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'The Last Word with Lawrence O'Donnell' for Friday, September 9, 2011

September 9, 2011


LAWRENCE O`DONNELL, HOST: The president takes his jobs plan deep
into Republican territory.


want you to e-mail, I want you to tweet, I want you to fax, I want you to
visit, I want you to Facebook, send a carrier pigeon.

O`DONNELL (voice-over): The president takes his jobs speech on the
road -- the road to Republican congressional districts.

OBAMA: I was glad to hear some Republicans, including your
congressman, say they`ve got -- they see room for us to work together.

JOE SCARBOROUGH, MSNBC ANCHOR: The president, first, is going to
Richmond, and then he`s going to Ohio. Should they close their eyes and
throw darts at the dartboard.

CHUCK TODD, NBC NEWS: So, in 13 seconds, the president managed to
hit the home states of Speaker Boehner, Mitch McConnell, and Republican
presidential frontrunner Rick Perry. Coincidence?

UNIDENTIFIED MALE: He`s essentially telling Congress, if you don`t
go along with this, I`m prepared to go over your heads to make this a
defining issue.

SCARBOROUGH: The first dart went to Eric Cantor issue.

OBAMA: Next week, I will send it to Congress. They should pass it
right away.

UNIDENTIFIED MALE: I think very little of this plan is actually
going to make it through Congress.

O`DONNELL: The Republican response? Mr. President, you`re not going
to get everything you want.

REP. ERIC CANTOR (R-VA), MAJORITY LEADER: I object to the all or
nothing message that the president is delivering. That`s not how anybody

UNIDENTIFIED MALE: The president said over and over last night, you
need to pass this right away. We need to see the bill.

CANTOR: My wife and I, married almost 22 years, don`t agree on
everything 100 percent.

OBAMA: That`s not class warfare. I`m not attacking anybody. I`m
just -- it`s simple math.

what I wanted. I`m pretty happy.

O`DONNELL: And as the nation prepares to mark 10 years since the
attacks of September 11th, a new threat looms in New York and Washington.

ANDREA MITCHELL, NBC NEWS: Secretary of State Hillary Clinton and
Vice President Joe Biden both confirmed today that there is a credible but
unconfirmed threat.

UNIDENTIFIED MALE: The source that told us this didn`t have any
names. He just said three guys are coming.

MITCHELL: See something, say something, is real.


O`DONNELL: In a speech watched by 31 million people last night,
President Obama called on Congress to pass his jobs bill 17 times. Today,
he delivered a variation of that speech to the University of Richmond in
Virginia, conveniently located in the congressional district represented by
House Majority Leader Eric Cantor. The president told Cantor`s
constituents he remains hopeful that Cantor and House Republicans will, in
fact, pass his jobs bill.


OBAMA: To their credit, I was glad to hear some Republicans,
including your congressman, say they got -- they see room for us to work
together. They said that they are open to some of the proposals to create
American jobs. Look, I know that folks sometimes think, you know, they`ve
used up benefit of the doubt, but I`m -- but I`m an eternal optimist. I`m
an optimistic person.


OBAMA: I`m an optimistic person. I believe in America. I believe
in our democracy. I believe that if you just stay at it long enough,
eventually after they`ve exhausted all the options, folks do the right


O`DONNELL: Next Wednesday, the president will take his jobs speech
to Ohio, home state of House Speaker John Boehner. This afternoon, the
House Republican leadership officially responded to the president`s
legislative proposal in a letter saying in part, "As we are certain your
advisors have told you, not all of your ideas should be packaged in a
single legislative vehicle, and we assume that your ideas were not
presented as an all-or-nothing proposition, but rather in anticipation the
Congress may also have equally as effective proposals to offer for

The Republican leaders also informed the president what is on their
agenda. "The House will continue with the jobs agenda outlined last month,
which, among other things, would provide relief to our nation`s job
creators, especially small businesses from the high costs of some of your
administration`s pending regulatory actions."

The Republican presidential candidates had harsher responses. Rick
Perry said the president`s proposal composed mostly of tax cuts is, quote,
"guided by his mistaken belief that we can spend our way to prosperity.
America needs jobs, smaller government, less spending, and a president with
the courage to offer more than yet another speech."

