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'Up with Steve Kornacki' for Sunday, May 19th, 2013

Read the transcript to the Sunday show

May 19, 2013

Guests: Rick Hertzberg, Julianne Malveaux, Margie Omero, Alan Abramowitz, Liz Kennedy, Marc Elias, Karl Smith, Kim Barker, Chaumtoli Huq, Michael Kazin, Brenna Schneider

STEVE KORNACKI, MSNBC ANCHOR: Good morning from New York. I`m Steve
Kornacki. A Powerball ticket worth of record $590 million was sold at
supermarket outside Tampa, Florida. Lottery officials announced late
Saturday night. And in other game-winning news for the 35th straight year
it will be no Triple Crown winner in horse racing after Oxbow jumped to an
early lead and held off Kentucky Derby winner Orb in yesterday`s Preakness.
And payout for betters was impressive. $2 win ticket returned $32.40.
The exact it was worth 300 -- 1.40 . And the horse I picked on the air
yesterday finished about 30 lengths behind the winner.

Anyway, right now I am joined by Margie Omero, strategist in Democratic
pollster at the research from Purple Strategies. Alan Abramowitz,
political science professor at Emory University. Rick Hertzberg, senior
editor and staff writer at the "New Yorker" magazine and author and
economist Julianne Malveaux. If you listen to most of the Washington
chatter this week, you would have thought that President Obama was about to
walk across the South Lawn to a waiting helicopter never to return again.
As Peggy Noonan put it "We are in the midst of the worst Washington scandal
since Watergate.

So now with the week over, let`s see exactly how much damage has been done
to Obama`s approval rating. And here you can see it. Back on Monday when
the week of scandal began, the Gallup daily tracking poll found 48 percent
approved of President Obama`s performance, 45 percent disapproved. But
fast forward to yesterday. After that long and bruising week of Watergate-
esque coverage and we see that Obama`s approval rating has increased to 51
percent with -- now with only 42 percent disapproval rating. 51-42, that`s
about as well as Obama has done in any poll since his second term began.

How do we make sense of this? One place to look at is our current partisan
divide. Among Democrats, President Obama`s approval rating stands at 84
percent. Among Republicans, his latest approval rating is 15 percent. And
that divide is really the story of the Obama presidency. And all the
scandal talk is not really budging it either way. There`s some research
from Brendan Nyhan, a political scientist at Dartmouth that helps explain
what is going on here. Nyhan analyzed 30 years of "Washington Post"
stories and determined a formula for House scandals take hold.

One factor is that when a president has a particularly low approval rating
among the opposition party. Something that creates an incentive for the
opposition party`s leaders to seek out and push scandals. Another factor
is when there is a stretch of slow news days. Which tempts media outlets
to take the scandal bait. And yet, as that 51-42 approval score for Obama
suggests there may be a flip side to all of this. That even when the
ingredients for a scandal are in place, at least from the media standpoint,
even when those ingredients are in place, when you have them -- it`s as
polarized as this, it`s a lot harder for a scandal, especially a flimsy one
to resonate across partisan lines.

And I have to say we were thinking about doing the segment even before we
saw the Gallup numbers yesterday. But that was a -- think of it had gone
the other way. If it was 48-45 at the start of the week, and 45-48 at the
end of the week, this would have been the latest, you know, element of its
scandal week and now the public starting to turn on Obama. And this really
gets in the way of what has been a dominant narrative for the past week,
doesn`t it?

RICK HERTZBERG, THE NEW YORKER: Really. And -- it opens up the
possibility that the scandals are actually improving his ratings. Which
actually isn`t that surprising when you consider how -- how it unfolded
over a longer stretch of time for Clinton. So maybe you can`t fulfill all
of the people all of the time.

JULIANNE MALVEAUX, AUTHOR & ECONOMIST: I was waiting for John Boehner to
announce that President Obama had orange juice instead of milk this week
and therefore, they are going to have a probe on the milk industry.
Literally. Mr. Boehner and his party are creating scandal. And to use a
word impeachment in the same sentence as some of these what are really
minor flaps is far reaching. Of course, the people who are using these
words are intellectually challenged, one might say, of Michele Bachmann, et
cetera. But you really -- the only real scandal, Benghazi, we have been
through that, done that, talked about that before the election, put Susan
Rice on the rack and we`re pretty much clear that that`s not a scandal if
you want the emails, find them. The White House has produced them.

The IRS thing, of course, does have some traction, but not very much. In
2004 the NAACP was investigated after Julian Bond gave especially
incendiary speech about President Bush. And we have seen other kinds of
those -- I think the IRS thing, you`ve got new 501(c )4 regulations, 70,000
applications. A staff in Cincinnati. You can`t (INAUDIBLE), I don`t
think, and you are extremely smart and come up with a different -- none of
us around this table and come up with the notion of what is actually
charitable work and what isn`t. So, I don`t think that`s a huge thing. I
mean I think the A.P. thing is a thing that for many of us in particular
might stick with. But again, I think that`s pretty minor, too.

KORNACKI: Well, yeah, there is -- there`s a lot in all of these -- there`s
a lot to discuss in the specifics. Especially in the IRS and the A.P, what
-- maybe not so much the Benghazi one. Although how that became the story
is an issue. But what`s interesting to me, just when you look at these
Gallup numbers and -- you look at the coverage we had this week is, yes,
the -- from the right standpoint, you know, there has been a search for the
career killing scandal for Obama since he became president. It was
Solyndra a couple of years ago. All sorts of things. What made this week
so interesting, though, is that it did spill over to sort of the mainstream
towards the Washington media, which was telling us this is a scandal.

MARGIE OMERO, DEMOCRATIC POLLSTER: Right. And people are still ultimately
not following these issues as much as they have other scandals in the past.
And -- part -- and it`s not because people don`t want to consume scandal,
right? There is a hit show "Scandal" that has more viewers and that people
want to read about scandal, but not these. These don`t pass the what does
this mean for me. Does this affect my daily life? Is this getting in the
way of me getting a job? Or feeding my family or getting health care.

And these scandals don`t really -- or these issues don`t really end up
meeting that test. They also for most Americans don`t reinforce maybe what
they think about the president. I mean if you look at Mitt Romney and the
47 percent, that wasn`t even a scandal. That was jut a comment, right?
And that was very sticky because it reinforced what people thought about
Mitt Romney and these particular issues don`t really -- except for some
folks on the right don`t really reinforce what people think about the

ALAN ABRAMOWITZ, EMORY UNIVERSITY: I think what we are seeing here to some
extent is similar to what we saw during the 2012 presidential campaign,
which is that the media, I think, are easily distracted by these sorts of
events, the latest thing that happened must be very important. It must be
the most important thing that ever happened, until something else comes
along to replace it. And there`s always a tendency, I think to greatly
exaggerate the significance of these sorts of events.

