All In With Chris Hayes, Wednesday, May 21st, 2014

ALL IN with CHRIS HAYES
May 21, 2014

Guest: Bernie Sanders, Richard Clarke, Analilia Mejia, Leticia Van de
Putte



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

Tonight, we continue our special series, "All in America," on the road
in the conservative heartland, with a special look at just what happens
when a state refuses to expand Medicaid for political reasons.

But first, today, amidst a growing chorus of outrage on Capitol Hill,
President Obama came forward to address the firestorm erupting around
allegations of mismanagement, long wait times, and cooked books at V.A.
hospitals.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So, when I hear
allegations of misconduct, any misconduct, whether it`s allegations of V.A.
staff covering up long wait times or cooking the books, I will not stand
for it. Not as commander in chief, but also not as an American. None of
us should.

So, if these allegations prove to be true, it is dishonorable, it is
disgraceful, and I will not tolerate it, period.

(END VIDEO CLIP)

HAYES: The president`s strong words coming after a controversy driven
by investigative reporting in "The Arizona Republic" and elsewhere last
month, which appeared to show that not only was the Department of Veterans
Affairs Medical Center in Phoenix mired in a long backlog, with sick
veterans waiting a month, even a year to see a doctor, but there was a
secret set of books created to hide the fact that administrators were
systemically violating the maximum wait time that the V.A. brass ordered
for all veterans seeking care.

Subsequent reporting has revealed similar patterns of alleged
misconduct and cover-up in V.A. hospitals from Florida to Wyoming, to
Colorado. The V.A. inspector general is now investigating at least 26
facilities that have been accused of falsifying records and both White
House Deputy Chief of Staff Rob Nabors and embattled Veterans Affairs
Secretary Eric Shinseki are also conducting reviews.

Congressional Republicans have used the scandal to go after the
president and push a theme of administrative incompetence, with
Representative Kevin McCarthy suggesting that Americans should doubt the
president`s ability to properly manage the leviathan government that he
helped create.

(BEGIN VIDEO CLIP)

SEN. JOHN THUNE (R), SOUTH DAKOTA: This V.A. issue is a national
embarrassment and the president`s response to it is an embarrassment.

SEN. JERRY MORAN (R), KANSAS: What I heard this morning from the
president`s remarks is a parroting.

REP. ERIC CANTOR (R), VIRGINIA: It is time for our president to come
forward and take responsibility for this and do the right by these veterans
and begin to show that he actually cares about getting it straight.

(END VIDEO CLIP)

HAYES: While Republicans are eagerly seizing on this issue in an
election year, it`s worth noting the criticism has not been entirely
partisan.

(BEGIN VIDEO CLIP)

REP. DAVID SCOTT (D), GEORGIA: I was disappointed with President
Obama today. There was no urgency. Mr. President, we need urgency! We
need you to roll up our sleeves and get into these hospitals!

(END VIDEO CLIP)

HAYES: But, before this story gets sucked into a #Benghazi-like
vortex of scandal-mongering that obscures the reality of what actually
happened and how to actually fix it, it is worth taking a moment to ask,
how did we get here?

In 2005, a great journalist named Phillip Longman wrote a cover story
for "The Washington Monthly" about a health care system that almost seemed
too good to be true. It`s getting arguably the best care in the country.
It was titled, the best care anywhere, and the article chronicled an
integrated single-payer system that had pioneered implementation of
electronic health care records, created the best practices for continuum of
care across doctors.

And because it dealt with patients for their entire lives, it had
every incentive to invest in prevention. It was efficient, cost-effective,
and provided high quality.

Longman cited a 2003 study by "The New England Journal of Medicine"
that found that facilities within this health care system exceeded fee for
service Medicare on all 11 different quality of care metrics they used to
evaluate. That system was the V.A. system. And yet, just two years after
Longman published that piece came this.

(BEGIN VIDEO CLIP)

BRIAN WILLIAMS, NBC NEWS: Wounded veterans returning from Iraq and
Afghanistan have been living in appalling conditions and fighting a
dysfunctional bureaucracy at the outpatient clinics of this nation`s
premiere military hospitals.

(END VIDEO CLIP)

HAYES: The Walter Reed neglect scandal revealed that at least part of
the veteran`s health care system is outrageously underfunded and
underperforming, failing to meet the basic standards of decency and care
for citizens who had rest their lives and health for the country.

President Obama came into office with a promise to fix things at the
V.A. and increase funding after a Bush administration that he said in 2007
had ignored deplorable conditions at some V.A. hospitals and neglected the
planning and preparation necessary to care for our returning heroes.

And yet, while backlogs in veterans` disability claims have been cut
in half over the past year and V.A. funding has increased 38 percent under
President Obama, according to the administration, a poll just last year
found that 58 percent of post-9/11 veterans said the V.A. is doing an only
fair or poor job of meeting their needs.

So, what happened? Who or what broke the V.A.? Well, for starters,
we can look at the budget. It certainly did not help matters when
Republicans in February blocked Senator Bernie Sanders` bill to provide $21
billion in medical and other benefits for veterans.

(BEGIN VIDEO CLIP)

SEN. JEFF SESSIONS (R), ALABAMA: I don`t think our veterans want
their programs to be enhanced if every penny of the money that`s going to
enhance those programs is added to the debt of the United States of
America.

