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'The Last Word with Lawrence O'Donnell' for Thursday, July 19th, 2012

Read the transcript to the Thursday show

LAWRENCE O`DONNELL, HOST: And today, yet another demonstration`s of
team Romney`s desperation, they forced for Ann Romney to try to explain why
she and her husband are hiding their tax returns. Let`s just say she
didn`t exactly put out the fire.


LUKE RUSSERT, NBC NEWS: The negative stories on Romney`s taxes --

CHRIS JANSING, NBC NEWS: Romney and his tax returns.

RUSSERT: -- are not going away.

ALEX WAGNER, MSNBC HOST: Team Romney continues to shield the
governor`s tax returns.

JANSING: Is anything going to put in to rest?

ANN ROMNEY, MITT ROMNEY`S WIFE: We`re given you all you people need
to know.

UNIDENTIFIED MALE: All you people need to know?

JANSING: Ann Romney is defending her husband`s decision.

A. ROMNEY: We`ve given all you people need to know.

JANSING: Not to release more of his tax returns.

UNIDENTIFIED FEMALE: We don`t owe you any answers.

UNIDENTIFIED MALE: It`s about Romney`s personal wealth and the
country`s lack of wealth.

A. ROMNEY: We`ve given all you people need to know.

UNIDENTIFIED MALE: Whatever you`re debating, you`re debating wealth.

UNIDENTIFIED MALE: Backtracking on Bain.




UNIDENTIFIED MALE: Radio talk show host Rush Limbaugh now denying his
"Dark Knight Rises" conspiracy.

LIMBAUGH: The villain in the "Dark Knight Rises" is named Bane, B-A-

WAGNER: Christopher Nolan being in cahoots with the Obama campaign?

UNIDENTIFIED MALE: The conspiracy that Bane the villain is out there
because of Bain Capital.

JON STEWART, COMEDIAN: Same name as the most frightening and current
Batman villain.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Corporations are people, my




O`DONNELL: With exactly 110 days left in Mitt Romney`s campaign to
win the presidency while hiding his tax returns, team Romney sent first
lady hopeful Ann Romney out to put out the fire without a fire hose. The
increasingly incompetent professionals pretending to be in control of the
Romney campaign actually put the candidate`s wife on national television
and didn`t give her one word to say that made any sense in response to why
she and her husband are still hiding their tax returns.


ROBIN ROBERTS, ABC NEWS: Why will he not follow the examples of
others on both sides of the aisle?

A. ROMNEY: You know, I think there`s reason for all of these things.
You know, you should really look at where Mitt has led his life and where
he`s been financially. He`s a very generous person. We give 10 percent of
our income to our church every year.

Do you think that is the kind of person that`s tried to hide things or
do things? No. He is so good about it. Then when he was governor of
Massachusetts, didn`t take a salary in the four years.


O`DONNELL: That was the best the campaigners could come up with for
Mrs. Romney say. Not one word she said was actually responsive to the
question in any way. And as irrelevant as how much Mitt Romney gives to
the Mormon Church is, we actually don`t know how much he has given to
charity without seeing his hidden tax returns.

Robin Roberts pressed the question again with Mrs. Romney and left out
there by the Romney handlers with nothing new to say, things got much worse
for Mrs. Romney.


ROBERTS: Because it`s a moot point. People can move on.

A. ROMNEY: Because there are so many things that will be open again
for more attack. And you just want to give more material for more attack
and that`s really -- that`s just the answer. And we`ve given all you
people need to know and understand about our financial situation and about
how we live our life.


O`DONNELL: And so that`s just the answer. So Mitt Romney is not
releasing his tax returns because it`s filled with, in his wife`s word, so
many things that will be open again for more attack.

And that is exactly why modern politics demands the release of the tax
returns. The Romney campaign is free to try to attack anything they want
in the Obama and Biden tax returns. That`s the game.

Al Gore was fairly criticized for having minuscule charitable
contributions in one of his tax returns. That`s the way it goes.

But very few politicians ever actually get attacked for what`s in
their tax returns. It`s actually very rare because politicians think about
that before filing their tax returns, and they think about getting attacked
when they make their financial arrangements and investments.

That`s why very few of them have Swiss bank accounts.

"Politico" asked the Romney campaign if the reason Romney refuses to
release his tax returns is because during a given year he paid zero in
taxes. Romney press secretary Andrea Saul made the absurd mistake of
replying to that question saying, "Not true."

That opens the Romney campaign now to be forced to answer questions
about all of his tax returns, specific questions. And those questions will
continue to come.

