updated 4/2/2014 11:11:27 AM ET 2014-04-02T15:11:27

THE RACHEL MADDOW SHOW
April 1, 2014

Guests: Bill Burton, Steven Pifer

STEVE KORNACKI, "UP" HOST: That is "ALL IN" for this evening.

THE RACHEL MADDOW SHOW starts now.

And speaking of birthdays, Rachel, I hear it`s yours tonight. So,
happy birthday to you.

RACHEL MADDOW, MSNBC HOST: My family and I thought ahead and planned
my birthday to coincide with "ALL IN WITH CHRIS HAYES" birthday --

KORNACKI: It`s perfect.

MADDOW: -- about 41 years ago.

Thank you, Steve. Appreciate it, man.

Thanks to you at home for joining us this hour. Happy April Fool`s
Day. I swear I`m not kidding about that.

One of the things that has been a frustration for people who support
President Obama politically is that President Obama has not been given much
credit for the times that he has gotten things done as president. Even
when he has achieved hard-to-win things in Washington, he has not
necessarily taken credit for those things in a way that would redound to a
political capital for himself, and that has been a frustration for the
years of his presidency so far for people who support him.

So, for example, take George W. Bush`s presidency and the issue of
economic stimulus. George W. Bush when he was president passed a stimulus
bill. So people essentially got money back from the government in the
hopes that they would spend it, thus goosing the consumer economy at a time
when there was slack demand.

George W. Bush`s stimulus bill was structured so Americans got that
money in the form of a physical check which they received in the mail. And
that check explicitly explained that this was your stimulus bill check that
you were getting courtesy of President George W. Bush. Thank you, Mr.
President. Here`s your money.

Well, President Obama also signed a stimulus bill, but those same
kinds of payments from the government under President Obama, they didn`t
show up as a check in your mailbox. They instead just showed up over time
as a mild bump in your paycheck.

Now, doing it that way is actually a much more effective way to use
money to stimulate the economy. If you get one lump sum check like you did
from George W. Bush, you`re more likely to just deposit that check in your
bank account or use it toward your savings. Use it toward paying down
debt. May be good for your personal economics, but it`s not good for the
overall economy, for goosing consumer demand.

That same amount of money distributed not as a lump sum check, but
instead as just a little bump in your paycheck every week in an ongoing
way, that`s a better idea. That is more likely to be effective at
stimulating the economy because you are more likely to spend that money if
you get it as just a few extra bucks in your paycheck every week.

And that`s the whole point of giving away money that way in a stimulus
bill. So, it is better economic policy to do it the way that Barack Obama
did it than to send everybody a lump sum check the way George W. Bush did
it.

But if you send everyone a lump sum check the way George W. Bush did
it, you get credit. Everybody notices the check. They think of you when
they see it.

What George W. Bush did was better for getting the president credit
for that policy, but it was worse for the country. And that is a microcosm
in some ways of one of the frustrations of the Obama presidency for people
who support the Obama presidency.

I mean, the deficit has plummeted under President Obama, but if you
listen to the Republicans, they either say, that didn`t really happen, or
if it did, that President Obama shouldn`t get any credit for it.

President Obama led the country out of the worst recession since the
Great Depression, but most people just remember how scary and terrible that
recession was and they don`t give him credit for us surviving it as a
nation and getting out of it.

Big picture, it has been a frustration for people who support
President Obama and I imagine for the White House, itself, that President
Obama doesn`t get credit for the successes that he has had in Washington.
And whether it is a symptom of that problem or a cause of that problem,
President Obama also doesn`t seem personally inclined to like to take
public credit for his successes when he has them.

Not most of the time, at least. But today, today was different.
Today was victory lap day for President Obama and the White House.

And we knew that President Obama was going to give a speech today. It
was easy to tell that this was going to be a policy speech. We knew that a
lot of congressional Democrats were planning on attending the speech, but
we didn`t know explicitly ahead of time that this was going to be that
rarest of all Obama-era things. We didn`t know ahead of time it was going
to be a rare presidential victory lap, an "oh, yes, I did it, and it
worked" kind of speech.

Until President Obama and Vice President Biden opened the door of the
White House, walked out on to the little balcony, and then walked out to
the podium into the Rose Garden. And just watch this. I pulled this from
the feed from the pool camera, the White House pool camera at the speech.

And what you`ll hear is the big voice guy making the announcement that
the president and vice president are arriving in the Rose Garden. But what
you need to look at here is the look on Vice President Joe Biden`s face.
Just watch the vice president`s face here.

This is absolutely priceless. Watch the vice president.

(BEGIN VIDEO CLIP)

ANNOUNCER: Ladies and gentlemen, the president and vice president of
the United States.

