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All In With Chris Hayes, Monday, November, 2013

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ALL IN with CHRIS HAYES
November 25, 2013

Guest: Eliot Engel, Christopher Hill, Matt Duss, Julia Ioffe, John
Yarmuth, Audrey Haynes, Ezra Klein

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

We are coming off a truly historic weekend, one in which the president
of the United States, on short notice late on a Saturday night, addressed
the nation live from the White House to announce the outline of an interim
deal with Iran -- a deal to cap its current nuclear program and move
towards a full diplomatic solution between the two nations.

This is the biggest development in the relationship between the two
countries in 35 years. What the president announced this weekend was the
fulfillment of a promise a long time in the making.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D-IL), THEN-PRESIDENTIAL CANDIDATE: I reserve the
right as president of the United States to meet with anybody at a time and
place of my choosing if I think it`s going to keep America safe.

HAYES (voice-over): In 2008, then-Senator Obama said he would do
something no president has done since 1979, speak directly to the leaders
of Iran. It became a central issue of the campaign.

SEN. JOHN MCCAIN (R), ARIZONA: It`s hard to see what such a summit
with president Ahmadinejad would actually gain, except an earful of anti-
Semitic rants and a worldwide audience for a man who denies one Holocaust
and talks before frenzied crowds about starting another!

HAYES: The conservative media machine jumped on the chance to
characterize the young senator as weak.

KARL ROVE, REPUBLICAN STRATEGIST: But we have a candidate who says
we`ll talk to the state sponsor of Hamas, Syria`s Assad, and we`ll talk to
the state sponsor of Hezbollah, Iran, without precondition.

HAYES: But candidate Obama responded by reiterating his intent to do
something that the U.S. had all but abandoned: practice diplomacy.

OBAMA: If George Bush and John McCain have a problem with direct
diplomacy led by the president of the United States, then they can explain
why they have a problem with John F. Kennedy, because that`s what he did
with Khrushchev, or Ronald Reagan, because that`s what he did with
Gorbachev, or Richard Nixon, because that`s what they did with Mao. That`s
the choice in this election.

HAYES: After just nine months as president, Obama was awarded the
Nobel Peace Prize, but in his first five years, much of his foreign policy
has been dominated by the wars he inherited, his expansion of the global
war on terror has made his supporters uncomfortable and earned disingenuous
praise from former Bush acolytes.

DICK CHENEY, FORMER VICE PRESIDENT: The Obama administration has
clearly reached the point where they`ve agreed they need to be tough and
aggressive in defending the nation and using some of the same techniques
that the Bush administration did.

HAYES: At times during the Obama presidency, the possibility of
direct talks with Iran, once a central foreign policy goal, seemed remote.

But this weekend, everything changed.

OBAMA: Today, the United States, together with our close allies and
partners, took an important first step toward a comprehensive solution that
addresses our concerns with the Islamic Republic of Iran`s nuclear program.

HAYES: On Saturday evening, the United States and Iran came to an
historic agreement to limit Iran`s nuclear capabilities, a dramatic step
towards fulfilling the central promise of an Obama presidency -- using
diplomacy to move towards peace and away from war.

And the right wing promptly lost it.

RUSH LIMBAUGH, RADIO HOST: Man, oh, man, oh, man, these people will
do anything to distract us from how bad Obamacare is!

UNIDENTIFIED MALE: Cornyn tweeted, quote, "Amazing what White House
will do to distract attention from Obamacare."

HAYES: The neocons took to the Sunday shows to oppose the deal.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: This interim deal with Iran
is, in fact, dangerous.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: If you`re Israel, you`ve got
to wake up and look at this deal as a nightmare.

BILL KRISTOL, THE WEEKLY STANDARD: Taking the break at time from one
to two months to two to four months in return for breaking the sanctions
regime, that strikes me as a terrible deal.

HAYES: John Bolton, George W. Bush`s former ambassador to the U.N.,
called the deal a victory for Iran.

JOHN BOLTON, FORMER U.S. AMBASSADOR TO THE U.N.: It`s a huge victory
for Iran.

HAYES: Back in 2010, he urged the Israelis to bomb Iran.

BOLTON: If Israel`s going to do anything against Bushehr, it has to
move within the next eight days.

HAYES: Over 1,000 days without an Iranian bomb, still pushing for an
attack.

Former Bush press secretary, Ari Fleischer, offered the world a lesson
in spelling and bitterness.

"Red State`s" Erick Erickson tweeted his congratulations to Iran on
their acquisition of the nuclear bomb.

Over at Breitbart, the conspiracy theorist who broke the story about
President Obama hugging his radical Harvard professor --

UNIDENTIFIED MALE: This is a clean bust.

HAYES: -- are comparing the president`s diplomacy to appeasing the
Nazis.

And once again, the people who have been tirelessly agitating for war
are turning themselves into cartoons to oppose peace.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: What was concluded in
Geneva last night is not an historic agreement, it`s a historic mistake.

(END VIDEOTAPE)

HAYES: Joining me now, Hooman Majd. He`s an NBC News contributor,
author of "The Ministry of Guidance Invites You Not To Stay: An American
Family In Iran." He`s returned from Geneva, where you and Ann Curry were
covering these talks.

I was amazed by this, that this happened. I mean, how big a deal is
this?