Today, NPR reports on the connection between Mitt Romney and a
notorious tax shelter user, Mitt Romney served as director of Marriott
International, the hotel company founded by Willard Marriott who Willard M.
Romney was actually named after. Ed Kleinbard who worked as chief of staff
for the Congress` Joint Committee on Taxation said Marriott was one of
those companies that loved to buy tax shelters."

Bloomberg reported this year on one Marriott tax shelter, the Internal
Revenue Service challenged the shelter and Marriott lost in court. Judges
called the shelter fictitious, and a scheme. And the company was forced to
pay $29 million.

Kleinbard notes that when the shelter was adopted, Mitt Romney was the
chairman of Marriott`s audit committee. That means Mitt Romney had
oversight over that tax shelter for Marriott.

And a new twist emerged today in the dispute over when Mitt Romney
left Bain capital. Today, "BuzzFeed`s" Andrew Kaczynski points out that
during a primary debate, Mitt Romney said this --


ROMNEY: I think people understand that I`m a man of steadiness and
consistency. I worked at one company, Bain for 25 years.


O`DONNELL: Unfortunately, the math of that means, 25 years means that
Mitt Romney left Bain three years after the campaign is now claiming he
left Bain.

The next tax question that the Romney campaign`s Andrea Saul is going
to have to answer involves the Swiss bank account revealed in the 2010 tax
return that Mitt Romney has already disclosed. "The Huffington Post" ran
this headline -- Mitt Romney taxes for 2010 not fully disclosed -- which
points out that Mitt Romney`s 2010 tax return which he released in January
should have also included this form, the report of foreign bank and
financial accounts, form F9022.1.

That form should be filed -- should have been released because it has
to be filed with people who have Swiss bank accounts like Mitt Romney.
They`re required to file this form with the IRS and Romney did not release
this form to the public when he pretended to be releasing his full 2010 tax

Let`s turn this form to page two. It gets really interesting there.
The most important item on this document is number 15 on page 2. It`s
right up here -- number 15 on page 2.

For some reason we`re highlights down here. But anyway, it`s the
maximum value of the account during the year reported, item 15.

So Andrea Saul, here`s a question for you, why didn`t the Romney
release the full 2010 tax form that would include this document. Oh,
what`s the number in item 15? Exactly how much money was in that account?
Is there something about that number that embarrasses Mitt Romney?

Mitt Romney loves to talk about how successful he has been, measuring
success exclusively by his accumulation of money. Is Mitt Romney really
proud of his success, proud of his money? Or is he now somehow ashamed of
his money, ashamed of the number in item 15?

Is he embarrassed by how much money that is?

Mitt, come on. If you`re proud of your money, if it really is your
pride and joy, show us a picture of it. Show us a picture of your baby,
you know, that picture we all take of our money every year. And send to
the IRS.

Joining me now, MSNBC`s Alex Wagner and Chris Hayes.

Item 15, if I was allowed one question to Andrea Saul, how much is in
that Swiss bank account? This thing where she decided to answer one
question about the returns -- and by the way, she was answering a question
about every one of the returns. Because the question was, are there any
returns where he pays zero taxes? And the answer to that is no.

Doesn`t that just open this up to, we get to pick what questions we
want to ask about which returns? Endlessly for the next 110 days?

WAGNER: That`s the thing, Lawrence. You get the sense, and we`ve
heard that the center of this whole sort of storm, the eye of it is Mitt
Romney -- all decisions come back to him. You know, whether it`s the
Republicans who are breaking ranks and or even the surrogates, and I would
almost count Ann Romney in here -- Mitt is the one doing a cost benefit
analysis about whether or not he should release these taxes.

And in the meantime, everyone else is going to have to take the fall
for him, whether it`s, you know, sort of being trotted out there for a
Robin Roberts interview and getting very close to the edge of saying you
peasants, stop asking us.

O`DONNELL: You people.

WAGNER: You people. Almost these --

O`DONNELL: Which people do you think she meant?


O`DONNELL: There`s so many possible interpretations saying that to
Robin Roberts.

WAGNER: Well, there are so many interpretations. I think she means
the madding crowds, the media, the poppers in society who won`t let them
hold on to their money, which is some sort of unpatriotic act to demand
transparency around a presidential campaign`s finances. But at the end of
the day, all roads lead to Mitt. This is financially his decision.

CHRIS HAYES, MSNBC HOST: Look, the taxes of high -- of extremely
wealthy people are bizarre, strange and alienating. And the reason is that
they pay people a lot of money to game the system. That`s explicitly what
it is.