(END VIDEO CLIP)

HAYES: But here`s the thing. The problem appears to be deeper than
simply one of resources. It appears to be tied to sheer institutional
capacity.

Think about it in terms of what might happen in an urban school
district, anywhere in America. A fully functioning school is serving the
needs of its community with a large enough facility, enough teachers for
every student, and then a bunch of tall apartment buildings pop up around
it. The student population skyrockets, and the school can`t keep up.

Now, even if the budget goes up a comparable amount to the influx of
enrollment, that doesn`t mean you can immediately recruit enough teachers
or that you have the physical space in your school for all those kids.
Something similar appears to be happening in the V.A., where the longest
period of continued war in the nation`s entire history has produced a
demand for services the V.A. appears to lack, the institutional capacity to
provide.

So, while primary care visits at V.A. hospitals rose 50 percent over
the last past three years, the number of full-time primary care physicians
has only risen 9 percent. There aren`t enough doctors to meet the
increased need.

This has resulted in long wait times and complaints about backlogs and
justifiable outrage that people returning from battle are not getting the
care and attention that they deserve. And so last year, the V.A.
established a goal for new patients seeking primary care to be seen within
14 days of calling for an appointment.

But here`s the thing. Without the institutional capacity to actually
make good on that promise, a decree such as that appears to have simply
produced cheating and gaming. And that`s not new. And it`s not just a
problem at the V.A.

Anyone who`s watched "The Wire" knows what happens all too often when
big city police departments announce quotas for crime reduction. Stats get
juked.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Juking the stats.

UNIDENTIFIED FEMALE: Excuse me?

UNIDENTIFIED MALE: Making robberies into larcenies, making rapes
disappear. You juke the stats and majors become colonels.

(END VIDEO CLIP)

HAYES: That sort of thing has happened in school system after school
system, where high-stakes testing and teacher accountable policies intended
to boost student performance have instead led to cheating scandals.

None of this is an excuse for deception and malfeasance, and anyone
that willfully engaged in that behavior should be held to account and
punished, no matter the political fallout.

But let us not lose sight of the fact that we have more veterans
needing more care than we have in a generation. So when people start
asking the question, who broke the V.A., the prime suspect, it seems to me,
is 13 years of war.

Joining me now, Senator Bernie Sanders, independent from Vermont,
chairman of the Senate Committee on Veterans Affairs.

Senator Sanders, this is something you`ve been working on a lot. What
is your reaction to the fallout from the revelations that have been
reported in the press and the president`s comments today?

SEN. BERNIE SANDERS (I), VERMONT: Well, I think a couple of things.
We held a big hearing on this issue on Thursday, and if you listen to the -
- all of the veterans operations, what they tell you, Chris, is that when
veterans get into V.A. health care, in fact the quality of care is quite
good. And there are a number of independent studies out there which
suggest that in many Republicans, v. Health care does better than health
care in the private sector.

But as you have indicated, one of the serious problems that we face is
that in the last several years, I think significantly because of the wars
in Iraq and Afghanistan, 2 million new veterans have come into the system.
And I have no doubt that there are parts of the country where we simply do
not have the staff needed to accommodate these veterans in a timely and
effective way. And that is a real problem.

The second point that I would make is that I am glad that my
Republican colleagues are now paying attention to our health care issue.
But, remember, these are the same folks in the house who voted to end
Medicare as we know it, make devastating cuts in Medicaid, have voted 50
times to repeal the Affordable Care Act, and in states throughout this
country, are putting in jeopardy millions of people, because they refuse to
accept the Medicaid proposal in the Affordable Care Act.

HAYES: And I should note, some of the 5 million folks that would
qualify for Medicaid expansion that`s not being implemented, some tens of
thousands of those themselves are inadvertence.

But how much of this is a resource issue? You had this bill, it was
$21 billion. It was filibustered by the Republicans. We`ve seen spending
go up 38 percent. Is it just not enough? I mean, is this a money issue?
Is this a mismanagement issue? Is this an institutional capacity issue?

SANDERS: You know what, I think you hit all three. I think you`re
absolutely right, in those three points. Is it a money issue? Yes, I
think it is. Not only have we seen more and more people coming into the
V.A., because they need the care, and they appreciate the good care that
the V.A. provides.

But many of these cases are not easy cases. These are difficult
issues. We have 200,000 men and women who have come back from Iraq and
Afghanistan who are dealing with PTSD and traumatic brain injury. You have
other people coming home without legs, without arms, losing their hearing.

These are tough issues. So for a start, I think it is probably the
case that while Obama has been pretty good in his budget, pretty good in
his budget, I think we probably need more resources and I have advocated
for that in the last several years.

Second point, though, I think it is fair to say that management of
V.A. has not been as strong as it should be. I think there are areas where
the V.A. should have been much quicker to pick up on the problems and
allocate resources.

HAYES: Let me interject there for a second, because you are already
seeing on the right in the conservative media, basically, a whole -- dozens
of pieces today, this shows government-run health care can`t work, this is
the bankruptcy of liberalism. And, obviously, this thing is going to be a
mismanaged bureaucracy, because it`s a big state enterprise.

What do you say to that?

