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'The Rachel Maddow Show' for Thursday, September 8, 2011

Read the transcript to the Thursday show

Guests: Valerie Jarrett, Jared Bernstein, John Mica, Steve Israel

RACHEL MADDOW, HOST: Good evening, Lawrence. Thank you very much.

And thanks to you at home for staying with us for the next very busy

We will have an update on the reportedly, quote, "credible, specific,
but unconfirmed terror" threat on the United States. Around what is, of
course, the tenth anniversary of the September 11th terror attacks. We`ll
have that coming up this hour.

We will also have the latest on the massive power outage in parts of
Arizona and southern California, primarily in the San Diego area where more
than a million Americans do not have electricity at this hour. Both of
those things happening and breaking in terms of news relatively recently.

There`s obviously an enormous amount of news tonight, political and
otherwise. But we begin as we must in Washington, D.C.

When a president addresses a joint session of Congress, it`s usually
for the State of the Union Address. Only very rarely do presidents ever
ask Congress to address a joint session for something other than the State
of the Union.

Before tonight, President Obama had only done that once before when he
unveiled his health reform plan -- his health reform plan that ultimately
became his health reform law. Republicans now denounce it as Obamacare and
lots of other things besides and they pledge that they will it away
somehow, but his health reform plan passed. The most significant change to
the socially safety net in this country since Medicare passed nearly 50
years ago. He got that done.

Tonight, once again, before a joint session of Congress, President
Obama faced his stiff political headwinds and called for another big new
initiative. One to fend off the unspoken, but looming, threat that the
country may be about to plunge back into recession.

After barely escaping a depression brought on by the financial system
collapse at the end of the George W. Bush administration, after a recovery
that tried and tried to bring us back all the way, but now seems to have
stopped in its tracks, can Washington act to stop a double economic dip?
Can the gleefully obstruction Republicans who control the House and act as
a super empowered minority in the Senate be brought on board to take action
to try to help the economy -- or can they not?

The president`s proposal tonight, a Republican-friendly but still
rather bold $447 billion plan, rated 60/40 tax cuts to spending, a plan to
try to reduce the unemployment rate now.

This was not a high concept speech. This was not a vague goals kind
of speech. The president has a piece of legislation with very specific
proposals in it -- many of them taken from the Republican side of the
aisle. And he would like that legislation passed, please, right now.


Congress a plan that you should pass right away. It`s called the American
Jobs Act.

Pass this jobs bill. Pass this jobs bill. Pass this bill. Pass this
jobs plan right away. Pass this jobs bill. Pass this bill. You should
pass it right away.

Pass this jobs bill. Pass it again. Right away. Pass this jobs

This plan is the right thing to do right now. You should pass it and
I intend to take that message to every corner of this country.


MADDOW: Ignoring calls from his Democratic base to name and shame the
Republican Party for having blocked economic progress thus far. President
Obama instead noted over and over again tonight the Republican origin or
past Republican support for many of the ideas he was asking Republicans to
vote for tonight.


OBAMA: Everything in here is the kind of proposal that`s been
supported by both Democrats and Republicans, including many who sit here
tonight. Fifty House Republicans have proposed the same payroll tax cut
that`s in this plan. This jobs plan builds on a program in Georgia that
several Republican leaders have highlighted.

I agree that we can`t afford wasteful spending and I agree there are
some rules and regulations that do put an unnecessary burden on businesses,
at a time when they can least afford it.

Every proposal I`ve laid out tonight is the kind that has been
supported by Democrats and Republicans in the past.


MADDOW: Sort of a push me/pull you move with the Republicans he needs
to get his jobs bill passed, President Obama tonight not only tried to woo
them with the bipartisan pedigree of many of his proposals, he also called
out the constraints that Republicans may perceive themselves to be under --
constraints that would prevent them from voting for this jobs bill.


OBAMA: I know that some of you have sworn oaths to never raise any
taxes on anyone for as long as you live. Now is not the time to carve out
an exception and raise middle class taxes which is why you should pass this
bill right away.

This larger notion that the only thing we can do to restore prosperity
is just dismantle government and refund everybody`s money and let everyone
write their own rules and tell everyone they are on their own, it`s not who
we are. It`s not the story of America.

Yes, we are rugged individualists. Yes, we are strong and self-
reliant. And it has been the drive and initiative of our workers and
entrepreneurs that has made this economy the engine and the envy of the
world. But there`s always been another threat running throughout our
history, a belief that we are all connected. And that there are some
things we can only do together as a nation.


MADDOW: Taking aim there at what may be the less politically
sustainable positions of the Republican Party`s activist base
characterizing it as this notion that the only thing we can do is dismantle
government, refund everybody`s money and let everybody write their own
rules and tell everybody they are on their own, taking aim at that position
of the Republican Party`s activist base tonight. The president pivoted and
also took aim at what he sees his own base. Saying tonight that he would
be willing to consider changes to Medicare.

