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'The Last Word with Lawrence O'Donnell' for Thursday, February 28th, 2013

Read the transcript to the Thursday show

February 28, 2013

Guests: Jared Bernstein, Robert Reich, Debbie Stabenow, Ilyse Hogue, David Serota, Karen Finney, Jesse Tyler Ferguson

CHRIS HAYES, MSNBC ANCHOR: In his darkest moment before the House
Republican caucus, Speaker Boehner recited the serenity prayer. Today in
the Senate we were introduced to the sequester prayer.


BARRY BLACK, SENATE CHAPLAIN: Rise up, oh god, and save us from ourselves.

CHUCK TODD, MSNBC`S THE DAILY RUNDOWN: We`re coming to the end.

UNIDENTIFIED MALE: The showdown over the sequester.

REP. NANCY PELOSI (D), MINORITY LEADER: We want solutions, Republicans
want sequestration.

CHRIS JANSING, MSNBC`S JANSING & CO.: Tomorrow the sequester kicks in.

CHRIS CILLIZZA, MSNBC CONTRIBUTOR: I see no way it can be averted.

UNIDENTIFIED MALE: The president is having a meeting on March 1st.

TODD: No meeting today. That meeting is tomorrow.

ALEX WAGNER, MSNBC HOST, "NOW": The first day of the sequester.

TODD: There is no chance to get legislation done to stop the sequester.

REP. JOHN BOEHNER (R), HOUSE SPEAKER: I`ve made it perfectly clear, the
sequester. I don`t like it.

It won`t create jobs.

BOEHNER: You know, the president proposed this sequester.

OBAMA: It`s not something that I proposed. It`s something that Congress
has proposed.

BOEHNER: Where`s the president`s plan?

OBAMA: Congress has to act.

TODD: So why are we here? It all goes back to July, 2011.

OBAMA: This process has been messy.

BOEHNER: I got 98 percent of what I wanted.

OBAMA: It`s taken far too long.

TODD: They couldn`t agree on how to reduce the deficit.

OBAMA: Both parties have reached an agreement.




OBAMA: Tough cuts that both parties would find objectionable.

BOEHNER: I got 98 percent of what I wanted.

OBAMA: Everything will be on the table. To hold us all accountable.

BOEHNER: I got 98 percent of what I wanted. I`m pretty happy.


WAGNER: Another day another crisis.

TODD: $85 billion sequester will go into effect.

UNIDENTIFIED MALE: It`s going to cost the taxpayer more.

BOEHNER: The sequester, I don`t like it. I got 98 percent of what I

JANSING: FEMA would see a significant funding cut.

UNIDENTIFIED MALE: Pre-K, national parks.

BOEHNER: I got 98 percent of what I wanted.

UNIDENTIFIED MALE: It`s really everybody`s responsibility.

BLACK: Rise up, oh god, and save us from ourselves.


HAYES: I`m Chris Hayes in for Lawrence O`Donnell.

Today on sequester eve, Congress failed to cancel the sequester, a
sequester that at least publicly nobody likes. Instead the Senate held
procedural votes on two bills to replace the automatic spending cuts. The
Democratic bill, which included equal parts spending cuts and tax
increases, received 51 votes in favor, nine short of the 60 needed to break
a filibuster to advance legislation.

The Republican bill would have granted the Obama administration some
authority and latitude to reallocate the sequester cuts. That measure
failed 38-62 votes.

Now you might think the White House would have welcomed more latitude to
direct cuts, but earlier today the White House threatened to veto the
Republican bill if it passed. President Obama explained why on Tuesday.


OBAMA: The problem is, when you are cutting $85 billion in seven months,
which represents over a 10 percent cut in the defense budge in seven months
there is no smart way to do that.


HAYES: After today`s votes, the president released a statement reading,
"Instead of closing a single tax loophole that benefits the well-off and
well-connected, Republicans in the Senate chose to cut vital services for
children, seniors, our men and women in uniform and their families. We can
build on the over $2.5 trillion in deficit reduction we`ve already
achieved, but doing so will require Republicans to compromise. That`s how
our democracy works."

So today in Washington we saw three camps in the sequester debate. The
first camp is led by the Republicans and it`s for austerity. Well,
actually I should clarify that. They are for austerity for some. Pretty
much everyone but the Pentagon and their current constituency of seniors
who like their Medicare and Social Security just fine, thank you very much.

And the austerity Republicans do support, they don`t want to take all the
blame for. So they voted on the bill today designed to pin the cuts on the
president, give him the knife and tell him to plunge it in where he sees

The second camp is for the ever elusive grand bargain and it`s led by the
White House with some followers among congressional Democrats. They`re OK
with some austerity measures so long as revenue is part of that austerity
package. And Republicans say no way.

And the third is the least talked about led by the congressional
progressive caucus but probably has majority support among congressional
Democrats and it supports the most sensible solution. Just cancel the
sequester. Cancel it. In fact today progressive caucus member John
Conyers of Michigan introduced this, the Cancel the Sequester Act of 2013.
It has one sentence. Section 251a of the Balanced Budget and Emergency
Deficit Control Act of 1985 is repealed.

This is the sensible bill. This is the bill that stops the thing everyone
including the American people says is a bad idea.

Here`s how the Senate chaplain began proceedings this morning.


