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Wednesday, February 16th, 2011

Read the transcript to the Wednesday show

Guests: Dana Milbank, Rep. Jason Chaffetz, Farai Chideya, Karen Finney


LAWRENCE O‘DONNELL, HOST:  The hot new candidate for president is from Jersey.


GOV. CHRIS CHRISTIE ®, NEW JERSEY:  I‘d say what I just said.  You‘d be vaporized into the carpet.

UNIDENTIFIED FEMALE:  This one popular guy in the GOP.

CHRISTIE:  So, it‘s put up or shut up time.

O‘DONNELL (voice-over):  The new champion of right-wing slash and burn budgets, Governor Chris Christie wants the rest of the country to be like New Jersey.  But 49 states say they don‘t want to be like Jersey.

CHRISTIE:  The real housewives of New Jersey, and now most regrettably the “Jersey Shore.”

Not a place that thought of itself as a national leader.

O‘DONNELL:  Christie wants Republicans to cut spending no matter who it hurts and conservatives love that.

UNIDENTIFIED MALE:  Why are so many Republicans going gaga over Chris Christie?

ANN COULTER, POLITICAL COMMENTATOR:  If you don‘t run Chris Christie, Romney will be the nominee.

ANDREA MITCHELL, NBC NEWS:  Chris Christie has been really riding a wave here.

CHRISTIE:  Speak it bluntly and directly.

UNIDENTIFIED MALE:  He has repeatedly said that he does not want to run.

CHRISTIE:  What do I have to do short of suicide to convince people I‘m not running?

UNIDENTIFIED MALE:  Is he so great or is the rest of the field just that lousy?

RICHARD TRUMKA, AFL-CIO:  His draconian cuts will end up costing more jobs and have fewer people working.

O‘DONNELL:  And while he was wowing conservatives, Democrats and Republicans in Washington were facing reality.

JOE SCARBOROUGH, MSNBC HOST:  Outrageous that anybody thinks we‘re going to solve this crisis by cutting heating assistance to the poor?

REP. CHRIS VAN HOLLEN (D), MARYLAND:  It is not common sense at all to cut this kind of money this quickly.


REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE:  If some of those jobs are lost in this, so be it.

PELOSI:  So be it.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I was glad to see yesterday Republican leaders say how come you didn‘t talk about entitlements.  I think that‘s progress.

UNIDENTIFIED FEMALE:  There are all sorts of sacred cows up for grabs.

SAVANNAH GUTHRIE, NBC NEWS:  Are you looking at tax reform?  Are you looking at Social Security, Medicare and Medicaid?

CHRISTIE:  You‘re going to have to raise retirement age for Social Security.  I just said it and I‘m still standing here.  I did not vaporize into the carpeting.

O‘DONNELL:  Tea Party Congressman Jason Chaffetz will respond to Christie‘s challenge to the Tea Party.

CHRISTIE:  You close the government, I‘m going to the governor‘s residence.  I‘m going to go upstairs, I‘m going to open a beer, going to order a pizza, I‘m going to watch the Mets.  Take a look at me.  You think I‘m sleeping on a cot?


O‘DONNELL:  Good evening.

New Jersey Governor Chris Christie spoke at the American Enterprise Institute today after he tied for third place in the straw poll at CPAC.  Second if you don‘t count the completely unelectable libertarian, Congressman Ron Paul.  For someone who‘s denied he‘s interested in running for president, he sounded a lot like someone who was ready.  “Politico” graded his speech an A.

The Republican governor is not shy about self praise, especially when it comes to his combative approach to New Jersey‘s Democratic-dominated legislature.  He mocked his Obama-backed predecessor Jon Corzine who said he‘d sleep on a cot in his office until the New Jersey‘s budget crisis was averted.


CHRISTIE:  What I said to them was, listen, you guys want to pass income tax increase, you can.  That‘s fine.  I am going to veto it.  And if you want to close down the government because of that—that‘s fine.

But I want to tell you something.  I am not moving any cot into this office to sleep in here.  Take a look at me.  You think I‘m sleeping on a cot?


CHRISTIE:  We submitted a budget that cut real spending 9 percent year over year.  Every department of state government was cut.  And we balanced the budget without any new or increased taxes.


O‘DONNELL:  Then, Christie attacked President Obama for pushing investments in his State of the Union speech.


CHRISTIE:  He says the big things are high-speed rail, the big things are high-speed Internet access, a million electric cars on the road by some date.  Ladies and gentlemen, that is the candy of American politics.  Those are not the big things, because let me guarantee you something—if we don‘t fix the real big things, there will be no electric cars on the road.


O‘DONNELL:  Christie then addressed the big things, the future of federal entitlements.


CHRISTIE:  Here‘s the truth nobody is talking about.  You‘re going to have to raise the retirement age for Social Security.  Oh!  I just said it, and I‘m still standing here!


CHRISTIE:  I did not vaporize into the carpeting, and I said it.