HOOMAN MAJD, NBC NEWS CONTRIBUTOR: I think it`s a pretty huge deal,
because it really puts the brakes on any idea of going to war or any kind
of military action. And it gives time to President Obama to do what he
said he was going to do way back when he first was elected, and that`s try
to have a diplomatic solution to the nuclear crisis in Iran. And other
issues that we have with Iran, many other issues that we have with Iran.

HAYES: How surprising is the speed with which all this is happening?
What`s remarkable to me is that Iran elected new leadership. It looks like
-- I mean, I remember two or three years ago, people making jokes about
President Obama`s promise to negotiate with Iran. Obviously, that`s not
going to happen. And they elected new leadership, and within months, we`re
announcing this historic deal.

MAJD: Yes, 100 days. President Rouhani said he was going to get
sanctions relief and make a nuclear deal within 100 days. He said that in
his campaign and he did it, within a few days, depending how you count.
When he was inaugurated or how you want to count it.

But I think the people of Iran made this choice and the regime
respected their choice this time around and Rouhani came into office with
an absolute determination to get this nuclear issue, get past the nuclear
issue, and I think there was a real will on his part, and I think the Obama
administration saw that will and said this is the opportunity.

So, the second-term Obama administration, we can make this deal. And
both sides really wanted it.

HAYES: There`s in some ways a mirror image, obviously, of extremely
different systems of government and different internal domestic political
conditions, but there are camps in each side that want is relationship to
be bad and see it as maximalism and threatening and there are camps inside
who are favoring diplomacy.

What is it -- why have the diplomatic camps been empowered on both
sides?

MAJD: I think because it`s in the interests of both countries. I
mean, I think it`s in the interests of both countries to resolve this
nuclear issue first of all and then resolve other issues that are existing
between the U.S. and Iran. And the only way the other issues are going to
be resolved is if this nuclear issue is resolved first, because that`s the
priority, and Prime Minister Netanyahu was constantly threatening to go to
war with or without us against Iran, and you have to put a stop to that.
You have to be able to get past this nuclear issue.

This gives time. It`s not a final agreement. There`s a lot of work
to be done and we should remember that.

HAYES: Right.

MAJD: For everybody who`s a naysayer right now, they should remember
this is not a binding agreement and this is not Munich and Iran is not the
Nazi regime.

HAYES: Yes. I want to bring in Congressman Eliot Engel of New York,
Democrat of New York, ranking member of the House Foreign Affairs
Committee.

Congressman, what`s your reaction to this?

REP. ELIOT ENGEL (D), NEW YORK: Well, my reaction is, I never quoted
Ronald Reagan, but it`s trust but verify.

The Iranians, you know, have not been friends of the United States,
and you do negotiate with your enemies. You don`t necessarily negotiate
with your friends. I think the sanctions worked, and that`s the reason why
the Iranians are at the table.

The president has decided to go on this course of action, and we`ll
have to see.

But I`m skeptical. I must tell you, I`m skeptical.

I`m skeptical because I think that it`s not so unusual to expect the
Iranians to stop enriching while they`re talking. If there are going to be
six months of talks, and that`s fine, where at the end, everyone says there
hopefully will be an agreement where Iran will not have a nuclear weapon, I
think it`s a show of good faith, Iran should stop enriching.

Now, the U.N. Security Council has met a number of times, has passed
resolutions calling on Iran to stop enriching, and yet, in this agreement,
that`s not in there. That`s troubling to me and troubling to a lot of
other members of Congress.

HAYES: OK. So, there`s a few technical things and we can get into
weeds a little bit of nuclear policy --

ENGEL: More than technical.

HAYES: But it`s important, right?

So, one of the big things, the biggest win for the U.S. in terms of
fear of progress towards a nuclear weapon in this agreement is that,
actually, the uranium that has been enriched up to a 20 percent threshold,
right, is going to be diluted back down. So, that is actually a very big,
concrete step, and that dilution is going to happen with some kind of
international monitory regime.

That strikes me as a pretty big, concrete, more than a sign of good
faith. I mean, nothing can happen in those six months that brings them
closer to a nuclear weapon, right?

ENGEL: Well -- look, there parts of this agreement that are positive
and good, but I think we have to hold the Iranians` feet to the fire. And
look, people say Rouhani is a moderate.

He`s not a moderate. No moderates were allowed to run in the Iranian
election. They were all eliminated from running.

There was six essentially hard-liners allowed to run. He`s the most
moderate of all the hard-liners, and it`s true that the Iranian people
voted for him because I believe the Iranian people do want peace.

But I think we have to understand that Rouhani may not have the
ability to make these decisions, that the supreme leader is the one who
really holds the power.

And let me just say, just a few days ago, he was at a rally where they
still chanted "death to America," where they still called Israel a rabid
dog of the region.

So, again, I think we have to be very careful. I think we have to be
dogged. I`m for it. I hope there`s an agreement, but we have to make sure
if there`s an agreement, it`s not just Iran suspending its program, they
have to dismantle it.

HAYES: Is it irrational for Iran want a nuclear weapon?

ENGEL: Is it irrational? I think nuclear weapons of itself are
irrational.

HAYES: Well, but the U.S. has one, Israel has one, all sorts of
countries has one. Is it an irrational aspiration?

