IE 11 is not supported. For an optimal experience visit our site on another browser.

'The Last Word with Lawrence O'Donnell' for Thursday, July 14, 2011

Guests: Richard Wolffe, Ezra Klein, Dana Milbank

LAWRENCE O‘DONNELL, HOST: At 5:43 p.m., Washington time, the president concluded yet another meeting with the congressional leadership with no resolution of the problem at hand: the Eric Cantor problem.
REP. ERIC CANTOR (R-VA), MAJORITY LEADER: We‘re not going to raise the debt ceiling if we don‘t have cuts.
O‘DONNELL (voice-over): Eric Cantor is now the man to blame for bringing us to the brink of economic catastrophe.
REPORTER: Are you the reason that there will not be an extension in the next few days?
CHRIS MATTHEWS, “HARDBALL” HOST: This is not a game.
CANTOR: We don‘t want to raise taxes.
UNIDENTIFIED MALE: He‘s not going to back down.
UNIDENTIFIED MALE: Let‘s play global thermonuclear war.
MARTIN BASHIR, MSNBC HOST: No sign he‘s really willing to negotiate.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now is not the time to play games.
Nevertheless, the clock is ticking.
CHUCK TODD, NBC NEWS: Hurtling toward a huge financial calamity.
UNIDENTIFIED FEMALE: Dire consequences.
CARNEY: That is a bad scenario.
UNIDENTIFIED MALE: A gloom and doom scenario.
UNIDENTIFIED FEMALE: Some are now asking if Cantor is hurting the debt talks.
SEN. HARRY REID (D-NV), MAJORITY LEADER: Republicans agree he shouldn‘t be at the table. It was childish.
TODD: Called them childish.
BASHIR: Once wrote in his high school year book, quote, “I want what I want what I wanted.
REID: Quote, “He‘s all about Eric.”
O‘DONNELL: Boehner and McConnell are trying to lead a party that doesn‘t even understand the problem.
REID: Even Speaker Boehner and Minority Leader McConnell seem to understand --
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We have been in this fight together.
UNIDENTIFIED FEMALE: I think Mitch McConnell frankly has lost his mind.
UNIDENTIFIED MALE: I think that we have plenty of money to service our debt.
MATTHEWS: All those people are lying and you‘ve got the truth?
UNIDENTIFIED FEMALE: It‘s so horrible, there‘s no way they could possibly be so stupid.
SARAH PALIN ®, FORMER ALASKA GOVERNOR: And now is not the time to retreat. It‘s the time to reload.
O‘DONNELL: And don‘t expect anything better from the Republican presidential candidates.
amendment. And that is the answer
UNIDENTIFIED FEMALE: You don‘t care if we get downgraded?
EZRA KLEIN, MSNBC CONTRIBUTOR: Michele Bachmann, as far as I can tell, just hasn‘t done the math.
MATTHEWS: This is how the earn the title balloon-head.
BACHMANN: The president doesn‘t want to be confronted with priorities in spending because he has a lot of chutzpah.
UNIDENTIFIED MALE: That‘s pronunciation.
STEPHEN COLBERT, THE COLBERT REPORT: I think the new show talking about federal budget negotiations is just cheap, salacious viewer bait.
O‘DONNELL: Good evening from New York.
Breaking news, President Obama will hold a news conference from the Brady briefing room at 11:00 a.m. tomorrow, his second news conference in five days.
The president met with Democrat and Republican leadership for a little over an hour today to continue to find a way to avert the worldwide economic catastrophe that is looming on August 2nd if the president and Congress have not agreed on a way to increase the debt limit of the United States government.
Before the meeting today, there was a flood of criticism of Eric Cantor‘s performance throughout these discussions, and including yesterday‘s meeting.
REID: House Majority Leader Eric Cantor has shown he shouldn‘t even be at the table. And Republicans agree shouldn‘t be at the table. One Republican told “Politico” last night, “The Hill publication,” quote, “He lost a lot of credibility when he walked away from the table. It was childish,” end of quote. And he was walking out on the meetings, with the vice president of the United States. It was childish.
Another Republican said Cantor is putting himself first. He said this. Quote, “He‘s all about Eric,” end of quote.
O‘DONNELL: Cantor, who caused trouble for John Boehner, led a rebellion against John Boehner, when the speaker returned from the negotiations with the White House over the July 4th weekend with a package of tax revenue increases that Boehner was willing to consider.