BLACK: As we anticipate an across-the-board set of budget cuts, becoming
law in our land, we still expect to see your goodness prevail.

Rise up, oh god, and save us from ourselves.


HAYES: Joining me now, Jared Bernstein, MSNBC contributor, former chief
economic adviser to Vice President Biden, and Robert Reich, former labor
secretary under President Clinton, now an economics professor at the
University of California-Berkeley. His new book is "Beyond Outrage".

Robert, I`ll begin with you. What do you think? We don`t need God to save
us from the sequester. We just -- we just need to scrape together a
congressional majority in both Houses.


HAYES: That`s right.

REICH: We just need courage.

HAYES: We just need -- why can`t we get -- I mean, I know the answer to
this, but I`ll ask you anyway. Why can`t we just have a one sentence
repeal bill?

REICH: Well, we should. I mean, that is the most sensible thing, Chris.
And after all, I mean, the budget deficit right now is shrinking. It`s
just a little bit higher as a percentage of the entire economy than it was
when Bill Clinton came into office in 1992. There is a long-term budget
deficit problem that has to do mostly with a -- you know, an aging baby
boomer population and healthcare cost. They`re out of control. But right
now we don`t have a budget deficit problem. We have a jobs problem

HAYES: Right.

REICH: We have an economic problem continuing. And so why can`t we simply
get together and do the right thing. The American public, if it really
understood all of the details of what`s going on right now, would say this
is insane. It`s absolute insanity. But it`s the Republican Party and they
started out, you know, in July of 2011, you put your finger on it and
that`s when they said we are going to blow everything up, not pay the
nation`s bills, unless we get major, major deficit reduction, and the
president said forget it. We`re going to have the sequester instead.

HAYES: And then -- and that`s what`s, I think what`s so frustrating as we
sit here, you know, now going through whatever the third or fourth of these
kind of manufactured crises, is that it`s a little like -- it`s a little
like the distance between lightning and when you hear the thunder, or the -
- or the bat hitting the ball and the crack of it getting to your ears,
which is that the political event that created this backlash happened a
while ago.

And yet we still find ourselves bound by the constraints now, you know, a
year and a half, two years later, and yet there seems no way out of them,

JARED BERNSTEIN, MSNBC CONTRIBUTOR: It is true. I mean, it`s funny, I`ve
spent the day or the last few days really talking to people about
sequestration. And going through the details and how it`s going to unfold
and citing the numbers and citing the economic damage and self-inflicted
wound aspect of the thing just like you and Bob were just talking about.

But talking about it as if this is kind of the new normal as if -- as if
this type of dysfunctional government is what we should expect and frankly
given recent track record I guess it is. BUt every five minutes I just
stop and say, wait a second, this is patently nuts. I mean, we have an
economy that is actually doing it`s best to get a recovery going.

HAYES: Right.

BERNSTEIN: And yet every few months we take another whack at it. I have
not heard anyone until Bob Reich just talked about the jobs deficit. Here
in this town all you hear about is the budget deficit. You don`t hear
about the jobs deficit. And the budget deficit has fallen. As you guys
mentioned from 10 percent down to 5 percent. There are long-term pressures
but none of what we`re talking about now including sequester scratches
those issues at all. I

HAYES: But Jared, let me ask you this. Because I think there`s two ways
of looking at -- they`re portioning blame, I think. I mean the big
obstacle of this is the House Republican caucus, right? I mean, they ran
on a kind of austerity agenda. They`ve stuck to it. They want to see an
austerity agenda that has nothing to do on the revenue side. Just cuts,
just cuts, just cuts. Right?


HAYES: And yet at the same time I think there`s two camps of theorizing
about what the White House wants. One is that they`re kind of going along
with playing ball with the Republicans because they believe in compromise
and because they don`t see any other political way of just rejecting the
conversation. And then there`s a school of thought that say they actually
want to be in the midst of a grand bargain negotiation. And I wonder which
of those you think is true.

BERNSTEIN: More the latter. If you actually sort of click through some of
the White House materials and find yourself on this plan, the president
keeps saying, you know, I do have a plan and he`s right. It looks a lot
like a grand bargain. It has revenues in the deal, but it also has a
significant spending cuts including entitlements, Medicare and Social
Security are on the table there, which goes out of a lot of Democrats`
comfort zones. So I do think they`re still in that mode.

I will say, just to underscore something you said, the reason we`re stuck
here is because Republicans refused to compromise on revenues.

HAYES: Right.

BERNSTEIN: The Democrats have a plan to cut spending and raises revenues
and of course that`s been unacceptable for the opposition.

HAYES: Bob, Jared just said something important, right, which is it is one
page, you know, if you look at the one pager that the White House has put
out about their alternative to sequestration, there is the chained CPI
change, right, which will be a change to the way that cost of living
increases are calculated. Personal security benefits. And in real dollars
represent a cut over a time window.

And my theory about all this is that basically this is all a game of
jujitsu in which the Republicans try to induce the Democrats into
advocating cuts to entitlements that are going to be very unpopular so they
can then turn around and run against Democrats for cutting entitlements.

REICH: Well, of course, that is exactly what they -- and this is what they
did in 2012. I mean, remember the president came up with some ways of
cutting Medicare or at least constraining the growing of Medicare, and then
what did Romney do? What did the Republicans do, they said look at the
White House, look at what -- they`re going to wreck your Medicare.


