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Wednesday, Nov. 17th, 2010

Read the transcript to the Wednesday show

Guest Host: Chris Hayes

Guests: Rob Andrews, Alan Grayson, Tim Ryan, Steve Ellis, Lisa Murkowski,

Bubba Grimsley, Alex Wagner

CHRIS HAYES, MSNBC GUEST HOST:  I‘m Chris Hayes, in for Lawrence O‘Donnell.

In 2009, voters wanted change and they got President Obama.  In November, those who actually voted said they wanted more change.  And so, now, Republicans are in charge of the House.  That‘s pretty much where the change stops.



CHUCK TODD, MSNBC HOST:  Huge change election.  Everybody wants change.

REP. STENY HOYER (D), MARYLAND:  This was a difficult election to say the least.

HAYES (voice-over):  After the ugly campaigning, a triumphant GOP and the Tea Party revolutionaries.

SENATOR-ELECT RAND PAUL ®, KENTUCKY:  We‘ve come to take our government back.

HAYES:  Democrats and Republicans decide who will lead their parties in Congress.

UNIDENTIFIED MALE:  I‘m proud to announce the leadership for the 112th Congress, our great leader, Nancy Pelosi.

TODD:  Joining Reid, McConnell and Boehner.

ANNOUNCER:  Ladies and gentlemen, the next speaker of the House, John Boehner.


TODD:  Well, look at that.

HAYES:  Democrats stick by Nancy Pelosi by a three to one margin.

REPORTER:  Why are you the best person?

REP. NANCY PELOSI (D), CALIFORNIA:  Because I‘m an effective leader.

HAYES:  And in spite of her being Republican targeted number one—

PELOSI:  A dollar bill, $75 million spent against one person, and I‘d like to see what your ratings would be.

HAYES:  And instead of change from the Republicans?

UNIDENTIFIED FEMALE:  President Obama‘s bipartisan meeting to talk about tax cuts and other issues has been postponed.  White House said that Mitch McConnell and John Boehner requested the delay.

ANDREA MITCHELL, MSNBC HOST:  So, what happened?  You guys are just too busy tomorrow?

UNIDENTIFIED MALE:  Speaker-elect Boehner, you may want to check with him on that.

UNIDENTIFIED FEMALE:  Are you serious?

UNIDENTIFIED MALE:  If the president invites you, you postpone everything else and you get there.

TODD:  Political risk here is all on the Republican side.

JOE SCARBOROUGH, MSNBC HOST:  Stay humble.  You got no reason to be cocky.

REP. CHRIS VAN HOLLEN (D), MARYLAND:  For the first time now, our Republican colleagues are going to share in the responsibility.


HAYES:  Good evening from New York.  I‘m Chris Hayes, filling in for Lawrence O‘Donnell.

Despite heavy losses in the midterm elections, House Democrats voted today to stick with Speaker Nancy Pelosi as their party‘s leader.


PELOSI: I‘m proud to be part of this leadership team.  Our consensus is that we go out there listening to the American people.  It‘s about job, about reducing the deficits and it‘s about fighting for the middle class.  So, I look forward to doing that for this great leadership team.


HAYES:  Pelosi won the House Democratic leadership by a secret ballot vote of 150 to 43, overcoming a challenge, if you could call it that, from North Carolina conservative Blue Dog Democrat Heath Shuler.


REP. HEATH SHULER (D), NORTH CAROLINA:  It wasn‘t about our—you know, winning or losing this race.  It was about truly making a difference within our caucus, to ensure that the moderates are heard within the caucus and that we have a seat at the table.  And I think that‘s what most of America would ask, that our caucus move in that direction.


HAYES:  On the Republican side, members elected John Boehner as House speaker and Eric Cantor as majority leader when the next Congress gets sworn in in January.  The White House had hoped to host a bipartisan meeting of congressional leaders tomorrow, but had to postpone it until November 30th because Republicans said they had a scheduling conflict.

Joining me now are Congressman Rob Andrews and Congressman Alan Grayson.

Gentlemen, thank you so much for being on tonight.

REP. ROB ANDREWS (D), NEW JERSEY:  Good evening.

HAYES:  Congressman Andrews, I want to ask you about this leadership vote.  There was an earlier vote to postpone the leadership vote.  And that came out with 68 people voting to postpone.  It might symbolize that there‘s a bit more dissatisfaction with the leadership team than was reflected in the final vote.  What do you think about that?

ANDREWS:  Well, I think some people want to take more time, but I think what the American people want us to do is talk about getting them back to work, getting through this housing foreclosure crisis.  I don‘t think they want us to spend another two weeks arguing with each other about political events in Washington.  So, most of us felt strongly, let‘s choose our leaders, let‘s get back to work, putting the country back to work.

HAYES:  Congressman Andrews just mentioned the foreclosure crisis, which we‘re going to be talking about a bit later on the show.  Congressman Grayson, what kind of action steps do you want to be taken just to deal with the foreclosure crisis?  I know it‘s been particularly bad in your district and obviously in your home state of Florida.

REP. ALAN GRAYSON (D), FLORIDA:  Well, that‘s right.  Sixty-eight percent of the people in Orlando, which I represent, owe more than they own on their homes, and I‘m one of them.  My mortgage is higher than the value of my home.

In a situation like that, people are looking for recovery in the mortgage market.  One thing that has to happen is that we have to continue to have the government underwrite mortgages.  The government has been underwriting 95 percent of all mortgages in the past two years in the United States.  The Republicans want to take government out of that business, which means that there will be no underwriting of mortgages in the United States.