As we saw a year ago, last June, there was this huge controversy when
President Obama made a comment about -- to the effect that the private
sector is doing fine. And that was blown up by the media, not just the
conservative media and the right wing talk shows. But by the mainstream
media. We saw reporters, pundits, talking about how this was, quote, "a
game changer." And here we are again. And we have another game changer
but again, we are seeing that it does not resonate with the public.

OMERO: I like this -- like this headline, right? (INAUDIBLE).


OMERO: It means ...

KORNACKI: But that`s -- there seems to be, there`s a couple of issues
there. And one is the media`s search for the exciting game changer. I
really hate the term "game changer." I want to use it -- but the media is
searching for those moments and they force them a lot. Another one I
remember last year, there was this ridiculous thing Hilary Rosen made some
kind of comment about Ann Romney, you know, not working and that -- this is
going to turn women on Obama. You know, that sort of stuff. So there is
that. But I wonder if there is also an aspect to it. And Alan, I know,
you talked about it a little bit this week. You talked to Ezra Klein of
"The Washington Post" about this. About that partisan divide ...


KORNACKI: And how those divisions are so deep now that, you know, for
anything to resonate, even something more substantive than Hilary Rosen,
you know, or Obama`s comments about the economy last year, for anything to
resonate in this climate and break that divide, it seems -- it seems
standard is very high.

ABRAMOWITZ: That`s why you see those poll results that you were just
showing us where you see this huge divide between Democrats and Republicans
in their evaluation of Obama`s job performance and that`s exactly what we
saw in the election as well. And you can go back to President Bush before
Obama and saw the same thing in reverse.


MALVEAUX: So, even Newt Gingrich warned the president -- not the
president, his party, not to overreach. Because for my part, keep beating
up Obama, it increases sympathy for him, there have been critics on the
left that have talked about the fact that there hasn`t been enough focus on
jobs. You know, this shows us why. Because, you know, he can`t focus on
jobs. And people keep pick, pick, picking at him. So, if the right wants
to stay on this one, I think that it just increases the amount of sympathy
people have and allow this president essentially back off from some of the
other issues, which Republicans are going to deal with -- anyway, they
don`t want to deal with balancing the budget, they don`t want to deal with
jobs. These are the issues Americans really care about.

To your point, people care about the fact the unemployment rate is still
over seven percent. That the black unemployment rate is nearly 14 percent.
That, you know, while we have some contained inflation we are seeing sort
of those inflation numbers heat up. That`s what people care about. So,
just keep picking at, you know, Benghazi which, you know, there are some
issues, but it`s not the biggest issue out there. People have been killed.
We need to find out who did it. But we don`t need to sit here and who did
what in what sequence. So keep it up, and all you do is boost this
president`s numbers.

OMERO: For every minute spent talking about the IRS, it`s a minute that
Republicans don`t have to talk why they are against background checks. So,
it`s just -- it is a distraction.

KORNACKI: The point is -- but also, and fire up their base. I mean,
that`s the amazing -- we did a thing on the show yesterday about Benghazi
and -- sort of downplaying this as a, you know, presidential scandal. And
I -- the torrent of, you know, sort of angry responses, I think, from
conservatives that I got -- this is sort of telling about -- how this, and
in fact, I`m going a statistic here, is, where there is sort of Gallup had
a poll this week, and asking, do you strongly agree that there`s a need to
investigate the Benghazi situation? And among Republicans, three out of
four, 76 percent. Among Democrats, just 27 percent. I mean this Benghazi
story in particular is resonating so powerfully on the right. And nowhere
outside of there.

HERTZBERG: Yeah, I think -- one thing that`s -- one thing that`s happened
here is that you can blame Obama for a lot of things and maybe one thing to
blame him for is the decline in quality of scandals.


HERTZBERG: This just -- this just does not have the elements that really
sets up the scandal. There are no bags of cash. There`s little, if any,
no presidential involvement that anybody can discern. There`s -- there`s
no sex. There`s absolutely no sex in this. So it doesn`t have -- it just
doesn`t have the colorful content.

MALVEAUX: Sex or the IRS, come on.


HERTZBERG: It doesn`t have any lying, anybody into a war.

OMERO: There`s nothing (INAUDIBLE) about email exchanges, about editing a
document. I mean don`t you think that`s really ...

KORNACKI: Well, that`s -- I think that`s sort of the question I have, is -
- what does it take anymore for there to be a scandal, or something to
genuinely be a scandal that might actually move people talking about? When
we come back.


KORNACKI: So, I want to bring Dick Cheney in this conversation ...


KORNACKI: ... because I think it plays off for something that Alan was
talking about, that this polarization kind of goes back to the Bush era.
And I think Dick Cheney actually did understand something kind of basic
about this and the political implications of this polarization. But think
of the story again about Iraq supposedly trying to obtain uranium from
Africa. This was the big scandal this week ten years ago, about a year
before the 2004 election. And this just was a real scandal, that this
information had been included.

But in his memoir, this is how Cheney discussed how the White House handled
this. He said, "Some of the president`s senior staff believed that if we
issued an apology the story would go away. I strongly opposed the idea.
An apology would only fan the flames. And why apologize when the British
had in fact reported that Iraq had sought a significant amount of uranium
in Africa. Those 16 words were true."

OK, what I`m getting out of that, from a political standpoint, is he`s
saying, basically, you know, put your fingers in your ears and keep saying
the same thing over and over again. And in today`s political culture you
won`t pay a price because your base will stick with you. In 2004, that is
what worked for Bush and Cheney. The information was out there, but the
base stuck with them.

ABRAMOWITZ: That`s right. It worked very well for them, well enough to
get them re-elected in 2004. And I think, again, this just reflects the
fact that in the political era that we are in, that almost every issue
divides the public along party lines.

MALVEAUX: Well, people -- excuse me. I`m sorry. But if people really
believed that people are not being fair since this president has been in
office the Republicans have tried to tear him down. He hadn`t had five
minutes of after the -- you know, his inauguration, it began then. And so
-- I mean, for -- people who are loyal Democrats, they see the piling on.


MALVEAUX: And so, no matter -- you know, no matter what he says, if he
says the sky is blue, there is going to be a Republican who finds that an
impeachable offense, because he is color blind.

OMERO: It`s a short-term strategy. And maybe a short, and effective
short-term way to deal with a scandal or tough questions or something you
don`t want to -- any answer you don`t want to have. But in the long view
of -- getting the American people the sense that you are fighting for them,
that you are taking them into account, that you are doing the people`s
business, the long view of this double talk or the constant pressure for
the scandals when that public appetite is not actually there, I don`t think
that`s actually helpful for a party or any politician along here.

