updated 10/31/2013 4:29:08 PM ET 2013-10-31T20:29:08

THE LAST WORD WITH LAWRENCE O`DONNELL
October 30, 2013
Guest: Robert Reich, John Barro, Krystal Ball, John Reitmeyer, Jonathan
Chait

LAWRENCE O`DONNELL, MSNBC HOST: Today, President Obama went to the very
spot in Boston where Mitt Romney signed Romneycare into law. And there,
President Obama defended the Affordable Care Act.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: President Obama is expected to share the limelight.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So health care reform in
this state was a success.

UNIDENTIFIED MALE: President Obama is just minutes away.

UNIDENTIFIED FEMALE: Stop in Boston by the president.

UNIDENTIFIED MALE: From a critical speech on his signature healthcare law.

OBAMA: Let`s face it. We`ve had a problem.

UNIDENTIFIED MALE: Obamacare Web site.

UNIDENTIFIED FEMALE: Web site glitches.

OBAMA: Web site hasn`t worked the way it`s supposed to.

UNIDENTIFIED FEMALE: No doubt about that.

OBAMA: There`s no excuse for it.

KATHLEEN SEBELIUS, HHS SECRETARY: I apologize.

OBAMA: I take full responsibility for making sure it gets fixed.

SEBELIUS: I`m accountable to you for fixing these problems.

UNIDENTIFIED FEMALE: Taking the blame.

UNIDENTIFIED FEMALE: Kathleen Sebelius accepted responsibility.

UNIDENTIFIED FEMALE: Kathleen Sebelius in the hot seat today.

UNIDENTIFIED FEMALE: Testifying before the House Energy and Commerce
Committee.

SEBELIUS: We were wrong. We must fix it.

UNIDENTIFIED FEMALE: You have a few committee members who were looking for
perhaps sound bite.

UNIDENTIFIED FEMALE: Everyone had their very rehearsed one-liner.

UNIDENTIFIED FEMALE: To be played on cable news.

UNIDENTIFIED FEMALE: Some people like to drink out of a red solo cup.

UNIDENTIFIED MALE: It`s a college student doing a keg stand.

UNIDENTIFIED FEMALE: Some people like to drive a Ford not a Ferrari.

UNIDENTIFIED FEMALE: Has a man ever delivered a baby?

UNIDENTIFIED MALE: Come on in, the water is fine.

UNIDENTIFIED MALE: Toto, we`re not in Kansas anymore.

UNIDENTIFIED MALE: I love the "Wizard of Oz" reference.

UNIDENTIFIED MALE: The proverbial, we`re not in Kansas anymore.

UNIDENTIFIED MALE: Well, you`re from Kansas. We`re not in Kansas anymore.

SEBELIUS: You clearly, whatever.

OBAMA: We are working overtime to improve it every day.

UNIDENTIFIED MALE: That`s good news.

OBAMA: This is the hall where Mitt Romney --

RICK SANTORUM (R), PENNSYLVANIA: Pick any other Republican in the country.

OBAMA: He did the right thing on health care.

SANTORUM: He is the worst Republican in the country.

OBAMA: We are in this together and we are going to see it through. We are
going to see this through! [

(CHEERS AND APPLAUSE)

(END VIDEOTAPE)

O`DONNELL: So sorry that we can`t afford the rights to clips of "Wizard of
Oz".

The secretary of health and human services faced hours of questions at a
House committee hearing today about Affordable Care Act.

And President Obama bypassed Congress to speak directly to the American
people at Faneuil Hall in Boston today.

(BEGIN VIDEO CLIP)

OBAMA: This is the hall where seven years ago, Democrats and Republicans,
came together, to make health reform a reality for the people in
Massachusetts. It`s where then-Governor Mitt Romney, Democratic
legislators, Senator Ted Kennedy -- many of the folks who are here today --
joined forces to connect the progressive vision of healthcare for all with
some ideas about markets and competition that had long been championed by
conservatives.

Enrollment was extremely slow. Within a month, only about 100 people had
signed up, 100. But then 2,000 had signed up, and then, a few more
thousand after that. By the end of the year, 36,000 people had signed up.

All the parade of horribles, the worst predictions about health care reform
in Massachusetts never came true. They`re the same arguments that you are
hearing now. Business didn`t stop covering workers. The share of
employers who offered insurance increased. People didn`t get left behind.
Racial disparities decreased. Care didn`t become unaffordable.

(END VIDEO CLIP)

O`DONNELL: President Obama took responsibility for the problems with the
federal insurance exchange Web site.

(BEGIN VIDEO CLIP)

OBAMA: Let`s face it. We`ve had a problem. The Web site hasn`t worked
the way it is supposed to, over these last couple of weeks. And as a
consequence, a lot of people haven`t had a chance to see just how good the
prices for quality health insurance through the marketplaces really are.

Now, ultimately, this Web site, Healthcare.gov, will be the easiest way to
shop for and buy these new plans, because you can see all these plans right
next to each other, and compare prices and see what kind of coverage it
provides.

But -- look, there`s no denying it. Right now, the Web site is too slow.
Too many people have gotten stuck. And I am not happy about it. And
neither are a lot of Americans who need health care. And they`re trying to
figure out how they can sign up as quickly as possible.