We have to reform Medicare because it costs too much, and it is going to bankrupt us.  And we have to fix Medicaid because it‘s not only bankrupting the federal government, it‘s bankrupting every state government.


O‘DONNELL:  Christie‘s Tea Party friendly approach to New Jersey‘s fiscal crisis has many right wingers calling him Republicans best chance in 2012.  The loudest right winger of them all is his biggest cheerleader.


COULTER: I don‘t care if he wants to run.  His country needs him.


O‘DONNELL:  Joining me now to consider the meteoric rise of Chris Christie, “Washington Post‘s” columnist Dana Milbank.

Thanks for joining us tonight, Dana.

DANA MILBANK, WASHINGTON POST:  Good evening, Lawrence.

O‘DONNELL:  Dana, during the first Q&A part of the session today, he was asked whether he would run for president in 2012.  Let‘s listen to that answer.


CHRISTIE:  Apparently, I actually have to commit suicide to convince people I‘m not running.  There are lots of people who will run because the opportunity presents itself.  And I‘m not stupid.  I see the opportunity.  I see it.  That‘s not the reason to run.


O‘DONNELL:  Dana, you were there.  What was the feeling in the room? 

Will Chris Christie seize his moment and run?

MILBANK:  You know, I don‘t think he could have been any more unequivocal about it.  He‘d said things before as he was alluding to, “What do I have to do, threaten to commit suicide?”  And now, he‘s saying, no, he has to go actually further and commit suicide.

I think it was admirable the way he ruled it out.  The idea of what people in this situation do is they generally to give some sort of non-denial denial, noncommittal, so they can change their minds.  He‘s going to find it very hard to walk back from that.

He said point-blank, look, I am not ready to run for president.  Now, there are a lot of people that are going to run for president that are not ready to run for president.  At least he has enough self awareness to know that.

O‘DONNELL:  Well, that just means that Republicans are going to have to take Ann Coulter‘s advice and, in effect, try to draft him into running.  And if we see some real weakness in the field in Iowa and New Hampshire, they could be begging for a savior.

MILBANK:  Well, and how could we not see weakness in the field.  You see, there is an ideal candidate in the Republican Party, but it‘s a piece of all of them, you know?  It sort of the looks of John Thune, the brains of Mitch Daniels, the smile of Mitt Romney, you know, without the health care record, Haley Barbour‘s rolodex, Michele Bachmann‘s Tea Party connections—it doesn‘t all exist in one package.

Now, I‘m not sure it necessarily exists in Chris Christie as a package.  But here you have a blue state guy who has an appeal to the Tea Party.  And it was very interesting the entire speech he gave today, I heard nothing about gays and guns.  He had kind words for Andrew Cuomo, kind words for Obama.

So, he‘s a Tea Party guy, but he‘s not that same sort of angry rebel. 

And I think that‘s why people see him as attractive.

O‘DONNELL:  Yes, he was interesting.  He is not harsh about President Obama.  Let‘s listen to his take on the president‘s State of the Union speech.


CHRISTIE:  What I was looking for that night was for my president to stand up and challenge me and say to me and everybody else in the country now is the time to fix the problems, and I‘m going to lead you there.  And it was a disappointment that he didn‘t.


O‘DONNELL:  Disappointment is not what you‘re supposed to have in President Obama when you‘re on the Republican side, you supposed to have something much more negative than that.  Does this have something to do with the fact that Christie knows well that Obama won New Jersey 57 to 42, and so, the governor of New Jersey cannot turn too harshly against President Obama at this stage, even if he is going to run against him?

MILBANK:  Well, it certainly has something to do with that, but he was also very critical of the Republicans.  He said, look, I was disappointed by Obama that he didn‘t say something specific on entitlements.  And he said, the so-called supposed Republicans that we elected to run the House punted as well.  And he said, you know, somebody needs to get up there and show some leadership.  That‘s why we elect leaders.  He said hence the name leader.

So, he gave it to both sides.  I think some of it is his blue state territory.  But, in general, he‘s a more amiable character than a lot of the people you typically associate with the Tea Party.  Very self-deprecating, didn‘t take him long to make jokes about his weight.  I think he has some self confidence that others don‘t, and also the sense that he‘s not running, so he can afford to be more of a truth teller.

O‘DONNELL:  And nothing lasts forever with Chris Christie, including his endorsements.  Listen to what he said about what he might do in the next election.


CHRISTIE:  It‘s put up or shut-up time.  And I‘ll be really clear, you know, if people who I campaigned for don‘t stand up and do the right thing, the next time they‘ll see me in their district is with my arm around their primary opponent.


O‘DONNELL:  Now, that‘s the stuff that they love about Chris Christie, isn‘t it?  That tough talk about you got to do what you promised you were going to do or I‘m going to be, you know, there campaigning against you.

MILBANK:  Yes, it absolutely is.  I saw no equivocation whatsoever during the hour that I listened to him today.  You know, that‘s what Chris Christie is about.  That‘s his appeal.