KORNACKI: So what -- I was asking this question last segment, what would
it take? What kind of scandal? Because we mentioned Bush in `04. It is
true in the second term, his approval rating really did drop. He did lose,
I guess, part of his base to the extent there are swing voters. He lost


KORNACKI: You could maybe pin that on the scandals of the second term.
Maybe you just put it on just the failures in Iraq, that sort of thing.

ABRAMOWITZ: I think it was unpopularity of the war ...


ABRAMOWITZ: ... with casualties there. And there were new stories
indicating the war was going very badly. It really wasn`t a scandal so
much. It was just -- the -- the way the -- the war was going. And in this
case, I think -- that the only thing that would really hurt the president
would be if there was credible information indicating that the president
himself was involved in this IRS scandal, that`s the only one that I could
see has even the potential to have a negative impact. If he was involved -
- if he knew about this, if he was involved in instigating it the way Nixon
was involved in abusing the IRS during his presidency, then, yes, I think
you would see a negative effect. But so far, there is no ...

KORNACKI: And it`s amazing. Right. It does not -- there`s absolutely no
reason to think that anything like that is the case here. But it is
amazing when you look at sort of the trajectory of Obama`s presidency, in
the very early days when he was first inaugurated in 2009, you know, he was
up 60-70 percent, something like that. You know, a popular guy. But as
soon as the Republican attacks began he lost any Republicans he had and
fell to these -- the high 40s, I would say and the approval rating has just
stayed there for 40 -- and it won`t go -- it hit 51 percent. That`s high
right now. It won`t get much higher, it also won`t get much lower, though.
It`s amazing how steady it is.

MALVEAUX: Well, you know, people -- a lot of people really care about the
jobs issue. I think -where -- President Obama really suffers is -- in
terms of the lack of progress that many perceive in the economy, although
lots of people say that GDP growth is up and it was 2.5 percent last
quarter, that`s not enough. It hasn`t trickled down enough. So I think
that when you see -- I would suggest that his popularity ratings would jump
when the unemployment rate got down to about 6.5 percent if it could. And
since it hasn`t and Republicans have blocked every attempt he`s made to
change things in the jobs situation, it`s -- the -- what these folks have
done and I hate to repeat a point, but they -- every time this president
attempts to make progress, they stifle.

We`ve got dozens, if not hundreds of presidential appointees that are empty
because Republicans will not basically approve anybody. You`ve got a
National Labor Relations board that is ineffective, because it only has two
members, and the quorum is three. So, this has been the kind of blocking
that`s been done, so that you can make an argument that this president is
ineffective and then this is just -- you know, the additional piling on. I
don`t think that President Obama`s brain works scandal-wise. I mean I
don`t think he is the kind of person you find in a scandal. There is some,
but you are not going to get a sex scandal. You are not going to get his
hands on the cookie jar or his fingerprints on anything that said that he
was stealing. Those things are just outside of the realm of this very
decent president. So, you are not going to have anything, but a fake

HERTZBERG: Well, you take this IRS -- this IRS scandal. The Cheney
approach to that would have been to say, we did everything right. This is
nonsense. Let`s move on. Obama has actually denounced the facts of this
scandal in stronger terms than are warranted by the facts. If -- this
story in "The New York Times" this morning paints a picture of this sad
little office in Cincinnati with his overwhelmed, underpaid, overworked
civil servants, you know, this is immense flood of applications for this
charitable status and it is clear that most of them are coming from -- the
huge majority of them are coming from right-wing groups. So, that`s the
ones they investigate in their ...

OMERO: It wasn`t just right wing groups.

HERTZBERG: It wasn`t just -- no, there was -- a percentage of liberal
groups that were also investigated. It is pretty clear that this was --
that this was not a genuine scandal.


KORNACKI: It is interesting. He non-forcibly came out.

HERTZBERG: Non-forcibly came out -- so when -- when the public -- when the
public learns of the muddled pathetic nature of the scandal then -- it`s
not -- that`s not going to hurt Obama at all. And it would have hurt him,
I think to have just come out Cheney-wise and said ...


KORNACKI: He made the brilliant political calculation that beating up the
IRS is good politics.


KORNACKI: Margie -- Margie wants to get something into -- she will as soon
as we come back.


KORNACKI: Margie was about to say?

OMERO: Well, the thing that makes the IRS issue so different from what we
were talking about with Cheney, is that they admitted it. They raised up
their hands (INAUDIBLE) conference -- we did it. We did this. So, that
was them. The folks at the IRS actually -- maybe perhaps not the best
strategy admitting to this issue. So, that`s completely different from
what we are saying of the Cheney reaction of -- this is not -- there`s
nothing -these aren`t the drones you are looking for, this is not the
scandal you are looking for. And I think that`s another way that makes the
-- this IRS piece so different.

ABRAMOWITZ: That`s right. It`s a different kind of scandal.

KORNACKI: I want to put up a tweet here from -- Rupert Murdoch this week.
Responding to the IRS story. And I love that Rupert Murdoch is on Twitter,
by the way. "Only way to handle the IRS story is for a special prosecutor.
Else one arm of highly politicized government investigating another arm,
bad week." He used the term special prosecutor. I want to talk about it a
little bit because -- after Watergate we had this explosion of independent
counsel. Special prosecutor, Lawrence Walsh for Iran-Contra, yet during
the Clinton years, it just - we sort of went crazy with it. That seemed to
be the standard call for about a generation. And every time there was any
hint of any kind of scandal, the opposition party calls for a special

I think we saw it with Ken Starr, with Lewinsky, with the Clinton stories,
people saw the excesses of that. And have we reached a point now, you
know, Rupert - excuse me, Rupert Murdoch is calling for it, I`m not hearing
this echoed a lot in the political system right now. Are we past the
special prosecutor?

ABRAMOWITZ: Yeah, well, of course, you are going to see the opposition
party call for a special prosecutor. That`s just their way of trying to
focus attention on this so-called scandal. But -- I don`t think you are
going to see the Obama administration or any future administration agree to
a special prosecutor unless their backs are really up against the wall
because they have seen, you know, the risks of doing that and the fact that
once you appoint that special prosecutor, then - the things can get
completely out of control.

MALVEAUX: You know, with the -- Monica Lewinsky case and Ken Starr, the
summary document was about six inches tall. This was a summary document
and then they had transcripts of every person they talked to, so you might
have had -- thousands of pages of so-called transparency on the part of it.
This doesn`t begin to warrant that. These people are using language that
suggests something far more serious than it is. As Margie said when the
IRS admits there`s something here, but meanwhile there is this piece of
journalistic organizations that used to get six months to get clearance are
now getting as many as three years, a piece that`s in the "Washington
Post." You said, these people are overwhelmed. So, special prosecutor
because budgets have been cut, because there is sequester at the IRS, I
don`t think so.