REICH: I mean, this is what the Republicans have done every single time.
And what the Tea Party Republicans are also trying to do is with their
strategy of paralysis and gridlock convince Americans that the government
is so dysfunctional that we might as well get rid of it.



BERNSTEIN: By the way, just to -- what they actually said back there in
2012 was -- what Mitt Romney said was, the president won`t tackle the
entitlement problem and he wants to cut Medicare.



HAYES: Right. That was the message.

REICH: Exactly.

HAYES: And here`s -- here`s Harry Reid I think talking -- sort of sniffing
out the same logic that we saw in the Republican alternative to the
sequester. This is him talking about the Republican alternative that would
have given the president more discretion for these cuts. Take a look.


SEN. HARRY REID (D), MAJORITY LEADER: Angus King in the cause on Tuesday
said, their proposal is we`re going to cut off three fingers. Now we want
to send it to the president to decide which finger goes first. That`s
about it. We`ve tried everything we can, they will not budge on anything
dealing with revenue. Period.


HAYES: Jared, having gone through the details of this, it looks like the
next big deadline is the end of March, around 27th when the continuing
resolution expires. Is that the real end game for this? Because everyone
seems a little non-plussed (ph) about the sequester kicking in tonight.


HAYES: It didn`t seem like a firm deadline in all the reporting and the
people that I was talking to.

BERNSTEIN: I think it`s an end game in the following sense. What I --
what I think and somewhat fear what will happen then is that the new levels
of spending including the sequester will get built into a new continuing
resolution so that moving forward we`ll simply take these caps --

HAYES: Interesting.

BERNSTEIN: -- that are already too low if you look at the discretionary --
non-defense discretionary side of the budget. And they`re going to lower
them further.

REICH: That`s exactly the problem. This does not end.


REICH: And the Republicans` plan is to keep this thing rolling on and on.
We`re going to have showdown after showdown.

HAYES: At some point there`s got to be -- there`s got to be some kind of
climactic battle. Some kind of Waterloo.

Jared Bernstein and Robert Reich, thank you.

BERNSTEIN: Thank you, Chris.

REICH: Thanks.

HAYES: Meantime, if you are looking for ways to increase revenue a great
plan was announced today. It`s so good it`s a win, win, win for
practically everyone involved but no one paid attention.

Also a day of celebration in Washington. The Violence against Women Act
finally got renewed. So after the delays, why did the Republicans finally

Big news from the Justice Department today. The Obama administration is
stepping into the marriage equality fight in California. It will ask the
Supreme Court to allow gay couples to marry in that state. Actor Jesse
Tyler Ferguson, an activist in the same sex marriage cause, will get
tonight`s "Last Word."


HAYES: Violence against Women Act finally passed the House today. The big
headline is 138 Republicans still voted against it. How did something like
VAWA go from being a safe vote to something to object to within the
Republican caucus?

And later move over Dennis Hastert. There`s a new rule in D.C. It`s
called the Boehner Rule and it can`t be making a lot of his Republican
colleagues very happy.



UNIDENTIFIED FEMALE: On this vote the yays are 286 and the nays are 138.
The bill is passed without objection. The motion to reconsider is laid
upon the table.


HAYES: And with that after 18 months mired in Congress, the Violence
against Women Act will now go to the president`s desk for his signature to
be reauthorized. The Violence against Women Act of VAWA was first passed
in 1994 and has been reauthorized twice since with strong bipartisan
support. But what many expect to be an easy pro-forma reauthorization this
time around managed the opposition of many House Republicans and some
Senate Republicans who objected to three way the new version of the bill
expanded protections. It didn`t want the bill to prohibit discrimination
against LGBT, survivors of violence, they didn`t want the bill to expand
protection of undocumented immigrant and women, who report abuse by
documented or naturally born citizens.

And it didn`t want to extend equal access to justice to American Indian
women who under current law fall into a gray area in which, if a woman is
assaulted by a non-Indian boyfriend or husband on tribal land, neither the
tribal police nor state and local law enforcement have jurisdiction to
protect her.

House Republicans tried one last time today to pass their version of the
bill without those protections but it failed. Then within minutes as
expected the House took up the Senate version which passed earlier this
month in the five-year reauthorization passed.

Vice President Joe Biden, who was responsible for the original act as a
senator in 1994, spoke today to a teen-dating violence awareness event at
the White House after the bill passed.


JOE BIDEN, VICE PRESIDENT: There are still too many women in this country
who live in fear of violence. And there`s still too many victims we mourn.
There is an urgent need for the bill that get passed. And it cannot be
more obvious in my view.


HAYES: Joining me now Democratic Senator Debbie Stabenow of Michigan and
Ilyse Hogue, the new president of NARAL Pro Choice America.

Thank you both for joining me tonight.

Senator, I guess my first question for you is, how do you understand this
process? Why did it take so long and then why seemingly out of nowhere did
you finally win?

SEN. DEBBIE STABENOW (D), MICHIGAN: Well, first of all, we`re thrilled
tonight that this happened. It`s been 14 months since the House had the
opportunity to act and didn`t and we have had 16 million victims of
violence, severe violence, rape, assault since they chose not to act. And
in fact as we`re talking right now, there will be 24 victims of domestic
violence for every minute that we are speaking this evening.

