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'The Last Word with Lawrence O'Donnell' for Monday, July 25, 2011, 11p show

Read the transcript to the Monday 11p show

Guests: Richard Wolffe, Jared Bernstein, Rep. Marsha Blackburn, Rep. Rob Andrews, David Frum, Ari Melber

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Tonight, I want to talk about the debate we‘ve been having in Washington over the national debt. But if we stay on the current path, our growing debt could cost up jobs and do serious damage to the economy.
LAWRENCE O‘DONNELL, HOST: Failing to raise the debt ceiling is impossible.
OBAMA: Neither party is blameless for the decisions that led to this problem. Both parties have a responsibility to solve it. Cut out waste and fraud in health care programs like Medicare. Let‘s ask the wealthiest Americans and biggest corporations to give up some of their breaks.
REP. STENY HOYER (D), MARYLAND: Mr. Boehner has walked away.
CHRIS MATTHEWS, “HARDBALL” HOST: Will Boehner be able to appease Tea Party members in both Houses with his latest proposal?
O‘DONNELL: They‘ve come up with new plans all year.
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I‘m John Boehner. We in the House said not so fast, a stimulus bill more effective in producing material for late night comedians than it was in producing jobs. And I tell you, I gave it my all. Unfortunately, the president would not take yes for an answer.
O‘DONNELL: Good evening from New York—as we continue our live coverage of the president‘s address to the nation tonight on what he called the stalemate in Washington over the debt ceiling.
This hour, we‘ll be joined by members of the House of
Representatives, MSNBC‘s Richard Wolffe and Jared Bernstein, who is also a former economic adviser in the Obama administration.
It‘s been an extraordinary night with President Obama and House Speaker John Boehner taking the debate over raising the debt ceiling to primetime, with dueling speeches. The president spoke for roughly 15 minutes from the White House where he rejected the new House Republican plan put forth by Speaker Boehner today that would require two votes on the debt ceiling, one before August 2nd and then another in 2012.
OBAMA: For the past several weeks, Republican House members have said the only way they‘ll vote to prevent America‘s first ever default is if the rest of us agree to their deep spending cuts-only approach. The new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts would force us to once again face the threat of default just six months from now.
In other words, it doesn‘t solve the problem. First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans have to pay as a result.
We know what to expect six months from now. The House of Representatives will once again refuse to prevent default unless the rest of us accept their cuts-only approach. Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions. Again, they will demand harsh cuts to programs like Medicare, and once again the economy will be held captive unless they get their way.
This is no way to run the greatest country on Earth. It‘s dangerous game that we‘ve never played before, and we can‘t afford to play it now. Not when the jobs and livelihoods of so many families are at stake. We can‘t allow the American people to become collateral damage to Washington‘s political warfare.
O‘DONNELL: Towards the end of the president‘s speech, he asked for your help.
OBAMA: The American people may have voted for divided government, but they didn‘t vote for a dysfunctional government. So I‘m asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your member of Congress know. If you believe we can solve this problem through compromise, send that message.
O‘DONNELL: The White House communications director Dan Pfeiffer tweeted that the servers on Capitol Hill crashed after the president made that plea for people to get in touch with their congressional representatives.
After the president‘s speech, House Speaker John Boehner spoke for roughly five minutes, and he came out against President Obama‘s proposals.
BOEHNER: President Obama came to Congress in January and requested business as usual. He had another routine increase in the national debt, but we in the House said, not so fast. He was a president asking for the largest debt increase in American history on the heels of the largest spending binge in American history.
And here‘s what we got for that massive spending binge: a new health care bill most Americans never asked for, a stimulus bill that‘s more effective in producing material for late night comedians than it was in producing jobs, and a national debt that has gotten so out of hand it sparked a crisis without precedent in my lifetime or yours.
O‘DONNELL: Speaker Boehner said he would bring the new Republican plan that was unveiled today, the one that would raise the debt ceiling in two steps to a vote this week. That new Republican plan has already been rejected by the Tea Party Republicans in the House for not being extreme enough.
Here‘s how the head of the nonpartisan Center on Budget and Policy Priorities, Bob Greenstein, a frequent guest on this show, described that Republican plan today.
“House Speaker John Boehner‘s new budget proposal would require deep cuts in the years immediately ahead in Social Security and Medicare benefits, benefits for current retirees. The repeal of health reforms coverage expansions or wholesale eviscerations of basic assistance programs for vulnerable Americans. The plan is, thus, tantamount to a form of class warfare. If enacted it could well produce the greatest increase in poverty and hardship produced by any law in modern United States history. This may sound hyperbolic, but it is not. The mathematics are inexorable.”