Today, Cantor desperately tried to tie himself to Boehner in an attempt to restore some shred of credibility.
CANTOR: The speaker and I have consistently been on the same page. And Leader Reid is I imagine frustrated as we all are. And the fact is, we are going to abide by our principles. And that‘s how it is. And I‘m sure the speaker joins me in that.
O‘DONNELL: So what does Boehner do when the guy who tried to stab him in the back reaches out for his help? Boehner did what all smart politicians do. You especially do it with a colleague who‘s tried to stab you in the back in the past. Boehner publicly stepped up.
CANTOR: That‘s how it is. I‘m sure the speaker joins me in that.
BOEHNER: Let me just say we have been in this fight together. And any suggestion that the role that Eric has played in this meeting has been anything but helpful is just wrong. Listen, we‘re in the foxhole. And I‘m going to tell you what? This is not easy.
O‘DONNELL: And with that embrace, and that lie, about Cantor being helpful in the negotiations, John Boehner now owns Eric Cantor.
Jay Carney pointed out today how absurdly politicized the debt ceiling has become, something that previously had always been a routine vote.
CARNEY: Collectively, the Republican negotiators in this room with the president have voted to raise the debt limit 25 times. Speaker of the House has voted six times. The majority leader of the House has voted to raise the debt limit five times in his career in the House. Senator McConnell has voted to raise the debt limit eight times. Senator Kyl, six times.
O‘DONNELL: Reports of today‘s meeting indicate that no progress was made, that Republican Senate leader Mitch McConnell‘s convoluted plan for a three-vote version of raising the debt ceiling over three months was not even discussed. And by all accounts, Eric Cantor did not say a word.
There is no meeting scheduled for tomorrow, but the president has scheduled a press conference. As the clock runs out, the president‘s hand only strengthens. Wall Street has instructed the Republican leadership that they must raise the debt ceiling by August 2nd—something McConnell and Boehner already knew. And as the negotiating sessions become less productive, it actually increases the chances that the president will get his original wish, a wish that no one seems to remember anymore—a simple clean bill—that does nothing, nothing, other than raise the debt ceiling. A bill that does not impose draconian spending puts in Medicare and other programs that Democrats cherish, and a bill that does not include any increase in tax revenues that Republicans oppose so relentlessly and irrationally.
If Congress does try to force something on the president that he does not like, he has plenty of time left to veto it and force the Congress to go back to work. In fact, with the debt ceiling increase, the president can veto it at sunset on August 1st with default looming at midnight, and the Congress will still have time to pass a clean debt ceiling bill at the last minute in order to avoid default—something the Congress knows how to do and has done many, many times in the past at the last minute.
In fact, it‘s been traditional to wait until the very last minute to try to pass debt ceiling increases, because as everyone used to understand in the Congress, the debt ceiling increase is what they used to call a must-pass bill. No one can tamper with it. They can vote against it, as long as—and you heard Senator Durbin explain this on this show the other night—you can vote against it, as long as, as Durbin put it, you‘re looking over your shoulder and making sure they have enough votes to pass it.
The Congress has frequently taken up the debt ceiling at the last minute, the night before default would hit, specifically in order to force members to just shut up and vote, to not use any delaying tactics, no filibustering, no attempts to amend the debt ceiling.
In fact, when I was running the staff of the Senate Finance Committee, we wrote and passed debt ceiling increases with ease. Here‘s a typical one right here that I did. It‘s one sentence long.
This is the entire debt ceiling increase bill. It is one page. The one sentence simply says, that this is to raise the—let‘s see—this was a temporary one. So, it has a little extra wording in it.
During the period beginning on the date of enactment of this act and ending on September 30th, 1993, the public debt set forth in subsection B of section 3101 of title 31, United States Code shall be temporarily increased to $4,370,000,000.
Those are the days, $4 trillion debt. It was a temporary debt increase.
The second debt increase that I had to do to back up when this temporary one ran out was this one. OK? A little bigger. This is the Omnibus Budget Reconciliation Act of 1993. It‘s got a lot of stuff in it. In fact, it‘s got funding for the entire federal government in here.
Here, tucked in here on page 254, is the debt ceiling increase. It is one sentence, just one sentence.
There‘s a lot of other work I‘m proud of in this bill, like the biggest tax increase in history. The only tax increase that I got to do during my time at the Senate Finance Committee. And if you‘re only going to get to do one tax increase in your life, it might as well be the biggest.