I suspect when people begin to see what cuts he did in New Jersey amount to over time, well, things may balance out.

O‘DONNELL:  Now, he has the New Jersey problem.  The New Jersey problem as personified, of course, by Snooki and The Situation, not to mention the Sopranos.  Here‘s what he said the other day about those “Jersey Shore” characters.

“Remember, Snooki is from Poughkeepsie, New York, and The Situation is from Staten Island, New York.  That‘s not New Jersey.  Take them back, we don‘t want them.”

This is not, I think, an unserious point.  Right now, the other 49 states, when they hear New Jersey, they‘re thinking Snooki.  A candidate from New Jersey is going to have to overcome a certain kind of imagery, isn‘t he?

MILBANK:  Well, they did have Woodrow Wilson.  Admittedly, that was before the New Jersey turnpike and the chemical industry.  So, yes, I am afraid they do have some things to overcome for New Jersey.

But look, a conservative Republican who can make it in New Jersey and can talk the way Chris Christie does I think is going to have some novelty appeal if nothing else.

O‘DONNELL:  Let‘s see if the History Channel can get ratings with Woodrow Wilson that are bigger than the “Jersey Shore.”

Dana Milbank of “The Washington Post”—thank you very much for joining us tonight.

MILBANK:  Thanks, Lawrence.

O‘DONNELL:  A big get alert for tomorrow night.  We will have more on the Chris Christie for president story with an important first time guest who is sure to make news here on THE LAST WORD.

On Capitol Hill, some congressmen are deciding to sleep in their offices.  They say it‘s all to save money for their personal expenses.  But does it mean they‘re actually cheating on their taxes?  I‘ll talk with Tea Party Republican Congressman Jason Chaffetz about that and his budget cut priorities.

And later, the legal trouble for John Edwards.  A grand jury is said to be in final weeks of preparing an indictment against the presidential candidate for spending campaign cash to help hide his affair.  If convicted, it could result in a serious jail term.  We will talk to an Edwards campaign insider.


O‘DONNELL:  Republican budget cutting is now targeting “Sesame Street,” Mr. Rogers, Arthur the Aardvark and every other character on PBS.  Republicans want to completely eliminate funding for the Corporation for Public Broadcasting in the 2011 spending bill.  So, Democrats brought Arthur to Capitol Hill today in protest.  Democrats are trying to put $460 million back into the budget by taking it away from money for oil and gas wells.

Congressman Ed Markey of Massachusetts warned his colleagues that voting against PBS would be, quote, “at their own political peril.”


REP. EDWARD MARKEY (D), MASSACHUSETTS:  This is an ideological attack on public broadcasting system.  Again, it happened in 1995, as soon as they took over the House the last time.  It happened after President Bush was elected.  This is just part of a recurring pattern.


O‘DONNELL:  It is really hard for Ed Markey to say Arthur the Aardvark.

What else are Republicans willing to cut?  Tea Party Congressman Jason Chaffetz is up next.

And later, the right wing hatred of journalists hit a new low with despicable attacks on reporter Lara Logan after her assault in Egypt.



JAY CARNEY, WHITE HOUSE PRESS SECRETARY:  The Social Security issue is not a deficit issue.  It is long term debt issue.  The president wants to protect current retirees.  He doesn‘t want a solution that slashes benefits.  And he wants to make it stronger and solvent for the future because it is an important element of security for our seniors.


O‘DONNELL:  On Jay Carney‘s first day at the White House podium, the Obama administration spent a third straight day defending its 2012 budget, in particular, its lack of entitlement reform.  Although the president‘s budget doesn‘t address the issue, the administration agrees it is a problem.


TIMOTHY GEITHNER, TREASURY SECRETARY:  This budget would achieve the dramatic reductions in our deficit over the next decade that are necessary to stop the national debt from growing.  This is only a first step, a downpayment, on a long term reform necessary to address the long running deficits.


O‘DONNELL:  Republicans continue to criticize the president‘s budget for being too timid and not cutting Medicare, Medicaid, and Social Security.

With the Tea Party pressuring Republicans to make big cuts in those programs—as one Democratic aide put it—they painted themselves into a corner.  The Obama budget, though fully detailed as all presidential budgets are, is really only a negotiating tool which leaves Republicans now asking themselves, do they really want to go first on proposing specific cuts to Social Security and Medicare when only 13 percent of Americans support cuts to Social Security, and only 21 percent support cuts to Medicare.

Joining me now, Utah Congressman Jason Chaffetz.

Thanks for joining me tonight, Congressman.


O‘DONNELL:  Congressman, to govern is to choose, the spending cuts are the toughest choices you can make.  In the “The Wall Street Journal” today, you mentioned one spending item that you‘re willing to cut, the subsidy for mohair farmers.  Would you be willing to eliminate the entire agricultural subsidy program since that is a purely socialistic program?

