 1979 and what it did to us have almost been lost to
history. I think mostly because the exact time when we came to the brink
that year, that exact same week was also when we had a legitimate national
emergency in the Three Mile Island nuclear meltdown.

But even though that debt ceiling problem isn`t widely remembered from
that year, we did technically default on some of our debt because of that
crisis. Congress thought they`d reached a deal at the last minute, just in
time to avert default, but they got too close to the deadline and the
Treasury technically did default on a bunch of loans that came due. The
system got overloaded, there was no time, and those loans were not paid
back when they were supposed to be.

That crisis, that getting too close to the debt ceiling cost the
country in a long-term way. If you add up the cost of all the extra
interest we had to pay on debt, because of that down to the wire glitchy
default in 1979, it adds up to $12 billion in just the first decade and
then more after that.

But if that scalding experience with hitting the debt ceiling is
largely forgotten in history, what is even more forgotten in history is how
we fixed it in Washington so that kind of thing didn`t happen again for a
long time after. At the time of that calamity in 1979, at the time of the
Three Mile Island overshadowed debt ceiling crash, the speaker of the House
at that time was Tip O`Neill from Massachusetts.

And that year he put a young Democratic congressman from Missouri
named Dick Gephardt in charge of the debt ceiling dirty business. He put
him in charge of getting everybody to vote to raise the debt ceiling every
time they need to. Josh Green wrote about this week at "Bloomberg
Businessweek."

Now, the way that system worked, it was a two-step process for
Congress. First, they`d stop to pass a budget. So, the budget said they
wanted to spend X dollars in defense and transportation and whatever else.
Then, they would have a separate second vote they would have to take to
raise the debt ceiling in order to accommodate all of that spending they
just voted for.

So, these were two separate votes. Number one, do you want to buy
this stuff? And number two, do you want the money to pay for that stuff
that you just said you would buy? They took these two separate votes.

Well, in 1979, in charge of getting that second really annoying vote,
Dick Gephardt said, let`s not do this anymore. This is a terrible job.
Everybody wants to spend the money, but nobody wants to raise the debt
ceiling to get the money to pay for it.

So what we`re going to do is that when we have the first vote. When
we pass the budget saying how much we want to spend on stuff, we are just
going to say the second vote happened too. We will just deem implicitly
that the debt ceiling has also risen by that much. It`s all going to be
one vote, not two. Problem solved.

That is how they solved the problem. After that nasty little glitchy
nightmare we had in 1979, where we did actually hit the debt ceiling and it
cost us billions of dolls, after that, they fixed it. They fixed it that
year so it would not happen again.

It became known as the Gephardt Rule after Dick Gephardt. No more
separate vote on the debt ceiling, just deem it done when you pass the
budget. And that`s how it worked for years and years and years.

That`s how it worked right up until 1995, when the Republicans got
control of the House for the first time in a generation, Newt Gingrich took
over as speaker of the House, and he and his fellow revolutionaries decided
that that debt ceiling thing was better off not fixed. They wanted to use
the threat of hitting the debt ceiling again to threaten President Clinton
and the country to try to get their way. So, they suspended the Dick
Gephardt Rule that had fixed that problem many years earlier, and we went
back to brinksmanship and the threat of national fault for the pure
partisan purpose of political blackmail.

For years, though, it`s forgotten to history, but for years, the
Gephardt Rule worked. It prevented any risk of a default or a government
shutdown. But in 1995, Republicans suspended it. We figured out a way to
fix this thing in freaking 1979, after that year`s disastrous and costly
default. But then in the 1990s, we broke it again on purpose, America.

Part of the deal that Congress struck last night to avert default is
an agreement that Democrats and Republicans will get together and engage in
negotiations over the budget and how we do the budget in an ongoing way.

By refusing to play Republican reindeer games in this particular
shutdown fight, by forcing the Republicans to climb down with nothing to
show for themselves after taking us to the brink, Democrats, as of last
night, have already reestablished the principle that you cannot hold the
country hostage to try to win things that you can`t get through normal
politics. That is established, as of last night.

But why not also say, now, you are never getting the opportunity to do
this again? Why not reinstate the old rule? Why not reinstate the old
Gephardt Rule as part of these negotiations over the budget?

It worked from 1979 until Republicans suspended it 16 years later in
the 1990s. Why not put it back in place now? Would that work?

Because of how close we got this time, the ratings agency Fitch now
says that the United States is in line for a possible credit rating
downgrade. That might still happen, even though a deal was reached last
night at the last minute.

The ratings agency standard & poor`s estimates that the government
shutdown has already taken $24 billion out of the U.S. economy. They say
the shutdown shaved at least 0.6 percent off U.S. economic growth for the
last quarter of this year.