Secondly, we‘re looking for ways to spur the housing market.  So, for instance, we can bring back the housing tax credit which expired.  And we can do other things like that, to encourage and coax the market back to life.

HAYES:  You know, it‘s interesting—there‘s some polling numbers I want to give you, gentlemen, because I think it reflects on where the public is, vis-a-vis Congress, which is one of the least trusted institutions in the country.  There‘s a new NBC/”Wall Street Journal” poll finding that just 22 percent of you believe there will be real change, 73 percent believe there will be some, or not that at all.  And I think what reflect is a sense, a kind of depressing sense that the status quo in Washington, particularly among the way Congress works, is the thing that rules in the end.

How do you—I mean, do you think that‘s what those numbers show?  And how do you convince people that is not the case?

ANDREWS:  I think you pass laws that would actually fix real problems like Alan Grayson just talked about.  And there‘s a reason why we didn‘t pass some of them in the last two years.  His name is Mitch McConnell.

HAYES:  Yes.

ANDREWS:  You know, there were proposals that would have helped a lot of those people in Alan‘s district to get out from under the crisis they‘re in and let them refinance their mortgage.  And the Senate Republicans made a choice.  They could either fix the country‘s problems or put us in a political fix from which we could not escape.  And I really do believe they chose partisan advantage in the election over fixing the country‘s problems this is what you get.

HAYES:  There‘s clearly a kind of structural incentive for Republicans to obstruct.  I mean, I think they‘ve been essentially doing that, and then rewarded at the polls.  And I wonder if you think—if you can see on the horizon what would change those political incentives.

Congressman Grayson, or either of you, because it does sort of seem like they chose this tact where they were going to do anything they could to vote against the president of the Democratic Party.  They‘ve now been rewarded in the election.  So, why change?

GRAYSON:  Well, of course, it will change when they‘re punished for it.  And I think what people are going to soon realize is that the reason why Republicans hate government so much is because they‘re so bad at it.  As soon as you give them any sort of power, they‘re going to drive the country back into the ditch, like the president talks about so often, and this time maybe over the cliff.

ANDREWS:  I think there‘s a change that‘s already occurred for at least one Republican.  One of their new members from Maryland ran on repealing the health care bill.  Got up at the freshman orientation and demanded his government funded health care start now, and not when he‘s sworn into office.  So, he‘s obviously had a conversion about the value of government-sponsored health care because now he wants it.

HAYES:  Well, anyone who gets the bill for COBRA, I think, has that conversion.

ANDREWS:  Well, I think his comments were cobra like a snake because this guy ran the repealing the health care law.  So, he‘s going to—the first vote he casts, or one of the first votes, is going to be to take health insurance away from waitresses and bus drivers and people working in supermarkets.  But he wants his right now paid for by the taxpayers.  Go figure.

HAYES:  Yes.  Can we talk about the tax cuts for a moment?  Because that seems like agenda “A” right now in terms of what‘s going to happen or not happen in the so-called lame duck session.

What is the sentiment of the caucus?  I mean, now Speaker Pelosi, soon to be Minority Leader Pelosi has been pretty firm about it, but obviously, the White House has signaled maybe a compromise.  What do you want to see happen?  Do you want just a vote on the middle class tax cuts?  Congressman Grayson?

GRAYSON:  Well, I think we need to make it clear to people what the choices are?  The choices between President Obama‘s middle class tax cuts and the Republican George W. Bush tax cuts for the rich.

The average millionaire gets an $85,000 tax cut under the Republicans plan.  If you just took that money, which is $100 billion a year, just for the millionaires in this country, you could create 3 million jobs paying a decent wage, $30,000 a year.  Do the math.  That‘s the way it is.

And in several—what we‘re doing is we‘re allowing each millionaire with U.S. government tax money to buy a Class AE Mercedes-Benz each year.  And that, it seems to me, to be the best use of that money.

ANDREWS:  Yes.  I think we should take a separate vote on retaining the tax cuts for the middle class, and then a separate vote on retaining them for the wealthier people in the country.  And let‘s see where people stand.

You know, the idea of borrowing money from the Chinese and others so the wealthiest 2 percent can get lower taxes, I‘m not for that.  And I don‘t think most of the country is for that.  Let‘s take a vote.  Let‘s see where people are.

HAYES:  In fact, we have some polling on that.  There‘s a 49 percent are saying that they don‘t—they don‘t want tax cuts for the wealthy; 46 percent want to see the tax cuts for the wealthiest, the top 2 percent, extended.

Bu how—what‘s—how do you gain this out in terms of what goes over to the Senate?  I mean, this has been both on in—it‘s going to be an issue in the lame duck session—

ANDREWS:  You know, something that I think one of the mistakes that we‘ve made the last few years—I think Alan would agree with this—is we have Senate-phobia.

HAYES:  Yes.

ANDREWS:  We worry too much about what they‘re going to do.  Pass what I just said, put it in their laps, and let the public evaluate what they‘re going to do.  Let‘s do that.

HAYES:  Congressman Grayson, what do you think about that?

GRAYSON:  Well, I think what we‘re seeing here is class warfare.  In fact, it‘s class warfare where the rich are winning.  The rich have been winning this class warfare for a long time now.

We actually have Republicans say they would hold up extension of people‘s unemployment benefits.  These are benefits that are keeping people in their houses and not living in their cars.  Hold up extension on the unemployment benefits just so we can extend the tax cuts for the rich.  What are they thinking?  Let‘s ask expose them once and for all.