OMERO: Well, the polls show people want - and you mentioned - and the
Gallup poll, people want to see an investigation, right? People want to
see investigation when it comes to IRS or Benghazi. And that, when you
look at public opinion, it is actually a pretty low bar. And it is
something we need to be mindful of. Because people say sure, let`s
investigate. So, I think that is the potential pitfall for anybody talking
about this. That people are going to want to say, well, why shouldn`t --
if there isn`t an issue, then why shouldn`t we have ....

KORNACKI: It could draw a distinction, too. Because I think in the case
of the IRS, this is a totally appropriate and I`m glad to see Congress is
looking into it. This is - this is the function of Congress. Oversight.
You know, you have an -- lots of questions have been raised about the
agency and you can have congressional committee looking into this. But you
know, the distinction between doing that, what I think is totally
appropriate and calling for the independent prosecutor, and we saw with Ken
Starr it was -- it was -- you know, lame dealings in Arkansas, in the 1980s
that never amounted to anything ,that`s where it started. And three
independent prosecutors later, you have the blue dress in Monica Lewinsky
and it was just - it was crazy. I`m wondering if we are finally past that
in our politics where people just lean on the independent prosecutor.

HERTZBERG: The problem with a special prosecutor is that prosecutors
prosecute. That`s their goal in life.


HERTZBERG: If you want to have an investigation where the goal is to
establish exactly what happened. So as you say, yes, there has got to be
an investigation. But the approach to the prosecutor approach, which has
burned every administration now, regardless of party and regardless of
guilt, too, even Jimmy Carter`s first couple of years were marred by a
special prosecutor investigating Hamilton Jordan`s behavior at parties ...


HERTZBERG: It`s a very -- it has always been a bad idea, the special
prosecutor idea. But investigations, yes, sure - that should be
investigation to establish some facts.

ABRAMOWITZ: Investigations quickly tend to turn into very partisan

KORNACKI: Right. Yeah.

ABRAMOWITZ: And so, you know, if anyone seriously believes that Darrell
Issa is interested in uncovering the truth as opposed to scoring political
points and trying to damage the ...

KORNACKI: I guess -- I guess - I should have said I like the idea of
congressional oversight ...


KORNACKI: if this idea was properly executed.

ABRAMOWITZ: And that`s the way they used to work. I mean think about what
happened during the Watergate scandal. We had an investigation by a Senate
committee there, urban committee, that was clearly seeking the truth. Not
to say there was never a hint of partisanship because there was. But --
clearly you have people on that committee at that time who are -- really
interested in finding out the truth. You had Republicans who were willing
to expose the truth about the Nixon administration.


ABRAMOWITZ: You also had the crime - the real crime, burglary ...

KORNACKI: And I would give - also, (INAUDIBLE) -- I always give credit to
Peter Rodino from New Jersey, I think I want to - anyway, I want to thank
Democratic pollster Margie Omero, Alan Abramowitz with Emory University,
Rick Hertzberg from "The New Yorker," excuse me, and author economist,
Julianne Malveaux. A worrying for the Tea Party and the Republican base
about scandal fever, next.


KORNACKI: Let`s get it out of the way first. It is totally conceivable
that the main political impact of all the controversies that have been in
the air for the last week trying to avoid using the word scandal here, that
the main political impact would be to fire up the conservative base and to
boost GOP turnout in next year`s mid terms. It is also possible as we just
heard Alan Abramowitz argue, that none of it will add up to anything, at
least in terms of electoral impact in 2014. We had a gazillion supposed
game changers, there is that awful term again in last year`s campaign. But
none of them actually changed anything.

So, maybe we will end up looking back at scandal week 2013 the same way.
But there`s also another possibility. It is one that Republican leaders
are clearly aware of and scared of. Possibility that their base will get
too carried away with scandal fever, that the party will be forced to spend
the next 18 months treating Benghazi or the IRS story or both as the top
issue on its agenda. And they are worried that the party might be forced
to do this even if the rest of the electorate, voters who are part of the
Republican base, decide they really don`t think these are major national
scandals. And that if this happens, it might end up firing up the other
party`s base even more in 2014. Republicans are worried about this,
because it`s happened to them before. The last time there was a Democratic


BILL CLINTON: Indeed I did have a relationship with Miss Lewinsky that was
not appropriate. In fact, it was wrong.


KORNACKI: Bill Clinton, Monica Lewinsky, 1998. We just talked about it a
bit. You know the basics. The really important thing to remember about
1998, though, is that even before anyone had heard anything about that blue
dress, that year`s election was supposed to be rough for Democrats. It is
because it was a midterm election. And when you are the White House party,
the only real question whenever there is a midterm election tends to be how
bad will the damage be. And it already had been bad for Democrats once
under Clinton in 1994, the second year of his presidency. It`s when an
anti-Clinton backlash handed Republicans 54 seats in the House and eight in
the Senate and made Newt Gingrich the first Republican House speaker since
the Eisenhower era. Gingrich proved to be a perfect foil for Clinton,
though. Who recovered from the `94 drubbing to win a second term in 1996.
His coattails there were limited. Republicans still controlled the House
and the Senate.

No one was expecting another `94 like tsunami in `98. But everyone assumed
the GOP would be padding its majorities. It is just what opposition
parties are supposed to do in midterm elections. Which brings us to the
Lewinsky mess. It is not a scandal that came out of nowhere. It is a
story that came to light through Kenneth Starr. The independent prosecutor
appointed in response to loud Republican demands for an investigation into
Bill and Hillary`s business dealings back in Arkansas. The Whitewater
scandal, it was called. Except it was never really much of a scandal. And
that`s the point. The resistance on the right when Bill Clinton became
president was just as immediate, just as over the top and just as
unrelenting as the rights resistance to Barack Obama has been. I was just
a kid, but I still remember seeing a car in the spring of 1993, just like a
month after Bill Clinton took office, with a red bumper sticker declared
"Impeach Clinton."

That was the mentality that animated and defined the right in the 1990s.
An assumption that the Democratic president had to be a crook, a
determination to prove it. And absolute conviction that the giant
Watergate-like scandal that would finish him off was just around the

So when the world learned about Lewinsky, conservatives did not pause to
gauge the public`s reaction. They just assumed that the rest of the
country now saw the president the same way they had seen him for six years.


REP. TOM CAMPBELL (R ), CALIFORNIA: If the evidence warrants it to vote to
impeach President Clinton, I would be prepared to do so on the merits,
whether the economy is doing well or doing poorly.