(APPLAUSE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you. Thank you,
everybody. Thank you. Everybody, please have a seat. Thank you so much.

Welcome to the White House.

(END VIDEO CLIP)

(LAUGHTER)

MADDOW: You can tell from the look on the vice president`s face,
president`s saying welcome to the White House, everybody. Look at Joe
Biden. You can tell from Joe Biden`s face that this is going to be a happy
day kind of speech.

We did not photo-shop him doing that. That is him actually doing
that. Look at him.

The vice president is like the joyful id of this administration. He`s
not afraid to swear and shout a little bit to make a point. He`s not
afraid to grin. He`s not afraid to do this. He`s not afraid to say
something is a big bleeping deal if he thinks it`s a big bleeping deal.

And today, Vice President Biden`s face was the first sign this was
going to be a pop the popcorn kind of speech on a big day for an
administration that knew that this was a big day for them.

And listen to the cheers that the president got when he made his big
announcement today. Now, I cut this tape, again, in a specific way. I`m
going to let this run longer than we would usually let it run so you can
hear the sort of raw volume here, so you can hear what exactly this felt
like in Washington today -- how they were feeling today at the White House.

Check this out.

(BEGIN VIDEO CLIP)

OBAMA: Six months ago today, a big part of the Affordable Care Act
kicked in, and as Healthcare.gov and state insurance marketplaces went
live. Last night, the first open enrollment period under this law came to
an end. And despite several lost weeks out of the gate because of problems
with the Web site, 7.1 million Americans have now signed up for private
insurance plans through these marketplaces -- 7.1 million.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MADDOW: If you want to know why that number, 7.1 million, if you want
to know why that number is driving them so wild in the Rose Garden, at the
White House today, it`s because that number, 7.1 million, that projected
enrollment figure, that benchmark number that the CBO set when they said
essentially that the health reform law is working, this is what it`s going
to look like. That 7.1 million, that 7 million number, that is not just
something that critics of health reform and critics of the president said
would never be met. It wasn`t just Republicans saying that 7 million
number. It became a 6 million, revised number, would never be met.

It`s not just something Republicans said would never happen. It is
something that the beltway press said would never happen.

The front page of "The Huffington Post" today, a link I think rather
gleefully to this "A.P." story today. They linked this one up less than
three weeks ago. The "A.P." saying less than three weeks ago that the
White House would need something close to a miracle to meet the goal of
enrolling 6 million people by the end of this month.

Well, not only did they get that miracle to get to 6 million people by
the end of the month, they got not only to 6 million people, they got to 7
million people. They got to 7.1 million people. And that`s not including
people who signed up through their state health care exchange or people who
signed up through Medicaid or people who started the process of signing up
for health insurance but didn`t complete the process yet and they will get
an extension.

And the front page of the White House Web site is bragging about that
as you can see here in all capital letters today. And the president -- and
a very broadly smiling vice president today, got to brag about that in
person. And when they took that victory lap today in the Rose Garden,
President Obama also took the opportunity to take a shot, basically take a
rather big shot at all those people who were not only predicting failure of
this law, but rooting for failure all along.

Watch.

(BEGIN VIDEO CLIP)

OBAMA: Like every major piece of legislation, from Social Security to
Medicare, the law`s not perfect. We`ve had to make adjustments along the
way and the implementation, especially with the Web site, has had its share
of problems. We know something about that.

And, yes, at times this reform has been contentious and confusing, and
obviously it`s had its share of critics. That`s part of what change looks
like in a democracy.

Change is hard. Fixing what`s broken is hard. Overcoming skepticism
and fear of something new is hard. A lot of times, folks would prefer the
devil they know to the devil they don`t.

But this law is doing what it`s supposed to do. It`s working. It`s
helping people from coast to coast. All of which makes the lengths to
which critics have gone to scare people or undermine the law, or try to
repeal the law without offering any plausible alternative so hard to
understand.

I got to admit, I don`t get it. Why are folks working so hard for
people not to have health insurance? Why are they so mad about the idea of
folks having health insurance?

Many of the tall tales that have been told about this law have been
debunked. There are still no death panels.

(LAUGHTER)

Armageddon has not arrived.

(LAUGHTER)

Instead, this law is helping millions of Americans. And in the coming
years, it will help millions more.

(END VIDEO CLIP)

MADDOW: Armageddon has not arrived, America.

We do not often see this side of the president or of this
administration, taking credit for something that they have done that they
are proud of and wanting credit for it. We do not often see them do this.

But on this landmark day for the president`s signature legislative
achievement, President Obama today, he hit the policy issues hard, and he
also went just as hard on the politics.

Watch this. The president, here, makes the argument that there not
only ought to be a cost for people who opposed this progress, he`s yelling
there, why are people working so hard, why are folks working so hard for
people not to have health insurance? Why are they so mad about the idea of
folks having health insurance?