This bill also includes spending provisions for the entire federal government. So that took more than half of these pages. And it is worth noting at this time that in this bill are a couple of hundred billion dollars in Medicare and Medicaid cuts that were proposed and supported by President Bill Clinton, written into law by a Democratic Congress and passed with Democrat votes only. The biggest cuts ever enacted in Medicare at that time.
That was the very first thing that Democratic President Bill Clinton did with Medicare. Actually cut it. To no objections, none, not one word of objection from liberals at that time about cutting Medicare. Not one person who has attacked President Obama from the left for even discussing Medicare cuts objected to the Clinton Medicare cuts, which were supported by every liberal in the United States House of Representatives and the United States Senate.
Now, I don‘t know where the newly appointed protectors of Medicare were at the time. It was the middle of the summer. So, they might have all been at baseball games.
But the president didn‘t hear from one of them. Not from one of them. What Barack Obama has heard from so many about betraying their trust by discussing Medicare cuts.
You know the rest of this story. This bill passed. Medicare continued to be the best government-run health insurance program in the world.
The biggest tax increase in history did not cripple the economy, as every Republican insisted that it would. Bill Clinton took ownership of the economy with this bill. And the economy soared to new heights, especially for the rich, the very rich, the super rich, the ultra-rich—they all got richer and richer and richer, living under that horrible Clinton 39 percent top income tax bracket. But I digress.
The debt ceiling in this bill, which we slipped in here on page 254, where we wanted it to be, pretty hard to find. In fact, it was so hard to find it took me most of the day today to find where I had put it in this bill back in 1993. It simply says, as all debt ceiling increases before it have said, with variations on the number at the end, “Subsection B of section 3101 of Title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $4,900,000,000.”
I can‘t tell you how relieved we all were at that time that we were able to keep the debt limit under $5 trillion, about 1/3 of where it is now. That‘s all a debt ceiling increase is. It‘s one sentence.
So, the president can hang tough on the debt ceiling right up until literally the 11th hour. He could veto a debt ceiling bill at 11:00 p.m. on August 1st, and the Congress would still have time to pass a clean bill, a clean debt ceiling bill, before midnight.
The president could write it himself, he could handwrite it if he wanted to. He could just take one that we‘ve written before, use the same words. Just take the last debt ceiling increase, the last one that was just passed just last year.
Here it is, right here in the monitor. All you have to do is change five digits. Change the 14,294 to 16,700. That‘s it. You‘re done. That‘s the bill.
The House and the Senate can vote for it by voice vote in less than 10 minutes. That‘s how far the president can take this if he really wants to put the Congress‘ back to the wall, as the clock continues to tick down. As the Republican retreat in disarray demonstrates, the president‘s power only increases.
Joining me now is Richard Wolffe, MSNBC political analyst and author of “Renegade: The Making of a President.”
Richard, as we‘ve heard, the president has scheduled a news conference tomorrow. No working session of the group. That doesn‘t sound like it‘s going to be a particularly good day for the Republicans. When he gets out there on the news conference stage on this subject, things don‘t go well for them.
RICHARD WOLFFE, MSNBC POLITICAL ANALYST: No. And he‘s told them to go back to their caucuses and figure out what they can do with this deal that he wants. He said he wanted the biggest deal possible. He still made that presentation today.
I understand that Tim Geithner and his chief economist, Gene Sperling, and Jack Lew, the budget director, were making one more big push for the big cuts Republicans say they want. If they turn their back on those big cuts, the president is in the strongest position to say they‘re not living up to their rhetoric, never mind their politics or their principles.
O‘DONNELL: And there is no chance of them accepting any version or any kind of big deal or medium-sized deal at all because the president is insisting that there‘d be tax revenue increases in there. So, the president knows that he is pushing something that they absolutely cannot agree to.
So, at this point, what the president does seem to be doing is what you just said, is making his position appear to be the one who wants to do the big move on deficit reduction, and forcing these Republicans to back away from big deficit reduction, thereby, he hopes, neutralizing deficit reduction as an issue against him in the presidential campaign.
WOLFFE: Well, look, he‘s talked about deficit reduction all the way through, did it in the Affordable Care Act, in health care reform. But remember, it‘s not just his position here. It‘s 2/3 of the American public. We‘ve got a whole slew of polls here saying that 2/3 of the American people want to see some combination of taxes and spending cuts to get this deal done and to put the federal budget on the right track.
