updated 10/18/2013 11:06:18 AM ET 2013-10-18T15:06:18

ALL IN with CHRIS HAYES
October 17, 2013
Guest: Bruce Bartlett, Michelle Bernard, James Pethokoukis, Bob Herbert,
Mark Pocan, Nelini Stamp, Jess McIntosh, Sam Seder


CHRIS HAYES, MSNBC HOST: Good evening from New York. I`m Chris
Hayes.

And you can now set the days without a government shutdown counter to
one. The government is open. Government workers finally returned to their
jobs today, greeted by some high-fives. Some were also greeted by Vice
President Joe Biden bearing muffins.

And President Obama took time to talk to the nation about his agenda
going forward.

As for Republicans -- well, they`re trying to figure out just how they
blundered themselves into the disaster they engineered. And today, there`s
plenty of blame to go around.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: This morning, the crisis is over.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We fought the good
fight. We just didn`t win.

UNIDENTIFIED MALE: Folks said we were going to lose turned out to be
correct. I can`t argue with that.

SEN. JOHN MCCAIN (R), ARIZONA: It was a fool`s errand. We were not
going to defund Obamacare.

MICHAEL STEELE, FORMER RNC CHAIRMAN: Instead of bringing people
through crisis, we are creating it for them.

UNIDENTIIFED FEMALE: Republican Senator Burr said, it`s the stupidest
idea I`ve ever heard. And I think a lot of establishment Republicans
really never thought it would come to this.

HAYES (voice-over): In the last4 hours, conservatives tried to come
to grips with the depths of their defeat.

RUSH LIMBAUGH, RADIO HOST: I was pondering if I can ever remember a
greater political disaster in my lifetime.

MARK LEVIN, RADIO HOST: All this crap about the law of the land. The
law of the land is the Constitution! John Boehner was never going to fight
hard on Obamacare.

REP. MICHELE BACHMANN (R), MINNESOTA: I voted no on the bill, because
this means Barack Obama got 100 percent of what he wanted.

SEN. TED CRUZ (R), TEXAS: Senate Republicans were divided and became
basically an air force, dive bombing the House Republicans and
conservatives.

REP. STEVE KING (R), IOWA: It would be hard to gin up this kind of
effort again. I just think that`s clear.

HAYES: Those are the people who will take blame for shutting the
government down. But the so-called "suicide caucus" shouldn`t take all the
blame. The preservation caucus of self-described moderate Republicans
could have stopped the shutdown before it started.

You see, on the eve of the shutdown, Congressman Peter King of New
York waged revolt in the House.

UNIDENTIFIED MALE: Sort of a Republican revolt on Capitol Hill with
five hours to go until a possible partial government shutdown.

UNIDENTIFIED FEMALE: Spoken to some moderate House Republicans, who
are working as we speak to stage what effectively would be a revolt to try
to stop their own party from passing their plans.

HAYES: King went on the record, saying he had enough votes to kill
the House bill and shut down the government.

REP. PETER KING (R), NEW YORK: What we need is 15 to 20 votes to
defeat the rule, and that would keep it from coming up. So I think -- put
it this way, I can tell you at least 25 people on Saturday night who told
me they were definitely going to vote no.

HAYES: But when the votes were tallied, just one other so-called
moderate, Charlie Dent of Pennsylvania, voted with Peter King.

A dramatic win for the Tea Party at cleared the way for the shutdown,
so much for the preservation caucus.

But the government shutdown and the Democrats pushing Speaker Boehner
to bring a clean C.R. to the floor, the speaker pushed back.

BOEHNER: There are not the votes in the house to pass a clean C.R.

HAYES: But according to whip counts from NBC News, "The Washington
Post," and others, the speaker was dead wrong. "The Huffington Post"
reported there were up to 29 Republicans who favored ending the shutdown
with no strings attached.

RACHEL MADDOW, MSNBC HOST: It`s called arithmetic. The votes are
there.

HAYES: All 29 could have voted with king and the Democrats to avert a
shutdown, but members like Devin Nunes and Darrell Issa and Tom Cole took
the easy away out and let the country suffer. Members like John Runyan and
Rob Wittman and Lou Barletta sat on their hands and let the suicide caucus
hijack the country.

And in the end, 25 of the 29 people who "Huffington Post" reported
would support a clean C.R. supported a clean C.R. If they had voted with
Peter King in the beginning, none of this would have happened.

PETER KING: And I think we have to do some of that. We have to be
willing to say no and vote against rules and do whatever we have to do,
just let the leadership know that it`s not just the Cruz people we have to
worry about. There are others that feel very strongly. I think that will
get us on an even keel. Otherwise, we`ll let 30 to 35 Red Cruz Republicans
dominate the House.

(END VIDEOTAPE)

HAYES: Today, the president told Republicans, there is a better way
to change things than by shutting down the government and bringing the
nation to the brink of default.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: 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.

(END VIDEO CLIP)

HAYES: Joining me now, Bruce Bartlett, former senior former policy
analyst in the Reagan White House, former assistant deputy secretary for
economic policy in the George H.W. Bush administration.

And, Bruce, you got a tweet yesterday. You said, some Republicans
missed a golden opportunity to stand up to the whackos and be a hero. Not
one did.

What is your takeaway about what this episode says about the so-called
moderates or establishment or sensible members of the Republican caucus?

BRUCE BARTLETT, FORMER REAGAN ADM. SR. POLICY ANALYST: Well, I can
only conclude that there are no moderate Republicans. None. Zero.

Peter King, I mean, if that`s the best we`ve got, then he`s not very
moderate.

