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'1600 Pennsylvania Avenue' for Tuesday, February 17

Read the transcript to the Tuesday show

Guest: Jennifer Loven, Virg Bernero, Emily Heil, Jennifer Palmeiri, Kevin Madden, Arne Duncan, Jane Hamsher> High: Lansing, Mich., Mayor Virg Bernero says Wall Street has sabotaged the auto industry and the federal government has abandoned the hard-working middle class, as Detroit has made strides toward transforming the industry, going greener.  A panel of experts responds to the accusation that President Obama has not engaged in substantial bipartisan dialogue, the rift in Washington is as bad as ever, hurting the American public.  Obama signs the stimulus bill into law.  Education Secretary Arne Duncan discusses the law.  A media outlet releases a “winners and losers” list regarding the law, called the American Recovery and Reinvestment Act.  Spec: Recession; Economy; Automotive Industry; Loans; Politics; Global Economy; Fuel Efficient Cars; Stimulus Package; Capitol Hill; Congress;

Democrats; Republicans; Bipartisanship; Taxes; Job Creation; Foreclosures;

Banking Industry; Wall Street; Sports; Steroids; Economy; Legislation;

Barack Obama

DAVID SHUSTER, HOST:  Hello everybody.  I‘m David Shuster.  Welcome to 1600, and this the 29th day of the Obama administration.  President Obama headed to Denver, Colorado today to sign the $787 billion stimulus bill into law.  The latest USA Today/Gallup Poll, meanwhile, shows 59 percent of people support the plan.  And the White House is now in overdrive to remind individual cities and states how they are going to benefit from the bill, like today in Denver where it was signed, sealed, and delivered.


UNIDENTIFIED MALE:  It is my distinct honor and privilege to welcome the president and the vice president of the United States to Denver, Colorado. 

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES:  Less than a month, think of this, less than a month into this presidency, the president is about to sign into law what is, I believe, a landmark achievement. 

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  Thank you.  The American Recovery and Reinvestment Act I will sign today is the most sweeping economic recovery package in our history.

Because of this investment, nearly 400,000 men and women will go to work; 14,000 teachers who were set to be let go may now be able to continue. 

Seven million Americans who lost their health care along the way will continue to get the coverage they need. 

It includes help for those hardest hit by our economic crisis, like the nearly 18 million Americans who will get larger unemployment checks in the mail.  In the form of tax cuts.  By the way, the most progressive in our history, not only spurring job creation but putting money in the pockets of 95 percent of hard-working families. 

And we expect you, the American people, to hold us accountable for the results.  But I have every confidence that, if we are willing to continue doing the critical work that must be done by each of us, by all of us, that we will leave this struggling economy behind us and come out on the other side more prosperous as a people. 


SHUSTER:  And, just a few minutes from now the president will board Air Force One, again, en route to Arizona, a state hit by home foreclosures to start to and sell his next big proposal: a relief plan for troubled homeowners. 

Keeping a close watch on the president, his policies, and the strategies, Jennifer Loven, White House correspondent for the Associated Press.  She joins us live now from the North Lawn. 

And Jennifer, why don‘t you take us behind the strategy: going to Colorado today, Arizona tomorrow.  Explain what the White House is up to. 

JENNIFER LOVEN, ASSOCIATED PRESS WHITE HOUSE CORRESPONDENT:  Well, David, what they want to do is get him out of town.  Last week he was away from the White House four days.  This week, three.  The reason for that is that the debate here in Washington didn‘t always go quite his way.  It was difficult for him to get bipartisan support to get his message heard in Washington. 

So time-honored presidential tradition, he takes it on the road. 

Signs the Bill in Denver, today, announces the housing component, a big

issue for Americans and American families tomorrow in Phoenix.  It‘s an

important step for him to take.  And he‘s probably going to continue this

by continuing to travel quite a bit in the coming weeks. 

SHUSTER:  Jennifer, as the president was on the road, today, the Dow dropped by almost 4 percent.  How concerned is the White House about at least the reaction that they seem to be getting from Wall Street?  And that is that a lot of investors are still awfully nervous, even as the president signs these bills and introduces these plans?

LOVEN:  That‘s right.  Well, of course, they‘re nervous about it.  They won‘t say that publicly.  But what they want to see is the numbers start to tick up.  What they will say is that they think that will happen in the coming weeks and months. 

So what they‘re doing, both on the stimulus package and on the financial industry bailout restructuring, the housing component, all these steps that they‘re taking, they‘re hoping that the effects will be felt over, time and that over time the president will be judged politically as well as from a policy standpoint on those results, not the one-day results. 

SHUSTER:  It was also so striking, Jennifer, today, to see the president essentially downplaying sort of expectations or playing the expectations game.  Here‘s the president.  I‘ll get your reaction on the other side.  Watch. 


OBAMA:  The road to recovery will not be straight.  We will make progress and there may be some slippage along the way.  It will demand courage and discipline.  It will demand a new sense of responsibility that‘s been missing from Wall Street all the way to Washington.  There will be hazards and reverses. 


SHUSTER:  Jennifer, you cover the president day in and day out.  How important is it for this president to essentially try to manage expectations to keep tamping down anticipation, even on big days like today?

LOVEN:  Well, it‘s very important.  And here‘s one reason for that. 