HAYES:  Congressman Grayson, this is the last question I want to get you out of here on this—you‘re going to be leaving Congress after serving two terms.  And I‘m wondering, what surprised you most about the way Congress works?  Sort of being an outsider, being inside it, and seeing it up close, what do you come away thinking about the institution and its health?

GRAYSON:  Well, I think that the Senate is utterly dysfunctional.  But I will tell you that the House under Nancy Pelosi‘s leadership reflected in my mind, both a head and a heart.  This is someone who actually created an environment that was a supportive environment.

She never took out the rubber hose on anybody, as far as I can see, yet consistently whenever she needed those 218 votes—

ANDREWS:  Maybe she should have.

GRAYSON:  Whenever those 218 votes were needed in order to accomplish what President Obama wanted to accomplish, she got those votes.  And to me, that says it all.  She has a head and a heart.  If not for her, if not for Nancy Pelosi herself, we would not have health care for all Americans today.

ANDREWS:  Very true.

HAYES:  I think that‘s right.

Congressman Rob Andrews and Congressman Alan Grayson—thank you so much for joining me this evening.  Really appreciate it.

ANDREWS:  Thank you.

GRAYSON:  Thank you.

HAYES:  Coming up: Republicans say they‘re going to ban earmarks in their quest to solve the debt problem.  What they didn‘t say is banning earmarks won‘t solve the debt problems.  A debate on what they are and where they should exist is ahead.

And NBC News calls the Alaska Senate race for write-in candidate Lisa Murkowski over Sarah Palin‘s Tea Party pick, Joe Miller.  Senator Murkowski has just proclaimed her victory and will join us for her first interview—next.


SEN. LISA MURKOWSKI ®, ALASKA:  I want to thank each and every one of you.  I want to thank all Alaskans for helping us make history.  It is truly, truly, truly remarkable.



HAYES:  Alaska Senator Lisa Murkowski has apparently beaten the odds and defeated her Tea Party opponent Joe Miller in the Alaska Senate race.  She declared victory moments ago.  You‘ll see her first interview in just minutes.

And the fight over earmarks, is it just a waste of time?  That is next.


HAYES:  The coalition to ban earmarks led by Tea Party favorite Jim DeMint scored a major victory on Monday when Senate Minority Leader Mitch McConnell agreed—though begrudgingly, very begrudgingly—to reverse his position.


SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER:  Make no mistake: I know the good that has come from the projects that I‘ve helped support throughout my state.  I don‘t apologize for them.  But there is simply no doubt that the abuse of this practice has caused Americans to view it as a symbol of the waste and out-of-control spending that every Republican in Washington is determined to fight.


HAYES:  With McConnell onboard, Republican senators met last night and agreed to a two-year nonbinding—nonbinding—earmark moratorium.  They join President Obama and newly-minted House Speaker John Boehner who also supports the ban.

Senate Democrats, saved for defectors Claire McCaskill and Mark Udall, are still holding firm in their support for the funding mechanism.


SEN. HARRY REID (D-NV), MAJORITY LEADER:  I believe personally that we have a constitutional obligation and responsibility to do congressionally-directed spending.  I do not feel comfortable turning that over to the people downtown.


HAYES:  Joining me now, Democratic representative from Ohio, Tim Ryan; and vice president of Taxpayers for Common Sense, Steve Ellis.

Gentlemen, thank you so much for joining me.

UNIDENTIFIED MALE:  Thanks for having me.

UNIDENTIFIED MALE:  Good to be with you.

HAYES:  Great.

Steve, you‘ve been very vocal, your organization is very vocal about earmarks.  And I want to quote you something Senator Murkowski said today.  She said, “An earmark moratorium will not reduce the level of spending by one cent or decrease the deficit.  We recognize we need to stop out of control spending.  But let‘s make sure the action we take actually translates into spending and deficit reduction rather than just messaging.”

The logic there seems pretty impeccable to me when you consider that we‘re talking about less than one half of 1 percent of the budget.  What‘s your reaction to that?

STEVE ELLIS, TAXPAYERS FOR COMMON SENSE:  Well, less than one half of 1 percent of the budget is still for fiscal year for 2010 was $15.9 billion.  And, clearly, you‘re not going to get one to one complete savings.  But if you eliminate earmarks, you actually try to reduce some of the spending and reduce the scope of the budget to that same level, you‘re going to save billions of dollars.

And let‘s face it, we have a big hole and we got to do everything we can.  I mean, Congress should be looking in the couch cushions to be saving money to try to close $1.2 trillion budget deficit.

HAYES:  Congressman Ryan, I wonder what you make of that.  I mean, it seems to me that the problem here isn‘t actually the level of spending, but the degree to which the mechanism is open to abuse.  I mean, it doesn‘t seem to me that you‘re necessarily going to reduce spending just because you get rid of earmarks, right?

REP. TIM RYAN (D), OHIO:  Well, you‘re not going to reduce spending, and I think we‘ve made some changes over the last couple years where this whole process is transparent.  There‘s no airdropping these earmarks in the middle of the, you know, dark night.  Everything has to be up on the Web site.  We post all of ours.