Since he would be opening Medicare for surgery in Washington under the
care of a Republican minority which says they`d like at it with a chain
saw, please -- that was a line about Medicare that will cause some
sleepless nights on the left and among America`s seniors and elsewhere.

But President Obama leavened that tonight with, frankly, the
reappearance of Obama, the political fighter. The confident knows where he
is going guy who knows how, among other things, to win elections.


OBAMA: I reject the government that says for the economy to grow, we
have to roll back hidden fees by credit card companies, or rules that keep
our kids from being exposed to mercury, or laws that prevent the health
insurance industry from short-changing patients. I reject the idea we have
to strip away collective bargaining rights to compete in a local economy.


OBAMA: Regardless of the arguments we have had in the past,
regardless of the arguments we will have in the future, this plan is the
right thing to do right now. You should pass it. And I intend to take
that message to every corner of this country.



MADDOW: Joining us now from the White House is White House senior
adviser Valerie Jarrett.

Valerie, thank you very much for your time. It`s nice to have you

Rachel. How are you?

MADDOW: I`m -- you know, I`m great. Every night there is an address
by a joint session to Congress, it`s a tiny little Christmas for somebody
like me.

JARRETT: It`s a good night for you.

MADDOW: Well, tell me -- I mean, you look back at this president`s
choices about big speech venues. He, of course, has had two State of the
Unions sessions before joint session of Congress, the other address happens
after the president is inaugurated, that sort of a State of the Union but
not really. The only other time he addressed a join session was unveil his
health reform plan.

Is this as big a deal to his presidency as his health reform plan was?

JARRETT: Absolutely. There is nothing more important to the
president right now than getting our economy going, putting people back to
work, putting a little extra money in the pockets of folks who are
struggling as they face this tough, tough economic time. And I think the
message that he made very clear tonight is the Congress should pass this
plan and they should do it right this minute, and that it`s fully paid for.

It is bipartisan in nature. These are -- provisions in here both the
Democrats and Republicans supported before and no reason we can`t move
forward this minute.

There are benefits in here for small business. There are
opportunities for construction.

In fact, Rachel, I was thinking about you this morning. When I woke
up, I turned on the TV and I saw the commercial that you have standing in
front of a bridge and you`re saying that, you know, the private sector
can`t do everything.

There are certain things that Americans expect their government to do.
Our infrastructure is vitally important. Putting people back to work with
construction is important. Our roads, our bridges, our sewers, our
waterways, our dams -- this is what makes our country so special.

And as we try to compete in this global marketplace, we need to
rebuild our infrastructure. We need to rebuild our schools. We need to
make sure that teachers and first responders and veterans who are coming
home from serving our country so proudly have jobs waiting for them.

We know all across the country companies are discriminating against
people who have been out of work for a long time. This bill has a very
important provision where if you`ve been out of work for over six months
will give a company a benefit if they will hire you so that we can get the
long term unemployed back to work with the skills that they need.

And so, there`s no reason why we can`t move forward decisively and
promptly. The president is going to draft the legislation, make the job a
little easier for Congress and send it up there next week.

MADDOW: Next week?

JARRETT: Next week.

MADDOW: Does that mean the president has a plan for passage here?
Has he met with the individual committee chairman or is he planning to meet
with the individual committee chairman? Is he planning on doing a full-
court press to lobby for this passage?

JARRETT: The president plans to do a full-court press with the
American people. So, he`ll be in Virginia tomorrow. He`ll be in Ohio next
week. As he said this evening, he intends to take this message all over
the country.

The reason why he wanted to do the speech this evening before Congress
was not just speak to the members of Congress yet important they hear the
message, but it was also important that he have a chance to speak directly
to the American people. They are the ones who are out there struggling
trying to make end`s meet. They are the ones who elected the people who
are representing them here in Washington. And now is the time for
Washington to remember that and act.

MADDOW: Congressional Democrats, among a lot of other challenges this
year, have been sort of delighted about the prospect of running against
congressional Republicans who voted for the Paul Ryan plan to kill
Medicare. Democrats feel like they broadly speaking running a
congressional races, Senate races, even dog catcher races, are delighted to
be a part of the party standing up for Medicare given that so many
Republicans voted to get rid of it by turning it into a coupon program, by

Given that, the president unilaterally offering tonight to essentially
tinker with Medicare himself.

Does the White House not recognize the political impact, not just on
the president`s re-election chances, but on Democrats down on every ticket
in the country for muddying those waters and making it seem like maybe
Democrats can`t be trusted with Medicare either?