And the more of that you see, literally, if just chose someone with
Mitt Romney`s net worth at random and you looked at their tax returns, they
would look crazy. You wouldn`t be able to understand them. They would
have all sort of bizarrely constituted corporations incorporated in the
Cayman Islands. They might have a Swiss bank account as a bet against the

It`s not -- what`s so remarkable to me about the story is the
embarrassment here isn`t personal. The embarrassment is about what this
says about how the entire system functions. This is how the system
functions. We no longer have the ability in this country to really tax
people at the top.

That`s the existential statement about the strength of the American
state. Can you actually tax the wealthiest people in your society? If you
can`t, if you can`t, like Greece couldn`t, we see how that goes. Societies
that are in decline or low on the development index have a very hard time
extracting money, taxing money from the elites in their society. And that
is a direction which we are headed and that is what is represented in the
Mitt Romney tax return.

O`DONNELL: OK, that is an officially brilliant observation about
what`s going on here and what`s at stake.

Alex, do you think that given the Romney campaign`s tax policy and
Republicans` tax policy in general, that what Chris just said is actually
factoring into the way Mitt Romney is thinking about this? That really,
what you`ll see here, even if totally legal, is just so shameful?

WAGNER: Well, keep in mind to Chris` point, Lindsey Graham on the
floor of the Senate says everybody tries to get out of paying taxes.
That`s what we do as Americans. There`s -- the Republican Party is totally
in bed with this notion.

I mean, there are plenty of wealthy Democrats who are I`m sure in bed
with it, too.

HAYES: Sure.

WAGNER: But as Chris says, the elites are in -- this is part of the
game, right? This is the narrative of -- it`s our economy and your
economy, and our tax code and your tax code. And don`t you dare let us --
don`t you dare try and take away what we have. That`s an American of you.

HAYES: The other thing is that they`re right obviously that it will
create more questions than it will answer. I mean, if we have 10 years,
right? There`s going to be more corporations in strange places. There are
going to be more foreign bank accounts probably. There`s going to be
strange movements of money moving in and out.

All of this is all played on a level that most people don`t have
access to unless you`re part of a very small, specialized vanguard of tax
attorneys who do this for a living.

O`DONNELL: Now, Erick Erickson, a conservative blogger said today, he
firmly believes that Romney is actually going to release the returns. We
all know what`s going to happen.

And he`s using the old formula, I think, in American campaign hot
spots or scandals, whatever you want to call them, where there`s a demand,
a demand, a demand, and you know the candidate has to give into the demand
and they`re just making mistake by dragging it out.

I do not have a strong feeling that Mitt Romney is going to end this
by handing out the number of tax returns his father did.

WAGNER: I think you`re right. I think right now the bet is we`re
going to let the Olympics and the dressage competition sort of be the
smokescreen. We`re going to come back and get back to the economy.

This is someone who`s not laid out any kind of real economic plan and
is running on fixing the economy. He has no foreign policy other than I`m
going to take to China and I`m going to go hard. I mean, he has not
elucidated any clear position on anything.

Transparency, thy name is not Mitt Romney. There`s no reason to
expect that he`s going to do anything with his taxes. I mean, we are at
critical mass here and yet it`s Ann Romney that`s answering the tough

O`DONNELL: The dressage thing is not going to distract me because I
actually have a question about dressage. Why are you deducting only
$77,000 for the dressage?

WAGNER: Of course, they`re expensive.

O`DONNELL: Why not $177,000? Chris, last word on this.

HAYES: You know, he could go, I think you`re right and I think he`s
going to try to go the Rumsfeld route. I mean, I`m to this day marvel
about Rumsfeld and Abu Ghraib. Everyone said it, he`s gone, he can`t
(INAUDIBLE) Abu Ghraib. Everyone said it -- Republicans, Democrats, press,
blah, blah, blah.

And Donald Rumsfeld said, you know what, I`m not resigning and it
worked, it worked. Eventually people got bored and they moved on to
something else. I think that`s the same bet Mitt Romney is making.

O`DONNELL: I`m betting with "he doesn`t turn them over".

Alex Wagner and Chris Hayes, thank you both very much for joining me

WAGNER: Thanks, Lawrence.

O`DONNELL: Coming up, our Thelma and Louise campaign to go off the
cliff. We have found our Thelma and she`s in the United States Senate and
you will meet her.

And in the "Rewrite," Mitt Romney is also about more freedom for
American business, except the computer business. He says that he wants a
porn filter put on every computer sold in America. We will show you a
focus group of teenage boys who might have a serious problem with that
coming up.


