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'The Last Word with Lawrence O'Donnell' for Monday, July 25, 2011, 8p show

Read the transcript to the Monday 8p show

Guests: Rep. Steny Hoyer, Elizabeth Drew, Richard Wolffe, Howard Fineman

LAWRENCE O‘DONNELL, HOST: Breaking news: after another day of no progress on the debt ceiling negotiations, the president is going straight to the American people.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Neither party is blameless for the decisions that led to our debt.
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: There is going to be a two-stage process.
UNIDENTIFIED FEMALE: Either way, we have eight days left.
O‘DONNELL (voice-over): Now, everyone has a plan, but no one has a deal.
ANDREA MITCHELL, NBC NEWS: House and Senate leaders are putting out competing plans.
LUKE RUSSERT, NBC NEWS: Harry Reid‘s plan hits every agency.
CHRIS JANSING, NBC NEWS: John Boehner drawing up a House plan.
UNIDENTIFIED MALE: Let‘s do it again in April. I mean, that‘s basically what the plan is.
SAVANNAH GUTHRIE, NBC NEWS: I don‘t understand the politics of it.
UNIDENTIFIED MALE: We‘ve known if we got this close, things would start to get bad.
JANSING: The threat of default is taking its toll on the markets.
BRIAN SULLIVAN, CNBC: I‘m Brian Sullivan with your CNBC market wrap.
Here‘s a look at how stocks are doing today—they are not doing well. The Dow is down 83 points, S&P down six, the NASDAQ down 12. The markets are waiting results for the debt ceiling dance and whether or not D.C. will be able to make a deal—a lot of nervousness in the market right now.
UNIDENTIFIED MALE: And now, we are this close.
O‘DONNELL: The Tea Party has Republican leaders trapped.
UNIDENTIFIED FEMALE: This is a self-inflicted wound.
REP. ERIC CANTOR (R-VA), MAJORITY LEADER: No side gets all that they want.
UNIDENTIFIED MALE: We‘re not crazy. We‘re patriots.
MARTIN BASHIR, MSNBC HOST: Right-wing nutters in the American Congress.
MITCHELL: You have this very difficult caucus.
BOB SHRUM, DEMOCRATIC STRATEGIST: John Boehner, the speaker, was reduced in some ways to being a reluctant ventriloquist for the Tea Party.
MITCHELL: I think Bob‘s phrase was a ventriloquist.
O‘DONNELL: How can the president negotiate with a party that keeps walking away?
MICHAEL STEELE, FORMER RNC CHAIRMAN: We‘ve watched our leadership in Washington behave like children.
UNIDENTIFIED MALE: We want reason-based politics.
UNIDENTIFIED MALE: The president has actually cancelled several upcoming fundraisers.
SHRUM: The president, who has been reasonable.
UNIDENTIFIED MALE: You can‘t win a primary without the backing of the 25 percent of Americans who believe in a literal six-day creation, think that gay people choose to be gay and everyone except them will go to hell when they die because they didn‘t ask Jesus to accept them.
MAYOR MICHAEL BLOOMBERG (I), NEW YORK: Hard choices and putting the public interest ahead of partisan gain or ideological purity. That‘s what governing it really about.
O‘DONNELL: Good evening from New York.
In one hour, the president will address the nation on the looming debt crisis as we approach the August 2nd deadline for a legislated increase in the borrowing authority of the United States Treasury. Up to now, raising the debt ceiling has always been a routine legislative matter, never the stuff of presidential addresses, never a reason for the president to ask the networks for time to address the nation.
But never before has one party seriously threatened to prevent an increase in the debt ceiling.
The president will speak at 9:00 p.m. Eastern from the East Room of the White House. House Speaker John Boehner has requested response time from the networks.
The dueling speeches come after two dueling plans emerged today. A plan from Senate Majority Leader Harry Reid is everything the House Republicans originally asked for, a $2.7 trillion cut in spending with no increase of any kind in tax revenue with the $2.7 trillion spending cut designed to match dollar-for-dollar, the amount of the increase in the debt ceiling. In effect, it is Senator Reid‘s way of calling the House Republicans‘ bluff. Speaker Boehner‘s original position was a dollar-for-dollar match of spending cuts to the amount of the debt ceiling increase and no change in tax revenue.
Senator Reid and Senator Chuck Schumer unveiled the president‘s plan first, and the Democrats noted they made a significant concession on tax revenues.