JARRETT: No, it doesn`t muddy the waters at all. In fact, if you
listen carefully to what the president said and if you look at the bill, he
intends to strengthen Medicare. He intends to protect existing
beneficiaries and you`re right. The Republicans intended to dismantle it

So there is a clear contrast. The president is fighting to make sure
that Medicare is available for future generations and that we protect those
who are depending on it right now.

So, no, I don`t think we muddied the waters at all. I think he
clarified the waters and he strengthened his position because he made it
very clear that he intends to protect Medicare.

We do have tough choices ahead, Rachel. I think he laid that out this
evening and there are some pretty clear choices. The Republicans for
example said they want to protect the income of the very wealthy and
corporations that are extremely profitable. The president said we need a
fairer system. We need balance.

We need to make sure that those who most depend upon government have
government when they need it. We need to extend the unemployment benefits
for people who are out of work. We need to make sure that youth and
disadvantaged families have jobs available in the summer and throughout the
year, so that they can experience what it`s like to have money in their
pocket and develop lifelong skills that will keep them employed over the
long haul.

We need to make sure that we have the ability to offer mortgage
refinancing for people who are under water with their mortgages and
restructure those and make sure that our neighborhoods that have been
blighted by all of these mortgage foreclosures have tools they need to get
rejuvenated again. And we need to make sure our teachers are employed.

We have so many states around our country who are facing these tough
budget times and are having to lay off teachers. We want to make sure that
we put those teachers back to work and that we put them in schools where
our children are in good schools where the roofs are protected and they are
renovated and they have the technology and the labs that they need so that
they can compete in this global marketplace.

Everything I`m describing to you, Rachel, is a part of the American
Dream. It`s a part of the fabric. It`s what makes our country so special
and the president really wanted to call on Congress to remind them of what
our mutual responsibilities are to each other and to the country that the
Americans who elected them.

And I think that it was an optimistic message. He is confident that
if we put politics aside, that we really can work together and that is what
he is going take to the American people beginning tomorrow morning.

MADDOW: Valerie Jarrett, one last question for you on a different
topic I did not expect to be asking you about tonight and that is this
potential terror threat that we have heard about in the last few hours.
Can you let us know if the president has been fully engaged, if he`s been
fully briefed in on this issue alongside with his responsibilities with the
speech tonight?

JARRETT: Absolutely. He was briefed this morning. He has received
updates throughout the day. He has ordered his team to redouble our
efforts as we go into this weekend where we are having, obviously, the
tenth anniversary of 9/11 and he is absolutely vigilant in doing everything
he can to protect the American people.

MADDOW: White House senior adviser Valerie Jarrett, many thanks for
your time tonight. I know you get up early if you were seeing those ads
with me in the hard hat.

JARRETT: I love those ads. I love leaning forward.

MADDOW: You know, the argument sounds much better without the blue
hat on, so that was a good move you guys didn`t go with that tonight.

Thank you very much, ma`am. It`s nice to see you.

JARRETT: You`re welcome.

MADDOW: All right. The latest on the terrorism alert we have been
notified about tonight.

Also, a big blackout in San Diego and other parts of the far southwest
tonight -- millions of people affected.

Plus, coming up we have a rather ecstatic reaction to tonight`s speech
from President Obama from an economist who is used to finding himself more
on the president`s left flank.

That`s all coming up.


MADDOW: Three days after Barack Obama defeated John McCain in the
2008 presidential election, three days after that election victory, Mr.
Obama called his first press conference as president-elect of the United

From his transition headquarters in Chicago, a victorious and -- look
at him -- notably much younger-looking Barack Obama announced to Congress
and to the American people what his first priority would be as president.


OBAMA: The one thing I can say with certainty is that we are going to
need to see a stimulus package passed either before or after inauguration.

I want to see a stimulus package sooner, rather than later. If it
does not get done in the lame duck session, it will be the first thing I
get done as president of the United States.


MADDOW: A stimulus package. That stimulus package ultimately wasn`t
passed during the lame duck session of Congress. That followed the
election, but while Bush was still president.

But when President-elect Obama, boy king, said there that the stimulus
would be the first thing he would get done as president, he was not
kidding. Less than a month after being sworn into office, President Obama
got that stimulus package.

Inaugurated in late January, Congress passed it in February, and he
immediately signed it into law. They move really fast on that.

Why did we move really fast on that stimulus? Well, we happened to be
right in the middle of catastrophic economic free-fall at the time!

Here`s what the economic picture looked like at the time when he was
sworn in. In the third quarter of 2008, just before the presidential
election, the economy wasn`t just not growing, it wasn`t just stagnant, it
was actually shrinking, getting smaller. That is very, very bad.