ENGEL: I don`t know. It depends. And what`s worrisome about Iran
having a nuclear weapon, Iran is not a democracy like the United States or
like Israel. Iran is a theocracy. And if Iran gets a nuclear weapon, so
will Turkey, so will Saudi Arabia, so will Egypt, and you`ll start a whole
race in the Middle East.

HAYES: But, Congressman, the idea that sanctions are what brought
them to the table, which is what you`re hearing from a lot of people, how
accurate that?

MAJD: It`s dangerous to assume that, and I should correct Congressman
Engel, because if he believes president Rouhani is a hard-liner, I`d like
to introduce you to some hard-liners in Iran.

ENGEL: There are plenty. And he was allowed to run. I don`t think
any moderates were allowed to run. He`s the least hard-lined of the hard-
liners --

MAJD: He`s not a hard-liner.

ENGEL: We delude ourselves if we don`t think he`s a hardliner.

MAJD: Well, he`s not a hardliner. I can assure you, he`s not a hard-
liner.

ENGEL: Well, he was the negotiator for --

MAJD: President Khatami, who was a reformist.

ENGEL: Well, and he talked openly about how the United States --

(CROSSTALK)

MAJD: You have a domestic audience in Iran as well. And if you don`t
understand there`s a domestic audience in Iran that he has to play to in
the way that you play to your audience in America, then you`re deluded.
I`m sorry. But anyway, my point with --

ENGEL: I`m not deluded. I just call it the way it is, the way I see
it.

MAJD: Well, so do I --

HAYES: I want you both --

MAJD: In terms of the sanctions, it`s dangerous. The Foreign
Minister Zarif said this a few times, he said to me and he said to Ann
Curry and he said to a few people, other reporters, it is dangerous to
assume that Iran came because of the sanctions. In terms of the enrichment
-- and Congressman Engel and others want Iran to suspend enrichment
completely.

Well, the fact is, the Obama administration understands that they will
not do that, so, the alternative is to find a way to prevent them from --

HAYES: I want you to both hold up because I want to bring into the
conversation -- joining me now is Ambassador Christopher Hill. He served
as assistant secretary of state for East Asia and Pacific during the Bush
and Obama administrations, during which he was also the head of the U.S.
delegation of the six-party talks on the North Korean nuclear issue. He is
now dean of the Joseph Korbel School of International Studies at the
University of Denver.

And, Ambassador, somebody who`s been a party to very intense and
difficult negotiations about a nuclear regime. What`s your reaction to
this deal? How surprised are you that this came about?

AMB. CHRISTOPHER HILL, UNIVERSITY OF DENVER: Well, I`m not she
surprised. I know that the Obama administration has worked on this a lot,
and I think one element of what they`ve been doing needs to be further
discussed, and that is these direct bilateral talks that have been taking
place very quietly between the State Department and the White House on one
side and the Iranians on the other.

And that`s where we have kind of laid out a vision for what this
relationship could be in the future, and obviously, we`ve put on the table
other aspects of Iran that are really quite toxic, and that is support for
terrorism and support or this sort of unfettered support for Bashar al
Assad.

So, there`s a lot going on. And clearly, clearly, this is the right
approach. Whether we finally get there, hard to tell, and whether Rouhani
is a soft-liner or hard-liner, it doesn`t really matter. The question is,
is he prepared to go forward on this basis?

I think we`ve given a little taste of what life could be like if he
continues on this, and we have to see what we`re going to have in six
months.

But I think it`s really a very sensible way to approach it.

HAYES: Big question for you, Ambassador, there`s a lot of fear about
the idea of Iran essentially gaining the system, that they talk and they
talk, and meanwhile, they do things behind the scenes that bring them
closer to some kind of nuclear capability.

How warranted do you think those fears are?

HILL: Well, certainly, there`s a lot of reason to be concerned about
the Iranians. They`ve done things in secret. They`ve lied about them in
the past. So, there are a lot of reasons to be concerned.

But, first of all, we have a pretty robust inspections system, daily
inspections system. We have a lot of national means to kind of figure out
what is going on in Iran.

And at the end of the day, if they cheat, they`re going to end up with
this thing stopped in its tracks.

I mean, this president, no president is going to pretend to believe
them if they`re in fact, cheating.

So, I think it`s kind of up to the Iranians. They have a taste of
where things can go. And frankly, all this talk about sanctions, bringing
them to the table, maybe they brought them to the table, but they`re not
going to bring them to their knees.

Sanctions are not going to be the deciding factor for Iran and whether
or not to continue these nuclear programs. It`s got to be something
broader and bigger, and that has to do with going in to be part of the rest
of the world. And I think there is enough evidence to suggest that Rouhani
wants that.

HAYES: That is the promise being dangled. Quickly, Hooman, how much
appetite or the possibility of an actual big deal? And we`re talking the
whole thing, right? Sponsors of terrorism, re-establishing diplomatic
relationship, like the whole thing -- is that a possibility?

MAJD: I think it is a possibility. It is a possibility with this
government, for sure, in Iran, and I think it`s a possibility because the
people of Iran have shown that`s what they want and right now, the regime
is listening to them.

Unless we do something crazy or unless somebody in Iran does something
crazy, the possibility is there, but it`s not going to happen until we
first get past the nuclear issue.

HAYES: Are your colleagues in Capitol Hill going to give space for
this to work? Movements towards new sanction bills that the president will
have to veto?