What I think there are, however, are a few pragmatists, who understand
that the party is going over a cliff, and they`re going to get taken with
it when it goes. But I`m just astonished by the cowardice of, for example,
the former treasury secretaries that I knew and have worked for who didn`t
say a single solitary word about defaulting on the debt and potentially
bringing down the entire world financial system.

HAYES: Yes, you were calling out former Republican treasury
secretaries to say, hey, guys, can anyone maybe come out and say, this is a
bad idea, to go through the debt ceiling, at least pierce the bubble of
delusion that has been building, that this is going to be fine. And no one
did.

BARTLETT: Not that I know of. I mean, if they had, I would have
trumpeted it to the skies. But, we have quite a few living former
Republican treasury secretaries, George Schultz, Paul O`Neill, my old boss,
Nicholas Brady, Henry Paulson, John Snow. Not one said that their party
was crazy, stupid, insane.

I`m the only one who was around saying that.

HAYES: Bruce, you`re in this position that I think is fairly novel, a
small amount of people in this position. You`re kind of an apostate from
the conservative movement, the Republican Party. I think you still
consider yourself a conservative. What it seems to me is that there`s
basically no place for people like you to stay within the conservative
movement.

What happens is, occasionally, someone will kind of come out and say,
hey, guys, what is going on here? This party is off the rails. We are
headed in a bad direction, we`re not very popular. We`re doing destructive
things. We`re denying just basic science or empirical facts about the
economy.

And what happens is, you get excommunicated as opposed to having any
kind of constitutional place to reform the party and change it.

BARTLETT: Well, that`s exactly correct. But what I don`t understand
is that just the total silence. I mean, anybody can start a Twitter
account, you know? I mean --

HAYES: Don`t I know it?

BARTLETT: I`m sure Colin Powell called up ABC or your network and
said, I got some things to say. You`d give him all the time he wants.

HAYES: Right.

BARTLETT: I don`t understand why they`re so afraid to speak out and
say that their party has been hijacked by crazy people, stupid people.

HAYES: Why is that? I mean, this goes back to these so-called
moderates, the people that were saying, let`s have a clean C.R. They could
have voted with Peter King on the rule and spared all of us.

Why the silence? What is it about the institutional structure, the
incentives, the culture or psychology of the modern conservative movement
that keeps those folks silent?

BARTLETT: Well, at least in Congress, it`s perfectly understandable.
You`ve got these crazy Tea Party people, you`ve got a primary system, where
a very few number of people decide who the nominee is of the Republican
Party, in a given congressional district. These people have unlimited
sources of money, from the Koch brothers, from the Club for Growth, from
the various billionaire plutocrats.

We have seen people like Sharron Angle and Christine O`Donnell and
Richard Mourdock and Todd Akin and other complete and total crackpots who
have gotten the Republican nomination for the Senate. You`ve got even
lower, dumber people who are capable of winning the congressional -- the
nomination for Congress in any congressional district.

But why are ex-members of Congress, why are ex-administration
officials, why are people who have no races to run for, why are they
afraid? I don`t know. I want to know. Please, tell me.

HAYES: Economist Bruce Bartlett, former Republican Treasury official,
thank you so much for your time tonight. Really appreciate it.

Joining me now is political analyst Michelle Bernard from the Bernard
Center for Women Politics and Public Policy, at think tank, and James
Pethokoukis, CNBC contributor and columnist at the think tank, the American
Enterprise Institute.

And, Michelle, I`ll begin with you. You`ve had a trajectory not
unlike Bruce Bartlett`s. You were a Republican. You were in the
conservative movement. You`ve migrated out of it.

As someone watching what unfolded over the last couple of weeks, what
conclusions do you draw about the state of conservative and Republican
politics?

MICHELLE BERNARD, THE BERNARD CENTER: It has been splintering for a
very, very long time. Quite frankly, I was listening to Mr. Bartlett
speak, and all I could think was, ditto, ditto, ditto, ditto. The
Republican Party and the, quote/unquote, "conservative movement" have been
hijacked by people who I -- it`s unfathomable what they are thinking.

So, for example, we know that today`s Republican Party is not really
run by the people who have been elected to govern it. It is run by radio
talk show hosts. It`s run by Heritage Action. It has run by the Club for
Growth, and those people are not elected officials.

We have a Republican Party that is horrible on social issues, many
people in the Republican Party, many people in the conservative movement
don`t like African-Americans. They don`t like women, they don`t like
Hispanics.

So, we ignore them on social issues and we are left with a party that
is supposed to be the party of economic common sense. And instead what we
see today is a party that does not care about the full faith and credit of
the United States.

We are supposed to be the greatest democracy in the world, and our
democracy is in tatters. We are the laughingstock of the world when a
small minority of right-wing zealots can virtually destroy the economic
well-being of the country in just a little more than two or three weeks.
And they never had a chance of winning.

That`s the only conclusion that you can draw, is that this is a
suicide attempt. This is a party that wants to be a par that is only being
-- that`s being governed through the South, and that is not going to win
national elections ever again.

HAYES: Jim, what`s your response to that.

JIM PETHOKOUKIS, AMERICAN ENTERPRISE INSTITUTE: Well, I`m going to
put aside like her comments about hating women, minorities. I think it`s
absolutely ridiculous, and not hating poor people.

Let me focus on the Tea Party from their perspective. The folks at
Tea Party they talked to and I read what they`re saying, I think they
understood -- some didn`t. There were sort of Ted Yohos who didn`t get
this -- that defaulting would be a bad thing.