The economy shrunk by half a percentage point during that quarter
which is a big deal when the economy is as big as ours is. But then in the
fourth quarter of 2008, look at that. It went off a cliff. The economy
shrank -- shrank another 3.8 percent

That is the situation President Obama walked into -- free-fall. And
so, we got the stimulus -- a piece of legislation that was responsible for
not only stopping the free-fall but for propping up an economy that was,
frankly, plunging toward depression.

Instead of the economy shrinking at that rate of 3.8 percent, the
stimulus is credited with adding one or two percentage points to the GDP in
2009. It grew the economy.

Because of the Stimulus Act, up to 2.9 million people had jobs who
otherwise would not have had them.

So, in that sense, even though nothing turned up roses, the stimulus
did work and did what it was supposed to do. It made things a lot less bad
than they otherwise would have been. Stop the freefall. But it was not

It managed to help the economy, but things were still unspooling at
the end of 2009, so much so that in December 2009 -- and this is lost to
history -- in Decembers 2009, President Obama called for a second round of
stimulus. Remember?


OBAMA: Even though we have reduced the deluge of job losses to a
relative trickle, we are not yet creating jobs at a pace to help all those
families who have been swept up in the flood. My economic team has been
considering a full range of additional ideas to help accelerate the pace of
private sector hiring.


MADDOW: It`s one of those things that sort of been lost to the
political memory hole the last few years, mostly because that second
stimulus effort he went on to describe in that speech didn`t end up

David Corn of "Mother Jones" wrote about this today, the lost second
stimulus speech. In December 2009, the White House recognized that we
needed more stimulus, that we had done some good with the previous stimulus
but more was needed. The problem was really bad but nothing materialized.

We got health reform but we didn`t get a second stimulus. There`s
essentially been no additional stimulus for the economy since then.

And since then -- here`s the most important thing -- since then, we
have also learned that the whole problem that the stimulus was designed to
address, the whole economic problem was way, way worse than we thought it
was all along even when they thought it was really bad.

Remember I said the economy shrunk by half a percent in the third
quarter of 2008? That`s we originally thought. It turns out it did not
shrink by a half percent. It actually shrunk by 3.7 percent. Ugh!

Remember that big, scary 3.8 percent that we thought the economy
shrunk by in the last quarter of 2008? It turns out it wasn`t 3.8 percent,
actually, it was 8.9 percent! That is not a typo. That`s how fast the
economy was shrinking.

Republicans look at this chain of events and say, oh, see? Well, the
stimulus didn`t work. Everybody else looks a at these numbers and say,
well, the stimulus did something but given what we now know what we were up
against, it`s clear that it was not enough. It`s clear that we actually
did need that second round of stimulus the president was sort of pushing
for back in December of 2009 but not that hard.

What we are seeing in the economy is the effect of not getting further
stimulus. Not only given that the economy has proven to be resiliently bad
but also because it was way worse than we thought it was when we initially
designed the things that we were going to do to try to fix it.

The hope it is not too late but time is up and time is up but we got
to do something now.


OBAMA: The people of this country work hard to meet their
responsibilities. The question tonight is whether we`ll meet ours. The
question is whether in the face of an ongoing national crisis, we can stop
the political circus and actually do something to help the economy.


OBAMA: Ultimately, our recovery will be driven not by Washington but
by our business and our workers, but we can help. We can make a
difference. There are steps we can take right now to improve people`s


MADDOW: Joining us now is Jared Bernstein, a former member of
President Obama`s economic team and former economic adviser to Vice
President Biden. He`s now a senior fellow at the Center on Budget and
Policy Priorities and an MSNBC contributor.

Jared, thanks very much for your time tonight.

JARED BERNSTEIN, MSNBC CONTRIBUTOR: My pleasure, Rachel. Thank you
for inviting me.

MADDOW: I have been watching your tweets and so I know that vaguely
happy. But let me get your baseline impression of the relationship between
the scale of the problem and the scale of the solution that the president
offered tonight.

BERNSTEIN: That`s where I thought the speech was particularly strong.
I mean, I was looking for something that would move the needle on
unemployment and not just a little bit, but significantly -- something at
least a point, maybe a point and a half, and when the number was floating
around $300 billion, I thought that could help, but I was a little nervous
about the magnitude, given the depth of the weakness.

And so, now that we are talking about a program in the $450 billion
range with lots of components that I think could be fast acting, that
struck me as a very positive note.

The other thing is the bipartisan nature of these ideas. The
president really hammered on this point that these are measures that in
normal times, partisans on both sides of the aisle would embrace. And I
was also looking to see if the president had the kind of fight that it`s
going to take to carry this forward and that, I think, we saw very clearly

MADDOW: In terms it of the overall package and the contours of it,
it`s 60/40 weighted tax cuts to spending. And generally speaking, we think
of spending being more spending as tax cuts. But it strikes me as sort of
an economics idiot, but one who pays attention, that these particular tax
cuts that the president is describing here, tax credits for businesses for
hiring, payroll tax cuts for people that they`re going to feel right away
in their paychecks, $1,500 for the average family with the payroll tax
extensions, these are the kinds of tax cuts are the most stimulative.

