'The Last Word with Lawrence O'Donnell' for Tuesday, January 7th, 2014

THE LAST WORD WITH LAWRENCE O`DONNELL
January 7, 2014

Guests: Peter Welch, Robert Reich, Caitlin Dineen


LAWRENCE O`DONNELL, MSNBC HOST: Harry Reid actually got 60 votes in the
United States Senate today, including six Republican. But they were not
votes to pass a bill. They were simply votes to do what the Senate knows
how to do best. Talk about maybe someday passing a bill.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Letting unemployment
insurance expire for millions of Americans is wrong.

UNIDENTIFIED MALE: Long-term unemployment benefits.

UNIDENTIFIED FEMALE: The majority of the nation wants to see these
benefits extended.

OBAMA: The good news is 24 this morning the Senate took an important step
in that direction.

UNIDENTIFIED MALE: The measure surprising got the 60 votes needed to
advance.

UNIDENTIFIED FEMALE: But not so fast.

SEN. BARBARA BOXER (D), CALIFORNIA: This is just a vote to proceed to the
measure.

UNIDENTIFIED MALE: We still have to actually clear the Senate.

UNIDENTIFIED FEMALE: And then the legislation will travel down the rabbit
hole.

UNIDENTIFIED MALE: The House of Representatives --

UNIDENTIFIED FEMALE: Where Speaker Boehner has already suggested it will
face resistance. Republicans say it is irresponsible.

UNIDENTIFIED FEMALE: They want to see it paid for.

UNIDENTIFIED FEMALE: To pledge funds without finding a way to pay for it.

UNIDENTIFIED MALE: Where`s the beef?

UNIDENTIFIED FEMALE: How do you pay for this?

UNIDENTIFIED FEMAEL: But not so fast.

UNIDENTIFIED MALE: Even when the Republicans had control under the Bush
administration.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Fourteen out of the last 17 times
they have been unpaid for.

UNIDENTIFIED MALE: Without a pay-for --

UNIDENTIFIED FEMALE: Well, he has a point.

UNIDENTIFIED MALE: How hard can the GOP fight back?

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: You talk about unemployment
insurance instead of job creation.

SEN. RAND PAUL (R), KENTUCKY: We have to talk about what policies create
jobs.

UNIDENTIFIED FEMALE: The best economic stimulus there is, is a job.

UNIDENTIFIED MALE: To be a recipient, you have to be looking for work.

UNIDENTIFIED FEMALE: Taking away resources makes them less likely to be
able to find jobs.

UNIDENTIFIED MALE: This ought to be a no-brainer.

UNIDENTIFIED FEMALE: It is a no-brainer.

UNIDENTIFIED MALE: The Republicans have a 28-point disadvantage --

UNIDENTIFIED MALE: The empathy gap.

UNIDENTIFIED MALE: -- when it comes to which party is more compassionate.

UNIDENTIFIED FEMALE: I have incredible amounts of compassion.

OBAMA: These are your neighbors, your friends, your family members.

UNIDENTIFIED MALE: There are a lot of uncertainties left here.

OBAMA: This is not an abstraction. These are not statistics.

UNIDENTIFIED MALE: It remains to be seen if it will pass.

(END VIDEOTAPE)

O`DONNELL: It is day two of the Carney beard, and I for one am not yet
used to the Jay Carney beard. I don`t know about you. But I`m just not
there yet. Six Republicans joined Democrats today in voting to move toward
debate on a three-month extension of emergency unemployment benefits.
After the vote in an event in the East Room with people who would be helped
by that extension, President Obama offered his reaction.

(BEGIN VIDEO CLIP)

OBAMA: The Senate is a complicated place. So, just because they agreed on
this vote, all they`ve agreed to so far is that we`re actually going to be
able to have a vote on it. They actually haven`t passed it. So, we`ve got
to get this across the finish line without obstruction or delay and we need
the House of Representatives to be able to vote for it as well. And it`s -
-

(APPLAUSE)

And that`s the bottom line.

Voting for unemployment insurance helps people and creates jobs. And
voting against it does not.

(END VIDEO CLIP)

O`DONNELL: The president also responded directly to this claim made by
Rand Paul.

(BEGIN VIDEO CLIP)

PAUL: I`m not against having unemployment insurance. I do think, though,
that the longer you have it, that it does provide some disincentive to
work.

OBAMA: I`ve heard the argument that says extending unemployment insurance
will somehow hurt the unemployed because it saps their motivation to get a
new job. I really want to -- I want to go at this for a second. You know,
I --

(APPLAUSE)

That really sells the American people short. I meet a lot of people as
president of United States, and as a candidate for president of the United
States, and as a U.S. senator, and as a state senator. I meet a lot of
people.