ENGEL: Well, let me says this -- first of all, I think that sanctions
absolutely brought Iran to the table. Their currency is worthless, the
economy is hurting, and I think it did.

Look --

HAYES: People are hurting, too.

ENGEL: Look, I hope that this works. I mean, there`s no one who
wants any kind of clash between Iran and the United States. I hope it
works. I have my doubts, but I hope it works.

And I think we have to hold their feet to the fire and we have to make
sure they don`t gain the system, that they don`t lie, and if it works,
wonderful. I`m for it.

HAYES: Quickly, though, this is important, will we see movement from
Congress to impose new sanctions, which would actually violate the terms of
the deal that have been signed?

ENGEL: Well, I don`t know. We passed the sanctions in the House.
That`s up to the Senate. They haven`t passed theirs. We passed ours 400-
20 on the House floor several months ago.

MAJD: And the Foreign Minister Zarif was very clear in his exclusive
interview with Ann Curry on Sunday morning in Geneva that if the United
States passes new sanctions, they will have violated the treaty, and
therefore, all bets are off.

HAYES: That`s a very worrisome idea.

Congressman Eliot Engel, Ambassador Christopher Hill, NBC News
contributor Hooman Majd -- gentlemen, thank you all.

Coming up, more on the diplomatic development between the U.S. and
Iran.

Plus --

(BEGIN VIDEO CLIP)

BUSH: North Korea as a regime arming with missiles and weapons of
mass destruction. Iran aggressively pursues these weapons and exports
terror. Iraq continues to flaunt its hostility toward America and to
support terror. States like these and their terrorist allies constitute an
axis of evil arming to threaten the peace of the world.

(END VIDEO CLIP)

HAYES: What will neo cons do now that perhaps their biggest enemy is
engaged in direct diplomacy? We`ll talk about that, ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Today, that diplomacy opened up a new path toward a world that
is more secure, a future in which we can verify that Iran`s nuclear program
is peaceful and that it cannot build a nuclear weapon.

(END VIDEO CLIP)

HAYES: Saturday was a dark day for neo conservatives everywhere. In
a string of seemingly endlessly dark days for people who over the course of
a few heady years there ran our foreign policy and were in charge of the
most powerful military on the planet.

It was just a few months ago that neoconservatives were given a
stunning rebuke by the country, which rose up in bipartisan rebellion
against the idea of a war in Syria. Nearly 60 percent wanting their
members of Congress to oppose the use of military force, only 33 percent
supporting military intervention.

Thanks to luck, happenstance and some very depth diplomatic
maneuvering, the Syrian intervention that Senators John McCain and Lindsey
Graham and others so badly wanted never happened.

But that is nothing compared to Iran. For neoconservatives, Iran is
the biggest enemy they have left. In this 2002 State of the Union Address,
President Bush famously declared the axis of evil as Iraq, North Korea and
Iran.

Well, Iraq is one of the greatest strategic disasters in American
foreign policy history, not to mention a moral abomination. North Korea,
of course, already has a nuclear weapon, first tested during the Bush
administration, which basically means there is no viable military solution
to the United States to impose.

So, Iran is the last place where the neocons can get the kind of war
they`ve wanted, the muscular assertion of military dominance, and if that
goes away, they are left with nothing.

Joining me now is Matt Duss, Middle East policy analyst for the Center
for American Progress, a left-leaning think tank.

Matt, a dark day in the halls of neocon-dom today.

MATT DUSS, CENTER FOR AMERICAN PROGRESS: A dark day for
neoconservatives and a great day for America. That`s in my view --

HAYES: Those usually go together.

DUSS: Those usually go together.

I`m glad you played that clip earlier about President Obama back when
he was running for office in that debate with John McCain, because I think
that is a central argument of his presidency when it comes to foreign
policy. He started and won a very important argument that had to do with
the appropriate uses of American power. He was criticized by
conservatives, certainly, even by some Democrats. He was called naive.

But I think now we`ve seen the results. He has effectively deployed
all the tools of American power, economic, political, diplomatic, military,
and he has advanced America`s security by talking to our enemies.

HAYES: There`s a really interesting political dimension domestically
to see play out here, and you and I think are both on the same page about
how we feel about the architects of the Iraq war and the Bush Doctrine, et
cetera. There`s been an insurgent wing, the Tea Party base, that has shown
signs of breaking with a kind of neoconservative orthodoxy that still
controls the upper echelons of Republican conservative think tanks and
political thinking.

And the big question for me is this strikes me as a huge test case.
What does Rand Paul say about this? What do Senators Ted Cruz and Mike Lee
say about this?

These are folks that kind of grab the mantle of skepticism, of use of
drones during Rand Paul`s drone filibuster. They`ve been much more open to
I think very legitimate critiques of the overreach of the surveillance
state.

Well, here`s an opportunity to support the peaceful resolution,
diplomatic resolution of a standoff with an adversary.

What do we hear from them?

DUSS: Right. I don`t know that I`ve heard anything from them
immediately, you know, just recently, but I think Rand Paul in past
speeches, he made a big foreign policy speech a few months ago at the
Heritage Foundation, that was very much distancing himself from
neoconservatives, neoconservatism and speaking in a much more sort of less
interventionist, I wouldn`t call it isolationist. I think that term`s
thrown around way too much.