That is not just a matter of politics. That‘s if the Republican Party is serious about its own survival, they read those same polls and know where they should go to.
O‘DONNELL: Nancy Pelosi seems to be having fun with this tactic, too. She‘s come out saying, oh, yes, she‘s for the big giant $4 billion package, too—knowing that she couldn‘t possibly get the votes on the spending cuts side of that in the House of Representatives.
MSNBC political analyst Richard Wolffe—thank you very much for joining me tonight.
WOLFFE: You bet, Lawrence.
O‘DONNELL: Coming up, Jon Stewart cannot help himself. He cannot control his deep desire to make gay jokes about Michele Bachmann‘s husband. So he needs a therapist to help him pray away the gay jokes. That therapist is Jerry Seinfeld. You‘re going to have that later in the show. Don‘t miss it.
And later, when Republican House leader Eric Cantor says he will never vote for a tax increase of any kind, he is forgetting one little thing about his own record on taxes. Luckily for him, and the political media has also forgotten it, too. But I‘ll be reminding him and the political media of the day Eric Cantor voted to raise income taxes.
That‘s in my “Rewrite” tonight.
O‘DONNELL: Coming up: Teddy Kennedy‘s opposition research team exposed Mitt Romney‘s weaknesses 18 years ago. A never-before-seen campaign ad against Romney and why those weaknesses are as important now as they were back then.
Up next, what would actually happen if the unthinkable happened and the United States defaulted on its debt?
O‘DONNELL: If Republicans do not get their way and they fail to raise the debt ceiling, President Obama would be forced to pick which of the roughly $80 million monthly payments the treasury pays and does not pay.
According to an independent report led by Jay Powell, a Republican former treasury official, in August, the U.S. has an estimated $306 billion in payment obligations but would only take in $172 billion in revenue, leaving $134 billion shortfall for the month of August. In other words, President Obama would immediately have to cut 44 percent of federal spending.
As “The Washington Post” points out, through August, the government could afford social security, Medicare, Medicaid, defense contracts, unemployment insurance, and payments to bondholders.
But then it would have to eliminate all other federal spending, including pay for veterans for members of the armed services, civil servants, as well as funding for Pell grants, special education programs, the federal courts, law enforcement, the FBI. What do they do, close it down? National nuclear programs, housing assistance. It goes on and on.
And this is to say nothing of the impact on global financial markets.
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I think it would be a calamitous outcome. It would create a very severe financial shock that would have effects not only the U.S. economy but on the global economy. We would destroy the trust and confidence that global investors have in U.S. treasury securities as being the safest and most liquid assets in the world.
O‘DONNELL: Joining me now, “Washington Post” columnist and MSNBC contributor Ezra Klein.
Thanks for joining me tonight, Ezra.
O‘DONNELL: Ezra, this report gives lie to this crazy Republican notion that has been going around, Michele Bachmann and the others saying, no, they‘d be fine, they just wouldn‘t pay the stuff we don‘t need, they‘d be able to pay Social Security, be able to pay the military, be able to pay for the interest on the debt, the bonds, all that stuff, be able to pay for everything that matters.
This is a completely untenable position with this study.
KLEIN: The danger of the debt ceiling is not theory. It‘s arithmetic. So, you mentioned earlier, $134 billion in August. That is 10 percent of the August GDP. So, you cut out 10 percent of America‘s GDP in that month, for that month. That if you do that over any period of time, if it‘s an instant recession, you shave off 10 percent of the nation‘s economy.
That doesn‘t even get into the uncertainty, the fact that every other or almost every other debt instrument, credit cards, mortgages, corporate debt, would jump up because they are all based on treasury debt. The damage to the economy is not on a scale that we‘re frankly even prepared to calculate.
O‘DONNELL: And this is all based on estimations of what the income to the federal government is going to be. There is some late tax filers that tend to come in around now, that they are expecting to come in in early August. But they don‘t actually—they never really know how much money is going to come in in the first week of August.
KLEIN: Or even how much money is going to go out. I mean, the secretary does not get on the floor of his office and spread out $80 million different checks, or 80 million different checks and decide which ones to pay and which ones not, and how much is coming in and how much isn‘t. It‘s all programmed into computers, it‘s all automatic. Nobody actually knows.