CHAFFETZ:  Well, look, as a sweeping generality, I am not in favor of the subsidies that we‘re giving for the ag development.  We have—mohair is a small part of that, $1 million a year, something that has been going on for decades and is not acceptable.  I don‘t like what we do with ethanol, for instance.

So, as a sweeping generality, yes, we‘re going to have to make some tough choices.

O‘DONNELL:  No, no, let‘s get specific.  There is an agriculture subsidy program.  Are you willing to zero it out to absolutely nothing?

CHAFFETZ:  I would like to see it move that direction.

O‘DONNELL:  But you‘re not willing to vote for it.  You‘re willing to talk about moving that direction.  Which agriculture subsidy do you want to preserve?

CHAFFETZ:  Well, I‘m not suggesting that we preserve any necessarily. 

I want to see the bill and look at everything that‘s absolutely in it.

O‘DONNELL:  Here‘s the bill, Jason.  Here‘s the bill, one sentence:

eliminate agriculture subsidy program.  Yes or no vote?  I vote yes, OK? 

Easy for me.  I want to eliminate the whole thing.  You, yes or no?

CHAFFETZ:  As a sweeping generality, yes.  I do want to cut those.

O‘DONNELL:  Thanks for joining me on that.  We got a liberal and conservative agreement on that one.

Now, the Pentagon wants to eliminate funding for the Joint Strike Fighter alternate engine.  The Pentagon opposes it, says it‘s wasteful, they don‘t need it.  You voted today to preserve that particular piece of wasteful spending.

Why do you want to hold onto that piece of wasteful spending?

CHAFFETZ:  Well, it did pass.  I did vote no.  There are conflicts in terms of analysis as to whether or not it‘s going to save money.

But, ultimately, we have the GAO, a very independent look at this, say that over the course of time, this would actually save money for the taxpayers.  The competition for the parts and whatnot for the engine over the course of decades would actually save us money, and also make sure that we have the supply we need.  So, I voted no.  It passed, but that‘s the way I voted.

O‘DONNELL:  Now, you recently flip-flopped on the Patriot Act.  You voted to reauthorize elements of the Patriot Act that you voted against last year.  One of your constituents, Doug Bail (ph), has reacted to that in “Salt Lake Tribune” saying, as a constituent, I‘m disappointed.  It‘s like when the vote doesn‘t matter, he can have his maverick vote.  When it matters, he kowtows to what the party wants.”  What do you say to your constituent about that flip-flop?

CHAFFETZ:  No, that‘s absolutely not true.  I did vote for temporary authorization on three provisions.  We did not vote on extending the Patriot Act, the entire Patriot Act.  What we voted on is a temporary extension of three provisions so that we could have time to do a markup, have hearings, and make adjustments.  I think that‘s fair.  It was—

O‘DONNELL:  You voted against—you voted against those provisions last year.  You voted for them this year.  So, you were against them before you were for them.

CHAFFETZ:  No, the Democrats that had the gavel before had plenty of time to bring this up.  When I talked to Republican leadership, they said we only have literally less than 10 legislative days before they expire.  We think it is responsible to go ahead and have a very temporary extension of those so that we can go back and make any necessary adjustments.  And I think that was a fair and balanced way to do it and I voted in favor of that.

Now, the Senate has whittled down to 90 days and we‘ll have to make some adjustments.  If there aren‘t adjustments, if we don‘t have the hearings, then I will vote no.


CHAFFETZ:  That‘s a reasonable way to do it.

O‘DONNELL:  I got you on that.

How high do you want to raise Social Security retirement age, to what age?

CHAFFETZ:  Well, we‘re working on an overall plan.  It‘s much more complex now.  I wish I could put the answer on a bumper sticker, but it just won‘t fit.  So, hang on there with us—

O‘DONNELL:  It‘s a number, Congressman.

CHAFFETZ:  No, it‘s not, because it will be adjusted over the course of time.  And I would love to get back—

O‘DONNELL:  That‘s right.  How long a period of time?  There‘s two elements to raising the retirement age—what‘s the maximum age it goes up to, and over what period of time do you do it.  You can do it over 30 years.  You can do it over 10 years.

How much time do you think you should take to raise retirement age to the level you want to raise it to?

CHAFFETZ:  I would adjust it based on longevity, based on how long are people living.  I think that‘s a fair way to do it.  There will be multiple other factors.  And I would love to come back on the show when I am ready to present the whole thing.

O‘DONNELL:  OK.  Got you.  OK, we have you in favor of raising the retirement age.

And how much would you like to reduce cost of living increases in Social Security?

CHAFFETZ:  I‘m not willing to peg a number at this time.  I need time to present that, but I will present it.

O‘DONNELL:  But do you want to reduce benefits in Social Security.

CHAFFETZ:  I would not.  No.  You‘re making a sweeping—


O‘DONNELL:  How much do you want to reduce the increase in benefits in Social Security for inflation?  How much do you want to reduce that inflation measure?

CHAFFETZ:  I think there‘s a reasonable way to do that, and I will present that in due time.