SEN. CHUCK SCHUMER (D), NEW YORK: It meets the requirements that they laid out, dollar-for-dollar savings in the debt ceiling. No revenues and cuts that they have supported. So, ask yourself, the American people will be asking themselves, if they oppose this, why? Since it‘s everything they asked for.
This is a very hard decision for many on our side. Our side knows that any serious debt reduction plan must include revenues. But in the interest of preventing a default, we can have the fight on revenues later when we get to the grand bargain that Speaker Boehner couldn‘t bring himself to accept from Barack Obama, we have offered them this plan. It‘s a tough choice, but for Democrats, we get an increase in the debt ceiling through 2012, and we succeed in preventing any benefit cuts to Medicare, Medicaid, or Social Security.
So, this proposal meets both sides‘ bottom lines. It‘s a good deal.
At this point, there is no alternative other than default.
O‘DONNELL: The White House quickly put out a statement endorsing the Reid plan.
“Senator Reid‘s plan reduces the deficit more than enough to meet the contrived dollar-for-dollar criteria called for by House Republicans. The ball is in their court.”
Then came the new House Republican plan, which is a good deal more complicated than the Reid plan. The Republican plan would require two votes on the debt ceiling. The first vote would raise the debt limit by roughly $1 trillion before August 2nd, followed by a second vote in 2012 during the election year. Both votes would require spending cuts in excess of the amount that the debt ceiling increase would be raised.
Here‘s how the House Republican leader Eric Cantor described their new plan at a news conference at the Capitol.
CANTOR: We put out our plan as to what it is we want, the “cut, cap, and balance” plan last week. This plan is not that. You know, the president said that he wants a higher taxes and he wants a vote through the election. This plan doesn‘t have that in it. So, it is a situation where no side gets all that they want.
O‘DONNELL: Under the House Republicans latest proposal, they get multiple debt ceiling votes, spending cuts without revenue increases, and cuts to the entitlement programs like Medicare that Democrats want to protect.
The head of the non-partisan Center on Budget and Policy Priorities Bob Greenstein issued a scathing verdict on this new Republican plan. “House Speaker John Boehner‘s new budget proposal would require deep cuts in the years immediately ahead in Social Security and Medicare benefits for current retirees. The repeal of health reforms coverage expansions or wholesale evisceration of basic assistance programs for vulnerable Americans.
The plan is, thus, tantamount and 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 U.S. history. This may sound hyperbolic, but it is not. The mathematics are inexorable.”
Despite that, the head of the House Republican Study Committee, Ohio Congressman Jim Jordan, rejected John Boehner‘s plan today because it doesn‘t go far enough. He said, quote, “While I thank the speaker for fighting for Republican principles, I cannot support the plan that was presented to House Republicans this afternoon, the Senate should resume debate on the cut, cap, and balance act, amend it if necessary and pass it so we can provide the American people a real solution.”
Joining me now is House Democratic whip, Maryland Congressman Steny Hoyer. Thank you very much for joining us tonight, Congressman.
HOYER: Good evening. Good to be with you, Lawrence.
O‘DONNELL: Congressman, the Senate today offered the House Republicans everything, every single point they said they wanted at the outset of this negotiating process now some months ago. I‘ve never seen something like that, where one side offers the other side everything, and so far what you‘re getting is a straight rejection, it seems.
HOYER: What we‘re seeing, Lawrence, is, in my opinion, a very sorry and irresponsible spectacle of holding America‘s creditworthiness and very frankly the interest of every American hostage to an increase in the debt limit, which simply says America‘s going to pay its bills.
And what has been offered by Speaker Boehner is a formula that he has rejected and Mr. Cantor have both rejected, saying that if we did just incremental, every six months or every eight months, that it would keep the economy roiled and it wouldn‘t grow, and I think they were absolutely right then. But for political reasons, simply to put the president in a corner, they have said no to every deal, to every compromise, to every effort to move this forward to adopt responsible policies which will protect the credit of the United States. Very unfortunate that the Republicans continue to pursue this, particularly when Mr. Boehner and the president have reached an agreement tentatively on two different occasions, and Mr. Boehner has walked away.
Frankly, the Republicans have walked intentionally more than Barry Bonds, and the fact of the matter is that we need to come to an agreement. The Senate, Senator Reid, has offered exactly what they asked for. Mr. Cantor just said we have no taxes in our bill. He was very pumped up about that, to tell his constituents that the richest people in America were not going to have to pay anything towards solving this problem. But frankly, the Senate is prepared to offer that, because they feel very strongly the responsible step to take is to make sure that America‘s able to pay its bills on August 3rd.