So, there`s no excuse for it. I take full responsibility for making sure
it gets fixed ASAP. We are working overtime to improve it every day, every
day.

(APPLAUSE)

(END VIDEO CLIP)

O`DONNELL: And the president responded to the controversy about people who
are losing their existing health plans.

(BEGIN VIDEO CLIP)

OBAMA: It is also true that some Americans who have health insurance plans
that they bought on their own through the old individual market are getting
notices from their insurance companies suggesting that somehow because
Affordable Care Act, they may be losing their existing health insurance
plans.

This has been the latest flurry in the news. Because there`s been a lot of
confusion and misinformation about this, I want to explain just what`s
going on.

If you had one of these substandard plans before the Affordable Care Act
became law and you really liked that plan, you were able to keep it.
That`s what I said when I was running for office. That was part of the
promise we made.

But every since the law was passed, if insurers decided to downgrade or
cancel substandard plans, what we said under the law is you`ve got to
replace them with quality, comprehensive coverage. For the vast majority
of people who have health insurance that works you can keep it. For the
fewer than 5 percent of Americans who buy insurance on your own, you will
be getting a better deal.

So, anyone peddling the notion that insurers are canceling people`s plan
without mentioning that almost all insurers are encouraging people to join
better plans with the same carrier and stronger benefits and stronger
protections, while others will get better plans with new carriers through
the marketplace, and that, many will get new help to pay for these better
plans and make them actually cheaper -- if you leave that stuff out, you`re
being grossly misleading, to say the least.

But nobody is losing their right to health care coverage. And no insurance
company will ever be able to deny you coverage or drop you as a customer
altogether. Those days are over. And that`s the truth. That is the
truth.

(END VIDEO CLIP)

O`DONNELL: Joining me are: Richard Wolffe, executive editor of MSNBC.com,
and Robert Reich, former Clinton labor secretary and a professor at
University of California-Berkeley. His film "Inequality for All" is in
theaters now.

Richard Wolffe, I keep thinking could have been you. It could have been
you, with the launch of the new MSNBC Web site.

RICHARD WOLFFE, MSNBC.COM: It may yet still be.

O`DONNELL: An awful lot simpler than the Affordable Care Act Web site.

WOLFFE: But, still, you know, every Web site is complicated. Just because
you can click on something doesn`t mean it`s simple. Lots of promises on
this Web site, Healthcare.gov, they`re still working on it at an incredible
pace. I got to tell you, yes, it was a mess to begin with. But anyone who
has done this, who can see how quickly they`re crunching through this,
you`ve got to tip your hat off to them because it`s a lot of man-hours
going in right now.

O`DONNELL: All right. Robert Reich. It`s ironic that the story that has
come along to, kind of -- overshadow possibly, helpfully in a way for the
Obama administration, the Web site problem, is this story about people are
losing health insurance, that here we have the launch of the Affordable
Care Act, and the story that`s leading the news now is people losing health
insurance. The president just explained it`s a kind of gross
oversimplification of what`s actually happening.

ROBERT REICH, FORMER LABOR SECRETARY: Well, not only an
oversimplification, Lawrence, but also, it is terribly misleading. I mean,
that 5 percent of Americans who are the private insurance market right now,
about 12 million, they`ve been losing their insurance -- half of them have
been losing their health insurance every year. And the private insurance
market is the place where the insurance premiums, co-payments and
deductibles have been taking huge leaps, 15 percent or 20 percent increases
every year.

So, all that the Affordable Care Act does is it says, look, you guys,
you`ve got to play by standard rules. You`ve got to provide minimum
coverage. In terms of competition, if you want to go 15 percent, 20
percent a year increase, you`ve got to compete directly with others in
these exchanges.

Now, of course the exchanges have got to by up and running in order for
people to see the benefits of that.

O`DONNELL: And, Richard, it turns out that what the president was saying
in his campaign for the presidency and his campaign to pass the bill turns
out to be true in the bill. You can keep your plan, the plan you had at
the time he was saying this before the law was enacted. All of those
plans, even substandard ones were allowed to continue under this law.

If they`re not continuing, it`s the insurance company deciding they`re not
continuing.

WOLFFE: Right. Because he is not a socialist, Marxist, Muslim
revolutionary, he is not actually telling the private sector, you must keep
these plans in place. You know, it is extraordinary watching people twist
this around for political gain. But this is a bit like someone saying, I`m
going to sell you a $500 car, and that pesky government says this car has
to be road-worthy.

I mean, it`s an astonishing idea that somehow these bad policies -- and I
cover the insurance industry for many years. Insurance sell cheap policies
because they never pay out on them. The prices are low, because they never
spend any money on them. It is pretty simple. If you spend a lot of money
on insurance, generally you should get something back. Not always, but
generally. That`s insurance.

So when you get a cheap policy. You get no benefits for it. What is it
really worth?

O`DONNELL: And, Robert Reich, every headache the Obama administration has
the at this point in the rollout of the Affordable Care Act, comes from the
operating principle going into writing the legislation that they did
everything they possibly could to preserve private insurance companies`
positions in the health care marketplace and allow them to preserve their
profit margins.

REICH: Exactly, Lawrence. The big irony here is that many of us had been
arguing for years that any new comprehensive health care system offered by
the Democrats ought to be grafted on to Social Security, Medicare, and paid
for by the payroll tax. That`s called a kind of single-payer.