It‘s not going to save any money.  But the bottom line is this: you know, I‘m an elected representative from Youngstown, Ohio, Akron, Ohio—there‘s nobody out in downtown Washington looking out for the regional economic development plan of Youngstown, Ohio.  And we‘ve had a lot of success bringing back targeted earmark investments for business, incubators, Youngstown State University, bio innovation corridor between Akron and Cleveland, hooking up with the Cleveland Clinic.  I mean, some real key things that we‘re investing in that somebody, a bureaucrat in downtown Washington has no idea what we‘re trying to do.

So, to take that responsibility away from an elected representative I think is wrong.

HAYES:  But to push back on that for a moment—I mean, the bureaucrats downtown are presumably—you know, we‘re talking about essentially the machinery of the executive branch.  It‘s the civil servants and the appointed people in the executive branch who are making these spending decisions in all the other cases, right?  And we think those are legitimate.  So, why is this different?

RYAN:  Well, I think it‘s OK for them in the general sense.  But I think it‘s important for a locally-elected representative in the United States of America in 2010 to be able to say, if this money‘s going to get spent anyway, why can‘t a locally-elected representative take a small portion of that money as you said, half of 1 percent of the entire budget, and this money‘s going to be spent anyway, why shouldn‘t they have the responsibility of carving out a small piece?

I‘m on the appropriations committee, for example.  We steer billions and billions and billions of dollars.  And to say that somehow a locally-elected representative can‘t just shave off a few million dollars for a targeted investment in their own congressional district, I think goes against—quite frankly, goes against the Constitution of the United States and doesn‘t save any money.

But you‘re elected to advocate on behalf of your district, and as long as it‘s clear and transparent in the American people, in everyone else, and watchdog groups can see what you‘re doing, and posting on your Web site, I think it‘s completely legitimate.

HAYES:  Yes.

Steve Ellis, I want you to respond to that.  I mean, you know, why—what do you have against Youngstown?  Why don‘t you want a Youngstown State University—

ELLIS:  I have absolutely nothing against Youngstown.


HAYES:  Yes, exactly.

ELLIS:  Absolutely nothing.  And, so, no—actually, the issue is, as the congressman points out, he‘s on the appropriations committee and he‘s in the very good position to be able to take care of his district.  The vast majority of the lawmakers are not on the appropriations committee.  And it‘s a zero-sum game.

And so, what you see is we‘re making funding decisions not based on project merit but on political muscle.  And so, money that‘s going to Youngstown is not money that‘s not available to somewhere else, and it was money that wasn‘t available to Congressman Ryan or to Youngstown before he got on the appropriations committee.

And on the transparency issue, let‘s be clear.  We certainly supported every change that‘s gone on as far as making the information more public and more available.  But it‘s still not transparent.  It‘s on 500 different Web sites if you want to try to track all that information.  We still don‘t know why one project gets picked and another one gets left behind.

And then, lastly, on this, if we—you know, a couple years ago, Congress gave—bought 10 new C-17s that the Air Force didn‘t want, cost a couple of billion dollars.  If we had cut that from the budget and allowed it to go to deficit reduction, we would have saved billions dollars.  So, you can save money by cutting earmarks, it‘s not just money that‘s going to be spent automatically anyway automatically.

HAYES:  I want to close—we have just a short amount of time here.  Senator Graham said this—he was talking about his quality support for this.  He says, “I maintain the right to seek funding to protect national security or where jobs and economy of South Carolina are at risk.”  In other words, I reserve the right to earmark even though I‘ve agreed to this earmark moratorium.

Steve, if you guys want to weigh in finally here on whether this moratorium is actually going to hold up, if we‘re back here talking about this in six months, what do you predict?

ELLIS:  Well, I know.  I think the proof is going to be in the pudding.  And, you know, certainly, you know, Senator McConnell put his finger up to the political winds to decide to support this.  And so, it‘s going to be up to the American public and people who are concerned about earmarks and concerned about having more transparent and accountable spending to hold Congress, Republicans and Democrats, accountable and actually make sure that we‘re spending our precious tax dollars wisely and appropriately.

HAYES:  Congressman Ryan, you get the last word.

RYAN:  Well, two things.  I mean, I think, first of all, you take the Pentagon, for example, it‘s good to have elected representatives outside of the bureaucracy of the Pentagon picking specific projects that they say, by being out in the field, this is something that the war fighter needs.  Or this is an investment that we need.  And I think it‘s important to have that.

And secondly, you know, I do sit on the appropriations committee, and I do have a slight advantage and or have in the past for directing some money.  But I don‘t sit on the energy and commerce committee.  So, you know, someone there has the ability to basically amend legislation, opportunities that I don‘t have.

So, if you‘re on a different committee, have you different opportunities to do different things.  But I think it‘s been critical for our community with the investments that we‘ve been able to bring back.  Youngstown is one of the top 10 best cities to start a business, in part because we have been able to bring some money back home and stimulate the local economy.

HAYES:  Congressman Tim Ryan represents Youngstown, Ohio, and Steve Ellis from the Taxpayers for Common Sense—gentlemen, thank you so much for joining me.

ELLIS:  Thank you.

RYAN:  Thank you.

HAYES:  Write-in candidate for Senate in Alaska, Lisa Murkowski, has just declared victory over the candidate endorsed by Sarah Palin, and it appears she will keep her seat.  Senator Murkowski will join for her first interview—next.

And there could be another financial crisis headed our way.  Thanks to banks trying to make a quick buck.  One of the lawyers issuing the warning and trying to stop it from happening joins us ahead.


HAYES:  In politics, you can argue about a lot of things—taxes, the role of government, foreign policy.  There‘s one thing you can‘t argue, math.  That is unless you‘re Joe Miller.