But I think, (a), they didn`t believe that we would actually default,
that Treasury could come up with the money, that they could prioritize
payments. My bigger complaint is that they didn`t think the huge budget
cuts that would have to happen if we didn`t raise the debt ceiling, that
those would be just fine. So they weren`t worried about that.

But what they are really worried about, and I think too worried. And
I`m worried, but they`re way more worried than I am, one, the debt problem,
which they view as a -- we`re about to go into a debt problem in the next
year or two. I don`t think that`s the case.

And I think Obamacare is going to lead to a socialist take, a single-
payer -- they`re very worried about that.

So, from their perspective, these are both existential threats to the
United States, and listen, and breaching the debt ceiling, small potatoes
compared to that.

HAYES: OK, here`s my question for you, Jim, and to move away from the
kind of social issues and to litigate that and talk about economics here.
You know, there was this period of time where Republicans would describe
themselves as pro-growth. This was this, you know, I`m a Reagan
Republican, I`m a supply-sider, I believe in growth.

And there`s this famous quote from a conservative economist who says,
once you start thinking about growth, it`s hard to think about anything
else.

And I sit here and look at this economy. It`s growing at 2 percent or
2.5 percent or 2.2 percent GDP. And I think, we need more growth, I want
more growth. I want to see higher growth and lower employment.

And here is the Republican Party, which was supposed to hold the
mantle for growth, that used growth as their symbol, doing things that
demonstrably retard growth, that affect growth.

How do you understand that, Jim?

PETHOKOUKIS: Well, listen, there has been a pro-growth message, but
unfortunately, it has not gotten beyond corporate taxes. But there has
been an extreme focus on cutting debt that cutting debt by itself, that
that is why we are growing slowly right now. They think cutting debt is in
itself a pro-growth policy. I don`t think that`s a problem. I don`t think
that`s why the economy is growing is slower because of the debt.

HAYES: I think the debt is a -- you know, it`s a medium to long-term
problem. I don`t think it`s a right-now problem. So they are focused on
that to the extent of everything else. And I think that`s a huge problem.

HAYES: And that, Michelle, is because the debt to me, as taken on
this kind of symbolic residence, it`s not necessarily about the numbers
attached to it, it`s some manifestation of the ills of the country, and
there`s no amount of empirical argument that could dissuade people that
that`s the problem.

BERNARD: I mean, Chris, if you look at this, everybody wants to lower
the United States` debt, but we also want our members of Congress to
actually govern the country. They`ve done nothing to deal with the debt
through governance. We had the gang of six. They couldn`t get anything
done.

We`ve had the president talk over and over and over again about how
the government should be smart, that we need smart government. No one
disagrees with that. But Congress can`t pass a bill.

We have a sequester, because no one wants to make the hard decisions
that need to be made on entitlement and everything else that we need to do,
to be fiscally sound. So what do they do? They take the easy way out and
they shut government down. That`s not dealing with the debt and that`s not
fiscally responsible and it has nothing to do with dealing with the
nation`s debt.

That is governance by cowardice.

HAYES: Yes.

Well, we are now going to enter a phase in which we`re going to have a
prolonged negotiation about the way out of sequestration, and all eyes are
on what you just referred to as entitlements,. I like to call social
insurance. The long-term debt projection, the elusive grand bargain, which
we are going to talk about in just a moment, including the reappearance of
one Paul Ryan, who voted for default yesterday, an amazing thing.

Political analyst Michelle Bernard, and CNBC contributor, James
Pethokoukis, thank you both.

Coming up --

(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.

(END VIDEO CLIP)

HAYES: That was President Obama`s message for house Republicans early
today. And after the past 16 days, all I have to say about that is, good
luck, Mr. President.

I explain, coming up.

(COMMERCIAL BREAK)

HAYES: We always love hearing from you on Facebook and Twitter. Many
of us today are breathing a deep sigh of relief, many of us, but not all.
Not House Republicans. So let`s soothe their pain with some good old-
fashioned counseling. What advice would you give to sensible House
Republicans on how to deal with the less-sensible party members? Tweet
your answers @allinwithchris. Or post Facebook.com/allinwithchris. I`ll
share a couple at the end of the show, so definitely stay tuned for that.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MEGYN KELLY, FOX NEWS: If Obamacare is imploding, stay out of it, let
it implode, and then you guys going into 2014, make the case to the
American people is that it`s a bad law.

REP. LOUIE GOHMERT (R), TEXAS: I know that`s one contention, but if
Ted doesn`t spend the filibuster, if we don`t make this the focus, we had
already heard what was coming. As soon as we got beyond this summer, we
were going to have an amnesty bill come to the floor. That`s what we would
have been talking about. And that`s where the pivot would have been, if we
had not focused America on Obama care.

(END VIDEO CLIP)

HAYES: That was Texas Republican Louie Gohmert on FOX News,
essentially giving was that he knew the government shutdown was an abject
failure for the Republicans. It accomplished nothing, except for one
thing. It ate up the clock for nearly three weeks, so that none of the
other agenda items, such as comprehensive immigration reform, could move
forward. But today, fresh off signing a budget compromise to reopen the
federal government, the president addressed the country and laid out with
surprising clarity his immediate legislative agenda.

(BEGIN VIDEO CLIP)

OBAMA: First, in the coming days and weeks, we should sit down and
pursue a balanced approach to a responsible budget. Number two, we should
finish the job of fixing our broken immigration system. Number three, we
should pass a farm bill.