On a night when the Democratic president and the Republican speaker of the House both had the chance to address the American people, it‘s worth remembering where the American people stand on the issues at hand. A Pew Poll released just last week shows 50 percent of Republicans, 53 percent of independents, and 72 percent of Democrats say we should maintain Social Security and Medicare instead of reducing the debt.
In that same poll, 87 percent of respondents said Social Security is a good program for the country, 88 percent say Medicare is a good program for the country.
And five—yes, five national polls released this month found that an overwhelming majority, an average of 67 percent, say deficit reduction must be a balance of spending cuts and revenue increases. The balanced approach referred to by the president tonight.
By comparison, only 26 percent on average support deficit reduction through spending cuts alone.
Joining me now, Democratic Congressman Rob Andrews of New Jersey and Republican Congresswoman Marsha Blackburn of Tennessee.
Congresswoman Blackburn, the Republican position of no revenue uses at all in deficit reduction is supported by only 26 percent of the American people. How can the Republicans maintain that they are in any way acting as representatives of the people when they are taking a position that is opposed by over 70 percent of the people?
REP. MARSHA BLACKBURN ®, TENNESSEE: I find it interesting that you phrase the question that way. I will tell you one of the things we hear repeatedly from people from coast to coast is that Washington doesn‘t have a revenue problem. It has a spending problem.
What the American people would really like to see us do is to get this out-of-control, wasteful Washington spending under control.
We‘ve heard from economists from coast to coast there again who have said what you have to do is move forward with the spending reduction plan. They want to see that. The ratings agencies want to see it. We can‘t continue on this trajectory.
This president has spent $7.3 trillion. We haven‘t had a budget in 800-and-something days, and $3.4 trillion of what he has spent is debt. We‘re borrowing 40 cents of every dollar that is spent.
We have to get a handle on this. Number one thing is to get the spending under control and cut, cap and balance—cut being the first part of that. That is the step that we have agreed should be taken first and quite frankly I think there are plenty of polls out there that show the American people also agree with that. That spending reductions have to take place.
O‘DONNELL: No, Congresswoman, there are no polls out there, no polls out there that support the Republican position. I just told you.
BLACKBURN: CNN had a poll that did.
O‘DONNELL: Sixty-seven percent --
BLACKBURN: CNN had a poll that did.
O‘DONNELL: Sixty-seven percent said that deficit reduction must be a balance.
My question to you, Congresswoman, is --
BLACKBURN: Ours is the most balanced plan.
O‘DONNELL: I know you come on television and spout the talking points. But when you guys close the door and you have a Republican caucus in the House, do you actually lie to each other about the polls there, or does anyone in that room say, hey, this is getting politically difficult? Our position is opposed by 67 percent of the people. Does anyone say that in your caucuses, any one referred to real polls?
BLACKBURN: Lawrence, the way you phrase that is insulting, and I think that you know that.
O‘DONNELL: I don‘t think it is. Congresswoman, I know you‘re defying the polls now. I‘m asking you in your private discussions, does anyone mention real polls or do you all just do these fake talking points to each other? Is that how you sound talking to each other behind closed doors?
BLACKBURN: We are focused on making certain that the steps we take are going to honor the commitment that we have taken, the oath of office that we have taken, to make certain that we put this nation on a firm financial footing.
What we do not want to do is have the nations that hold our debt, China being one, Japan number two, the U.K. number three and OPEC number four. Those are the entities that hold our debt. China owns about 25 percent of that.
What we don‘t want to do, Lawrence, is to cap our children‘s future and trade it to the people that hold that debt.
This is a very serious issue. It is one where we cannot kick the can down the road.
What we are saying is, let‘s get this addressed. And we are certain that we have put good plans on the—you know, the president doesn‘t have a plan. He has yet to a put a plan on the table.
O‘DONNELL: He has put a plan on the table. Did you see—did you see—Congresswoman, he put a plan on the table at 6:00 p.m. on Friday at in his conference, he out lined specific cuts—
BLACKBURN: No, what he said today he didn‘t want to bore us with the details of the plan.
O‘DONNELL: He has put plans on the table. And every time he‘s put a plan on the table --
BLACKBURN: That‘s what he said on the speech. No, you‘re incorrect.
O‘DONNELL: -- the Republicans have walked away. They refuse to discuss it.
BLACKBURN: He has not. He‘s given speeches. But CBO can‘t score the speeches, and you can‘t put a speech on the board and call the vote on it. He‘s got a teleprompter, but he doesn‘t have a plan, and we as Republicans have plans.