But the Republicans for years have been saying, no, we don`t want it that
way. We want private insurers. We want a profit motive. We want a
market.

And indeed if you look back, historically, Richard Nixon came up with a
proposal that was very, very close to the Affordable Care Act. The
Democrats didn`t like it because it wasn`t close enough to Social Security
and Medicare.

Mitt Romney, the reason the president is in Massachusetts is because
Obamacare was modeled exactly after Romneycare in Massachusetts, including
the individual mandate, which Mitt Romney after he signed that into law and
was asked where did the mandate come from. He said, oh, it was an idea
from the Heritage Foundation, and I heard from it through Newt Gingrich.
That`s where -- that`s where this comes -- comes from.

So, for Republicans now to turn around and say, oh, we think this is just
awful. We don`t like any of this. Well, it`s beyond ironic. It is sort
of -- tragic and comic at the same time.

O`DONNELL: Now, Secretary Sebelius repeatedly faced questions about this
dropping of insurance policies on paper. Let`s listen to how she handled
it.

(BEGIN VIDEO CLIP)

SEBELIUS: The president made it clear, and our policy was put a
grandfather clause in both employer-based coverage and in --

UNIDENTIFIED MALE: Right, but in the federal --

SEBELIUS: These are private insurance plans --

UNIDENTIFIED MALE: I do have to ask you this.

SEBELIUS: -- making private decisions.

(END VIDEO CLIP)

O`DONNELL: Richard Wolffe, will that message get through this, these are
private insurance plans making private decisions which, this all-
encompassing government program allows them to do.

WOLFFE: Allows them to do.

I don`t think it will break through because Republicans just don`t want to
hear that what this socialist, Marxist revolutionary president has done is
empower consumers and encouraging --

O`DONNELL: I think you actually have to label that as a joke, in this kind
of programming. Without a laugh track in the audience, people aren`t
really sure.

WOLFFE: Excuse me. Yes, some Web sites probably should fail will pick
this up and treat that as serious.

You know, this is about empowering consumers and about fostering
competition. One of the problems, I`m sure many of these congressmen have
had rich and varied lives before they went into this browbeating session
today. But as someone who has tried to buy insurance in the individual
market place for many years, it is incredibly hard to compare anything with
anything. You are looking at variables all throughout.

Having informed consumers is surely the most free market approach you can
get. Will they accept this explanation? I don`t think so.

O`DONNELL: Robert Reich and Richard Wolffe -- thank you both very much for
joining me tonight.

WOLFFE: Thank you.

REICH: Thanks, Lawrence.

WOLFFE: Coming up, Ted Cruz is backing down. He really is. There is big
news about Ted Cruz from a private meeting of Republican senators today.

And in tonight`s episode of campaigning versus governing, no one, no one
oversimplifies on the campaign trail more than Chris Christie.

And Kathleen Sebelius, the Wizard of Oz, and Bill O`Reilly are together in
tonight`s "Rewrite."

(COMMERCIAL BREAK)

O`DONNELL: When House Democrats held a closed door briefing with Health
and Human Services officials last week, House Republicans demanded to have
their very own meeting with Health and Human Services officials to discuss
the healthcare Web site problems. So that meeting was schedule for
Republicans and just Republican today. And of the 232 Republicans in the
House who demanded that meeting, exactly 20 showed up.

Up next, Senator Ted Cruz is backing down.

(COMMERCIAL BREAK)

O`DONNELL: Ted Cruz is backing down.

Remember this Ted Cruz?

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), TEXAS: We saw the House of Representatives stand
strong, listen to the people, and stand strong against Obamacare. And,
sadly, as you just noted, what we then saw was Senate Republicans not unite
but be divided. If Senate Republicans had united and supported House
Republicans, supported the American people, we could have had a very
different outcome.

(END VIDEO CLIP)

O`DONNELL: That was Ted Cruz talking two weeks ago, actually while
Congress was still voting to open the government, raise the debt ceiling,
and yes, continue funding the Affordable Care Act.

Today, "Politico" is reporting Ted Cruz is backing down and has promised
his fellow Republican senators that he will stop attacking them. According
to "Politico", Ted Cruz attended a closed door lunch meeting with fellow
Senate Republicans where he told them he won`t engage in the Senate
Conservative Fund`s hardball tactics to defeat his colleagues. The
freshman conservative told his colleagues that he would not intervene in
their 2014 primary fights or fund raise for the controversial outside
group.

The Jim DeMint founded Senate Conservatives Fund closely aligned itself
with Ted Cruz leading up to the government shutdown, even putting him in
one of their ads.

(BEGIN VIDEO CLIP)

CRUZ: We need Congress to stand up and defund Obamacare now.

(END VIDEO CLIP)

O`DONNELL: Ted Cruz is not disassociating with the group entirely,
according to the "Dallas Morning News." Cruz`s spokeswoman says he will
continue to work with them on common conservative issues as they arise.

Joining me now, Jonathan Capehart, an MSNBC policy analyst and "Washington
Post" columnist, and Josh Barro, politics editor for "Business Insider".

