updated 1/8/2014 1:12:46 PM ET 2014-01-08T18:12:46

THE LAST WORD WITH LAWRENCE O`DONNELL
January 6, 2014

Guests: Richard Wolffe, Jared Bernstein, Nia-Malika Henderson, Sam Stein, Jenni Bergall, Ezra Klein


LAWRENCE O`DONNELL, MSNBC ANCHOR: Emergency unemployment benefits have run
out and the Senate is trying to do something about it.

And Colorado is running out of pot.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The big chill.

UNIDENTIFIED FEMALE: The cold facts of unemployment insurance.

UNIDENTIFIED MALE: The checks will not come this week for 1.3 million
Americans.

UNIDENTIFIED MALE: A dangerous deep freeze.

UNIDENTIFIED FEMALE: What we`re talking about is that Senate vote on
unemployment benefits.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Denying families that
security is just plain cruel.

UNIDENTIFIED MALE: Bottom line, it`s going to get even worse. Everybody
is feeling this.

UNIDENTIFIED FEMALE: It`s a great inequality campaign of 2014.

REV. AL SHARPTON, MSNBC ANCHOR: The year of action on fight be inequality
on minimum wage. On unemployment.

UNIDENTIFIED FEMALE: President Obama is back and ready to go.

MARK HALPERIN, MSNBC POLITICAL ANALYST: He still has the problem of a
Republican House.

CHRIS JANSING, MSNBC`S JANSING & CO.: But he is well rested and better
armed. His plan is to focus on a core Democratic message -- income
inequality.

ALEX WAGNER, MSNBC HOST, "NOW": First on the list, unemployment insurance.

LUKE RUSSERT, MSNBC ANCHOR: The Senate is back at work today.

SHARPTON: Harry Reid delayed that critical test vote on extending jobless
benefits.

UNIDENTIFIED MALE: The proposal by Republican Senator Dean Heller and
Democrat Jack Reed extends benefits for only three months.

JANSING: Will it be more partisanship and acrimony?

RUSSERT: Even if it does come out of the Senate --

SHARPTON: The president is vowing to hold Republicans` feet to the fire.

RUSSERT: Probably dead on arrival in the House.

UNIDENTIFIED MALE: All of those people have to run for re-election next
year.

JANSING: Could this set the tone for 2014?

RUSSERT: The 2014 elections, now just 11 months away.

UNIDENTIFIED FEMALE: Bundle up. Get used to hearing this populist message
against growing inequality a lot.

SHARPTON: The GOP doesn`t get it.

UNIDENTIFIED FEMALE: They`re happy to hurt the economy under Barack Obama.

UNIDENTIFIED FEMALE: And we mean a lot.

UNIDENTIFIED FEMALE: It`s cold here, Chris. It`s so hard to even smile.

(END VIDEO CLIP)

O`DONNELL: The senior senator from Nevada and the junior senator from
Nevada don`t team up very often. Senators from -- the senator from Nevada
-- the senior senator from Nevada is the majority leader of the Democrats
in the Senate and the junior senator is a conservative Republican.

Today on the Senate floor you couldn`t tell them apart.

(BEGIN VIDEO CLIP)

SEN. DEAN HELLER (R), NEVADA: It is difficult to stand here in the
nation`s capital, an area that has largely felt little negative impact of
the recession, and describe just how tough times are for so many of my
constituents.

I hear about choices individuals are forced to make, whether to buy gas for
their car, pay for heat in the frigid northern Nevada weather, or to buy
school supplies for their children or perhaps save for the future.

These are hard-working individuals who rely on these benefits. They are
trying to find a job. They want to provide for their children. But for
these benefits to simply vanish without giving families a time to plan or
figure out alternatives to help them get by to me is just not right.

SEN. HARRY REID (D), MAJORITY LEADER: Instead of celebrating the beginning
of the new year on January 1st, more than a million Americans, including
20,000 veterans and about 20,000 Nevadans, were left wondering how they
would feed their families and make their mortgage payments while they
continue to look for jobs.

(END VIDEO CLIP)

O`DONNELL: Nevada`s Republican Senator Dean Heller has teamed with Rhode
Island Democratic Senator Jack Reed in co-sponsoring a bill to temporarily
extend emergency unemployment benefits for three months. It is no
coincidence that Dean Heller represents the state with the highest
unemployment rate in the country, 9 percent, and it is no coincidence that
Nevada is tied for the number one spot in unemployment with the state of
Rhode Island, which his co-sponsor Senator Reed represents.

Here`s Harry Reid yesterday on "Face the Nation" on the prospects of the
passing the extension of emergency unemployment benefits in the Senate.

(BEGIN VIDEO CLIP)

REID: I think that there are five Republicans, five Republicans, Dean
Heller plus four Republicans -- remember, Dean Heller is not some maverick
that is out spewing socialism. Here`s a guy who`s really a conservative
person. And he wants to extend unemployment benefits. I admire him for
doing that.