O‘DONNELL: He does have plans. Congresswoman, I have to move on to Congressman Andrews. Let‘s him have a chance to speak here. Your filibustering can go on all night. He does have plans. I‘m not going to lie about that on this show.
Go ahead, Congressman.
REP. ROB ANDREWS (D), NEW JERSEY: I have to say to my friend from Tennessee she‘s absolutely right. Borrowing money from the Chinese and giving the bill to our children is indefensible. We think borrowing money to give tax breaks to oil companies is indefensible when they made $77 billion in profits last year.
I would ask my friend from Tennessee, do you support closing those oil company tax loopholes?
BLACKBURN: Well, one of the things that we have done and I think --
ANDREWS: Marsha, it‘s a yes or no answer. Is it yes or no?
BLACKBURN: Republicans are the ones that put closing the loopholes on the table.
ANDREWS: So it‘s a yes? So it‘s a yes?
BLACKBURN: We have said let‘s level the playing field. Let‘s close a lot of these loopholes.
ANDREWS: Good. Why don‘t we put that in the debt reduction bill? How about this one? How about the ethanol loophole, where we‘re paying people huge amounts of money to grow corn and use it for fuel that pollutes and costs more than regular gasoline? Do you support closing that loophole?
BLACKBURN: I have supported closing that one, but, Rob, what you are trying to do is --
ANDREWS: What I‘m trying to do is put it in the law.
BLACKBURN: -- warfare issue?
ANDREWS: Warfare? You‘re the ones. Marsha, really. You‘re the ones waging --
BLACKBURN: No, you‘re trying to do the class warfare issue and you
know that.\
ANDREWS: You‘re the ones waging war on Medicare recipients, Social Security recipients and students.
BLACKBURN: No, you all cut Medicare $575 billion. You did that when you --
ANDREWS: You put the same cuts in your budget.
BLACKBURN: You cut $575 billion when you passed Obamacare. You made a choice to do that.
ANDREWS: You made the choice to—Marcia, you put --
BLACKBURN: What we are trying to do is to continue Medicare for today‘s seniors and near seniors, and we are very serious in doing that and continuing those benefits.
ANDREWS: You know what else you‘re serious about? You know what else you‘re serious about?
Did you or did you not put those same Medicare reductions in your budget that you voted for under Paul Ryan this spring? Didn‘t you do the same thing?
BLACKBURN: We have said let‘s save Medicare. We have said let‘s save Medicare for today‘s seniors.
ANDREWS: Did you or did you not include those cuts in your budget?
BLACKBURN: Those—we have a different plan. We have a plan to save Medicare.
ANDREWS: You‘re saying you didn‘t include those in your budget?
BLACKBURN: We have a plan to save Medicare for today‘s seniors and near seniors.
ANDREWS: Have you read the budget?
BLACKBURN: So we continue to have—yes, I have.
ANDREWS: Have you read the budget you voted for?
BLACKBURN: We continue to have—we --
ANDREWS: Have you read the budget you voted for?
BLACKBURN: Yes, I‘ve read that budget.
ANDREWS: And does it --
BLACKBURN: We have a plan that continues to save Medicare for—
ANDREWS: You have a plan?
BLACKBURN: We have the Ryan budget and the budget that I have—I‘m yet to get the bill that the speaker has referenced today as you are, too. The bill, we‘re waiting for that to be filed, and we‘re looking forward to reading that. We understand that many of the provisions that were in the Ryan budget are there.
Our goal is to make certain that what we do is to end wasteful Washington spending to make certain that the future is bright for the future Americans.
ANDREWS: I want to ask you a simple question.
BLACKBURN: Rob, I‘m not here to be interviewed—I‘m not here to be interviewed by you.
ANDREWS: Are you here to answer questions? Will you answer one question? Listen, I‘m here to do—I‘m here to do an interview with Lawrence. I was not here to be interviewed by you.
O‘DONNELL: Congressman Andrews --
ANDREWS: Lawrence, can I suggest a question you should ask? Ask her whether—because she‘ll answer your questions evidently.
O‘DONNELL: Well, we‘ll see.
ANDREWS: Ask her whether the Ryan budget included the Medicare reductions in the health care bill in it or not?
O‘DONNELL: Did the Ryan, Congresswoman Blackburn, do you want to take that question, Congresswoman Blackburn?
BLACKBURN: I find it so interesting that you have a member -
O‘DONNELL: -- you‘re not going to answer.
O‘DONNELL: Congresswoman Blackburn, are there any circumstances under which you would vote for a debt ceiling increase without accompanying spending cuts?