KORNACKI: That`s not what Americans saw. One poll after another in 1998,
through the spring, through the summer, through the fall, showed
overwhelming opposition to impeachment. But this was the moment
Republicans have been waiting for for years, the chance to file real
genuine impeachment articles against Clinton. They plowed ahead.
Gleefully. Mike Pappas, a conservative Republican congressman from New
Jersey took to the House floor in 1998 to literally sing the praises of the
special prosecutor who was pursuing the president.


REP. MIKE PAPPAS, (R ) NEW JERSEY: Mr. Speaker, twinkle twinkle Kenneth
Starr now we see how brave you are, up above the Pentagon sting like a fair
judge in the ring. Twinkle, twinkle Kenneth Starr now we see how brave you


KORNACKI: Was it music to the right`s ears, but no one else`s, which is
why this happened when election day came around.


TOM BROKAW: There`s a new day in Washington D.C., early Wednesday morning,
and congressional Republicans, House Speaker Newt Gingrich, Senate Majority
Leader Trent Lott, and a lot of others are putting up a brave front this
morning. But the fact is the election they expected to be a triumph for
the GOP turned into an important symbolic victory for the Democrats. And
the president.


KORNACKI: The numbers were small. Democrats picked up five seats in the
house, including, by the way, Mike Pappas`s in New Jersey and they broke
even in the Senate. But the statement couldn`t have been louder. Not
since James Monroe`s presidency in 1822, had the White House party gained
any seats in the second term midterm election. In the facet of an
opposition party intent on playing up a scandal that no one else thought
was much of a scandal, Bill Clinton`s Democrats pulled it off.

The IRS story is complicated and still unfolding. We will see where it
leads. But for now, the story of 1998 is creating some real tension in the
GOP. You have Michele Bachmann and Mike Huckabee out there talking of
impeachment, you have party leaders trying as gently as possible to tell
the right guys let`s not go too fast here. Gingrich himself weighed in
this week. He told and PR "I think we overreached in `98." How is that
for a quote you can use? Well, he ought to know. 1998 didn`t just cost
Gingrich`s party seats in the House, it also cost him his job as speaker.
And it seems like Speaker Boehner hasn`t forgotten that.

One of this week`s so-called scandals is different from the others. That`s


KORNACKI: With Benghazi and to some extent the A.P probe fading from the
front pages as the week wore on, the IRS story took on new dimensions
Friday, and not necessarily in a good way for the Obama administration,
testifying before the House, the Treasury inspector general for tax
administration, Jay Russell George, said the IRS`s internal probe was known
about as early as May of last year by officials in the Treasury Department.


then Commissioner Shulman on May 30, 2012. I subsequently alerted the
general counsel of the Department of the Treasury on June 4th and
subsequently, and I do not have the exact date, alerted the deputy
secretary, Neal Wolin about this matter and then upon his assumption, and -
- into the position I mentioned it to Secretary Lew.


KORNACKI: Also, on Friday, Jack Lew, the Secretary of Treasury, confirmed
that he had been told about the investigation, but said he was only in the
most general terms.


SECY JACK LEW, U.S. TREASURY DEPARTMENT: He went through a number of items
that were -- matters - they were working on. And the topic of -- project
on the 501 (c ) 3 issue was one of the things he briefed me was ongoing. I
didn`t know any of the details of it until last Friday. When I learned
about it from the moment I learned about it, I was outraged.


KORNACKI: However, Republicans were not taken by surprise either.
Congressman Darrell Issa, the chair of the House Oversight Committee told
"Bloomberg Business Week" this past Monday that he had known about the
investigation for the past year as well, but waited for the I.G.`s process
to conclude before making any public accusations.

After this was noted on Saturday by "The Huffington Post," the oversight
committee spokesman told them, quote, "the oversight committee knew about
the audit because it requested it. We released or re-released this letter
a week ago. It does not explain why the Obama administration officials
knew about serious allegations of wrongdoing within the Treasury
Department, but failed to ask questions and take immediate action. Both
the administration and its critics are right that there is a scandal here.
The congressional investigation it is now beginning to play out is needed.
If only to tell us the exact dimensions of the scandal and what shape any
reform or congressional oversight might take.

I want to bring in Liz Kennedy, counsel at the progressive think tank Demos
working on money in politics. Marc Elias, Democratic election attorney
with Perkins Coie, and chairman of the firm`s political law group. Karl
Smith, assistant professor of public economics and government at the
University of North Carolina, Chapel Hill. He also writes for the Modeled
Behavior blog at And Kim Barker, reporter with the
investigative Website Pro Publica.

So, there have been some developments, basically, in the last - in the last
two days. There is sort of this -- I don`t know, game going on here where
Republicans want to make it seem like the Obama administration knew all
about this, knew that there was -- the IRS was going after, it was singling
out Tea Party groups, right wing groups before the 2012 election and didn`t
say anything about it. Now we have news that the -- Republican chairman of
the oversight committee actually requested the investigation and probably
knew the same thing as the Obama administration and -- probably more to
come out here, but right now my reading on this is sort of everybody knew
there was some kind of probe going on and that might be about the limit of

KIM BARKER, PROPUBLICA: Well, I mean, last year, beginning of the year,
Tea Party groups were very open about the fact, they felt like they were
being persecuted by the IRS. They came out, they told members of Congress,
members of Congress talked about it openly. So -- this was no secret to
anybody. And the fact that like there was this probe going on and the fact
that like groups had complained about it. In fact, investigation was
requested early last year on -- right?

LIZ KENNEDY, DEMOS.ORG: Yeah. I think it is entirely proper that people,
you know, we are now aware that people were informed that this
investigation was moving forward. But it`s entirely proper that people
were waiting to hear the results of the investigation, and in fact, what we
learned is that -- obviously, it is unacceptable that any actual names that
would reflect, you know, presumed policy positions were used to read out
these groups. Because that is an un-American, you know, type of targeting.
However, what we are just seeing is that this really overwhelmed office was
seeking to apply the laws they are charged to do and -- the number of
groups were shooting up and that they were trying to use kind of
bureaucratic short hand to get in as soon as anyone in Washington heard
about any kind of, you know, actual viewpoint things. They were told to
stop doing it and then, in fact, these elections -- these officials in the
Cincinnati office then reapplied this kind of targeted thing for review.

It really looks like this office itself was kind of more like Keystone Cops
than Big Brother in terms of what these real reviews looked for. We find
only a third of the 300 groups objected for special review, actually had
these Tea Party names, other progressive groups were also reviewed and -
it`s the real issue is that they -- 501(c) 4s and 501(c)3s are actually
getting involved in political campaign activity and the IRS is charged with
making sure that these groups aren`t abusing the tax laws.

