updated 7/10/2014 9:59:02 AM ET 2014-07-10T13:59:02

ALL IN with CHRIS HAYES
July 9, 2014

Guest: Henry Cuellar, Michael Burgess, Louise Melling, Glenn Greenwald,
Sen. Anthony Hensley, David Cay Johnson


(BEGIN VIDEOTAPE)

CHRIS HAYES, MSNBC HOST (voice-over): Tonight, we are ALL IN.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Are folks more
interested in politics or are they more interested in solving the problem?

HAYES: The crisis at the board. The president and Rick Perry meet in
Texas, as the political circus continues in Washington.

SEN. JOHN MCCAIN (R), ARIZONA: They can`t stay. They cannot stay.

HAYES: As Republicans hammer on border security.

SEN. TED CRUZ (R), TEXAS: Come together and secure the border once
and for all.

HAYES: What if the crisis exists because the borders are secure?

Then, who we spied on, now we know which Americans were under
surveillance by the NSA.

UNIDENTIFIED MALE: I was a conservative Reagan-loving Republican.

HAYES: Glenn Greenwald is here and he`s naming names.

Plus, the Hobby Lobby flood gates. Democrats unveil their plan to
fight the Supreme Court decision.

And free lunches for every public school student.

UNIDENTIFIED MALE: There are no such thing as a free lunch.

HAYES: Why Chicago`s big decision makes so much sense.

ALL IN starts right now.

(END VIDEOTAPE)

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

Just a short while ago, President Obama emerged from a roundtable
discussion with Texas Governor Rick Perry and local leaders, and addressed
the ongoing humanitarian crisis at the southern U.S. border. That meeting
came after a handshake with the Texas governor on the tarmac in Dallas -- a
handshake the governor had initially balked at being a part of.

In his comments after the meeting, the president urged Congress to
pass a $3.7 billion emergency appropriation to address the surge in child
migrants from Central America, and also referenced the political criticism
that has been leveled in his direction.

(BEGIN VIDEO CLIP)

OBAMA: I want to emphasize to the governor, the problem here is not a
major disagreement around the actions that could be helpful in dealing with
the problem. The challenge is, is Congress prepared to act to put the
resources in place to get this done? Another way of putting it, and I said
this directly to the governor is, are folks more interested in politics or
are they more interested in solving the problem? If they`re interested in
solving the problem, then this can be solved.

(END VIDEO CLIP)

HAYES: Republicans have harshly criticized the president for not
visiting the border during his two-day fund-raising trip in Texas, a
decision that Rick Perry casts as, quote, "a real reflection of his concern
of what`s really going on.

The president said in his remarks today, he`s intimately aware of what
is happening at the border.

(BEGIN VIDEO CLIP)

OBAMA: This isn`t theater, it`s a problem. I`m not interested in
photo-ops. I`m interested in solving the problem.

(END VIDEO CLIP)

HAYES: Some Democrats have also questioned the president`s decision
not to visit the border, including Congressman Henry Cuellar, whose
district runs from south of San Antonio to the border and who suggested
Monday the situation could become, quote, "Obama`s Katrina moment."

And Democratic Congressman Henry Cuellar joins me now.

And, Congressman, that comment struck me as hyperbole. What kind of
point are you trying to make?

REP. HENRY CUELLAR (D), TEXAS: The point is, that there is a real
humanitarian crisis at the border. The last month, we had about 48,000
people that crossed the border into Texas that border patrol detained,
9,700 of them were kids with no parents. And that`s the humanitarian
crisis. When you see young kids hungry, scared, it`s a humanitarian crisis
that we need to address.

HAYES: But it seems to me -- and I think everyone agrees on that
point. It is a humanitarian crisis. It does need to be addressed.

It seems to me strange that the debate in Washington, political
circles, has centered on whether the president will show up physically in
the space to look at the border as opposed to what the actual solution for
the problem is.

CUELLAR: You know, certainly the president already made a decision,
he`s not going to visit the border at this time. But I certainly hope that
at some time in the future, he does visit the border.

Again, you have to see the young kids. I visited the facilities where
they`re at, and when you see young girls and boys that have crossed the
border, you have to see the problem in person to understand the magnitude
of what we`re seeing there.

Remember, the numbers are not stopping, they still have 48,000 people
that have crossed the Texas border, 38,000 of them crossed the southern
part of Texas. That`s a humanitarian crisis, and homeland security issues
that we have.

HAYES: Let me distinguish here, though. When you`re using those
numbers, right, those are distinct numbers from the -- I mean, there`s two
issues here. There`s people that cross the border, which is something that
happens every day in America. Some of them are detained, some of them get
through.

That is distinct from the surge of child -- unaccompanied minors and
sometimes with their mothers from three Central American countries that is
producing this kind of humanitarian crisis.

CUELLAR: That is correct. The numbers I`m giving you were the
numbers that were detained by border patrol just in Texas, 48,000; 38,000
were just in the southern part of the state of Texas, and that`s where the
flooding of the zone (ph), if I could use that term, where they`re coming
in through south Texas. Huge numbers.

HAYES: The president today really put the onus on Congress. There`s
a strange situation in which it seems like Republicans are telling him to
act unilaterally, at the same time they`re suing him for doing so.