SANDERS: Well, these are -- look. It is no great secret that if
people want to repeal the Affordable Care Act, if they want to end Medicare
as we know it and convert it into a voucher program, if they want to slash
Medicaid and leave millions and millions of people out on the street
without any health insurance, it`s fair to say these guys are not great
fans of public health. I think that`s a fair statement.

I would argue that in many ways, and according to many studies,
despite its problems, V.A. today provides good quality health care in a
cost-effective way.

HAYES: I would say to you, Senator, I hope Republicans either in the
Senate or the House have the courage or the convictions to introduce
legislation to privatize the V.A. and we can see how the voters feel about
that.

Senator Bernie Sanders, I know where you would be on that. Thank you
so much.

SANDERS: Thank you.

HAYES: Coming up, 13 years after 9/11, we`re still officially,
legally a nation at war. Who are we at war with? That turns out to be a
surprisingly difficult question to get an answer to.

Richard Clarke, President George W. Bush`s chief counterterrorism
adviser, will try to help me answer it, next.

(COMMERCIAL BREAK)

HAYES: Coming up, our special series, "All in America" continues
tonight. We`re on the road in Kansas to find out what happens when people
are too poor for Obamacare and not poor enough for Medicaid.

Stay with us.

(COMMERCIAL BREAK)

(BEGI VIDEO CLIP)

SEN. BOB CORKER (R), TENNESSEE: I want a yes or no answer. Are you
authorized under the 9/11 AUMF to go after ISIS?

UNIDENTIFIED MALE: Sir, I can`t speak publicly about which groups we
may or may not have determined --

CORKER: Is this a classified answer, is that the reason?

UNIDENTIFIED MALE: That`s my understanding, yes, sir.

(END VIDEO CLIP)

HAYES: It appears who we are at war with is a secret. But what we do
know, even if the last American troop ever leaves Afghanistan, the United
States will, 13 years after 9/11, still be at war, officially and legally.
Thanks to the 60 words that make up the Authorization for Use of Military
Force, or AUMF. That the president is authorized to use all necessary and
appropriate force against those nations, organizations, or persons he
determines planned, authorized, committed, or aided the terrorist attacks
that occurred on September 11th, 2001, or harbored such organizations or
persons in order to prevent any future acts of international terrorism
against the United States by such nations, organizations, or persons.

It was passed one week after 9/11. The lone dissenting voice of
Congresswoman Barbara Lee. That document puts the U.S. on more footing and
we will continue to be on more footing until it is repealed.

Just last year, the president indicated he was interested in finally
moving the country away from a perpetual state of official war.

(BEGIN VIDEO CLIP)

OBAMA: I intend to engage Congress about the existing Authorization
to Use Military Force, or AUMF. To determine how we can continue to fight
terrorism without keeping America on a perpetual wartime footing. So, I
look forward to engaging Congress and the American people in efforts to
refine and ultimately repeal the AUMF`s mandate.

(END VIDEO CLIP)

HAYES: Today, there was a hearing before the Senate Foreign Relations
Committee about the scope of the AUMF. And in a somewhat surprising turn
of events, two of the administration`s the top lawyers says they don`t
think the president even needs the AUMF to continue waging war against
terrorist groups in a carte blanche fashion.

(BEGIN VIDEO CLIP)

CORKER: I would just like to know, yes or no, if the 2001 AUMF was
undone, can the president carry out the activities that he`s carrying out
right now?

UNIDENTIFIED FEMALE: Yes, I believe he could, Senator Corker.

CORKER: It sounds like I don`t think we need an AUMF at all? So,
it`s kind of becoming an irrelevant question. But are there terrorist
groups per the AUMF that you don`t think is relevant that you don`t have
the ability to go against?

UNIDENTIFIED MALE: I`m not aware of any foreign terrorist group that
presents a threat of violent attack on this country that the president
lacks authority to use military force to defend against as necessary,
simply because they have not been determined to be an associated force with
the AUMF.

(END VIDEO CLIP)

HAYES: Joining me now, Richard Clarke. He was the chief
counterterrorism adviser to the National Security Council under President
George W. Bush, author of the new book, "Sting of the Drone."

Richard, do we know the AUMF? I mean, if the legal analysis presented
to the committee today is true, why do we still have this thing? Shouldn`t
we repeal it?

RICHARD CLARKE, "STING OF THE DRONE" AUTHOR: Chris, I was also the
chief counterterrorism adviser during all eight years of the Clinton
administration, and we used force during the Clinton administration against
al Qaeda and we had no AUMF. I think every president, and certainly in my
lifetime, has used force without having an AUMF.

So, the president has inherent authority to use military force when he
thinks the United States is threatened. And whether or not we have the
AUMF, a president will have that authority.

The question is, can we use a debate in Congress about the AUMF
resolution, to have some discussion about what is authorized and what is
not authorized, in terms of NSA activity, in terms of drone activity. You
know, we`ve killed 2,500 people in five countries with drones. And it`s a
little bit difficult to argue in all of those cases, the people involved
were threatening the United States.

HAYES: Well, that`s the question. What`s -- there`s a kind of
constitutional question, a basic question that seems to me as a citizen, I
would like to be able to have a clear answer from the government, who we
are at war with. That doesn`t seem like asking too much.

And yet, that seems to be past the capability, presently. And then
there`s an efficacy question, a moral question, about whether it`s
justifiable to be reining down the kind of violence we have been across the
world, and whether that`s getting us anything that`s tangibly improving
American security?