BLACKBURN: No. We‘ve already put that on the floor. We had that vote. I think it‘s --
O‘DONNELL: Congresswoman, you did vote for that. Congressman, you did—tell America the truth. You voted for it.
Congresswoman, tell America the truth. You voted for a 9 percent
increase in America‘s debt ceiling
BLACKBURN: Under President Bush, yes.
O‘DONNELL: It was a one-sentence bill. It had no spending cuts in it, nothing in it, one sentence bill.
BLACKBURN: You‘re talking about a vote in ‘06. That‘s correct.
You‘re correct.
O‘DONNELL: You voted for it. Why did you that? Why did you vote for a debt ceiling increase that was a one-sentence bill with no spending cuts whatsoever?
BLACKBURN: Lawrence, I have to tell you this. The spending right now is out of control.
O‘DONNELL: So, you‘re not going to tell you why you cast that vote, right? You won‘t answer that question?
BLACKBURN: This president has spent --
O‘DONNELL: You‘re going to give a speech but you won‘t answer a question about why you—
ANDREWS: Lawrence, we now have something in common. She wouldn‘t answer your questions either.
O‘DONNELL: We‘re running out of time. I‘m going to have to wrap this up. I don‘t want to interrupt you, but I don‘t expect you to actually answer it.
BLACKBURN: Spending has to stop.
O‘DONNELL: Right. OK. So you won‘t answer that question about why you cast that vote that way in the past.
BLACKBURN: I told you. There has been far too much spending. The spending is out of control. We have to get it under control.
O‘DONNELL: When the debt was at $7 trillion, when the debt was at $7 trillion, Congresswoman Blackburn, you didn‘t blink at eye at raising it.
BLACKBURN: I have always run across the board cut amendments. Rob Andrews has never voted for any of my across the board spending cut amendments.
ANDREWS: That‘s right. You know what?
BLACKBURN: It‘s time that people begin to vote for these and we reduce what the federal government spends, reduce the reach of the federal government and make certain that we get this fiscal house of the United States in order. Republicans are focused on that. We‘re committed to doing that. We have a way to make certain that this government keeps its commitment on its trust funds with Medicare and Social Security that we deal with entitlements and we‘re determined that we are going to leave this country in better shape than it is right now.
It is time for us to get behind this spending issue and to get it under control.
ANDREWS: Lawrence, can I say one more thing?
O‘DONNELL: No, Congressman Andrews, you can‘t, because Congresswoman Blackburn has run out the clock on tonight‘s mini debate. We will try to put it back together.
Come on to our blog, Congressman Andrews and make your point there.
I‘m going to wrap it there.
O‘DONNELL: Congressman Andrews, please, it‘s live television. We‘ve got some commercials to do.
ANDREWS: I have not voted for spending. I have not voted for spending cuts because I don‘t believe in cutting Medicare when millionaires get off scot-free.
BLACKBURN: We didn‘t cut Medicare and you know it.
ANDREWS: You just did, you voted to abolish Medicare and you should be ashamed of that.
BLACKBURN: No, you did that.
ANDREWS: You should be ashamed of it.
BLACKBURN: No, you did that.
O‘DONNELL: Congressman Robert Andrews, Congresswoman Marsha Blackburn, thank you very much for joining me tonight.
BLACKBURN: Thank you.
O‘DONNELL: And, Congresswoman Blackburn, I do have an open invitation to come back here at any point to explain to me why the debt was at $7 trillion you had no problem, no problem voting to raise the debt ceiling without $1 of spending cuts. Thank you very much for joining me tonight. Come back and answer that question whenever you think you can.
Still ahead, let‘s roll it. Was John Boehner‘s direct attack on the president meant to score points with voters or with the Tea Party? Republican David Frum and Democrat Ari Melber join me.
And next, the Republican plan will keep the debt crisis going for months. What will that do to the economy? Former White House economic adviser Jared Bernstein joins me next.
O‘DONNELL: Up next: the policy analysis of the latest plans to raise the debt ceiling with Jared Bernstein.
And later, Tim Pawlenty continues to talk tough in Iowa. That‘s in the “Rewrite.”
OBAMA: Congress now has one week left to act and there are still paths forward. The Senate has introduced a plan to avoid default which makes a down payment on deficit reduction and ensures that we don‘t have to go through this again in six months. I think that‘s a much better approach, although serious deficit reduction would still require us to tackle the tough challenges of entitlement and tax reform.
O‘DONNELL: That was the president addressing the nation from the East Room earlier in evening. Joining me now is Jared Bernstein, the former chief economist to the vice president, Vice President Biden. He‘s currently a senior fellow at the Center on Budget and Policy Priorities and an MSNBC contributor.