The math in Alaska‘s Senate race is now completely against him.  With only hundreds of ballots left to count, Alaska senior senator, Lisa Murkowski, leads Miller by over 10,000 votes.  That includes about 8,000 votes Miller is contesting.  But even if he got all the ballots left to count, he cannot win.  Again, the math is completely against him.

And just moments ago, Senator Murkowski declared victory against the Sarah Palin-backed Tea Party candidate.  Murkowski is the apparent winner in this race.

The senator put her re-election hopes in the hands of voters staging an unprecedented write-in campaign, one which asks voters not only to write her name in but to try to spell it correctly, M-U-R-K-O-W-S-K-I.

The results are even more unprecedented than the campaign itself.  The Murkowski campaign posted a message online today thanking supporters.  It reads in part, “They said you couldn‘t do it, but you proved them wrong.  And you put it in writing.  Rest assured, I return to Washington with renewed energy and commitment to represent all my fellow Alaskans.”

Miller‘s campaign site meanwhile still reads, “It‘s not over yet.”

Joining me now in her first interview since claiming victory, the first Senate candidate to win a write-in campaign since Strom Thurmond in 1954, Republican Senator Lisa Murkowski.

Senator, thank you for taking the time to talk with us tonight.

SEN. LISA MURKOWSKI ®, ALASKA:  You bet.  Thank you.  It‘s an historic moment here in Alaska.  So, we‘re excited.

HAYES:  It is historic.  I want to take a second to listen to what your opponent Joe Miller had to say earlier today.


JOE MILLER ®, ALASKA SENATE CANDIDATE:  We also want to make sure that going-forward, that the state of Alaska imposes the statutory standard, that we don‘t end up having in the future the same sort of thing that we had in this race where you have an unelected bureaucrat that basically makes the call.  We essentially got one super voter right now that has applied inconsistently the standard that they developed just 36 hours before the count began.  So, again, less cautiously optimistic obviously, but also committed to ensure the integrity of the vote here in the state of Alaska.

NEIL CAVUTO, FOX NEWS:  I‘m sorry, Joe, but do you want a recount?  Is that what you‘re saying?

MILLER:  Well, we may.  We may actually ask for a hand count of our ballots as well.


HAYES:  So, that does not sound to me like someone who‘s ready to give you a phone call, concede the race.  So, where do you see this playing out?  Are we destined for a recount?

MURKOWSKI:  Well, all I can tell you is over 100,000 Alaskan voters have correctly filled in the oval and written in Lisa Murkowski.  That‘s a pretty affirmative act of the electorate here in this state.

And, you know, Joe is saying, well—trying to blame this, that or the other thing.  The fact of the matter is, even if we were to throw out every one of the ballots that he has challenged, he still loses by the count.

So, he had said several days ago, that if the numbers don‘t line up, he‘s not going to drag this out.  So, he‘s going to have to make that call.  But Alaskans have clearly spoken and they have put it in writing.

HAYES:  So, you lost the primary, and largely because conservatives mobilized against you.  And the GOP establishment sort of ran away from you.  There was talk about you not being given your committee assignments.

I wonder what your relationship is like with Mitch McConnell and with other members of caucus as you head back to Washington.  Is it just going to be business as usual when you get back?

MURKOWSKI:  Well, I‘ve been in the Senate now for eight years.  I developed some great friendships.  I was back there this week.  And there were a lot of hugs and congratulations, and good strong showings of support, not only from my Republican colleagues, but from my colleagues on the Democrat side of the aisle. 

I‘m working for all Alaskans, I have got to be working with everybody in the United States Senate to accomplish our goals for Alaska‘s agenda.  I‘m looking forward to doing just exactly that. 

HAYES:  Now that you‘ve declared victory, I want to get your take on legislating going-forward.  There‘s two items that are going to be coming before you in this lame duck.  One is going to be a vote.  Carl Levin‘s announcing they‘re going to try to bring a vote to the floor on repealing the Don‘t Ask Don‘t Tell policy.  And the other is going to be a vote that Harry Reid has announced in the Senate on the Dream Act, which would allow undocumented immigrants who—essentially to qualify for financial aid and go to college. 

How do you view yourself voting on both of those?  Do you support the repeal of DADT?  Do you support the Dream Act? 

MURKOWSKI:  I‘ll be honest with you, based on what I‘ve heard, I‘m not convinced that we go to either one those issues in this lame duck.  There‘s a lot of contention, obviously, in terms of what will be on that schedule.  That‘s still being hammered out now. 

Those are two areas that clearly have their own level of controversy and discussion.  So it remains to be seen where we go with it.  We have a lot of work to be doing, that‘s for sure. 

HAYES:  Yes.  But they are important issues, though.  Which side of them are you on? 

MURKOWSKI:  I‘m sorry, I‘ve got background. 

HAYES:  I know you‘ve got a lot of people there.  Do you support—whether the bill comes up or not, do you support the repeal of Don‘t Ask Don‘t Tell, and do you support Dream Act, whether they vote now or a year from now? 

MURKOWSKI:  I think that what we need to be doing right now in this lame duck is making sure that we‘re focusing on the issues that the American people expect us to be dealing with.  That‘s jobs and the state of the economy. 