O‘DONNELL: Congressman Hoyer, in addition to the Republicans‘ recalcitrance on tax revenues, which the Reid plan now meets and simply eliminates any form of tax revenue increase, including the closing of egregious loopholes, it seems now that the Republicans are intent on getting Democrats to cast a vote for Medicare cuts, and getting the president to sign a bill that includes Medicare cuts, because they have exposed themselves in a serious of votes in the House in favor of draconian Medicare cuts, including ending Medicare as we know it with the Ryan plan. And it seems to me that their dissatisfaction with the Reid plan is that he achieves these cuts without cutting Medicare.
HOYER: Lawrence, you‘re absolutely right and Bob Greenstein is absolutely right, and your observations with reference to the cuts that would be required in this second tranche to Medicare, Medicaid, Social Security are absolutely correct. Deep, devastating cuts to those programs, and they wouldn‘t get the votes. So it is a plan that they know would fail, but it carries out their obsession with protecting the wealthiest in America and making the most vulnerable in America pay the bill. That‘s not good policy, and I suggest to them in the long run it‘s certainly not good politics.
So I would hope that in the next few hours, frankly, that we could come to an agreement. The Reid plan, as you pointed out, is everything they asked for, and that we could see that pass in the Senate, we‘d get some Republicans to vote for that, send it over to the House, let us pass it forthwith, so that again, America‘s credit is not put at risk.
We‘ve done this before numerous times. Parties have joined together, and, in fact, Mr. Boehner has voted to raise the deficit—debt limit on numerous occasions, both under George Bush and under Bill Clinton. So this is not something that he can say I‘ve never done this. In fact, he has done it. Why? Because he knew it was necessary. In fact, as you know, he said this was going to be an adult moment. Unfortunately, an adult moment has not yet occurred in the House of Representatives.
O‘DONNELL: Congressman Boehner the new Republican plan—
HOYER: I‘m Congressman Hoyer.
O‘DONNELL: Congressman Hoyer, sorry, Congressman Hoyer, the new Republican plan, the Boehner plan, would call for two votes, meaning they would require a vote, a painful vote, a politically painful vote for everyone on the debt ceiling during an election year. They have accused the president of playing politics with this debt ceiling recently because the president says he doesn‘t want to have a vote during an election year. He wants to have the next debt ceiling increase come after an election year. If the president is playing politics by saying he doesn‘t want a vote during an election year, aren‘t the Republicans playing politics very specifically by saying they do want to put the Democrats and the president through another debt ceiling vote in an election year?
HOYER: I think it‘s very obvious that that‘s exactly what they are doing, and as a matter of fact, their rhetoric is to put President Obama in a bad spot.
I disagree with Chuck Schumer, by the way, who says what Democrats get out of this is raising the debt limit. That‘s not what Democrats get out of it. That‘s what America gets out of it. That‘s what every citizen in our country gets out of it. A responsible country that pays its bills and protects the financial stability of our country, every credit card, 401(k) programs, stock market. So—Mr. Boehner made the observation, Speaker Boehner made the observation some months ago when politics were not on the forefront of this issue that we ought not to do exactly what he‘s proposing. He said we need a long-term solution. He said we need a big solution, a grand solution. The president offered that. It was clear that he could have gotten that deal, in my opinion, the first time that he walked away from the deal, and I‘m absolutely convinced, having talked to the president, he could have gotten a deal the second time he walked away.
The problem is I think his party wants to play politics. His party irresponsibly wants to hold hostage the credit of the United States and every American‘s credit to their politics. And that‘s unfortunate. Hopefully we‘ll get by that. Hopefully Mr. Boehner will return to his original concept that we ought to have a long-term, get us out of the election year, and what he‘s always said he wants is stability so businesses can count on our policies. Well, he‘s suggested something absolutely the opposite of what he said is good policy.
O‘DONNELL: Congressman Hoyer, I appreciate your semantic correction on what I said about the Democrats get a—
HOYER: Actually, Schumer said that.
O‘DONNELL: -- an increase in the debt ceiling.
HOYER: Schumer said that.
O‘DONNELL: My point about it, though, is that—and I think Senator Schumer‘s point can also be taken is we have a history here now, going back the last few decades, that the party of responsibility, the party that makes the most responsible budgetary choices, including in matters of taxation and spending increases and in spending cuts, which Democrats have done in the past, is the Democratic Party. They have become, unfortunately, your burden has been to become the party of responsibility, while the Republicans just run off in whatever they find to be the most politically profitable position they can take, even on something as crucial as the debt ceiling.