Jared, first of all, let‘s talk about the policies now that have come out on in what is called the Reid plan. Senator Harry Reid‘s plan in which there would be no revenue increases at all. It‘s the latest compromise offered by the Democrats. It would offer a dollar-for-dollar spending cuts to the amount of debt ceiling increase, $2.7 trillion.
Walk us through that, and what is your assessment of the policy in that proposal?
JARED BERNSTEIN, MSNBC CONTRIBUTOR: The Reid plan, as you correctly pointed out, reduces the deficit over 10 years by it $2.7 trillion. It‘s up there in the same ballpark as the other plan that‘s getting a lot of play today, the Boehner plan. That‘s $3 trillion.
Now, $1 trillion of the Reid plan comes from reduced expenditures on the war. That‘s somewhat controversial because some of those savings are expected to happen anyway.
On the other hand, Republicans have consistently claimed that trillion as savings for example in the Ryan budget. It cuts $1.2 trillion in discretionary spending. And that‘s been part of the Republican plan. It‘s part of the president‘s plan. When he talked tonight and talked about getting discretionary spending down to the lowest levels in 50 years as a share of the economy, that‘s really what he‘s talking about.
But I think one of the key points you mentioned—really two key points. First of all, this is a plan that has no revenue in sight. And ever since the beginning, including tonight, in fact, the president has stressed the importance of having some balance in the plan. If you don‘t have any revenue, there‘s too much weight on the spending side.
Secondly, what‘s very important about this plan it gets the debt ceiling increased through 2012, and that means we‘re not wrestling about this again in the few months.
O‘DONNELL: Jared, it seems to me that all plans as they‘ve emerged have become unrealistic politically, fairly quickly—meaning some faction has erupted in the Senate or House that shows you the votes don‘t exist in one body or the other to pass that plan. Immediately, there was opposition in the House to the Reid plan, and so, the Reid plan, more than most of them, since it‘s so perfectly designed to fit the Republicans‘ initial requiring for raising the debt ceiling seems to be the Republican and bluff plan, the Republican embarrassment plan.
Here‘s Harry Reid saying, OK, here‘s exactly what you asked for at the outset. No revenue raisers, dollar-for-dollar match on debt ceiling versus deficit reduction, and he watched them reject that today.
Wasn‘t that as much as anything what was going on with that Reid plan?
BERNSTEIN: Absolutely. What really slain me tonight was hearing Representative Boehner say, you know, the problem with this White House is they won‘t take yes for an answer. When you think about the extent to which the president has bent over backwards, gone way out of Democrats‘ comfort zone with significant cuts to Medicare, Medicaid, Social Security on the table, I thought it was egregious of the congresswoman in the earlier segment to act like none of that occurred—along with, of course, the very significant spending cuts. And then, yes, you have this plan tailored very much like the original Republican plan.
So, clearly, it‘s been impossible to get to yes with folks whose posture from the very beginning has been, you know, we simply won‘t negotiate.
O‘DONNELL: Quickly, Jared, where do you see it going from here?
BERNSTEIN: I like to think that people mean it when they say there‘s not going to be a default, and I think that the Reid plan may be as good as the Republicans get. The president may ultimately have to call their bluff and do what Bill Daley suggested yesterday on Sunday TV, and that‘s actually veto any plan that doesn‘t get the deficit ceiling raised for the long term.
O‘DONNELL: Former White House economic adviser and MSNBC contributor Jared Bernstein—thank you very much for joining us tonight.
BERNSTEIN: My pleasure, Lawrence.
O‘DONNELL: Coming up the outcome of the debt debate. We‘ll have consequences on the presidential campaign. Ari Melber and David Frum join me.
And, later, two very different tactics. President Obama praises John Boehner and quotes Ronald Reagan, and John Boehner attacks the president.
LAWRENCE O‘DONNELL, MSN ANCHOR, THE LAST WORD: After the president asked you to contact members of Congress with your opinions on his balanced approach to deficit reduction and raising the debt ceiling, The Huffington Post is reporting that you have crashed the e-mail servers Capitol Hill.
Congratulations. While those servers were crashing, House Speaker John Boehner was ridiculing the president, and Tea Party Republicans were rebelling against the speaker. That‘s next. Later, Tim Pawlenty talks tough in Iowa about the president. In the process he does what you just saw Congresswoman Blackburn do, he lies that the president has offered no plans to solve this budget crisis. That‘s in the “Rewrite” ahead.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is first time a deal was passed a predecessor of mine made a case for a balanced approach saying this. Would you rather reduce deficits and interest rates by raising revenue from those not now paying their fair share, or would you rather accept larger budget deficits, and higher interest rates, and higher unemployment? I think you know that answer.