And this is the scary part. Nobody knows how you would stop paying certain things and not others. There‘s no program where you just check and uncheck boxes. That is not how the federal government works.
So, aside from everything else, you‘d have an enormous amount of
uncertainty as: (a), whether we could do this, and (b), who would be paid
and who wouldn‘t be, which means not only will you have the people who
aren‘t getting paid pulling back their economic activity, you‘d have a much
larger group which isn‘t sure if they‘re going to get paid pulling back
their economic activity and when all these different people begin to stop -
begin to horde money all at once. And what we call that is a recession.

O‘DONNELL: So, Whitey Bulger is supposed to be on trial. I guess he is not a federal case. But federal courts around the country, what happens if there‘s no money to pay the clerks, the judges, everything that goes on in a federal courthouse?
KLEIN: We really—it‘s amazing, we really don‘t know. As you know, Lawrence, in federal shutdowns, there is legislation governing who stays on and who doesn‘t. It‘s people who are sort of vital to national security, vital to protecting people. We actually don‘t have legislation like that for a debt default. We‘ve never dealt with this situation before. It isn‘t clear what would be legal and what isn‘t.
So, it isn‘t even clear. Let‘s say you‘re a member of the FBI. You don‘t want to go home because your work is vital to the nation and you assume you‘ll get paid eventually. It‘s not clear you can keep coming to work lawfully.
O‘DONNELL: “Washington Post‘s” Ezra Klein—thanks for joining me tonight, Ezra.
KLEIN: Thank you.
O‘DONNELL: Coming up: the person who did the ads for Senator Ted Kennedy nearly 20 years ago knew exact lee how to hit Mitt Romney—a devastating anti-Romney ad that never aired is coming up.
And Jon Stewart has to bring in an expert to help him pray the gay jokes away.
MITT ROMNEY ®, PRESIDENTIAL CANDIDATE: My work led me to become very deeply involved in helping other businesses, from start-ups to large companies that were going through tough times. Sometimes I was successful and we were able to help create job. Other times I wasn‘t.
O‘DONNELL: Yeah, sometimes he wasn‘t. In the Spotlight tonight, Republican presidential candidate Mitt Romney says his business background at investment company Bain Capital prepared him to rescue the economy, despite Bain‘s involvement in mass layoffs.
Democrats are already preparing to use that against him, just as Ted Kennedy‘s campaign did in 1994, when Romney ran for Senate in Massachusetts. Today, “Politico” posted a Kennedy ad that never aired, attacking Romney‘s record at the consulting firm Bain & Company.
UNIDENTIFIED MALE: Mitt Romney says he saved Bain & Company. But he didn‘t tell you that on the day he took over, he had his assistant fire hundreds of employees, or that the way the company was rescued was with a federal bailout of 10 million dollars.
According to “The Globe,” Romney‘s company failed to repay at least 10 million dollars to a failed bank, and the rest of us had to absorb the loss. Romney, he and others made four million dollars in this deal, which cost ordinary people 10 million dollars.
Mitt Romney, maybe he‘s just against government.
O‘DONNELL: Joining me now is Dana Milbank, national political reporter for “the Washington Post.” Thanks for joining me tonight, Dana.
DANA MILBANK, “THE WASHINGTON POST”: Good evening, Lawrence.
O‘DONNELL: Dana, that is the campaign against mitt Romney, if he makes it to the nomination. But will Republicans—will any Republican be able to exploit that kind of thing against him in a primary fight?
MILBANK: I don‘t see why not. I mean, and the only reason this ad wasn‘t used is because Mitt Romney had already been wiped out by other ads pointing to other deals at Bain that had gone sour in the first place.
So it seemed that this would be applicable for Republicans to come at as well. Look, Mitt Romney may well have been a good businessman. That doesn‘t mean he was a good job creator, which of course is the flaw in the argument that we‘re hearing here, that just cut corporate taxes and regulations, and businesses will create jobs.
They are already sitting on record levels of profits. They are just not right now turning it into jobs.
O‘DONNELL: And we have seen Michele Bachmann surge in Iowa ahead of Romney now, indicating that there‘s a—there‘s a fundamental dissatisfaction with Romney out there that‘s easy to exploit.
Sarah Palin loves to continue to undermine the field, not just Romney. She said last night on Fox News that maybe she would continue to think about this, make a decision, oh, you know, maybe at the end of the summer. Let‘s listen to this.