Today, a day where he signs this bill, this giant package, probably the biggest economic package ever in this country‘s history, he has to—he now owns it.  The debate in Washington, you could say it was—it was a Hill product.  There was back and forth.  It was messy.  People reading the newspapers might see a lot of owners of the bill. 

Now it is his.  He signed it on the road.  He‘s calling it “my plan.”  So he has a political, very large political stake here.  And he‘s admitted this, himself, that if this works or doesn‘t work, really that determines his future as a president, whether he‘s one term or two term.  Potentially whether his party losing seats in Congress.  This is it; this is the game changer.  And it‘s now his.  And so he has to talk in realistic terms. 

He also promised during the campaign and during the transition to talk in terms like that.  To be honest with the American people about how difficult the times are.  But, you know, we have to be honest here, it‘s a politician standby to try to lower expectations, to try to keep people‘s expectations realistic so that, as it plays out they can manage that a little bit better. 

SHUSTER:  Jennifer Loven, White House correspondent for the Associated Press.  Jennifer, great work.  And thanks so much for joining us.  We appreciate it. 

LOVEN:  Delighted to do it.  Thank you, David. 

SHUSTER:  Welcome.

And, today, President Obama highlighted one of marquee features of his stimulus package: $100 billion in aid for education and school reconstruction.  Watch.


OBAMA:  We‘re making the largest investment in reconstruction in our nation‘s history. 

It‘s an investment that will create jobs, building 21st-century classrooms, and libraries and labs for millions of children across America.  It will provide funds to train a new generation of math and science teachers while giving aid to states and school districts to stop teachers from being laid off and education programs from being cut. 


SHUSTER:  Joining us now, the president‘s secretary of education, Arne Duncan.  Welcome. 

ARNE DUNCAN, SECRETARY OF EDUCATION:  Good evening.  Thanks so much for having me.  I appreciate the opportunity. 

SHUSTER:  Sure.  You now have the responsibility of dispersing something like $54 billion intended to keep states from having to lay off teachers in this economy. 

There‘s an important logistical question on the minds of so many school districts tonight.  And that is, will a school district get money directly from your department or will they have to get it from their state capitol?

DUNCAN:  We‘ll work through the states, and we‘ll work in close partnership with the school districts.  And obviously, there‘s a huge sense of urgency.  People are hurting out there. 

There was a recent study that came out that talked about as many as 600,000 -- 600,000 teaching jobs being lost.  We need to avert that catastrophe.  We need to get dramatically better.  We have to keep people working.  We have to keep teachers teaching and keep our students learning. 

So we‘re going to work quick.  We‘re going to work smart, and we‘re going to make sure those districts that need the most help get it. 

SHUSTER:  Having said that, in your own department, the positions of undersecretary, chief of staff, other senior White House—other senior education posts remain, they remain unfilled.  So why shouldn‘t Americans be concerned or skeptical about your department‘s ability to disperse this money as quickly and effectively as you suggest?

DUNCAN:  Well, we have an extraordinary team in place.  Those positions are being filled as we speak.  And we had people working throughout the weekend: Saturday, Sunday, Presidents‘ Day.  People were unbelievably excited. 

This is a time of national crisis.  It‘s a time of education crisis, not just economic crisis.  We see this as a historic opportunity.  And our team is rolling up our sleeves and working, again, extraordinarily hard to get this out as quickly and efficiently as possible. 

SHUSTER:  Are you concerned at all about the—perhaps having unsustainable funding?  In other words, there‘s so much money that‘s going to go to some of these school districts but, again, this is perhaps just a sort of one-time bill. 

At a certain point, whether it‘s a year from now or two years from now, aren‘t some of these school districts still, in some of these states, going to have to cut back?  I mean, at a certain point, don‘t they still have to make some tough choices if the economy does not improve?

DUNCAN:  Absolutely.  But again, the reverse is just to do nothing now and just let that catastrophe happen.  So we‘ll deal with that down the road. 

Right now, we have to save hundreds of thousands of jobs.  We want to get many, many more students going on to college.  There‘s a huge amount of money here for increase in Pell Grants.  We want to push a reform agenda. 

And the long-term challenges shouldn‘t prevent us from working hard now.  We need to absolutely attack these problems as quickly as we can.  And the best thing we can do is to keep our teachers teaching, keep our students learning, save those jobs around the country.  People are really hurting out there.  They need help, and they need help now. 

SHUSTER:  The key Bush-era education program, No Child Left Behind, do you consider it a success or a failure?  And what changes will you be making?  And how do you implement them in the midst of all of this?

DUNCAN:  Well, let me sort of walk through our timing.  First of all, we‘ve been pushing very, very hard to get the stimulus package passed.  We‘re so proud of what the president and Congress did.  This is a historic opportunity. 

Now, we move into the implementation stage.  Again, we want to implement this impeccably. 

As we go forward, I want to get out, travel the country, listen and learn.  There are parts of NCLB that work very well.  There are parts that we want to improve on.  We‘re just going to have a really simple strategy.  What worked, we want to build upon.  What didn‘t work, we‘re going to fix it. 

But there‘s lots of smart folks out there.  And I want to get out and travel the country, listen to students, listen to parents, listen to teachers, listen to principals.  And we‘ll come back late in the year with reauthorization. 