Jonathan Capehart, well, that was quick. I mean --

JONATHAN CAPEHART, THE WASHINGTON POST: Well, I mean -- the story points
out that he promises not to campaign against them in their -- in their re-
elections. But I don`t -- look, I believe firmly this is a trust but
verify situation with Senator Cruz. There is nothing stopping him from
going to the floor and/or going out to the cameras and saying, well, you
know, the Senate is not doing what it needs to do.

You just -- you do not spend as many months as he has spent in the Senate,
however little they`ve been in the Senate, beating the hell out of the
institution and Republican colleagues and over one lunch decide, you know
what, I`m going to back off. I`m going to leave you alone.

O`DONNELL: Well, we`re going to find out whether, Josh Barro, this means
simply not naming names anymore or just kind of -- as Jonathan said, still
being able to go out there and say, you know, the Senate isn`t working, and
our side of the Senate isn`t working well.

JOSH BARRO, BUSINESS INSIDER: Well, expect he will go out and say that. I
mean, this group, the Senate Conservatives Fund, Mitch McConnell has
basically declared war on it. They`ve been backing his opponent in this
Kentucky Senate race and his campaign put out a statement about how the
Senate Conservatives Fund is really working to help Democrats by
undermining the Republican majority in the Senate.

So, I think Ted Cruz through a number of things forcing Republicans into
the shutdown has angered a lot of his colleagues and it`s helped raise his
profile nationally but maybe made them too angry to serve Ted Cruz`s
purposes.

So, I think, you know, this is not a surrender by Ted Cruz. I would call
it strategic retreat. I think he needs to rebuild some relationships
there.

But, clearly, Ted Cruz`s power to fame and power within the party and his
own presidential run in 2016 involves running against the rest of the
Senate caucus as not conservative enough. So, this is not the end of Ted
Cruz`s fight. But he maybe a little bit less noisy for the next few
months.

O`DONNELL: Right. You know, we were all kind of marveling at how he can
do this. We have never seen anything like it, attacking your own party in
the Senate. So, it will not surprise me itch he actually stops doing this,
because it`s unprecedented behavior already.

Let`s listen to something Mike Lee said yesterday that sounds like may be
pulling back from the really rough stuff on his colleagues. Let`s listen
to this.

(BEGIN VIDEO CLIP)

SEN. MIKE LEE (R), UTAH: But however justified, frustration is not a
platform. Anger is not an agenda, and outrage as a habit is not even
conservative. Outrage, resentment and intolerance are gargoyles of the
left.

For us, optimism is not just a message. It`s a principle. American
conservatism at its core is about gratitude and cooperation and trust and
above all, hope. It`s also about inclusion.

Successful political movements are about identifying converts not heretics.

(END VIDEO CLIP)

O`DONNELL: In the future, Jonathan, we`re going to ill leave your mike
open during that kind of video, so we can hear the laughter. You finished
laughing.

CAPEHART: I`m finished laughing.

O`DONNELL: Ready to comment on what you`ve just heard.

CAPEHART: Platitudes are us. Is he talking about -- his and Senator
Cruz`s behavior to their own colleagues in the Senate? Or is he talking
about the conservative movement as a hole. And their vision for the
country and where they want the country to go, because if you look at what
they have done, vis-a-vis Obamacare, where is the hope?

Where is the looking-forward? Where is the coming together, the tolerance
that he was talking about? Where are the ideas? Where are the real ideas
that are coming out of Senator Lee and Senator Cruz to make those
platitudes he mentioned so, so well, make them a reality?

O`DONNELL: So here is Tea Party Republican Mike Lee, he seems to now have
gone from attacking Republicans to attacking the Tea Party. How dare he
say anger is not an agenda? How dare he attack the Tea Party like that?

BARRO: Yes, I mean, this is a really interesting speech from Senator Lee.
The whole speech is worth a read. This part was kind of platitudes. But
there are really substantive policy see ideas in the speech. Some of which
are even good ideas. Some of them are bad idea.

He does seem to be trying to reengage with creating a positive policy
agenda for the Republican Party, rather than just attacking. What`s weird
about it, it is so different than what he has been doing with Senator Cruz
for the last few months.

And we have been seeing news stories about after shut down was resolved,
Congress went home. Ted Cruz went home to a hero`s welcome, and got a
standing ovation. And in Utah, Lee was not as the well-received. Utah
like Texas is a conservative state.

O`DONNELL: His poll numbers went underwater over this.

BARRO: His poll numbers want down. I think the Mormon conservatism is
somewhat different from Southern conservatism. Not as interested in this
kind of disorder and trying to fight the government and break everything.

So, I think, Lee maybe finding that that didn`t sell so well with his home
base. It certainly hasn`t sold very well with the rest of the Republican
caucus. And he may be setting out to do something a lot more constructive.
I`m pretty happy about it.

O`DONNELL: Jonathan Capehart and Josh Barro -- thank you both for joining
me tonight.

Coming up, what you`ve been told abut Chris Christie`s governing record by
Chris Christie not exactly true.

And in the "Rewrite" tonight, Republicans drag the Wizard of Oz into the
House hearing on the Affordable Care Act today.

Jonathan, someone has got to tell those Republicans, the Wizard of Oz is
not a documentary. OK?

BARRO: It`s not?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I know we still have work to do. But
I really believe, finally, New Jersey is moving in the right direction.