And can`t we get four Republicans to agree with the American people that we
should do that? I would certainly hope so.

(END VIDEO CLIP)

O`DONNELL: Today two Republicans announced their support for the bill.
Alaska`s Lisa Murkowski and Maine`s Susan Collins.

Joining me now, Richard Wolff, executive editor of MSNBC.com and the author
of the new book "The Message: The Reselling of President Obama." And Jared
Bernstein, a senior fellow at the Center on Budget and Policy Priorities,
an MSNBC contributor.

Richard, so the Republican with the highest unemployment rate in the Senate
is on board for this.

(CROSSTALK)

RICHARD WOLFFE, MSNBC.COM EXECUTIVE DIRECTOR: What a coincidence.

O`DONNELL: Big surprise. But, you know, there are -- the next one down, I
believe, is Mark Kirk in Illinois, which has an unemployment rate that`s
above the 7 percent national average. He`s not on board yet. And
probably, you know, there`s a very high unemployment rate in Mississippi
with two Republican senators.

It would seem that that`s where you would try to get your support for this.

WOLFFE: Right. And it`s not surprising that the president`s going to go
out tomorrow and apply a lot of public pressure on these Republicans. You
know when -- whenever you get the president out there with people, real
people behind him, in this case people who are looking for unemployment
benefits, to try and put pressure on the Congress to do something, it`s one
of two things.

Either they are gettable, you have these vulnerable Republicans who have
high unemployment in their states, or everything`s broken down and we are
in the game of very visible political theater in the run-up to the State of
the Union, I think.

It`s both, right? In the Senate there is a room for something to happen.
In the House it`s politics.

O`DONNELL: Jared Bernstein, the politics of this would have been easier in
an earlier time in the Senate and in the Congress generally. I mean this -
- this sort of thing wasn`t controversial. They did it under President
Bush. And these same people who did it under President Bush are standing
in the way now.

JARED BERNSTEIN, CENTER ON BUDGET AND POLICY PRIORITIES: Well, actually,
what`s kind of interesting about this is that in the past, even with
partisan legislatures, they`ve increased these benefits. They`ve allowed
for the extension when the number of long-term unemployed people was
actually considerably lower than it is today.

In fact, the share of long-term unemployed, people who have been without a
job for at least half a year, is twice what it`s been in the past when
Congresses of all stripes and spots have allowed the program to expire. So
I`m not saying that it`s a big surprise that these folks aren`t data
driven. OK? We knew that. But the extent of partisanship on the issue
really is extreme. You kind of forget that these days because we`re so
used to this level of gridlock. But it is extreme.

O`DONNELL: The -- Gene Sperling talked about this, this weekend, about
speaking with Senator Heller about it. Let`s listen to that.

(BEGIN VIDEO CLIP)

GENE SPERLING, NATIONAL ECONOMIC COUNCIL DIRECTOR: I talked to Senator
Heller on Friday, and he said, you know, for him this was not ideology,
this was being a senator in a state that had 9 percent unemployment. It
was talking to constituents every day who are often in economic distress,
who desperately wanted a job, and understanding that we`re a country that
has each other`s back in these difficult times.

(END VIDEO CLIP)

O`DONNELL: Richard Wolffe, this does highlight what for me is a Republican
phenomenon that I`ve watched many, many times, which is they get it if it
happens to them.

WOLFFE: Right.

O`DONNELL: And so the Republican with the highest unemployment rate in the
country in his state is the Republican who gets this. And the others are
immune to it.

WOLFFE: And I don`t think that`s unique to Nevada or anywhere else. You
know, we had a great story at MSNBC.com today about the kinds of choices
these individuals are having to make. People who`ve saved up for their
pickup truck. People who are going to face selling their home today
because they`re not getting these benefits.

And the economic impact of that. Right? So people who -- they say, you
know, Republicans will say in general, when it`s an abstract idea, people
should just go and take whatever job`s out there. But if you are long-term
unemployed, so you`ve got a college education, going to flip burgers does
not help your long-term employment.

You may get a job in the short run, but it makes it much harder to get a
job that you`re qualified for later. When it`s real, when it`s personal,
it becomes much, much harder to dispute the need for these benefits and, by
the way, for longer-term solutions. For training and for everything else
that you need to do to move these people off the long-term unemployed.

O`DONNELL: And, Jared, I think that what Richard just raised is something
that a lot of rich Republicans and others don`t understand. And you`re a
rich Republican if you`re making a congressional salary. That puts you in
the rich level in this country. That just how important these benefits
are. They`re very small. And I think that`s what the Republicans see.

BERNSTEIN: Right.

O`DONNELL: They go, hey, this is a small amount of money to these
individuals, it can`t make that much difference. But that is -- what they
don`t understand is life at the margins, as Richard was just describing it,
and how these hundreds of dollars can actually make that car payment or
just keep the mortgage afloat.