HOYER: Lawrence, as you know, the last four balanced budgets that were offered and passed were offered by Bill Clinton when he was president of the United States. And we had a balanced budget. So we have not only rhetorically committed to it, but we‘ve done it. We‘ve passed statutory Pay-Go which said you ought to pay for what you buy. Unfortunately, we ran up $5 trillion in new deficits during the Bush administration simply because we bought a lot and we didn‘t pay for it. And Republicans, of course, were in control of all the economic policy.
But the issue is not what happened in the past or who‘s responsible. The issue is who‘s going to be held accountable, who‘s going to be responsible right now to make sure that America, for the first time in history, is not put in a position where it can‘t be relied upon by its creditors to pay its bills. That would be destabilizing for not only our own markets but the international markets as well. And every American, every American will lose if we allow that to happen. Hopefully, the Republicans will come to their senses.
O‘DONNELL: Congressman Steny Hoyer, minority whip and Democrat of Maryland. Thank you very much for joining me.
HOYER: Thank you, Lawrence.
O‘DONNELL: Coming up: how did it come to this? Raising the debt ceiling used to be a non-controversial Washington routine. But this year, Washington has used the debt ceiling to create a new phenomenon in our politics. In her masterful analysis, my next guest calls it the politics of calamity. Elizabeth Drew will join me.
And at 9:00 p.m. Eastern, the president will address the nation about the debt ceiling negotiations, a speech you will see live right here on MSNBC.
O‘DONNELL: Coming up: we‘ll go live to the White House and Capitol Hill for the latest on what‘s happening before President Obama and Speaker John Boehner make separate speeches to the nation. But, first, a look-back at how the Tea Party created the crisis.
The politics of calamity is next.
O‘DONNELL: We are now about 40 minutes away from hearing what the president is currently thinking about the debt ceiling standoff.
It is worth considering how we have come to this, what were they thinking—is the question legendary Washington journalist Elizabeth Drew asks in the title of her piece that tells the story of the strangest year in the budgetary history of the federal government.
“Someday, people will look back and wonder what were they thinking? Why in the midst of a stalled recovery, with the economy fragile, and a job creation slowing to a trickle did the nation‘s leaders decide that the thing to do in order to raise the debt limit, a normally routine matter, was to spend less money, making job creation all the more difficult?”
Joining me now is Elizabeth Drew, a contributor to the “New York Review of Books.”
Thanks very much for joining us tonight, Elizabeth.
ELIZABETH DREW, NEW YORK REVIEW OF BOOKS: Thank you, Lawrence. I‘m happy to be with you.
O‘DONNELL: In your piece, you say, “Experts on the economy believe that the president has it backward, that focusing on growth and jobs is more urgent in the near term than cutting the deficit, even if it requires borrowing. But that would go against Obama‘s new self-portrait as a fiscally responsible centrist.”
When did Obama try to portray himself as a fiscally responsible centrist?
DREW: Well, officially, he gave a speech at George Washington University in April and he said there, “I got it, let‘s cut the debt by $4 trillion.” And that was his debut as the new fiscally responsible centrist.
That is the position or the portrait that he and his political adviser, David Plouffe, decided on after what the president called his shellacking in November of 2010.
But, Lawrence, this is insane, because you and I have talked about this, it is really nutty to be cutting back spending in this fragile economy when you have 9.2 percent unemployment. How in the world is the economy going to grow if you‘re cutting back on it? I can‘t figure that out.
And a lot of people are very troubled by this and by the fact that the president has actually accepted the Republican premise that this is what needs to be done now. He didn‘t fight it, he joined it.
O‘DONNELL: Yes. It is striking, and I‘m very much of the growth first school, which says let‘s get this economy growing. Growth would do more to solve this deficit problem than any of the cutting proposals that are out there, even minor increases in our rate of growth over what we‘re doing now.
But—and in reading your piece, Elizabeth, it was really striking to me how recently some of these ideas have come into the mix that Speaker Boehner was—at the beginning of the year wasn‘t saying there has to be a dollar-for-dollar cut in spending to match an increase in the debt ceiling, they‘ve been making up new ideas as they‘ve been going on.
Today is an encapsulation of all of that, where they suddenly come out with a brand new plan that‘s different from their brand new plan of last week. But they‘ve been coming up with new plans all year.
DREW: I don‘t know if I should call it now the politics of calamity, or policymaking on the fly, or policy making in panic.
Politics of calamity means just as there was going to be a government shutdown if they didn‘t agree on the spending bill for the rest of this year. Now, they are acting under the threat of a default if they don‘t raise the debt limit.