Willard Romney tweeted that the president`s plan came 960 days too
late and bragged about "the 25,000-plus downloads of my job plan.
Americans are looking for a leader with real-world experience in the real

The president`s speech was focus grouped in Richmond, Virginia, last
night by Hillary Clinton`s 2008 pollster Jeff Garren (ph) who is now
working for the pro-Obama group, Priorities USA.

In the memo to reporters, Garren summarized voters` reaction to the
president. "Many respondents came into the room feeling discouraged,
dispirited, and disappointed, but in last night`s speech, they saw the
Barack Obama they hoped they were electing in 2008. Their simple message
to President Obama is keep it up. They saw the speech as a beginning, and
they want the president to continue pressing the case for the agenda he
laid out before Congress."

Joining me now are: Howard Fineman, "Huffington Post" editorial
director and MSNBC analyst, and Chris Hayes, editor in large of "The
Nation." Chris` new show launches next weekend, next Saturday morning.

Thank you both for joining me tonight.

Howard, in the excerpt of the president speaking today, the line that
got applause was, "I`m an eternal optimist. I`m an optimistic person."


O`DONNELL: It wasn`t any of the policy points, and he certainly has
proven himself politically to be the great eternal optimist, possibly of
any recent memory of Washington. But that is -- it seems -- what the focus
group is referring to. That does seem to be what appeals to people, and
that`s -- isn`t that why that applause was spontaneous in that moment?

given the surround last night, given the dismal economic numbers, given the
problems in the United States and Europe, given the unemployment rate,
given the president`s own low job approval numbers, coming into the lion`s
den so to speak, into congress in a joint session and deliver what I
thought and wrote on "The Huffington Post" was arguably the best speech
he`s given as president shows that he is an optimist. Because if he
weren`t optimistic, he wouldn`t be able to gather the strength and focus to
give that kind of speech.

And as the focus group people said to Jeff Garren, that`s the
president we saw last night that people who voted for Obama thought they
were getting. And I agree with Mitt Romney, maybe it was 900 days too
late, but at least he finally gave it last night.

O`DONNELL: Chris, the eternal optimist, I think, is very optimistic
when he says pass this bill as if it actually is one bill. There are
several committees of jurisdiction involved here in the House and the
Senate and all of the different moves parts he has. Obviously, this thing
cannot be legislated as one bill. It`s going to be passed or rejected in
pieces or amended and changed dramatically in the different committees.

How can the president navigate all that as one piece comes out of the
ways and means committee and then some other piece comes out or gets killed
in the transportation committee?

CHRIS HAYES, THE NATION: Well, what I thought was so fascinating
about it was it marked the first time in the history of the Obama
presidency in which he gave that directive, in which he said I will send
you a bill that you should pass. Every -- the three major legislative
accomplishments of this president, and they are not insignificant
accomplishments -- the Recovery Act, the Affordable Care Act, and the Dodd-
Frank Financial Bill -- all of them bubbled up through the congressional
process to the point of madness, actually, right? To the point where
people were so sick of watching the process developed and they were so
reticent to ever thunk something down on the steps of Capitol Hill.

This was the first time the president actually did that, and I don`t
know how the process is going to play out because it is such a break from
how he`s done it in the past, but, I think, politically it is exactly the
kind of thing many people have been urging for a long time. I mean, they
seem to have learned the lessons of Clinton care too well, right? The idea
being there that the White House and Hillary Clinton cooked up this 1,000-
page thing and sent it over to Capitol Hill and it was thrown out because
it didn`t go through all the processes that happen on Capitol Hill, and the
fact they deferred so heavily to Congress as their legislative strategy has
given them a new kind of critique, that they are not assertive enough.

Well, this was the first time the president said, look, I am sending
you a bill and you should pass it. He said you should pass it, he said,
times, I guess, in the speech. And that sort of diverts us off the path we
had been on in the first two years of the presidency.

O`DONNELL: Howard, I don`t think Chris` point can be overemphasized,
this first writing of a bill, and it, in fact, gives them a two-step
process here because they willfully left out a lot of specifics that we`re
only going to find when they actually turned over this bill, when they hand
this bill to Congress that`s going to have the specific tax provisions in
there, which were not mention last night. And a lot of other specifics,
which there`s two sides to that -- it gives you a new round of stories
about what the president is actually trying to do, but it also opens it up
to a new round of attack.