(END VIDEO CLIP)

O`DONNELL: That was New Jersey Governor Chris Christie and his newest
campaign ad. In the spot light tonight, another example of what New York`s
former governor, Mario Cuomo, would call campaigning in poetry and
governing in prose. This time in New Jersey.

Here is what then-candidate Chris Christie promise heed would do as
governor campaigning against Jon Corzine in 2009.

(BEGIN VIDEO CLIP)

CHRISTIE: Here`s exactly what I`ll do as governor: I`ll cut spending and
end special interest giveaways. I`ll cut taxes and restore your property
tax rebates. I`ll bring good jobs back to New Jersey. And not chase them
to other states. And I`ll make sure all of our children get the education
they deserve.

(END VIDEO CLIP)

O`DONNELL: But today, "The New York Times" reports as Governor Chris
Christie, quote, "has relied on the same kind of short-term strategies
diverting money from things like affordable housing and property tax
rebates to balance the budget." He has issued more debt for transportation
projects than any of his predecessors. Overall spending has risen 14
percent. And while state surpluses nationwide are growing, New Jersey`s
has shrunk to its lowest percentage in a decade.

The state`s bond rating is among the worst in the country. Mr. Christie`s
budget for 2014, at just shy of 33 billion will reach the second highest
amount in state history and more than Governor Corzine`s did in his last
two years in office. Chris Christie`s democratic opponent Barbara Buono
highlighted these failures during a debate last week.

(BEGIN VIDEO CLIP)

BARBARA BUONO (D), NEW JERSEY GOVERNOR CANDIDATE: This is a governor who
balanced his budget by raising property taxes, the cruelest tax of all
without asking millionaires to pay a penny more. A governor raised taxes
on the working poor and then veto the minimum wage increase. And then
increase taxes in essence by raising fares on trains and buses. You might
not call it a tax, but has the same effect because it increases the cost of
living for beleaguered commuters and increased tolls. Need I go on. And
let me just say this, I said it last week, I will say it again. You are
the last person to talk to anybody about taxes, governor.

(END VIDEO CLIP)

O`DONNELL: Joining me, MSNBC`s Krystal Ball and John Reitmeyer, a reporter
for "The Bergen Record" who covers the New Jersey budget.

Krystal, so, you know, controversy today in Washington is President Obama
said, you know, you could keep your health insurance policies and it turns
out, I can`t keep mine. Well, you know, he didn`t say -- I can prevent
your insurance campaign from taking it away from you.

KRYSTAL BALL, MSNBC CO-HOST, "THE CYCLE": Right.

O`DONNELL: But here is Chris Christie with much bigger variations off of
his campaign language and what he actually did.

BALL: Right. Absolutely. And I mean, what you see with Chris Christie is
actually common Republican magical thinking, in terms of his budgets and
the way his rhetoric matches up with reality. And I think Barbara Buono
was pointing out. One example there were in Republican world, a tax
increase only counts as a tax increase if it is on the wealthy. Right?
Lowering the earned income tax credit which is essentially a tax on the
working poor as she points out. That doesn`t count. Raising fees.

That apparently doesn`t count. And the other piece of magical thinking
that he engages in, that reminds me a lot of Paul Ryan. Is he projects
that lowering taxes on businesses and on millionaires is going to somehow
magically increase revenue. And he has a lot of rosy predictions about the
state`s growth that when it doesn`t come to pass his revenue projections
fall far short of what was originally anticipated. And he has to grab
money from these other posts in order to fill the gap.

O`DONNELL: John, we just saw the video. He ran for governor saying --
here`s exactly what I will do as governor. Exactly what I will do. I will
cut spending. Didn`t cut spending. I mean, the list goes on. I will cut
taxes. Restore your property tax rebates. And he raises property taxes.
How does this work in New Jersey?

JOHN REITMEYER, REPORTER, "THE BERGEN RECORD": He cut the program and he
turned it into a direct credits. Not only did he significantly reduce how
much, most low income. And middle-class homeowners and seniors receive.
He also converted it in. Instead of receiving a rebate check. That you
can then go out and spend. Transferred it into a direct credit on your
property tax bills. You know, I`m going to get that check. You know, this
was the campaign commercial a month after he won election, I think that the
results may have been a lot different. I think the takeaway is what he`s
found is it is a lot harder when you are actually running the state and
you are in control of the budget than when you`re on the outside and you
are criticizing the guy who is.

O`DONNELL: And Krystal, it seems that he trust to work this reputation as
the straight talker.

BALL: Right.

O`DONNELL: But it isn`t actually based on doing what he says he would do.

BALL: Yes, that`s exactly right. And I mean in fairness. He doesn`t try
to work it. He does work it. He`s got great approval rating, he`s
coasting to re-election. And one thing John and I were talking about here
is, you know, he will do a big thing. Like he will mix the tunnel project
that, you know --

O`DONNELL: Disastrous. The stupidest thing I have seen a politician in
the region do in my lifetime.

BALL: This tunnel project which is a very big, you know.

O`DONNELL: Very important.

BALL: Splashy thing. And then meanwhile, so he gets the reputation as, as
making tough choices. And cutting spending in a big way. Meanwhile, he
has increasing transportation this reputation that doesn`t match what he is
actually doing. And I think that speaks to a lot of what he is doing.
People used to say that George W. Bush was all hat and no cattle. And I
think that could kind of apply to Chris Christie here as well.