What do you think about the $3.7 billion package that is now -- the
ball is in your court in Congress? Will it solve the problem? Will it get
passed?

CUELLAR: Well, you know, the court is -- for Congress, the
appropriators, under the Constitution, we`re the ones that will be
appropriating, and we`re going to be looking at this very, very carefully.
There are things that we need to do, there are things that we need to fund.
But we certainly have to look at the details.

So, certainly, the president needs to continue working with us, so we
can come up with the right approach to address not only the humanitarian
crisis, but how do we return those kids and those families safely to their
countries.

HAYES: You know, this is what everyone I heard is talking about how
to return them. It is possible they have good asylum claims. I mean, it
seems to me strange that people further removed are passing a kind of
judicial judgment on the validity of actual legal claims to possible asylum
under U.S. law by people that are possibly fleeing for their life or
fleeing persecution.

CUELLAR: Well, let`s understand what the law is. The law says that
contiguous countries like Mexico, border patrol will screen those
individuals and if they want to be returned voluntarily, we can do that.
We`ve been doing that with people from Mexico -- kids, families, for a long
time. Nobody has said anything.

Now, if somebody claims a credible fear or an asylum or they`re a
victim of a sex crime, yes. Then, at that time, we should have the
immigration hearings.

The problem is, those immigration hearings for kids are taking up to
two years to even have a hearing. So, we need to expedite the time so we
can have the hearings as quickly as possible.

HAYES: Congressman Henry Cuellar, thank you for your time tonight.

CUELLAR: Thank you so much.

HAYES: So, why you might be asking yourself is all this happening?
What is the source of this surge of children showing up at the border?
Republicans say they`ve found the answer.

(BEGIN VIDEOTAPE)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: If we don`t secure
the border, nothing`s going to change. We have to do something about
sealing the border and ending this problem so that we can begin to move on
with the bigger question of immigration reform.

HAYES (voice-over): To hear the Republicans tell it, the humanitarian
crisis is the president`s refusal to enforce the southern border.

GOV. RICK PERRY (R), TEXAS: What has to be addressed is the security
of the border. You know that, I know that, the president of the United
States knows that. I don`t think he particularly cares whether or not the
border of the United States is secure.

UNIDENTIFIED MALE: The issue is, is the border secure? And it is
not. The president is absolutely incorrect when he says that the border is
secure.

HAYES: Republicans are using the rising number of unaccompanied
migrant children apprehended at the border by border patrol to argue for
stronger border patrol. But those calls ignore the unprecedented buildup
at the border in the years since President Obama took office.

OBAMA: Right now, there are more border patrol agents and
surveillance resources on the ground than at any time in our history.

HAYES: Under this president, funding for Immigration and Customs
Enforcement and Customs and Border Protection has steadily increased.
There are more CBP agents patrolling the border now than under any other
administration. In fact, the budget for Customs and Border Protection has
doubled since 2005. And under President Obama, the number of people
deported has reached record highs, with almost all of that increase coming
from deportation at the border. Not in workplaces or homes, but at the
border.

The border has never been more secured than it is now. In some ways,
the humanitarian crisis along the southwest border is actually a result of
that security.

OBAMA: The issue is not that people are evading our enforcement
officials. The issue is that we`re apprehending them in large numbers.

HAYES: If the border was not well staffed and protected, agents
probably wouldn`t be there to apprehend the unprecedented number of
unaccompanied minor children who would show up. We wouldn`t be seeing
pictures of children on U.S. buses, or in U.S. processing facilities.
Those migrant children would probably be coming into the country largely
undetected.

But calling for more border security is the only way Republicans can
talk about immigration. It`s what their base demands. The problem is,
those calls could make the crisis even worse.

(END VIDEOTAPE)

HAYES: Joining me now, Republican congressman from Texas, Michael
Burgess.

Congressman, do you agree that this is not -- whatever you think about
border security, spending on border security, this is not a border security
problem?

REP. MICHAEL BURGESS (R), TEXAS: Well, it actually started as a
border security problem, because if you begin to relax the laws and change
the laws as the president did, with an insecure border, with a porous
border, it really only --

(CROSSTALK)

HAYES: What do you mean by that? How did he make the border more
porous.

BURGESS: When the president unilaterally deferred adjudication for
childhood arrivals in 2012, you knew at that point that something was going
to give.

HAYES: If that is driving -- if deferred adjudication or deferred
action was driving this, why wouldn`t we see kids show up from Mexico?
We`ve seen no real increase of kids showing up from Mexico.

BURGESS: No, you do --

(CROSSTALK)

BURGESS: But I think, you just had Representative Cuellar on, and his
point was exactly right. You got 38,000 people last month in the Rio
Grande Valley, and that is an overwhelming number.

HAYES: Wait, 38,000 let`s be clear, 38,000 who were apprehended.

BURGESS: Correct, because they`re not trying to evade.

HAYES: That`s right. But that`s the whole point, is that --

BURGESS: They`re passing the river and they`re holding their hands in
the air.