CLARKE: Well, I don`t think it`s a mystery who we`re fighting. We`re
fighting al Qaeda. Al Qaeda has morphed, however, into a number of
deferent organizations, and organizations have self-declared themselves to
be al Qaeda and changed their name to al Qaeda.

I suppose when they do that, they automatically become a target of the
United States but --

HAYES: Well, let me just stop you there, because we also have been
fighting groups that don`t have that name, particularly, but share,
essentially, a Wahhabism, or a kind of militant, violent jihadi ideology.
I believe the operations we`ve done in Somalia aren`t against a group that
calls itself, necessarily, al Qaeda --

CLARKE: Actually, it does.

HAYES: It does?

CLARKE: The Shabaab organization, self-declared last year, that it
was now a part of al Qaeda.

But I think real issue here is not what they call themselves or what
the name is, but whether or not the organization actually threatens the
United States. And some of them do. Certainly, al Qaeda in the Arabian
Peninsula has tried to blow up American planes and tried to have bombs go
off on the United States.

HAYES: That`s a group located in Yemen?

CLARKE: It`s largely in Yemen.

The one in the Somalia, Shabaab, has also tried to recruit Americans,
but that hasn`t actually happened.

So I think having a debate in Congress about which organizations
threaten us and what are the acts that you have to do to threaten us, well,
there`s a terrorist group have to do to qualify, I think that`s worth
having.

HAYES: Finally, today, Nancy Pelosi announced the five Democrats who
would be appointed to the Benghazi select committee, that Bob Corker line
we`ve played had to do with one of the groups that appears possibly
responsible for the violence that happened in Benghazi. Do you think this
is a serious inquiry, or someone who`s spent a lot of time thinking about
counterterrorism, does this strike you as a side show?

CLARKE: We`ve had serious inquiry. In fact, we`ve had several. This
is a side show, but we`ve had serious inquiries run by the highest ranking
officer in the United States and the longest serving foreign service
officer in the United States, men appointed repeatedly by Republicans and
Democrats.

We have their report. They did a very good job. Their
recommendations are being implemented.

There`s no need to do anything more on this in the way of an
investigation. It seems to me that this is entirely about politics and
entirely about trying to smear a potential Democratic candidate for
president.

HAYES: Richard Clarke has a new book out, it`s called "The Sting of
Drones," it`s a novel actually about war in this 21st century.

Richard Clarke, thank you so much.

CLARKE: Thank you.

HAYES: Coming up tonight, we`re a lot closer to solving the mystery
of why it was time for some traffic problems in Fort Lee. An update on
Chris Christie`s bridgegate is next.

(COMMERCIAL BREAK)

HAYES: The biggest mystery in politics, for months now -- one we`ve
been reporting on and thinking about and trying to solve -- why was it time
for some traffic problems in Fort Lee? Why did Chris Christie`s appointees
and staffers shut down traffic lanes on the George Washington Bridge? What
was the motive?

We know the crime, the details, the perpetrators. We just don`t know
why.

Now, finally, we have come much, much closer to solving that mystery,
thanks to new testimony from the ongoing investigation of New Jersey
legislature select committee.

Matt Mowers is 24-year-old former aide to Governor Chris Christie`s
re-election campaign last year, who was charged with cultivating mayoral
endorsements. He testified the Christie re-election campaign was pursuing
Fort Lee Mayor Mark Sokolich`s endorsement last year. In fact, Bridget
Kelly, at the time Christie`s deputy chief of staff, called Mowers on
August 12th.

(BEGIN VIDEO CLIP)

MATT MOWER, FORMER AIDE TO CHRIS CHRISTIE: She just called to check
in and said -- if I recall correctly, and you know, some of this is going
to be paraphrasing from recollection -- she said, "Is Mayor Sokolich
endorsing?" I said, no, you know, he`s not. "He`s definitely not
endorsing, right, not going to happen?" I said, no, not going to happen.
You know, from everything I know, just, door shut. Like not going to
happen. She said, "OK, that`s all I need to know."

(END VIDEO CLIP)

HAYES: And you know what happened the very next day? Kelly sent this
now-infamous e-mail.

Now, we still don`t definitively know Christie`s level of involvement
or non-involvement. It does appear, though, that the motive behind it was
as petty as we first thought.

And the really bad news for Chris Christie is that his biggest problem
has absolutely nothing to do with this. His biggest problem is that the
signature issue he ran for governor on, the cornerstone of his political
appeal, what made him a Republican star and darling of the party`s donor
class, is all falling apart, right before our eyes.

I will tell you what it is, next.

(COMMERCIAL BREAK)

HAYES: All right, some Wednesday night word association.

Chris Christie. If you have been watching this network, you might
say, Bridgegate. Bully. Town halls. Sandy. Stronger than the storm.
Guy who yells at teachers. Presidential hopeful. Former presidential
hopeful.

But the number one phrase that Governor Chris Christie wanted to be
associated with himself, the thing that made him the star he was, was
pension reform.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: What I`m doing is trying to
change the pension system in New Jersey so the pension`s actually there for
them.

We have a benefit problem. It`s not an income problem from the state.
It`s a benefit problem. And it`s -- so we have got to change those
benefits.