So, passing a budget, immigration reform, farm bill. Those are three
specific things that would make a huge difference in our economy right now.

(BEGIN VIDEO CLIP)

HAYES: Of course, in order for these bills to move forward, they`d
have to pass the House of Representatives. Perhaps you`ve heard of it.
That`s the same house that just allowed a minority of its Republican
members to shut down the government for no ostensible reason.

Joining me now is Bob Herbert, a distinguished senior fellow at Demos,
former "New York Times" columnist, and Congressman Mark Pocan, Democrat
from Wisconsin, a member of the House budget Committee.

Already everybody`s starting to talk about what this budget deal is
going to look like, because obviously we have just reset the clock. We
passed a continuing resolution, and her deadline coming up in January.

This is a joint statement from Senator Patty Murray, who`s the chair
of the Senate Budget Committee, and Congressman Paul Ryan, of the House
Budget Committee, who are heading up the Budget Conference Committee, that
are going to talk to each other. "In months ahead, we hope both sides can
work together to grow the economy and tackle our debt responsibly. We hope
we can reduce the deficit in a smarter way. We hope to restore stability
to the budget crisis and end the lurching from crisis to crisis."

Do you share the same hope and is that a delusional hope?

REP. MARK POCAN (D), WISCONSIN: I think it`s a good hope. It`s
something Democrats have been talking about since the Senate passed their
budget back in March. We`ve been trying to get the house Republicans to
appoint conferees so we could do just this.

But, you know, we haven`t had a budget for four years in this country.
You need a road map and we need to have this budget done. So I`m hopeful,
and despite the last three weeks, what we saw, which was a disaster, I
think we can move forward on this.

HAYES: So, here`s the trade everyone`s talking about. First, I want
to play about what the president said about long-term government debt,
right? This is the social insurance programs that are Medicare chief, that
are drivers of long-term debt. Take a listen.

POCAN: Sure.

(BEGIN VIDEO CLIP)

OBAMA: We need a budget that deals with issues that most Americans
are focused on -- creating more good jobs that pay better wages. The
challenge we have right now are not short-term deficits, it`s the long-term
obligations that we have around things like Medicare and Social Security.
We want to make sure those are there for future generations.

(END VIDEO CLIP)

HAYES: OK. So this is what -- this is always what it -- it`s the
grand bargain, the elusive grand bargain. Now, here is -- so what
everyone`s been talking about is you`ve got sequestration, which everyone
hates, right, which is in place, which is a drag on growth. It`s
austerity, it`s stupid austerity.

The deal on the table and what Paul Ryan is kind of talking about in
that "Wall Street Journal" op-ed a few days ago is, we trade sequestration
for, quote/unquote, "entitlement reform", right?

BOB HERBERT, DEMOS: Entitlement reform, right.

HAYES: What do you think about the odds of that and what that would
mean?

HERBERT: You know, I can`t, frankly, se it happening. If you got
real entitlement reform -- I don`t call it reform -- but something that
would appeal to the Republicans, the president`s going to have a revolt on
the left. You`ll have liberals who will be upset about it.

HAYES: You`re already seeing it today. The AFL-CIO essentially
sending out a warning shot about a benefit cut to Social Security.

HERBERT: Exactly right. But before we ever get to that, I think we
have to recognize that we still have such a dysfunctional government.
We`ve defined deviancy down to the extent where if we don`t have a debt
ceiling crisis again in February, we`ll consider that to be a victory.

HAYES: That`s right.

HERBERT: That`s a long way from a grand bargain.

HAYES: Yes. Congressman, I want to read you something Harry Reid
said today about the idea of this trade that people have been talking
about. You know, get rid of sequestration for what I will call cuts to,
you know, very important social insurance programs.

He said, "That`s no trade. We are going to affect entitlement so we
can increase defense spending? Don`t check me for a vote there. I`m not
interested in that. It is the most successful social program the history
of the world."

I don`t even know if that fact checks.

"The program is not about to go broke. So take it easy on Social
Security."

That sounds pretty strong to me. Is that in line with your thinking?

POCAN: Absolutely. You know, I know at least 107 of us signed a
letter months ago to the president that said, don`t cut Social Security or
Medicare as we figure out these budget issues we need to. You know, I sit
on the Budget Committee. Paul Ryan`s budget is the same recycled stuff
he`s put out there that`s not realistic.

We can`t even pass appropriation bills, based on their ideas, they`re
so unrealistic. It`s like Sasquatch economics. It`s something you want to
believe in, but it`s just not real. And that`s why they can`t even pass
bills assigned to those numbers. I think we need to stand strong.

HAYES: I want to sort of hang a lantern on that for a second, because
this is really important. The transportation bill -- I mean, there`s
routine work that Congress did, passing an appropriations bill. They tried
to come up -- the Republicans tried to get a transportation bill that came
in under the caps that were put in there by the Ryan budget, and the cuts
were so deep, the Republican leadership had to pull it off the floor at the
last minute, because it was going to get voted down.

HERBERT: Exactly right. And this is why, I think, it`s even silly to
be talking about long-term cuts to entitlement, if you`re talking about
Medicare or Social Security. We have to get back to having a functional
government from day to day, where the government provides the services that
American families and businesses need.

HAYES: And can be reliably counted on not to screw up the recovery.

HERBERT: Exactly. We cannot even assure people that we`ll even go
ahead and pay the bills that we`ve already contracted. So, we`re in a very
difficult place.

HAYES: Congressman, the savvy insiders, the people that cover Capitol
Hill have been saying for months, there`s no way this House is doing
anything on immigration reform. Obviously, it`s DOA. Obviously, it`s not
going to get a vote.