BERNSTEIN: No question about it. I mean, the average benefit is about
$300 a week. Well, that`s real money to the folks in the middle of the
income scale. And remember, these are not people who were doing great
until the recession hit and they lost their job. Many folks in the middle,
lower end of the pay scale, have been struggling for quite a while. In
fact, even over the expansion of the 2000s when the economy was growing
before the big downturn.

Median income was flat. The wages of low-wage workers were flat or
falling. So that`s another dimension to this. Folks don`t have an asset
portfolio or deep savings to fall back on. And I think you and Richard are
talking about a very important thing here, which is this idea of not being
able to sympathize or empathize with the other.

You kind of hark back to a guy like Bill Clinton. Yes, I think he really
had a tangible feel for that sort of thing.

O`DONNELL: And Richard, the other area of life on the margin that the
president is going to be pushing, Democrats are going to be pushing, is an
increase in the minimum wage, which presumably will run into a similar kind
of lack of comprehension by Republicans.

WOLFFE: Right. They`re going to play the same argument that they`ve done
before, which is that this is a disincentive. For companies making, by the
way, record profits, a disincentive to economic activity. You know, when
you look at the economic activity that`s spurred by unemployment benefit,
for instance, it has a big impact on the broader economy. Economists are
talking about .2 percent, .4 percent of economic growth that will disappear
because unemployment benefits don`t get paid.

Ask yourself, if you are a Republican who cares about growth, and they all
say they want growth, what`s better for this country? For the money that
corporations are hoarding right now to go directly into the pockets of
people who will spend it or for that money to be salted overseas or sat on
as some kind of cash reserve in case of another crisis?

O`DONNELL: By the way --

WOLFFE: It will help people right now.

O`DONNELL: Jared, quickly, before we go.

BERNSTEIN: Quick point on that. Quick point on it. .2 percent of GDP.
That`s what we shave off in GDP if we don`t do this. That`s about $30
billion. The cost of this is about $25 billion. I`m not saying it pays
for itself. But boy, talk about shooting yourself in the foot.

O`DONNELL: Richard Wolffe and Jared Bernstein, thank you both for joining
me tonight.

WOLFFE: Thank you.

BERNSTEIN: Thank you.

O`DONNELL: Coming up in the "Rewrite," William F. Buckley Jr., the
intellectual father of modern conservatism and the war on drugs.

Also, Colorado`s new marijuana stores are running out of marijuana. That`s
coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The yeas are 56. The nays are 26. The nomination is
confirmed.

(END VIDEO CLIP)

O`DONNELL: Tonight the Senate voted 56-26 to confirm Janet Yellen as the
head of the Federal Reserve.

Janet Yellen will replace Ben Bernanke when his term expires at the end of
this month. She will be the first woman head of the Federal Reserve.

There were just 82 senators present to vote because weather is preventing
some senators from returning to Washington tonight.

Coming up next, another Republican abandons ship in the House of
Representatives.

(COMMERCIAL BREAK)

O`DONNELL: Another member of Congress is abandoning the Republican ship of
fools in the House of Representatives. Six-term Republican Congressman Jim
Gerlach of Pennsylvania announced today that he will not seek re-election.

In his written statement he did not blame Tea Party madness for his
premature retirement. Instead the 58-year-old career politician offered
the standard line of wanting to spend more time with his wife and family.

Gerlach is the fourth moderate Republican to announce retirement since
November and joining Jon Runyan of New Jersey, Tom Latham of Iowa, and
Frank Wolf of Virginia.

Joining me now, Nia-Malika Henderson, political reporter for the
"Washington Post" and Sam Stein, MSNBC political analyst and senior
politics editor for "The Huffington Post."

And so Nia-Malika, another Republican would like to spend more time with
his family and a lot less time on the House floor with those crazy Tea
Partiers.

NIA-MALIKA HENDERSON, THE WASHINGTON POST: We are seeing something of a
trend here. I think the question is whether or not it continues into 2014.
You saw at the end of 2013 -- Boehner himself get fed up with the Tea Party
and also moderate Republicans say that they needed to speak up more, that
they needed to band together.

They of course were against the actions around the government shutdown that
were led by the far right of the party. So this is an interesting thing.
And I think if you look at what Democrats need to do come 2014 to win back
the House, you know, slim, slim, slim chance that they can, I think it`s
something like 1 percent, but when seats like this open up it certainly
gives Democrats more of a chance to win back some seats in the House.

O`DONNELL: Well, Sam Stein, Gerlach`s seat looks interesting.

SAM STEIN: Yes.

O`DONNELL: Mitt Romney won that district with only 51 percent of the vote.
That seems like it could be something the -- the Democrats could get.