O`DONNELL: It`s Batman week in American politics. And Batman`s first
victim was Rush Limbaugh. That`s coming up.

And Mitt Romney talks a lot about the freedom for business for
business -- for American corporations, but he does not believe in freedom
for the computer business or the Internet. The freedom to browse is in
tonight`s "Rewrite".



ROMNEY: Now, I`m -- know that there`s some people who think what the
president has said was just a gaffe. It wasn`t a gaffe. It was instead
his ideology. The president does in fact believe that people who builds
enterprises like this really aren`t responsible for it. But in fact, it`s
a collective success of the whole society that somehow builds enterprises
like this.


O`DONNELL: That was Mitt Romney today in Massachusetts at a bus and
truck repair shop, a business that would be nowhere today without the
Interstate Highway System built by the federal government. Mitt Romney is
continuing his campaign of lies about what the president said about how
businesses are created and grow in this country.

In order to spread the lie in a campaign ad, Team Romney had to edit
what the president actually said.


OBAMA: Let me tell you something. If you`ve got a business, you
didn`t build that. Somebody else made that happen.

UNIDENTIFIED MALE: My father`s hands didn`t build this company? My
hands didn`t build this company? My son`s hands aren`t building this
company? Did somebody else take out a loan on my father`s house to finance
the equipment? Did somebody else make payroll every week to figure out
where it`s coming from.

President Obama, you`re killing us out here. Through hard work and a
little bit of luck, we built this business. Why are you demonizing us for


O`DONNELL: Well, you know, the president is not demonizing you. Mitt
Romney is lying to you. As I`m sure you know, you did not build the roads
your business uses. You did not build the water supply your business uses.
You did not build the airports your business uses. You did not build the
Internet that your business uses.

The government did all of those things and more and without them, your
business could not exist today. In fact, Mitt Romney knows these things
and he knows he`s lying about these things as the latest team Obama ad
tries to show.


ROMNEY: He said if you`ve got a business, you didn`t build that.
Somebody else made that happen.

OBAMA: If you were successful, somebody along the line gave you some
help. There was a great teacher somewhere in your life.

ROMNEY: We value schoolteacher, firefighters, people who build roads.

OBAMA: Somebody invested in roads and bridges. If you`ve got a
business, that -- you didn`t build that. Somebody else made that happen.

ROMNEY: You really couldn`t have a business if you didn`t have those

OBAMA: The point is that when we succeed, we succeed because of our
individual initiative but also because we do things together.


O`DONNELL: Joining me now, Krystal Ball, co-host of MSNBC`s "THE
CYCLE", and John Heilemann, national affairs editor for "New York"
magazine, MSNBC political analyst, and the king of the Emmys today.


O`DONNELL: "Game Change," the HBO movie based on your book was
nominated for 2,700 Emmys today, wasn`t it?

JOHN HEILEMANN, NEW YORK MAGAZINE: That`s only 2,288 too many.

O`DONNELL: Twelve?

HEILEMANN: Twelve, we`re happy with 12. We`re really proud of the
folks at HBO, all of our actors, directors, everyone got nominated. It`s

O`DONNELL: I think you`re going to win just about every one of those.


O`DONNELL: So, let`s complete the story about the Romney ad. Jack
Gilchrist went on television today and it turns out, he actually agrees
with President Obama.


NEIL CAVUTO, FOX NEWS: The president`s message is you had help along
the way, the government was there, there was a support structure there,
that without which, you wouldn`t have done what you did. What do you say?

JACK GILCHRIST, SMALL BUSINESS OWNER: Well, there`s truth to what he
said. I mean, (INAUDIBLE) my 11th grade English teacher made an impression
on me that will last with me for the rest of my life. I can`t even tell
you what, but she just sticks with me.

I think my dad and his parents, the great generations on their backs,
we built the interstate highway system and the bridges and whatnot. But we
all pay taxes every time we put gas in our tanks which go to maintaining
and keeping up the roads and the bridges.

I think the military maybe? I`m not sure if it`s Al Gore or the
military which created the Internet. For whatever purpose it was intended.
We all get to benefit from it since then.

So yes, there`s been some help along the way.


O`DONNELL: I did not write that answer for him. I love Jack

This, Krystal, this is one of the problems, when you go out there and
you recruit people to be in your ads in your campaign, you can not control
their talking points after their 30 seconds.

BALL: Yes, he should be an Obama surrogate. That was amazing.

But he`s missing the point here about the president`s secret
collectivist agenda that he let slip in that clip.