SARAH PALIN, FOX NEWS CONTRIBUTOR: Now I‘m not wholly confident that we have that field set yet, that one individual that is in the field. So I‘m still thinking about being one who would offer myself up in the name of service, knowing confidently that I have those common sense, fiscally conservative pro-private sector policy experience and ideas that can be put to good work for this country.
O‘DONNELL: Now, in the polls that show Michele Bachmann at the top in Iowa, she is trailing Tim Pawlenty. She is running like fourth, fifth in those polls. How much longer can “Hannity & Company” play the charade that this is actually a credible discussion?
MILBANK: Lawrence, you called this months ago. Obviously, it‘s going to turn out the way you said. But I think we can all engage in a little guilty pleasure of toying with the possibility of Palin now. But, look, it‘s the same as it ever was. She‘s not raising the money. She‘s not getting the people behind her.
Everybody else has moved on. Sarah Palin just wants to, you know, get a little bit of that spotlight a couple more months.
O‘DONNELL: And my belief is that she is smart enough a politician to read those polls and know exactly what they mean. I think she finishes those bits with Hannity and walks off the set going, I can‘t believe they‘re still letting me do this here.
MILBANK: This isn‘t about votes. It‘s about speaking fees.
O‘DONNELL: Right. It‘s about keeping that bubble in the air, that Palin bubble.
MILBANK: Exactly.
O‘DONNELL: Is there something to watch in Romney going forward? Does he need to try to start building in a defense on this job creator versus job killer?
MILBANK: How does he do it? You know, the dispute is whether he was 47th out of 50 or 49th out of 50 when he was governor. Look, of course that‘s unfair. It‘s based on policies that happened before he was in office..
But that‘s the same thing that can be said of Obama, that he is being saddled with exactly what was given to him by the MBA president before him. So Obama is stuck with that economy. But Romney is stuck with his economy too.
O‘DONNELL: Dana Milbank of the “Washington Post,” thanks for joining me tonight.
MILBANK: Thanks, Lawrence.
O‘DONNELL: Coming up, Eric Cantor and the debt talks. And how I proved two and a half years ago on this network that Eric Cantor is the worst person to represent the Republicans in presidential negotiations. That‘s next.
And later, Jon Stewart takes on Marcus Bachmann and his clinic‘s practice of praying the gay away. This is a segment you will not want to miss.
O‘DONNELL: Time for tonight‘s Rewrite. As we‘ve seen already tonight, Eric Cantor is not having any more fun in his role of bad cop to John Boehner‘s good cop in their negotiations with the president on the debt ceiling. He famously walked out of those negotiations a few weeks ago when the vice president wanted to discuss tax revenue that could be included in a deficit reduction package.
Now, you cannot get tougher than that about tax increases, refusing to even discuss them. And as you know what the White House wanted to discuss was not an increase in tax rates, but simply a proper enforcement of current tax law, and adjustments in such a way that would come close some egregious loopholes and bring corporations and very, very rich tax filers closer to what could be described as paying their fair share of taxes.
John Boehner was willing to at least discuss raising tax revenue that way. But he has always been unwilling to discuss raising tax rates. John Boehner has been flawlessly consistent in his opposition to raising tax rates. Boehner has never met a tax rate increase he didn‘t hate.
But Eric Cantor‘s history is not so consistent. Let‘s take a look at my one and only encounter with Congressman Cantor on “MORNING JOE” almost 2.5 years ago, when I had one very simple question for him. How was he going to vote on a tax rate increase being brought to a vote that day in then Democratic Chairman of the House Ways and Means Committee Charlie Rangel?
Now, let‘s remember that the Republicans remain staunchly opposed to raising the top income tax rate from the Bush level of 35 to the Clinton level of 39. That four percent increase they fight with all the strength that that party has.
What Charlie Rangel was calling for that day was not for a top income tax rate of 39 percent, but a top income tax rate of 90 -- yes, that‘s nine, zero -- 90 percent on bonus income paid in any of the companies that took assistance in the federal government‘s bailout of Wall Street, the so-called Tarp fund.
My simple question to Eric Cantor that day is how are you going to vote on a 90 percent top income tax rate on some taxpayers.
O‘DONNELL: Have you and your Republican colleagues finally found a tax increase that you can love? Are you going to vote for the Tax Seizure Bill that the House of Representatives is going to vote on today, to seize those bonuses back?