And I can`t -- I can`t name a time where I met an American who would rather
have an unemployment check than the pride of having a job.

(APPLAUSE)

(END VIDEO CLIP)

O`DONNELL: Joining me now are Democrat Congressman Peter Welch of Vermont
and former Secretary of Labor Robert Reich, professor at the University of
California at Berkeley.

Representative Welch, assuming this bill makes further progress in the
United States Senate, which is not at all certain at this point, what are
the prospects of some kind of action in the House of Representatives?

REP. PETER WELCH (D), VERMONT: Well, it`s pretty uphill, because we`re
having this debate as though extending unemployment benefits is going to
solve the problem. What it will do is mitigate the impact on individuals
and on the economy.

But, in fact, what we should be doing is incorporating a discussion about
what job creating policies will help, things like building our
infrastructure, best time we can do that is now. It increases employment
and demand.

Second, subsidize job program that was a partnership between Republican and
Democratic governors in the administration and employers that put people to
work. Then third, I think we should be raising the minimum wage. You do
those thing, you`re actually going to increase demand, increase the base of
employment.

O`DONNELL: Robert Reich, I would like you to take on this notion that`s
being advanced by Rand Paul that the longer people are able to get
unemployment insurance, the less they will be inclined to seek work.

REICH: Well, the problem -- the logical fallacy there, Lawrence, is that
they`re three unemployed people in America for every job opening there is.

So, you know, these people want work. I mean, as the president said today,
there is nobody out there who is just -- doesn`t want to work or would
rather have unemployment insurance and unemployment insurance benefits.
Those benefits are very small for one thing. And, you know, it`s -- it`s
crazy to think that there are all these jobs.

The reason that people are unemployed this long is very simple. There are
not jobs out there for them. And not to extend unemployment benefits is
not only cruel and puts a huge hardship on them and their families, but
it`s also very bad for the economy.


It means that these people don`t have money in their pockets that they can
turn around and buy stuff with. And that means there are no jobs being
created by their purchases. This is a drag on the economy. It makes no
sense at all.

O`DONNELL: Let`s listen to how Rush Limbaugh wants to reframe the language
of this debate.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO HOST: What is unemployment insurance? It is paying
people not to work. And that, let`s change the term. Let`s get rid of
unemployment insurance and let`s call it paying people not to work.

(END VIDEO CLIP)

O`DONNELL: Rush Limbaugh doesn`t seem to notice the word insurance in
there. No one receives unemployment benefits who hasn`t paid into that
insurance fund that the government runs that in effect pays it.

But what I`m concerned about, Representative Welch, is that kind of
thinking invading the House of Representatives and elsewhere -- I mean,
that kind of thinking seems to me to be a much more crudely phrased version
of what Rand Paul seems to be saying. Do you hear echoes of that Limbaugh
kind of thinking about this in your Republican colleagues in the House?

WELCH: Well, I do. In fact, big time. It`s as though it`s a morality
play. And the morality for us and our responsibility is to have economic
policies that can actually create employment. Create jobs and create
wealth.

We`re not having a debate about that. I mean, for instance, we have too
large a trade deficit. And we`re not debating that. A trade deficit means
the jobs are getting exported overseas. If we could rebalance our trade we
would create a lot more jobs here at home. The minimum wage is not on the
table for discussion.

Mr. Limbaugh doesn`t like to talk about that. And then the infrastructure
is falling apart in this country. And the irony of this is if we spoke
about some of these concrete things instead of everybody giving their
vision of morality, then we`d actually be able to take some concrete steps
forward that would put people to work on proposals that both sides could
agree on, like infrastructure.

O`DONNELL: Well, one of the new Republican views of the economic morality
of this is that any extension of unemployment benefits should be, quote,
"paid for", that is to say taken for some other section of the budget. And
that`s something that they were not troubled by in the past, when they were
doing this under President Bush.

But let`s listen to what Mitch McConnell today said about one way of
possibly paying for these benefits.

(BEGIN VIDEO CLIP)

MCCONNELL: I`d like to propose that we`d be allowed, my side would be
allowed to offer an amendment to pay for these benefits by lifting the
burden of Obamacare`s individual mandate for one year.

(END VIDEO CLIP)

O`DONNELL: Robert Reich, I haven`t thought about it, but if you had given
me a few minutes to think about what would the Republicans propose as a
pay-for, I guess that`s where they would begin.