All of this damage has already been done, just by getting this close
to the brink, just by having this fight again this year, just by getting
this close. How about, let`s not do this again ever. Would it work to put
back in place the rule, the old fix that prevented this for happening for
nearly two decades?

Hold on. Stay with us. We`re about to find out.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN (R), MINNESOTA: This was exactly the right
fight.

REPORTER: Any regrets?

BACHMANN: Absolutely none, no. I`m extremely proud of John Boehner.
I think he did a wonderful job.

REP. PHIL GINGREY (R), GEORGIA: We, indeed, will continue to fight.
We`re not going anywhere. We`re going to go upstairs and take this vote.
And then we`re going to go home for a couple of days. But we`re coming
back early next week and continue to fight the good fight. I think the
strategy was a good strategy.

REP. TIM HUELSKAMP (R), KANSAS: We lost the battle, but we`re going
to win the war. At the end of the day, Republicans had some great
principles and we fought those principles. I`m looking forward to the next
round.

(END VIDEO CLIPS)

MADDOW: "Looking forward to the next round."

Which part of the next round are Republican members of Congress
looking forward to, exactly?

How about we never, ever do what we just did again? What would it
take to make that happen? What would it take to take the debt ceiling and
government shutdowns off the table? OK, at least just the debt ceiling?

Joining us now is the ranking member of the House Rules Committee,
Congresswoman Louise Slaughter of New York.

Congresswoman Slaughter, it`s great to have you here tonight. Thanks
for your time tonight.

REP. LOUISE SLAUGHTER (D), NEW YORK: Oh, it`s a pleasure. Glad to
see you, Rachel.

MADDOW: Is there a way to change the rules in the House like they did
in 1979 to make the whole debt ceiling debacle not happen again?

SLAUGHTER: You know, something really has to be done here. It`s
really become a tool of blackmail and extortion, to tell you the truth, a
blunt instrument. It doesn`t make any sense.

And there`s a section in the federal budget that`s known as the
appropriate level of the public debt. And once the debt -- the budgets are
agreed on by both Houses and ready to go, that figure goes in.

That is the debt limit, in my view. We could use that, is whatever
that budget says needs to be spent, for that year. You know, we do the
budget a year ahead for the following year. That should be the debt limit.
And when we vote for the budget, it should take care of it.

Now, I know the Gephardt Rule certainly was a great improvement over
what we had been doing. But I -- it`s been too easy to get rid of. And
I`m very much concerned about that. I can`t believe, Rachel, what we`ve
gone through and what the country has gone through.

These opposition people (ph) upended everything for three months and
then to have to go through this again. And everything I`ve seen and heard
indicates that we will go through exactly this again.

And I`m hoping that we can look to make some rules changes. We do
rules changes in the House, the first session of the term. With any luck,
we can get a new term and a new Congress and Democrats taking over and
Nancy Pelosi speaker, and we can do something about this right away. But
it really needs doing. No question about it.

MADDOW: When you see those conservative House Republicans who had
been among those who were really pushing for the shutdown, among those who
voted not to restart the government and to go ahead and hit the debt
ceiling. When you see them say, they`re looking forward to round two, and
they`re going to do this all over again, and we know that another set of
deadlines is coming up in January and February, everybody, except them,
feels exhausted and I think enervated by that prospect --

SLAUGHTER: And angry.

MADDOW: And angry -- I think you`re seeing that too.

Well, the other thing that`s happening is this budget negotiation,
which is supposedly not just about what the budget should be, but about the
process. In that negotiation, whether or not you`re hopeful about how
fruitful that discussion is going to be, is that the place where they could
work out new rules, where we don`t keep hitting this limit?

SLAUGHTER: No, we would have to do a little bit deeper than that.
They repeal Gephardt Rule and then brought it back. I think it was
repealed in 2001, brought back in 2003, repealed again in 2011. That can
be done.

But I -- my sense of it would have to be one of the House rules
changes. I could be wrong about that. I`m not a parliamentarian by any
means.

But I tell you I had a chance to talk with Senator Murray last week.
We -- you know how Democrats feel, I think made it clear in the last debate
where we are coming from. And to negotiate with Ryan on the Ryan budget,
which is the one that passed the House, is terrifying to me. That budget
did grievous harm to the things we care about in this country. They
continue the $40 billion for oil companies to encourage them to do drilling
but they don`t care a bit about taking away all the nutrition and WIC and
programs for the poor.

But then we can get together and sing a rousing chorus of "Amazing
Grace", I guess, and make it all right. It is really terrifying to me
what`s going to come out of this conference.

MADDOW: It is interesting -- interesting that the Republicans who are
critical of this whole press from the right, the far right Republicans who
wanted shutdown and everything, they`re already saying that no matter what
happens, they reject what comes out of the conference. They don`t expect
there will be anything there?

SLAUGHTER: You know something, John Boehner is a mystery to me. I
have to admit that. I have known him a long time. I have been here
casually.