I would love to send the bill to Whitman, McGreevey, Cody, and
Corzine. What I won`t live with is sitting off in my retirement somewhere,
watching police officers and firefighters and teachers in New Jersey not
get their pension.

When I get this done, 10 years from now, when you retire, you`re going
to be looking for my address on the Internet to send me a thank-you note,
because you`re going to have a pension.

Never said I wasn`t going to make the payment. I will make the
appropriate payment to the pension this year.

(END VIDEO CLIP)

HAYES: All right. That was the thing that made Chris Christie. Blue
state Republican wins on running against the big, bloated pensions against
the corrupt Democratic establishment that kicked the can down the road and
raided the pension fund year after year.

And the first thing he does when he gets in office, he does the tough
thing. Christie stiff-arms the naysayers. He reaches out across the aisle
and gets bipartisan compromise to pass a tough, accountable pension reform
bill.

No longer would it be the case that profligate liberals in New Jersey
would be stealing from the future to pay off the big public sector unions
now. That was the thing that made Chris Christie a darling in the eyes of
national Republicans, made the Wall Street donor class swoon. That was his
defining thing.

But that was then. Here`s the news now. You will never guess what`s
happening New Jersey. Mr. Fiscal Probity is overseeing a more than $800
million budget shortfall. That`s $800 million, as in close to $1 billion,
with no way to pay for it.

The state constitution requires a balanced budget, and so, guess where
Christie`s hand is creeping towards? Good old wallet that`s been sitting
there on the dresser since time immemorial, the public pension funds.
Christie halts $900 million due for pensions.

(BEGIN VIDEO CLIP)

CHRISTIE: I have been talking since January about the fact that we
need to be more aggressive in this regard. And despite the steps that we
took in 2011, the reality for New Jersey is that what we have done so far
has not come close to closing the gaps quickly enough.

(END VIDEO CLIP)

HAYES: Joining me now, Analilia Mejia, executive director of the New
Jersey Working Families Alliance.

All right. Is this just a complete and total 180, flip-flop, doing
exactly the thing he said he wouldn`t do? Am I wrong in thinking that?

ANALILIA MEJIA, EXECUTIVE DIRECTOR, NEW JERSEY WORKING FAMILIES
ALLIANCE: I think, bottom line, the governor has continuously walked the
state into this idea of he is the fiscally responsible candidate. He was a
fiscally responsible governor.

And the reality is that he has continuously decided to protect tax
breaks for the rich, corporate loopholes, and at the expense of regular New
Jerseyans. The governor has said that he was going to fix the pension
problem. He asked regular people to pay 25 percent more to get 30 percent
less in their pension.

HAYES: That was what the pension reform was.

MEJIA: Exactly.

HAYES: That`s what it came down to. You paid more and you got less.
That`s how the -- that`s where the money came from.

MEJIA: Exactly.

And so he`s asked regular, hardworking New Jerseyans to make those
tough sacrifices. And then what does he do? He moves the goalposts. He
changes the rules. This is Chris Christie at his best. This is what he`s
done continuously. It`s not to be -- it`s not a surprise to us in New
Jersey, but it`s unacceptable.

HAYES: But, also, he ran around the state denigrating every one of
his predecessors, Democrat and Republican, basically being like, these
shiftless losers hustled and conned all you people, because every year,
year over year, they had a shortfall.

(CROSSTALK)

MEJIA: Exactly.

HAYES: And instead of paying the money into the pension, they just
took it to close their budget gap. That was the great sin.

He is -- am I wrong that he is just doing that now, right?

MEJIA: He`s exactly doing that.

And what`s interesting is that you hear the governor talk about that
it is a benefit problem and not a revenue problem. He`s absolutely wrong.
His gross estimates led to this huge budget shortfall. The fact that he
hasn`t actually looked at revenue and really trying to seek real revenue
coming into the state is just resulting in a fiscal crisis.

Our roads are crumbling, our infrastructure is down, he has shorted
education. This is Chris Christie`s playbook. It`s just catching up with
him now.

HAYES: There was also the issue that you had the sort of independent,
technocratic guy who was part of the legislature who said...

MEJIA: Called him Kevorkian.

(CROSSTALK)

HAYES: Yes, he called him Dr. Kevorkian, basically said, look, you`re
projecting these very optimistic, rosy scenarios about how very low
employment, very high growth, and he took a hatchet to the guy, he killed
him. We played the sound. He just killed this poor dude. And now he`s
got the shortfall.

(CROSSTALK)

MEJIA: Absolutely.

So the governor, when you don`t agree with the governor, when you show
facts to the governor, all he does is personal attack. But here`s the
reality. All right? The governor worked with a small number of Democrats
to move this pension reform.

The real promise, the promise that he made to New Jersey was that they
were going to fix the system, they were going to ask public sector workers
to pay more.

HAYES: Right.

MEJIA: And in exchange, he was going to fully fund this. They were
going to put in one-seventh each year, growing, growing...

(CROSSTALK)

HAYES: That`s the key, the social contract. The promise was, yes,
it`s going to be tough now.

MEJIA: Exactly.

HAYES: You are going to pay more and you`re going to get less in
benefits, but you saw the tape.

MEJIA: Absolutely.

HAYES: It is going to be there, because I won`t do what everyone else
has done, which is essentially rob Peter to pay Paul. I won`t rob from the
present -- or rob from the future to pay the present. Right?