The president here is not only arguing that people ought to pay a cost
who have taken that stance, people who opposed this progress, people who
opposed the first major progress in Americans` access to health care in
generations. He`s saying there not only ought to be a cost, a political
cost for the enemies of this policy, but he says there ought to be
political reward for the people who made this successful policy happen.

Watch.

(BEGIN VIDEO CLIP)

OBAMA: Nobody remembers well those who stand in the way of America`s
progress or our people. That`s what the Affordable Care Act represents.
As messy as it`s been sometimes, as contentious as it`s been sometimes, it
is progress. It is making sure that we are not the only advanced country
on earth that doesn`t make sure everybody has basic health care.

And that`s thanks in part to leaders like Nancy Pelosi and Dick Durbin
and all the members of congress who are here today. We could not have done
it without them. And they should be proud of what they`ve done. They
should be proud of what they`ve done.

(APPLAUSE)

(END VIDEO CLIP)

MADDOW: President Obama and Vice President Biden today celebrating
the success of the most hard-fought policy victory for Democrats in
decades. Telling congressional Democrats they ought to be proud of what
they have done to get this done.

The White House saying congressional Democrats did the very hard work
of passing health reform in the president`s first term. And the political
capital that that achievement cost them cost them at the ballot box in the
first midterm election in 2010. The Democrats took a big political risk to
get this policy done, and they did pay a political price for it.

Well, now it is the next midterm election of the Obama era. And the
gerrymandered map that determines control of the House and pattern of terms
and retirements in the Senate means that this election is likely to be
another steep climb for the Democratic Party. But it is now starting to
become clear that as tough a road as the Democrats know they have in this
year`s elections, it`s starting to become clear that the Democrats have
started to identify two big problems, two big challenges for the
Republicans in these elections as well.

And the first one is that the Tea Party movement, and the Republican
Party`s far right flank, that is still driving schismatic politics in the
Republican Party, which means that Republican incumbents, even as high a
ranking Republican incumbent as the Senate Minority Leader Mitch McConnell,
Republican incumbents aren`t safe within their own primaries.

It also means that in some districts the Republicans once again are
going to nominate, what`s the technical term? Oh, yes, kooks -- kooks who
will lose to Democrats in places where garden variety non-kook Republicans
could probably have won. So, that`s problem one that the Democrats know
the Republicans have in this year`s elections.

But problem two is what the president was screaming from the rooftops
today. While the vice president could barely contain himself over the
president`s shelter. And that is that Democrats think that the Republican
plan for this year`s elections is to run against Obamacare, as if being
against what health reform has done is a surefire blot box winner.

Democrats are no longer convinced that Republicans are right about
that as a matter of election strategy. Democrats are increasingly starting
to become convinced that when Republicans say we can win as long as we run
against Obamacare, Democrats are starting to believe Republicans may be
wrong about that. And you can see it in the ads that they are running in
the contested Senate races around the country.

The ads now are starting to look like this. This Republican candidate
wants insurance companies to be able to deny you coverage when you`re sick.
This Democratic candidate stood up to the insurance companies and won`t let
them take away these reforms that were so hard won.

Watch.

(BEGIN VIDEO CLIPS)

AD NARRATOR: You already know that billionaires are paying for Terry
Lynn Land`s Senate race. What they already know with Land, insurance
companies will be able to deny you coverage when you get sick. Women`s
access to preventative health care would be cut.

AD NARRATOR: He knows we can`t go back to letting insurance companies
deny coverage for pre-existing conditions and kick people off their
coverage when they get sick. That`s why Braley says protecting the middle
class comes first.

AD NARRATOR: North Carolina can count on Kay Hagan.

UNIDENTIFIED MALE: She protects my Medicare and Social Security.

UNIDENTIFIED FEMALE: Forced insurance companies to cover cancer and
other pre-existing conditions.

UNIDENTIFIED MALE: I`ve reed that Speaker Thom Tillis sides with
insurance companies.

UNIDENTIFIED MALE: He let insurance companies deny coverage if I get
sick.

UNIDENTIFIED FEMALE: Thom Tillis, what about us?

(END VIDEO CLIPS)

MADDOW: Those are ads running this cycle from a pro-Democratic PAC
called the Senate Majority PAC.

Well, today, as he celebrated his signature health care law, meeting
and exceeding expectations in its implementation, President Obama made the
case forcefully in a tone of voice he does not usually use -- President
Obama made the case today on this victory lap speech that Democrats all
over the country ought to be running on the achievements of this law. And
that Republicans who opposed it then and opposed to now ought to pay a
price not just in history for taking that stance but ought to pay a price
now as well. They ought to pay a price this year.