But I think, as you said, the thing is, for all the failures of neo
conservatism, and we could fill up the whole show talking about them, they
still control the commanding heights of policy-making and the elite
discourse on the conservative side, but we have seen a challenge from
people like Rand Paul and others.

And I think I would also note this, which I think is really
significant. Last week, Marco Rubio, who previously had very closely
identified with the neoconservatives, gave a foreign policy speech at the
American Enterprise Institute, which is kind of the mother ship of
neoconservatism, but he tried to triangulate a way from neoconservatism.
He was saying, well, OK, there are interventionists and isolationists and I
want to be somewhere in the middle.

Now, even if this is old wine in new bottles, which I think it is,
it`s still very telling to me that he felt the need to kind of distance
himself from that sort of ideology.

HAYES: And I think we`re going to see, I think we`ll get some polling
on this, but we`ve already seen some polling indicating Americans support
this. I think this is going to be broadly popular.

The third point in this triangle here are the Democrats, congressional
Democrats. We just had Eliot Engel, congressman from New York, Senator
Chuck Schumer of New York very critical of the deal. There are Democrats
in Congress, in the Senate and the House, who don`t like this deal and are
going to push for sanctions.

How much room are they going to give this deal to work?

DUSS: Well, I think even if you look at the statement from Harry Reid
on, I think it was Thursday or Friday and today, as of the end of last
week, he was definitive that when they come back from Thanksgiving, they
were going to move on new sanctions. We got a deal over the weekend, and
Harry Reid is a bit more circumspect, a bit more measured right now.

So, I think, you know, given the significance and the potentially era-
defining, you know, importance of this agreement, the implications for U.S.
security in the region and the world are huge, if we can --

HAYES: It is absolutely bonkers and ridiculous if the Senate goes
ahead on a vote for sanctions that are explicitly, any sanctions within six
months of the deal are barred. That is ridiculous.

Matt Duss from the Center of American Progress -- thank you so much
for your time.

DUSS: Thanks, Chris.

HAYES: Coming up, a 30-year-old former Rudy Giuliani campaign staffer
that you`ve never heard of is the guy who pushed the government into a
shutdown.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is the time to lay down a marker and say
we`ve told our voters, told our constituents we`re against this. We`re not
going to fund it.

UNIDENTIFIED MALE: And potentially shut down the government.
Wouldn`t Republicans be blamed for that?

(END VIDEO CLIP)

HAYES: Now, fellow Republicans have the knives out for the guy in the
biggest way possible. Please, grab the popcorn because we`ll fill you in
next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. ORIN HATCH (R), UTAH: There`s a real question on the minds of
many Republicans now, and I`m not just speaking for myself, for a lot of
people, that is heritage going to go so political that it really doesn`t
amount to anything anymore? I hope not. I`m going to try and help it to
survive and do well, but right now, I think it`s in danger of losing its
clout and its power around Washington, D.C.

(END VIDEO CLIP)

CHRIS HAYES, MSNBC HOST, "ALL IN WITH CHRIS HAYES": Well, that`s Utah
Republican Senator Orrin hatch expressing his frustration and a not so
veiled threat at the evolution of the heritage foundation, a once fairly
stayed conservative think tank that has transformed itself in the last few
years into the war room of the Tea Party right and has engineered one
disaster after another for the country and the Republican Party. It`s a
group that right-wing columnist Jennifer Ruben argues has gone from
intellectually honest and consistent conservative scholarship to renegade
anti-Republican anti-same governance posture. The public face of this
transformation has been this man, Jim DeMint, the hard-line warrior for Tea
Party purity who abandoned his Senate seat -- the guy was a sitting senator
at the start of the year -- to go and become the group`s president.

Perhaps just as important has been this guy, Mike Needham, the 31-
year-old CEO of Heritage Action, the Koch Brothers-backed activist branch
of the Heritage Foundation. Even more than Ted Cruz, who was featured on
Heritage Action`s defund ObamaCare tour in August, Needham and his group
were the driving force behind the defund ObamaCare at any cost strategy
that brought about the government shutdown debacle. This in spite of the
fact that as he admitted as the shutdown was finally ending, Needham always
knew it was doomed.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MAN: With a Democrat in the White House and Harry Reid
with the majority in the Senate, what can you do?

UNIDENTIFIED MAN: Well, everybody understands that we`re not going to
be able to repeal this law until 2017 and that we have to win the Senate,
we have to win the White House.

(END VIDEO CLIP)

HAYES: Everybody understands! As you might imagine, Republican
staffers who have been told by Needham to jump off a cliff weren`t too
happy with his blase acknowledgment of the obvious, and now the knives are
out. A nasty, little civil war is brewing inside the conservative movement
that Julia Ioffe details in an amazing article in the New Republic.

One house aide told Julia that quote, "If Nancy Pelosi could write an
enormous check to Heritage Action, she would." And other GOP staffers of
the Republicans see the group as willing to drive a truck off a cliff but
with no purpose. As a reminder of how it flexes its muscles, just today,
Heritage Action pressured GOP lawmakers to oppose President Obama`s nominee
to run the Federal Reserve, meaning anyone who votes for Janet Yellen will
be scored by the group as traitors and invite a possible primary challenge.