O‘DONNELL:  So, you are going to reduce the inflation measure?

CHAFFETZ:  No, you‘re putting words in my mouth.  I‘m saying that I will introduce it in a reasonable time frame and layout all the factors, because there are multiple factors.

O‘DONNELL:  All right.  So, you‘re going to raise—you want to raise retirement age and reduce the COLA increases.

CHAFFETZ:  You‘re trying to put a bumper sticker to it.

O‘DONNELL:  No, I‘m not putting any words.  Stop it, I am not putting words in your mouth.  You‘re saying yes to the things I‘m asking you about.

Now, on Medicare, how much do you want to raise co-pays in Medicare? 

How much more do you want beneficiaries pay for Medicare?

CHAFFETZ:  I have not peg a number to that.

O‘DONNELL:  But you do want to do it?

CHAFFETZ:  You said that.  I didn‘t say that.  No.

O‘DONNELL:  All right.  So, you absolutely will not raise co-pays in Medicare?

CHAFFETZ:  I didn‘t say that either.

O‘DONNELL:  OK.  Good.  There we are.  Just stay on that fence.

Now, you‘re living in your office.  You‘ve been living in your office for two years now in the House of Representatives?

CHAFFETZ:  No, I live in Alpine, Utah.  That‘s where my home is.

O‘DONNELL:  Oh, that‘s your answer on your tax return, right?  Because have you filed on your 2009 tax return, have you filed the equivalent income you have in effect received by illegally living for free in a federal building?

CHAFFETZ:  I reject the whole premise of what you‘re saying there.  I live in Alpine, Utah.  That‘s my home.  I work here in Washington.

O‘DONNELL:  Where are you sleeping tonight?

CHAFFETZ:  I work in Washington, D.C.—well, they asked me to come to the floor at 2:00 in the morning, I am not sure I‘m going to be sleeping anywhere tonight because we‘re going to—

O‘DONNELL:  Congressman, you have given yourself—

CHAFFETZ:  That is the reality.  The reality is I will not necessarily go to sleep tonight.  So—


O‘DONNELL:  Congressman, you have seized.  You have illegally seized from the federal taxpayer a personal income benefit that saves you the rent money that you would pay in Washington like all of your fellow congressmen who are responsible, who pay rent in Washington.  How much money do you save by not paying rent in Washington?  Would you say you save $20,000 a year off your $175,000 salary?

CHAFFETZ:  Oh, it depends on month to month.  I mean, you know—

O‘DONNELL:  Do you declare that savings as income as you are legally obliged to do or are you sleeping in your office as a tax criminal?

CHAFFETZ:  I reject the whole premise of your question and the way you phrased it.  I am trying to save money for myself, my family.

O‘DONNELL:  For your personal intent.  So, you are deriving—you are deriving additional personal income of your $174,000 of House income, you get to save more of it because you sleep in the office.  Have you declared that additional income benefit on your tax return with a dollar figure?

CHAFFETZ:  The way you phrase it, absolutely not.  I am trying to be fiscally responsible for my family.  I live in Alpine, Utah.  That‘s where my mortgage is.

O‘DONNELL:  Have you sought advisory opinion from the IRS that it is a legal tax behavior of yours—

CHAFFETZ:  No, no.

O‘DONNELL:  -- to not declare that as income?

CHAFFETZ:  I have not sought a tax opinion from the IRS, no.

O‘DONNELL:  Would you seek advisory letter from the IRS as to whether or not you can derive that additional in kind income from the House of Representatives without declaring it on your tax return?

CHAFFETZ:  I have not sought to do that.

O‘DONNELL:  Will you seek to do it tomorrow, write a letter to the IRS director and ask for an advisory opinion?

CHAFFETZ:  No, no, I don‘t think so.

O‘DONNELL:  All right.  We will ask for that advisory opinion for you, Congressman.

And, by the way, $174,000.  Does your wife have any income or is that your total family income?

CHAFFETZ:  Total family income.

O‘DONNELL:  And you cannot afford on $174,000 a way to live in Washington legally without becoming a tax criminal in the process?

CHAFFETZ:  Boy, you got up on the right side of the bed, didn‘t you?  Look, I‘m trying to be a responsible family man.  I‘m trying to do the right thing for me and my family.

O‘DONNELL:  H much is your housing in Alpine, Utah?  How much is your monthly housing, $1,500?

CHAFFETZ:  About $2,000.  My mortgage is about $2,000 a month.

O‘DONNELL:  And that‘s deductible, that interest is deductible.

CHAFFETZ:  Well, look, I‘ve got to make personal choices for me and my family.  I‘m trying not to—


O‘DONNELL:  You‘re trying to make the most money—you‘re trying to make the most money you can—you‘re trying to make the most money you can from the House of Representatives by sleeping on your sofa and not declaring the additional in effect income benefit you get from it.