O`DONNELL: We forgot that.

BALL: In all seriousness, this is what it`s about. Even before this
president was elected, they`ve been talking about this sort of secret
agenda and hinting he`s going to take away everybody`s guns and
redistribute all the wealth.

And the other thing that`s interesting to me is Romney keeps saying
that the president can`t run on his record. But Romney apparently also
feels that he can`t run on the president`s record because they have to pull
these sound bites.

Their first ad was totally -- I mean, not even taken out of context.
It was the president quoting John McCain they used in their first ad. They
feel they have to go to this, because if they actually talk about the
president`s very centrist policies, including many tax cuts, a third of the
stimulus was tax cuts, that`s not going 20 sell to their base and people
they`re trying to get riled up.

O`DONNELL: John, how worried are they about this tax issue? And do
they believe they actually can change the subject with ads like this?

HEILEMANN: Well, I know on your previous segment, Alex and Chris were
on here talking about this. They are, you know, concerned.

And I don`t think it takes a genius to understand that. The people
around Mitt Romney are not dumb. They recognized that certain things about

O`DONNELL: Can I stop you there? How dumb do you have to be to send
Mrs. Romney on a morning talk show to defend the hiding of the tax returns
who it a single new concept or word or sentence to say and the poor woman
is left out there. She ends up saying this stuff that`s interpreted as
being very condescending.

HEILEMANN: Yes. Well --

O`DONNELL: I don`t blame her. I blame campaign dumbness for allowing
that to happen.

HEILEMANN: You know that the thing with the Romney campaign is they
believe they have -- Mrs. Romney is a more compelling, more sympathetic
figure than Mitt Romney is.

O`DONNELL: She is, but she`s not a magician.

HEILEMANN: I understand that. But you know how campaigns are. You
got use to. You got a go-to surrogate who helps things get fixed.

O`DONNELL: Ann can do it.

HEILEMANN: Ann can fix it.

It`s clear that part of what the Obama campaign is doing, they saw the
way Mitt Romney got rattled in the Republican nomination fight when he was
challenged on this. I had a senior White House official said to me, that`s
one thing he learned in this process. There`s a psy-ops element to this.
They are trying to get inside the Romney`s collective heads.

And Mrs. Romney today looked a little rattled. She was not on her
best game today.

To go back to the first question, they are not dumb. They recognize
it`s a huge problem, but the thing that Chris and Alex are right about,
this does come back to Mitt Romney. You know, he is -- he does not want to
release these returns.

And I think the one thing that his political advisers know, we don`t
know what`s in those returns, but we do know one thing, Cayman Islands,
Swiss bank accounts, those are toxic with independent swing voters. If
there`s more than that in the earlier taxes, that`s a good reason not to
want to release them.

BALL: Or an even lower tax rate. That`s also a good reason.

O`DONNELL: We got to break it there.

I just love Jack Gilchrist, remembering his 11th grade English
teacher, Mrs. (INAUDIBLE). Jack Gilchrist, great guy.

Krystal Ball and John Heilemann, thank you both for joining me

Coming up, our Thelma and Louise segment, off the cliff. If we go off
the cliff, it could be the end of Grover Norquist. That`s coming up.

And Mitt Romney wants a porn filter on every computer sold in America.
And that has landed him back in tonight`s "Rewrite."



UNIDENTIFIED FEMALE: Let`s keep going.

UNIDENTIFIED FEMALE: What do you mean?





O`DONNELL: Callie Khouri won the Oscar for writing that. In the
Spotlight tonight, "Thelma and Louise." Your response last night to the
LAST WORD`s Off the Cliff Campaign, telling your members of Congress that
you`re willing to go off the cliff, has Mitch McConnell running scared
today. On the Senate floor today, Mitch McConnell played the Harvey Keitel
role, desperately trying to stop them from going off the cliff.


SEN. MITCH MCCONNELL (R), MINORITY LEADER: Democrats said they think
it`s a good idea to drive the country off what economists are calling
America`s fiscal cliff this coming January. You might call this Thelma and
Louise economics. Right off the cliff.


O`DONNELL: And starring for the Democrats in the role of Thelma is
Senator Patty Murray.


SEN. PATTY MURRAY (D), WASHINGTON STATE: If we can`t get a good deal,
a balanced deal that calls on the wealthy to pay their fair share, then I
will absolutely continue this debate into 2013 rather than lock in a long-
term deal this year that throws middle class families under the bus. And I
think my party and the American people will support that.