Joining me now is Julia Ioffe, senior editor at "The New Republic" who
wrote that piece at Heritage Foundation, it appears online and in the
current issue of The Magazine. What`s great about this piece is a
microcosm of where the right is at this moment. And we`ve made this point
before on the program that it used to be that there`s like a policy --
there`s a policy shop and the politicians and the propaganda arm goes and
sells the message they cook up. And now it`s the propaganda arm that`s
running things and that`s what`s happened at Heritage.

JULIA IOFFE, SENIOR EDITOR, "THE NEW REPUBLIC": That`s right. And
ironically, they`ve modeled themselves after the Center for American
Progress, which they`ve long deride as the liberal political action
lobbying arm masquerading as a think tank. And they saw themselves get
out-muscled by cap on The Hill during the health care fight and they said,
why aren`t we doing this? And then Citizens United happened, the Tea Party
happened, and they decided, you know, we should take advantage of this
moment and become like them.

HAYES: I am amazed at their influence both with the influence the
have with members of Congress, the sort of bullying that Heritage Action
has pulled off successfully. They`re an $82 million -- I mean, this is a
huge operation. They have real, genuine power and clout.

IOFFE: Right. And a lot of it is because, again, this $82 million
budget didn`t come, didn`t happen overnight. This is a 40-some-year-old --
a 40-year-old organization. It was founded in 1973. Now, I think people
overstate a little bit this golden era of heritage. It was always kind of
the more hawkish think tank.

HAYES: Yes, it`s a think tank. Who are we kidding?

IOFFE: No, I mean, it`s not just a think tank. It was -- the purpose
was to influence the vote.

HAYES: Right.

IOFFE: There`s a reason it`s down the street from Capitol Hill, that
it`s not across town in DuPont circle like the other think tanks.

HAYES: Right.

IOFFE: So, the point was always to influence the vote and influence
what happened in Congress. It`s almost tragic what has happened. Like,
it`s literally tragic. It was encoded in its DNA and this kind of, this
bomb that was, you know, in there originally has been exploding recently.

HAYES: Right. My favorite part of the Heritage strategy on defund
ObamaCare and the shutdown was that once the whole thing had happened,
they`re like, well, obviously, we can`t get rid of the thing until we elect
more senators. They then scored the no-vote on the final deal, so even if
you voted for it at the end after everyone recognized you had to, they were
still going to nail you for it.

IOFFE: Right. That`s right. So, again, they are using this brand
that`s 40 years old that has this huge brand nationally. The brand is
plummeting in D.C., but nationally, people don`t know that its reputation
has been tarnished, so they are using it to bully people on The Hill. And
so, they say, you know, vote no on this, vote no on that. It`s --

HAYES: Well, here`s what`s interesting, the power imbalance is
remarkable. You have a 31-year-old, he`s tossing a football around in his
office.

IOFFE: Right.

HAYES: A former Giuliani staffer. And there`s this quote in the
piece thing that, like it`s a little more than a little galling for a
former Giuliani staffer to be walking around deeming who`s conservative and
who`s not conservative. But what`s striking in the article, and I`ve seen
this time and time again reporting on the center-right, is that the
senators are afraid of the groups, that all the power is with the folks
like Heritage and this 31-year-old staffer and very little of it is with
the, you know, six-term senators.

IOFFE: That`s right. They`ve leveraged this 40-year-old brand, this
massive budget and kind of used this Tea Party fervor to create this
massive national army, and people are afraid of them.

HAYES: And they go after Republicans. That`s the key thing, and
that`s why they`ve got so many enemies.

IOFFE: That`s right, instead of informing Republicans. I mean, they
were always very partisan, but staffers on The Hill were saying, before
they used to inform us, they used to shape strategy, they kind of, they
were constructive. Now they`re destructive. They`re going after
ideological purity rather than something more constructive.

HAYES: When you look back, I always put it this way, when you look
back at the Gingrich contract for America and the kind of agenda of agenda
of the Tea Party Congress, in fact there was actual social policy they
wanted to implement, much of it I think terrible, a lot of those things we
still live with today, but there was an agenda, and there is no agenda now.

IOFFE: This is just no, no, no, no.

HAYES: This is no, no, no, this is destruction, destruction,
destruction, and that really comes, that transformation comes across
beautifully in the piece. Julia Ioffe here from "The New Republic," thank
you so much.

IOFFE: Thanks.

HAYES: Coming up, John Boehner signs up for ObamaCare and Republicans
were hoping it was going to be a cataclysmic disaster. The surprising turn
of events, next.

(COMMERCIAL BREAK)

HAYES: A funny thing happened to House Speaker John Boehner last
week. There he is sitting at his computer, using his very own fingers to
type into healthcare.gov marketplace to sign up for a new health plan. And
technically, he doesn`t need one, but he did it anyway. He even wrote a
blog entry about it saying how frustrating and time-consuming it was.
After putting in my personal information, I received an error message. He
left his desk without enrolling, which sounds bad, until you realized it
isn`t true. Boehner actually succeeded in enrolling and got a phone call
to tell him as much.

A reporter at NBC`s DC affiliate tweeted that a health exchange
spokesman said Speaker Boehner`s office kept their representative on hold
for 35 minutes. After quote, "lots of patriotic hold music, that
representative have actually hung up." And about that error message, the
spokesman explained that after enrollment, some users have been receiving a
random error message. So, to recap, the error message didn`t actually
affect Boehner`s enrollment, and when he was contacted about it, Boehner`s
office itself made the process much more time-consuming than it should have
been.