JOE SCARBOROUGH, MSNBC ANCHOR: Which, by the way, just for the record, side bar here, counselor, that will not be sustained by the Supreme Court. But go ahead.
O‘DONNELL: I said that yesterday. But what I want to know, Congressman Cantor—
SCARBOROUGH: it‘s unconstitutional.
O‘DONNELL: Congressman Cantor, if you‘re opposed to these bonuses, have you finally found the tax increase that you like, specifically targeted for those bonuses? If not, how would you get the money back?
REP. ERIC CANTOR ®, MAJORITY LEADER: Listen, I‘m for whatever we can do right now to get that money back into the Treasury.
O‘DONNELL: There‘s a vote today. Are you going to vote for it today?
CANTOR: Well, I‘m going to—we‘ve got two bills coming to the floor today. There‘s a sense of Congress, which says that we ought to take a look at all of this.
O‘DONNELL: Do you not know how you‘re going to vote on Charlie Rangel‘s tax bill today?
CANTOR: It is terrible tax policy, but I‘m telling you one thing. I want to get those bonus payments back in.
O‘DONNELL: I think I heard a no. Was that a no?
CANTOR: I‘m going to get those bonus payments back in, because—
O‘DONNELL: How are you going to do it? How are you going to get that money back?
CANTOR: First of all, we put in—there was an announcement of a bill yesterday which directs Treasury Secretary Geithner to come out with how he‘s going to get it back in. How in the world—
O‘DONNELL: You‘re going to say, Tim, could you please get it back? I don‘t know how. Could you please do it?
CANTOR: We all know that he approved the second tranche of the Tarp money that went to pay these bonuses.
O‘DONNELL: So you don‘t have an idea. You‘re telling us today, we have no idea how to get the money back. We would like to ask the Treasury secretary to do it. We will not vote for Charlie Rangel‘s tax proposal to get the money back.
CANTOR: I‘m not saying that. I think you‘re going to find a lot of support in the House on both sides of the aisle.
O‘DONNELL: There you go. I got him to do what the vice president couldn‘t get him to do, talk about raising taxes. This went on and on. And I had a lot of fun. But I never actually got an answer.
What I did do was I established to my satisfaction, and it should have been to the satisfaction of anyone watching, that I was dealing with the worst amateur who had ever ascended to a leadership position in Congress. A member of the leadership who actually did not know how he was going to vote on a bill involving a matter of party principle.
And that vote was only a couple of hours away. When the role was called in the House, there were 328 yays. It passed overwhelmingly, including yays by virtually all of the Democrats, and almost half of the Republicans; 85 Republicans were for it, 87 against it.
The Republican leader, John Boehner, voted against it, of course. Because it was a tax rate increase. And not just a tax rate increase, a confiscatory tax increase, a seizure of income, a 90 percent income tax, a Republican‘s worst nightmare.
It was hard for John Boehner—it was not hard for John Boehner to decide how to vote on that. Eric Cantor, that‘s right, Eric Cantor voted for it. Eric Cantor voted for a 90 percent income tax increase. He voted with Dennis Kucinich. He voted with Charlie Rangel on a tax rate increase.
The thing he is now claiming is the single most destructive thing Congress can possibly do, increase taxes. John Boehner had been dealing with Eric Cantor for a while before I got to deal with Eric Cantor for a few minutes that day.
So Boehner knew what I just discovered that morning, that Cantor was an incompetent amateur who deserved no place in congressional leadership. Cantor has proven himself to be exactly that in the budget negotiations with the president.
The president has obviously recognized from the start that a rank amateur was sitting across the table from him. And the president has played Cantor‘s childish reactions to the Democrats‘ full advantage.
The next time you hear Eric Cantor lying about all tax increases being harmful to the economy, and downright evil, always remember this.
O‘DONNELL: Congressman Cantor, if you‘re opposed to these bonuses, have you finally found the tax increase you can like?
CANTOR: I am for whatever we can do right now to get that tax money back in to the Treasury.
O‘DONNELL: There‘s a vote today. Are you going to vote for it today?
CANTOR: I‘m going to—we have got two bills coming to the floor today. There‘s a sense of Congress, which says that we ought to take a look at all of this.
O‘DONNELL: I just want to know how you‘re going to vote, one vote.
SCARBOROUGH: He‘s going to vote for it. No, read between the lines.