O`DONNELL: Senator Thelma understands that this is the only way to
get around the Grover Norquist anti-tax pledge that almost every Republican
in Congress has signed.


MURRAY: If the Bush tax cuts expire, every proposal will be a tax cut
proposal. And the pledge will no longer keep Republicans boxed in and
unable to compromise. If middle class families start seeing some money
coming out of their paychecks next year, are Republicans really going to
stand up and fight for new tax cuts for the rich?


O`DONNELL: Senator Thelma hasn`t found her Louise yet, another
senator willing to actually hold hands with her publicly and go off the
cliff. But she knows there are a lot of secret Louises in the back rooms
of the Capital in both parties.


MURRAY: In the privacy of back rooms and in small gangs, Republicans
are far more willing to discuss the need for revenue. And there are some
Republicans passionate about national defense and willing to make some
tough choices on revenue to protect the Pentagon. In fact, some of the
productive conversations that my Republican colleagues have been having
have led Grover Norquist to decry their, quote, "impure thoughts" when it
comes to taxes.

Well, I hope these impure thoughts continue. If Norquist is mad, and
I mean that in the angry sense of the word, then we must be on the right

I also think many Republicans are starting to realize something very
important. On January 1st, if we have not gotten a deal, Grover Norquist
and his pledge are no longer relevant to this conversation.


O`DONNELL: That is so Thelma. I hope those impure thoughts continue.
Grover Norquist has done a lot of unwise things in his life as a lobbyist,
most recently calling a Republican senator a liar. But Grover has done
nothing more unwise, nothing more unsafe than crossing Senator Thelma.


MURRAY: Grover Norquist, by the way, was kind enough to wish my luck
on the super committee by telling reporters that the lady from Washington
doesn`t do budgets.


O`DONNELL: Oh, Grover. You should have known that bad things happen
to guys who cross Thelma and Louise. Joining me now are two guys who would
never cross Thelma and Louise, Ezra Klein, "Washington Post" columnist and
MSNBC contributor, and Jared Bernstein, and senior fellow at the Center on
Budget and Policy Priorities and an MSNBC contributor. He is the former
chief economist to Vice President Biden.

Jared, I have been hearing for some months now, very quiet whispers
from other Democratic senators about going off the cliff and their
determination to do it. And recently, I have been picking up, as Patty
Murray has said, that there are Republicans who want to do it, too, because
it`s the only way they will ever be able to cast a responsible vote or
anything approaching responsible vote on taxes once they`re free of Grover
Norquist pledge.

that`s true. And by the way, I`m sitting here, just thinking, if somebody
had come up to me 20-plus years ago when I was walking out of "Thelma and
Louise," and say you`re going to be using this analogy to talk about fiscal
policy in a couple of decades, it would have blown my mind.

O`DONNELL: And Jared, it will be the responsible thing to do.

BERNSTEIN: Right, exactly. I wouldn`t have known what that person
was talking about. But now I get it. I think that`s exactly right. You
know, you`re starting to pick up some kind of healthy vibrations that there
might be enough grown-ups to actually make this happen.

The fact is that nobody, Patty Murray included, wants to go over this
cliff as the first best option. But she recognizes, as I mentioned others
are beginning to do, that we can`t achieve a sustainable budget path
without new revenues. And Grover Norquist has very successfully blocked
that blatant reality for a very long time.

If he can be broken on this, and if it takes going over the cliff, or
as we think of it, kind of starting down a slope that we can reverse and
come back up quickly, that would be a quite positive thing for the economy
and for fiscal policy.

O`DONNELL: And Ezra, it`s against my interest as a dramatist to make
this less dramatic, but the truth of January one and that first week and
first weeks of January, and first month even, is that it`s not exactly a
cliff. It`s more of a gentle kind of driveway slope down from the curb,
because it`s impossible to do these gigantic cuts all at once, right away,
in one month.

EZRA KLEIN, "THE WASHINGTON POST": I`m not going to say gentle. I
think it might be a rocky slope down the hill, but it is a case that it is
a slope. Jared`s organization, the Center on Budget and Policy Priorities
has done really great work here. As they`ve shown, the kinds of economic
effects you would see will be staged. They will come in pieces.

And for the beginning of it, people aren`t going to believe that this
is really happening. They`re going to not change their behavior that much,
because they assume, like every other time Congress is bickering and
yelling at each other and going a couple minutes midnight, they`re
eventually going to get their act together.