I‘m not convinced that the Dream Act comes up.  I‘m not convinced that Don‘t Ask Don‘t Tell comes up.  I think that we need to work on is making sure that we keep the focus on the Bush—the tax cuts that are going to be expiring.  We have that obligation to be doing that.  I don‘t think that we‘re going to be dealing with some of these other issues that bring, again, their own set of controversy, and will just get us wrapped around the axle, trying to push something through at the very end of a very short session, when we have an awful lot on our plate when it comes to dealing with jobs and our economy. 

HAYES:  Senator Murkowski from Alaska, who has just declared victory in her Senate race.  Thank you so much for joining me.  Really appreciate it. 

MURKOWSKI:  Thank you.  Thank you.

HAYES:  While Bristol Palin is working it on the dance floor, Mama Grizzly says she is toying with the idea of running for president.  She also Tweeted today “buy my book.”

It‘s the biggest financial scandal that no one raised an alarm about until now.  What you don‘t know about the foreclosure crisis still to come.


HAYES:  Who would you pick to teach the youth of America about the virtues of abstinence and safe sex?  How about Bristol Palin and Mike “The Situation” Sorrentino?  Bad idea.  Unless, of course, the idea was to leverage the pair‘s sheer teeth-rattling, cringe-inducing awkwardness into convincing teens to stay away from anything remotely sexual. 

The awkward quotient begins with the duo referring to one another as Sitch and B-Palin.  That awkward quotient then rockets out of the stratosphere when The Situation refers to Bristol‘s reproductive system as a situation, and then points out that the word abstinence includes the word abs. 


MIKE SORRENTINO, “THE SITUATION”:  Excuse me, miss, have you ever had a situation with the official Situation? 


SORRENTINO:  Oh, snap, B-Palin. 

PALIN:  You mean to tell me that girls actually fall for that line? 

SORRENTINO:  Come on, I mean, if those words don‘t work, I have the situation.  Right there. 

PALIN:  I hope you‘re committed to safe sex as you are those abs. 

SORRENTINO:  I know you‘re all about that abstinence thing, you know.  But come on, B-Palin, are you seriously—you‘re not going to hook up like before you‘re married, for real? 

PALIN:  For real. 

SORRENTINO:  For real for real? 

PALIN:  For real for real for real? 

SORRENTINO:  All right.  Well, you know what, I mean, just in case you do get into a situation, I want to make sure that you are situated.  Because if you get into a situation with your situation you may end up with a situation and you may like that situation.  

PALIN:  Trust me, though, I‘m not getting myself into another situation.  I know how hard it is to be a teen parent. 

SORRENTINO:  You know what?  I totally respect that.  And I totally respect abstinence.  I mean, it actually has the word abs in it.  I‘m the Situation.  I love that. 

PALIN:  Very funny.  But I‘m worried about you and you practicing safe sex. 

SORRENTINO:  I actually practice a whole lot.  I mean, a whole lot. 

PALIN:  I‘m talking about the safe part of that. 

SORRENTINO:  The safe part, we got the safe part down pat.  Wa-pow, Magnums.  You know what?  I might be able to spare one.  I‘ll give you one. 

PALIN:  It‘s fine.  I avoid situations. 

SORRENTINO:  All right, good, good.  If you‘re good at avoiding situations and you‘re situated and I‘m situated, the situation‘s under control. 

PALIN:  Well, I‘m glad we agree on one thing.  Pause before you play. 

SORRENTINO:  Pause before you play, that‘s probably the most important thing.  You got to think before you get into a situation.  PBYP, that ain‘t not PB&J sandwich.  Right, wa-pow.  Slam.


HAYES:  By the way, we counted for you; some variation of the word situation is used 18 times.  I can‘t believe you‘re still watching after that video. 

Speaking of the Palins, Sarah Palin says she‘s going to run for president.  She wants trustworthy people on her campaign this time.  We already knew subtlety is not her strong point. 

It could be the biggest financial scandal ever, banks cutting corners, forging documents all to make fast profits.  And it could cause another financial meltdown.  Small town lawyer trying to stop it next on THE LAST WORD.


HAYES:  If you thought the financial crisis of 2008 was a thing of the past, think again.  In fact, we‘re still trying to digest the rotten fruits left by big banks and their fraudulent mortgages.  We‘re starting to see how poisonous our financial system really is at the core, with possibly trillions dollars at stake. 

“Rolling Stone‘s” Matt Taibbi write, “it turns out that underneath that little iceberg tip of exposed evidence lies a fraud so gigantic that it literally cannot be contemplated by our leaders, for fear of admitting that our entire financial system is corrupted to its core, with our great banks and even our government coffers backed not by real wealth, but by vast landfills of deceptively generated and essentially worthless mortgage-backed assets.” 

Democrats in the House took some action today by upholding the president‘s veto of a bill that would have made it harder for homeowners to stop flawed foreclosures.  They were opposed, not surprisingly, by all but five Republicans. 

But that‘s just the beginning of what has to be done.  And joining me now from Pensacola, Florida, a man on the front lines of the mortgage fraud battle, foreclosure defense attorney Bubba Grimsley. 

Bubba, thank you for joining me tonight? 


HAYES:  Listen, I spoke to you last week.  And I thought you did a really good job of doing something that I think is really hard, is that people have been monitoring a little bit—they hear that there‘s these robo signers out there, and maybe there‘s fraudulent foreclosures.  Can you boil down to people that are kind of coming to this new, what is the problem here?  What is the fundamental kind of issue at the core of this?  When you go into court and a bank is trying to—a servicer is trying to foreclose on someone, what are you finding? 