Those words were spoken by Ronald Reagan. But today many Republicans in the House refuse to consider this kind of balanced approach. An approach that was pursued not only by President Reagan, but by the first President Bush, by President Clinton, by myself, and by many Democrats and Republicans in the United States Senate.
O‘DONNELL: That was the president earlier tonight quoting Ronald Reagan in his call for a balanced approach to deficit reduction. Joining me now, former special assistant to George W. Bush and current editor of “Frum Forum”, David Frum, also correspondent for “The Nation” magazine, Ari Melber.
Thank you both for joining me tonight.
Ari, did you ever expect to hear a Democratic president quoting Ronald Reagan in an inspirational speech about deficit reduction?
ARI MELBER, CORRESPONDENT, “THE NATION”: No, I‘m afraid not. In fact, the last time that Barack Obama quoted Ronald Reagan it was during those contentious Democratic primaries. He was talking about having the kind of transformational effect for liberalism that Reagan had for conservatism. Now, I guess, it‘s just all going in that direction, although under duress.
The real problem we‘ve seen tonight and you‘ve obviously been confronting it in some of the tough questioning you have had to do, of Republican members of Congress tonight. As we are in an era of the politics of bad faith, so this isn‘t just about normal disputes, it is not just about normal tone. We have people who in the case of John Boehner going on television responding to the president I thought, who was rather graceful at times, and definitely kind to his political adversary. We have Boehner getting up there and being rude, being I think at times disrespectful and then being inaccurate, in claiming he had a bipartisan vote, where he didn‘t. In claiming there‘s a blank check, when it‘s really the opposite as anyone who is watching, anyone who follows this knows. It is the politics of bad faith. That‘s hard to negotiate with.
O‘DONNELL: David Fromm, I tried to get on this show, the Republican in the House or Senate, if there is one, who would actually agree with that quote by Ronald Reagan, and we aren‘t able to find them. If they‘re there, they are afraid to speak publicly. How did it come to this?
DAVID FRUM, “THE FRUM FORUM”: Party discipline is pretty strong, obviously. I‘m not going to try to tell an MSNBC audience the Republicans in the House of Representatives have behaved well and responsibly. Obviously, they have not done that.
But look at what the president did tonight. I have to say I was discouraged and to tell you the truth kind of frightened by it. Where is the president‘s red line. He talked more passionately about the need to extend the debt ceiling in time, past his own re-election bid, than he did about any of the underlying issues.
Now, if I‘m a member of MSNBC audience and maybe you gave money to the president thinking he would defend the old or poor, that is in this speech a lower priority for him than his re-election calendar. That‘s one of the things that made the Republicans so inflamed and driven them wider than they already were. It‘s pushing this country to brink of a crisis.
O‘DONNELL: Ari, I‘m going to give it to you in a second. But, David, I‘d normally agree with you. If I heard a president say look, the most important thing is make sure you push this next decision off until after the re-election campaign, except for the case the president then takes a paragraph to make. Saying, look at the way it has worked this year. Look what it‘s become. Look how this works.
Ari, I think, although the president is giving us a political line in the calendar saying do it after the election year, it is also the normal range in which we raise debt ceilings. We like to do debt ceiling increases that will last more than a year. Anything else is considered very short-term. There are market reasons to do longer term debt ceilings, but they tend to be the traditional form of debt ceiling. And he does make, I think, a very reasonable case that our politics, our congressional politics and our campaign politics can‘t possibly handle another debt ceiling debate where we actually would have to legislate one next year.
MELBER: Right. The only thing I didn‘t hear the president say is that we have enough real crises. We don‘t need any more manufactured crises. I think David is onto something about the tenor of the speech, but not the motivation. I don‘t think there‘s any evidence that Barack Obama isn‘t willing to make some tough political calls here in order to try to get this done. I think that‘s clearly proven.
Where I would agree a little bit with David‘s sort of critique of the message, especially when we consider this is the first time many people hear about this in any depth, was-and I wrote about this on tonight-if you actually look at the words used by Obama tonight, the number one word was “Americans”. Which is kind of boiler plate in this kind of speech.
And the second most common word that he repeated over and over was “approach”; because he kept talking about this approach, and that approach, and all these different roads not taken. I think ultimately for people that can be a blizzard of options without a clear value statement. The value statement, of course, is that Congress has already done this, and the Republicans, the Tea Party Republicans here are like people that you go out to dinner with. They order all this food, and when the bill comes they start complaining. You say, well, you already ordered this.