So this is very serious. All I can say is I think that it was the
overwhelming bipartisan outrage and activism of women and families and law
enforcement. People who care about their families and children across the
country that made this happened. I mean -- they were overwhelmed with
response from the public. And I think it really means that when people get
engaged, when we stand up for what`s right, and the basic premise was,
every victim of domestic violence should have the opportunity to be

Law enforcement should have the resources they need to protect them,
regardless of their circumstances. Violence is violence. We stood up for
that principle as Democrats and there was an overwhelming amount of support
from across the country. And we were able to get it done. And I`m very
grateful to everyone that had made that happen.

HAYES: Ilyse, you`re no stranger to activism and pushing up on Capitol
Hill. And do you -- do you see this as a fairly straightforward story of
just successful outside pressure overcoming this -- political obstruction?

the Congress flooded with outrageous Senator Stabenow said. But I think
what we`re seeing here is that we`ve actually found the line where the
political survival instincts of the GOP actually trump their filthy to the
party extreme. Unfortunately that line actually was around the question of
whether or not women deserve protection from being beaten.

But, you know, one of the things that we felt and saw in last year`s
election is that there are a whole bunch of folks out there that would like
to create classes among women. Some women don`t deserve protection from
the law like in VAWA. Some women don`t deserve to have access to
contraception or choice. But you know what, women made their voices heard
last election. They`re going to do it again.

And that`s why I think the Republicans are giving a second look to these
bills that actually say hey, women, you know what? We`re going to -- for
your protections and we`re going to treat you like United States citizens
with all the rights and freedoms that`s afforded by that.

HAYES: The most -- the most controversial, I think, it`s fair to say --
the item that got the most attention was these expanded pr protections for
American Indian women on tribal lands where there is a tremendously high
and really outrageously high rates of domestic violence and assault. And
to give the most charitable interpretation of the objection, Senator, some
members of Congress, Republicans, thought that there were these
constitutional problems or jurisdictional problems or this was setting some
kind of jurisdictional precedent that was going to come back and be bad in
the future. And I just wonder what your argument was to allay your
colleagues in the Senate where it passed by a fairly overwhelming majority
to allay their fears about that.

STABENOW: Well, first of all, I think those were just excuses and secondly


HAYES: I was trying to be charitable.

STABENOW: Yes, I know.


You did a good job. But the bottom line is violence is violence. It does
not matter where it happens. You know I remember back in the 70s when I
was a very small child. But I led the effort in Michigan to create one of
the first two domestic violence shelters. And we went through all those
kinds of arguments, all those excuses at the time. It was very tough at
the time.

But since then, this has become a commonly held bipartisan belief that
domestic violence is wrong, that it shouldn`t matter whether you were
assaulted outside your house by somebody you know or inside your house by
somebody you do know that you ought to have protections under the law and
in fact the most dangerous situation a law enforcement individual can walk
into is the domestic violence situation. So they need support. And so we
just kept saying over and over again that this is about making sure we
treat all victims, all women with dignity and respect.

It doesn`t matter if it`s tribal land, if they`re in a city, even if they
are in a small town, out in the country, I guess it matters who their
partner is.

HAYES: Right.

STABENOW: Violence is violence.

HAYES: Ilise, my understanding -- I think I`m recalling this correctly
that all of the Republican women in the United States Senate voted for the
version of the bill that would ultimately passed with these expanded
protections. And when we`re talking about gender politics and the way that
the general divide has played in partisan terms, I wonder what you make of

HOGUE: Well, you know, it`s really interesting. I really believe what
Senator Stabenow is true that people believe violence is violence. One
more I believe earlier said and women are women. And I think that as
something that everybody in this country believes. That your basic
protections under the law regardless of what we`re talking about should not
be determined on what kind of woman you are.

Women are 52 percent of our country`s make-up. And women are women are
women. So when rights and protections are afforded to women they need to
be afforded to all women. And, you know, we`re seeing more and more women
vote that way and I think more and more women regardless of which side of
that aisle they`re on, stand up for that basic principle. And I`m thrilled
to see it.

HAYES: Senator Debbie Stabenow --

STABENOW: No, I also wanted to just say and if we elect more women we`ll
get better results.

HAYES: Yes -- no, I mean, I think that`s a really -- that is --

STABENOW: I agree.

HATES: That is the key question here going forward tonight. I pine for
the day that we have a 50-50 United States Senate. I think it would be a
very different place.

Senator Debbie Stabenow and Ilyse Hogue, thank you both for your time

HOGUE: Happy birthday, Chris.

STABENOW: You`re welcome.

HAYES: Thank you very much.

Coming up, we`ll try to make sense of the Republicans` nonsensical
legislative strategy. What is the point of putting up a fight when you`re
only going to wave the legislative white flag days, weeks or months later.
Then they get nothing out of it. That`s in tonight`s "Spotlight." And
later a new tax is looming for Wall Street. Why it`s a very good idea and
it`s time for it to finally pass Congress.