O`DONNELL: John, when you isolate Barbara Buono in that debate there. It
sounds like, wow, she should really be scoring points?

REITMEYER: Well, the problem is no one really watched it.

O`DONNELL: Ah. There is that. OK.

REITMEYER: Her challenge the whole time. Polls that came out this week,
shows that there are still I think 30 percent, 35 percent New Jersey voters
who still don`t know enough about her to form a solid opinion about her.
So for all that, she has been out on the campaign trail and trying to make
her points. And going on the debate. And being very aggressive with the
governor. His staff whether be the campaign side or the governor`s office,
they`re incredibly skilled at creating these narratives. Pumping them out
through social media. YouTube videos.

He talks over the news media. And he is able to go right around us, go
right to his constituents. Where we might be presenting a more objective
version, one that`s more rooted in the facts. Such as the spending
increases, borrowings up, tolls are up. Property taxes are up. At the
same time, the rebates have been cut. The narrative that`s coming out of
his office that everybody is listening to, whether its Sandy or just
generic leadership, that`s what carries the day.

O`DONNELL: Let` listen to Barbara Buono`s new ad.

(BEGIN VIDEO CLIP)

BUONO: Four hundred thousand New Jerseyans out of work and our poverty
rate at a 50 year high. Christie raised taxes on the working poor. But
won`t ask millionaires to pay another dime. He wants to be president. I
want to be your governor.

(END VIDEO CLIP)

O`DONNELL: But Krystal, it`s hard to get the message through.

BALL: It is hard to get that --

O`DONNELL: He has got an overwhelming amount of money in terms of TV
advertising over her.

BALL: He has got an overwhelming amount of money. And it`s the sort of
thing, there`s a chicken and egg problem with her. Right? She was running
against this guy that basically everybody else was afraid to run against.

O`DONNELL: Yes.

BALL: So, she had trouble getting off the ground. Getting support.
Nobody nationally really came in to help her. All the focus has gone to
Virginia. And because this race is seen as sort of already gone. So she
hasn`t been able to get the attention she really hasn`t been able to get
the campaign rolling and score points on him. When there are places where
he genuinely is vulnerable. And I think if he did run for president in
2016, there would be a lot more scrutiny on the things. We`re talking
about a lot more scrutiny on the fact that New Jersey has the eight worst
unemployment rate in the country. So, we can exactly hang a hat on great
economic results there.

He would hear that in the Republican primary as well as a general election.
Krystal Ball and John Reitmeyer, thank you both very much for joining me
tonight.

BALL: Thank you, Lawrence.

O`DONNELL: And coming up, things congressmen say on TV. Even when they
know they`re on TV. Today`s house committee hearing on the Affordable Care
Act produced some gems including a couple, from the oldest member of
Congress who is actually the only one. Wise enough to know that when he
tries to tell a joke in a committee hearing. He actually has to explain to
the audience that it is a joke. That`s in the "Rewrite."

(COMMERCIAL BREAK)

O`DONNELL: On Friday of this week, the city of Boston, the Boston Celtics
will unveil a statue honoring basketball great and presidential Medal of
Freedom recipient Bill Russell. I will be there at City Hall Plaza when
they but today, President Obama got a sneak peek of the statue which is
under a tent on City Hall Plaza now in Boston. And a Boston statue of Bill
Russell was actually President Obama`s idea. It was something that the
president suggested the day he gave Bill Russell the presidential Medal of
Freedom. Boston heard that suggestion and now it is happening. The
president was joined in this, in this sneak peek today by Bill Russell and
Massachusetts Governor Duval Patrick.

(BEGIN VIDEO CLIP)

OBAMA: You don`t get to see it until Friday.

(END VIDEO CLIP)

O`DONNELL: The "Rewrite" is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. RALPH HALL (R), TEXAS: Were you born in Kansas, in Meade, Kansas?

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: I was not. I was
born in Cincinnati, Ohio. I married a Kansan and went to Kansas.

HALL: All right. I was in the third grade there, and I thought I saw you
on a tricycle there one day.

(LAUGHTER)

SEBELIUS: Well, it was an illusion.

(END VIDEO CLIP)

O`DONNELL: Today, the House of Representatives rewrote the importance of
Kansas. Now I am not saying Kansas isn`t important. But let`s just
remember, it is only one of 50 states. It is in fact one of our smaller
states buy population, 32 states have more people than Kansas. California
has 13 times more people than Kansas. But because Health and Human
Services Secretary Kathleen Sebelius is from Kansas or more accurately
married her way into Kansas, some members of the House of Representatives
seem to believe that the secretary`s Kansas connection explained a lot
about at the Affordable Care Act.

Ninety-year-old Congressman Ralph Hall thought he saw Kathleen Sebelius on
a tricycle when he was in the third grade. Never mind that Kathleen
Sebelius was at least 18 years away from being born when Ralph Hall was in
the third grade. I guess we are to assume that Ralph Hall was joking, but
it is never easy to tell when a 90-year-old congressman is joking. And
Ralph Hall seems to get that. Because, he usually labels his jokes a joke.