HAYES: Exactly, but that`s --

BURGESS: Chris, if I could --

HAYES: Wait, I want to make that clear, because I want you and I to
disagree on the facts of the matter here, because I feel that`s been
getting lost a little bit, when people talk about border security. What is
happening at the border, is that people are going to border patrol agents,
right? Just so we`re clear, there`s not masses of people that are sneaking
through and getting by people, it is precisely the presence of border --

BURGESS: There are masses of people who are crossing the border
illegally, and then it is quite OK with them if they get apprehended
because they have been told once they get apprehended and processed,
they`ll be released for a court date, and that`s basically their free
ticket in.

The message has gotten out into those countries in Central America
that if you can get here, the president is going to let you stay.

Now, the president said he`s not going to the border. I do not
understand that, I cannot imagine President Johnson not going to the
border.

HAYES: I have to say, Congressman --

BURGESS: I cannot imagine President Clinton not going to the border.
If the president went to the border -- Chris, hear me out on this -- and
said very clearly, into the camera and said, do not send your children to
Texas.

HAYES: He said that into the camera in his last interview.

BURGESS: No, sir.

HAYES: He did. He said it tonight.

BURGESS: Well, it was a throwaway comment in the Rose Garden. I
watched the comments tonight. I was unconvinced. He needs to be clear and
unequivocal. Look what Bill Clinton did when he was faced with the masses
of people who are going to leave Haiti.

HAYES: Congressman, here`s the thing. Congressman --

BURGESS: Right before he was inaugurated and he went on Voice of
America with a translator and said, if you come to this country you will be
sent back, I will not change the policies of the previous administrations.

HAYES: But, Congressman --

BURGESS: Clinton did that.

HAYES: The law under which these people are being processed which is
a 2008 law, which was unanimously approved by both Houses of the United
States Congress signed by President Bush, creates a due process for them.
The president cannot unilaterally overturn that. I know Republicans are
talking about deferred action. But that is the actual state of the law.

(CROSSTALK)

BURGESS: There are expedited procedures that can be followed. Chris,
I was just there. I was in (INAUDIBLE) last week. And the border chief
down there in said, we are starting to implement (INAUDIBLE) pilot, we will
try to get people back within eight days. I think that`s a good thing. I
think that`s --

HAYES: So, the president`s point is that this $3.7 billion emergency
supplemental request is basically, he said this, that this is the way to
essentially create the capacity to process these people faster. He said,
if the Texas delegation is on board, we can move this and get it done the
next week. You remember that --

BURGESS: Conveniently, he`s forgetting about the $40 billion we gave
him at the beginning of the fiscal year, and the $40 billion we`re about to
give him for the next fiscal year for homeland security.

There are the funds within the department to do this, they just choose
not to. So, he`s made a political --

HAYES: You think they`re choosing --

BURGESS: -- statement, oh, I need more money. Oh, absolutely.
Absolutely.

HAYES: Why are they doing that, Congressman?

BURGESS: I have not any idea, but right now -- I mean, Representative
Cuellar used the term, "flood the zone," that`s exactly what`s happening
here. They are overwhelming the facilities --

HAYES: It is your position --

BURGESS: -- of the Rio Grande Valley, and heaven help us if there`s a
hurricane down there during the season.

HAYES: It is your position the president has intentionally decided to
starve the necessary agencies of funds to process these people for what
reason?

BURGESS: Look, I don`t know if I`ve had a full accounting of the last
$40 billion that we gave him.

HAYES: Why would he do that? Why would anyone do that?

BURGESS: I don`t know, I haven`t seen the particulars of his request,
I mean, that`s --

HAYES: No, the request is -- I`m talking about -- I`m talking about
right now.

BURGESS: Why did he decide for 48 hours, but why did he decided he
was short of money? I mean, this -- look, when I ask people on the border,
Lackland (ph), when did you know this was a problem? When did you know
this was different? The answer is somewhere between November and January
of this year, if you knew it was a problem then, why are you waiting until
24 or 48 hours ago to say I need something --

HAYES: You`re not going to move on the supplemental?

BURGESS: Well, you know, I haven`t seen the details of it.

HAYES: All right.

BURGESS: Any appropriations bill that comes to me, obviously, I`m
going to look at. Look at from the confines of my committee on Energy and
Commerce. I`m also on the Rules Committee, I suspect I`ll be deeply
involved in it.

But just the fact that the president said he needs more money, I don`t
know if I buy that, Chris. He`s had plenty of money. He`s had plenty of
time. He`s had plenty of warning.

HAYES: Record spending --

BURGESS: He is one step behind.

HAYES: -- at the border.

HAYES: Congressman Michael Burgess from Texas, I really appreciate
you coming on tonight. I`d love to check back in with you as this
continues.

BURGESS: Anytime. Glad to do it.

HAYES: All right. Why are gay rights groups withdrawing their
support for legislation that would prevent employers from discriminating
against LGBT people? I`ll tell you, next.

(COMMERCIAL BREAK)

HAYES: (AUDIO GAP) the Republican governor of Kansas, thought he had
a good thing going when he signed a massive tax cut into law.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You say whether or not you`re in New York, or
anywhere in America, come to Kansas. What`s your pitch?

GOV. SAM BROWNBACK (R), KANSAS: My pitch is, no taxes. If you`re a
small business, LLC, Sub S, is zero income taxes. We got overall tax rate
down, and we think we`re the best place in the country to grow a business,
raise a family. A lot of people, tax refugees are looking for places to
go, come to Kansas.