Frankly, I think the president shouldn‘t want any of these plans. They tie his hands for the rest of his presidency, it might last less long under this situation, because he cannot let government grow, he cannot have employment grow.
I should point out that it‘s not just that these people think we should borrow now and grow the economy, but then take the second step in a couple of years.
They all agree we have to reduce the debt. It‘s too high as a percentage of our gross domestic product. But first, let the economy grow, let more people get jobs.
Don‘t say to kids who need college help or people looking for work or people on food stamps, sorry, you have to wait until the president gets reelected and his new image is out there, and then maybe we‘ll let you get the rights, the benefits that we‘ve promised you.
O‘DONNELL: Elizabeth, what should the president be saying tonight? He‘s going out—this is a first for me seeing a president—I think for anyone, seeing the president address the nation on the debt ceiling, asking for network time.
It seems to me that if he‘s doing that, he should be saying something we haven‘t heard before and something very forceful.
What would you want to hear him say tonight?
DREW: Well, I‘d like to hear him say what you optimistically, Friday, thought he would say or thought he was thinking, but you‘re ahead of him, which is forget all this. Enough. Let me have—let‘s have a clean bill.
We should not be making economic policy for the next 10 years, you know, Lawrence, these proposals cover the budget for the next 10 years. That‘s—you‘re tying the hands of the presidency, I cannot possibly meet emergencies under these conditions. Thank you very much for all your consideration, I tried and tried and tried to reach an agreement with you, now enough.
I want a clean bill on my desk by Thursday. I will veto anything else, and I will take it to the American people if you don‘t do that.
O‘DONNELL: That is exactly the speech that I would like to hear. That‘s the speech I would write for him. I think he has positioned himself perfectly now to deliver that speech, appearing to be willing to compromise on all these things.
Also, Elizabeth, it seems to me he has successfully gotten the Republican leaders at least onboard with the notion that failing to raise the debt ceiling is impossible, we absolutely must do it. If we must do it and time has run out to do anything complicated, all it takes is one sentence to raise that debt ceiling.
Elizabeth Drew, contributor for the “New York Review of Books”—
thank you very much for joining me tonight
DREW: Thank you, Lawrence.
O‘DONNELL: Coming up, the president addresses the nation about the debt ceiling fight and then the speaker takes his turn. A look at what‘s at stake with Howard Fineman and Richard Wolffe is coming up.
O‘DONNELL: We are now 26 minutes away from the president‘s address on the, quote, “stalemate over avoiding default and the best approach to cutting deficits.” According to a Tweet from Press Secretary Carney this evening, Speaker Boehner will respond shortly after the president.
For the latest, we are joined by NBC News correspondent Kristen Welker from the White House briefing room, also NBC News correspondent Luke Russert, who is on Capitol Hill.
Kristen, can you give us any reporting on when and why the president decided to address the nation tonight?
KRISTEN WELKER, NBC NEWS CORRESPONDENT: Hi there, Lawrence. Well, White House officials tell me the president wanted to address the nation tonight because this is really a pivotal moment. They say we are almost exactly one week out from that August 2nd deadline.
I asked when the decision was made to make this speech this evening. They said that really, the president has been considering making this speech for quite some time. But again, because we are about one week out, he wanted it to be tonight.
You‘re really going to hear him speak to the American people tonight. We‘ve heard him address this issue publicly several times, Lawrence. But tonight, he‘s going to speak to the American people. He‘s going to really try to break this down.
This is going to be Debt Limit 101. He‘s going to explain why it is so important to increase the debt limit. Of course, Treasury Secretary Timothy Geithner has said that the nation will default on its loans for the first time in history if we don‘t increase the debt limit.
So you‘re really going to hear him address the American people in simple terms and explain to them why he thinks it‘s important that we compromise on this issue and that we get it resolved by August 2nd. Lawrence?
O‘DONNELL: Luke, did the Republicans have any hesitation today about asking for response time? Did they give any consideration to the possibility of maybe we‘ll just let the president hang out there tonight on telling the American people why they have to increase the debt ceiling?
LUKE RUSSERT, NBC NEWS CORRESPONDENT: No, not at all, Lawrence. Literally since last Friday, when President Obama went and addressed the press at 6:00 p.m. in the White House briefing room, after the deal broke down, Republicans have wanted to be quick to respond, because they don‘t want to allow the president, as one of them told me, to take his case to the American people without us—having the chance to hear the GOP side of things.