MEJIA: Well, but that`s exactly what he`s done.

And it`s not -- it doesn`t just end with this shorting the pension
payments. The reality is that the governor also today, his treasurer said
that they were going to make toughs to New Jersey transit, which, by the
way, is a tax on the working poor. He`s going to delay or skip allowing
for the property tax credits, which, by the way, is a tax on homeowners in
New Jersey.

HAYES: Well, and here`s the other thing. Politically, to me, it
seems that, forget all the bridge stuff, everything. You`re running in
Iowa, in the Iowa caucuses an ad about you having a $800 million budget
deficit that you...

MEJIA: Or not living up to your word.

HAYES: That you -- right, not living up to your word -- that you paid
by taking money out of the pension fund? That`s brutal.

(CROSSTALK)

MEJIA: Breaking the law.

HAYES: Analilia Mejia from the New Jersey Working Families Alliance,
thank you so much.

MEJIA: Thank you.

HAYES: Coming up, our special series "ALL IN America" continues. We
traveled to Kansas, where that state`s Republican insurance commissioner
went head to head with a member of her own party, the governor, who decided
not to expand Medicaid. We will have that story for you next.

(COMMERCIAL BREAK)

HAYES: All this spring and summer, we`re leaving the studio and
heading out across the country to bring you stories that illustrate the big
political fights in this country.

Our series is called "ALL IN America."

This week, we have been looking at Kansas, looking at everything from
the Koch brothers` attempts to stymie renewable energy in their home state,
to the Republican governor`s defunding of public education, and what that`s
doing to small-town schools.

To a brand-new story tonight about the state`s refusal to expand
Medicaid, and the Republican fighting to change that.

Later this week, we will be looking at how the NRA is looking to
Kansas as a model for pro-gun legislation, how women are getting access to
much-needed health care. It`s a lot, and we`re sure you have lots of
lingering questions about the stories we`re telling. So, please, tweet
those questions @allinwithchris. Post at Facebook.com/allinwithchris.

Or you can always head on over to allinwithchris.com.

We will be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: As a spirited crowd waited for word of the court`s
most important ruling in decades, the decision came a few minutes after
10:00 a.m.

(CHEERING AND APPLAUSE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Today`s decision was a
victory for people all over this country, whose lives will be more secure
because of this law and the Supreme Court`s decision to uphold it.

(END VIDEO CLIP)

HAYES: Next month marks the two-year anniversary of an historic
Supreme Court ruling that upheld Obamacare, to the delight of its
supporters and disappointment of its critics.

There was, however, another ruling that same day that did something
both destructive and vastly underappreciated at the time. That ruling made
it possible for states to refuse to comply with one of Obamacare`s most
important provisions.

You see, under the original Affordable Care Act, states were required
to expand Medicaid eligibility for low-income residents, or risk losing
their existing federal payments for Medicaid. But, in June 2012, the
Supreme Court ruled by a 7-2 margin that such a penalty was
unconstitutional, which meant that Medicaid expansion became voluntary.

The Affordable Care Act had been crafted with the presumption that all
of the states would have to raise their Medicaid eligibility to a
nationally acceptable level. So, it created tax credits to help low-income
people buy health insurance, but it`s only really affordable for people
earning more than 100 percent of the federal poverty level.

The law presumed that those who earn less than that would be
automatically covered by the states. But since the Supreme Court made
Medicaid expansion optional, 19 states have decided not to expand Medicaid,
leaving nearly five million low-income people in this country in the
tragically absurd situation of being too poor for Obamacare, and not poor
enough for Medicaid. Tens of thousands of them live in Kansas.

(BEGIN VIDEOTAPE)

GOV. SAM BROWNBACK (R), KANSAS: You see, you don`t change America by
changing Washington. You change America by changing the states.

HAYES (voice-over): The Medicaid expansion has largely been talked
about as a red state/blue state issue. But the real divide and the real
Obamacare Medicaid battleground is inside the Republican Party.

If you look only at red states, you might be surprised by which states
decided to take billions of federal dollars to give poor people health
insurance and who decided simply out of spite to give the president the
finger.

For example, Jan Brewer, Arizona`s Tea Party governor, of presidential
finger-wagging fame, the very person who triumphantly signed into law the
infamous papers please anti-immigration law, Jan Brewer is expanding
Medicaid.

But head on over to Kansas, the land of rock-ribbed Eisenhower
Republicans and Bob Dole pragmatists, and not only is Republican Governor
Sam Brownback not interested in expanding Medicaid; he signed into law a
bill designed to prevent any future governor from expanding Medicaid
without going through the legislature first.

UNIDENTIFIED MALE: It`s illogical, it`s unreasonable, and it`s
immoral, what they`re doing.

UNIDENTIFIED FEMALE: There are so many examples and so many stories
that we hear, and I -- I just can`t believe that really the citizens of
Kansas can ignore this. It`s -- it`s frightening.

HAYES: So is there anyone listening to the Kansans fighting the good
fight?

Meet Sandy Praeger, the state`s Republican insurance commissioner.

SANDY PRAEGER (R), KANSAS COMMISSIONER OF INSURANCE: The goal is not
just to have a piece of paper that says you have insurance; the goal is to
have people get health care, and not sick care, which is what I call it
when you end up in an emergency room. You`re in a crisis.