I have been in a small minor of perhaps hopeful contrarians that
there`s a probability, there`s daylight. Am I wrong?

POCAN: Chris, I`m with you. You know, I`m hearing --

HAYES: But don`t you have to say that? Do you actually believe that?

POCAN: I do. I really do. I mean, I share a county with Paul Ryan.
We have adjoining districts. And he has been pretty consistent on why he
thinks we have to have immigration reform. It`s for different reasons than
I think. He realizes they won`t ever be a national party again if they
don`t do it.

But the fact that you still have people like that in the party,
realizing that this is something that`s important, that you have a
bipartisan deal in the Senate, tells me it`s still alive. I know the
Democrats feel very strongly, just like the president does, and we`re going
to fight to have meaningful comprehensive immigration reform.

HERBERT: One of the big problems facing the push for immigration
reform is that a lot of people on the right in the Republican Party,
believe that this would be a political disaster for them. They don`t
believe that this is a way for them to maintain their national party
status. They think this is a way of assuring Democratic victories going
forward.

HAYES: Because you bring in 11 million new voters.

HERBERT: Exactly. They think those are going to be Democratic
voters. That`s one of the things standing in the way of it.

HAYES: Here`s the point I would make, is that the issue here is
precisely the same issue that we just had with the shutdown. Which is, if
John Boehner brought the Senate bill to the House of Representatives right
now for a vote, I think it would probably pass. I think there`s probably
20 Republican votes and almost all the Democrats, maybe all the Democrats
to pass the thing, and yet it`s going to take some courage on the part of
the same people who have shown themselves so feckless in order to get this
done.

Bob Herbert from Demos and Congressman Mark Pocan, thank you both.

HAYES: All right. There was a little something slipped into last
night`s bill to reopen the government that looked suspiciously like it
could have been a big boon for Republican Senator Mitch McConnell. But
there`s more to the story than meets the eye. We`ll unravel the mystery,
coming up.

(COMMERCIAL BREAK)

HAYES: There is an unsolved mystery about last night`s bill to open
the government and it centers on this little piece of legislative language
slipped in at the 11th hour. "Section 123, Subsection 386 of Public Law
100-676 is amended by striking both occurrences of `$775,000,000` and
inserting in lieu thereof, `$2,918,000,000.`" Confusing. Well, what it
amounts to is $1.2 billion more in authorization for an infrastructure
project on the Ohio River that just happens to be adjacent to the State of
Kentucky that just happens to the be home state of the Senate minority
leader Mitch McConnell who finds himself in a tough reelection battle. The
Senate of Conservative Fund rushed to call it the `Kentucky Kickback.`

But how did over a $1 billion for an Ohio River construction project
actually get into the bill? And is Mitch McConnell really the culprit?
Here`s the story.

Way back in 1988, Congress authorized $775 million from the Olmsted
Locks and Dams project to deal with a choke point in the Ohio River. The
locks and dam mechanism is meant to aid the commercial navigation system by
reducing the shift delays through this busy stretch of river. Its
completion date was once slated for 2006. It is now 2013,seven years
later, and the project remains unfinished and the price tag has soared.
The projected costs are now $3 billion. URS Corp is the contractor on this
Army Corps of Engineers project.

So, the project is now -- if you`re keeping track of this -- costing
four time as much as originally slated, and is behind schedule seven years
and counting. And yet, there it is, in the legislative language of last
night`s deal after a government shutdown ostensibly about government waste
and the debt and deficit. And so the Senate Conservative Fund, by calling
it the `Kentucky Kickback,` immediately fingered the culprit, Mitch
McConnell -- that dastardly (bear) in the establishment, the very senator
the Senate Conservative Fund is trying to knock off the primary challenge
to his right. And pinning it on McConnell was not a ridiculous assumption.

Here`s Mitch McConnell in 2009 visiting the Olmsted Locks and Dam
project. McConnell has a secure earmark for the project for hundreds of
millions of dollars up to 2009.

(BEGIN VIDEOTAPE)

MITCH MCCONNELL, SENIOR UNITED STATES SENATOR FROM KENTUCKY,
REPUBLICAN FROM VIDEOCLIP: Our goal would be to try to meet the annual
challenges to keep this project as close to on schedule as possible, which
in the end will allow it to be finished sooner and cheaper.

UNIDENTIFIED FEMALE: We don`t really need these and that`s because
everything at the Olmsted Locks and Dams is on a grand scale. From the
floating walls to the construction equipment to the cause.

HAYES: Then, Republicans started getting squirmy about earmarks.
Here`s McConnell in 2010.

MCCONNELL: And what I`ve concluded is that on the issue of
Congressional earmarks as the leader of my party in the Senate, I have to
lead first by example. Nearly every day that the Senate`s been in session
for the past two years, I`ve come down to this very spot and said that
Democrats were ignoring the wishes of the American people. When it comes
to earmarks, I won`t be guilty of the same thing. That`s why I`m
announcing I will join the Republican leadership in the House in support of
a moratorium on earmarks in the 112th Congress.

(END VIDEOTAPE)

HAYES: So, has McConnell violated his pledge to lead by example? Did
he try to sneak it in at the 11th hour when no one was looking? Well,
heavens, no. Senator Lamar Alexander came forward to say `It`s yours
truly.` Alexander is the ranking member of the Water Projects
Appropriations Sub-Committee, and he said the Chair, Senator Dianne
Feinstein, and himself were responsible for this request. So, Lamar
Alexander give Mitch McConnell an alibi. It wasn`t Mitch -- he was at my
house that night. I was the one, coincidentally not up for reelection or a
primary challenge, who stuck the pork in there.