CHAFFETZ:  I‘m trying to be as responsible as I can for the Chaffetz family.  I‘m not trying not to go into debt.  I have a mortgage payment and I have a car payment.  Other than that, I try to avoid all the consumer debt that I possibly can.

O‘DONNELL:  Do you think fellow H members who pay their own rent in Washington are more responsible about this than you are?

CHAFFETZ:  Oh, they got to make choices for themselves.  I am one of dozens who do what we—what I do, and on both sides of the aisle.  We‘re just trying to be frugal and—

O‘DONNELL:  Have you checked with any of your colleagues about whether they file the benefit on their tax return?

CHAFFETZ:  No, no.  I have—no.  No, it‘s none of my business.

O‘DONNELL:  So, as far as you know, the rest of them are tax criminals, too?

CHAFFETZ:  No, no.  That‘s ridiculous.

O‘DONNELL:  All right.  Congressman Jason Chaffetz, get straight with the IRS.  Republican from Utah—thank you very much for joining us tonight.

CHAFFETZ:  Thank you.

O‘DONNELL:  Coming up: Congresswoman Michele Bachmann‘s attack on Michelle Obama as the creator of a new nanny state.  That‘s tonight‘s “Rewrite.”

But, first, a new twist in the story of the shirtless congressman. 

It‘s the page six story that we want to be true, next.


O‘DONNELL:  Time for tonight‘s Page Six story we want to be true.  Ex-Congressman Chris Lee‘s flirtation with a woman didn‘t happen when he was relaxing at home, as he claimed, when he sent topless photo to Craigslist crush, Yisha Calahan (ph).  Sources say Lee was at a Baltimore hotel with the House Republicans for the 2011 Republican retreat on January 14. 

After a lecture on Intelligent Use of Information Technology, which clearly didn‘t sink in, and a few drinks at a pub near the hotel with Representative Duncan Hunter, Representative Bill Shuster and Representative Tom Rooney, Lee headed back to his room, a spy said, just in time to send a few flirty messages to Calahan. 

His rep couldn‘t be reached.  We took a closer look at the hotel in question to see if the shirtless congressman‘s moment of using information technology could be placed in that hotel.  Our photo shows different counter color, no art work in the bathroom. 

But our photo doesn‘t prove anything.  It could be in a different section of that hotel, a remodeled section.  The congressman could have been in the hotel next door, which is close enough for me.  We don‘t want to doubt Page Six on this one.  We‘re just trying to help. 

And we really want this one to be true. 

Coming up, how an heiress named Bunny and her donations to the Edwards campaign could be the key to indicting a former presidential candidate on campaign finance violations.

And tonight‘s Rewrite goes inside the stream of unconsciousness coming from Michelle Obama (sic).  She doesn‘t like a tax break that benefits moms and babies.


O‘DONNELL:  First, an obvious correction to what you just heard.  I just said Michelle Obama when I meant Michele Bachmann, but we had video of Michele Bachmann on the screen at the same time, so I‘m sure you all figured out that particular little bit of misspeaking. 

Now to the John Edwards affair.  The two-year federal criminal investigation into whether former Senator John Edwards violated campaign finance laws while covering up an affair may finally be reaching a decisive point.  The federal grand jury has been hearing testimony about Edwards‘ web of donations, including a reclusive 100-year-old heiress, named Bunny Melon. 

Edwards met Melon at her estate in 2006.  She told him he reminded her of John F. Kennedy.  And his campaign promptly followed up with a call asking for a million dollars.  Edwards made sure to check in frequently with Melon by phone after that, and dispatched his aide, Andrew Young, to make persistent requests for more money. 

In 2007 and 2008, Young asked Melon to give Edwards 700,000 dollars for an urgent personal need, and Melon agreed to send him the money, making out checks for, quote, furniture to her interior designer, who then endorsed them to Young, who then gave them to Edwards, sometimes hidden in a box of chocolates. 

Edwards allegedly needed the money to pay to keep his mistress, their child, and the child‘s pretend father, aide Andrew Young, away from the media and everyone else.  John Edwards denies knowing anything about those payments. 

Joining me now is MSNBC political analyst Karen Finney, who served as communications director to Elizabeth Edwards during the 2004 campaign when her husband was the vice presidential nominee.  Thanks for joining us tonight, Karen. 


O‘DONNELL:  Karen, from what you know about this case, as outlined publicly so far, what would the violation of campaign finance law be? 

FINNEY:  Well, you know, it‘s interesting because the government has had quite a time trying to disentangle all the various pieces of this.  As I understand it, at this point, there was a 527, and that was initially where Bunny is alleged to have I think sent millions of dollars. 

That 527 -- there was also an LLC by a similar name.  Money went from the 527 to the LLC.  The 527 spent money during the 2008 campaign in support of John Edwards‘ campaign, with what are called the issue ads.  But that potentially by following the money from the 527 to the LLC, it meant that the LLC could spend money for what was called consulting services without really having to report it. 