Obviously, the debt ceiling, everyone now understands, is not about further spending, because it doesn‘t appropriate or authorize funds. Congress does that. It‘s about catching up with what Congress has already done. This is really rich to see them complain about it, when it‘s their spending particularly. Of course, both administrations during the Bush era, the Medicare Part D and the Bush tax cuts. The CBO numbers show that, and everyone knows that. So it is rich.
O‘DONNELL: Go ahead, David.
FRUM: The behavior has been pretty bad and irresponsible, but you don‘t need to make it worse than it is. What this debate is about is, in fact, the Tea Party Republicans trying to deal with the spending that was bequeathed by the previous Congress. They‘re re-litigating the 2008 election.
MELBER: Right, we agree on that. Now, we agree it‘s Republican party spending. I agree with you.
FRUM: No, I‘m sorry the 2008 elections won by the Democrats, not by the Republicans.
MELBER: No, but you are speaking about a record of spending that does include the Bush era, right?
FRUM: The reason they‘re so agitated and the reason they are trying to put a cap now, is to deal with it, they are very unhappy with what happened over the past two years, and they see this as their moment.
What is striking about the president is he doesn‘t defend any of that. One of the things that has been brooded about, one of the reasons he‘s eager for a deal is because he hopes the deal will include, for example, further measures for unemployment insurance, and maybe some further stimulus in the form of accelerated spending on highway funds. The president doesn‘t talk about that. What he talked about was his re-election calendar. His red lines and not your red lines.
MELBER: I don‘t think there‘s any evidence for that. I think the president you served, President Bush, also had long-term deficit hikes. I don‘t think you can sit here and incredibly say, as you said tonight, for an MSNBC audience, which is informed or has been following this, or for any cable news audience, I don‘t think you can incredibly say that presidents don‘t look for long-term increases in the debt ceiling. The only difference was tonight the president was forced to go to Americans and ask for their help in raising the roof. Because tonight we actually have to get the public involved for something that President Bush‘s budget director called a routine housekeeping matter.
FRUM: But the president gave this public a very weak reason to get involved.
O‘DONNELL: All right. David Frum, that is going to have to be the last word. Thank you very much for joining us.
Also, thank you, Ari Melber.
MELBER: Thank you.
O‘DONNELL: Coming up, is there a good option forward for either side? Richard Wolf joins me. Next, Tim Pawlenty uses the Michele Bachmann method of campaigning. That is completely ignoring the facts. The rewrite is next.
Coming up, now that the president and the speaker of the House have taken their conflicting messages to the American people, what are they actually going to do to raise the debt ceiling? Richard wolf joins me. Tim Pawlenty pushes the Republican lie, which you heard earlier on this program that president Obama has not offered any plan to solve the debt ceiling crisis. That‘s in the rewrite next.
O‘DONNELL: Time for tonight‘s “Rewrite”.
As Tim Pawlenty‘s campaign continues to struggle to get traction in Iowa, the candidate has decided to talk tough. He made the mistake of directing some of that tough talk at Michele Bachmann, whose followers he would eventually need if he were to get the Republican nomination. He chose to talk tough, tougher, in fact, about Michele Bachmann‘s lack of executive experience than any criticism he has dared to offer of front-runner Willard M. Romney, and that is perhaps for constitutional reasons.
Because if the worst possible thing happens to the Republican Party and Michele Bachmann becomes their nominee for president, she is in effect constitutionally forbidden from choosing Tim Pawlenty as her running mate because she and Pawlenty are from the same state. But attacks on Bachmann only increase her popularity in Tea Party ranks, which Pawlenty must have eventually realized since he has now taken to the safer strategy of talking tough about President Obama.
TIM PAWLENTY, ® PRESIDENTIAL CANDIDATE: The leader of the Free World, would you please come to the microphone and quite hiding in the basement, about your proposals and come on up and address the American people? Is he chicken?
O‘DONNELL: Now, remember, the guy is in a car driving around Iowa all day. He can‘t keep up with everything happening on TV.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Essentially what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense. We then offered additional $650 billion in cuts to entitlement programs, Medicare, Medicaid, Social Security. What we said was, give us $1.2 trillion in additional revenues, which could be accomplished without hiking tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in tax reform process that could have lowered rates generally, while broadening the base.
O‘DONNELL: That was Friday. And even though the president addressed the nation tonight, and went in to real specifics about what he has proposed for deficit reduction, as well as the ideas that others have proposed, which he can support, like Harry Reid‘s latest plan that specifies the $2.3 trillion spending cuts. Tim Pawlenty issued this bold statement.