HAYES: So this is kind of late for me. I`m used to hosting in the morning
8:00 a.m. Easter on Sundays and Saturdays. Set your DVRs now. I`m also
used to having a plate on the desk, the pastry plate, the up pastry plate
which has, if you believe it, its own Twitter handle completely independent
of the show, I should add and an upcoming guest, a very known chef and
restaurateur named Tom Colicchio, recently Tweeted on that since the plate.

I`m going to make you delicious. So the plate is getting a make-over this
weekend. The plate for its part is nervous and excited, all at once.

But with the fun Thomas bring a very serious message. He`s talking about
hunger in America and his involvement with a new film called a called a
place at the table. You can see what happens to the plate and learned more
about why more and more Americans are going hungry.

This Saturday on my show, starting at 8:00 Eastern right here on MSNBC.

Coming up in the "Spotlight" the Boehner rule. It`s the new normal in the
House, it has Nancy Pelosi demanding some power to help right legislation.

And later, actor Jesse Tyler Ferguson of "Modern Family" is getting married
to his partner soon. And today, he heard the news the White House will
push the Supreme Court to make marriage equality legal in his own home
state of California. Ferguson gets tonight`s LAST WORD.


HAYES: In the Spotlight tonight, Republican obstruction getting less
obstructiony. First, it was the fiscal cliff, then Sandy disaster relief.
Today the passage of the Violence Against Women Act marks the third time
this year that Speaker Boehner disregarded the so-called Hastert Rule.
That rule, named after former Speaker Dennis Hastert, refers to his policy
of refusing to bring any bill to the floor of the House for a vote unless
it had a support from a majority of the majority party.

That is unless Republicans could pass the bill without any Democratic
votes. But increasingly, it seems, the Hastert rule is no more. Earlier
today, Democratic Congressman Luis Gutierrez Tweeted, "from now on I will
refer to the Hastert rule as the Hastert suggestion."

But I think the Hastert rule has been replaced rule, which is,
(EXPLETIVE DELETED) it, let`s vote. This change has not escaped Nancy
Pelosi`s notice.


REP. NANCY PELOSI (D), MINORITY LEADER: The only thing that they have
been able to pass with their own votes is the very destructive Ryan bill
and the even more destructive son of Ryan that they passed earlier this
year. Other than that, we have had to supply the votes. And I`m saying,
if we`re supplying the votes, we should be helping to write the bill.


HAYES: The Boehner rule, it seems, isn`t just limited to the House.
After contentious confirmation hearings and a 12 day delay filibuster
delay, Republican senators finally gave up and allowed a vote to confirm
Chuck Hagel. On Tuesday, Hagel was sworn in as the nation`s new defense

It is one thing to implacably obstruct until the last dying breath, as
the Republicans have done on Obamacare, or alternately to obstruct in
exchange for specific legislation concessions that lead to compromise
legislation, as they have done around budget policy.

But it is hard to understand the point of obstructing for a period,
accepting no concessions and then just folding. But that is just what the
GOP has done on two big issues this week alone. In the end, the Democratic
version of the Violence Against Women Act will be signed into law. In the
end, Chuck Hagel still got the job.

So now the question is, if the Boehner rule is the new precedent, what
will this mean for the next big pieces of legislation, the sequester,
immigration and gun safety legislation?

Joining me now to weigh in, MSNBC`s Karen Finney and`s David
Serota. Great to have you here.

David, you worked in the House. What is the logic here?

DAVID SEROTA, SALON.COM: I think the logic is that the -- clearly the
Republican party is trying to show to its existing base that we are going
to go to bat for you. But then when it has to actually go to bat, it
doesn`t got to bat for them. And so they are in chaos.

I think the Hastert rule is something that I remember well when I
worked in the House for Democrats. Being on the floor of the House and
seeing Republicans have their arms twisted to vote for bills -- once in a
while we managed to slip in a bill -- an amendment that they had to allow
for a vote. And I was on the floor where the Republicans actually -- they
didn`t get enough votes to stop a bill and so the Republican leader sort of
went like this, and 70 votes switched to make sure that --

HAYES: While they kept the voting period open.

SEROTA: To make sure that the bill that passed looked like it was
backed by Republicans. So seeing the Republicans actually pass -- or allow
legislation to pass without a majority is an amazing thing.

KAREN FINNEY, MSNBC POLITICAL ANALYST: But, you know, what Boehner --
it was very wise how he did this, because basically they voted for the
Republican House version first.

HAYES: Yes, right.

FINNEY: Then the Senate version. So technically, you can say, if
you`re a Republican, I voted for Violence Against Women. I didn`t vote
against that. And who is going to know the difference between this version
or that version?

And similarly with Sandy, you could say I didn`t support all that
money going out the door. And so it is very wise how he has done it. My
suspicion is, in terms of the implications for other legislation, this is a
little bit of Boehner trying to get some leverage because he`s got such an
unruly caucus.

HAYES: But what is the leverage by allowing -- it seems to me, in all
three instances on the House side -- we can talk about the Hagel thing in a
second. But on the House side, the three instances we talked about, today
being the most recent, it seemed like he ended up -- just like the clock
ran out or like their will just went out of them. Like what is the

SEROTA: The tension is this: he needs to let his members go home and
say I voted against this and I voted against that. And then he needs to go
to his own donors, his own -- the big party big wigs and say, I tried to go
to bat for what you want, but I also need to run the House. The danger
here is less for individual Republican members of Congress who are going
home to their district than it is ultimately to John Boehner and whether he
will be able to maintain being speaker, the votes needed to be speaker,
while also playing this game?