SHUSTER:  Finally, Margaret Spellings, your predecessor, told “The New York Times,” today, “It‘s hard to imagine moving that much money that quickly.  It‘s never been done before.  And as much confidence I have in Arne Duncan, there‘s an awesome opportunity for slippage with that much money moving through the meat grinder.” 

Are you the least bit nervous about this?

DUNCAN:  I‘m not.  Again, people are working extraordinarily hard.  I‘m sure we may make—make a mistake here and there.  But people see this as what—for what it is, which is a once in a lifetime opportunity to make a difference in the lives of our children and save off disaster.  People couldn‘t be more motivated and inspired to do the right thing and to do this absolutely as perfectly as we can. 

SHUSTER:  Mr. Duncan, the secretary of education.  Mr. Duncan, good of you to join us tonight.  We appreciate it. 

DUNCAN:  Thanks for having me.  Have a good night, now. 


Up next on 1600 PENNSYLVANIA AVENUE, our colleagues in the mainstream media have come up with a list of winners and losers in the stimulus debate.  And the winners list includes Republican House Whip Eric Cantor.  Some powerful voices in the blogosphere say the logic is ridiculous and that the Washington media is insane. 

Plus, is Dick Cheney afraid that Scooter Libby is thinking of blowing the whistle in a book or elsewhere?  Cheney is again trying to make sure Scooter fears how angry Dick is at George W. over the lack of a pardon. 

Later, the story from Senator Burris has changed again in Blagogate. 

We will tell you what he‘s saying now.

Alex Rodriguez tried to apologize today for taking performance-enhancing drugs. 

Remember the war in Iraq?  Several members of Congress seem to have forgotten.  That‘s our “Hypocrisy Watch.”

And we are taking your questions during this hour over Twitter.  Just go to  All ahead on 1600.


SHUSTER:  The blogosphere was already on fire for much of the stimulus analysis by the mainstream media.  And then, some of my mainstream colleagues came up with a “Winners and Losers” list.  Ouch.


SHUSTER:  Welcome back to 1600. 

In his first four weeks in office, President Obama successfully got his nearly $800 billion economic stimulus package passed.  And so his job approval ratings stay comfortably in the 60s.

But the headlines are not about the new president‘s successful legislative coup.  They‘re focused on the GOP‘s unsuccessful opposition to it.  Headlines like “The GOP Finds Its Voice”; “The GOP Unites and Takes a Stands for Fiscal Conservatism.” 

Furthermore, the mainstream media has produced a list of winners and losers that seem strange when viewed beyond the beltway.  According to several organizations, including MSNBC, the winners include the Republican Party, for its unity; Eric Cantor, the House Republican whip, for raising his profile; and Democratic Senate Majority Leader, Harry Reid, for getting Republican senators on board in his chamber, at least of them. 

The losers include House Speaker Nancy Pelosi, despite her having played a key role in writing the bill that ultimately got passed. 

Joining us now is Jane Hamsher, founder of, an influential voice on the Net. 

And Jane, first of all, Nancy Pelosi, she didn‘t get a single Republican on board.  So why not describe that as a loss?

JANE HAMSHER, FOUNDER, FIREDOGLAKE.COM:  Well, I guess you could if you were looking at this as a game akin to baseball.  Or hockey. 

But if you‘re an average American, and you‘re looking at a bad economy, your hours being cut back, the inability to pay your mortgage, you‘re more than likely to look at her as a hero for having done something that really helped you. 

So the polling that was done by Research 2000, on behalf of Daily Kos, indicates that Pelosi‘s popularity actually surged as a result of what she did with the stimulus bill.  Her approval ratings since the first of the year have gone up five points.

Whereas Mitch McConnell and John Boehner‘s approval rating have gone down by 11 points.  And the congressional Republicans have also gone down by ten points. 

So the view that she is a loser and the Republicans are winners for sticking together is a rather insular view of people who like to cover process over substance. 

SHUSTER:  Well, speaking of—let‘s put up the numbers that you mentioned from that Research 2000 poll.  Nancy Pelosi favorable, unfavorable 42-49.  Harry Reid, it‘s actually 32 favorable, 42 unfavorable. 

When you look at the Republicans, John Boehner, 18 favorable, 55 unfavorable.  Mitch McConnell, the Senate Republican leader, 22 and 50. 

And then, of course, there‘s this issue of Eric Cantor.  I want to play something that he said on CBS, and we‘ll talk about him on the other side.  Watch.


UNIDENTIFIED MALE:  Ninety-three percent of America‘s families are current on their mortgages and, frankly, are out there wondering, you know, who‘s going to pay for this continued succession of bailouts?

Homeowners right now are suffering under skyrocketing property taxes.  And if we put the bill for $50 billion plus on top of all the bills that families have right now, you may very well be set to encourage more foreclosures.  We cannot continue to pay for the kind of things that this administration thinks that we can. 

Now, Jane, clearly Eric Cantor raised his profile, whether you agree with him or not.  Why do you think the media cares about somebody‘s profile and whether it‘s high or not?

HAMSHER:  Well, that‘s—those stories are easy to cover.  They‘re - it‘s easier to cover process than it is to actually dig into substance and talk about what‘s actually going on. 

And the mortgage crisis is very complicated.  And obviously, Eric Cantor doesn‘t understand it.  Because if he thinks the $50 billion that is scheduled to help mortgage owners, homeowners with their mortgages is coming out of property taxes, he has no business being in a leadership box in the House of Representatives.  It‘s not. 