Not to mention the fact that Boehner could actually get a pretty good
deal. With his salary, he can get a plan with dental coverage and no
deductible for nearly $700 a month. 3.7 percent his annual income, which
is not bad for a 64-year-old smoker. These details were left out of John
Boehner`s blog post, fitting since the details of any ObamaCare success are
left out of the Republican narrative. There is one place in which the
success of ObamaCare is becoming too great for anyone to ignore, and it`s
in one of the last places you`d expect. I`ll tell you where it is and why
it`s working, next.

(COMMERCIAL BREAK)

HAYES: There`s a sort of paradox at the core of right-wing rhetoric
about ObamaCare, particularly right before the government shutdown. So, on
the one hand, they say it`s going to be a train wreck, an absolute train
wreck, and the other, that we have to stop it now or we`re never going to
be able to repeal it. But of course, why would those two things both be
true? The panic that led to the shutdown, this desire to stop ObamaCare
before it started was because the right`s worst fear isn`t that ObamaCare
is a train wreck, no.

Their worst fear is that it is a success. And not only that it`s a
success substantively, but that it`s a political success. And right now,
the one place in the country that looks most like Republicans` biggest
nightmare is, amazingly, the last place you`d guess, Kentucky. Yep,
Kentucky, a state that looked like this after last year`s presidential
election, a state home to senators Mitch McConnell and Rand Paul, one the
Republican leader, the other a Tea Party darling. Last month wrote an op-
ed that sums up their bitterness over the law.

ObamaCare might sell in New York, but Kentuckians aren`t buying it.
Not only are people in Kentucky buying it, they`re loving it. According to
figures released by Governor Steve Beshear, through last week, more than
56,000 people signed up for new health care coverage with over 45,000 of
them enrolled in Medicaid. Now, this is a state where nearly one in six
people are uninsured. As Governor Beshear made it clear last month, the
people in Kentucky are looking at the importance of expanding health care
coverage and overlooking the rhetoric of Kentucky`s Congressional
delegation.

(BEGIN VIDEO CLIP)

GOV. STEVE BESHEAR (D), KENTUCKY: People, number one, are eager to
find out. They`re going on this website in droves. And number two, when
they really dig down and they look, man, they like what they`re finding,
and they`re going away with Affordable Health Care for the first time in
their lives.

(END VIDEO CLIP)

HAYES: If ObamaCare continues to improve and if what`s happening in
Kentucky takes shape at the national level, we might soon be hearing more
reactions like this one from Kentucky. After a 35-year-old man found out
he qualified for insurance for the first time in his life, well, thank God.
I believe I`m going to be a democrat. And that sound you hear right now,
if you listen carefully off in the distance is the sound of Senator Mitch
McConnell screaming in his dreams.

Joining me now, Congressman John Yarmuth, Democrat from Kentucky,
Audrey Haynes, secretary of the cabinet for Health and Family Services for
the state of Kentucky, where she oversees the health benefits exchange and
Medicaid. And our own Ezra Klein, MSNBC policy analyst, editor of Wonkblog
and columnist of the "Washington Post."

Now, I`ll begin with you, Audrey. Why are things working so well in
Kentucky? Explain it to me.

AUDREY HAYNES, HEALTH AND FAMILY SERVICES SECRETARY: Hi, Chris. Good
evening. Well, first of all, things are working in Kentucky because most
of us are pulling in the same direction, and that is, to be successful.
You played a clip from our governor, and as everyone has gotten to know
him, you know how energized and heartfelt he is about insuring that not
only is Kentucky moving in education but Kentucky is on the move to become
healthier. We`re about the 44th sickest state in the country, and that is
just unacceptable to him and to many of the rest of us, and so --

HAYES: But wait a second.

HAYNES: His dedication --

HAYES: OK. I understand, the governor`s behind it, that makes a huge
difference, but you know, we`ve got fixed, Oregon is a state where the
government has been very invested, they want this to work and they haven`t
signed up anyone in their health care exchange. So, it`s not just the case
that wanting the thing to work makes it work, whatever you`re doing down in
Kentucky is working. I would like you to share with the rest of the class,
as it were, what exactly is going on?

HAYNES: Well, first of all, there are several prongs to our approach.
One was, clearly, a successful website. And as you mentioned, Chris, in
your introduction, the health benefit exchange along with Medicaid,
behavioral health, public health, health policy, all of that, as well as
social services, food stamps, all of those programs are under me in the
cabinet for Health and Family Services. So, first and foremost, that
helps, and it helps to insure coordination. The other thing is, is that we
have brought up very large IT systems within our state quite successfully.
We`re accustomed to working with large vendors because of our Medicaid
program and many others, and so, we know how to stay on top of it.

HAYES: You knew what to do, yes.

HAYNES: And it was really a whole group of people. We have such
dedicated staff who wanted to see this happen successfully for our state
and that many people, their dedication, many, many hours.

HAYES: Congressman, what are the politics of this look like to you
right now?