Is that right?

BERNSTEIN: It is right. Tax cuts don`t help you if they are saved or
if they leak out on imports. As far as the saving goes, if you`re someone
who is pretty wealthy and you`re not income constrained, then there is
really no multiplier associated with the tax cut. I suggest that these are
well targeted in that regard.

And, you know, over the past few weeks, you and have talked about
this. And I keep saying that this payroll tax cuts is a great idea, we got
to renew it, but it doesn`t put the foot down on the accelerator any more.
All it does is keep something that`s in the economy going. Well, in fact,
now it does push the foot down a little bit more on the gas pedal because
it was a 2 percent credit, now, it`s 3 percent credit. So, what was 1,000
bucks extra in your paycheck becomes $1,500 if you`re earning around
$50,000. That`s going to help.

MADDOW: In terms of the spending here you and I have also talked
about the idea of investing in American schools as physical places, as
buildings, as a physical plant where we send our kids to get educated. In
terms of the president`s infrastructure discussions tonight, there was talk
about trying to prevent teachers from being laid off but talking about
school buildings themselves and investigating in them.

Is this the fast program we were talking about?

BERNSTEIN: This is the fast program. And you and I talked about this
about a week ago. We had suggested maybe $50 billion for this program. It
looks like it`s in there for $30 billion. And I think that`s great. I`m
more than 3/5ths pleased about that addition.

Remember, this is a program that can be stood up quickly which
infrastructure that`s not always the case. You`ve got a backlog that`s
very deep in the public schools. You`ve got a distribution mechanism,
something called title one where you can get the dollars out there quickly
and it`s labor-intensive work and work you see there in your community.

So, I view this as a big win for the American people.

MADDOW: Jared Bernstein, senior fellow at the Center on Budget and
Policy Priorities, MSNBC contributor, and somebody I have not seen this
uniformly happy about a thing in Washington since I`ve met you.

BERNSTEIN: Yes. Well, let`s see where the politics go but we have
had a good discussion so far. Bring that in.

MADDOW: Thanks very much, Jared. Appreciate it.


MADDOW: All right. I`m willing to talk about rebuilding America`s
crumble infrastructure pretty much anytime over drinks or not. But when a
Florida Republican who is the chairman of the House Transportation
Committee wants to come on this show and talk about it with me? I don`t
need cocktails. That is a full on 100 percent win and that Republican will
join me next. I couldn`t be happier.


MADDOW: Just about 30 minutes before President Obama was scheduled to
deliver his jobs speech to Congress tonight, a bit of breaking news crossed
the wires concerning about a terror threat -- one believed to be linked to
this weekend`s tenth anniversary of 9/11.

Here`s what we can tell you right now. At some point, late last
night, U.S. law enforcement officials received intelligence what`s being
described as a specific and credible, but the unconfirmed, terror threat
involving New York City or Washington, D.C. Officials are not saying at
this point what exactly is being targeted but counterterrorism officials
tell the "Associated Press" today that the threat was so specific that it
could not be ignored.

U.S. government officials telling NBC news tonight the intelligence
originated in the tribal areas of Pakistan and relate to a plot to set off
car or truck bombs in Washington, D.C. or in New York City. The
information indicated that three people would travel to the United States
from Pakistan to carry out the attack. But the timing and the exact
targets of that attack remain unknown.

President Obama was reportedly briefed on the threat this morning. We
heard that just moments ago from Valerie Jarrett as well. The president
reportedly reported the counterterrorism communities, such as it is, to
redouble its effort in response to this new intelligence.

Shortly after the president addressed to Congress tonight, Republican
Congressman Peter King of New York, chairman of the House Homeland Security
Department Committee spoke about this threat to NBC`s Luke Russert. Watch.


REP. PETER KING (R), NEW YORK: What I can tell you, it is very
specific. It`s credible but it`s not confirmed. But you combine the
specifics and also the fact it`s credible with this being the weekend of
9/11, it`s being taken very seriously.

I have faith that federal law enforcement, all of our agencies,
federal, state, and local are appropriate and doing everything that has to
be done. There`s absolutely no need for any panic. And -- but, again,
with abundance of caution and also knowing that al Qaeda in the past does
look for anniversaries, looking for landmarks, it`s being taken very
seriously. But, again, certainly no need for any type of panic.


MADDOW: Again, as Congressman King noted, this threat remains
unconfirmed at this point but it is being taken seriously. Congressman
King is chairman of the House Homeland Security Committee.