They are looking to the TARP, too, in order to take that money from. 

He‘s just wrong.  But I guess he makes good copy. 

SHUSTER:  And do you think, Jane, maybe the media is just lazy?  And believe me, I agree with you on that. 

HAMSHER:  There‘s that.  There‘s that, too.  I mean, you know, you have to fill up space somehow.  But we like to think you as a hybrid MSN/blogger since you‘ve been with us since the Libby trial, David. 

SHUSTER:  Yes.  We certainly—we certainly like to think that some of us do not belong to that lazy category. 

In any case, Jane Hamsher from FireDog.  Jane, great stuff.  An important issue that you raise and one that people are justifiably upset on. 

Jane Hamsher from  Thanks, Jane. 

HAMSHER:  Thanks, David. 

SHUSTER:  Coming up next on 1600 PENNSYLVANIA AVENUE, Illinois Senator Roland Burris changed the story again today.  Now it appears he did try to help Governor Blagojevich after all.  In Illinois it‘s going from bad to worse. 

Plus, this is D-Day for the U.S. automakers.  GM and Chrysler racing to finish the restructuring plans to present to the White House.  Will it be bailout or bankruptcy?

And coming up next on “Hypocrisy Watch,” some of the House Republicans and the forgotten war in Iraq.  All ahead on 1600.


SHUSTER:  Welcome back.  And here‘s a look at what is on our radar today. 

First the Securities and Exchange Commission has now charged Houston billionaire Allen Stanford with massive ongoing fraud in the sale of $8 billion in high-yielding certificates of deposit.  Federal agents swarmed the offices of the cricket-loving Stanford, whose company consists of himself, his father, and his college roommate, among others. 

Senator Roland Burris appears determined to talk his way out of trouble in the Blagojevich scandal.  And he‘s doing an increasingly lousy job at that. 

First, Burris—first, Burris denied in Blago‘s impeachment trial any contact with Blago‘s family.  But last week, Burris admitted he actually did have contacts, though he denied doing anything to help the family.

And last night, Burris admitted he actually did try to raise money for Blagojevich after being selected for the Senate seat.  Today Senator Burris insisted to reporters there was nothing wrong with any of this. 


SEN. RONALD BURRIS (D), ILLINOIS:  There was never any inappropriate conversation between me and anyone else.  And I will answer any and all questions to get that point across to keep my faith with the citizens of Illinois. 


SHUSTER:  And speaking of questions, Burris then refused to take any. 


Traveling in Japan today, Secretary of State Hillary Clinton warned North Korea against testing a ballistic missile and called on the regime to follow through on comments to—on commitments to abandon its nuclear program. 


HILLARY CLINTON, SECRETARY OF STATE:  The possible missile launch that North Korea is talking about would be very unhelpful in moving our relationship forward. 


SHUSTER:  After Clinton‘s warning, North Korea said the United States is planning a military attack and warned the United States of destruction. 

In the ongoing debate over President Obama‘s economic recovery plan, congressional Republicans have been complaining about the spending and about the process.  And that takes us to tonight‘s “Hypocrisy Watch.”

First, here‘s the Republican House leadership just before the floor vote. 


SEN. JOHN BOEHNER ®, MINORITY LEADER:  Bad process leads to bad policy.  And that‘s what we have here, in my view.  Bad policy that will drive up—drive up the debt and put all of this cost on the back of our kids and their grandkids and their kids. 

UNIDENTIFIED MALE:  The Bill we‘re voting on today represents a fundamental dereliction of duty. 


SHUSTER:  A fundamental dereliction of duty?  A bad process driving up the debt on our kids?  Well, that‘s interesting, because the same Republican leadership in Congress has had no such concerns when it comes to funding for the war in Iraq. 

The funding bills didn‘t go through the normal appropriations process.  The money wasn‘t included in the budget.  And the financial debt on future generations will be over a trillion dollars. 

Did the Republican leadership ever complain about the war funding process?  No. 

But it gets worse.  The U.S. inspector general for Iraq reconstruction is now investigating money that remains unaccounted for, money that was supposed to go towards rebuilding and military equipment.  How much money:

$125 billion.  That‘s right, up to $125 billion unaccounted for.

Are the Republicans firing off press releases or speaking out on the House floor about this?  Nope.  There‘s only silence from Congressman Boehner, Cantor, and most of their Republican colleagues. 

Congressmen, when you complain about wasteful government spending in the United States and don‘t say a word about our government‘s wasteful spending in Iraq, that‘s hypocrisy, and it‘s wrong. 

GM and Chrysler are getting ready to send the restructuring plans to the White House.  It‘s up to President Obama to decide if it‘s bailout or bankruptcy.  How could this affect the local economy?  We‘ll ask the mayor of Lansing, Michigan, Virg Bernero. 

Coming up, Republicans say President Obama did not reach out in the economic stimulus discussions.  So why, then, did they clamber for his autograph at those meetings and White House parties?  We‘ll be right back on 1600. 