“Once again President Obama did not have the courage to offer real solutions to fix runaway debt.”
Of course, Pawlenty‘s statement ignores what the president said tonight. No, Pawlenty‘s statement actually lies about what the president said.
Let‘s live within our means by making serous historic cuts in government spending. Let‘s cut domestic spending to the lowest level since Dwight Eisenhower was in office. Let‘s cut defense spending at the Pentagon by $100s billions. Let‘s cut out waste and fraud and health care programs like Medicare. And at the same time let‘s make modest adjustments so that Medicare is still there for future generations. Finally, let‘s ask the wealthiest Americans, and biggest corporations to give up some of their breaks in the tax code and special deductions.
O‘DONNELL: Even though the early polling does not offer great encouragement in to the Pawlenty campaign, Tim Pawlenty is learning to do the single most important thing that leading presidential candidates do every day—lie about President Barack Obama.
REP. JOHN BOEHNER, SPEAKER OF THE HOUSE: Here‘s what we got for the massive spending binge. A new health care bill that most Americans never asked for. A stimulus bill that is more effective for producing material for late-night comedians than it was in producing jobs, and a national debt that has gotten so out of hand, it sparked a crisis without precedent in my lifetime or yours.
O‘DONNELL: That was House Speaker John Boehner speaking after the president‘s address to the nation tonight on the debt ceiling crisis.
Joining me now, MSNBC Political Analyst Richard Wolffe.
Richard, some reporters overheard Speaker Boehner when he was leaving. That was his national debut, by the way, as a respondent to the president on this kind of address. They overheard him saying as he was leaving that little response speech of his, “I didn‘t sign up to go mano a mano with the president of the United States.”
It doesn‘t sound like Boehner was particularly confident about how his speech played out there.
RICHARD WOLFFE, MSNBC POLITICAL ANALYST: And in that tinny sounding room.
Look, it is always hard when you are going up against the president seal in the East Room. And he didn‘t come off terribly well, even though he had those heavily scripted lines that sounded like they were written for someone who was also writing for late-night comedians. It is ironic, to say the least that Republicans, who have criticized the president for not coming up with specifics would think their best rebuttal is to go with just the cheap one liners.
O‘DONNELL: Richard, where to we go from here? These plans—we didn‘t make any progress in any negotiating today. Unbridgeable plans came out. What happens tomorrow?
WOLFFE: Well, Speaker Boehner has, indeed, posted the legislation that he is putting forward here, which means a vote could come on Wednesday, at the earliest. Interestingly that legislation still doesn‘t talk about raising the debt ceiling. We‘re in this weird McConnell language of the debt ceiling disapproval resolution, which is voting for a debt ceiling increase and pretending like you haven‘t. And then Thursday you would have, at the earliest point, the Harry Reid position coming to a vote, which means there will be a great weekend when the House and the Senate won‘t agree with each other.
The markets really will be spooked this time. Look, if the House and Senate couldn‘t agree with each other when they are both controlled by Democrats, how are these people going to resolve it next weekend, by the time they have all debated and voted? That means this next money, this time next week, will be very ugly in the financial markets.
O‘DONNELL: Well, it all can in the end come down to a one sentence bill. That‘s the funny things about this. As complex as they have made it so far, if we get to August 1st and it is 10:00 p.m. And they have done nothing and the pressure starts to build on what they do know how to do, and what most of them have already in their careers voted for many times, which is just that one sentence that says we‘re going to raise this number to this number.
WOLFFE: But if Marsha Blackburn cannot explain why she voted for Bush‘s debt ceiling increase on this show, how will she explain to her own voters she has boxed herself in and now needs to find a way out. They need the financial markets, because the Wall Street executives are not going to tell them. They need the market to tell them. This is serious. You have to do something here and stop playing the games, because at the moment, neither side is willing to come out of its compromise.
O‘DONNELL: Remember that in terms of the vote count, anyone can vote against a debt ceiling increase, as long as just enough vote to pass it. We had Dick Durbin on the show saying when he and Barack Obama voted against the debt ceiling increase as senators they knew there were enough votes to pass it. None of them were going to vote to actually kill the debt ceiling increase. We will see what we end up with, if we get that far.
Richard Wolffe, thank you very much for joining us tonight.
WOLFFE: Thank you, Lawrence.
O‘DONNELL: On THE LAST WORD tomorrow night at 8 p.m. Eastern, Bill Maher, host of HBO‘s “Realtime”, on his reaction to the president and Congress in the stalemate over the debt ceiling. You can have THE LAST WORD online at our blog, You can follow my Tweets @Lawrence. MSNBC‘s coverage continues right now.
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