President Obama and Vice President Biden today throwing sand in the
gears of the most common Beltway common wisdom of all. Is there any whey
to know from here if they are right?

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I got to admit, I don`t get it. Why are folks working so hard
for people not to have health insurance? Why are they so mad about the
idea of folks having health insurance?

Many of the tall tales that have been told about this law have been
debunked. There are still no death panels.

(LAUGHTER)

Armageddon has not arrived.

(LAUGHTER)

Instead, this law is helping millions of Americans.

(END VIDEO CLIP)

MADDOW: Armageddon has not arrived. That was President Obama today
doing something he almost never does. President taking a victory lap on
health reform. On the occasion of his announcement that more than 7
million people have signed up for private insurance under the new law, and
the president today encouraging his fellow Democrats to also take victory
laps on this legislation, to get out there and run on that success and make
Republicans pay a political price for opposing that law. Is that smart
politics?

Joining us now is Bill Burton, former deputy White House press
secretary under President Obama. He`s now a managing director of the
ominously named Global Strategy Group.

Mr. Burton, thank you for being here.

BILL BURTON, GLOBAL STRATEGY GROUP: Thanks for having me.

MADDOW: So, you worked closely with President Obama for a long time
both as a candidate and as president. I feel like as an observer of his
presidency, he very rarely say, hey, look at this thing I did. I want
political credit for it and I want to share it with my fellow Democrats.

Is that a bias in my perception that I want to see more of that as a
liberal? Or is it true that it`s hard for him to do that?

BURTON: I would say that was probably one of our biggest challenges
over the course of the first term was that the president would do these big
extraordinary legislative things, but then we`d get to the end of it, and
then the BP oil spill would happen or the auto industry was failing. So
there was no time to go out and take a victory lap. So, Republicans would
say, oh, here comes the death spiral. And we have nothing that -- we
wouldn`t have time to deal with it because we`re dealing with Ukraine or
Syria, something like that.

So, yes, this is a moment that is of extraordinary magnitude -- 7.1
million people signing up for this health care program. The biggest
government program put in place in decades, as you noted. And, you know,
so far, it`s working. More than 10 million Americans have health insurance
that didn`t previously have it. It`s really pretty amazing.

MADDOW: Is that a political practice problem, though, for the
administration? I don`t think they`ve gotten better at it since the first
term. I think today did stand out. If you don`t claim credit for
something, if you don`t run on it as if it is a positive, doesn`t that give
your political opponents more room to cast it as a negative? Didn`t that,
in fact, sort of create a vacuum in which AFP and these Koch brothers-
funded groups and Republicans all were able to step in and describe
Obamacare as a disaster even as a policy, it was succeeding?

BURTON: Right, no, during the health care debate and after it was
passed and being implemented the fact the Koch brothers and their pals put
in $100 million to fight health care and destroy it and make people think
it was some terrible thing with death panels and all these horrible things
in it that were going to harm Americans, yes, there was a big problem,
because "A," we didn`t have the cash on our side to deal with it. And,
"B," the president is not prone to victory laps. It`s not something that
the president does.

And as a result, they did something that Democrats have suffered from
around the country. The problem now for Democrats is that we`ve gotten to
a moment where Obamacare and the president`s approval rating have sort of
been decoupled. I think today is a good leadership moment and it could
change that, but the president`s ratings have been more related to the
economy, I think, than just Obamacare. And that`s something that the
president now hopefully will have some time to really focus in on in a way
that the American people can see that he`s actively working on and working
in their interest.

MADDOW: We are, right now it`s April 1st. The elections are in the
first week of November. In that much time, do you think we`re going to end
up in a midterm election cycle that looks like 2010? Looks like the last
midterm election cycle that`s still about Republicans defining Obamacare as
a bad thing?

Or is there enough time, I guess is there enough sort of opportunity
for momentum shift for the Democrats to neutralize that as an issue or turn
it to a positive?

BURTON: There`s definitely time for a momentum shift. If you think
back to 2006, the last time Democrats took control of the House of
Representatives, at this point, nobody really predicted Democrats are going
to be able to take control.

MADDOW: Right.

BURTON: And that`s not to say that the mountain is not very, very
steep for Democrats right now, but Democrats are doing everything they can.
They`re getting good candidates. They`re raising way more money than
Republicans have -- can. And Steve Israel is doing a hell of a job at the
DCCC trying to make the case.

But, again, I actually -- I don`t think that this election is going to
be about Obamacare. I think this election is going to be about the
economy.