SAM STEIN, MSNBC POLITICAL ANALYST: Yes. Now Gerlach won his re-election
with 57 percent of the vote. So it was trending away from Democrats
because of redistricting. However, one thing that is in the Democrats`
favor is that the governor of Pennsylvania, Tom Coburn, is up for re-
election. Widely unpopular guy. There will be depressed Republican
turnout it`s expected because of that and intensified Democratic support.

So it is one of these seats that Democrats feel they have a legitimate shot
to pick up a number. But Nia-Malika`s right. They are starting from a
deficit that`s very -- going to be very difficult to overcome. They`re
also forfeiting a seat in all likelihood with Jim Matheson in Utah
retiring. The one Democrat so far is retiring. So it is still an uphill
battle for Democrats, but this is probably good news for them today.

O`DONNELL: And Nia, when this happens the Tea Partiers don`t exactly stay
quiet. In New Jersey Steve Lonegan, who lost to Cory Booker in the Senate
campaign, has announced that he`s running for that seat that is -- that is
currently held by that retiring moderate in New Jersey, Jon Runyan. So we
may -- in some of these instances, you could conceivably end up replacing a
moderate with a Tea Partier. Maybe not in New Jersey but possibly in some
other ones.

HENDERSON: That`s right. And remember Lonegan. He was back. He got some
endorsements from the likes of Sarah Palin, people like Rand Paul. You
know, had some pretty disparaging comments to say about Cory Booker during
that race. But we`ll see what happens.

I think the establishment part of the Republican Party very much wants to
play it safe and put in candidates that they think can help them maintain
their lead in the House of Representatives, if not expand it. So we`ll see
what happens there with that seat.

I think also one of the things that you are seeing from moderate
Republicans is they have formed a super pact. The defense of main street.
They are looking -- the defense of main street. They are looking at
raising about $8 million and targeting about 10 or 12 races in 2014. So
there is a sort of "Empire Strikes Back" moderate Republicans wanting to
strike back.

O`DONNELL: Sam, the retirement phenomenon was always interesting to watch
in Congress, and usually there`s more of a kind of rush to the door when
you`re in a minority party in one body particularly in the House of
Representatives. And it looks hopeless. It looks like you`ll never get
out of the minority.

STEIN: Yes.

O`DONNELL: It`s watching the retirements from the majority party that is
more interesting as we`re seeing here.

STEIN: Totally agree. You would think that in this current state with
this current landscape the Republicans would be more excited about the
upcoming election than Democrats. The Generic Congressional Ballots have
trended in Republicans` favor since the launch of Obamacare. They seem
downright giddy to run another election on the Affordable Care Act. And
yet we`re seeing more retirements on the Republican side especially among
the moderate members and the only real logical explanation that I can come
up with is that they`re just really tired of the business as usual.

They don`t like the constant government by crisis, they don`t like to get
basically led around by the more conservative members of their faction.
And then there`s one other thing to look out for, which is Speaker John
Boehner.

Some of these members who are retiring, specifically Tom Latham of Iowa,
are very close allies of the speaker, and there`s been some rumors that
Speaker Boehner is going to give up his speakership at the end of this
term. The Latham retirement in particular sort of piqued discussion and
gossip that in fact he might step down after 2014. So that`s another thing
to look out for.

O`DONNELL: Nia, the -- which we`ve already talked about here, Boehner`s
kind of public demonstration of frustration and difficulty, it`s kind of
unique and certainly rare anyway in the history of speakerships to see a
speaker out there complaining about what`s going on within his own party,
including with some of his own members in the House of Representatives. He
kind of in that moment, in that press conference, personified the
frustration that we`re seeing expressed by some of these retirements.

HENDERSON: That`s right. And you remember originally, I mean, he was
swept into office by a Tea Party wave, and his philosophy back then in 2010
was dance with the one that bring you. And that was the Tea Party. It
very much changed in the wake of the government shutdown. Very stern words
for these outside groups specifically and just the movement in general
about lacking a strategy, essentially going on a fool`s errand around the
government shutdown and Obamacare.

So I think, you know, that was probably the most surprising development
from Boehner over this last year. And of course I think we`ll have to look
at what that means for the debt ceiling fight. That thing will obviously
happening now. And we`ll hit the limit come February, next month. So you
know, what this means for immigration. So many issues I think are going to
be determined by, you know, how Boehner is feeling about the Tea Party, how
moderate Republicans are feeling about the Tea Party, and what they feel
like they can do.

O`DONNELL: Nia-Malika Henderson and Sam Stein, thank you both for joining
me.

STEIN: Thanks, Lawrence.

HENDERSON: Thank you.

O`DONNELL: Thank you.

Coming up in "The Rewrite," conservatives versus conservatives on
legalizing marijuana. And later, now that marijuana has been legal in
Colorado for six days. Colorado is of course running out of marijuana.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: The other day I actually tried to get my son
signed up through the Kentucky exchange that the Democrats have said are so
good. And I have here my son`s Medicaid card. We didn`t try to get him
Medicaid. I`m trying to pay for his insurance. But they automatically
enrolled him in Medicaid.