(END VIDEO CLIP)

HAYES: We`ll check in on how that`s all turned out, ahead.

(COMMERCIAL BREAK)

HAYES: There`s an underappreciated consequence to the highly
controversial Hobby Lobby decision the Supreme Court handed down last week,
which is that the total legal chaos and uncertainty it has left in its
wake.

The decision that allowed for profit corporations to exempt themselves
from the birth control mandate and the Affordable Care Act based on a
sincerely held religious beliefs, have left lower courts with such a mess
of unanswered questions that a circuit court judge, a federal judge,
Richard George Kopf, a George H.W. Bush appointee, took to his blog to post
this. "This term and several past terms have proven that the court is now
causing more harm, division, to our democracy than good by deciding hot
button cases that the court has the power to avoid. As the kids say, it is
time for the court to STFU." It`s not something we even put in scripts
here in our humble cable network.

Indeed, there are a bevy of lower court cases the Supreme Court has
ordered to be reconsidered in light to the Hobby Lobby, as well as lower
court cases in which the Supreme Court has denied a government appeal.
These two group of cases which include one in which employers object to all
forms of birth control, all forms of contraception, but it doesn`t end with
those cases. Religious conservatives now are seeing opportunity to use
religious exemption as a tool for all kinds of things.

In the domain of LGBT equal rights, religious conservatives
increasingly aware they`re on the wrong side of the opinion of the majority
of the country now see religious objection as their way from exempting
themselves from the rising tide of equality jurisprudence of the law.

And while ENDA, the Employment Non-Discrimination Act, had already
passed the Senate and would have expanded employment protections to gay,
lesbian and transgender workers, the legislation includes a religious
exemption. And so, gay rights groups have now withdrawn support of ENDA,
fearing that in the wake of the Hobby Lobby decision, the religious
exemption will render the law meaningless. So, talk of Hobby Lobby opening
the flood gates was not overstated.

Well, today, Senate and the House Democrats tried to close them again
by proposing legislation that would ban employers from refusing coverage
for any benefits guaranteed under the Affordable Care Act, and also
specifies that Religious Freedom Restoration Act, it`s not grounds for such
refusal.

(BEGIN VDIJEO CLIP)

SEN. PATTY MURRAY (D), WASHINGTON: Women across the country are
outraged, they`re demanding a change, and today, by introducing this new
legislation with a strong coalition behind us, we are here to be their
voice.

And it`s not just women who want Congress to act. People across the
country understand that if bosses can deny birth control, they can deny
vaccines, HIV treatment, or other basic health services for employees or
their dependents.

(END VIDEO CLIP)

HAYES: Joining me now, Louise Melling, the deputy legal director of
the American Civil Liberties Union.

What do you think of the legislation the Democrats introduced today?

LOUISE MELLING, DEPUTY LEGAL DIRECTOR, ACLU: It`s nice to be here.
Thank you, Chris.

We`re pleased with the legislation. We`re supporting the legislation.
We think there can`t be a fast enough action to correct what happened with
Hobby Lobby last week.

HAYES: The irony here, of course, is that what happened to bring us
to Hobby Lobby was a Supreme Court case that found that people smoking
peyote for religious regions could be fired. The Congress didn`t like it,
so they passed a bill called RFRA. It`s that law which then was used in
Hobby Lobby, and we`re getting another congressional law to correct that
Supreme Court decision.

MELLING: That`s true. But that said, I support this, we should
correct this.

HAYES: You think it`s the right thing to do?

MELLING: Absolutely, absolutely. I mean, we have a decision that`s
completely unprecedented, and that we have the court saying for the first
time ever than an employer could invoke its religious beliefs to deny its
employees a benefit guaranteed by law. We`ve never seen religious freedom
interpreted in that way before.

HAYES: That`s what Ruth Bader Ginsburg says in her dissent.

Is there now -- it seems to me, there`s now a whole host of questions
about how far this goes, that the lower courts are going to have to sort
out.

MELLING: Absolutely. There`s a whole host of questions both about
the contraception cases and there`s a whole host of other kinds of cases
out there in the courts including businesses that try to turn away people,
turn away lesbian and gay couples for example, because it`s against the
owners religious beliefs to serve those couples.

Many, many questions about the scope of the religious exemptions
playing out in courts and legislatures all across the country.

HAYES: Now, walk me through the way the Hobby Lobby decision
interacts with the decision that was already in the law for the Employment
Non-Discrimination Act, ENDA, which is now seeing support from both civil
liberties community, the equality community, and the LGBT community
hemorrhage in the wake of Hobby Lobby, because they think the exemption in
there can now be used given the court`s current jurisprudence to basically
blow the whole thing up.

MELLING: Well, first of all, I`m here from the ACLU, and we care
deeply about religious freedom. But we have opposed the exemption that
existed before.

What ENDA does is prohibit discrimination employment based on sexual
orientation, gender identity. It had an exemption that said, that`s true
for everybody unless you`re a religiously affiliated employer. So, think
hospitals, schools, nursing homes. Those institutions didn`t have to abide
by the law. They could just continue to discriminate.

So, we oppose that all along on the theory that you have a right to
your beliefs, but you don`t have a right to discriminate in the name of
religion.