Even on Sunday night, when there was a possibility of hearing from the president regarding what happened over the weekend, Speaker Boehner and his staff reserved the right to respond quickly.
Today, after the announcement was made that the president would speak, it was within a half hour they really asked for network time and were granted it. This is unprecedented for John Boehner. He‘s never directly responded to President Obama in this type of address. It will be on national television, where it‘s just him in the room, no reporters, nobody else.
It‘s going to happen in the speaker‘s ceremonial office, right off the side of the lobby. We‘re expected to hear a real verbal rebuke of whatever the president says, a real support for the plan that he put forward, stressing that it‘s a common sense idea, that it has, he believes, bipartisan support.
He‘s going to stress that he worked on it with Democratic leaders in the Senate. Their aides saying that this was an idea that was brought to President Obama last night by Harry Reid and dismissed. Democrats dispute that.
But expect to hear that line of thought from John Boehner.
O‘DONNELL: Luke, just to follow up on the Republican response, there‘s a very State of the Union structure to this tonight. We‘re going to first here from the president. Then we‘re going to hear the response.
But in State of the Union Addresses, the opposing party takes some time to think about who should deliver that response. And they try to find the most eloquent Republican they can, or Democrat, whoever the opposing party is, and who is best positions to do it.
Was there any discussion that maybe this message should be delivered by someone other than John Boehner?
RUSSERT: No, not at all. And as you know, Lawrence, there‘s been a lot of discussion, is John Boehner really in control of the House Republican party? Is he the man to lead them? Is Eric Cantor trying to flank him? Is Kevin McCarthy out to get him?
All those questions John Boehner has been trying to put aside. Tonight, he‘s really trying to assert himself as the leader of the Republican party. Now, granted, this plan he‘s putting forward, Lawrence, it‘s not a slam dunk that he‘s going to get 218 votes for it.
I spoke to some GOP aides, and they said look, this is not just going to be John Boehner asking votes, twisting arms. This is a full court press. Eric Cantor is going to be involved in the whip count, as is Kevin McCarthy, the whip himself, and other leaders within the party on the whip team, ones who have bona fide conservative credentials.
Because there are a lot of folks on the extreme right of this party who are not accepting of this plan as it stands right now.
O‘DONNELL: Kristen, do you get the sense at the White House that the president intends to make news tonight? Or is this just going to be kind of an updated version of what he‘s been doing in his press conferences?
WELKER: Well, you know, I heard you saying earlier, Lawrence, that you wanted to hear something new from the president. And I think a lot of people are saying that this evening.
I think what‘s going to be new is potentially his tone. I don‘t know that he‘s going to be making news. But you will certainly hear him reiterate that he does not support a short-term plan. Of course, the plan that Speaker Boehner has put forth is a short-term plan. It would only increase the debt ceiling through the beginning of next year, at least in its first phase.
So you‘ll likely hear him make some comments to that effect. I‘m not sure this is going to be record breaking, in terms of him coming out and supporting an entirely new idea here. But again, he will be addressing the American people. And really, it will be debt limit 101, trying to talk to them, trying to get them to understand why this is such a pivotal moment.
O‘DONNELL: NBC‘s Kristen Welker and Luke Russert, thank you both for joining me on this unprecedented night of a presidential address on the debt ceiling. Thank you both very much.
RUSSERT: Take care, Lawrence.
WELKER: Thanks.
O‘DONNELL: Following the president‘s address at 9:00 p.m. Eastern, Speaker of the House John Boehner will respond to President Obama‘s statement on the debt ceiling negotiations. Coverage and analysis of both speeches are ahead. About 20 minutes away from the president‘s speech now. Stay with us.
O‘DONNELL: President Obama is now minutes away from addressing the nation from the East Room of the White House, as hopes for keeping the nation not defaulting seem to dim with every passing day. The incredible political and financial drama is about to reach a nationwide, prime time television audience.
Joining me now, MSNBC political analyst Howard Fineman, editorial effort for the Huffington Post Media Group, and MSNBC political analyst, Richard Wolffe, author of “Revival 2.0, How the Obama White House is Making its Political Comeback.”
Richard, some would say that part of the president‘s political comeback now is to try to portray himself as a centrist, deficit cutting president. Has he achieved that, do you think, in his public postures in the debt ceiling negotiations up to this point?
RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Well, the polls suggest so. There‘s more than 50 percent of the country thinks that the president isn‘t responsible for the current crisis. In fact, doesn‘t think that Democrats in general are responsible for either the debt ceiling situation or the state of the economy.