Is that the best way to go about this is to basically announce the
bill and then a week later, at a later time actually produce it and deliver

FINEMAN: Well, as long as it doesn`t take too long for that second

What the president is doing here is laying down a marker both
politically and substantively. And he gets to go around the country and
utter a simple phrase, "pass this bill," and it`s a whole different way of
operating where he`s going out to the country with something specific, and
I think they`ll have to fill in at least enough of the specifics quickly so
that the lobbying effort at the grassroots makes sense, and try to build
pressure from the outside in.

This is the way Ronald Reagan used to do it back in the day. He
would go over the heads of Congress, use his appeal to the country to try
to do it. The president is doing it at a time that he`s not that popular,
but you got to build your popularity.

And, of course, the other thing he`s doing is launching, in my view,
he`s launched the 2012 presidential campaign in the manner perspectively of
Harry Truman in 1948. Paint the Congress` do-nothing if they pick thing
apart -- at least that`s the effort he`s going to make, because while the
president has a job approval rating in the 40s, Congress has a job approval
rating in the teens. And that`s the president`s political strategy going

O`DONNELL: Chris, the Democrats have things in here that the
president talked about last night that Democrats really don`t want to talk
about. They have been standing in the way of the three trade bills with
the three different countries that the president mentioned last night.
Doing any one of those trade bills is a big and difficult deal for
Congress. The president wants to do all three of them. Democrats, so far,
are silent about it.

They also aren`t making very much noise yet about what the president
referred to very eclectically in his speech which is really Medicare and
Medicaid cuts -- he called them adjustments, but they are cuts in spending
to those programs. What is the Democrats` game here? Are they going to
stay quiet and give the president as much, in effect, quiet support, even
including on things that they don`t really like with the possible
expectation that -- well, the Republicans are going to be the bad guys and
kill this thing anyway? That seemed to be what Barney Frank was saying to
me last night.

HAYES: Yes. I mean, I think a majority of the caucus will probably
do that. I mean, I think the -- there are sort of two issues here. The
free trade -- the free trade is such a loaded term and it`s sort of a
propagandistic phrase because no trade is free. It`s all regulated through
a set of rules. We don`t have free trade on patents, et cetera, et cetera.

The trade deals are trying to push through. The fact is, forget
about ideology for a moment, you ground yourself in what actually the
empirical work on these trade deals, they are not massively job-producing
agreements in any way, shape, or form. I understand the White House thinks
they`ve tinkered around the edges of these current deals such as they are
going to be more beneficial than prior ones, but I think it`s implausible,
empirically based on the work that`s out there to say these are actually

In terms of the Medicare issue, which is going to be huge, I think
everyone`s kind of waiting for the other shoe to drop, which is the speech
that`s going to be next week, a apparently about the deficit side of this,
about deficit reduction, the long-term out years fiscal outlook, and it
really matters a lot.

I can`t stress this enough, and, Lawrence, I think you would agree
with this, the devil is in the details. I mean, there are a whole bunch of
different ways to bend the curve, to bring down long-term Medicare costs
and how you do them, you can stack them up in order of how just and
equitable and efficacious they are and it matters what they actually put on
the table. So, I think people are reserving judgment somewhat rightly
because it actually matters what the policies they propose are.

O`DONNELL: Well, the way Democrats cut Medicare is they go after the
beneficiaries. They take out of the hospitals and the doctors, that Bill
Clinton did massive cuts to Medicare. His first act of his presidency, but
it didn`t go to the beneficiaries.


HAYES: Exactly.

O`DONNELL: Howard, just quickly before we go. What is the
Democratic congressional strategy going forward on this?

FINEMAN: To hold on for dear life.


FINEMAN: To congratulate and encourage the president on being a pro-
active person here, being a leader, and hope that he gets passed what they
like and that somehow the Republicans defeat what they can`t stand.

O`DONNELL: Howard Fineman of MSNBC and "The Huffington Post," and
Chris Hayes, whose new show debuts next weekend, Saturday morning,
September 17th, thank you both.

HAYES: Thank you, Lawrence.

FINEMAN: Thank you, Lawrence.

O`DONNELL: New York City is under its highest state of alert as U.S.
counterterrorism officials work to track down intelligence about a specific
threat against New York and Washington, D.C.

Up next, Roger Cressey joins me to go through what they are doing to
deal with that threat.

And later, 10 years after the September 11 attacks, Matt Lauer takes
us inside the New Freedom Tower at Ground Zero.