And the more the president can show the contrast and Democrats can
show the contrast between the things that we`re for, like an increase in
the minimum wage, the fight on income inequality, versus the Ryan budget
that came out today. That`s devastating for the middle class, devastating
for poor Americans who are really struggling to get by with all the cuts to
food stamps and programs that help the poor. There`s just real differences
that now we can focus on in a way that we couldn`t before because people
were so singularly obsessed with Obamacare.

MADDOW: Do you think -- it did not seem to me like an accident that
the Republicans released the latest Paul Ryan budget, which is the same as
all the other Paul Ryan budgets.

BURTON: Worse.

MADDOW: Well, yes, but it`s the same idea, right? They released it
on the same day that they knew the news was going to be completely
dominated by the Democrats patting themselves on the back and saying we had
a great success on our signature legislative achievement. I felt like they
were burying it. I think there`s just no way to know.

BURTON: Well, no, what`s interesting is that it`s like the
Republicans know that they`ve got this real liability in the way that the
Tea Party wants to cut Medicare, they want to cut these programs for the
middle class and for the poor in order to fund these tax breaks for the
wealthy. They know that`s not necessarily politically popular. But they
also know for their politics they have to do it because there`s no way out
of it and their terrible coalition of horribleness death spirals that
they`ve built in the House.

MADDOW: The coalition of horribleness. For that, you have to give me
a cupcake.

BURTON: Happy birthday.

MADDOW: Thank you very much.

BURTON: I`ve got six for you.

MADDOW: Thank you very much. I`ll take them all. Appreciate it.
Did you really? Serious?

All right. Bill Burton, former deputy White House --

BURTON: Twenty-six years old.

MADDOW: Current managing director of Global Studies Group, which is
definitely reading your e-mail and watching you while you sleep, but also
giving you cupcakes on your birthday. Bill, thank you very much for being
here.

BURTON: Thanks for having me. Happy birthday.

MADDOW: Thank you. You`re not really watching me when I sleep?

BURTON: I`m not. Just Rand Paul.

MADDOW: All right. We`ll be right back.

BURTON: It`s creepy. Super creepy.

(COMMERCIAL BREAK)

MADDOW: We`ve got some breaking news tonight. A very strong
earthquake has shaken the northern part of the nation of Chile tonight
centered off the coast of Iquique. It`s magnitude measure 8.2. The quake
is reported to have caused a tsunami of up to 8 feet tall, which has
already hit parts of the Chilean coast. That`s according to Chile`s navy.
Tsunami warnings have been issued for Chile, Peru and Ecuador.

Evacuation orders have been issued for all coastal areas of Chile and
southern part of Peru. There have been reports of at least three
aftershocks thus far measuring at least 5.0. Within the last few minutes,
the National Office of Emergency of the Interior Ministry says there are no
reports of major property damage in Chile and no reported injuries.

But, again, this breaking news tonight is of a strong earthquake in
northern Chile tonight, and an eight-foot tsunami wave as a consequence of
the quake. But again, as yet, importantly, no reports of injuries or
damage. And we will keep you posted as we learn more.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: If you go to the U.S. Navy`s Web site, if you go to Navy.mil,
you`ll find that all the way down at the bottom of the page, there`s a link
labeled FAQ, frequently asked questions. You got a question about the Navy
-- well, here`s the place to get it answered. You click on that link, you
get to the frequently asked questions page and you`ll see that right
between photo of jet breaking the sound barrier and how to send mail to a
sailor, right between those two entries, there`s something called
lighthouse joke.

One of the Navy`s frequently asked questions it turns out has to do
with a great old joke that`s gone around the Internet for years and went
around many a barroom in years before that. The Navy would like you to
know that joke is not a true story. So, they have debunked it at Navy.mil
while putting it in this easy to find place if you want to tell this joke,
yourself.

What it is is a supposed radio transmission between -- a conversation
between a U.S. naval vessel and Canadian authorities. So, the U.S. naval
ship calls out to the Canadians, "Please divert your course half a degree
to the south to avoid a collision." The response from the Canadians,
"Recommend you divert your course 15 degrees to the south to avoid a
collision."

The Americans, incredulous, respond back, "This is the captain of a
U.S. Navy ship. I say, again, divert your course." The Canadian reply,
"No, I say, again, you divert your course."

Then the U.S. ship says, "This is the aircraft carrier USS Coral Sea.
We are a large warship of the United States Navy. Divert your course now."

The Canadian reply, "This is a lighthouse. Your call."

The U.S. Navy has this whole thing posted on their Web site as a way
of essentially saying this is a joke radio transmission. If you happen to
see this in your travels around the Internet, know that this is made up.
But also if you want to get the joke right, here`s how to tell it well.

That radio transmission may be made up, but not every radio
transmission you find posted online is made up. This one posted today by
the "Houston Chronicle" is not made up and they posted the audio as well as
the transcript. And what you`re about to hear is the actual audio
discussion between these two vessels that are on a collision course toward
each other in the open water.