ROBERT REICH, UNIVERSITY OF CALIFORNIA-BERKELEY: Well, sadly, Lawrence.
You know, unemployment insurance extension under emergency conditions where
we have very high unemployment, this has been an automatic routine approval
since 1970. There`s never been a required offset in this kind of
emergency. We`ve had these emergencies before. And suddenly now, after 45
years, Republicans are saying we have to have an offset.

Now, when they talk about offsets, interestingly, they don`t talk about
closing tax loopholes for the rich. I mean, if you took just one tax
loophole, that`s the carried interest tax loophole that gives a huge tax
break, $11 billion a year to very rich hedge fund managers and private
equity managers, that would more than pay for this unemployment benefit
extension for people who are very hard up.

But the Republicans won`t even consider doing that.

The whole thing is so utterly hypocritical.

O`DONNELL: Representative Welch, Chuck Schumer warned on the Senate floor
that looking for these pay-fors is a much trickier business than people
think and it`s very, very difficult to find one that both sides would agree
on using.

Are there any that you`ve heard of that you think might be able to get
bipartisan agreement?

WELCH: The bipartisan part is the elusive quality. Professor Reich just
mentioned I would support. But, you know, it`s like emergency assistance
after Hurricane Sandy. If you start having a debate among 535
representatives and senators about their favorite pay-for while the water
is rising and the barn is burning, you`re not going to make any progress.

Ultimately, these things do have to be paid for, we know that. But that
becomes an excuse to not have a commitment to policies that can build the
economy. And we don`t even have that debate. We turn it into a morality
play as though the cause of unemployment is the sloth of individual
Americans who are desperate to get some work.

O`DONNELL: Thank you for joining me tonight. Robert Reich`s film
"Inequality for All" is available on DVD, iTunes and on demand.

Robert Reich and Congressman Peter Welch --

REICH: Thanks very much, Lawrence.

O`DONNELL: Thank you both.

WELCH: Thank you.

O`DONNELL: Coming up, former Bush and Obama Defense Secretary Robert Gates
has written a controversial new memoir about his time working for both
presidencies. Some amazing things in this book.

And in "The Rewrite", Republican economic predictions -- you could get
very, very rich betting against Republican economic predictions. That`s
coming up.

(COMMERCIAL BREAK)

O`DONNELL: Under House Majority Leader Eric Cantor, the House of
Representatives has voted 47 times to repeal the Affordable Care Act and
Cantor is now planning more such votes in 2014.

But that -- that`s not enough for David Brat, the perfectly named chairman
of the Department of Business and Economics at Randolph Macon College.
Brat tells "The National Review" that he`s going to run a primary campaign
against Cantor because Cantor voted for the Murray-Ryan budget deal and
because when it comes to repealing the Affordable Care Act, quote, "he
hasn`t moved the ball down the field at all."

Congressman Brat, I can`t wait for that title.

Up next, you think you hate Congress? You do not hate Congress more than
former Defense Secretary Robert Gates does. That`s next.

(COMMERCIAL BREAK)

O`DONNELL: People have no idea how much I detest this job. But enough
about me.

According to Bob Woodward, that is actually something Bob Gates said to a
friend while he was secretary of defense. Quote, "People have no idea how
much I detest this job," end quote.

In a new memoir about that job that he detested, Gates reveals that there
was nothing he detested more than testifying to Congress. "All too often
during my 4 1/2 years as secretary of defense, when I found myself sitting
yet again at that witness table at yet another congressional hearing, I was
tempted to stand up, slam the briefing book shut and quit on the spot. The
exit lines were on the tip of my tongue.

I may be the secretary of defense but I am also an American citizen and
there is no son of a bitch in the world who can talk to me like that. I
quit, find somebody else.

Much of my frustration came from the exceptional offense I took at the
consistently adversarial, even inquisition-like temperament of executive
branch officials by too many members of Congress across the political
spectrum, creating a kangaroo court environment in hearings, especially
when television cameras were present."

Having served in that job under Presidents Bush and Obama sequentially,
Gates is in a unique position to compare the two presidents.

In his book, Gates say, "Stylistically, Bush and Obama had much more in
common than I expected. Both were most comfortable around a cadre of close
aides and friends, like most presidents, and largely shunned the Washington
social scene. Both I believe detested Congress and resented having to deal
with it, including members of their own party. They both had the worst of
both worlds on the Hill. They were neither particularly liked nor feared,
nor did either work much at establishing close personal relationships with
other world leaders. Both presidents in short seemed aloof from two
constituencies important to their success."