O`DONNELL: Coming up in this hour, the latest on what is known about
the terror threat against Washington, D.C. and New York City. Roger
Cressey analyzes all the known details for us.

And later, why Governor Rick Perry`s attacks on Social Security make
him the Republican candidate the Obama campaign is now hoping to face in
the general election. That`s in the "Rewrite."


O`DONNELL: New York City and Washington, D.C. were already
increasing security ahead of Sunday`s tenth anniversary of the September
11th attacks. Now that security is being put to the test by what top Obama
administration officials are calling a credible, but unconfirmed, threat.
The report comes from an intelligence source in Pakistan who heard that
three unnamed men flew to the U.S. on orders from al Qaeda to set off car
or truck bombs in New York or Washington this weekend. Officials believe
that source has been reliable in the past.

The FBI and border officials have been searching through weeks of
travel records looking for clues. Some of the men may have U.S. passports.

In New York City, police presence was beefed up not long after the
news broke last night. They are patrolling landmarks like Times Square,
which nearly fell victim to a car bomb last spring.

In Washington, D.C. and New York, bags are being checked at subway
stations. Cars and trucks are being stopped at tunnels and bridges leading
into Manhattan for inspection. Officials are giving the familiar warning,
"if you see something, say something." And the public is listening to that

Today, the number of tips to New York police reporting a suspicious
package tripled.

On Capitol Hill, the House sergeant at arms sent a letter to House
staffers saying additional police patrols have been in place since Tuesday.

This morning, Vice President Joe Biden discussed the threat on NBC`s
"Today" program.


president ordered four months ago when we found information in bin Laden`s
compound after we got him that he wanted an attack on 9/11. We`ve been
running every single threat to ground. This is the first, the first
credible piece of credible information we`ve gotten. We cannot confirm it.
We are doing everything within our power, all hands are on deck.


O`DONNELL: Today on Wall Street, Secretary of State Hillary Clinton
helped ring the opening bell to mark the anniversary and spoke about the
threat to CNBC.


HILLARY CLINTON, SECRETARY OF STATE: This one was specific. It was
credible, although, unconfirmed. And we took it seriously. There`s also
an advantage by making it public you enlist literally millions of people to
be your eyes and your ears.

Remember, we were very fortunate to foil the Times Square bomber
because a food vender saw something suspicious.


O`DONNELL: Joining me now: NBC News analyst Roger Cressey, who
served in counterterrorism positions under the last two presidents.

Thanks for joining me tonight, Roger.


O`DONNELL: Roger, what makes a threat like this credible? What
gives it that status?

CRESSEY: It comes from a source judged reliable and accurate. But
here`s a challenge, you can be accurate, you can be reliable, but this
current information does not necessarily have to be true, and that is
what`s bedeviling the government right now.

When I used to do this for a living, we had four questions we asked
with every terror threat. Is it credible? Can it be corroborated? Is it
specific? And is it imminent?

And in this case, three of the four questions, the answer was yes.
The one question we don`t have an answer to yet is corroboration, and
that`s what the whole efforts are about right now.

O`DONNELL: Why do we know as much as about this as we do? Why are
officials letting us know that it`s three men, that the information was
picked up in Pakistan? Why do they allow that kind of specificity to seep
into these news accounts?

CRESSEY: Well, because it`s imminent. If this was a threat aimed at
a holiday season or an undetermined point in the future, you wouldn`t see
the government spinning up the public affairs component of this for the
reason Secretary Clinton just said, which is, the more people who are aware
of a potential threat, the more opportunity for someone to say something if
they see something out of line.

But if the timeline is much longer, then they are going to handle it
in a different way. When you have a specific time frame like we do with
this, the 9/11 anniversary weekend, then you have a different requirement
and an obligation to release this information to the public in the way that
they are doing right now.

O`DONNELL: Roger, assembling everything you now know about this with
all of your experience in this area and evaluating this kind of thing, what
is the Cressey threat level? Where would you put it?

CRESSEY: Well, my greatest worry is whether or not the Red Sox is
going to win the division in the American League East.

Set that aside, look, this is -- this is important, it`s significant,
but I do not think we should overreact to it. The two safest places in
America this weekend, Lawrence, are going to be Lower Manhattan and are
going to be the National Capitol Region.