HAYES: Commissioner Praeger fought hard for the Medicaid expansion in
Kansas, and ultimately lost.

PRAEGER: I kept hoping that the governor would eventually seeing the
rationale behind getting those federal dollars. Those are tax dollars that
are going to Washington, that are going to other states that are expanding
coverage.

HAYES: In Kansas, the expansion could have been especially powerful,
because the state is already so stingy with Medicaid. Right now, if you`re
an adult without children, you cannot qualify for Medicaid. If you`re an
adult with children, you can`t qualify unless you make under $8,000 a year
for a family of four.

That means thousands of Kansans make too much to qualify for Medicaid,
but too little to qualify for insurance tax credits under Obamacare,
leaving state health care navigators to deliver the heartbreaking news.

DAVE SANFORD, CEO, GRACEMED: I know many times, people just looked at
them and cried, because they thought the ACA was going to provide coverage
for anyone, when, in fact, without that Medicaid expansion, it doesn`t.

HAYES: GraceMed Clinic in Wichita provides sliding scale health care
to the uninsured, so they have been getting an up-close look at many of
those Kansas who are falling in the Medicaid gap.

SANFORD: These are hardworking folks that are just trying to make
ends meet in the world, and, unfortunately, paying for health care many
times is the last priority to them.

HAYES: So what exactly is the argument for walking away from the
Medicaid expansion anyway? Well, there isn`t one.

PRAEGER: You know, I think it`s mostly political. I think it`s
mostly about who the next president`s going to be. I think it`s about not
giving this president a political win, because I can`t find any other
logical reason that you would not want people in our country to have access
to health care services.

HAYES: If you want to understand the rift in the Republican Party,
this is it in its most essential form. The dividing line in the GOP over
the Medicaid expansion is a line that divides Republicans who can govern
and those who can`t.

(END VIDEOTAPE)

HAYES: I will talk to former governor of Vermont Dr. Howard Dean and
Wendy Davis` running mate in the Texas gubernatorial election about all of
this up ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHELLE NUNN (D), GEORGIA SENATORIAL CANDIDATE: Georgia, are you
ready to make history in Georgia?

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

HAYES: Last night, Georgia`s Michelle Nunn became the Democratic
nominee for the Senate seat being vacated by retiring incumbent Senator
Saxby Chambliss. She`s pro-deficit reduction, pro-choice, and pro-Medicaid
expansion.

(BEGIN VIDEO CLIP)

NUNN: Our state did not expand Medicaid, which I think was a mistake.
But we need to make sure that we repeal the cuts that are happening or
could happen to our rural hospitals.

(END VIDEO CLIP)

HAYES: Michelle Nunn isn`t the only midterm candidate who`s actively
campaigning on expanding Medicaid in his state. So is Tom Wolf, the
Democratic challenge to Republican Governor Tom Corbett in Pennsylvania,
and Jason Carter, the Democratic challenger to Republican Governor Nathan
Deal in Georgia.

(BEGIN VIDEO CLIP)

JASON CARTER (D), GEORGIA GUBERNATORIAL CANDIDATE: The governor has
decided to put that Washington politics of what he calls Obamacare ahead of
our taxpayers. We`re paying today as Georgians for the Medicaid expansion
dollars that the government has, and yet we`re refusing to take them. That
is a terrible stewardship by our governor of our tax dollars.

(END VIDEO CLIP)

HAYES: While Georgia is still one of the 19 states that has not
expanded Medicaid, Indiana just joined the ranks of states that have, at
least in some form, Republican Governor Mike Pence announcing this week he
will be seeking a waiver to broaden his state`s Healthy Indiana plan as an
alternative to Medicaid.

Joining me now is Texas Democratic state senator Leticia Van de Putte.
She`s a candidate for lieutenant governor running with Texas State Senator
Wendy Davis. And former Governor of Vermont, former chair of the DNC, and
CNBC political analyst Howard Dean.

Governor Dean, I will begin with you. If I could get in a time
machine right now, interview you on the day of the ACA decision before the
court that upheld the ACA, but made Medicaid expansion eligible, and I were
to ask you, two years from now, how many states will not have expanded
Medicaid, what would have that Governor Dean said?

HOWARD DEAN, FORMER PRESIDENTIAL CANDIDATE: Well, I knew this was
going to happen, because some of the Republicans are so much -- so
interested in embarrassing the president, they don`t care what they -- they
don`t care about their own citizens.

It was interesting you had Jason Carter on. Jason Carter is now four
points ahead of Governor Deal in Georgia for exactly this reason. Four
rural hospitals in Georgia have already gone broke because of the Medicaid
and closed. And that`s going to happen all over the country. There are
real governors, and as you said in the introduction, real governors who
understand how to govern. Jan Brewer is one, but Rick Snyder, John Kasich
in Ohio.

And then there are governors who are just mostly political, Bobby
Jindal, Rick Perry, Sam Brownback in Kansas, Nathan Deal. And there`s a
big difference between the two, and I think the voters are going to know
that.

HAYES: Senator Van de Putte, you are in state that, if I`m not
mistaken, has the largest number of citizens who would qualify in the
Medicaid expansion who will -- are being denied that because Governor Perry
is opposing it.

Is there political pressure manifest in the state? Or is it just
considered a done deal, and, heck, what are you going to do, life`s tough?