For a month they wouldn`t talk to us because they said they weren`t sure he
existed. He had to go down to the welfare office, prove his existence.
Then the next thing we know we get a Medicaid card. So really most of the
people in Kentucky are automatically being enrolled in Medicaid.

I`m trying to pay for insurance and can`t pay for it. And I`m uncertain
now whether I`m enrolled in D.C. and/or Kentucky. And it`s a mess.

(END VIDEO CLIP)

O`DONNELL: In the spotlight tonight the Medicaid expansion under the
Affordable Care Act. We tried to reach Rand Paul`s office today to find
out more detail about how his son apparently received Medicaid coverage in
Kentucky and why he wasn`t covered by Rand Paul`s family policy, but we
have received no reply yet about those questions.

In the design of the Affordable Care Act, Medicaid was intended to be the
single largest provider of coverage for the uninsured. But since Medicaid
eligibility is entirely dependent on income levels, what happens when a
worker`s income level increases and then makes that worker ineligible for
Medicaid? That is a process called churning as explained today in the
"Washington Post."

Quote, "Typically people lose Medicaid eligibility after their income
spikes temporarily such as when they get a seasonal job or pick up extra
hours at certain times of the year. They re-enroll and their income --
when their income drops. Until now people who churn out of Medicaid
because of an income bump often wound up uninsured because they cannot
afford private insurance. Starting this month under the Affordable Care
Act many will become eligible for insurance and subsidies through the
exchanges."
But that might not turn out to be as simple as it sounds.

Joining me now is Jenni Bergall, who is a reporter for Kaiser Health News,
and Ezra Klein, a columnist at the "Washington Post" and MSNBC policy
analyst.

Jenny, you wrote this article in the -- that appeared in the "Washington
Post" today about this new phenomenon, which will be churning out of
Medicaid but still within the Affordable Care Act onto possibly private
insurance. But that could be a very complicated churn. Explain to us
what`s going on in that.

JENNI BERGALL, KAISER HEALTH NEWS: Well, what`s going on is -- it is a
difficult thing. What`s going on is that in the past churning was very
common with Medicaid people. They would go up. They go down in their
income. And they churn in and out of Medicaid. The bad news then was that
when they churned out oftentimes they were uninsured. When they earned a
little bit more money they became uninsured and had no insurance.

Now with the Affordable Care Act the good news is that they can move into
an exchange if their income rises, goes up a little bit. However, it`s up
and down and up and down with a lot of these people with their income. And
so they may move from Medicaid onto the exchange and then their income may
drop and they may have to go back to Medicaid.

So that`s what the churning issue is. And it`s -- it`s kind of a
nightmare. It will be somewhat of a nightmare for some of the states.

O`DONNELL: Ezra, this is one of the things, as you know, that single-payer
advocates like me and others, one of the reasons we`re single-payer
advocates is look at this thing and look how messy it can become.

And there`s also now going to be a churn on the private insurance end of
this thing with the subsidies. People will be getting private insurance
for some number of, I don`t know, weeks, months, and then they will become
eligible for Medicaid and churn downward into the Medicaid system.

Is that how it`s going to work on the churn out of the insurance part of
it?

EZRA KLEIN, STAFF WRITER, "THE WASHINGTON POST": Yes, this is what you get
when you have a system that gives you one health care system for the poor
and another one for everyone else, or at least everyone else who can afford
insurance.

(CROSSTALK)

O`DONNELL: There are two systems for the working poor, because you have
that subsidized component right above the Medicaid income thresholds.
You`re still dealing with working poor people at the margins whose incomes
shift a lot.

KLEIN: Yes.

And to be fair, the group of poor or working poor I`m more worried about
are in the states where they don`t actually have the Medicaid expansion.
So when they would churn beneath getting 133 percent of poverty, when they
become poor, essentially, there`s nothing there to catch them.

Back when the ACA was being designed in sort of our underlying health
reform discussions, there were essentially two ways to solve this. Right?
There was, one, we could have had some kind of single-payer system, but
that was ruled off the table ideologically. The other is, you could have
had private insurance for everyone, but the problem is that is actually too
expensive.

The reason they didn`t just do private insurance for the Medicaid
population in large part was, to give poor folks insurance as comprehensive
as what Medicaid offers would just be much, much more, because private
insurance is a whole lot more expensive than Medicaid. And so you end up
with a patchwork.

And the fundamental reality of having a patchwork health care system is
people end up falling through the sort of edge cracks. And that`s going to
be particularly bad in the early years of the Affordable Care Act, when you
have some sort of questions from the administration of the income subsidies
and then it will be very, very bad, particularly in the states where you
don`t have the Medicaid expansion, because when they fall underneath the
amount they get subsidies for in the private insurance system, there`s
nothing there to catch them.