Joining me now is David Corn, co-author of the book "Hubris", who is also
an MSNBC political analyst, and E.J. Dionne, MSNBC political analyst and
columnist for "The Washington Post."

E.J., the coverage of the book so far to me, I`m a bit surprised at. For
example, in your paper, the headline of the Bob Woodward story is, "Robert
Gates, former defense secretary, offers harsh critique of Obama`s
leadership."

I don`t see the harsh critique here. Everything I`m seeing in here is
gates talking about things that happened in the administration that he
acknowledges that actually perfectly normal things that happen in all
administrations.

E.J. DIONNE, THE WASHINGTON POST": First of all, I think before we lose
track of it, it`s worth noting how anti-war this former defense secretary
is.

O`DONNELL: Yes, yes.

DIONNE: One of the things that struck me reading the excerpt in "The Wall
Street Journal," and he talked about this some as defense secretary, is how
wary he was, both of humanitarian intervention and, if you will, of neo-
conservative style intervention. And he really talked a lot about the cost
of war, about what happened to troops, about people never coming back the
same. I thought that was very powerful.

In terms of his account of, and in the Woodward story, he says this,
there`s really more ambivalence here about President Obama, I think,
because, you know, for example, at one point, he talks about being very
uneasy, and he`s quite critical of the way some of the Obama folks spoke to
some of the military people. And the mistrust they had.

But at the same time, he also says that the military kind of hijacked the
discussion of the Afghanistan policy and that President Obama felt boxed.
And he wrote somewhat sympathetically about that feeling on the part of
President Obama. And he has some sort of favorable words about Obama in
the book, and yet there is still this mistrust.

You know, on the Congress thing, I think he`s right about congressional
hearings. There`s a tendency to posture really hard, to look like you`re
asking a hard question as opposed to being polite but asking a genuinely
hard question.

Nonetheless, this is democracy and that`s what happens. So that`s what
happens. I was a little surprised by how ferocious he was about that.

O`DONNELL: Well, Dave Corn, I can understand it. What I`m interested in
when we get our hands on the book is, does he name names about senators or
members of the House that he`s talking about?

And in my observation, there is a huge difference between a House of
Representatives hearing and a Senate hearing. The Senate hearing always
operates at a higher level. Maybe not high enough for Bob Gates to feel
comfortable and respected, but he does seem like guy who demands an
extraordinarily high level of respect in order to feel comfortable.

DAVID CORN, MOTHER JONES: Well, the book seems to have a pretty high level
of crotchetiness in it.

O`DONNELL: Yes.

CORN: And that he`s critical of Obama but at the same time, he says Obama
made all the right decisions on Afghanistan. He goes overboard in saying
that Joe Biden in decades of public service has never been right on any
foreign policy issue, yet Joe Biden helped us get the last arms control
treaty that Gates supported. Joe Biden tried, unsuccessfully, to limit
Bush`s authority to invade Iraq, and Gates says that the invasion of Iraq
was a mistake.

And of course, you know, Gates, you know, he was himself was no the in
favor on the raiding of the bin Laden compound.

So, there`s a lot going on in this book. In which it seems like, you know,
Gates is very -- he`s contradicting himself. I mean, hell hath no fury
like a cabinet secretary maybe somewhat partially scorned.

O`DONNELL: Well, I think that people when they`re talking about this are
frequently leaving out certain careful words that Gates inserts in some of
these paragraphs that I think make it all make sense, and not
contradictory. But one of the things that is in here as E.J. says, this is
the strongest anti-war statement I have heard from a defense secretary
ever.

He says very clearly in here that this country goes to war way too easily,
E.J. uses the weapons of war way too easily, and that he talks about fire
breathers in Congress. He seems to be saying Lindsey Graham and McCain,
without saying their names, these people who are in favor of military
intervention at every possible turn. He`s clearly against that.

CORN: Right. And again, this is -- this book is thoroughly consistent
with many of the things he said publicly when he was defense secretary.
And, you know, historically, I think it`s very common.

Generals were often the most critical people about war. It was Eisenhower
when he left the White House who criticized the military industrial
complex. And I think this -- you know, this book fits well with the
current mood of the country, which after Iraq and after Afghanistan is very
wary of intervention, which is why President Obama could not get, or
probably wouldn`t have gotten the authorize to use force in Syria.

O`DONNELL: There`s not much reporting on how critical he is on President
Bush`s decision making, but he does very clearly say in the book that he
believes the invasion of Iraq hurt tremendously, as he put it,
significantly compounded the problems in Afghanistan, David Corn.