SHUSTER:  Welcome back to 1600 PENSYLVANIA AVENUE. This is deadline day for U.S. automakers receiving federal bailout money to submit their plans to become viable companies to the Obama White House. It‘s a tall and painful order. GM said today it may need a total of $30 billion in government loans to survive; that‘s $16 billion on top of the money it‘s already received. GM said just last week it would cut another 10,000 salaried jobs, while Chrysler is taking down clocks in order to cut corners.

Want to bring in now someone who is acutely affected by what‘s happening in the auto industry, the mayor of Lansing, Michigan, Mayor Virg Bernero.

Mayor Bernero, we‘re keeping an eye on the GM news conference. But your reaction to GM saying it needs more than double the original amount?

MAYOR VIRG BERNERO, LANSING, MICH.:  Look, we‘re on pins and needles here in Lansing, Michigan, and in car towns around this country. We‘ve not waving the white flag.  We‘ve got good, decent, hard-working American here, some of the most productive in the world. You know, we made the award-winning Cadillac CTS in here in Lansing. It was the “Motor Trend” Car of the Year last year. We know we can produce great vehicles. We know we can produce the leaner, greener vehicles of the future. We think that those plug-in vehicles, those electric vehicles, those hybrid vehicles should be made in places like Lansing, Michigan, and other parts of the United States for export to the world.

That‘s going to take a strategic partnership. That‘s going to take a new way at of looking at things, David.

You know, as you‘ve talked about, you know, we sent billions to Wall Street and we‘re getting ready, I guess, to send billions more to the banks, basically with no questions asked. This is an industry of real people, making real products in a very competitive environment. It is an industry worthy of our investment. They‘ve got a great track record, a great heritage, and we think a great future. But it‘s going to take some more work and some commitment. I think a strategic partnership from the federal government.

SHUSTER:  Well, Mayor, why has it taken so long for them to make these terrific products?

BERNERO:  Well, they‘re in transition. As I say, you know, the “Motor Trend” Car of the Year, the Cadillac CTS, was made last year. They make more hybrid vehicles. General Motors makes more hybrid vehicles than any other company on the face of the planet. But, look, this recession, you know this walloping blow from Wall Street, this credit crunch has basically frozen everything. It has put them in a very difficult position.

This was something brought to you by Wall Street. And now I see us punishing the working person, throwing them under the bus, while still there‘s very little to no accountability for Wall Street and the banks. I think there‘s a double standard at work here. This is an industry that produces things, that make things. They put the P in GDP, you know, gross domestic product. We‘ve got to have a product.  We‘ve got to produce something. If nothing else, to pay off this stimulus package which I support. I think President Obama‘s done a wonderful job. But ultimately, this has to be paid back and has to be paid back by growth, economic growth. Well, the economic growth is in products, great products like American cars that could be exported to the world.

SHUSTER:  There is every indication that automakers certainly are taking it a little more seriously in terms of trying to cut back on their spending and on their ways than the Wall Street bankers did. I want to show our viewers what Chrysler is doing as it fights for its life. We mentioned Chrysler taking down its clocks. It has removed most clocks at headquarters. It has reduced snow plows in parking lots. It has reduced hallway temperatures from 72 to 68. It has removed half the light bulbs at headquarters for a total savings estimated just under $1 million.

How depressing is this right now?

BERNERO:  I‘m glad you brought that up.  You know, I don‘t find it depressing. These are tough times. We‘re tightening our belts at Lansing City Hall. We don‘t expect taxpayers to pay more. We‘re not raising taxes.  We‘re not spending down our reserve. The average family is tightening their belt, we have to tighten our belts. I think it‘s heartening to see the Big Three are doing that. As you said, Wall Street, they don‘t know anything about tightening their belt. It‘s incredible. They‘re at the public trough, taking public money, and it‘s more, more, more. There is a double standard.  Their attitude is let them eat cake. They have no respect for the working person. They don‘t care if a product is made here, or Malaysia or China, it‘s all these same because they make money off of it.

We need to put the working person first in this country.  You know, David, who‘s looking out for the American worker? That‘s what I want to know.  I know China, they look out after their people. And Korea they look out after their people. Who‘s looking out after the American worker? We need change in these trade laws. We need fair trade, not free trade. We‘ve been suffering under free trade agreements. I tell you there has been an unholy alliance between Washington and Wall Street.  And the American workers has picked up the tab. You talk about removing clocks, the American worker has their clocks cleaned by Wall Street and Washington. A dynamic duo and they‘ve paid a heavy toll by the American worker.

SHUSTER:  Mayor Virg Bernero, mayor of Lansing, Michigan.

Mayor, good of you to join us tonight.  We appreciate it.

BERNERO:  Thank you.

SHUSTER:  The fate of the U.S. auto industry is just one of the challenges President Obama will have to deal with in the near future. More, let‘s bring in our panel now. Kevin Madden, is a former senior adviser to Mitt Romney‘s presidential campaign and a managing director at the Glover Park Group; Emily Heil writes the “Heard on the Hill” column for “Roll Call”, Jennifer Palmeiri is with the Center for American Progress.

Jennifer, let‘s start with you. Is this a difficult political call for the Obama White House, in terms of how they try to deal with the automakers?

JENNIFER PALMIERI, CTR. FOR AMERICAN PROGRESS:  I think that they‘re probably right to not do another czar.  There seems to be a lot of czars in the administration. I don‘t know that you need another silo. What you really need is the Treasury secretary and the NEC director focusing on the way Geithner and Summers, has said they‘re going to do.