O`DONNELL: And, Jenni, there`s also the problem of this means that the
most complicated area of the Affordable Care Act is at the lower -- lowest
ends of the income brackets in this country. Those of us at the higher
ends of the income brackets have no problem because we`re not involved in
any of these subsidy issues involving our health insurance or any of that.

And so we have taken something complicated and then made it much, much more
complicated for the working poor.

BERGAL: Yes, absolutely.

And what`s really bad about that situation is when people at that level
lose their coverage or are in and out of coverage, there are major
consequences. Some of them don`t seek treatment. Some of them aren`t
followed consistently with one doctor or one health care network.

And so they just get lost. And it affects their health care. There was a
study this year, I believe, that found that people on Medicaid who churn in
and out and in and out had significantly different health outcomes and were
ending up not getting blood pressure screenings, were not getting
prescriptions, were not getting the things that they needed. So it`s a
serious consequence.

O`DONNELL: Ezra, the -- one of the possibilities here is to simply say,
OK, once you qualify for Medicaid, you qualify for Medicaid for the year
and you don`t have to get your income checked every few months, as it is.

But that`s being considered way too expensive by the states and the federal
government end of it. Is there any practical solution to this? That stay
in it, your qualification works for a year sounds to me like the smoothest
kind of practical solution, but it`s an expensive one. Is there any other
solution that you could see being applied to this kind of churning?

KLEIN: Yes, or even to say you get it for three years after that. There
are a lot of ways to offer that kind of continuity of care, and it`s not a
technically difficult problem to allow people to pay the difference between
whatever they were going to get and what they`re actually going to -- what
they get because they have a sort of continuity of care arrangement.

The problem, and this is a problem across all dimensions of the Affordable
Care Act, is that Republicans in Congress will not allow any fix, no matter
how minor, to pass. So, places where you have very small technical tweaks
that are needed, to much larger questions about how to actually deliver the
best care to people, as we learn what works and what doesn`t in the
program, as we see what gets people tripped up in the field and what
doesn`t, and as we see what is successful and needs to be scaled up and
what is a failure and needs to be brought down, our ability to actually
make any changes to the program is completely gummed up in Congress.

And, so, there`s no -- there are many practical solutions to the problem,
but there are no that -- there are none that can currently pass Congress.

Jenni Bergal and Ezra Klein, thank you both for joining me tonight.

KLEIN: Thank you.

BERGAL: Thank you.

O`DONNELL: Coming up in "The Rewrite," what the father of modern American
conservatism had to say about legalizing marijuana.

(COMMERCIAL BREAK)

O`DONNELL: The one and only Dennis Rodman has gone back to North Korea
with 12 less famous American basketball players to play a basketball game
for dictator Kim Jong-un`s birthday. Why? Because he loves the guy.

(BEGIN VIDEO CLIP)

DENNIS RODMAN, FORMER PROFESSIONAL BASKETBALL PLAYER: This game is for his
birthday. It`s for his birthday. And I`m hoping that if this opens the
doors, that we can actually talk about certain things, we could do certain
things. But I`m not going to sit there and go over and say, hey, guy,
you`re doing the wrong thing. That`s not the right thing to do. He`s my
friend first. He`s my friend. I don`t give a (EXPLETIVE DELETED) about
the world. He`s my (EXPLETIVE DELETED) friend. I love him.

(END VIDEO CLIP)

O`DONNELL: "The Rewrite" is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

WILLIAM F. BUCKLEY JR., FOUNDER, "NATIONAL REVIEW": Drugs are a form of
escapism, and the damage in taking them is not by any means self-limited.
It damages other people also.

(END VIDEO CLIP)

O`DONNELL: That was the intellectual father of modern American
conservatism, William F. Buckley Jr., who, by the way, would be horrified
by 21st century Tea Partiers hijacking thoughtful conservatism and aiming
it toward anarchy.

Bill Buckley died in 2008 at the age of 82, and so was spared the horrors
of the Tea Party takeover of the Republican Party. Bill Buckley burst onto
the scene in 1951 with a bestseller about being a conservative
undergraduate at Yale.

A few years later, he was the founding editor of "The National Review,"
instantly making it America`s premier conservative journal. He became
America`s first politically conservative TV talk star with the long-running
show "Firing Line," where he discussed the issues of the day, frequently
debated liberals, and delighted in uninhibited displays of egotism which
were frequently charming, but could turn very ugly, as happened with his
gay bashing of Gore Vidal on Dick Cavett`s show.

In that 1986 interview you just saw, Buckley was saying something that we
can all agree with: Drugs are a form of escapism.