And he also is says in here that he saw President Obama use some political
considerations as he was approaching some of his decisions involving
Afghanistan and Iraq. And he says he never saw President Bush do that, but
he also points out within the book itself that of course, President Bush
was not running for election. He came into the last two years of Bush`s
administration.

CORN: But he also says, when it comes to those political factors in
Obama`s case, they were never decisive.

O`DONNELL: Right, right.

CORN: So, I mean, so you`re right. There`s a lot of very careful language
here. And if you sort of pull back and say, OK, Bob Gates, I understand
you didn`t like the way the White House aides treated some generals when it
comes to policy considerations, but compare that to George Bush launching a
war, an invasion, not just an operation like Libya or like we might have
had in Syria, but a full-scale war in Iraq. In terms of wrongs and
mistakes, you know, one is an elephant, one is a flea. Yet, I don`t sense
in the excerpts that have come out yet that he`s been able to make those
discerning difference, that a lot of this is still very personal from where
he sat.

O`DONNELL: E.J., I think what we have here is a book that is not going to
be read all that much before it is already going to be used as some kind of
weapon against President Obama. And people going in there trying to
selectively carve out the pieces that they can say he`s being critical of
the president, President Obama on, ignoring the similar material about
President Bush, and ignoring the fact that have pretty much everything he`s
talking about is stuff that has existed in every administration.

DIONNE: Right. Well, first of all, everything is going to be used as a
weapon against President Obama. I suppose a Republican would say that
about Bush. But I do think that he sort of helps us on a couple of points.

We knew and had some reporting on how wary Obama got of the military when
it came to the Afghanistan policy. I think this book gives some more
detail about how uneasy Obama became with the Afghanistan policy -- how
much real argument and in-fighting there was in the administration about
this, and in the end for good reason.

CORN: Well, you know, the interesting thing about that bit, the first
headline out of this was "The New York Times" saying Obama abandoned his
Afghanistan policy. But yet, Gates pointed out he did it because he
thought it wasn`t working. There`s nothing wrong with abandoning a policy
that`s not working.

O`DONNELL: David Corn and E.J. Dionne, thank you both for joining me
tonight.

DIONNE: Good to be with you.

CORN: Sure thing.

O`DONNELL: Coming up, the cocaine congressman returns to work, a free man
with a big paycheck. That makes him a lot luckier than thousands of
Americans who are serving hard time tonight for exactly what he did.

And in "The Rewrite", the shockingly wrong predictions of Republicans,
consistently, totally wrong and mostly ignored by the mainstream media.

(COMMERCIAL BREAK)

O`DONNELL: The cocaine congressman is back.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: The majority of illegal drug users and
dealers nationwide are white. But three-fourths of the people in prison
for drug offenses are African-American and Latinos. Why are arrest rates
so lopsided?

UNIDENTIFIED FEMALE REPORTER: He is the first congressman in history to be
convicted of cocaine possession.

REV. AL SHARPTON, MSNBC ANCHOR, POLITICS NATION: He was arrested in an
undercover drug sting last month after buying 3.5 grams of cocaine. And
today he was sentenced to one year probation.

REP. TREY RADEL (R), FLORIDA: I believe in faith. I believe in
forgiveness and redemption. And I hope if there`s anything positive that
can come out of this, and I know there will be positive that comes out of
this, it`s that I hope that I can be a role model for millions of others
that are struggling.

UNIDENTIFIED FEMALE REPORTER: Radel is preparing for a sit-in (ph) rehab
and the leave of absence from his job.

UNIDENTIFIED MALE REPORTER: Radel left rehab in Naples nearly a month
after pleading guilty to buying and using cocaine.

RADEL: I love what I do and I`m going to return to what I do, what you
sent me to do in Washington, D.C.

(END VIDEO CLIP)

O`DONNELL: Joining me now is Zerlina Maxwell, contributor to The Grio and
Ari Melber, co-host of MSNBC`s "The Cycle" who is working on a new series
entitled "Presumed Guilty" which examines race and the criminal justice
system in United States.

Ari, it seems to me that if you`re going to get caught with cocaine, it`s
real good to be a congressman in the United States. Things turn out pretty
well.

ARI MELBER, MSNBC HOST, THE CYCLE: I think things turn out a lot better
for you if you are a member of Congress. If you are a white American,
things turn out better you than if you`re an African-American, as you
alluded to on the program before. And I think the history you just show us
is important because this is one of those things where this member of
Congress who is many people pointed out voted to say that people who use
cocaine should be denied benefits. He still has a lot of government
benefits, as well as government power.