GRIMSLEY:  Well, the biggest thing we‘re finding is that the banks have done a really good job as of late at arguing that everybody that‘s in a foreclosure is a deadbeat.  We‘re not finding that.  We haven‘t had anybody show up so far and say, hey, we don‘t want to pay for our house, and we‘re seeing in the press that you can get a house for free; could you help us with that? 

What we‘re finding is that everybody that comes to us has a similar story, that they were going along with life and something got in the way, that they tripped somewhere along the sidewalk of making their house payment.  The next thing they know, it has snowballed into some enormous debt that they can‘t imagine how we got to that number, and now the bank is foreclosing on them. 

If that‘s not the situation, then they wanted a Hamp (ph) modification, and the bank told them, hey guys, we can‘t give you a Hamp modification because you‘re not in default yet.  So if you want a Hamp modification, you need to stop making your house payments for 90 days and then we‘ll give you a Hamp modification. 

Oddly enough, the foreclosure takes place before the bank ever gets around to modifying the loan. 

HAYES:  Wait, so you‘re saying—I just want to make sure I understand this.  The foreclosure servicers are telling people to stop—people that are current on their mortgages, who were underwater on their homes, that are trying to get aide through a government program called Hamp, so that they can modify the terms of their loans—you‘re telling me the servicers are telling them—are instructing them to stop making payments, to become behind—in arrears on their mortgage so that they can qualify for a modification.  And then when they do that, they get foreclosed on? 

GRIMSLEY:  Absolutely.  Happens every day.  And the foreclosure folks—I mean, when you get involved with a servicer and the servicer tells you, don‘t worry, you‘re working with us on a Hamp modification, you can disregard all of those foreclosure notices—the next thing you know, the sheriff is knocking on your door saying you need to move out and the people are kicking and screaming, saying, wait a minute, I‘m working in this Hamp notification program.  And the bank knows nothing about it. 

HAYES:  So here‘s the thing I think it‘s hard to understand, is, you know, foreclosures seem like a bad deal for everyone.  They‘re sort of a lose, lose, lose.  Obviously, the family loses out.  The bank then owns a home that presumably it doesn‘t really want to own.  It‘s got to sell it.  Investors aren‘t necessarily happy. 

Why are there all these foreclosures that the servicers are creating, often out of junk late fees or sort of deceptive practices?  What is the financial incentive here? 

GRIMSLEY:  Well, the servicer isn‘t making any money off servicing the loan.  It‘s kind of a break even business in the best of times.  But the big money in servicing is when you foreclose on the house.  Now, I know there was testimony yesterday at the Congressional oversight panel that that‘s just not true.  If you get into depositions with servicers and find out what their fees are, the real fees come in the broker/purchase opinions and the appraisals that we do once you fall behind and the fee itself. 

And what you‘re going to find is that—go look at bankruptcy court.  You‘re going to go to bankruptcy court and find out that everybody in a Chapter 13 has a motion for relief of stay filed at some point in their bankruptcy.  And what half of those folks do is they pay that 800 or 1,200 or 8,000 dollar fee, depending on which jurisdiction you‘re in, whether it‘s a judicial or non-judicial foreclosure state.  And the servicer gets that money when they file that motion for relief of stay.  And then they get another bite at the apple a few months down the road when they file their second—

HAYES:  Right.  so they‘re rolling up these fees the whole way through.  Finally and quickly here, I think people hear this and they think to themselves, well, I‘m sure this guy has a few clients this has happened to, but there‘s a lot of mortgages in this country.  How big is this problem?  How big is the fraud that we‘re talking about here, based on what you‘re seeing in terms of foreclosure court? 

GRIMSLEY:  Well, what we‘re seeing is that in every one of these securitized loans—it‘s a running joke in our small circle of lawyers that do this that if we ever find a securitized loan that was actually done correctly, that the bank actually followed the contract on their side, that we would bronze it and hang it on the wall. 

We have roughly 200 cases filed throughout the state of Alabama, from one end to the other.  And we haven‘t found a case yet that we had to turn down because the bank had everything correct. 

HAYES:  Bubba Grimsley, a real estate attorney who‘s taking on the big

banks and foreclosure fraud.  Thank you so much for coming on tonight and

explaining this.  >

GRIMSLEY:  Good to see you again, Chris.

HAYES:  The former half term governor of Alaska has a reality show, a job as a TV pundit, a new book coming out.  So why in the world would Sarah Palin give it all up to run for president?  Exactly.  The Palin business model, up next.


HAYES:  Since quitting her boring government job as the governor of Alaska about 16 months ago, Sarah Palin has earned plenty of cash, about 10 million dollars according to “Forbes.”  Other estimates put it even higher at 12 million.  It‘s a lot more than what Palin was making as governor, to be sure. 

From her book “Going Rogue” to 100,000 dollar speaking engagements, her TLC reality show, not to mention her job at Fox News, quitting proved to be quite a lucrative decision.  At the same time, she‘s dropping more and more hints that she plans on running for the White House in 2012.  And this during an upcoming interview with Barbara Walters, for example.


BARBARA WALTERS, “THE VIEW”:  If you ran for president, could you beat Barack Obama? 



HAYES:  Then there‘s also this hint in an interview the “New York Times Magazine” did for their upcoming edition with the multimillionaire former governor.  In it, Palin says, “I‘m engage in the internal deliberations candidly and having that discussion with my family, because my family is the most important consideration here.  Yes, the organization would have to change.  I‘d have to bring in more people, more people who are trustworthy.” 