David Brooks, "The New York Times" conservative columnist, said as much in
his first column of the year, which might turn out to be his most
controversial column of the year. David Brooks began the column by
confessing to fond memories of pot smoking during his teenage years,
before, as he put it, he graduated to more satisfying pleasures.

He went on to say: "I think being stoned is not a particularly uplifting
form of pleasure and should be discouraged more than encouraged. We now
have a couple of states, Colorado and Washington, that have gone into the
business of effectively encouraging drug use."

David Brooks` piece, as usual, has a few high-minded lines that seem to be
an echo of Buckley, but his opposition to the legalization of marijuana put
him in direct opposition to Bill Buckley.

(BEGIN VIDEO CLIP)

BUCKLEY: My position on drugs is that they are -- the drug wars aren`t
working and that more damage net is being done by their continuation on the
books than would be done by withdrawing them from the books.

(END VIDEO CLIP)

O`DONNELL: In what may be William F. Buckley Jr.`s most valuable legacy,
he led "The National Review" to oppose the war on drugs 18 years ago and to
favor legalization.

And today, in an editorial that is the perfect answer to David Brooks`
column, but doesn`t mention Brooks or Buckley, the editors of "The National
Review" have used the occasion of legalization in Colorado to make their
case brilliantly.

"Launching 17 million Rocky Mountain high jokes, Colorado has become the
first state to make the prudent choice of legalizing the consumption and
sale of marijuana, thus dispensing with the charade of medical restrictions
and recognizing the fact that, while some people smoke marijuana to counter
the effects of chemotherapy, most people smoke marijuana to get high. And
that is not the worst thing in the world."

The editorial went on to use a cost-benefit analysis of marijuana
prohibition that Buckley was the first to use in "The National Review" 18
years ago. "The history of marijuana prohibition is a catalogue of
unprofitable tradeoffs, billions in enforcement costs, and hundreds and
thousands of arrests each year in a fruitless attempt to control a mostly
benign drug, the use of which remains widespread, despite our energetic
attempts at prohibition. We make a lot of criminals while preventing very
little crime."

The "National Review" editorial addressed a very important point that David
Brooks ignored, alcohol addiction. "Marijuana is a drug as abusable, as
any intoxicant is, and its long-term use is in some people associated with
undesirable effects. But its effects are relatively mild. And while
nearly half of American adults have smoked marijuana, few develop habits,
much less habits that are lifelong. Compared to binge drinking or alcohol
addiction, marijuana use is a minor public health concern."

Alcohol has killed more people in cars and elsewhere than marijuana ever
will, but alcohol remains legal and no doubt is sometimes served in David
Brooks` home.

In the middle of the Nixon administration, Bill Buckley revealed one of his
greatest pleasures in an interview with "Playboy" magazine. He said: "I
have discovered a new sensual treat, which, appropriately, the readers of
`Playboy` should be the first to know about. It is to have the president
of the United States take notes while you are speaking to him."

We can only hope that Republicans are still taking notes when William F.
Buckley Jr. is speaking to them, as he did today through the editors of
"The National Review."

My next guests will be "The Denver Post"`s new marijuana reporter and one
of the new legal sellers of recreational marijuana in Colorado.

(COMMERCIAL BREAK)

O`DONNELL: Organizers of the Campaign to Legalize Medical Marijuana in
Florida say they expect to submit enough signatures this week to get that
issue on the ballot in November.

And in Colorado, after six days of full legalization of marijuana sales,
stores are running out of pot. Big surprise. The owner of a Colorado
marijuana store will join me next.

(COMMERCIAL BREAK)

O`DONNELL: Recreational marijuana use has only been legal in Colorado for
six days, but already some marijuana stores say they are running low on
product.

On day two, one shop owner told "The Colorado Springs Gazette" -- quote --
"We are going to run out. It`s insane. This weekend will be just as
crazy. If there is a mad rush, we will be out by Monday" -- this despite
the drug`s steep price, according to "TIME" magazine.

In some cases, stores were charging $50 or even $70 for one-eighth of an
ounce of pot that costs medical marijuana users just $25 the day before.
And taxes add on an extra 20 percent. And so prices in legal pot shops
have already risen to upwards of $400 an ounce.

An illegal dealer in Pueblo, Colorado, told a local paper that short supply
and high taxes just might work in his favor. He said: "People will get
real tired of paying the taxes real fast when you can buy an ounce from me
for $225 to $300." The state adds as much as $90 just for the tax.

Joining me now, Robin Hackett, co-owner of Botana Care Medical Cannabis
Center in Denver, Colorado, and John Ingold, a "Denver Post" reporter who
covers marijuana.

Robin, I have not asked any guest on this program this question before, but
do you have any weed?

(LAUGHTER)

ROBIN HACKETT, BOTANA CARE MEDICAL CANNABIS CENTER: Yes. We still have
plenty of marijuana in our shop.

HACKETT: OK. Well, plenty. So what is this talk about, you know, there`s
a run and, by Monday, which is today, some of the stores could run out?
Has that been happening?