So --

HAYES: So, Catholic hospitals, Notre Dame University, the large
evangelical institutions.

MELLING: Employers that are hiring and serving people of all
different faiths --

HAYES: Right.

MELLING: -- arguing they have a right to continue to discriminate.
We`ve seen this playbook before, this was true in the context of race, as
institutions claiming that it was against their religion to integrate for
example, and we rejected that as a matter of history and statute and
courts. What we`re seeing here --

HAYES: And the Supreme Court ultimately rejected that as well? Jones
case that went to the Supreme Court.

MELLING: Exactly. We`re saying here, Congress should reject that
here, and we do hope that the courts will similarly reject claims like that
coming up in the context of hiring.

HAYES: Do you think there is a conservative look at liberals talking
about Hobby Lobby, they think they`re being overly dramatic or excessive or
hysterical? Do you think there`s a rising tide of sort of coalescing
around the religious exemption as a kind of means of fighting back against
a shift in public opinion?

MELLING: Yes. I mean, I think that this is --

(LAUGHTER)

MELLING: I think this is a moment of culture change, and what we had
was, many of the groups that are seeking exemptions oppose the changes
opposed the contraception rule in general, oppose ENDA in general.

And now, when the tide is shifting, such that there are now rules
requiring nondiscrimination, then they`re asking for a carve-out. As I
said, this is not uncommon in terms of moments of social change, be it
either in terms of the Civil Rights Act or in terms of earlier iterations
of women`s rights.

HAYES: But you don`t think ENDA is worth passing with the current
carve-out?

MELLING: No.

HAYES: That`s really something.

And the Human Rights Campaign and a whole variety of gay organizations
are of that opinion as well?

MELLING: Exactly. I mean, just think about it in another context.
In terms of the laws we have, the discrimination hiring, for example, based
on race or sex or national origin, we don`t have this religious carve-out
in that context. So, why should we say that lesbian and gay people have a
lesser status? It`s a second class iteration of nondiscrimination.

HAYES: Louise Melling from the ACLU -- thank you very much.

MELLING: Thank you so much.

HAYES: All right. A little over a year ago, we learned the U.S.
government had been spying on Americans.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: New details are breaking about widespread
government surveillance of Americans. Late today, we learned of a separate
and what could be a far more explosive government program tapping into e-
mails and computer traffic.

(END VIDEO CLIP)

HAYES: Today, we learned who the government has been spying on, as in
the names of people. And you might be surprised to see who they are.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HAYES: Quick correction, I just misspoke in that earlier segment about
the sport of the human rights campaign for the Employment Non-
Discrimination Act. They still do support ENDA in its current form as
passed by the senate. My bad.

All right, when I was growing up in the Bronx attending public school,
there were two lines in the school cafeteria. On one, there were the kids
whose families were poor enough to qualify for free or reduced lunch. That
is majority of kids. On the other, were the few kids whose families could
afford to buy lunch.

And, everyone knew who is who, who is on what side of that line.
Now, thanks to a smart decision by Mayor Rahm Emanuel. That will no longer
be the case in Chicago public schools. Starting this September, Chicago
public schools will begin offering free meals, lunch and breakfast to all
children enrolled in their schools.

Chicago joins at least six other large cities already participating
in a federal program that now allows schools and school districts to offer
breakfast and lunch at no charge to all of their students if more than 40
percent of that student body, if their families are approved for S.N.A.P.

Cities like Dallas, Boston and Detroit have enrolled in the 4-year-
old federal program, which recently opened nationwide as much out of good
economic sense as appropriate moral concern for the children and their
charge. Paperwork and processing cost of determining students` eligibility
were already eating up hundreds of thousands of dollars from school
budgets. And, many of these school systems, like Chicago, a vast majority
of students already qualify for federally subsidized free lunch.

There are many whose parents make just above the income cap, which is
130 percent of the federal poverty level to qualify or folks that would be
enrolled if the paperwork were not so daunting. This decision removes the
paperwork, makes the system more efficient, ensures kids can concentrate on
their work instead of their hunger and takes away the stigma of being a
free lunch kid.

Of course, the bigger thing to notice here is that 90 percent of
Chicago`s school children come from households making $30,000 a year or
less. So, do 89 percent of Dallas public school students and at least 87
percent of Detroit public school students.

The reason we spend so much money in this country feeding the poor,
and we still do not spend enough, is because too many people are poor.
Poverty in America is a policy choice. And, it is one we keep choosing
over and over.

(COMMERCIAL BREAK)

HAYES: For the first time since Edward Snowden disclosed the biggest
batch of government secrets in American history, we now have names. What
we had for almost a year now, since the Snowden revelations are documents
revealing a massive surveillance program to collect the electronic
communications and metadata of millions of Americans.

And, as shocking as those were, what we did not know until today were
the identities of any actual Americans were being spied upon. Thanks to a
three month`s investigation by the website, "The Intercept." We now know
that at least five Americans all civilians, all Muslim or from Muslim
backgrounds whose e-mail accounts were monitored by the NSA and FBI.