So, I believe what we`re doing now is expanding and hardening the
perimeter around, and as a result of that, I think we`re in pretty good
shape. So, if you`re going to memorialize the events of 9/11, continue to
do that. Don`t change your behavior.

O`DONNELL: NBC terrorism analyst, Roger Cressey -- thank you very
much for joining us tonight, Roger.

CRESSEY: You bet, Lawrence.

O`DONNELL: Coming up, we take you inside the extraordinary new tower
at what will become the new World Trade Center.


O`DONNELL: Still to come tonight, rookie presidential candidate Rick
Perry is trying to rewrite something he wrote and then said and then said
again. He`s been calling Social Security a Ponzi scheme until today.
That`s in the "Rewrite."

And on the eve of a weekend marking 10 years since the September 11th
attacks, a look inside the new tower that will be One World Trade Center.


O`DONNELL: On Monday, the September 11th memorial site will open to
the public ten years and one day after the worst terrorist attacks in this
country`s history. The destruction of the Twin Towers left a city scarred
and a neighborhood destroyed. Business fled the lower west side of
Manhattan. And a long and dangerous clean-up effort began before the sun
set on September 11th.

The 750 million dollar cleanup of the 16-acre site began while toxic
fumes were still in the air. Police officers, firefighters, sanitation
workers, and many clean-up volunteers now face severe ailments that they
trace to the toxicity of the air at the site.

The biggest building to rise on the site is now almost complete, One
World Trade Center. "Today`s" Matt Lauer got a fascinating tour of the new
World Trade Center.


UNIDENTIFIED MALE: You have a little bit of your life and soul
embedded into that building right there.

UNIDENTIFIED MALE: This is a labor of love.

UNIDENTIFIED FEMALE: We are moving on. And we`re making it bigger,
better, and stronger.

UNIDENTIFIED MALE: I feel like I accomplished something really big.

MATT LAUER, "THE TODAY SHOW" (voice-over): The men and women
rebuilding Ground Zero understand their work is much more than a job.
Every bolt, every beam, every floor supports the weight of history.

I begin my tour in the footprint of those once historic buildings,
with memorial architect Michael Arad. This forest of trees will grow 70
feet tall, all of them Oak except one, the survivor tree, pulled from the
rubble at Ground Zero.

MICHAEL ARAD, GROUND ZERO ARCHITECT: It looked like it was a dead
tree, but, in fact, it was nursed back to health. It was struck by
lightning a few years ago while being nursed back to health. But this tree
is thriving and surviving.

LAUER: When he was just 34, Arad beat out over 5,000 entrants in a
design competition for the memorial. His winning vision, set where the
original towers once stood, two 30 foot waterfalls dropping into pools of
darkness. He called it "Reflecting Absence."

(on camera): What do you want them to think as they look down in

ARAD: What I wanted to do was really create a place that was built
equivalent of a moment of silence. Both about emptiness -- about an
emptiness that`s full of meaning.

LAUER: Can you just show me a glimpse of what it`s going to look

(voice-over): Yet to be revealed are the victims` names, engraved in
panels surrounding the pools.

(on camera): So here are some of the ladder companies.

(voice-over): While the pools are meant to honor the dead, it`s the
building towering beside them, One World Trade Center, that will honor the

(on camera): You look at this thing, you got another 30 floors to go.
But it`s going up at a pace of about a floor a week, right? How high are
we going?

We`re going to 76. I think it`s going to give you a real sense of the new

LAUER (voice-over): I head up with Chris Ward, executive director of
the Port Authority of New York and New Jersey that oversees construction.

(on camera): What`s being done to make it as safe as possible?

WARD: Well, what you`re looking at is this incredible, soaring,
beautiful lobby that has in, inherent in its design, safety and security.
This is a blast wall that was poured at 18,000 pounds per square inch
concrete, to stop anybody attempting to bring a truck bomb in.

These steel girders are 60 feet tall and weigh 70 tons.

Up we go. I`d like to say that this is truly going to be the
exclamation point on the New York City skyline.

LAUER: How tall is it going to be?

WARD: Well, all the way to the spire, it`s going to be 1,776. To the
rough, it`s going to be 1,356. It`s going to be 3.2 million square feet.
It will be the tallest skyscraper in America.