So—and that‘s in addition to the 700,000 dollars in the box of chocolates.  So the question is, as always, what did John Edwards know and when did he know it?  You know, technically when you have a 527 or a PAC, the campaign is not supposed to coordinate in any way, know anything about those operations. 

I think there are some questions regarding how that money flowed, whether or not John Edwards knew about where that money was going.  And there are also some questions about—again, there are some limits on how money can be used that can‘t be used for what‘s called personal use.  And I would say trying to hide your mistress is probably about as personal as it gets. 

O‘DONNELL:  Now, I don‘t know John Edwards.  You do.  I know politicians generally.  It is inconceivable to me that a big donor could be passing 700,000 dollars knowingly to a politician without ever mentioning that to a politician or having a conversation with that politician.  Is it conceivable to you that John Edwards is telling the truth when he says I knew nothing about the movement of that money? 

FINNEY:  It sure seems like a stretch, doesn‘t it?  It‘s very hard for me to believe that.  That is also another sort of point in the crux of this case, as to whether or not he knew about the 700,000 dollars.  Or did he solicit—did he say to Andrew, can you get this money?  How did that all go down? 

It is hard to believe, I got to tell you.  And unfortunately, I hate to say this, but John Edwards doesn‘t have the best track record of telling the truth. 

O‘DONNELL:  And what does this case overall now tell us about the effectiveness, ineffectiveness of campaign finance laws?  If massive amounts of money like this can be moved, possibly illegally, and it isn‘t discovered until years after the campaign, after the candidate has already won or lost, aren‘t these campaign finance laws, in effect, useless during the campaign for helping us sort out who‘s honest about campaign financing? 

FINNEY:  Well, sure.  And you remember, Lawrence, during the 2010 cycle, obviously, the whole notion of the super-PACs, the rise of the super-PACs in the wake of the Citizens United decision kind of even added yet another layer onto an already complicated and—system that makes it very hard to find the money, makes it very easy to hide the money, until much longer after the campaigns. 

There are all kinds of different reporting rules.  I think what it says is, you know, something we‘ve all known, our system is badly broken and desperately in need of reform. 

Unfortunately, personally, I am rather cynical.  I don‘t think it is ever going to be reformed to the degree that it needs to be, because ultimately it is not in anyone‘s interests. 

O‘DONNELL:  Karen, I know this isn‘t a story you ever wanted to talk about.  I really appreciate you joining us tonight and helping us sort our way through it.  MSNBC analyst, Karen Finney, thank you very much. 

FINNEY:  Thanks. 

O‘DONNELL:  Coming up, leave it to Michele Bachmann to find a way to attack the First Lady over her support of breastfeeding mothers.  More about that in tonight‘s Rewrite. 

And right wing bloggers actually attack CBS correspondent Lara Logan for being attacked in Egypt.


O‘DONNELL:  Time for tonight‘s Rewrite.  Minnesota Tea Party favorite Michele Bachmann hasn‘t officially declared that she‘s running for president in 2012.  But she‘s taking ever opportunity she can to criticize every Obama she can.  Her newest target, Michelle Obama for encouraging more women to breast feed as part of her Let‘s Move campaign. 

Bachmann also blamed the administration for the new IRS rule that makes breast pumps tax deductible. 


REP. MICHELE BACHMANN ®, MINNESOTA:  I think this is very consistent with where the hard left is coming from.  For them, government is the answer to every problem.  I‘ve given birth to five babies, and I breast fed every one of these babies. 

To think that government has to go out and buy my breast pump for my babies?  I mean, you want to talk about the nanny state, I think you just got a new definition of the nanny. 


O‘DONNELL:  Of course, no one is talking about the government buying breast pumps for anyone.  Needless to say, Michele Bachmann doesn‘t live in the real world where she has to file a real world tax return that includes deductions for a variety of expenses, because all of her expenses are covered by the House of Representatives, where she makes 174,000 dollars a year, or, by her various campaign funds, which can in effect pay for all sorts of things, including her dry cleaning and every meal she eats. 

So Michele Bachmann doesn‘t realize that when something is deductible, it does not mean that the government is actually paying for it.  It means you have to pay for it in full.  Then maybe a year after you do, on your tax return, you will be allowed to reduce your tax liability by a small portion of the amount of money that you paid for that thing. 

A tax deduction makes an expense slightly less expensive.  And if Michele Bachmann is now opposed to the tax deductions for breast pumps, that would logically mean she must be opposed to the tax deduction for all medical equipment. 

And that‘s all that‘s happened here.  What‘s happened here is that the IRS has quite reasonably finally classified breast pumps as medical equipment, making them tax deductible, but only—only for people whose out of pocket medical costs exceed 7.5 percent of adjusted gross income.  So for most people who used breast pumps, they still will not be tax deductible. 

The IRS welcomed breast pumps into the medical equipment category because the Academy of Pediatrics presented many documented health benefits from breastfeeding for both mother and child.  So making breast pumps tax deductible is a matter of fairness and consistency in the tax code. 