(BEGIN VIDEO CLIP)

SEBELIUS: There has been $197 million obligated. And that is -- to last
through March of 2014. And as I said before about 104 million dollars has
been expended in that obligated amount.

HALL: I will try to be here on 2014 to make sure your testimony is
correct, OK. I`m just joking with you.

(LAUGHTER)

SEBELIUS: OK.

(END VIDEO CLIP)

O`DONNELL: Yes. OK. I suppose, a 90-year-old congressman joking about
his life expectancy could be funny. But I do think the audience was
absolutely correct in holding their laughter until they were absolutely
certain it was a joke. Texas Congressman Joe Barton is 26-years younger
than Congressman Ralph Hall, but he already speaks Hall`s language.

(BEGIN VIDEO CLIP)

REP. JOE BARTON (R), TEXAS: There is a -- a famous movie called the
"Wizard of Oz." And in the "Wizard of Oz," there is a great line, Dorothy,
at some point in the movie, turns to her little dog Toto and says, Toto, we
are not in Kansas anymore. Well, Madam Secretary while you are from
Kansas, we are not in Kansas anymore. Some might say that we are actually
in the "Wizard of Oz" land given, the parallel universes we appear to be,
habitating.

(END VIDEO CLIP)

O`DONNELL: No, no, no, no. No one might actually say, in a Congressional
hearing, we`re in the "Wizard of Oz" land, no one, except a congressman
with a staff who cannot control him. And so he wastes his precious few
minutes of speaking time at an important hearing talking about the "Wizard
of Oz" land. The next speaker, Frank Pallone, a democrat from New Jersey
could not resist the setup.

(BEGIN VIDEO CLIP)

REP. FRANK PALLONE (D), NEW JERSEY: Thank you, Mr. Chairman. I know we
are not in Kansas, but I do believe increasingly we are in oz because of
what I see here. So, this "Wizard of Oz" comment by my colleague from
Texas, I think is particularly apropos given what we hear on the other side
of the aisle. I don`t know how you keep your cool, Madam Secretary.

(END VIDEO CLIP)

O`DONNELL: Bruce Braley, a democrat from Iowa was inspired by Joe Barton`s
riff on the "Wizard of Oz" and with all of Dorothy`s Dewy eyed optimism
about hope and change, he turned the "Wizard of Oz" back on the
Republicans.

(BEGIN VIDEO CLIP)

REP. BRUCE BRALEY (D), IOWA: One of these things that keeps coming up in
this hearing because you are from Kansas is references to the "Wizard of
Oz," and people went to see the wizard because of the wonderful things that
he did. And the Affordable Care Act is doing a lot of great things in
Iowa.

(END VIDEO CLIP)

O`DONNELL: Can`t you just hear Dorothy saying, the Affordable Care Act is
doing a lot of great things in Iowa. In the future, Congressman Braley
would be well advised to confine his Affordable Care Act comparisons to
things that actually exist. Unlike say, the "Wizard of Oz." I hope by
now, Congressman Braley staff has explained to him that the "Wizard of Oz"
is not a documentary. When the only member of the committee from Kansas
finally got to speak, the Republican Mike Pompeo was not happy that his
colleagues had already stepped all over his obviously planned "Wizard of
Oz" bit.

(BEGIN VIDEO CLIP)

REP. MIKE POMPEO (R), KANSAS: Thank you for coming, Secretary Sebelius.
Won`t surprise you I would like to talk about Kansas a little bit today.
Much like with some of my colleagues have made references to the "Wizard of
Oz." I don`t think anybody not from Kansas should be able to do oz
allegories.

(END VIDEO CLIP)

O`DONNELL: Yes. Good luck trying to get the committee to follow that
brew.

(BEGIN VIDEO CLIP)

POMPEO: The way I think about it is those folks worked awful hard to go
down that yellow brick road. At the end of the day when they got there and
pulled back the curtain, they found there was nothing that they didn`t
already have. And, as we pull back the curtain on Affordable Care Act, I
think people are finding that it`s not exactly what they`re going to have
worked so hard to find their way to as well.

(END VIDEO CLIP)

O`DONNELL: Mr. Chairman, I would look to remind the committee that the
"Wizard of Oz" is not a documentary. Now, all of this talk of Dorothy and
Toto and the yellow brick road and yet unborn Kathleen Sebelius on a
tricycle was all because the Secretary of Health and Human Services spent
most of her working life in Kansas.

(BEGIN VIDEO CLIP)

BILL O`REILLY, FOX NEWS HOST: Kathleen Sebelius is former governor of
Kansas. OK? Well, you are not in Kansas anymore Dorothy. You are in the
big time.

(END VIDEO CLIP)

O`DONNELL: And nothing, I mean nothing makes you feel you are in the big
time more than the number of times members of Congress mention the "Wizard
of Oz" in a wicked important hearing.

(COMMERCIAL BREAK)

O`DONNELL: What does Ted Cruz backing down today mean to the governing of
the United States of America? That`s next.

(COMMERCIAL BREAK)

O`DONNELL: With Ted Cruz apparently backing down on his attacks on his
fellow Republican senators, does that mean Ted Cruz will back down the next
time they have to raise the debt ceiling and vote to continue funding the
government. Members of the House and Senate Budget Committee are at least
talking to each other.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R-WI), BUDGET COMMITTEE CHAIRMAN: In all seriousness, we
have got to work it out for us. It`s not going to be easy.