KORNACKI: But it is -- I mean, there were -- we have the case of a
progressive group that lost its 501(c)4 status. But at this point, the
only sort of group we know really was kind of singled out by the criteria.
You can argue there were logical reasons for doing so, but it was
conservative groups disproportionately, at least as far as we know right
now that they were ...

BARKER: Also - but also, the criteria said any group that had expanded --
one advocate of the expansion of government, which is pretty much going to
be a liberal group. But nobody has come out and said yes, I was one of
those groups. The kids have lawyers saying that like, yeah, I represent
clients. That ...

MARC ELIAS, PERKINS COIE: I agree we learned two things that are
significant in terms of systemic failure. Number one, as - as the
president has said, as you just said, it is completely unacceptable, it`s
outrageous that the IRS would target or politically profile groups based on
their ideology or based on their -- what candidates they support. It is
unacceptable. That has to be dealt with and that`s a separation. The
second, though, is an important systemic failure about how the IRS
operates. And it has been -- in this area of 501(c)s generally and
501(c)4s in particular completely opaque. If you look at its report and if
you look at the I.G. report, and you look at the reaction of the IRS, they
go back to, well, these all have to be judged based on facts and

If you -- if the IRS were more transparent and provided clear guidelines,
what is it that a 501(c)4 can`t do (INAUDIBLE) that a social welfare? What
is political intervention? What does primary purpose mean? If it laid out
those lines in clear public forum, then the groups that want to do
everything right would have guide posts to do it. And those who want to
monitor to make sure their groups are doing everything are doing everything
right, would have guide posts to hold them accountable to. But what we
learned is that not just there was a Keystone cops, but that basically it
was a bunch of low-level IRS people holding up an application saying looks
like social welfare to me, looks like political intervention to me, and
that`s not a standard that we should want to have.

KARL SMITH, FORBES.COM: The thing about it, though, is that even though it
makes -- gives guide posts you can and do the right thing, it gives the
guide posts if you want to do the wrong thing. So, if you are outlining
exactly specifically what this means, this is also telling you exactly how
to structure loopholes to get around it or structure organizations that are
officially within the law, but violate the spirit of the law, and so --
that`s what people always complain about, right? There are always groups
getting around, it`s hard and why is it common sense? When people try to
do it in a common sense way, this is what happens.

KORNACKI: Well, there`s ...


KORNACKI: Well, that`s the issue here. The idea that this has fallen --
through the evolution of campaign finance, that this has fallen to the IRS
and the IRS is clearly or was clearly woefully unprepared to deal with this
latest evolution of a campaign finance, I want to talk about how we got to
this, what the IRS can do and if the IRS should be doing anything at all
when we come back.


KORNACKI: So, there are all sorts of issues sort of within the IRS. "The
New York Times" has a story today about just how woefully understaffed the
office is since it has been handling it. Here are issues with Lois Lerner,
who was in charge of this portion of the IRS. She leaked this by planting
a question at a news conference. That`s part of the news. There`s a lot
there. But I want to talk about what I think is sort of the bigger scandal
of this sort, the evolution of the campaign finance system has brought us
to the proliferation of these groups, these 501-( c)-4s. These are groups
that are under the tax code supposedly to be primarily engaged in social
welfare. These social welfare groups that, you know, basically -- they can
have some political involvement, it is not defined what some political
involvement means. And so this is -- here is an example. You`ve probably
seen it, but this is a social welfare group in a political ad last year.


UNIDENTIFIED FEMALE: Tax raising politician Tim Kaine backs cap and trade,
which has been called a huge tax. Raising energy bills for families.
Putting over 50,000 Virginia jobs at risk.

UNIDENTIFIED MALE: Cap and trade policies will kill Virginia jobs. What
people don`t understand is the impact it is going to have on working
families in this country.

UNIDENTIFIED MALE: This energy tax will kill 1,400 jobs at this company.

UNIDENTIFIED FEMALE: Tim Kaine`s for cap and trade, and that would cost


KORNACKI: Defeat Tim Kaine for U.S. Senate. That`s Karl Rove`s group, and
this is a social welfare group. This is what the evolution of the campaign
finance system has brought us. So -- in terms of, you know, looking for
solutions to where we are right now, I will go through a couple of
proposals that have been put on the table. Lawrence O`Donnell talked about
it this week. Right now, the enforcement is these groups have to be
primarily engaged in social welfare. They -- they can - but there can be
political involvement. What if we just said 501(c )4s can have no
political involvement whatsoever?

LIZ KENNEDY, DEMOS: Yes. That`s absolutely an acceptable proposal. I
think we have to take a step back, as you were saying, and look at the fact
that Citizens United changed the rules of the game in terms of political
spending and what is currently allowed. And yet, none of the rules of the
game have really changed to keep up with the situation we are currently in.

So that is why you see so many C-4s now set up to accept - C-4s are
corporations that previously were not allowed to spend directly to
influence elections, but now are. The Supreme Court, when they allowed
this money to go in, assumed it would be disclosed. And yet it is not. So
the Congress can take really common sense steps to, A, pass entirely
disclosure legislation that would disincentivize people from setting up
these C-4 groups, which can serve as these vehicles for dark money. C-4
groups spent $250 million on those types of ads in the 2012 election,
without telling the American public who was funding their sources. So
that`s the real scandal here.

We can have disclosure legislation and, you can bar C-4s that are set up as
exclusive social welfare organizations. That`s the statutory language.
They are supposed to be exclusively for social welfare purposes, even more
than just primarily, or you could set a really low threshold, to say, OK,
C-3s absolute bar on campaign activity; C-4s perhaps a low threshold, 5
percent to 10 percent or some dollar amount. That if there was a bright
line test to enable the IRS to more easily enforce this law more clearly
without currently, as it`s required, to look at the totality of spending to
see if they have reached this majority level. It is a mess.

SMITH: Let me address your proposal. Let`s say you did something like
that. I think the problem there is you get -- you have some group that`s
interested in breast cancer, mammograms for poor people, they depend a lot
on public funding. That public funding is getting cut. And now they want
to say something about it. Right? You know, we think what we do is really
important and we think we are saving people`s lives. They are clearly --
think of themselves in the community, we think of them as trying to --

KORNACKI: They are a social welfare group. They really are, yes.

SMITH: But now they become -- now they have a political message, are they
being cut off? Did they get there -- are they subject to prosecution for
saying no, we think people should spend the money? We think the government
should support this.

BARKER: It is never going to happen. I mean, the Supreme Court said in
the Citizens United decision that nonprofits, corporations and unions, can
spend money on politics. Unless the Supreme Court comes in there or you
get some sort of act of Congress, or the IRS actually were to come out
wanted to - if they just published the regulation, they could say no more
money spent on political advertising. But they don`t --


KORNACKI: That gets me to the point, with the Supreme Court setting,
basically setting the rules that they set for --

BARKER: Even before Citizens United, nonprofits could spend money on
politics, and they did. That often gets lost in the whole like because it
is so complicated.