The FBI and the Department of Homeland Security are reportedly working
on a bulletin to send out to local law enforcement officials about this
tonight, which may result in further information.

We are monitoring also a press conference set to begin soon by New
York City Mayor Michael Bloomberg and New York Police Commissioner Ray
Kelly. If there are any further developments this hour, either from that
press conference or elsewhere, we will, of course, bring them right to you.

Also, as we noted earlier on the show, there is a massive power outage
right now primarily affecting the San Diego, California area. It`s left
millions of people without power and it has shut down two nuclear reactors
in the area. Again, to be clear, the blackout caused the nuclear reactors
to shut down. The shutdown was not caused by the reactors.

Our NBC affiliate in Los Angeles reporting that an event happened
somewhere between Arizona and California affecting major power line
connections, causing the outage. But we can`t get more specific with you
than that. Nobody -- not only has that main electric utility for San Diego
County said that all of its 1.4 million customers are without power
possibly until tomorrow.

But "The Los Angeles Times" is reporting that these two reactors at
San Onofre Nuclear Power Plant have also been shutdown. A spokesman for
the utility saying the outage caused no safety issues and that the overall
plant continues to have power, but they have been shut down in reaction to
the overall blackout affecting that large area of southern California.

We will, of course, keep you posted on the terror threat report and
this western power outage as more information becomes available. And we
will be right back.



OBAMA: Everyone here knows we have badly decaying roads and bridges
all over the country. Our highways are clogged with traffic. Our skies
are the most congested in the world. It`s an outrage.

Building a world class transportation system is part of what made us a
economic super power and now we are going to sit back and watch China build
newer airports and faster railroads at a time when millions of unemployed
construction workers could build them right here in America?



MADDOW: President Obama tonight calling for $50 billion in immediate
new spending on transportation, on infrastructure for his new proposal the
American Jobs Act. Everybody likes to say they are for infrastructure --
whether you`re wearing a hard hat while you`re saying. But the way it gets
done is through Congress. Infrastructure goes through lawmakers and
through lawmakers committees -- lawmakers like, in particular, Republican
Congressman John Mica of Florida.

Mr. Mica chairs the House Transportation and Infrastructure Committee.
You may remember him the man who forced a partial shutdown of the Federal
Aviation Administration this summer because he and other Republicans wanted
to make it harder for transportation workers to join a union. Mr. Mica and
his committee now face another deadline, a gas tax we use to pay for
highway construction in this country and set to expire at the end of this

Tonight, it looks like a short term extension is in the works.

But to re-up that gas tax that pays for highway construction projects
and to keep those highway construction projects going for the long haul,
Mr. Mica says he wants to bill that cuts transportation funding -- just
when President Obama is calling for more investment in roads and bridges,
both for the sake of those roads and bridges and for the economy that they
drive and for the people who would be employed to do that work. Something
has got to give.

Joining us now is Congressman John Mica, chairman of the House
Transportation and Infrastructure Committee.

Congressman Mica, really delighted to have you with us tonight. Thank
you so much for staying up and joining us.

REP. JOHN MICA (R), FLORIDA: Always good and always interesting, too,
to be with you.

MADDOW: I appreciate that.

You`ve said that one of your concerns about the way we invest in
infrastructure is that we need to spend our money as efficiently and
effectively as possible. Tonight, President Obama said no more earmarks,
no more boondoggles, no more bridges to nowhere.

Is that persuasive for you? Do you think you can back what he was
talking about tonight?

MICA: Well, he also mentioned two specific projects which would be
earmarks. I guess the bridge between Connecticut and Ohio and then the
Houston Transit System.

But, I -- the president gave a very good speech. I think he is
interested in the same thing we are interested in, and that`s getting
people working building the nation`s infrastructure. He`s a little bit
light on details tonight and my particular area which is -- which is

But -- and I have to say I would take exception with the one major
specific proposal and that was for a national infrastructure bank which is
a proposal by a Massachusetts and Texas senator, bipartisan. But I think
it`s wrong based.

MADDOW: Why do you oppose an infrastructure bank? The idea I think
behind that at least politically was it would harness both private and
public investment in a way that could sort of allow market forces to play
role in where things got built rather than allowing it to be decided by who
is the most powerful congressman with the best connections.

MICA: Well, what you described, Rachel, about, you know, harnessing
private sector investment and participation and getting projects moving
people working is right. But the problem I have is creating one more
Washington-based program where you have to come on bended knees to
Washington. You have to go through the red tape of Washington. You have
to go through the approval and then the political process you talked about

That`s not what we need to do. You know, I have 33 states that
already have infrastructure banks. I can empower those states. What they
need is probably that financial backing. And also rather than pay
administrative overhead in Washington and more bureaucracy and approval
here, I can get it done quicker and faster and more directly at the local

MADDOW: The local level funded by what, though?