And here is the most important thing that Michele Bachmann doesn‘t understand: tax deductions are tax cuts for people who take the tax deductions.  So Michele Bachmann has finally found a tax cut that she‘s opposed to.


O‘DONNELL:  CBS News correspondent Lara Logan was interviewed by Charlie Rose on February 7th, after she and her crew had been detained by the Egyptian army.  She talked about her desire to go right back in and cover the story. 


LARA LOGAN, CBS NEWS CORRESPONDENT:  Fundamentally, it is in my blood to be there and to be on the street and to be listening to people and to do the best reporting I can.  At the same time, I am also aware of the fact that I put my family through a very difficult situation. 


O‘DONNELL:  On Friday, February 11th, the day Egyptian President Hosni Mubarak stepped down, CBS correspondent Lara Logan was covering the jubilation in Tahrir Square for a “60 Minutes” story when she and her team and their security were surrounded by a dangerous element amidst the celebration. 

It was a mob of more than 200 people whipped into a frenzy.  So says a CBS News statement released yesterday.  The statement continues, “in the crush of the mob, she was separated from her crew.  She was surrounded and suffered a brutal and sustained sexual assault and beating, before being saved by a group of women and an estimated 20 Egyptian soldiers.  She reconnected with the CBS team, returned to her hotel, and returned to the United States on the first flight the next morning.” 

CBS, Lara Logan and her family intend to make no further statement on this.  She‘s now recovering at home after being treated in an American hospital. 

Making a bad situation worse, there have been many reactions to what happened to Lara Logan.  The worst from conservative commentator Debbie Schlussel, who brags about her appearance on “The O‘Reilly Factor.” 

She wrote, “so sad, too bad, Lara.  No one told her to go there.  She knew the risks and she should have known what Islam is all about.  Now she knows.  This never happened to her or any other mainstream media reporter when Mubarak was allowed to treat his country of savages in the only way they can be controlled.  How fitting that Lara Logan was liberated by Muslims in Liberation Square while she was gushing over the other part of the liberation.  Hope you‘re enjoying the revolution, Lara.” 

Joining me now, author and journalist Farai Chideya of  Farai, I am a little lost.  I am a little bit sickened by what I just had to read.  I thought it was hard to be surprised by what can surface on the Internet these days.  This is surprising. 

FARAI CHIDEYA, POPANDPOLITICS.COM:  It‘s—any time that you deliberately set out to profit from someone else‘s tragedy, that is evil.  There is no question in my mind. 

And I believe that she in writing those words had the intent of enriching herself, or perhaps spreading her fame as a pundit.  In some ways, I want to believe that it is a profit motive rather than ideological motive, because if you talk about trashing an entire religion, as she constantly trashes Islam, this country has to come to grips with the fact we are a pluralistic society and the founding fathers wanted us to be that. 

They designed us as a pluralistic society.  So it does no good in this tragic situation to blame an entire religion for a rape.  There are plenty of rapes in the United States every day by Christians, by atheists, I am sure by Muslims. 

You know, I am just so sad for this reporter.  I am proud of her bravery.  And there‘s no call for this kind of talk. 

O‘DONNELL:  How can anyone so eager to attack Muslims for this not notice that it is 20 Egyptian women who save her. 

CHIDEYA:  Right.  You know, the facts fall easily under the bus of convenience, when you‘re trying to make a point only.  The reality is that courageous female reporters constantly put themselves in risk in war zones, and in the United States as well, although we in the United States who are reporters have many more protections than people in other parts of the world. 

I would point out the work of the International Women‘s Media Foundation, which every year has the Courage Awards.  And one of the people who came to the awards as an awardee from Mexico, you know, she had all sorts of threats leveled against her. 

And you know, people that work in international journalism, whether they are from the U.S. or other places—I know reporters who have had to fight off rapists.  I know reporters who have, you know, been photojournalists, female reporters and had a bullet lodged in their camera.  Women reporters put themselves at risk every day.  That is not a justification. 

O‘DONNELL:  There‘s politics in this, too, though.  She had nothing gleeful to say when Fox News reporters got into some trouble, physical trouble in Egypt.  This was—there‘s targeted politics in this, isn‘t there?

CHIDEYA:  Oh, absolutely.  The whole idea is to grind an ax against a religion.  And to grind an ax against what she perceived as political opponents.  A good reporter should not be, you know, viewed as a political opponent when they go out to get the news.  That‘s fundamentally bizarre to me that someone would think that. 

O‘DONNELL:  Farai Chideya with, thank you for joining me tonight on this grim story. 

CHIDEYA:  Thank you. 

O‘DONNELL:  You can have THE LAST WORD online at our blog,  You can also follow us on Facebook and follow me @Lawrence on Twitter.  That‘s tonight‘s LAST WORD. 

“THE RACHEL MADDOW SHOW” is up next, including her interview with former Wisconsin Senator Russ Feingold.  Good evening, Rachel. 


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