KORNACKI: Which brings me to another proposal that I want to put on the
table that -- doubt it will ever happen, but I want to put it out there
after this.


KORNACKI: Hello from New York. I`m Steve Kornacki here with Liz Kennedy
from the progressive think tank Demos. Marc Elias, with the law firm
Perkins Cole (sic). Karl Smith from the University of North Carolina
Chapel Hill. And Kim Barker with the investigative web site, Pro Publica.

So I said I was going to put another proposal on the table. This one, I`m
going to give credit to Jonathan Bernstein, who is a political scientist,
wrote a piece for "The American Prospect" this week basically called how to
fix the IRS mess. And he said, at the root of all of this really is a
basic problem. That`s -- basic issue. The Supreme Court has said in two
rulings over the last 35 years or so, first of all, that money equals free
speech. And second, that corporations can give money to elections. You
have that, and then you look at the evolution of campaign finance reform
law over the last generation or so, where it basically has -- it has been
an attempt to move political money away from candidates, away from
campaigns and away from parties. You had soft money originally, and then
you had these 527s about a decade ago after McCain/Feingold. Now the new
loophole that Karl Rove and all these other people exploit are these 501
(c)4. So if you patch up somehow the 501(c)4, it is like a game of whack-
a-mole. It just goes somewhere else.

So what Bernstein proposed is, he said -- let`s admit that this money right
now because of the Supreme Court, it is out there and it`s going to find
its way into the system. Let`s let it go back to the campaigns. Let`s let
it be -- let`s let it be unlimited. It goes to the campaigns, it`s fully
disclosed and there is public financing.

ELIAS: I want to take up before-- I want to take up the --

UNIDENTIFIED FEMALE: Do we have an hour?


ELIAS: -- proposal that you raised before, which is that the Democrats in
Congress proposed the Disclose Act. You know, there was a time when
disclosure was a bipartisan solution. Remember 527s used to not disclose.
Then there was a 527 disclosure bill, which was a bipartisan bill. It was
supported by Democrats and Republicans alike through Congress. Democrats
proposed the Disclose Act last Congress as a way to disincentivize one type
of tax entity versus another, whether it is a 527 or a 501-(C)-4, or a
taxable nonprofit or a 501(c)6. It would create a relatively equal playing
field, and money would be disclosed. And I think -- and remember, in
Citizens United, the Supreme Court upheld 8-1 disclosure as possible -- and
in a later case, Doe versus Reed, disclosure was again upheld in the ballot
initiative context.

So I don`t think you ought to -- before you move to the more radical
solutions, I don`t think you ought to leave the topic of disclosure and
just throw your hands up and say it is not possible.

KENNEDY: And in fact, you were saying that this proposal you were putting
on the table was that it should be unlimited money, which I think there are
quite a few problems with, but that it should all be disclosed. And that
was, in fact, formerly the conservative position on money in politics.
William F. Buckley, George Will famously all over saying it should be
unlimited but it should be entirely disclosed, and that was what the court,
the Supreme Court in Citizens United thought was going to be the case, was
that all of this new money would be disclosed. They said disclosure
requirements allow shareholders and the public to judge if the spending is
in their interests and determine whether the candidates, you know, the
financial relationships between candidates and the elected officials and
their financial supporters. And that`s something that the American public
really has a right to, and that, you know, in fact, disclosure was so
noncontroversial, Scalia in that Doe v. Reed case said that requiring
people to stand up in public for their political acts requires civic
courage without which democracy is dead.

KORNACKI: Right, so the proposal that Bernstein made, again, I just -- it
interested me because if the reality of the Supreme Court decision is the
money is going to be out there, and we are basically seeing unlimited money
in politics right now, except it is taking different forms. It is not
directly going into Mitt Romney`s campaign, but it is popping up in a 501-
(C)-4, it is popping up in a super PAC, something like that. So if you
really put that in the sunlight, it goes to the campaign directly, there is
no fudging it, there is no cuteness. We know who you are giving it to, we
know who you are. And then we say there`s also going to be public
financing, because the other point he makes is let`s be honest. The money
gets more and more the lower down the ballot you go. So if you have public
financing and unlimited money, you know, we are sort of acknowledging
reality and we`re trying to deal with it.

KENNEDY: We should absolutely have public financing and the kind that New
York State may be about to adopt in terms of empowering small citizen
donors so that we encourage more people and more types of people to get
involved in financially supporting their candidates and more, you know,
active in the democratic system. But the point is that unlimited money
directly to candidates is, of course, you know, what we were seeing in
Watergate, two candidates, and outside of candidates, but that`s why we
have campaign contribution limits.

KORNACKI: Well, sure, but we did not know -- we had briefcases of cash
going -- I`m not talking about that. I`m talking about the name on the


BARKER: There are states that do that. And it does -- it does happen. I
think that, like, when it comes to Congress, you already have a situation
where everybody has to start fund-raising from day one. Even before day
one, you have to start fund-raising. And I wonder what would happen if you
have unlimited donations. I mean, would there be any governance happening?
I mean -- I don`t know. It`s just a question. It is a solution, most

SMITH: I think that`s probably the best -- I think that probably would be
easier. If you were able to connect with these broader groups that were --
wanted to do this full-time, wanted to organize this full-time and could
funnel the money directly to you, I think that would alleviate some of the
-- what politicians have to do.

On the disclosure thing, I know that it is consensus among the lawyers, I
know that you guys think it is all a good idea, but the very issue there is
that people who want to say things that don`t agree with the consensus or
that are weird or that are out there fear the backlash that they are going
to get. Right? We -- we see that, and you do see an increased, like,
polarity in American politics, and some of that is represented by actual
crazy ideas that people have, and they want to express these crazy ideas,
and that they know they are crazy. And we could stand back and say, well,
why do we need so many crazy ideas? But once you do that, now you are
shutting off people who are innovators and different at all.

ELIAS: There is a relatively easy solution for that which already exists
in the law. I believe it was the Socialist Workers Party last month. The
FEC, the Federal Election Commission, extended their exemption from having
to disclose. So if you are a group that can come forward and say, look,
here is the deal, we are so out of favor, we are so subject to harassment,
to threats to -- threats of violence, intimidation that the disclosure of
who we are, who our donors are, who are vendors are would pose a risk to
us, then there can be -- there can be an opt-out procedure. And that,
courts have recognized that in other circumstance.