MICA: The same that they would be doing in Washington, except,
against I cut through that bureaucratic process, the administrative
overhead creating a new bureaucracy. I have 33 states that have
infrastructure banks. They just don`t have the backing and the financial
wherewithal right now.

Why create that model in Washington? I think we could do it there.

So, that`s just one thing and I think we can work with the president
on finding better ways of streamlining the process.

I still have, as of last week, 35 percent of the $63 billion in
infrastructure money that was in our particular area stuck here in
Washington because shovel-ready has become -- you know, it`s a national
joke. It doesn`t exist.

But we can streamline that process, speed up the process and actually
get people to work on long-term jobs and get those big projects under way
that hire people for more than just putting in a sidewalk or repaving,
which may be necessary, but it`s short term, temporary employment.

MADDOW: Sure. I think Republicans have tried to make the idea of
shovel-ready into a joke, but I`m not sure outside of Republican circles,
it seems that funny.


MADDOW: I don`t mean to be disrespectful.

MICA: No, no, the president -- I`ve been with the president and he
just, you know, he gets it, I think, that you`ve got to streamline the
process. It is a joke. I mean, it takes 78 years just to go through the
standard approval process for a federal transportation project.

MADDOW: Specifically --

MICA: That`s too long.

MADDOW: In what the president was talking about tonight, let me get
one specific other things he talked about. He talked about infrastructure
investment to modernize 35,000 public schools -- 35,000 public schools
across the country doing that sort of investment. I realize your area of
the area in which people come on bended knee to you for permission to do
things is transportation specifically. But do you foresee something like
that investing and upgrade in America`s public schools spending $30 billion
on investing in America`s public schools and their buildings? Could that
be something that Republicans could get behind?

MICA: Well, again, I don`t know the specifics. I deal in
transportation, not school construction.

But if we can speed up the process -- and, again, I think the
president made a commitment to pay for these projects as we go. You know,
we have been borrowing 43 cents on every dollar from China or whoever to
pay for projects now. So, we want to do it responsibly. I`m not opposed
to do that. I thought the president had some other good ideas.

I think a tax credit for people who have lost a job. I would probably
base it on a percentage of the salary rather than just a $4,000 dollar
amount, but I think that`s a good beginning because there are people have
been out of work a long time. We need to get them working and we need
incentives for people who create jobs, private sector employers to employee
employ and expand employment of people.

MADDOW: Congressman Mica, talking to you, I realize that I`m struck
by how much we are all counting on you as a country right now. To the
extent that if we believe that the government needs to do something to try
to put people to work right now and one of the things we know that puts
people to work right now is, quite literally, transportation infrastructure
projects and the president wants a big infusion to do that right away in a
rushed way with a sense of urgency.

I find myself really desperately wanting you to say that you have a
sense of urgency about this too. Do you feel like this is something that
can be done urgently or do you think this is all long-term stuff?

MICA: Rachel, that`s a very good point. Really, you go back and your
heart aches for people who are losing their homes. They have been out of a
job. And it`s affected so many America`s 14 million Americans.

And I think in our committee, we have that ability. Today, we marked
up legislation. We do a lot of things that don`t get attention.

Tomorrow, I`ll introduce an FAA bill. I didn`t close down the FAA
before. I had the bill to the senate in time.

But, you know, I wrote the last bill in 2004, it expired in 2007, and
I agreed to 20 some extensions. And, finally, I said, let`s just cut this
baloney out. We need to do a long-term FAA bill, a long-term
transportation bill, because these are the bills that can actually get
people working again. So whatever it takes.

Today, I sat with Mr. Rahall, who is the ranking Democrat. I sat last
time with Barbara Boxer. We`ve done bipartisan hearings. We`ve got to get
this resolved because people are counting on us and we can`t play games,
particularly on our nation`s infrastructure.

MADDOW: Congressman Mica, appreciate the time to talk with us
tonight. And I hope you know that I mean it earnestly that really the eyes
of the nation are upon you in terms of trying to turn all of this talk into
something moving through the Congress.

Thank you for speaking with us, sir.

MICA: Thank you so much.

MADDOW: Thank you. We`ll be right back.


MADDOW: For decades, one of the most effective political tools
Democrats have had during campaigns has been the promise to protect
programs like Social Security and Medicare, which they invented and voted
for and helped protect, and which Republicans have sort of had a chainsaw
out for quite some time.

The guy who`s in charge of electing a Democratic majority to the House
of Representatives in the next election said in May that his strategy for
electing a Democratic majority in the House in the next election was a
three-part strategy. The three parts were Medicare, Medicare, and


REP. STEVE ISRAEL (D), NEW YORK: That is the defining issue. We`re
going to continue as Democrats to fight for Medicare in any congressional
district, no matter how high the hill, no matter how great the odds.