As early as 2005 and at least up until 2008, the targets of federal
government surveillance included, according to Intercept`s investigation,
five men who have all led highly public outwardly exemplary lives.
Including the co-founder and executive director of the Council on American-
Islamic Relations, the nation`s largest Muslim Civil rights organization; a
former Hill staffer and prominent attorney seen here shaking hands with
George W. Bush and Hillary Clinton. And, the kicker, a former policy
adviser in the department of Homeland Security with security clearance
under President George W. Bush and a one-time republican candidate for the
Virginia house of delegates.

(BEGIN VIDEO CLIP)

FAISAL GILL, A FORMER POLICY ADVISER IN THE DEPARTMENT OF HOMELAND
SECURITY WITH SECURITY: How does it make me feel that I was surveiled by
the government? I mean that is a very good question. I guess my big
feeling is, I just do not know why. I mean, I have done everything in my
life to be patriotic.

I mean, you know, I served in the navy, served the government, served
in a political administration. I was active in my community. I was a very
conservative Reagan-loving republican. I just do not know what is in my
background. And, if somebody like me could be surveiled, then you know
some other people out there I could only imagine who are under, you know,
surveillance.

(END VIDEO CLIP)

HAYES: Joining me now, Glenn Greenwald, founding editor of "The
Intercept" and author of "No Place To Hide: Edward Snowden, the NSA And The
U.S. Surveillance State. All right, Glenn, I have read through the piece,
which I thought was really well done. Two or three times, and I cannot
figure out whether I am being dense or it is just not there, whether these
people were being surveiled with the presence of a FISA warrant or without
a warrant. Can you help clear that up for me?

GLENN GREENWALD, FOUNDING EDITOR OF "THE INTERCEPT": The entire time
Chris that we were talking to the NSA trying to get comment. They kept
urging us not to publish any names on the grounds that all the spying that
they do that is directed in Americans is done under the ages of the FISA
court.

And, we were scheduled to publish our story at the last week, and at
the last minute, some DOJ officials started telling media outlets that at
least one of the individuals specifically Nihad Awad who is the executive
director of CAIR, who is actually surveiled without a FISA warrant.

And, so, we repeatedly asked the NSA, they refused to tell us whether
there were warrants on all these people or not. And, so, we just tinkered
with our story a little to clear that, that was uncertain. We certainly
know they were spied, whether it was subject to a FISA warrant or some
other theory is unknown.

HAYES: It seems to me, though, legal implications and policy
implications matter a fair amount about whether a FISA warrant was there or
not, because it is a question whether the FISA process is actually working
or whether it is just being -- there is an end run around it, right?

GREENWALD: Well, so there are two issues. One is that before the
2008 FISA law that was passed by a bipartisan congress, what that law
mostly did was increase the government surveillance powers by legalizing
what had been the controversial Bush-Cheney eavesdropping program. But,
one of the protections that it provided was it said any time you want to
target Americans, whether they are on the U.S. soil or not, you need a Fisa
warrant.

Prior to that law in mid-2008, the NSA, according to their documents,
they believed they could surveil Americans outside of the U.S. soil simply
by getting a certification of the attorney general. So, it is possible
that prior to this law they targeted people like Nihad Awad without getting
the FISA warrant, and they would have thought it was legal. They thought
they only need an attorney general certification if the American was on
foreign soil at the time they are being surveiled.

HAYES: It is striking that the five people that have been identified
in these files are all either Muslim, practicing Muslim or of Muslim
heritage or Muslim backgrounds. There is this crazy memo, a 2005 document,
a person instructed how to properly fill out internal memos to justify FISA
surveillance in place for the person`s name would go -- where you would
imagine they put something like John Dough. It`s identity Mohammed
Raghead. What is your reaction to that?

GREENWALD: Yes. You know, I think that provides crucial context to
the document. I mean, Spencer Ackerman, when he was at wired in 2011,
uncovered a bunch of similar training material that taught FBI and other
intelligence community officials to regard even moderate Muslims as being
serious threats to national security.

You know, when we think about the 60s and 70s and surveillance abuses
then, we now think of it as clearly wrong, because they were spying on
people like anti-war protesters and civil rights activist. But, at the
time, there were a lot of people who believed that those kind of people,
civil rights activists, anti-war protesters, anti-government critics were a
serious threat, and wanted them surveiled.

And, I think that mind-set has shifted after September 11th to our
fellow citizens who are Muslim. And, I think there is an institutional
ethos pervading the intelligence community -- parts of it, not all of it,
that says when that Muslim Americans exercise their political rights
guaranteed by the constitution, you should regard that as threatening.

HAYES: Are you worried that you have now invited all sorts of hit
jobs on these five people who are now going to go out and be like, well,
they were up to something no good?

GREENWALD: You know, one of the important factors that we took into
account when deciding who we were going to report on was whether the people
wanted to be reported on. You know, there are a lot of people who I
thought about reporting on who simply did not want to be identified as a
target because of that stigma. All five of these Americans to their great
credit said that they wanted to come forward and defend their rights. And,
it was purely by consent.

HAYES: Glenn Greenwald from "The Intercept," thanks so much.

GREENWALD: Thank you, Chris.

HAYES: Two years ago, the governor of Kansas signed a bold piece of
legislation that had republicans raving. Now, he could lose re-election
because of that piece of legislation. How Sam Brownback is ripping what he
sewed, ahead.