It‘s a very tricky issue and I think it sort of portends future debates that they‘re going to have to deal with like health care, which seems like they maybe at least giving us a good indication or where they‘re going with health care, as soon as next week when the president gives his joint session.

I think that it‘s a tricky issue, but I think that, you know, it‘s going to—that they will see what comes out this afternoon. But I think there is a general sense you‘ve got to do something to keep these guys going.

SHUSTER:  Kevin Madden, what‘s the Republican view on the automakers?  And also your view as far as the Obama administration essentially changing from a car czar to essentially dealing with this by committee? There were some people here in town who thought this was the Obama White House essentially punting for a while. What‘s your view?

KEVIN MADDEN, MANAGING DIR., GLOVER PARK GROUP:  I think there‘s universal agreement among Republicans and Democrats and industry observers that this is a big test for the Obama administration and congressional Democrats.

In order to reach long-term viability there are going to have to be concessions by the UAW. I think you see bondholders and other stakeholders in this process take many steps toward deleveraging the industry so that there are - there‘s a greater structure toward long-term viability. Now it‘s up to the UAW.  And one of the big tests for the Obama administration as well as congressional Democrats is, are they going to confront what is essentially a political constituency of theirs?  And are they going to make the hard decisions that we‘re going to need in order to move toward long-term viability?

Because if we‘re going to have strong auto jobs and a strong auto industry, today, tomorrow, the future, we‘re going to have to look toward long-term viability rather than quick fixes.

SHUSTER:  And, Emily, as far as the supporters and detractors of the auto industry having their voices heard with the administration. You‘re looking at the White House today signs this big stimulus plan. Tomorrow, rolls out a foreclosure plan. There are so many issues on their plate. Do you get the sense, that for example, members of Congress who have a strong position either way on the automakers are able to essentially do any lobbying on this, with this White House right now?

EMILY HEIL, COLUMNIST, “ROLL CALL”:  Well, they‘re certainly going to try. There are going to be a lot of lawmakers really bending the ear of the Obama administration. They‘re going to - like you said - they‘re going to have to get in line. Because there are a lot of different issues that the administration is confronting right now; a lot of people with their hands out. And so they‘re going to really have to take a number and get in line.  I think they‘re going to have to deal with a little bit of bailout fatigue.

I know we‘ve been talking about that a lot. I think that‘s definitely had much more time to take effect. It‘s going to be even stronger, I think, by the time this March 31st deadline comes around, when a decision is going to have to be made. There‘s going to be a lot more sentiment in the public about just really questioning whether these bailouts are worth it?  Whether they‘re going to work?  How should they be directed?  How should they be overseen?  Those are a lot of questions that the administration is going to have to deal with. But they‘re going to hear a lot with a lot of members of Congress with repeating interests and often contradictory ones.

SHUSTER:  Jennifer, do you think the timing, at least, is beneficial right now to the Obama White House given that there is so much going on?  They are, if they want, politically, they do want to punt this, which it appears they‘re doing. It doesn‘t seem like they‘re going to be - that anybody is really going to complain that much about it.

PALMIERI:  Right.  I don‘t think you can argue that it‘s not as if they don‘t, you know, it‘s not as if they‘re not acting on problems.  They‘re doing stimulus today and housing tomorrow and they announced new troops going to Afghanistan. Secretary Clinton is in Asia and next week she‘s addressing the joint session of Congress.  It‘s I think - Emily spoke just a little bit, I think it‘s hard for people to even - for people on the Hill to even get attention.  I mean, the press will focus on it today but I think they‘ll probably be off of it tomorrow and on to housing.

So it is—I think that they will be able to get through this and on to the next problem, which—of which there are many.

SHUSTER:  By the way, there are some Twitter questions coming in for our panel. We will get to that next.

Also ahead, new details about the presidential library for the man who just moved out of 1600 Pennsylvania Avenue. Why it‘s being compared to a baking cake.

Plus, President Obama‘s economic stimulus bill is now law. And he can specifically thank three senate Republicans for making it happen. Whatever happened to all that talk of bipartisanship though?


SHUSTER:  Welcome back to 1600. Now that the stimulus bill has been passed and signed into law with the grand total of three Republican Senate votes the GOP has a new set of talking points. It‘s blaming the goose egg it handed President Obama in the House on Obama. Here‘s Karl Rove on Hannity last night.


KARL ROVE, REPUBLICAN STRATEGIST:  He was shown not to be really serious about bipartisan. For him the definition of bipartisan was to come into the White House, I‘ll give you a cup of coffee, but I‘ll tell you that I won, and I‘m not going to listen seriously to your suggestion.


SHUSTER:  But as the “Huffington Post” Sam Stein points out, a picture is worth a thousand words. And the White House is fighting back with a slide show that documents Obama‘s attempts to reach across the aisle. Back with us to talk about it is our political panel, Kevin Madden, Emily Heil and Jennifer Palmeiri.

Let‘s take at, Kevin, I want to start with you, at some of the pictures the White House  included in the slide show. First, January 27, 2009, on Capitol Hill, the president listens to a question from a member of the House Republican Caucus. After the meeting, he gave some brief remarks.  House Republicans, the next one, House Republicans surround the president after the meeting, many of them were seeking his autograph. Every House Republican eventually voted against the bill.