Of course, Mitch McConnell and Harry Reid wrote the text of this bill
together, and even though McConnell`s office said he played no role in
securing the language, if McConnell didn`t want it, (he) would not have
been in there. All of that said, I have to say I am happy see 27
Republicans in the Senate and 87 in the House voting for an infrastructure
project which creates jobs. Now if we can just ruffle -- rustle -- up
Republican votes for the $21 billion Bill President Obama presented in
March of this year for the nation`s crumbling infrastructure, we`d be
getting somewhere.

(COMMERCIAL BREAK)

HAYES: Big election news last night that should make you think hard
about Democrats` chance to retake the House in 2014. There are in fact two
Americas and they come out for different elections. What that means to the
future of progressive politics -- later in the show. But first I want to
share the three awesomest things on the internet today. We begin with the
government shutdown slipping the surly bonds of earth, and while we breathe
a sigh of relief that this chapter is finally over, you have to admit it
gave us some great "Clip 3" fodder.

So we take a look back at some of the moments that defined this mess
in a tone befitting the congressman who fell asleep in the middle of the
whole thing. Good night, Shutdown, wish it was all just a dream. Good
night to the guy in the corner of the screen, good night Conan who
furloughed his crew, good night to the couple who still said `I do.` Good
night Wu Tang, good night Priest, good night to the Congressman who fell
asleep. Sleep tight, see you again in December.

The second awesomest thing on the internet today, the debt ceiling was
raised so it`s no surprise "Fix the Debt" has once again showed up to rid
the country of social programs. It`s the brainchild of billionaire Nixon
commerce secretary Peter Peterson who uses the comedy duo of Alan Simpson
and Erskine Bowles to go out in public and act like austerity-minded
versions of those guys from the Muppet Show. But instead of sitting in the
balcony, they try to kill Social Security. Well today "Fix the Debt" held
a Q&A on Twitter and as one blog`s "No More" pointed out, they got trolled
epically with questions like "Is it true billionaires have money vaults
like Scrooge McDuck?" "Do you ever get the urge to drink from a chalice?"
Or "Does Peter Peterson know his first and last names are comically
similar?" Or this, from Stephanie Kelton (ph) -- "Why don`t your bios
disclose your corporate ties and conflicts of interest?" -- with a helpful
link to a page disclosing all of the "Fix the Debt" conflicts of interest.
MSNBC`s Suzy Khimm did a little research and concluded the entire Q&A was
100 percent trolling, making it the most disastrous online interaction
since the ill-fated hashtag "#AskAnthonyWienerAnything.

And the third awesomest thing on the internet today, a real reason for
sports announcers to flip out. This is Cam Zink -- real name apparently.
He`s competing in the Red Bull Rampage Mountain Bike Competition, and if
you`re watching this and your nerves are already frayed, just wait until
you see the record-setting back flip he pulled off and take in the
brilliantly hyperbolic commentary.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Lots of speed for Cam Zink. He --

UNIDENTIFIED MALE: Nice little double drop. Cam Zink upside down --
He landed the flip!

UNIDENTIFIED MALE: Cam!

UNIDENTIFIED MALE: Cam Zink just landed the biggest step-down back
flip in two-wheeled history!

(END VIDEO CLIP)

HAYES: Oh, it was the biggest-step down back flip in two wheels
history? I -- of course this guy finally got respect when he did the
triple lindy. And if you thought Cam Zink`s amazing feat needed further
embellishment, our trusty announcer was standing by.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The doors have just been shattered on what can be
done on a mountain bike.

(END VIDEO CLIP)

HAYES: Which is certainly reason to celebrate because I for one have
been trying for years to shatter the doors on my mountain bike. You can
find all the links for tonight`s ("Clip Free") on our web site --
allinwithchris.com. We`ll be right back

(COMMERCIAL BREAK)

HAYES: Today the State of New Jersey has its next Senator-elect.
It`s Newark Mayor Cory Booker who won a special election last night though
it was not the resounding victory his supporters once might have expected
Booker beat his Tea Party opponent by 11 points. Last year, President
Obama won New Jersey by a significantly larger margin -- 17 points. Now
this is a little bit of an anomalous situation -- a special election in
October on a Wednesday, but the discrepancy points to a simple truth that
is often forgotten. The nature of the electorate, as much as the will of
the people, is what decides elections.

In an off year, and especially in a special election, there is lower
voter turnout and an older voting population, and that tends to favor
Republicans. For Democrats, the big challenge going forward is to try to
leverage the near catastrophe engineered by the GOP to convince their
voters to come out in 2014, a year from now, even though the president
won`t be on the ballot.

(BEGIN VIDEOCLIP)

HAYES: The story of how we got to the brink of economic catastrophe
is not just a story about Ted Cruz and a bunch of GOP extremists. It`s
much bigger than that. It`s a story about how we elect our leaders in
America. There are two fundamentally different electorate that shape
American politics. There`s the one that comes out to elect a president,
and there`s the one when the president is not on the ballot.

JOHN BOEHNER, SPEAKER OF THE UNITED STATES HOUSE OF REPRESENTATIVES:
It`s pretty clear that the Obama-Pelosi agenda is being rejected by the
American people -- they want the President to change course.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I`m not recommending
for every future president that they take a shellacking like I did last
night.