MADDOW: Tonight, did the hill get higher and did the odds get greater
-- when President Obama said in his speech to joint address of Congress
that he, too, has some ideas for Medicare.


OBAMA: Millions of Americans rely on Medicare in their retirement.
And millions more will do so in the future. They pay for this benefit
during their working years. They earn it. But with an aging population
and rising healthcare costs, we are spending too fast to sustain the
program. If we don`t gradually reform the system while protecting current
beneficiaries, it won`t be there when future retirees need it. We have to
reform Medicare to strengthen it.


MADDOW: Joining us now is Democratic Congressman Steve Israel from
the great state of New York, chair of the Democratic House Campaign

Congressman Israel, thanks very much for joining us.

ISRAEL: Happy anniversary. Three years on the air. Congratulations.

MADDOW: Thank you very much. I forgot and got a nice love letter to
the show, written to me by my dear old dad this morning, which reminded me
about it. It was nice. Thank you.

When Republicans talk about Medicare, their policy as far as I can
tell is to kill Medicare. But what they say is they want to save it or
strengthen it. Now, we`ve got the president saying he, too, wants to
strengthen Medicare.

Does that give you the willies at all?

ISRAEL: No, not all. Look, we have always said consistently from day
one that we will negotiate to improve Medicare, reform Medicare, strengthen
Medicare. We will not negotiate to end Medicare.

It`s not what the Republicans say. It is what they have done. Paul
Ryan budget ends the guaranteed Medicare benefit. It turns Medicare into a
coupon program.

And so, Democrats united, Democrats in the House, Democrats in the
Senate and Democrats in the White House, that we are open to ideas for
efficiencies in Medicare to extend its solvency. But we will not negotiate
what Republicans have been trying to do 20 years now, and that is to end

MADDOW: In terms of that as a potent political issue, one of the
reasons I wanted to talk to you about this, you`re in charge of converting
that issue into electoral gains for Democrats. And I know you`re confident
you can do that.

Does that also apply to Social Security? Are Democrats planning to
draw a bright line between a Democratic plan to protect Social Security and
Republicans putting it at risk?

ISRAEL: Well, this election in 2012 is going to be very much a
referendum. Do you want a crowd that is dedicated to terminating Medicare
and privatizing Social Security? Or do you want a majority of Democrats
who are going to promote pro-growth agenda, create jobs and protect
Medicare and Social Security?

And I have to say, Rachel, that we found a new ally in this fight,
surprises me, but Rick Perry. Rick Perry called Social Security a Ponzi
scheme. I have to give Rick Perry credit. At least he`s honest. He has
unmasked what the Republicans sought to do.

They talk about strengthening Social Security. Rick Perry told the
truth. They believe that it is a Ponzi scheme and they want to end Social
Security. And the American people are going to face that contrast and I`m
confident they`re going to make the right decisions.

MADDOW: The Beltway media is so much better at covering conflict
among politicians that it is at covering policy. I feel like we also got a
this great blessing when Mitt Romney attacked Rick Perry for having said
that because it made the Beltway media start covering this issue of how at
risk Social Security would be under a particular Republican politician.

My question to you, though, is Mitt Romney`s position on Social
Security substantively any different than Rick Perry`s, or is he planning
on putting it at as much risk as Rick Perry would?

ISRAEL: Well, look, Mitt Romney can say what he wants, dance around
it. The fact of the matter is, the Ryan budget that passed the House of
Representatives and has been embraced by every single Republican
presidential candidate ends Medicare. It turns it into a coupon. It costs
the average American senior an additional $6,000.

So, they can speak in sound bytes, but I think the American people are
going to hold them accountable not to their words but their actions. The
Ryan budget, as a matter of action, that passed the House of
Representatives, endorsed by every single Republican presidential
candidate, ends the guaranteed Medicare benefit.

MADDOW: Democratic Congressman Steve Israel of New York, chairman of
the Democratic House Campaign Committee -- thanks for joining us tonight,

ISRAEL: Thank you.

MADDOW: We`ll be right back. Excuse me.


MADDOW: Update on the breaking news on the terror threat concerning
New York City and D.C., New York Police Commissioner Ray Kelly saying
moments ago that the department had already been preparing security
precautions in advance of the 9/11 anniversary this weekend. It`s now
going to be more measures on top of that, including vehicle checkpoints in
the city.

The mayor is saying the threat is credible but not corroborated. He`s
encouraging the public to remain vigilant but not to be intimidated by the
threat. We`ll keep you posted as we learn more here at MSNBC.

That does it for us tonight. Now, it`s time for "THE ED SHOW."


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