January 31, to the Annual Alfalfa Club Dinner on January 31st; it was a social affair.  The president took time out to talk with Senate Minority Leader Mitch McConnell.  Picture number four, in the White House family theater, the president serves cookies to his guests during the Super Bowl.  Many of these guests were congressmen, and senators and their families.

Kevin, do you agree the president was not reaching out?


MADDEN:  Wow. I mean, what are we going to show next?  Like a picture of the Loch Ness monster?  I mean, come on, look.

SHUSTER:  We‘ve got pictures of you, Kevin.

MADDEN:  Yeah, I‘m sure.  Look, I‘m reminded of the movie “A Few Good Men” where Jack Nicholson is on the stand, he‘s being grilled, and he says, “Foam locks and footlockers?  That‘s what you got?”  You know, that‘s all you have to base your case on?

Look, you know, I always call this kissing through a screen door. If you can‘t go into the White House, take a picture with the president, and then vote no against him based on principle you‘re probably in the wrong business. I think that what you saw from the White House, and I think Karl Rove is exactly right, what we saw was more cosmetic overtures toward Republicans from the White House. There was really not a whole lot of substance to the bipartisan outreach. There wasn‘t a chance for—there wasn‘t instances where President Obama was calling Nancy Reid and David Obey -I‘m sorry, Nancy Pelosi, Harry Reid and David Obey, and saying, look, these guys have some valid points on some of the wasteful spending here.  Let‘s sit down and hammer out a compromise.  Instead it had more to do with cocktail parties and the Super Bowl down at the White House than it did on substantive bipartisan outreach.

SHUSTER:  And yet, as I‘m hearing, as somebody just pointed out on Twitter, what about the $300 billion in tax cuts?  Was that not a concession?

MADDEN:  Sure. No, that‘s one part. But if you have a bill that‘s one-third tax cuts and two-thirds of it is wasteful spending that‘s essentially growing the mandatory spending side of government, there‘s going to be financial liabilities there for generations to come, that is not going to get a vote. I think if there were efforts to go out and cut out another third of that bill which was wasteful spending, growing the bureaucracy, essentially an effort by Democrats, one in a 25-year chance to get go out there and get that kind of spending for social programs, that they had always been drooling over, there might have been more Republican votes. You might have had a chance to really claim that this was a bipartisan accomplishment.

SHUSTER:  Jennifer?

MADDEN:  Instead, this is a partisan bill that wasn‘t really solution oriented.

PALMIERI:  Yeah, I have so much to say.


MADDEN:  Come on, Jennifer, jump in.

PALMIERI:  I mean, I just have so much to say.  Well, first of all, there is a lot of things that went in - as David pointed out, it‘s -you know—people are, it‘s people that commented on Twitter pointed out.  There were a lot of things that went into the bill that were things that Republicans supported, the repeal of the AMT, for example. The were a number of tax cuts that went in, that the president put in early on as an overture to Republicans.

There was bipartisan support for this bill, because there were a number of republican governors who did support it.  I just think that the House Republicans Caucus made a decision they were just going to vote no.  I‘m not sure why they‘re so proud of themselves that they did and why they think it‘s so great that 60 -that they got the caucus -the Republican Caucus to vote against the bill that 60 percent of Americans support.

So I think they just got a little too caught up in their own thinking about what it meant to beat the president, as opposed to doing what‘s actually in the country‘s best interest and in their best interest. They might want to take a look at their own actions here and realize, gee, if it‘s really important for me to get an autograph from Barack Obama, perhaps the rest of the American people seem to think the president is doing a good job. Maybe it‘s not so smart of me to vote against the stimulus package.

SHUSTER:  Jennifer, Emily, and Kevin, stick around.  We‘ve got a lot more ahead. But we‘re going to take a quick detour now and take a look at what‘s going on inside our “Briefing Room.”

And remember this from yesterday?




SHUSTER:  Well, there will be no more economic briefings from this guy. Now he‘s Japan‘s former finance minister. Yesterday we told you there were calls for him to step down because of this news conference where he appeared drunk. Well, he resigned today. And apologized for quote, “causing a commotion through not taking enough care of my health.”  He was replaced by Japan‘s economic minister.

And you know it was just a matter of time, a vendor at the toy fair in New York City has a smash hit on his hands, literally. It‘s called the Smash Me Bernie Doll named after alleged scammer, Bernie Madoff. The doll is wearing a red suit, carries a pitch fork, and gold hammer. The toy sells for just under 100 bucks. But if you need a stress release, you might call it a good investment.

George W. Bush‘s Presidential Library‘s beginning to take shape. A Texas-sized shape. Actually more like a Wal-Mart super center. The library at Southern Methodist University has evolved from separate buildings into a single multistory complex, with a policy institute.  And nearly two-thirds bigger than first proposed. As one official put it, it‘s like a cake being baked in the oven. It‘s still changing. Based on new designed, the George W. Bush Presidential Library will be now be an estimated 207,000 square feet. That would be twice as large as his father‘s library. 

Coming up next on 1600 PENNSYLVANIA AVENUE, baseball slugger Alex Rodriguez breaks his silence about his use of performance-enhancing drugs.


ALEX RODRIGUEZ, NEW YORK YANKEES:  I knew we weren‘t taking Tic Tacs.