The vessel up top is moving from left to right on the screen. The
vessel on the bottom is heading dead-on toward it. Listen to this. This
is the audio as it happened. This audio was just released.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: How do I look to you on your --

UNIDENTIFIED MALE: Well, if you keep on going, I`m going to get you
unless you`re doing seven or eight knots because right now, I`m less than
three-quarter a mile from you and you ain`t got to the channel yet.

UNIDENTIFIED MALE: All right. Well, I`m glad I called you here.
Unless you want to cut them back a little bit.

UNIDENTIFIED MALE: I can cut it back. I can put it on dead slow.
That ain`t going to stop because I`m almost coming up half a mile on you.
You might want to stop. I don`t know what to tell you, because, man, it`s
close.

UNIDENTIFIED MALE: All right. We`re backing her down.

UNIDENTIFIED MALE: Keep on doing it, skipper. How many loads you
got?

UNIDENTIFIED MALE: Two loads. Two loads. I`m looking at you now.
It don`t look good.

UNIDENTIFIED MALE: Yes, it don`t look good. Keep on backing it down
hard as you can. I`m going to shoot it for the red side as much as I can.
Just keep her going.

UNIDENTIFIED MALE: Miss Susan?

(END AUDIO CLIP)

MADDOW: Those two ships collided. They collided and caused one of
the worst oil spills to hit the state of Texas in more than a decade. That
was the live radio transmission between the two vessels that hit each other
in Galveston Bay last weekend dumping nearly 170,000 gallons of oil into
Galveston Bay and the surrounding waters.

The two boats were essentially playing chicken with each other, as you
heard, "you slow down," "no, you slow down," and bang. And as bad as that
spill is and was, we are lucky that there was not a bigger national
economic impact from that spill. A bigger ship in that collision, one of
the huge oil tankers that traverse those waters, or that collision
happening at a slightly different place around that oil alley down there,
that could have been economically disastrous.

So, that accident had shut down the whole Houston ship channel for a
prolonged period of time, that could have choked off almost the whole U.S.
oil economy for as long as that channel had to stay closed. The ship
channel only ended up being closed for three or four days, but had it been
three or four weeks not only would the U.S. stock market not be closing at
a record high like it did today, but we would probably be in a different
place economically as an entire country.

So we got a little bit lucky in terms of the economic impact of that
crash. The environmental impact is bad already. Its full extent remains
to be seen. Earlier this week, officials in Texas announced oil from that
spill washed up at state park located about 150 miles down the coast from
the site of that spill.

This past weekend, oil was spotted as far as 200 miles away from the
spill site at another state park along the coast. The immediate area of
the spill may be in better shape than it was a week ago, but the oil is now
apparently spreading. It was four years ago this month that the BP oil
spill turned the otherwise rather pristine Gulf of Mexico into an
environmental crime scene. It`s now four years on from that disaster in
the gulf, but oil-soaked tar balls are still washing up along the Gulf
Coast from the BP spill.

Four years later, 300 pounds of tar balls were just discovered last
week on one of Mississippi`s barrier islands. Despite that, BP has now
been given the green light to return to the Gulf of Mexico. Last month,
the U.S. government lifted its ban on BP and allowed them to start bidding
again on new leases in the Gulf of Mexico. BP`s new perspective neighbor
in the Gulf of Mexico is now this guy.

That is Russian President Vladimir Putin on the right, standing
alongside the CEO of ExxonMobil, as the two sides inked a deal for Russia
to get into the Gulf of Mexico. That photo was taken in 2011 as the
Russian oil company Rosneft, which is 75 percent owned by the Russian
government, as they signed a contract with Exxon that would allow the two
oil companies to jointly drill the arctic together as well as the vast Gulf
of Mexico.

The biggest stockholder in Rosneft is the Kremlin. Rosneft`s chief
executive used to be Vladimir Putin`s deputy prime minister. He`s known as
Putin`s shadow. Last year he and Rosneft announced they were ready to get
into the Gulf of Mexico. They announced that they were acquiring a 30
percent stake in 20 deepwater exploration blocks in the Gulf of Mexico,
blocks held by Exxon.

The formal agreement was signed in March of last year and gives rush
Russia`s state-run oil company access to more than 111,000 acres in the
Gulf of Mexico. They are coming to America. Today, it was announced that
in response to Russia`s military envision and subsequent annexation of
Crimea, NATO, the military alliance of which U.S. is a charter member, NATO
has cut off all cooperation with Russia for the foreseeable future. That
move by NATO today comes in response not only to Russia`s actions in
Crimea, but also to Russia`s aggressive military buildup on the border of
eastern Ukraine.