SEN. PATTY MURRAY (D-WA), BUDGET COMMITTEE CHAIRWOMAN: I am ready to
listen to their ideas. And as long as they`re fair, for seniors and our
families, I am ready to make some tough concessions to get a deal. But
compromise runs both ways.

REP. TOM COLE (R-OK), BUDGET COMMITTEE: We can succeed where the super
committee and other bipartisan working groups to fail. But it will not be
easy.

(END VIDEO CLIP)

O`DONNELL: Joining me now is Jonathan Chait, a columnist for New York
Magazine. Jonathan, I`m going to ask you the question, do you think a deal
is possible? But I think I will just read to the audience the headline of
your most recent column. Yes, there is a budget deal in the works. Here`s
what it will look like. Why don`t we just go to that?

JONATHAN CHAIT, NEW YORK MAGAZINE: Sure.

O`DONNELL: OK.

CHAIT: I think the Republicans are actually ready to deal. They`ve set up
the whole previous year, attempting to execute this plan to extort
unilateral concessions out of the Democrats. That`s what the leadership
Paul Ryan, Boehner wanted to do with the debt ceiling and that`s what Ted
Cruz wanted to do with the government shutdown. But that failed. That`s a
disarray. So, now they`re really on to their backup plan. And the backup
plan is a very small deal. But I think they`re going to try to lift
sequestration cuts. The automatic cuts to the non-mandatory spending
programs. For a year, maybe two, probably one year. And just fry to
cobble together a small package. And kind of stop hurting the economy as
much as they have been doing. So, by recent standard this would be real
progress.

O`DONNELL: What would be the elements of the deal, Jonathan, as you see
it?

CHAIT: Well, what people are just guessing is that President Obama had
about $200 billion in his budget of cuts to what he called entitlement
spending programs, not Medicare, not Medicaid, not Social Security. But
things like farm subsidies and federal pension reform and postal. This,
and you know sort of user fees, and transportation fees. And other sort
of, you know, assorted fighting change under the cushions of the national
sofa to kind of make the budget add up. And that would probably be enough
money to sort of offset the cost of sequestration for a while. So, that`s
what people think they`re going to do. Because Obama will only offer up
these cuts to Medicare and Social Security if Republicans give him more
revenue. Republicans would rather die than give them more revenue. So,
that`s sort of where we are, the lowest common denominator.

O`DONNELL: Yes. And so, that`s the version of what they would call the
grand bargain, the one that would include more tax revenue and cuts to the
big entitlements.

CHAIT: Right. Paul Ryan would cut off his left leg before he goes with
the grand bargain.

O`DONNELL: Right.

CHAIT: He spent his last three years, killing the grand bargain left and
right. And he just started this whole thing off saying, no grand bargain.
Forget the grand bargain. But they are apparently open to this kind of
small deal. Now, it`s possible they can shake loose some tiny little bit
of revenue here and there and some cuts that are relatively acceptable to
Democrats. And that`s where I think they`re going with this.

O`DONNELL: And strategically what this comes down to, the question
Republicans have to answer for themselves is --

CHAIT: Yes.

O`DONNELL: What`s more important to them? Defense spending or say,
agricultural subsidies because it is the defense spending that they would
get restored in this kind of deal.

CHAIT: Right. And they have to give up agriculture subsidies. And
Republicans like agriculture subsidies.

O`DONNELL: Yes, they do. A lot of them --

CHAIT: A lot of them get agricultural subsidies. And people that get
agriculture subsidies are wealthy. They`re rural. They`re overwhelmingly
white. The kind of people that Republicans are genuinely happy to see
getting help from the government. So, that`s one of the few government
programs where Republicans have been debating more money be spent than the
Democrats want to spend. So, that`s the kind of cut that Democrats are
trying to get in this budget agreement.

O`DONNELL: All right. There is a possibility here. You`ve sold me that
this is possible. Jonathan Chait --

CHAIT: I`m not making any guarantees.

O`DONNELL: No, no, no, but you have laid out a perfectly conceivable
scenario. I couldn`t have done that. I didn`t see that deal. Now I do.

CHAIT: OK. All right.

O`DONNELL: Jonathan Chait, thank you very much for joining us tonight.

CHAIT: Thank you. Thanks, Lawrence.

O`DONNELL: Chris Hayes is up next.

CHRIS HAYES, HOST, "ALL IN WITH CHRIS HAYES": Good evening from New York.
I`m Chris Hayes. President Obama hit the road today traveling to the
laboratory of ObamaCare. The state of Massachusetts, to defend his
signature law today.

(BEGIN VIDEO CLIP)

OBAMA: I`m confident these market places will work. Because Massachusetts
has shown that the model works. Yes, this is hard. Because the health
care system is a big system. And it`s complicated. And if it was hard
doing it just in one state. It is harder to do it in all 50 states
especially when the governors of a bunch of states and half of the Congress
aren`t trying to help. Yes. It`s hard. But it is worth it.

(END VIDEO CLIP)

HAYES: Well, the president was in Boston trying to reboot the conversation
around the new health law. House Republicans were back in Washington, hard
at work. Investigating the laws troubled debut.

END

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