LAUER (voice-over): Touted as the new gold standard in skyscrapers,
the top half will be shaped like a perfect octagon, with 20 floors of
blast-resistant glass. It will also have some of the fastest elevators in
the world. But all this comes at a cost, am estimated 3.2 billion dollars
and years of delays.

(on camera): They`re doing an incredible job. Yet some people are
going to say it`s been ten years. And they are surprised that it`s not
done by now. How do you answer that?

WARD: We have built the most complex public works project in
America`s history. This tower that we`re going to be on was built on top
of a subway train. They are working every single hour of every single day.

LAUER (voice-over): And to move forward, they needed to put aside
years of infighting among politicians, designers, and the victims`

WARD: Take us up to 68. We`re going to turn right, and when you do,
look what you see.

LAUER (on camera): Wow. Wow. Like an unobstructed view also.

WARD: Completely. This could be your corner office.

LAUER (voice-over): Unlike the old World Trade Center, with a
framework of external steel, this building rises through an armored
concrete core.

(on camera): If something were to happen to that structure right
there, it doesn`t jeopardize the integrity of the building.

WARD: Exactly. It was designed to stop that cascading, catastrophic
failure that everybody saw on 9/11.

OK, so we`re now going to go out on the outer stairway.

LAUER: Leaving the comfort of home.

WARD: Yes.

LAUER: If you have a problem with heights, this is probably where the
tour ends.

(voice-over): It`s a workout just to reach the top. A dizzying
labyrinth winds upward.

(on camera): From now on, we`re on ladders?

WARD: We`re on ladders.

LAUER (voice-over): If you need a break, you can duck into the Subway
-- sandwich shop, that is. It rising with the building.

(on camera): I`m buying lunch, guys. So, come on, belly up.

(voice-over): There are over 3,500 workers at Ground Zero, many of
whom feel deeply connected to this site. Brian Lyons came downtown on 9/11
to find his kid brother, Michael, a firefighter who never made it home.

(on camera): You`ve been down here basically every day since. Why?

a commitment to myself, I wanted to find my brother, find everybody else
and rebuild this place bigger and better than ever before. New York City
and America can`t be defeated.


WARD: Seventy six, 30 to go.

LAUER: Wow. Wow. That`s a lot to think about.

(voice-over): A soaring testament to our nation`s resilience, wrapped
up in concrete, glass, and steel.

(on camera): The day you turn the key and they open this place, what
do you think it`s going to mean to not only New York City but America?

WARD: I think it`s going to be just an incredible statement of pride,
because this is what we do. We build. We recover. We create a place to
live. That`s who we are.


O`DONNELL: Matt Lauer reporting. Stay with MSNBC for coverage of all
the memorial services this weekend. Saturday at noon Eastern, you can see
the memorial at Shanksville, Pennsylvania, commemorating the passengers of
United Flight 93. And Sunday morning at 8:00 Eastern, our coverage of the
memorial service at Ground Zero begins.

There`s much more ahead tonight in this program. In the Rewrite,
we`ll return to politics and watch Rick Perry try to Rewrite himself on
Social Security.

And we`ll get the late night comedians reactions to this week`s
Republican presidential debate.


O`DONNELL: In Rick Perry`s book "Fed Up," he called Social Security a
Ponzi scheme. In Wednesday`s debate, the Texas governor made the rookie
presidential candidate mistake of repeating the Ponzi scheme bit, proving
that he knows nothing about Social Security or Ponzi schemes. That`s ahead
in the Rewrite.

And the MSNBC Republican presidential candidates debate was a gold
mine for the late night comedians. The best jokes of the week are coming


O`DONNELL: Time for tonight`s Rewrite. It did not take long for Rick
Perry to start Rewriting his politically suicidal position on Social
Security. In the most harmful book any presidential candidate has ever
written to launch his presidential campaign, author Perry called Social
Security a Ponzi scheme and said the most popular government program ever
is a failure.

On Wednesday night, during his first presidential debate, Rick Perry
was not ready for what everyone knew was going to come at him, his own


JOHN HARRIS, MSNBC CONTRIBUTOR: I`d like you to explain your view
that Social Security was wrong right from the beginning.

that want to go back and change 70 years of what`s been going on in this
country is probably going to have a difficult time. And rather than
spending a lot of time talking about what those folks were doing back in
the `30s and the `40s is a nice intellectual conversation.