REP. JOHN YARMUTH (D), KENTUCKY: Well, of course, Mitch McConnell has
been out there ranting and raving, saying we need to tear out the system
root and branch. That`s his quote. From day one. He`s still talking from
the Frank Luntz Republican memo of 2009, trying to scare people, but my
good friend Audrey and the governor, what Audrey didn`t say, phenomenal
commitment to it, but also the outreach from our program has been
phenomenal. I mean, people, going out, talking to community groups,
talking out to at-risk populations, making people -- creating curiosity, if
nothing else, having a booth at the state fair. I mean, all of these
things generated interest. But politically, you know, Mitch is going to
wake up next spring or summer, and people are going to realize that Mitch
McConnell has been deceiving them for the last four years, and he`s going
to pay a political price for this.

HAYES: Ezra, the federalism, the kind of state-centric approach
that`s happening, at work in Kentucky, was the original idea behind a lot
of ObamaCare. It hasn`t worked out that way. I want you to explain what
that vision looks like and whether this shows how rightly guided that was,
right after we take this quick break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA (D), UNITED STATES: There was a story that came
out of Kentucky where some folks were signing people up at a county fair
somewhere, and some guy goes up, and he starts looking at the rates and
decides he`s going to sign up, and he turns to his friend and said, this is
a great deal. This is a lot better than ObamaCare. All right? Which is
fine, because we -- you know, I don`t have pride authorship on this. I
just want this thing to work.

(END VIDEO CLIP)

HAYES: We`re back with Congressman John Yarmuth, Audrey Haynes, Ezra
Klein. Ezra, the White House thought a lot more states were going to do
what Kentucky did. What happened?

EZRA KLEIN, MSNBC POLICY ANALYST: So, in the original House
Democratic bill, people always forget this, it was one national.

HAYES: That`s right.

KLEIN: One exchange to rule them all. It was a Senate bill, and in
part because of Republican governors and democratic governors coming and
saying, look, we want to have control of this. We know our states, we know
our people, we know how to work on the ground, it will be better this way.
So, this is a concession the Democrats thought they were making in part to
Republican governors to sort of get their participation in the bill. When
they did that, they put in this backstop, that if a state for some reason,
they had a big mess-up, that it just didn`t work out for them, they didn`t
get their act together in time, the federal government could run the
exchange. They thought at the time they would do this with one, two,
three, maybe four or five exchanges. They`re doing more than 30.

HAYES: That`s amazing.

KLEIN: So, the one thing that`s going on here is that they weren`t
all that well prepared, more than 30. It shouldn`t be able to scale, it
should be working out, not let them off the hook if not working, but it
wasn`t supposed to be the case, that you had 48 state exchanges and then
two or three more because you`ve also got the District of Columbia out
there, would be run by the states.

HAYES: Audrey, this point about --

KLEIN: Or the feds.

HAYES: -- the folks in rural Kentucky who don`t have necessarily have
internet access, how are getting to them right now? How are they
interfacing with the programs, the folks who really need health care can
get it?

HAYNES: Well, Chris, we have a great ground operation. We have what
we call connectors all around the state as well as we have enlisted
insurance agents. You know, we have over 1,000 small businesses that have
opened applications. And I know many people thought that the small
businesses would not be interested in signing up, but here in Kentucky,
they are. I worked a phone bank. The very first night, October the 1st in
Louisville, and we received hundreds and hundreds of calls. I worked it
for about four hours for a local TV station.

And I will tell you that there are many people in their 50s, 40s and
50s and early 60s that I answered that night that told me clearly, they
have never had health insurance ever in their life that they can recall.
So, people in Kentucky are hungry for this, and they`re telling their
friends and their neighbors. And once that they see how easy it is to sign
up, they are telling friends and neighbors and saying, it only takes 10
minutes or 20 minutes, or you know, whatever.

HAYES: So, you`re getting word of mouth as well.

HAYNES: So, we`re just -- absolutely. Absolutely. But we have a
lot. We really have both the private sector, the public and the non-profit
sector all stepping in. All of our local health departments, all of our
community well health centers, our hospitals who deal with lots of indigent
care, they`re all stepping pup.

HAYES: Congressman, let me jump in for one second. Congressman, do
you think you can see a way in which the poison from this politically
drains a little bit in Kentucky as this works?

YARMUTH: Oh, I think it`s already drained from it.

HAYNES: I hope not.

YARMUTH: Actually, I think what you`ve got is you`ve got this word of
mouth campaign that`s going on. People are finding good, affordable
coverage for, again, many for the first times in their lives, they`re
telling their friends, their neighbors. This is the absolute kind of
grassroots campaign that basically undermines whatever rhetoric a
politician throws out. So, again, I think Mitch McConnell and the other
members of our delegation who have been equally strident about opposing
ObamaCare going to have some explaining to do to their constituents,
because the actual reality on the ground is very different from what
they`ve been telling them.

HAYES: Very different. Ezra, very quickly, what is the one big
takeaway for the other states from what Kentucky is doing?

KLEIN: Expand Medicaid and get your website working.

HAYES: Yes. Expand Medicaid. And it`s really a huge, huge
percentage of the people being helped right now are coming through that.
Congressman John Yarmuth, Audrey Haynes from the Kentucky Cabinet for
Health and Family Services, and MSNBC policy analyst Ezra Klein. Thank
you. That is ALL IN for this evening.

"THE RACHEL MADDOW SHOW" starts 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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