But would make one more point on this, one thing Democrats are
thinking about here isn`t just this fiscal cliff and this tax deal. It`s
that they need to break the Republicans of brinkmanship altogether. Over
the past couple of years, we`ve had near shutdowns. We`ve had a near
breach of the debt ceiling. Both John Boehner and Mitch McConnell said
they want to go at the debt ceiling again. It will come a couple of months
after the fiscal cliff, probably February or March.

And Democrats believe at this point, they need to show Republicans
that they can`t keep threatening to drive the country off of these various
kinds of cliffs, that eventually they need to show Republicans that the --
as the economy strengthens, they`re no longer quite as up against a wall.
And as such, they won`t be such pushovers at the negotiating table anymore.

O`DONNELL: And Jared, if we do go off the cliff on New Year`s Eve,
that means in the first week of January, for the first time ever under this
Tea Party Republican politics, there would be a chance to put together a
complete deal that addressed everything that happened in going off the
cliff, including the substantial defense cuts, the other spending cuts that
are included in going off the cliff and the tax rate increases, as well as
the debt ceiling increase. All of that could be very quickly wrapped into
a bill that fixes things in such a way that the stuff that everyone really
fears about the cliff would immediately be solved.

BERNSTEIN: I think it`s imperative that it plays out that way. And
by the way, the grown-ups we were talking about earlier, of which Patty
Murray is a prime example right now, need to be talking about and framing
that deal starting now. You`re absolutely right. I mean, these increases
kick in whether it`s the increases in the tax code, the expiration of the
payroll tax cut, the automatic cuts. Many of those pieces need to be reset
right away, the biggest of which is a middle class tax cut.

That`s the part that Patty Murray was talking about. That becomes a
tax cut after January 1st. That`s going to be a big part of this deal.
And believe me, they all want to make that happen quickly.

O`DONNELL: Jared Bernstein and Ezra Klein, thank you both for joining
me tonight.

BERNSTEIN: My pleasure.

O`DONNELL: Send us your designs for THE LAST WORD`s Off the Cliff
Campaign button. You can Tweet @Lawrence or @TheLastWord. You can also
post it on our Facebook page or e-mail us. I`m going to show you my button
right now. Let`s get this up on the screen. I had it on last night, the
Off the Cliff button. And even today, we worked on a little redesign. Got
a better exclamation point today. Kind of more modern font. A little tilt
and energy to it.

So we`re not satisfied. This is where it is as of tonight. You can
get a little screen grab of that at home and work on it, make it better.
We`re willing to update it as we go along.

And coming up, the freedom Mitt Romney wants to take away, the freedom
to browse. That`s in the Rewrite.



ROMNEY: We have to restore economic freedom in this country. Let me
-- you see, America`s economy runs on freedom. It is not driven by
government. It`s driven by free people pursuing their dreams. And so
we`ve seen during this presidency one step after another that`s made it
harder for people to see freedom in enterprise here. .


O`DONNELL: In tonight`s Rewrite, the economic freedom Mitt Romney
wants to take away, the one business whose freedom he wants to control.
Romney talks about freedom a lot these days, but he hasn`t always been such
a big fan of freedom. That`s right. Mitt Romney has flip flopped on
everything, including freedom.

Here he is in his last presidential campaign talking about a freedom
he doesn`t want you to have.


ROMNEY: I want to make sure we all understand we`ve got to clean up
the water that our kids are swimming in.


O`DONNELL: No, he didn`t want to take away your kids` freedom to swim
in polluted waters. In fact, he didn`t want to clean up any waters at all.
He`s no environmentalist. He wasn`t even talking about water.


ROMNEY: I want to make sure that we all understand we`ve got to clean
up the water that our kids are swimming in. And by that I mean the


O`DONNELL: Even though Mitt Romney has profited from pornography
through his investments, including through his hotel investments where pay-
per-view porn is a big profit center, Mitt says he wants to limit your
freedom. He wants to limit some Americans` freedom to search for porn.

Here he is in 2007 when he was apparently teaching Rick Santorum how
to run for president four years later.


ROMNEY: I want to make sure we enforce our obscenity laws. And I
want to make sure that retailers don`t sell adult video games to kids. And
I want to make sure that every new computer sold in this country after I`m
president has installed on it a filter to block all pornography, and that
parents can click that filter and make sure their kids don`t see that kind
of stuff come into their computer.


O`DONNELL: The one business that Mitt Romney claims the most pride in
is Staples. Now, I don`t have in front of me exactly how many computers
Staples has sold, but it`s like millions. And Romney was in a position to
put a porn filter button on every computer that Staples sold, every single
one. And he didn`t do it. He didn`t require one porn filter button on one
computer that he sold at Staples.