There`s been no Russian incursion into eastern Ukraine so far beyond
Crimea, given how fast they acted moving into Crimea, it is seen as a
positive development that they haven`t gone further yet. Maybe it`s a
signal that western pressure on Russia might be working to keep them from
annexing some place else. Well, yesterday, Vladimir Putin removed a
battalion of troops, about 500 troops from the Ukrainian border. He told
German Chancellor Angela Merkel that he had ordered a partial withdrawal
from the area.

So, for now, it seems that western sanctions against Russia may be
having some effect. They at least are being seen as credible. Late
tonight, the U.S. Congress passed a new round of sanctions against Russia
that will now head to President Obama`s desk for his signature. But all of
the sanctions up until this point have been against individuals in the
Russian government or members of Vladimir Putin`s inner circle. As well as
one Russian bank that`s linked to Vladimir Putin`s inner circle.

In terms of ratcheting up the sanctions, in terms of room to grow with
that pressure on Russia, there is one really looming question -- 60 percent
of the Russian government`s revenue comes from oil and gas. So far there
have been no sanctions against Russia`s oil and gas sector. If you really
did want to hurt Russia, if you really did want to squeeze them, isn`t that
where you would squeeze?

"Moscow Times" reported today the head of Rosneft, Putin`s shadow,
he`s been traveling the world trying to drum up business because he`s
worried about the effect of Western sanctions. He`s taken trips to Japan
and to South Korea and to Vietnam and India, among other places, to try to
secure new contracts and new revenue for the Russian state-run oil company.

To the extent that Russia is already being squeezed, it may be
satisfying to the West, it may be satisfying to the American government
which is so mad at Russia to see Russia out there scrambling to put
together new deals in places like Vietnam and South Korea. But how
effective can the united front against Vladimir Putin be if Russia is not
only signing those deals, they`re also about to start drilling here?
They`re also about to start drilling 111,000 acres of the Gulf of Mexico.
How much are we really squeezing them if we are willing to let deals like
that two ahead?

Joining us now is Steven Pifer. He`s a former U.S. ambassador to
Ukraine. He`s now director of the Brookings Arms Control and
Nonproliferation Initiative.

Mr. Pifer, Mr. Ambassador, thank you for being with us. Pleasure to
have you here.

STEVEN PIFER, FORMER U.S. AMBASSADOR TO UKRAINE: Thanks for having
me. And happy birthday.

MADDOW: Thank you.

Why has the Russian energy sector been off limits to sanctions so far?
Should we see that as a sign that it is off limits in total or just that it
is being held out as something to further squeeze Russia with in the future
if they do something really bad?

PIFER: Right. Well, about 10 days ago, President Obama signed an
executive order. Among other things, that gives him the authority to
impose sanctions on certain is sectors of the Russian economy -- the
financial sector, the defense sector, and also the energy sector. So that
potential is out there.

I think the hope in Washington and, perhaps, in Brussels is just the
threat of those sanctions will have an impact on the thinking in Moscow.

MADDOW: When I look at the size of that deal, that historic deal
between ExxonMobil and Rosneft and all the details around that are so
amazing. Not only just the connections of Vladimir Putin to the Russian
oil monopoly there, but also the fact that the deal was signed at his
vacation home in Sochi. It`s obviously something that`s very important to
him.

One of the things that I wonder about that from an American
perspective is how much pressure Exxon will put on the American government
to not jeopardize that deal? How does American corporate power function in
our decision-making about issues like this?

PIFER: Well, my guess is it`s not just Exxon but a variety of
American companies and a variety of European companies that are doing
business in Russia are talking to the American government and the European
governments and saying, please don`t go there in terms of sanctions. You
know, but at some point, if the West is going to be serious about making
clear that what Vladimir Putin did in Crimea, you know, a land grab that
really violates that fundamental post-war rule that you don`t use force to
seize a neighbor`s territory, you know, we`re going to have to make some
tough decisions which may cut against the interest of some American
companies.

MADDOW: When it comes to sanction discussions like that, do
governments try to coordinate with the relevant corporate entities here?
Will they try to work something out with Exxon, with Boeing, with Pepsi,
with Ford, with all these other American companies that have such big
investments in Russia?

PIFER: I think they`re certainly going to listen to those concerns
and they`re also going to be talking to the Europeans. One of the things
here that will be important is that the United States and Europe move
together. One concern being, you mentioned Boeing, is if the United States
moves out too aggressively, do the Russians then say, fine, Boeing, you
just lost our air market for the next 20 years, Airbus wins?

So, a lot of this is not working just with companies but working with
the Europeans to maintain a united front so that you inflict the pain on
the Russian economy without giving the Russians the opportunity to play one
side of the Atlantic against the other.