HACKETT: Yes. A lot of our competitors have run out of marijuana at this
juncture, yes, sir.

O`DONNELL: And John, did people see this coming, that there would be kind
of a huge surge starting first week of January?

JOHN INGOLD, "THE DENVER POST": Sure.

I think there was a lot of expectation there was going to be lines on the
first day, on January 1. I mean, certainly, there was a lot of interest
among people being, you know, on the first day to be able to buy
recreational marijuana in the United States.

I think the sustained interest has caught some store owners by surprise.
You know, there`s been lines every day since January 1. There were lines
over the weekend. I drove by a place this weekend. It was Sunday morning.
It was 10:00 a.m. It was 10 degrees, and there was a line, probably 20- or
30-people-long outside of it.

So the sustained interest has I think really been a surprise.

O`DONNELL: Robin, where do you get your supply of marijuana?

HACKETT: We grow our own marijuana. We have a warehouse that we grow in.

O`DONNELL: And is it possible for you to get marijuana from some other
method? Is it necessary -- is it required that you grow your own marijuana
according to the law?

HACKETT: It is required that we grow our own marijuana until July of this
year. In July, they decouple it, and we can purchase from other growers
that are just doing nothing but grow marijuana.

But until July, we`re going to have to grow enough to keep our store open.

O`DONNELL: John, when I look at those images we just had up there of the
long lines, and I read from the illegal dealer, a street dealer, how he
might be able to exploit this, I mean, there`s a risk there for the state,
isn`t there, in seeing these very long lines and thereby provoking more
interest in the illegal market?

INGOLD: Sure. I think that risk was always there. As you mentioned,
there`s taxes. The taxes are fairly hefty as far as other products would
go.

So there was always kind of that risk that people might choose to stay out
of the legal market, stay in the black market, or there`s also the
possibility people will remain in the medical market or even join the
medical market. They will get medical marijuana cards now, sure.

O`DONNELL: And is the -- Robin, is the price of medical marijuana in your
store different from the other prices?

HACKETT: Yes. It`s $10 an eighth or $10 a quarter cheaper on the medical
side than it is on the recreational side. We really haven`t upped our
prices and started gouging folks.

We are trying to maintain that same price level. We know that it`s
important that the marijuana stays at a price level so that we can
outperform the underground at some point. So our goal is to maintain a
good price range, so that folks will want to come to us, as opposed to the
underground.

The one beauty is that we have 45 types of marijuana to choose from, and
the underground has one or two types. So that`s why folks tend to want to
come to the more legal establishments.

O`DONNELL: And, Robin, are you seeing a different customer walking in
there now?

INGOLD: Well, actually, the customers that we`re seeing are 40, 45 and
older. We`re not really seeing any 20-year-olds, a few in their 30s.

But mostly we`re seeing folks from 40 to 70 years old, is what we`re seeing
in the stores.

O`DONNELL: John, what were some of the worst fears that the opponents of
this were expecting to see this week, and have they seen any of them?

INGOLD: I think there was a lot of fear of there being chaos, you know,
maybe there being trouble with the crowds or people causing trouble.

I think there was a lot of fear of people consuming publicly. Public
consumption is still illegal. So you can`t walk down the street and puff a
joint in Denver. And I think there was a lot of worries about people
taking their purchases out of the store and sort of celebrating with them
in the parking lot or in the parks or on the streets.

And that really didn`t happen. I think in Denver at least, the city -- the
city police department issued two citations for public consumption on
January 1, and there wasn`t any evidence that those were actually even
connected to the sales.

O`DONNELL: Robin, is it possible that what we`re seeing in the big lines
is just kind of the end of prohibition and all the publicity about that and
a certain excitement about that, and that the customers that you have this
week will not be regular customers?

HACKETT: We`re already seeing folks that are coming back. They have come
-- you know, they were here the first or second day, and now they`re
starting to return.

But we believe that there is already a huge marijuana market that exists,
and I think we`re going to see more folks coming in that aren`t afraid of
the lines, because a lot of people didn`t want to stand in these long
lines. So I actually think we have got a lot more people coming that
haven`t shown up yet.

O`DONNELL: OK.

Robin Hackett, who does have weed, America, she has not run out.

Robin Hackett and John Ingold, thank you both very much for joining me
tonight.

INGOLD: Thanks for having me.

HACKETT: Thank you.

O`DONNELL: Chris Hayes is up next.

END

Copyright 2014 CQ-Roll Call, Inc. All materials herein are protected by
United States copyright law and may not be reproduced, distributed,
transmitted, displayed, published or broadcast without the prior written
permission of CQ-Roll Call. You may not alter or remove any trademark,
copyright or other notice from copies of the content.>


Watch The Last Word With Lawrence O'Donnell each weeknight at 10 p.m. ET