But the fact is we got to be focused on how we`re going to change this
program. And people who are on Social Security today -- men and women who
are receiving those benefits today are individuals at my age that are on --
in line pretty quick to get them. They don`t need to worry about anything.

But I think the Republican candidates are talking about ways to
transition this program.


O`DONNELL: Perfect. That was the perfect dodge. That`s where an
experienced presidential debater knows he`s done. That`s it. That`s his
answer. He`s finished.

But at this point in the debate, Rick Perry didn`t really know where
he was, on a national stage, where he had to be very, very careful. So the
rookie debater foolishly kept going.


PERRY: I think the republican candidates are talking about ways to
transition this program.

And it is a monstrous lie. It is a Ponzi scheme to tell our kids that
are 25 or 30 years old today, you`re paying into a program that`s going to
be there. Anybody that`s for the status quo with Social Security today is
involved with a monstrous lie to our kids. And it`s not right.


O`DONNELL: Brian Williams` co-moderator John Harris pointed out that
Perry calling Social Security a Ponzi scheme in his book had already
prompted Karl Rove to say this.


KARL ROVE, FOX NEWS CONTRIBUTOR: What they`ve done thus far is, I
think, inadequate, which is to basically say, look, we didn`t write the
book with a presidential campaign in mind. Well, OK, fine. But they are
going to have to find a way to deal with these things, because, as you way,
they are toxic in a general election environment. And there`s also toxic
in a Republican primary.


O`DONNELL: Harris also pointed out that the Ponzi scheme comparison
puts Perry in direct conflict with conservative hero Dick Cheney.


don`t believe it`s a Ponzi scheme. It`s a program that a great many people
depend upon. So I think it`s a very important program. We do, in fact,
want to preserve it for future generations.


O`DONNELL: After Perry deliberately and needlessly reached for the
Ponzi scheme line, Mitt Romney shot back with this defense of Social


governor, as you say, by any measure, Social Security is a failure. You
can`t say that to tens of millions of Americans who live on Social Security
and those who have lived on it.

The governor says look, states ought to be able to opt out of Social
Security. Our nominee has to be someone who isn`t committed to abolishing
Social Security, but who is committed to saving Social Security.

We have always had, at the heart of our party, a recognition that we
want to care for those in need. And our seniors have the need of Social
Security. I will make sure that we keep the program and we make it
financially secure. We save Social Security.

And under no circumstances would I say, by any measure, it is a
failure. It is working for millions of Americans. And I`ll keep it
working for millions of Americans. And we have to do that as a party.

HARRIS: Governor Perry, a 30 second rebuttal?


O`DONNELL: Some Democratic observers of the debate were wondering if
maybe Perry knows something about Republican voters that Romney doesn`t.
What they didn`t notice is that that was Romney who just got the applause
on Social Security from a Republican audience in the Ronald Reagan Library.
Ronald Reagan, a similar-sounding supporter to Social Security as Mitt

And who do you think knows more about Republican voters nationally? A
candidate like Perry who`s been campaigning in Texas all of his life, or
Karl Rove, who says Perry`s language is toxic to Republicans and Republican
primary voters?

Here`s what Steve Schmidt, campaign manager for John McCain in 2008,
said on Wednesday night after the debate.


explaining controversial statements, you`re losing. And that`s what the
problem with the Ponzi scheme statement is. There`s no constituency in the
Republican party to abolish Social Security.

Lawrence O`Donnell pointed this out correctly before. President Bush
tried to privatize Social Security in `05. There was no Republican
congressional support because they know the constituents don`t support it.
And I think it`s going to be very problematic for Governor Perry, as you
look at Horey (ph) County on the South Carolina coast, where there`s a lot
of retirees, when the campaign moves into Florida.

And I think that Stewart Stevens (ph) is exactly right. You can`t win
a national campaign when you are on the record calling for the dismantling
of Social Security, and then exacerbating it with statements like he did
tonight. It`s very problematic for him. And I think it`s something that
Democrats have a lot of glee over, obviously.


O`DONNELL: Stewart Stevens, who Schmidt referred to there, is a
senior advisor in the Romney campaign. Steve Schmidt went on to say that
he thought the Obama campaign must now be hoping to face Perry in the
general election, instead of Romney, adding that they are probably, quote,
"hanging up Rick Perry signs over in the West Wing."