But when you got 233 members of your caucus why on earth would you let
20 or 30 of them run the place? I am puzzled, I wish I could ask him.
Maybe I`ll try to do that.

But that doesn`t make any sense to me. And if I could tell you and
I`m sure every member tells you that our Republican friend and other
Congress persons from my state, Republicans, continuously tell us how they
hate it. How they don`t want to do that, and how they would look to see it
change.

And I can`t understand how we continue with this same very small
percentage of his caucus having -- wielding such incredible power.

MADDOW: Congresswoman Louise Slaughter of New York, thank you for
helping us understand this. I feel like we are all trying to become
parliamentarians to find a way out of it. But thank you for helping us
understand the process. Appreciate it.

SLAUGHTER: Let`s hope for divine interference. Thank you, Rachel.

MADDOW: That`s always the best way forward.

All right.

SLAUGHTER: Yes.

MADDOW: The government was shut down, but it is amazing what still
got done and got absolutely no headlines. But some really big and some
really surprising stuff got done.

Stay tuned.

(COMMERCIAL BREAK)

MADDOW: This clock needs to be maintained to keep on ticking. It
does not just tell time infinitely without human intervention. It needs to
be wound on a regular basis. This is the Ohio clock, which stands in the
United States Capitol, just outside the entrance to the chamber of the U.S.
Senate. It is frequently the backdrop of Senate press conferences.

About a week ago the Ohio clock stopped at 12:14 a.m., p.m., I don`t
know, 14 minutes past some 12:00, the Ohio clock stopped ticking. The
reason it stopped is that the government shutdown forced furloughs for the
people who wind it. The curators in charge of winding the thing couldn`t
come work anymore, no winding means no ticking and that means no telling
time.

Tonight, good news, the clock is back to tick another day.

Today, the museum specialist with office of Senate curator got un-
furloughed along with the federal government. He came out to the hallway
outside the chambers, big crowd was watching, climbed up the ladder. He
did his thing, wound the clock, checked to see its gears were up and
moving.

And what do you know? It works. Still works. We didn`t screw that
up. Welcome back to life, Ohio clock, your country is delighted to see
you.

And even though the Ohio clock stopped completely during the
government shutdown. The government itself did not shut completely during
the shutdown and Congress did not stop completely. It seemed look nothing
was going on but fighting over the shutdown all this time. But that`s not
true.

Quietly while everybody was distracted during the shutdown, the
Senate, for example, confirmed three federal judges. One for northern
Alabama, and two for Illinois. The Senate also last night confirmed
Caroline Kennedy as our new ambassador to Japan. Caroline Kennedy, of
course, the lawyer, Democratic activist, who`s probably best known as only
surviving daughter of President John F. Kennedy.

Also last night as Congress raced to raise the debt ceiling, the
Senate confirmed the new top lawyer for the Defense Department. Before
becoming the top lawyer at the Defense Department, with last night`s
confirmation vote, Stephen Preston was the top lawyer at the CIA. That`s
what held up his nomination for months until it snuck through last night.

You may remember Senate Intelligence Committee spend years and tens of
millions of dollars putting together a huge report about the CIA torturing
people during the Bush years and lying to Congress about it and lying
publicly about it. That huge report is still secret. And there is a big
fight in Washington over whether it will ever be declassified so us regular
humans can read it.

What we do know about the report, we know in part because, in order to
get confirmed at the Pentagon, Stephen Preston had to answer questions
about the report from Senator Mark Udall, he held up Preston`s nomination
until he got answers.

Jane Mayer reports on this at "The New Yorker" tonight. It`s a
fascinating story, people fighting how secret things should be, and we
never get to know what the thing is they`re fighting about because it`s
secret. We`ve linked to that at MaddowBlog.com today, if you want to check
it out.

Being the top lawyer for the Defense Department is a high-profile gig
in Washington in part because the last guy who had the job made it very
high profile. Jeh Johnson at the center of pretty much every major
national security decision of the Obama administration, including the
president`s ability to kill people abroad not in war zones, the question of
whether the military could intervene in Libya without a vote in Congress.
In this speech that you see here just before resigning, Jeh Johnson said
there had to be an end to the war on terror.

On top of all that, he also led the Pentagon`s effort to repeal "don`t
ask, don`t tell", which was no easy lift. Mr. Johnson stepped down as the
Pentagon`s general counsel less than a year ago. Today, we learned that
President Obama is nominating him as the next secretary for the Department
of Homeland Security. "The Daily Beast" first reported this to day.

If approved by the Senate, Jeh Johnson will be only the fourth
confirmed secretary of this young but huge agency. The president is set to
officially announce the nomination of Jeh Johnson for Homeland Security
tomorrow.

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

Thanks for being with us tonight. Have a great night.

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

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