O`DONNELL: Zerlina, there are plenty of it or thousands and thousands of
people, men and women in America tonight doing hard time in federal prison
cells over exactly what he did.

ZERLINA MAXWELL, POLITICAL ANALYST: Right. And I think, you know, to
quote Michelle Alexander, there is nothing more than the war on drugs that
has contributed to systemic mass incarceration of people of color in this
country. And I think that this is the perfect example, actually, to show
that disparity if he was a person of color, if he was in his home state of
Florida, it would have been a felony and he would watch his voting rights,
je would have denied housing and employment. And so, he`s very lucky to be
white, male, in the District of Columbia and able to just go back to his
job.

O`DONNELL: And by the way, just my position is that with the sentencing
and the treatment he got is the harshest that anyone in America should get
anywhere for what he did. I`m not looking for him to get thrown in prison
the way other people have been.

Let`s listen to what he said today. He was off camera talking to
reporters. It was recorded today in his office. Let`s listen to this.

(BEGIN VIDEO CLIP)

RADEL: So I have an incredible network, both at home and right here in
Washington. And this is something that I will continue to work on for the
rest of my life. I will take it one day at a time. And in doing so, I
hope to rebuild and regain trust one day at a time. And I`ll be doing just
that starting today.

UNIDENTIFIED MALE REPORTER: Are you facing an ethics investigation.

RADEL: Re-election is the absolute last thing on my mind.

(END VIDEO CLIP)

O`DONNELL: Listen, I wish him luck with the one day at a time thing. But,
reelection is absolutely the last thing on my mind?

Ari, the guy did not forget how to spin while he was in rehab.

MELBER: No, he didn`t. He didn`t forget. I mean, look, the good part
about rehab on the human side is it does gives you tools to think about
things, as they said, one day at a time. The problem for someone in his
position is that he does look like a hypocrite and he`s part of a
Republican caucus that has two sets of rules. And it doesn`t seem to have
a problem of few exceptions. Rand Paul is one, as you pointed out, I think
he is good on this because he is co-sponsoring a bill that change this and
change mandatory minimums with Democrat senate Leahy.

But most of this caucus and the people he wants to run with r-election
with, are perfectly fine with this. Because they have basically have
signed off on rules that from the beginning of the process, to how we
profile and look for these crimes, to how we prosecute them to what we do,
as Zerlina mentioned, well after people served their time, which is deny
them voting rights and all these other issues, that are done in a racially
fundamentally unfair way.

O`DONNELL: It is interesting to watch him coming out of the rehab. One of
the elements of the rehab is honesty and fighting your way to more honesty
(INAUDIBLE). And here`s a politician on his first day back on the job and
he has to lie about are you running for reelection? Reelection is the
absolute last thing on my mind.

MAXWELL: Right. He probably skipped over a few of the steps. But, you
know, I think that this is just evidence that there is a growing problem
with mass incarceration and the fact that more people of color are in
prison than apartheid South Africa right now, right?

And so, I just -- it`s so fundamentally troubling that Republicans, even
like Rand Paul, I think that it`s a good start that he co-sponsors
legislation with Leahy, but I think he has to do much more. I mean, his
rhetoric is right on, but he hasn`t done more. He said in an interview
with me recently that he is going to do more this year. So I`m waiting for
Rand Paul and more Republicans to jump onboard. Because we can`t just be
throwing people in prison, people of who are in prison in the way that
we`re doing right now.

O`DONNELL: I think this story is entirely about the teachable moment,
about fairness in the penalties for these kinds of things. And many of
which shouldn`t have any kind of real legal penalty at all.

Ari Melber and Zerlina Maxwell, thank you both very much for joining me
tonight.

Coming up, how wrong are Republican economic predictions? Like totally
wrong. That`s in "the Rewrite."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Maybe in 41 years it will be no big deal and everyone
will be getting married.

UNIDENTIFIED FEMALE: You can`t imagine how hard she was to pursue. I
first, then it was yes, then it`s no, then it`s yes, and then it`s no. And
that was before I asked her to move in.

(END VIDEO CLIP)

O`DONNELL: That was Lily Tomlin and Jane Wagner in 2012 receiving an award
in Palm Springs. Lily and Jane met in 1971 and confirmed that they got
married after more than 42 years together at a private ceremony in Los
Angeles right after New Year`s Eve. Lily and Jane collaborated on the Tony
winning one woman show, the search for intelligent life in the universe."

Last summer, Lily Tomlin told E News, you don`t really need to get married,
but marriage is awfully nice. Congratulations, Lily.