They blame Republicans, President Bush overwhelmingly. And that‘s across the board. That takes in independents too.
So yes, you‘re going to hear from the president tonight. I‘m told by White House officials there‘s going to be a lot of emphasis on being reasonable, on the compromise, the need for compromise, and that he‘s worked tirelessly for that.
Of course, that doesn‘t guarantee this will come to anything like the compromise that he‘s been working towards. But that‘s where he‘s positioned himself all along. And that sets up what is a very hard lined position from this president, which is that anything short-term will be vetoed.
O‘DONNELL: Howard, we were getting initial reports from the White House saying the speech could be from ten to 15 minutes long. Now we‘re getting indications that it could be from 15 to 20 minutes long. Does that mean that the president‘s final pencilings here might include something directed towards his base, since he has been so clearly trying to get into the center politically on deficit reduction?
He has been, in many ways, worrying his base about what he‘s been willing to do in terms of Medicare cuts, for example.
HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Yes, that quite possible, and it‘s not necessarily a good sign if the speech keeps getting longer. I just e-mailed one of the top White House officials and said is this going to be—I asked him, is this going to be a stern speech or is it going to be I‘m the only grownup in the room kind of speech.
The answer I got back was well, it‘s going to be a little bit of both. The problem that the president has on his right flank is if he really calls out the Tea Party, which are, of course, running the show here—this is all about the Tea Party. If he calls out the Tea Party and really goes after the Tea Party, which the polls that Richard cited would seem to give him room to do, then he makes it all that much more difficult to get any kind of deal at all at the very end.
On the other hand, if he tries to say look, I‘m the compromiser, I‘m the adult in the room, I‘ve got to do this, he does risk continuing to upset his Democratic base. Because the way they view it is that the president has capitulated on almost every turn to the right wing of the Republican party. The deals that we‘re talking about here, both deals, the Republican deal in the House and the Democratic deal in the Senate, do not talk about any revenue raisers at all.
And to most Democrats, that‘s outrageous. So the president seems to be negotiating against himself most of the time, at least according to the left wing of his own party.
O‘DONNELL: Richard, I‘ve been trying to figure out why is the president doing this tonight? Why does he pick tonight? It seems to me that if he‘s going to go to address the nation, ask for network time, to do it this way, he has to say something new. He has to make some kind of news that something different than what he said Friday night at his press conference that we covered—but it‘s a Friday night in the summer, so America wasn‘t exactly staring at every minute of his press conference.
Is he ready—do you know, is he ready to add something new to what‘s happening here?
WOLFFE: Well, that depends on your definition of what‘s new here. But I tell you what really lies behind it. I was talking to a very senior White House official over the weekend who made it clear a couple of things. First of all, the anger we both saw on Friday night in that press conference was very real. In fact, in my experience, I don‘t think I have seen him that angry since Jeremiah Wright staged his comeback tour.
This was a president is steamed by this. He doesn‘t drop that. When he gets angry, it sticks with him. That has carried him through this point, where frankly, according to this confidant of the president, he is dead clear that he is willing to stake his presidency on this.
This is not a minor twist, an incremental moment. This is a defining moment, in his view, because, again, in his opinion, he cannot govern, and the economy cannot pick up any kind of speed with these kinds of games going on. If he is held hostage and the economy is held hostage every six months to the latest demands of the Tea Party, then there‘s no way forward for him or for the country.
And that‘s what he has to go out and explain tonight. I don‘t know if that‘s news, in a sense. But he does have a responsibility, if he‘s going to stake his presidency on this moment, to explain that to the American people and to the members of Congress who want to push him this hard.
O‘DONNELL: Howard, can you hold that thought? We‘re going to take a break and come right back. Howard and Richard, just stay with us. We‘re going to come right back.
We‘re going to have more on the speeches tonight from the president and the speaker of the House when we return.
O‘DONNELL: All eyes on the White House now, as President Obama prepares to address the nation at 9:00 p.m. Eastern. As we stand by to bring that to you, we turn once again to MSNBC political analyst Howard Fineman and Richard Wolffe.
Howard, you were in the middle of making a point when we just got cut off by that commercial. So go ahead.
FINEMAN: What I was going to say, Lawrence, that president has to make the point, and I think will make the point, that it‘s not about politics for him. It‘s about the economy. And I think there‘s a lot of truth to that. I think he believes, and I think his advisors are telling him, and I think he‘s right that in every three or four or six month debt limit debate like this is a killer for economic confidence and stability.