SHUSTER:  Will his fans and teammates forgive him? Or is the game over for A-Rod? Our panel weighs in, and your Twitter comments ahead.


SHUSTER:  Welcome back to 1600.  It was eight days ago when President Obama spoke out about the latest revelation of steroids in Major League Baseball, this time involving Yankee star Alex Rodriguez. The president, at the time, called the news depressing. Anybody who watched Alex Rodriguez today may be even more depressed. In a news conference, Rodriguez contradicted himself, he used some very twisted logic, and apologized by saying this has been a rough two weeks. He blamed his drug use on being naive and stupid.


ALEX RODRIGUEZ, YANKEES BASEBALL PLAYER:  I knew we weren‘t taking Tic Tacs. You know? I knew that it was - potentially, something that perhaps was wrong. But I really didn‘t get into the investigation, perhaps, like I would have. I mean, I wouldn‘t imagine thinking of doing something like that today, obviously. It‘s a different world, it‘s a different culture.


SHUSTER:  Also today, the Associated Press reported that federal prosecutors questioned Rodriguez‘s teammate, Andy Pettitte last week of whether Roger Clemens lied to Congress when he denied taking performance-enhancing drugs.

Let‘s welcome back our panel, Kevin, Emily, and Jennifer.

Emily, at a time of distress in so many parts of this country, it‘s bad enough that Alex Rodriguez was using steroids, even worse when he gives a horrific news conference like he gave today. What do you make of it all, and the impact on the national mood?

HEIL:  Gosh, you know, I‘m going to have to take a pass on this. I know so little about sports. All I know about A-Rod, honestly, is that he dated Madonna, because I read it in “US Weekly.”  So, I‘m going to pass this one along to those of you who read “Sports Illustrated” and not “US Weekly”.

SHUSTER:  Jennifer Palmeiri, you want to take a shot at this?


PALMIERI:  I should probably take the same route as Emily. But I have to say, I think that I was never a big A-Rod fan. Last week I thought he handled himself pretty well. I thought that being—and doing a press conference and having that type of transparency and being willing to answer questions that seemed like a good idea. I thought that perhaps the people advising him on his PR strategy are little better than people advising, say, for example, Governor Blagojevich.

But if you are going to do this, you need to be—for example, I would pay people advising A-Rod more money. If you‘re going to do this you need to be more prepared for it. I think that, you know, this just in, baseball star uses steroids, and had lied about it a few years ago? I don‘t know that it has a huge impact on the, you know, on baseball even, let alone the national mood once we have lots of other problems.

SHUSTER:  I have a feeling if Kevin Madden has been advising A-Rod, A-Rod would have done a heck a lot better today. Kevin, your thoughts?


PALMIERI:  Absolutely.

MADDEN:  Thank you.

Well, look, I think that - you know, baseball players like A-Rod, they suffer from high expectations. These are guys who get paid millions of dollars to hit a round ball with a round bat. We expect a little too much out of them. The one message I thought helped A-Rod acquit himself pretty well today was when he said baseball is bigger than Alex Rodriguez. That‘s true. This is a national pastime. We have to get back to cleaning it up. I think when Alex Rodriguez comes forward and offers a mea culpa, pledges to help clean up the game, that‘s the probably best indication we‘re one step closer to getting back to our national pastime, having a cleaner reputation than it has had in past years.

SHUSTER:  All right.  Now, back to the Twitter questions. Let‘s get back to the issue of bipartisan. We tried to A-rod, everybody.

Kevin, one of writer on Twitter wants to know, bipartisanship does not mean the losing side gets half. Your reaction to that?

MADDEN:  Look, I think that‘s a good point. At the end of the day, you know, elections have consequences. We have to remember that the bar and the standard here was set by the Obama administration. He spent a year talking about bipartisanship, going and changing the tone of Washington. And I think that having said that, I think there were genuine expectations from Republicans that he was going to reach across the aisle, and work with Republicans on substantive issues.

Instead, what we‘ve seen is President Obama and some of the congressional Democrats expect a genuflection from Republicans to those election results. Instead, I think there was a robust debate. The Democrats won. Republicans didn‘t do as well as we hoped. We didn‘t lose. But there are genuine efforts by Republicans to try to reach out, and try to perfect legislation. And that we have to get back to that. Because the Obama administration is one who talked about it for a year and a half.

SHUSTER:  Emily, here‘s another question. How did Republicans treat Democrats for eight years?

HEIL:  It‘s interesting when I hear the moaning from Republicans about how this is not how bipartisanship works. It‘s a lot how bipartisanship worked for many, many years. Whether it was Republicans in control or whether it was Democrats. For as long as I covered the Senate, when the margins were really tight, this is how Republicans did it, this is how Democrats did it. You find a couple folks from the other side of the aisle that you think you can do business with, bring them into the room, and you cut a deal and you walk out and you call it a bipartisan bill.

That‘s what bipartisanship means when it comes to the Senate. There could have been more input, for sure, but in some ways this is meeting the definition of bipartisanship.

SHUSTER:  Emily Heil, Kevin Madden, Jennifer Palmeiri. Thank you all very much. We appreciate it.

That is the view from 1600 PENNSYLVANIA AVENUE tonight. I‘m David Shuster. Remember you can go to Twitter us on I‘m David Shuster.  “Hardball” starts right now.




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