Up next, what happens when Republicans are proven totally wrong? Hint,
nothing.

(COMMERCIAL BREAK)

O`DONNELL: In tonight`s "Rewrite" Republican predictions. As economic
predictors, Republican politicians have a very, very bad record. Couldn`t
be worse. They are just wrong. And they are wrong over and over and over
again, but that never inhibits them from continuing to make wrong
predictions. And more importantly, it never inhibits the mainstream media
from passing on those predictions in their stories as if they are something
other than a failed Vegas magic act.

White House press secretary Jay Carney made this point sharply today by
showing just how wrong Republican predictions have been about what
Obamacare would do to health care costs in this country.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I would also remind you that a
number of skeptics including the aforementioned speaker of the house said
in August of 2010, quote, "health care costs will skyrocket next year,
thanks to Obamacare." I think he missed on that prediction. Paul Ryan,
unless repealed, this law will exacerbate the spiraling cost of health
care. That was January 201 1. The opposite happened. The opposite
happened.

(END VIDEO CLIP)

O`DONNELL: In fact, since the affordable health care act passed, health
care spending has increased below the normal rate. And of course, it will
take years to have a final verdict on the affordable care act`s health on
health care cost on our economy, but we do already have a final verdict
right now on John Boehner`s prediction and Paul Ryan`s prediction on what
would happen to health care costs in 2011. They both predicted
skyrocketing health care costs in 2011 and that did not happen. The
opposite happened.

They will continue to make predictions about health care costs, and most of
the media will not warn their readers or viewers that those Republican
predictions have already been proven wrong. Republicans are very good at
making very clear, very specific economic predictions. And they are very
good at being very wrong in those predictions.

(BEGIN VIDEO CLIP)

NEWT GINGRICH, CNN HOST, CROSSFIRE: Well, tax increases will so weaken the
economy that, in fact, a recession will come on, jobs will be killed,
revenues will go down and the deficit, instead of decreasing will increase.
I believe that that will, in fact, kill the current recovery and put us
back in the recession.

(END VIDEO CLIP)

O`DONNELL: Could not be clearer. No punches pulled there. Tax increases
will put us back in a recession. That was Newt Gingrich in 1993 fighting
against Bill Clinton`s proposed tax increase, which later that year passed
the House and the Senate with every Republican in each body voting against
the bill. Every single Republican in the House and the Senate said the
Clinton tax increases, which were the biggest tax increases in history
would badly hurt the economy, and most of them specifically predicted a
recession.

And what happened? Every one of them was wrong. Every single Republican
was wrong about the Clinton tax increases of 1993. The economy soared
after those tax increases. And here`s where we stood toward the of that
decade.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Think about it. There .probably have never been better
times than these when so many people are doing so well in an economy that
just gets stronger and stronger. The latest measure are the numbers that
are in for the end of the 1998 and they`re sensational.

(END VIDEO CLIP)

O`DONNELL: Just over a year ago, Republicans were telling us once again
that the Obama tax increases on America`s highest earners would be a job
killer. Republican speaker John Boehner simply recycled the talking points
that Newt Gingrich used 20 years earlier.

(BEGIN VIDEO CLIP)

O`DONNELL: The problem for Boehner is how does he give on rates. He said
this the other day. I oppose tax rate increases because tax rate increases
cost American jobs. That gives you no room to give on rates. It is, by
the way, not an original thought. Who said this? The tax increase will
kill jobs and lead to a recession and the recession will force people out
of work and on to unemployment and actually increase the deficit? That`s
Newt Gingrich in 1993 on the Clinton tax increase. And those of us who
were work on the other side of that tax increase, Newt, have been waiting
for your apology for 20 years to be completely wrong about that.

GINGRICH: Lawrence, I don`t agree with you.

O`DONNELL: But the economy soared. No one lost a job because of that tax
increase. There was no recession.

(END VIDEO CLIP)

O`DONNELL: Jay Carney presides over a press briefing room that includes
more than a few reporters who were not quite old enough to remember that
every single Republican in Washington was wrong about the Clinton tax
increase. And so today, he offered this little history lesson that bare
repeating over and over again.

(BEGIN VIDEO CLIP)

CARNEY: Do you remember 1993, the Clinton budget?

UNIDENTIFIED MALE: Yes.

CARNEY: Remember, and some of these members are still in the House and the
Senate, profoundly confident predictions that if this budget were to pass
we would -- the country would go into recession, job growth would be
decimated. Terrible things would happen. And instead, we saw the longest
sustained period of economic growth and job creation in half a century. So
I think we`re a little bit better about the prediction business.