FINNEY: Can I just mention, on a side note, it seemed like no
Republican -- I mean, there were plenty of Republicans who did not have a
problem voting against Violence Against Women? So I feel like Scalia`s
whole, who is going to vote against something called the Voting Rights Act
doesn`t really hold up.

HAYES: If it were the case -- Scalia`s theory of legislating is if
you put a nice enough name on a piece of legislation, it will pass, which
there is some precedent there, like the Patriot Act being the iconic
example of this. But it doesn`t quite work out that way.

In fact, this is what is fascinating to me from the politics
perspective, right? There is the caucus politics on Capital Hill, right,
what Boehner has to do with his caucus, how he is leveraging himself. Then
there is the individual politics in their districts. And then there is the
politics of members of Congress with ambition, right?

So here are a list of House Republican members who are considering or
declared for a 2014 Senate bid. So we`re not talking about some
gerrymandered district where you only get to talk to people who -- you
know, who agree with you. Right? You`ve got to run statewide. And this
is a long list of people who voted against the Violence Against Women Act,
which says to me the same kind of physics calculation of what you have to
do to get through a primary is absolutely still operational, whatever
Boehner is doing.

FINNEY: But they voted -- didn`t they vote against the Senate version
but for the House version?

HAYES: Yes, right.

FINNEY: So technically, when the adds get run against them, they can
say, that is not true. I voted for --

SEROTA: So this is a larger reflection of the chaos in the Republican
party. How do you go to your base that you still need, especially in a
primary, and say I did what you wanted me to do, and then also run an
entire legislative body? I mean, how do you do that when the Senate is
forcing legislation at your door? How do you do it?

HAYES: But then they did the same thing. So they did the same thing.
They picked the same fight on Hagel. It`s a different fight. It`s a whole
different issue space, a different group of special interests. But it
looks from the outside very similar in terms of its trajectory, right?

This Violence Against Women thing got delayed and then nothing
changed, and then they folded.

FINNEY: But it felt like with Hagel, particularly if you watched the
hearings, there was certainly the grand standing of Ted Cruz, who just was
making stuff up -- OK, he and Rand Paul. But for John McCain and some of
the others, this was about readjudicating the Iraq War. This was about an
old grudge match.

And McCain actually came out and said it pretty honestly last well,
that some people have pretty hard feelings against him for the things he
said against Bush.

SEROTA: My guess is what you`re going to see on all of this is that,
ultimately, I think, if they are smart, which is a big if, that Boehner
will try to get ahead of this and say, all right, look, instead of us
voting against something that is ultimately going to pass and we vote for
it, why don`t we start just taking credit? Why don`t we just start voting
for things and take credit, and get both the --

HAYES: And that, of course, is the logic of the grand bargain, which
has been totally elusive and absent since the kind of Tea Party Congress
came into -- right, that`s the normal way that people think about this
working, is things are going to pass anyway, the train`s leaving the
station, get on the train and you`re going to be able to get some credit.

FINNEY: But the problem is, I mean, look at the sequester. He has a
segment of his caucus who -- they are excited to let this happen, the Tea
Party guys, because they`re saying, this shows the power of the Tea Party.
That is what he is trying to navigate between, those who say let`s blow the
whole thing up and those who say we have to try to get something done.

HAYES: There is also a little bit in both cases, I think in the Hagel
case and the VAWA case, of running a hustle on your own base, which, David,
you and I are familiar with from being sort of agitators on the outside of
Democratic party politics, where it`s like, oh yes, we are fighting telecom
immunity. We put up the fight for telecom immunity. And then it`s like,
oh well, you know, we lost the vote on telecom immunity.

So you can go and talk to your base and say, we did it, dudes. We
really tried. And the votes weren`t there.

SEROTA: And here`s Boehner`s calculation, is that he thinks he can
get away with that. And I think ultimately what you will see, depending on
the piece of legislation, he will try to play that game. He may try to
play that game with something really explosive. And then he will see a Tea
Party candidate for speaker against him.

HAYES: That`s going to be the really interesting thing, I think,
particularly on immigration, because that is such an emotional live wire of
an issue. And it`s very difficult to kind of thread this needle, as I mix

Karen Finney and David Serota, thank you so much.

Coming up, taxing Wall Street. It could bring in billions of new tax
revenues at a time when everyone in Washington says the government is
desperate for cash. So why did the announcement go largely unnoticed?

And later, to the surprise of many, the Obama administration is
stepping into the marriage equality fight in California. Actor Jesse Tyler
Ferguson is here to react to that important development today.


HAYES: The Democrat`s bill in the Senate to avert the sequester, as
we now know, failed today. The plan was referred ad nauseam by the
Democrats and the administration as a, quote, "balanced approach to solve
the sequester problem" because it offset the cost with a mix of both
spending cuts and new revenue.

The White House plan, which Republicans repeatedly said did not exist,
even though it did, included 1.8 trillion dollars in new deficit reduction.
It found most of its revenue from closing tax loopholes for top wage
earners. It also went nowhere fast.