HAYES: The President was introspective that day after the midterm
elections in 2010, but John Boehner claimed that America wanted the
President to change course only makes sense if you pretend that the 41
percent of people who cast ballots are a good representation of America.
And they aren`t. This is America. This is what the electorate looked like
in 2010. And this is what it looked like in 2012 when 58 percent came out
to vote. In the 2010 shellacking, the electorate had fewer African-
Americans, fewer Latinos and more whites. It looked, well, less like
America. In short, the 2012 electorate looked kind of like the audience
that watches the Super Bowl while the 2010 electorate looked more like the
audience that watches Fox News.

The shutdown and debt ceiling fight was as standoff between those two
electorates. The big question that will determine the shape and future of
American politics -- the one that will decide whether we keep having these
destructive fights over and over and over again is whether Democrats can
turn the marginal voters who came out in 2008 and 2012 into the habitual
voters who come out in off-year elections like 2014. There are signs it
may be happening. Democratic polling shows that three of the party`s top
Republican targets in the House are more vulnerable because they backed the
shutdown.

Before that debacle, Democrats looked likely to fall short of winning
back the House next year. Thanks to GOP in intransigence, the goal is
perhaps now within reach. But a lot can change in a year, and more
importantly, the President won`t be on the ballot in the midterms next
year. They won`t be there in 2016 either, which leaves Democrats with a
major question -- can the Obama coalition 2008 and 2012 become the
permanent Democratic coalition? Answer -- dictate if we continue
government by crisis or if the `suicide caucus` can be dismantled for good.

(END VIDEOCLIP)

HAYES: Nice sunset shot there, Producers, that was beautiful.
Joining me now is Nelini Stamp, an organizer and youth director for Working
Families, Sam Seder hosts the online podcast "Majority Report" and co-host
of the "Ring of Fire" radio show and Jess McIntosh, host of the online
podcast -- no, you`re not the host of the online podcast -- (inaudible).
You work at Emily`s List.

JESS MCINTOSH, COMMUNICATIONS DIRECTOR, EMILY`S LIST: Yes, I do.

HAYES: Um, all right, so -- it`s like oh my God.

(CROSS TALK)

HAYES: I want to bring up two -- two pieces of information here
because I think this is -- this is the big question, all right. This is
the big question about progressive electoral politics, the kind of
trajectory that we`re on, whether we`re entering some era in which we can
really move the center of American debate to the left, whether we can move
policy in a progressive direction or whether we`re going to be locked in
this kind of generational war. This kind of slit that embodied in what
brought us to the shutdown.

So, there`s two things here. One, I just want to show -- the 2010
electorate versus the 2012 electorate. The 2010 electorate is 77 percent
white, 2012 is 72 percent white. 2010 electorate 12 percent under 30, 2012
electorate 19 percent are under 30. And you see also the same thing with
the senior citizens -- 21 percent in -- over 65 in 2010, 16 percent over
65. Now, those look like relatively small differences, but those margins
are everything. When you`re talking about elections, you`re talking about
close elections. And then the other thing, in the Rothenberg Political
Report today, which basically is tracking races, they are basically saying
there`s a lot more races moving into the possible Democratic column after
this shutdown, right? So the big question is, can this amount to anything?
And I want you guys to weigh in on that right after we take this break.

(COMMERCIAL BREAK)

HAYES: Earlier in the show we asked people what advice they would
give to sensible Republicans. We got lots of answers. Post into our
Twitter and Facebook pages like Kristi Meyer on Facebook, it says, "Put
your energy into compromising with the Democrats rather than tea partiers
so we can actually get the business of the country done." Judy McKay
Shaddock on Facebook who says, "I don`t think you can say that on TV!" And
my favorite, Jessica Greeley-Ceglowski who says, "They could try the way we
do it at my house, we ignore temper tantrums and the adults go on as
planned."

(COMMERCIAL BREAK)

HAYES: We`re back. On here with Nelini Stamps, Sam Seder and Jess
McIntosh who I`ll correctly identify this time as the communications
director for Emily`s List. All right, Jess, why does this problem exist?
Why does this gap exist? And is it fixable?

MCINTOSH: Yes, absolutely. It is true that historically Democrats
come out in smaller numbers in midterm elections, but we have never played
with this hand before. We were dealt something in 2012 that we frankly
have not seen. We had historic gender gaps. More women turned out -- that
was the one demographic that you left out -- 10 million fewer women voted
in 2010 than in 2008, and that was one of the --

HAYES: Wow.

MCINTOSH: -- big reasons why we saw the Republican wave. Those
women, and I work for an organization that only works to elect pro-choice
Democratic women -- that`s all we do -- our membership quintupled over the
2012 cycle.

HAYES: Wow.

MCINTOSH: That is an astronomical level of political engagement and -
-

HAYES: Here`s the question, though. If -- why was it that there was
such a difference between 2008 and 2010, I mean, that, Nelini -- that
suggest to me -- and here`s someone who works on sort of channeling
progressive energy into electoral politics?

NELINI STAMP, ORGANIZER AND YOUTH DIRECTOR FOR WORKING FAMILIES PARTY:
Yes.

HAYES: Like, how do you understand that dip after the Obama machine
had built this incredible, incredible get out the vote operation that
totally changed the electoral map?

STAMP: Well, absolutely, I mean in 2008 a lot of it -- it was just
the narrative with (inaudible) change, you know, young people turned out,
women turned out, Latinos turned out in a big way in 2008 as they did in
2012. But you saw a dip because a lot of those things weren`t -- you know,
we had a student debt crisis, we have a climate crisis -- all at hand and
we did get health care -- we got the Affordable Care Act, but what you see
is a lot of times in off-year elections and the state and local elections,
fewer people turn out. You know, the thing is off-year elections, midterm
elections happens to also be when we elect governors and state legislators
as well, and those are when people really need to go out and vote as well.