Maybe this is just another empty Romney promise, porn filters on every
computer in America. Still, that kind of talk is pretty scary to the
people most affected by it. And "the Daily Show" recently empanelled a
group of those people and the kind of stuff Romney was talking about
sounded to them like a very serious restriction on their freedom.


UNIDENTIFIED MALE: You guys are familiar with the birds and the bees.
Right? Let`s take the birds out of the equation and just talk about what
happens when the bees are by themselves and they have a solid Internet
connection. Huh?


UNIDENTIFIED MALE: No, I`m not talking about (EXPLETIVE DELETED) it.
I`m talking about freedom.

UNIDENTIFIED MALE: How are they going to know, like, when we`re --

UNIDENTIFIED MALE: Doing what he said?

UNIDENTIFIED MALE: Doing what he said, yeah.

UNIDENTIFIED MALE: They know. Trust me.


O`DONNELL: Luckily for Mitt Romney, those guys are not old enough to
vote yet.



O`DONNELL: It`s been a great week for Batman in our politics. Jon
Stewart got Batman week started on Monday.


JON STEWART, "THE DAILY SHOW": Bain. Not since Ayds Diet Candy --


STEWART: -- suffered through their somewhat ill timed 1980s, lose
weight with Ayds sales campaign, has a brand faced this kind of challenge.
Bane, what are you?

ROMNEY: Corporations are people, my friend.


O`DONNELL: The next day, the paranoid self-loathing drug addict in
charge of Romney campaign strategy had this to say about Batman.


RUSH LIMBAUGH, RADIO TALK SHOW HOST: The villain in the "Dark Knight
Rises" is named Bane, B-A-N-E. Do you think that it is accidental that the
name of the really vicious, fire breathing, four-eyed whatever it is
villain in this movie is named Bane?


O`DONNELL: Rachel spent some delightful time on her program
humiliating Rush Limbaugh for that. And the late night comedians took
notice, too.


Rush`s show and we combined it with footage from the animated Batman

LIMBAUGH: Do you think that it is accidental that the name of the
really vicious fire breathing, four-eyed whatever it is villain in this
movie is named Bane?


CONAN O`BRIEN, "CONAN": I think Rush may have a point.

UNIDENTIFIED MALE: I`m going to torture you like a dog tied to the
top of my car. The streets will run red with blood before I release my tax


O`DONNELL: The next day after drowning in humiliation, Rush saw the
error of his ways and did what Rush always does when he`s publicly proven
wrong in a way that he has to acknowledge. He lied and pretended he never
said what he said.


LIMBAUGH: Yesterday on his program I uttered some words about the new
Batman movie and the evil villain named Bane. I made some comments about
it. It doesn`t matter what.

Everybody is out there running around thinking I have this giant
conspiracy theory. I never said that. I didn`t say there was a conspiracy
theory. I said the Democrats were going to use it.


O`DONNELL: And of course, today, on day four of Batman politics, Rush
said this whole thing is the Democrats` fault.


LIMBAUGH: The Democrats clearly were going to try to link this
villain to Mitt Romney. And I outed them. They`re acting like I`m some
sort of conspiracy creep, but I outed them. I have shined the light of
truth, as it were.


O`DONNELL: Richard Wolffe, what is Rush going to say now that one of
the Batman cast, Morgan Freeman, has just given a million dollars to the
Obama campaign?

RICHARD WOLFFE, MSNBC CONTRIBUTOR: He could point out that the lead
actor is called Christian, which is clearly a reference to Mormonism,
right? And Ann Hathaway, she is obviously a reference to Ann Romney.
What`s he going to say?

Morgan Freeman played the role of God and the president and Nelson
Mandela, too. There`s only one bat theme going on, and it`s right there in
front of the microphone.

O`DONNELL: You`ve got to wonder, does Rush own Time Warner stock?
You know, the Warner Brothers Studio made the movie. But it`s so great
watching him get caught, you know, in absolute inanity, and then the move
is always the same. He lies and says I didn`t say what you just saw me say
on tape.

WOLFFE: Right. Well, he also suffers from the delusion of all
conspiracy theorists, which is that he`s always right. It`s really about
the truth. In the end, the best weapon against Rush Limbaugh is humor.
And what killed him here is people laughing at him because it`s sad.

O`DONNELL: Rachel did a beautiful job with it even before the late
night comedians got to it. But he watches that stuff. It gets to him.
Richard Wolffe gets tonight`s LAST WORD. Thanks, Richard.

"THE ED SHOW" is up next.


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