CANTOR: Well, I‘m going to—
REP. MICHELE BACHMANN ®, PRESIDENTIAL CANDIDATE: Here is the big issue. The president doesn‘t want to have to be confronted with priorities in spending, because he has a lot of chutzpah. He spent a trillion dollars on the stimulus. It failed.
O‘DONNELL: He has a lot of what? While praying away the gay, the Bachmanns might want to devote some prayer time to something more achievable, like praying for divine guidance in the pronunciation of Yiddish words.
As has been documented here and elsewhere, praying away the gay is wicked hard. And for comedians, staying away from praying away the gay might just be even harder to do.
Here‘s last night‘s “Daily Show,” where Jon Stewart tries manfully to resist the urge to do gay jokes about the congresswoman‘s husband, Marcus Bachmann. Jon realizes he is powerless in the face of this urge, and calls on a higher power for help, Mr. Jerry Seinfeld.
JON STEWART, “THE DAILY SHOW”: We haven‘t yet heard from the man himself, Dr. Bachmann, seen here dancing with his wife at a Tea Party—wait, I‘m sorry. Wait a minute.
Can we just come back here? That‘s Michele Bachmann‘s husband. That
that‘s the—that‘s the guy teaching people not to be gay.

Seriously. Is he—is that the guy—is he—is he teaching people not to be gay, or is he like “the Green Mile” guy and just absorbing it all?
No, no. You know what? No, no. I‘m not going there. Don‘t—don‘t go there, Jon. Just repress it. Just—even though you‘re feeling a deep desire to comically exploit the fact that this man is an Izod shirt away from being the gay character on “Modern Family.”
Let‘s just hear what he has to say.
UNIDENTIFIED FEMALE: What do you say when your teenager says she‘s gay?
MARCUS BACHMANN, HUSBAND OF REP. MICHELE BACHMANN: There‘s that curiosity. But, again, we—we like, you know—it is as if we have to understand barbarians need to be educated. They need to be disciplined.
STEWART: You know what? I realized that I am—this is bigger than I am. I can‘t fight this on my own. I need a higher power, someone who has been through this, who understands my struggles.
I wish that someone could—
JERRY SEINFELD, COMEDIAN: It‘s going to be OK, Jon.
STEWART: It‘s my comedy repression therapist.
SEINFELD: We talked about this in group, Jon. Comedy is a choice.
STEWART: I know.
SEINFELD: You weren‘t born this way.
STEWART: I know, I know.
SEINFELD: Instead of going for the cheap gay joke, why don‘t you try watching the footage and making some astute observations.
Look at him. He‘s a big man. He‘s dancing. What kind of a dance is he doing?
STEWART: I think it‘s called the shag, I think.
SEINFELD: The shag, that‘s a funny name. And he‘s got a funny name.
STEWART: Marcus Bachmann. Marcus Bachmann, how is that funny?
SEINFELD: Bach-mann, what is that? Some classical music superhero, Bach-mann?
You see? You see. This is a target-rich environment. I can‘t believe you get Emmys for this crap.
MA. BACHMANN: But, again, we—it is as if we need to understand barbarians need to be educated.
SEINFELD: Ok, so it‘s a funny tone. He has got a funny tone. You go deeper than that. Tone is cheap. You see me getting laughs just in the way that I talk?
STEWART: Yes, yes, I see you getting laughs.
SEINFELD: No, they are not laughing—this is just my natural tone.
STEWART: Aren‘t you ever tempted by this stuff? Doesn‘t it ever—
SEINFELD: Well, of course, I‘d love to say Dr. Marcus Bachmann buys Brawny Paper Towels for the packaging. I have that in me.
STEWART: I know.
SEINFELD: Or he‘s so gay Richard Simmons tells him to tone it down.
STEWART: Or that he (EXPLETIVE DELETED) pinkberry. Oh, God!
SEINFELD: Remember, no matter how much of a comedy home run some one‘s stereotypical behavior may be, you have to stay focused. Jon, this is a nightly news parody program, not a gay dancing and tone social readjustment seminar.
O‘DONNELL: Jon Stewart and Jerry Seinfeld get THE LAST WORD. You can have THE LAST WORD at our blog, You can follow my Tweets, @Lawrence.
Copyright 2011 CQ-Roll Call, Inc. All materials herein are protected by
United States copyright law and may not be reproduced, distributed,
transmitted, displayed, published or broadcast without the prior written
permission of CQ-Roll Call. You may not alter or remove any trademark,
copyright or other notice from copies of the content.>