(END VIDEO CLIP)

O`DONNELL: A little bit better? A lot better.

(COMMERCIAL BREAK)

O`DONNELL: Up next, 911 tape from a police shooting that left a 90-pound
18-year-old North Carolina high school student dead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MARY WILSEY, KEITH VIDAL`S MOTHER: We want justice for my son`s death.
This officer who shot my son needs to be behind bars. He needs to die the
way my son died.

(END VIDEO CLIP)

O`DONNELL: That was Mary Wilsey who says her son, Keith, was shot and
killed on Sunday by a police officer. Keith Vidal was a 90-pound, 18-year-
old North Carolina high school senior who liked drumming. He also suffered
from schizophrenia which is why his stepfather called 911 on Sunday
afternoon.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Can you send an officer over here? We have a son that
has schizophrenia and he`s not doing very good. We`ve got to get him some
place.

911 OPERATOR: OK, what is he doing right now?

UNIDENTIFIED MALE: He wants to fight his mother. He`s got a screwdriver.
He`s just, you know, he`s not doing good. She`s scared to death of him.

911 OPERATOR: Are you with him right now?

UNIDENTIFIED MALE: No, he`s in the kitchen. I stepped outside to talk to
you.

911 OPERATOR: How old is he?

UNIDENTIFIED MALE: 18, just turned 18. We`ve had to put him in before.
Getting real bad again. Won`t take his medication and stuff.

911 OPERATOR: And you said he has a screwdriver?

UNIDENTIFIED MALE: Yes, he had. I don`t know if he`s still got it. I`m
going back in right now. He had one earlier and he wouldn`t give it to me.

911 OPERATOR: OK. Is this a suicide attempt?

UNIDENTIFIED MALE: No. He just wants to fight his mother. He just --
he`s not right.

(END VIDEO CLIP)

O`DONNELL: According to his parents shortly after that call, two police
officers arrived and got the situation under control, but the stepfather
says things changed when a third officer from another town arrived.

(BEGIN VIDEO CLIP)

MARK WILSEY, KEITH VIDAL`S STEPFATHER: Keith was not threatening anybody.
Keith did not want any part of it. He was having a bad day. Then all of a
sudden the Southport cop came, walked in the house. I don`t know have time
for this. Tased him, let`s get him out of here, tased him, he hit the
ground, he got shot. There were two cops on top of my son when he shot him
right over my shoulder.

(END VIDEO CLIP)

O`DONNELL: According to the 911 reports, just 70 seconds passed between
the time the third officer arrived at the scene to the time that that same
officer made this call to dispatch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don`t know if you`ve been advised or not, but shots
fired. I had to defend myself against this subject.

(END VIDEO CLIP)

O`DONNELL: Southport officer Byron Vassey has been placed on paid
administrative leave, but authorities will not confirm whether Vassey is
the officer who pulled the trigger. The North Carolina bureau of
investigation is looking into the shooting.

Joining me now, one of the first reporters at the scene on Sunday, Caitlin
Dineen of the "Star News" in Wilmington, North Carolina.

Caitlin, I just don`t see how this could possibly have happened. Here`s an
unarmed 18-year-old. No one in this situation is armed except the police
officers. They had overwhelming control of that situation. Have you heard
any theory from the police as to why there could have been a legitimate use
of deadly force there?

CAITLIN DINEEN, REPORTER, STAR NEWS: Unfortunately at this point in time,
details are scarce at best as to what transpired Sunday afternoon down in
that quiet rural community. We`re still asking the questions. I know the
family for every question I have, they have five more. Just following
suit. Unfortunately, though, we just don`t have too many answers and
speculation is not something that local authorities are doing right now.

O`DONNELL: And the family, the parents have spoken to the local media
there as we`ve seen in some of those clips. Their story seems quite
simple, doesn`t it?

DINEEN: I mean, that version of events is quite straightforward. And
being one of the first reporters who responded to the home Sunday
afternoon, they have stuck by their story. The father, Mark, has
maintained that the son had a screwdriver. He never denied that by any
stretch of the imagination. The story has stayed the same and it should
appear simple but as with police investigations and anything involving use
of force, there`s so many so many situations that we just don`t know what
happened. And unfortunately, unless you`re in that moment, I`ll never know
exactly what happened that afternoon.

O`DONNELL: Well, there`s going to be I think enough investigation in this
case to give us some final version of what really has happened.

Caitlin Dineen of the "Star News," thank you very much for joining us
tonight.

DINEEN: Thanks so much for having me.

O`DONNELL: Chris Hayes is up next.



END

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