HAYES: And we are living with a legacy of that 2010 wave election for
ten years because those states Houses --

STAMP: Right, yes.

HAYES: -- then did redistricting that gave the -- that gave
Republicans these ridiculous advantages -

STAMP: Yes, right.

MCINTOSH: This is the first year we can get some of those governors
out. A lot of them got in -- Rick Scott in Florida -- got in -- Tom
Corbett in Pennsylvania is sort the perfect one -- they got in on this
wave, they have no business being there, and I think this is the year that
we`re going to take them back

SAM SEDER, HOST, "MAJORITY REPORT" PODCAST: And you know I`ll say
that you know part of the problem I think in 2010 is illustrated by the
fact that -- today you mentioned earlier -- that the AFLCIO had to come out
and say `No cuts to Social Security in any deal,` Harry Reid came out today
-- no cuts to Social Security in the event that --

HAYES: Right.

SEDER: -- we just give back on the sequester. And who are they
talking to? They`re not talking to the Republicans.

HAYES: Right.

SEDER: They`re talking to the President. And if -- there should be -
- if Democrats have to play defense against their own President right now -

HAYES: Actually I want to say two things -- one is that we left out
the most masterful trolling of Fix the Debt that happened today which was
single-handedly done by you --

SEDER: Oh, well thank you.

HAYES: We should all go follow you on Twitter and look at the
questions you asked as to that which were hilarious. Second of all, I do
not buy that argument. OK? The argument the two of you are making are the
following -- is that substantive policy decisions are things that depressed
the turnout in 2010.

SEDER: No, I totally disagree. That`s not what I`m --

HAYES: (Inaudible) Completely a structural issue that has to do with
getting these marginal voters who come out and are sort of not as attuned
to the political process -- getting them to come out as habitual voters as
a matter of course, not because, oh you didn`t have a public (inaudible).

SEDER: No, no, no, no, it`s not because of that, it`s because you --
the people who bring out those voters are the activists who are trying to -

HAYES: Ah, I see. That`s a more -- that is more nuanced theory.

SEDER: They`re trying to protect their rear guard. Unions right now
should not be worried that the President is going to push cutting Social
Security. What they should be going after is pushing right now for
comprehensive immigration reform, they should be going out there and
convincing candidates to run on increasing the minimum wage. These are
things that are going to bring out that youth vote. But instead, they`re
watching their rear guard.

HAYES: Right.

SEDER: The President has to let the Democrats go forward on offense
instead of forcing them to play defense.

HAYES: Do you think that makes sense -- that just sort of bank shot
theory about how sort of the demoralization of activists then has a cascade
effect in terms of --

STAMP: Absolutely. I mean we do need to -- as Sam just said -- we
need to go out there and tell people it`s our responsibility -- it`s
organizations, political activists -- it`s our responsibility to turn out
the vote and we need to go out there on off-year elections for a
comprehensive immigration reform, for you know the wage -- minimum wage -

HAYES: OK, here`s the perfect example. Comprehensive immigration
reform is the perfect example, OK? Here`s what`s going to happen -- and
I`ve seen this from activists on the immigration front who I respect
enormously -- who have been so kick-ass and amazing, OK? But I see them
saying that we`re frustrated, we`ve had broken promises directed at the
President. The answer to comprehensive immigration reform not getting
through if that`s what you want is to vote out Republican members of the
House. It is that simple. There is -- there is no electoral calculation
we made here other than that, and yet, sometimes delay and obstruction ends
up serving to demoralize people so that they don`t go out and vote --

SEDER: But I`m not talking about demoralization, I`m talking about
where our efforts and energies` going to go. And the fact is that if we
need to rally Democrats to prevent Social Security from being because the
administration wants to do that, that means that there`s less time for them
to be driving (inaudible).

MCINTOSH: Actually don`t. I think that there are factors in place in
2014 in terms of villains and heroes which are the two things that are
going to motivate people to come out to the polls -

HAYES: Oh I work in cable news, I`m aware.

MCINTOSH: -- that are not usually -- usually the off year is sleepy.
We need to take long lunches.

HAYES: Right.

MCINTOSH We get to go home on the weekends.

HAYES: Right.

MCINTOSH: It`s not like that this year. This year we are dealing
with presidential levels of partisanship, we just shut down the government
--

HAYES: You`re saying that organizationally in terms of what you`re
seeing day in and day out?

MCINTOSH: yes. It`s is uglier to engage the activists, I think we
can be engaged around more than one (inaudible).

(HAYES): I totally agree with that but if you`re just saying `Don`t
screw it up` --

(CROSS)

SEDER: And the people who are going to talk about those villains and
those heroes -- they have to be on board and feel like they (inaudible) the
rear guards.

MCINTOSH: I`m just being the optimist here.

(CROSS TALK)

SEDER: But I`m optimistic too.

HAYES: I think there`s a lot to be optimistic about, but I do think
you`re right -- the channeling that energy and getting that infrastructure
kind of in place and people feeling that level of presidential level energy
is what`s going to be key for center left electoral politics. Nelini
Stamps from Working Families Party, Sam Seder from the "Majority Report"
and Jess McIntosh from Emily`s List. Thank you so much. That is "All In"
for this evening. The Rachel Maddow Show starts right now -- good evening,
Rachel.

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

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