He‘s got to say it‘s not about me. It‘s not about my reelection. It‘s about the economy. He‘s get to say, from his point of view, now that he‘s willing to be touting the Reid plan, the Harry Reid plan, which is all about spending cuts with no tax increases, that it‘s clear that the Republicans are the ones who are playing politics with this issue.
He‘s got to do that in his I‘m the most reasonable guy in the room type tone. But that‘s the point he‘s got to make tonight.
O‘DONNELL: Richard, although it‘s not about politics—of course, it can‘t be about politics. It has to be about the country. He has declared his candidacy for reelection as president of the United States. How worried are—is the team in Chicago, the Reelect Obama Team in Chicago, at what they‘ve been watching?
It seems there are many, many different ways, every day, in which all of this could go wrong for the president politically in his reelection campaign.
WOLFFE: Well, just from a purely political argument, actually not doing the deal, the grand deal with John Boehner helps Democrats, helps the campaign, because they can go after them for that Ryan Budget, which has these massive cuts to all those social programs that are very popular to all the voters, for instance. So I don‘t think that the politics is made harder from this.
Of course, you never know how people are going to react to an economic collapse, if that‘s what it comes to with default.
But I just want to add one point here; the message for the politics is not just for the regular people in Washington or even the campaign folks. There‘s a message this president wants to get out to the business leaders and the Wall Street types, who they are talking to privately and saying, you do understand we need a long-term deal. They are saying yes, of course, we need a long-term deal.
But they believe, these business leaders, that this president will blink. They think he will take the short-term deal just because they want to avoid a default. And they are not prepared to go to the Republicans and say, you really have to do this for the sake of the economy.
So there‘s a narrow-casted message here for those business folks, to say to them, it‘s time to move. It‘s time to step up and go public and put real pressure on the Republicans to put them in line.
FINEMAN: Lawrence, the fact that the president hasn‘t done that forcefully is one of the tactical mistakes he‘s made here. The establishment Republicans, the Chamber of Commerce Republicans, the corporate Republicans, the Republican CEOs needed to be called out to do battle with the Tea Party.
That‘s the battle that the Republican mainstream should have been forced to engage in, instead of leaving the president to have to do it and John Boehner, who‘s too weak to do it.
O‘DONNELL: Howard, I‘ve been calling this an address to the nation, which is the normal term we use for these things. But in many very important ways, this is an address to the world, especially the world financial markets, who are beginning to wonder—they‘ve actually begun to wonder quite a while ago what is happening here? Is it possible that the safest asset in the world, United States Treasury Bonds, may suddenly become unreliable?
That is something the president has to deal with in a worldwide way tonight, isn‘t it?
FINEMAN: Well, perhaps. But this isn‘t the situation in which the president can show tremendous strength. I mean, he‘s facing a situation where he may have to be presented with and may have to veto or accept something he very much doesn‘t want.
I agree with Richard that a lot of the politics internally might play to his advantage in the long run. But for right now, this is not going to be a demonstration of strength by the president. You know, he‘s staring at the final days of a confrontation with a Congress that has, I think it‘s fair to say, made him look pretty weak in many ways.
The Republicans are playing a very tough game. They‘re playing a tough, even cynical game. And this isn‘t going to—look, the markets are smart. They know that this is a political crisis, not a deeply economic one in and of itself. One reason why the markets haven‘t tanked so far is that they know what‘s going on here. They know that this is a political dance that tonight—tonight is not a state of the union speech. It‘s a back-to-back—it‘s two states of disunion speeches.
People in the markets understand that right now.
O‘DONNELL: Richard, given the markets, can the president suggest that he will veto certain things? He has made that kind of reference publicly before. But as we get closer and closer to the deadline for raising the debt ceiling, is it possible for him to both reassure the markets and suggest there‘s a version of this that he‘ll veto?
WOLFFE: I think beyond reassuring the markets at this point. The markets have a very perfect understanding of how Washington plays its games. We all do, let‘s face it, in this situation, because it is unprecedented. When the market turns, when the bond market stampedes in the wrong direction, you just have to get out the way. There‘s nothing you can do.
It‘s not a finely-tuned organ. I mean, it really is just a brutal
thing that will take down everything. If they believe that default is real
really the market is saying, whether the president solves it or the Fed just prints money, this will be solved.

O‘DONNELL: MSNBC political analysts Richard Wolffe and Howard Fineman, thank you both for joining me tonight.
FINEMAN: Thank you, Lawrence.
O‘DONNELL: Coverage of the president‘s address to the nation and the response of the speaker of the House starts right now.
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