But amidst these dire times of fiscal constraint, a time continues to
turn its lonely eyes to potential sources of revenue that will not hit the
paycheck of American workers who have seen their wages stagnate. Enter
Senators Tom Harkin and Sheldon Whitehouse of Iowa and Rhode Island
respectively, along with Congressman Pete Defazio of Oregon.

The three Democrats held a press conference today on Capital Hill to
discuss an idea to raise 352 billion dollars over 10 years. And almost no
one showed up. Seriously.

My colleague George Zornick (ph) of "The Nation" was in the room. He
said there were six or seven reporters there. I don`t have a cut away shot
of the reporters from that press conference. But that`s six or seven
compared to this. Here is what the same room looked like during the
Democrats` press conference on the sequester this afternoon, dozens of
reporters. It is a standing room only crowd for a bill that everyone knew
was dead on arrival.

So what is this great idea that these three Democrats have, and why is
no one listening to it? The bill from Senators Harkin and Sheldon
Whitehouse and Congressman Defazio would place a small tax of three basis
points on most non-consumer financial trades.

Or in plain English, a tax of three pennies on every 100 dollars
traded in the markets. That is just a dollar and 50 cents on a 5,000
dollar trade. Again, according to the Joint Committee on Taxation, this
modest tax would raise 352 billion dollars over 10 years, and would have
virtually no impact on most Americans. It creates revenue while adhering
to the most cardinal and sacrosanct rule of taxation. It taxes something
we want less of, much like tobacco and alcohol taxes.

This is right out of Econ 101, because the thing we don`t want that
this targets is Wall Street speculation. As George Zornick write, "it
would apply to traded stocks and bonds, derivative contracts, options,
puts, forward contract swaps and other complex Wall Street instruments. It
would not cover the initial issuance of any stocks or bonds, nor covers or
loans in the form of stock."

"This transaction tax would most notably impact high frequency
traders. And this is a feature, not a bug. High speed trading presents a
real threat to the economic system, and would theoretically be slowed if
the bill is passed."

What`s more, high frequency trading produces no net social value.
Coming up with an algorithm that can make a purchase a nano second faster
than your competitor is good for one thing and one thing only, increasing
profits for your investment bank. It does not further the goal of the
efficient allocation of capital.

I mentioned alcohol taxes because high frequency trading is the Wall
Street version of spending all day, every day chugging 40s. Here is how
Congressman Defazio put it at today`s press. And apologies, because there
is only one video of this press conference. And it has bad audio, which is
why you are about to see subtitles.


REP. PETER DEFAZIO (D), OREGON: We have here a proposal that would
both raise revenues and bring more stability to the financial markets,
favoring long term value investors, those who want to build an economy. We
need to put people back to work. We need to rebuild our real economy. And
at the same time, while we`re doing that and making those investments, we
have to figure out how to deal with our growing burden of debt."


HAYES: This idea is such a good one that 11 European countries have
announced plans to implement the same kind of tax at the beginning of next
year. The Eurozone version calls for 10 cents on every 100 dollars, way
more than the one these three Democrats proposed today.

The same idea was introduced during the legislative sessions of the
two previous Congresses. But as both Congressman Defazio and Senator
Harkin noted today, in the past, former Treasury Secretary Tim Geithner was
completely against this idea. However, they seem to sense some hope with
the new good, newly sworn in Treasury Secretary Jack Lew.


SEN. TOM HARKIN (D), IOWA: So then I talked with Mr. Lew about the
transaction tax. And he said, well, I can`t put words in his mouth, but he
didn`t say no. He wasn`t saying no. He was saying that he was basically
open, looking at it and to engage in further discussions on it.


HAYES: So finally there is a bit of an opening on this idea. He
didn`t say no, like the last guy did. So you`re saying there`s a chance.
And the Europeans are doing it. The bill has a total of 20 House co-
sponsors and three in the Senate. And the conservative argument against it
is the same as always: we don`t need new revenue, only cuts.

A piece today from the Heritage Foundation state, "this country has a
deficit and debt crisis because Washington spends too much, not because it
taxes too little. Congress needs to focus on cutting spending, not
unnecessary and economically damaging tax hikes."

Taxes complete two roles in policy, raising revenue to fund the
government, which is important, and disincentivizing destructive behavior
and expensive externalities. This does both. The truth is Wall Street can
afford it.

Of course, all the logic in the world is merely a slingshot in David`s
hands against the Capital Hill Goliath that is the financial services
industry. Goliath, of course, did ultimately fall.

Coming up, actor and activist Jesse Tyler Ferguson gets THE LAST WORD
on today`s news the Obama administration is joining the fight for marriage
equality in California.


HAYES: Some very surprising and welcome news today. Opponents of
California`s Prop 8 same sex ban just gained a new ally, the Obama
administration. The Justice Department is filing a friend of the court
brief in support of the two gay couples who launched the fight over Prop 8
four years ago.

In 2008, 52 percent of California voters approved Prop 8, which bans
marriage equality, even after 18,000 same sex couples were legally married
earlier that year. The Supreme Court is set to hear oral arguments March
26th to decide the fate of Prop 8, a subject that hits close to home for my
next guest.


UNIDENTIFIED FEMALE: I have the most amazing news and I`m super
excited, but I won`t be if you don`t want me to be. Ready?

I`m getting married.

UNIDENTIFIED MALE: Oh my gosh, congratulations.