(COMMERCIAL BREAK)

HAYES: The state of Kansas is broke, extremely broke. Revenues were
down 7.3 percent, the first half of the 2014 fiscal year. That is the
second biggest decline in the entire United States. Job growth in Kansas
lags behind the rest of the country. Moodies has downgraded the state`s
credit rating.

And, the states` Supreme Court recently ruled that Kansas had been
unconstitutionally underfunding its schools. So, what happened to bring
the land that produced Dwight Eisenhower the paragon of balanced budgets
and fiscal moderation to these dire straits? What happened to the state of
Kansas? This happened.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE SPEAKER: Specifically, what do you want to do with
the state income tax?

SAM BROWNBACK, (R) KANSAS GOVERNOR: Get it to zero. The whole thing.

(END VIDEO CLIP)

HAYES: The whole thing. Kansas Governor Sam Brownback did not
actually make it all the way to zero, but he came pretty close. In 2012,
Kansas passed a tax bill that among other things cut the state is highest
income tax rates and completely exempted small business income. But, the
loss of revenue of the state general fund is now projected to be over a
billion dollars in the red by 2019.

At some level, none of this should be surprising. Many Kansas
republicans ran on a platform of slashing tax revenue, the people elected
them. They followed through and slashed tax revenue, and now the state is
broke. Thanks in part to the fiscal fallout, Governor Brownback now finds
himself in a bit of trouble.

It is an election year, and the governor currently trails his
democratic challenger in three out of the four most recent polls. But, it
is not just Brownback who is dealing with the impact of those tax cuts. It
is the citizens of Kansas. As we showed in our "All In America" series,
the lack of funding has some very real consequences.

(BEGIN VIDEO CLIP)

DARRYL TALBOTT, PRINCIPAL OF MARQUETTE ELEMENTARY: We lost the 7th
and 8th grade three years ago, and then we lost our fourth grade last year.
And, budget cuts just seem to be coming down.

MARY KAY LINDH, TEACHER IN MARQUETTE ELEMENTARY: This budget cut is
closing the school. When the town loses its school, you lose the town. It
is just kind of hard to put into words, because it is just like you are
losing a part of your family. Like a part of your family is being torn
away from you, and so it is a -- it is an extreme loss, it really is.

(END VIDEO CLIP)

HAYES: Joining me now, Kansas State Democratic Senator Anthony
Hensley. Senator, how bad is it in Kansas?

ANTHONY HENSLEY, (D) KANSAS SENATOR: It is pretty bad, Chris.
Unfortunately, in this past fiscal year, we had a $700 million revenue
decline, and you can compare that with the great recession in 2007, 2008
and 2009 where we had a $600 million dollar revenue decline in three years.

HAYES: So, in one year the tax cuts took out more revenue from the
state budget than three years of the worst financial crisis in 80 years?

SEN. HENSLEY: That is exactly right. Those are the figures that we
have been given at $700 million versus $600 million. In one year, as I
said, it is a $700 million revenue decline.

HAYES: The governor was on with my colleague, Chuck Todd, this
morning on the air here. He was defending his record. This is what he had
to say.

(BEGIN VIDEO CLIP)

GOV. BROWNBACK: This really stimulated investment, it stimulated
people coming into the state. We have got a record number of new
businesses. We have got a record number of people working in the state of
Kansas. So, it is working, overall. It is just these things take some
time, and it is moving us on forward.

(END VIDEO CLIP)

HAYES: What is your response to that?

SEN. HENSLEY: Well, I do not see the growth that the governor is
referring to. And, when he talks about a record number of businesses, in
reality, it is small business who are changing their tax status, so that
they can get the return of no -- paying no income taxes. I think that is
the increase in the businesses that we have seen. They have just changed
their filings.

HAYES: So, people are changing their filing because taxes on small
businesses were zeroed out or cut dramatically? You are seeing people now
file as small businesses if they can, so they can get the tax benefit?

SEN. HENSLEY: That is correct. And, that is why I think it is rather
disingenuous to say that we have had an increase in businesses in fact it
is just existing businesses that have changed their tax status.

HAYES: You are -- if I am not mistaken, you are actually a teacher,
is that right?

SEN. HENSLEY: That is correct.

HAYES: As a teacher, and someone who is in the state senate, what
does this look like on the ground level in terms of Kansas` education,
which has been hammered by cuts to try to balance budgets in the face of
this revenue decline?

SEN. HENSLEY: We have already seen a cut of $550 per student on our
base budget per pupil. And, we are going to see more cuts in the future
because of these income tax cuts that the governor has pushed through the
legislature, and the real concern I have is the bottom line with our
general fund. The projection is, by 2019 we will have to cut the budget by
some $1.2 billion.

And, in a small Midwestern state like Kansas, that is going to be
devastating in terms of meeting our general fund obligations such as K-12
education, higher education, corrections, highways, social services and all
of the rest of it that we are obligated to try to, you know, help people.

HAYES: So, what is the solution? It is striking to me that your
party -- Democratic Party`s nominee for governor running against Mr.
Brownback does not advocate going back to the tax rates before the tax
cuts. So if you do not want to raise taxes, what is the solution here?