LETICIA VAN DE PUTTE (D), TEXAS STATE SENATOR: Well, unfortunately,
when Governor Perry decided to say no to almost a million Texans, he said
no to 200,000 jobs.

Governor Perry is not running for reelection, but it is a matter of
concern. As I travel the state on campaign trails, and it`s a big state,
people are asking about health care and about what happened. And these are
hardworking Texans. They know that their tax dollars now are being used in
other states.

(CROSSTALK)

HAYES: But let me ask you this. Let me ask you an honest question.
Can you go to your median Texan voter, who you and Wendy Davis need to win
in a very tough political terrain in the red state of Texas, and talk about
Medicaid expansion, or is that just like, what are you talking about and
why do I care?

VAN DE PUTTE: Well, it`s all about a conversation. And I have ban
pharmacist for 33 years and have been having conversations right across the
prescription counter.

But when 22 chambers of commerce begged the legislature to find a
Texas solution that would add 200,000 jobs, it would also add that 68,000
veterans and their spouses to be able to have -- you know, when I talk to
people, I ask them one question. And that is, do you believe that every
American family deserves to have a family doctor?

If the answer is yes, then you`re in support of the Affordable Care
Act. If the answer is no, there is nothing about it that you`re going to
like. But it`s just that simple.

HAYES: Right.

Governor Dean, what Senator Van de Putte said there about the chambers
of commerce, if you were a governor and you actually sat in the governor`s
chair, right, and let`s say you put yourself in the situation where you
haven`t expanded Medicaid, out of this kind of ideological spite or, I
don`t know, because you don`t want people to have health care, what are the
phone calls coming into the governor`s office like, not just from the power
of big poor people, which is not the most powerful lobby in these states,
but from the whole panoply of interests that want to see this expansion
happen?

DEAN: Well, one of the reasons I know a lot about is, this is this is
how we got to universal health care for everybody under 18 in my state when
I was governor 20 years ago. We expanded Medicaid up to 300 percent of
poverty. We made it a middle class entitlement program.

I still run into people today in the hardware store who are -- who
come up and say how grateful they are to have health insurance, at least
for their kids. I still run into people all over the country who grew up
in that generation. A whole generation now of kids in Vermont has
universal health care.

You know, businesspeople are not crazy. They are not these right-wing
lunatics. They get smart economics. And smart economics, as Senator Van
de Putte has said, is getting jobs into your state. I find it ironic that
Governor Perry is running around to other states saying, come to Texas.
Here`s a guy who just turned down 200,000 jobs.

HAYES: Right, and, presumably, if you look out at a time horizon,
billions of dollars in federal money.

Senator Van de Putte, this would be paid -- 100 percent of it paid for
in the first year, and then it goes down to 97, 95 percent over a certain
amount of time span, but is that argument -- does that argument have
traction, or is this just something that Greg Abbott, who is Wendy Davis`
opponent, is saying, not even in the realm of the possible?

VAN DE PUTTE: Well, if you keep hearing the rhetoric and the
vilification of the Affordable Care Act, you might say in a state like
Texas, no, people are going to think Obamacare is bad.

But it`s not. It was a bad decision not to expand Medicaid. It was a
bad decision to say no to that many jobs. And if any other comments that
I`m getting on that LeticiaVandePutte.com Web site are any indication,
people are getting it. They know that other Republican governors and
legislators that are conservative are finding a way and they`re asking, why
can`t Texas?

(CROSSTALK)

HAYES: In a state like Texas, I have got to imagine that the
eligibility is pretty low already. I mean, what -- how poor do you have to
be to get into Medicaid as it is in a state like Texas?

VAN DE PUTTE: It is -- we are not a luxurious state. We are a proud
state. We value that "you pull yourself up from your own bootstraps"
mentality, but we always know when neighbor needs to help neighbor.

And it`s being very disrespectful to the taxpayer, because 85 percent
of the Texans are paying high property taxes to hospital districts, because
it`s our hospital districts that are paying for the uncompensated care.

HAYES: Right.

VAN DE PUTTE: This is a really bad business decision not to accept
those Medicaid dollars and find a way to do this.

HAYES: State Senator from Texas Leticia Van de Putte, former Governor
of Vermont Howard Dean, who oversaw Medicaid expansion in that state 20
years ago, and the benefits still continue to flow, thank you both.

On "ALL IN America" tomorrow, the NRA is calling Kansas a model state,
thanks to a new law that stops local governments from regulating guns.

(BEGIN VIDEO CLIP)

JANET MILLER, WICHITA CITY COUNCIL MEMBER: Can you carry, openly
carry weapons into municipal buildings now, public buildings? Can you take
them into the rec center? Can you take them into the library?

JIM HOWELL (R), KANSAS STATE REPRESENTATIVE: This issue does not
belong at city level. If we want to have a law that gets into issues --
gets involved in the Second Amendment, this needs to be a statewide,
uniform law.

(END VIDEO CLIP)

HAYES: We are going to bring you that amazing report tomorrow as part
of our weeklong series as "ALL IN America" on the road in the conservative
heartland.

And a reminder: You can find out lots more on our reporting so far,
other stories from the conservative heartland on our Web site,
ALLIN.MSNBC.com.

That is ALL IN for this evening.

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

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