UNIDENTIFIED FEMALE: The love of my life.

FERGUSON: So you finally bagged your boss.

UNIDENTIFIED FEMALE: Yes, but it is not him and I don`t work there
anymore. His name is Tony. I met him three months ago. He is the
greatest guy ever and seriously, are you guys OK with this?

UNIDENTIFIED MALE: Of course, why wouldn`t we be?

UNIDENTIFIED FEMALE: Because I can get married and you guys can`t.

FERGUSON: So? That doesn`t mean you shouldn`t.

UNIDENTIFIED FEMALE: Really? Because I will not go through with it
if you don`t want me to. Seriously.

UNIDENTIFIED MALE: Not necessary? I mean what kind of people would
we be if we denied you or anyone the right to marry.

FERGUSON: Hash tag politics.


HAYES: Joining me now, Jess Tyler Ferguson, Emmy nominated start of
ABC`s "Modern Family," gay rights activists. It`s great to have you here,

FERGUSON: Thank you. Gay rights activist, wow.

HAYES: Yes, well we`re on cable new now. We have to give you a
proper Chiron billing.

FERGUSON: Much more official.

HAYES: The bow tie, you are promoting Tie the Knot. Tell me a little
bit about Tie the Knot.

FERGUSON: Tie the Knot is a foundation that me and my partner -- my
fiance, Justin Mackeda (ph)

HAYES: Congratulations, by the way.

FERGUSON: Thank you. We are designing these bow ties with the tie
bar. And all the proceeds go to marriage equality.

HAYES: It is difficult to tie a bow tie. But you seem to have it

FERGUSON: I had to learn it because I started a bow tie line. I
would wear clip ons. And also the guy who was helping us with these
designs told us that we need to do self-tie ones. I had to learn. But it
is a little intimidating.

HAYES: Yes. But it looks quite spiffy.

FERGUSON: Thank you.

HAYES: Let me ask you this question, you know, we have the news today
about the White House. They`re going to support this. We`ve seen this
tremendous sea change in almost every area of American life, local
jurisdictions, state jurisdictions, the White house, the president of the
United States` own evolution, the White House`s institutional support, you
know, not defending DOMA, now coming out with a proactive amicus brief,
which they didn`t have to do, on Perry and the Prop 8 case.

What do you chalk this up to? Why have we seen this move as quickly
as we have in the last say five years?

FERGUSON: I think it`s for a few reasons. I think a lot of it is
because we have more of the younger generation getting out and voting. And
they I don`t think care. I think they`re on the right side of history and
they just don`t care. Also, we have a lot of people like -- I mean, having
the president, you know, saying that he supports marriage equality is
really -- it`s bigger than I think he realized it is, because I think
people kind of wait for the cue. And that was a really big cue. They were
just -- now people are lining up and saying, I also support.

HAYES: I`ve also been -- I`ve become really convinced that culture
plays a massive role in this. And I`m curious whether you -- how much you
think of yourself in the role that you have on "Modern Family" and the way
in which the culture has moved --- how much that is driving public opinion
even more than politics is?

FERGUSON: It`s tough because we are a sitcom and we keep ourselves
light. And I don`t want to look like I`m patting myself on the back.

HAYES: Go ahead. I mean, your bow tie tying skills are amazing also.

FERGUSON: I do think, you know, it is obviously a hot topic, marriage
equality right now. And "Modern Family" serves as like a cultural touch
stone. So that is -- it does play a part in that. I think it is -- I
think it`s a safe in for a lot of people.

HAYES: Right. And you even making that joke in that scene, hash tag
politics, as if like there is this thing called politics, which is out
there, which is specific and technical. And then there is this thing of
life, which is people love each other and they do whatever. It makes it
somehow less threatening.

FERGUSON: Yes, exactly. And also "Modern Family" is smart in the way
that they do it -- our writers are, anyway, because you have a character
like my father, who is not necessarily comfortable with it, but is
learning. I think a lot of people, you know, attach themselves to that
character and say, OK, that`s kind of where I`m at. And they are going
through that process just like his. And that is OK.

HAYES: The culture of Hollywood gets a lot of attention in our pop
culture at large, because obviously so much culture comes out of there.
And you are in Los Angeles. I`m curious, like at one level it seems like
it is a very tolerant culture and it has been on the forefront pioneering
on marriage equality. And the other times it seems like a very sexist
culture. There was a lot of anger about some of the jokes that Seth
MacFarlane made at the Oscars. How do you think about the culture of that
place that is the entertainment complex?

FERGUSON: I think a lot of it is because social media is out there.
And people can put their opinions out immediately and it goes so viral so
fast. So I think it is just a lot of people -- and I`m guilty of it too.
Sometimes I`ll say something and it goes viral. But it`s -- I think that
that is the main driving force of it.

But it is a tough city. I mean, i was not thrilled to move to Los
Angeles. I`m learning how to negotiate it. And the most important thing
for me is to remove myself from it whenever I can.

HAYES: Jesse Tyler Ferguson with Tie the Knot Campaign, thank you
very much.

FERGUSON: Thank you so much.

HAYES: I`m Chris Hayes, in for Lawrence. A reminder, you can see my
show "UP" every weekend morning from 8:00 to 10:00 am. "THE ED SHOW" is


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