So is she really going to run in 2012?  Or is Palin just using her political celebrity to cash in?  Joining me now, Alex Wagner, White House correspondent for “Politics Daily.”  Alex, how are you? 

ALEX WAGNER, “POLITICS DAILY”:  I‘m good, Chris.  Thanks for having me on. 

HAYES:  OK.  so I‘m of the theory that this is—that basically what she‘s doing is monetizing her celebrity.  And a key part of monetizing that celebrity is everyone to agree on the fiction that she is still a viable political figure, because that‘s sort of the punitive foundation of her celebrity, but that she‘s actually not going to run for president.  Why am I wrong about that? 

WAGNER:  I think if you look at the behavioral patterns, they‘re pretty sophisticated for someone who‘s just putting up a front.  Let‘s look at SarahPAC, right.  She has over a million on hand in cash there.  And if you look at the expenditures through the third quarter of last year, she has spent a million dollars on consultants, 750,000 on direct mail and advertisements, and only 250,000 on Republican candidates. 

Then you look at who she endorsed, and she has winners in Iowa, New Hampshire and South Carolina, which are all key states for a Republican nominee.  I think this is someone who is being very calculated.  Sarah Palin has shown herself to be very unconventional in other areas of her life.  But with this, I think she‘s taking it very seriously.  I think there‘s a very real possibility that the dogsled has left the building on it. 

HAYES:  Let‘s talk about the endorsements for a second.  I think the record there is pretty mixed, in terms of people that she endorsed winning.  Obviously, there was a Christine O‘Donnell endorsement that came in late.  And that did not pan out very well.  There‘s a Joe Miller endorsement, which has kind of blown up in her face. 

But do you think the strategy that she‘s pursued—I mean, what is the thinking behind the strategy, if there is a kind of long-term political strategy, in the endorsements she was making?

WAGNER:  Look, she picked people that were moderate—Terry Branstad in Iowa, who is now the governor—or is the governor elect—did not need Sarah Palin‘s endorsement.  He was 15 up by the time she endorsed him.  He was going to be a winner.  Kelly Ayotta was running against Ovide Lamontaigne in New Hampshire.  Ovide Lamontaigne was a Tea Party favorite but Kelly Ayotta ended up pulling it out.  And it‘s great for Sarah Palin.

Nikki Haley, again, her endorsement made all the difference.  But Palin now has Republicans in high places when she needs to call in favors, if she, in fact, does that in 2012. 

HAYES:  So now we‘re seeing—because she has this book out, we‘re seeing her—well, I think because she has this book coming, we‘re seeing her now talk to members of the, quote unquote, lamestream media, as opposed to communicating with the world via Facebook style sort of ransom notes. 

I‘m a little upset actually about this, because here‘s what it says to me:

it says to me that as a politician, right, there‘s no incentive to actually communicate with media outlets with whom you do not share essentially a business model, an audience, a political perspective.  But once you have the market incentive to sell a product, then have you to go and talk to people like the “New York Times Magazine.”  Is that a really—that seems to be a really bad precedent for how politicians are going to comport themselves in terms of what media outlets they talk to in the future.. 

WAGNER:  I‘m not trying to judge, but I think a lot of the stuff that‘s happened vis-a-vis Sarah Palin and the media is a disturbing precedent.  I think my favorite quote in the “New York Times Sunday Magazine” story that‘s coming out this weekend is she says, I just Tweet, that‘s how I roll.  It‘s sort of like—

HAYES:  Did she then say hash tag real talk. 

WAGNER:  She speaks in hash tags.  No, I think—look, this is someone who has become arguably one of the most if not the most powerful voice in the GOP via Facebook, Twitter and limited messaging with conservative outlets.  She herself in the article in the “New York Times” says that she wants to talk to more outlets.  She wishes she was out there.  They make the case that she, in fact, want to do more interviews than just the sort of explosive Katie Couric interview that happened on the campaign trail. 

I think, you know, it‘s curious that she gave the “New York Times” an hour long sit down.  That‘s unprecedented as far as Palin media.  Maybe that‘s to your point that she‘s trying to sell more books and it‘s conveniently time to run the book tour.  Or maybe it‘s because she‘s realizing that as an actual presidential candidate or political candidate, she needs to engage with something other than Fox News. 

HAYES:  Looking ahead—so if you‘re right and I‘m wrong, if she is actually going to run—and I would also notes that running is actually going to be complicated from the prospective of her balance sheet, right?  Presumably, she can‘t run for president while she has all these sort of conflicts.  We‘ll see whether she just disengages those. 

What should we look for her to be doing strategically, politically in the next few months, very quickly? 

WAGNER:  Well, I think one thing is—and this is—she doesn‘t have a campaign staff.  She doesn‘t have a press secretary.  She doesn‘t have field operations.  She‘s going to have to start having to hire staff.  She‘s going to have to have more of a—a real—people she can trust, but really designated persons who are on staff that can really manage a campaign.  I think that‘s what we have to see first before anything else. 

HAYES:  We‘ll look for it.  Alex Wagner from “Politics Daily,” thank you so much. 

WAGNER:  Thanks for having me, Chris. 

HAYES:  That‘s THE LAST WORD.  I‘m Chris Hayes, Washington editor of “The Nation,” in for Lawrence O‘Donnell.  He‘ll be back tomorrow night.  You can find more of my work at the  Follow me on Twitter, user name @ChrisLHayes.  You can follow this show on and Facebook.  “COUNTDOWN” is up next.   


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