SEN. HENSLEY: Well, right now, the candidate for our party is
advocating that we at least freeze the income tax cuts at the 2015 level.
And, that would certainly improve the out years when you look at 2017, 2018
and 2019.

HAYES: I see. Am I right, quickly here, that there were also tax
raises on the lowest income earners in your state?

SEN. HENSLEY: Well, the governor had to try to pay or lessen than the
revenue reductions as possible and pay for these tax cuts. So, what we
actually did was we eliminated a program that had been on the books for
years for income eligible Kansans, typically people, disabled Kansans and
elderly who received the state food sales tax rebate.

HAYES: Kansas State Senator Anthony Hensley, thank you so much for
your time.

SEN. HENSLEY: Thank you.

HAYES: So, the idea is that when you hear the word tax cut, you
think about more money in your pocket. But, what if it is not the case,
what if tax cuts have made everyone poorer? That is ahead.

(COMMERCIAL BREAK)

HAYES: The basic argument for cutting taxes usually goes something
like this.

(BEGIN VIDEO CLIP)

FMR. PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: For families
with children to raise, and debts to pay, tax relief will lift burdens and
ease worries. For small businesses, tax relief means more customers and
improved cashflow.

More money to hire more workers. More money to expand benefits.
More money to invest in new technology. Tax relief will create new jobs.
Tax relief will generate new wealth, and tax relief will open new
opportunities.

(END VIDEO CLIP)

HAYES: Is that really the indication? What if tax cuts actually have
a negative impact on the economy? Reducing prosperity and making it so
individual people actually end up with less money? In a provocative new
column, David Cay Johnson argues that is precisely what is happened over
the last decade and a half.

Thanks to tax cut after tax cut starting under George W. Bush.
Americans have lost out on $6.6 trillion of income since the year 2000.
That is an average $48,000 per person in the United States. David Cay
Johnson joins me now to explain.

All right, David. So, the case here is that if you look at how income
was growing until 2000, and what is happened to it since. There is $6.6
trillion in missing income that would be in people`s pockets if things
continued the way they were going in 2000, right?

DAVID CAY JOHNSON, AMERICAN INVESTIGATIVE JOURNALIST: If we had just
stayed stable at the level of 2000, we did not have the falling incomes and
I accounted for both inflation and the growing population. And, by the
way, it is $48,000 per taxpayer or household --

HAYES: Right. Right. Right.

JOHNSON: -- not per person.

HAYES: So, then the question becomes what happened, right? So, is
there a case to be made not just that tax cuts did not deliver on their
promise of prosperity, which it does not look like they have, but they
actually created or helped create the conditions that led to these declines
in income.

JOHNSON: Yes, I -- and my Al Jazeera columns I have written a number
of these. We have reduced our investments in the future of America. We
have radically cut spending on basic research, which is crucial to economic
growth especially in the technological world that we live in.

We have cut spending for education and infrastructure that makes the
economy more efficient. We have reduced food inspections so that we have
much higher food born-illness rates than other modern countries. We have
had deaths of babies or babies who are never going to be fully developed
because they are not given proper medical testing. These cuts are costing
us money. They are damaging our economy. Private wealth creation requires
huge investments in commonwealth to make that possible.

HAYES: Is that -- you know, that is an argument that I have heard
democratic politicians try to make in various venues, infrastructure, the
president, the recovery act. But, it never strikes me that it necessarily
resonates politically or has not yet.

JOHNSON: Well, I am not a politician. I am an investigative reporter
who believes in holding people accountable. And, I got the Bush
administration -- Bush campaign in 2000 to say that no ifs, ands or buts,
these tax cuts would lead to us being better off than we were in 2000.

In fact, the campaign spokesperson said, "When is your story going to
run?" And, I said, "I do not know, 10 years or so." -- Because, we now
have the data to look back and see what happened. In 10 of the first 12
years of the Bush tax cuts, incomes went down. $48,000 per household is so
much money, we could pay off all student loans, all car loans, all credit
card debt and people after their taxes would still have almost $18,000 per
household they could put in the bank.

HAYES: Wow! And get -- there is something about tax cuts which also
does something really insidious. It lowers the baseline, and after a while
it becomes the norm, right? I mean, so one-way ratchet. We are seeing it
in Kansas. I mean in Kansas, they are not even running on raising taxes,
because once you cut them, they are harder to raise than they are to cut.

JOHNSON: That is exactly right, and what we are seeing in America
today is that our country is falling apart. We are not maintaining it. We
are not doing the things we need to do to continue to have our government.
And, the answer that we are provided with us by people like Sam Brownback,
we need more tax cuts.

You know, what are we going to do, bleed ourselves to death? It just
did not work? If it had worked I would be saying, this is the greatest
idea ever. Look how fabulous the results are. We have not seen any
evidence that they work. In California, where they raise taxes
significantly, last year, roughly a third on million dollar plus earners,
California had more job growth than the rest of the country.

HAYES: You know, part of this gets to this broader question, which I
think is something we do not grapple with in economic conversation is what
produces good economies is so multivarian and our policies end up tax
rates. David Cay Johnson from Al Jazeera America, thank you so much. All
right, that "All In" for this evening. The Rachel Maddow Show starts right
now. Good evening, Rachel.

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

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