Karl Rove, Steve Schmidt, and Stewart Stevens of the Romney campaign
are not guessing about Republican attitudes towards Social Security. They
don`t guess about anything. They read polls.

In a pew poll in June, 87 percent of Republicans said that Social
Security has been good for the country, 87 percent. And a June NBC
News/"Wall Street Journal" poll gave us a peek at what Perry would
encounter if he takes his Social Security position into a general election
against President Obama.

Twenty three percent say they`d be more likely to vote for a candidate
who wants to privatize Social Security; 55 percent say they`d be less
likely to vote for a candidate who wants to privatize Social Security.

It is impossible to win a presidential election in America while
demonizing Social Security, while calling it, in effect, a fraudulent
criminal enterprise, which is what a Ponzi scheme is.

Even Rick Perry now knows this. And his retreat from what Rove
correctly calls the toxic rhetoric has begun. Here`s Rick Perry today in
Orange County, California.


PERRY: I`d say that`s misinformation. We just want to fix it.

UNIDENTIFIED MALE: Amen. God bless you, Rick.

UNIDENTIFIED MALE: Are they distorting your record?

UNIDENTIFIED MALE: Yeah, Governor Perry.


O`DONNELL: That is what a candidate looks like when he`s learning to
stop saying crazy things. First, he calls his own words misinformation.
Then he realizes he`s in over his head and shuts up and just keeps walking.
That was the safest thing for Perry to do today. And it will be the safest
thing for him to do tomorrow, as he tries to Rewrite his Ponzi scheme
rhetoric out of his campaign.

Charles Ponzi was the Bernie Madoff of the 1920s. He operated in
Boston and elsewhere, basically stealing people`s money through fraudulent
investment schemes. He would frequently pay very high investment returns
to his initial investors, just like Madoff did, simply by taking in new
investment money from new victims.

What Ponzi also did was divert massive amounts of the money to his own
personal use, of course. And of course, his schemes would come tumbling
down and everyone involved would lose all of their money. That is, of
course, completely different from Social Security.

Social Security will be able to pay benefits forever. No, no, no, not
for another 20 years, forever. The question before us in the future is
simply how much should those benefits be? How much can we, as a country,
afford to pay in Social Security benefits? We will always be able to
afford to pay something.

If we do absolutely nothing to current law, make no trends, no cuts,
no adjustments of any kind, don`t touch the retirement age, no changes, 30
years from now, Social Security beneficiaries will be receiving a minimum
of 80 percent of the equivalent of what Social Security benefits are today.

Unlike Ponzi, Social Security will not run out of money. It will
never run out of money. It cannot run out of money. It will always pay a
benefit because it will always be collecting Social Security taxes, every
week out of your paycheck and your children`s paychecks and grandchildren`s
paychecks forever.

So Perry has put himself in the middle of a political nightmare by
choosing colorful language that actually has no descriptive accuracy to
what he thinks he`s talking about. Charles Ponzi, who was as much of an
egomaniac as any of our politicians, would probably get a big kick out of
Rick Perry.

When Ponzi got out of prison for the last time in Boston -- he was
actually Charlestown where he got out of prison -- he told reporters, "I
went looking for trouble, and I got it."

If the Perry campaign does not yet have a motto, I know of nothing
more fitting than the words of Charles Ponzi. "I went looking for trouble,
and I got it."


O`DONNELL: Here`s the late night comedian`s take on the MSNBC
Republican presidential candidates debate.


DAVID LETTERMAN, "THE LATE SHOW": The Republican debate was on
earlier tonight. Side effects may include dizziness, nausea and sexual

CONAN O`BRIAN, "CONAN": A lot of focus on Rick Perry last night. It
was his first debate. People were focused on him. He said something
interesting. Rick Perry said he understands health care because his wife
is a nurse. Yeah, he also said he understands terrorism because he watched
all eight seasons of "24."

BRIAN WILLIAMS, "NBC NIGHTLY NEWS": Governor Perry, question about
Texas, your state has executed 234 death row inmates, more than any other
governor in modern times --


WILLIAMS: Have you --

JON STEWART, "THE DAILY SHOW": The biggest applause line of the night
was the mere mention that Rick Perry had executed 234 people. Holy

lethal cocktail all over my desk.


O`DONNELL: You can see much more of the late night comedians on our
website, Up next is Rachel Maddow and Richard Engel
with their documentary, "Day of Destruction, Decade of War."


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