MADDOW: Steven Pifer, former U.S. ambassador to Ukraine -- thank you
very much for helping us with this tonight, sir. I appreciate your time.

PIFER: Thanks.

MADDOW: Thank you.

All right. There is an area of American life where no news is truly
great news, and we have some of that for you tonight.

Plus, a best new thing in the world, sort of an unkempt edition.

That`s all coming up. Stay with us.

(COMMERCIAL BREAK)

MADDOW: Last month, for the first time in more than a decade, there
were no American combat fatalities anywhere in the world. Not one in any
combat situation in Afghanistan or Iraq or any of the many other lower
profile places that U.S. troops are deployed around the globe.

Last month, March, was also the first month in seven years that no
Americans were killed in combat in Afghanistan. We have been at war for so
long as a nation that it is hard to remember that war is not a permanent
condition for us. And that U.S. troops not dying in combat should be the
norm and not the aberration.

But it is the aberration. It has been more than a decade since that`s
been true. But it is true right now. It`s true as of the month that just
ended and that`s worth being thankful for.

And I have another one for you, which is always worthy of thanks.
Over this more than a decade at these two long wars, hundreds of thousands
of claims from wounded and disabled veterans from the Afghanistan war and
the Iraq war and from other wars besides, these claims having building up
into a backlog. Veterans waiting months and months, years for the
treatment they are due from the V.A. The V.A. backlog got to where
soldiers were dying before they got the benefits they were promised when
they signed up. One refrain among veterans is this backlog has just built,
and built, and built, was delay, deny, wait until I die.

At the beginning of 2012, the average delay for a U.S. veteran putting
in a disability claim was about 188 days, more than six months waiting just
to get an answer from the V.A. A year after that, the wait was worse. It
wasn`t six months anymore. It was nine months, 262 days, even if the
answer a veteran had waited for all that time was no.

Well, today, the V.A. reported that the backlog has been cut way, way
down. It has been cut by 44 percent, by almost half of these hundreds of
thousands of claims that were being held up in the system for months.
There are still well over 300,000 veterans in line, but the V.A. is finally
starting to make significant process in terms of the number of veterans
waiting and the overall waiting periods they`re being forced to endure.

The V.A. also said today that the average wait times have been reduced
from nine months to about four months and the claim is that the V.A. is on
track to eliminate the backlog all together by next year. V.A. Secretary
Eric Shinseki has said that he wanted to get rid of this backlog entirely
by the end of next year. They say they are on track to do it.

The V.A. backlog has been an embarrassment and a disgrace for the
government. For the Obama administration, which inherited these wars and
for American civilian really who has not been able to hold our own
government into account to get this right. Our country owes our veterans
the things we told them we would give them when we signed up.

As the Afghanistan war comes to an end, as more American troops become
American veterans, the V.A. appears finally to be going in the right
direction in terms of providing for these men and women what we promised
them in the first place, which is good news, which we will keep watching
and reporting.

Stay with us.

(COMMERCIAL BREAK)

MADDOW: Best new thing in the world today.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: People often ask, you know, why is my head hair
different than my facial hair? This is my boy hair that I was born with
and this is my man hair when I became a man. And this is a tool that I can
express man. I mean, it`s just pure man.

(END VIDEO CLIP)

MADDOW: That was from Morgan Spurlock`s documentary film "Men Some",
a whole movie on the love of beards.

Earlier this year, we reported on a historical first at the White
House concerning President Obama`s press secretary, Jay Carney. Mr. Carney
briefly stopped shaving while he was on vacation. He made hairy history.

Notice the difference between him and every one of his secretary
predecessors? All of the men who dealt with the White House press corps,
all of them have been clean shaven until Jay Carney bagged the ax back in
January. It was a short-lived thing but it was a historic first.

We checked with a historian and confirmed that, yes, President Abraham
Lincoln did have this really cute guy who used to talk to the press for him
and he was beardy, but he was technically not a press secretary. So, yes,
Jay Carney made history.

Today, further history -- the White House blog hosted this
announcement of the first ever president`s council on beards. The White
House announcement said finding inspiration from today`s visit by the
renowned beard enthusiasts from the Boston Red Sox, President Obama has
pulled together an experienced enthusiastic and hairy team of council
members to advise him on issues related to beard growth, health and styles.

The council includes the briefing beard, of course, Jay Carney, a
member of the Boston Red Sox, Mike Napoli with a beard they called the
siesta. Also a speech writer named Cody Keenan, the bearded bard, and the
best one obviously is the guy from the Office of Management and Budget, a
man named Brian Dees who has the O.M. beard from the OMB.

Happy April Fools` Day, everyone. A day where every year it`s the
best new thing in the world to show that you can take a joke.

Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL."

Have a great night.

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

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