KENNEDY: Absolutely. And other than that, chilling -- criticizing people
for taking a position in an election is not the same thing as chilling
speech. That`s just regular democratic accountability. So it is not the
same thing to say that I disagree with this person`s political spending,
or, wow, that`s an interesting message, but the fact that it is brought to
me by this huge powerful interest whose motives I might find a little
suspect make me judge this message differently.


BARKER: -- a lot of these ads are incredibly hateful. It`s not -- you
can`t look at these ads and say, oh, that brought up something I never
thought about before. It brought up crazy.


KORNACKI: Anthony Kennedy in the Citizens United ruling, Anthony Kennedy
basically made the point that it would be free speech checking free speech.
That if you had companies engage -- corporations directly giving into the
political system, the key was that their consumers, their shareholders
would know about it, and would be able to use their free speech to sort of
check the free speech. He is sort of -- in his ruling, at least, he
indicated it is sort of a free market thing.

KENNEDY: And instead what we are hearing is some of these speakers wanting
to take the benefit of their new rights to speak directly to influence
American voters, but without any of the accountability that we have in our
political system that was set up. As you said, candidates -- contributors
to candidates are all disclosed, over $200 on the FEC website. Political
action committees, when they spend money, when they register a 527, they
have to disclose their donors. People who play in politics have to
disclose their donors.

But now, because of these new avenues that the Supreme Court set up without
realizing that there weren`t appropriate disclosure provisions, we have had
$300 million in dark money from C-4, C-5, C-6s, and that`s really
inappropriate, and we need to fix things in some pretty clear ways.
Disclosure legislation, bright line legislation, the SEC rule, you know,
which investors are demanding, and then, obviously, public financing at the
end of that would be fantastic. But disclosure is really absolutely

ELIAS: And I hate to play the lawyer here, but I am the one wearing the
tie on this Sunday morning. But there is a difference between playing in
politics and playing in elections. And I think we need to be clear and
precise here. No one is suggesting -- or at least I don`t think anyone is
suggesting that a group that wants to effect policy, that wants to lobby
Congress for clean water, wants to lobby Congress for reasonable gun
registration, laws, immigration reform, should have to disclose their
donors for doing that. The question is what do you do on the portion where
they are directly intervening in elections. And one of the things that I
lament about what`s happened now with the IRS is that there had been
legitimate questions raised about some groups, particularly on the right,
about whether or not they are abiding by these rules as they should be.
And I think that what`s happened with the fact that we now know the IRS
itself didn`t have internal administrative mechanism for screening right
from wrong, that gets lost in the shuffle.

SMITH: I think though, as an actual issue of public policy, just a lot
more grayer than that, because elections form this focal point for
discussion about these policies. And if you look a lot of the super PAC
stuff, which people want to talk about a lot, and my biggest thing -- I
think (INAUDIBLE) supporting me is that most of this is not going to
matter, because on elections, it is about elections, it is about
candidates, but it is driven by people who have particular agendas, who
mainly want to see an ad that reflects their viewpoint. Right? And some
of the ads just don`t work at all. Like they don`t connect with the
voters, they don`t have any sort of impact. And the reason they don`t have
any sort of impact is because they were written to satisfy the donor, and
what the donor wanted to say is I hate this, I hate this person for doing
it, and I want everybody to know it. And that is -- that is a -- political


BARKER: -- that they have no influence. Really, I would hate to make that

SMITH: They have an influence inside the Beltway. I don`t know that they
actually change anybody`s votes.

KENNEDY: I think the big question is that super PACs at least acknowledge
that they are political action committees and disclose their donors. What
we have seen with some of these C-4 groups is that they are applying to the
IRS for C-4 status, their applications say we are not going to spend any
money on politics. A group that said as they were mailing their
application to the IRS, we are not spending any money on politics, was
already up and running ads in Nevada and Florida.


KENNEDY: -- IRS law enforcement question where they are actually not
subjecting enough groups to further review.

KORNACKI: It is also so blurry because Marc talks about the distinction
between politics and elections, which I think real and exists, but it also
could be nebulous because we live in Sidney Blumenthal called it 30 years
ago the age of the permanent campaign. I put a couple --


ELIAS: -- bright lines.

KORNACKI: So we need bright lines. We need (INAUDIBLE). Here is the
question, though. With the scandals, I don`t want to call it a scandal,
but with the stuff happening in Washington now, is there going to be any
chance of getting any reform at the IRS now that it`s sort of a problem
agency? Let`s talk about it when we come back.


KORNACKI: I just want to play what President Obama had to say about the
IRS situation this week.


OBAMA: Across the board, everybody believes what happened in -- as
reported in the IG`s report is an outrage. The good news is, it is
fixable. And it is in everyone`s best interest to work together to fix it.

I will do everything in my power to make sure nothing like this happens
again by holding the responsible parties accountable, by putting in place
new checks and new safeguards, and going forward by making sure that the
law is applied as it should be, in a fair and impartial way.


KORNACKI: He is talking about reform there. Look, nobody trusted or liked
the IRS before all of this. Now it has been -- it has been tainted with --
you know, potentially looking after groups on the right, the right now
thinks the IRS is really out to get them. And yet, it is the IRS right now
that`s charged with overseeing these groups where all the money is sort of
proliferating. Is it feasible that we are going to get any reforms, since
the IRS is going to have to implement these reforms?

BARKER: At least people are talking about it. I mean, I feel like last
year I was covering the subject the entire year and a lot of times you just
sort of felt like you were right into this vacuum that nobody was paying
attention to. In the last week, I feel like people at least know that
there is such a thing as a 501-(c)-4 and they are talking about it. So
maybe something can happen out of it. At least with the intention -- at
least we can be talking about it, and America can sort of realize all this
anonymous money is going into the elections.

KENNEDY: And I think that this is something where, you know, there are a
lot of different elements to solve, you know, the really unequal influence
of money in politics that are somewhat more controversial or that have to
be developed. This is a pretty simple, straightforward fix. First of all,
it is getting the bureaucracy right. I mean, I think what we -- I`m
absolutely serious.


KENNEDY: What we are hearing about, I go back to Keystone Kops instead of
Big Brother. What we are hearing about is these --


BARKER: We don`t know yet.

KENNEDY: Exactly. If it is, that`s where --


KENNEDY: -- investigations are being made, but I will say that when you
read the IRS investigative report, you see that they refer to the team of
specialists that was reviewing the C-3 and C-4 applications. It was one
employee up until just very recently. So this poor person was overwhelmed
as the C-4 applications double between 2010 and after Citizens United in
2011. The point is I think that, you know, the Senate is now paying
attention, we are going to be having hearings on this, I think we
absolutely need to look at, you know, the problem with the way these laws
are being -- and regulations are being interpreted, the massive abuses that
we have seen with the C-4 form, and the fact that some of them report 87
percent of their spending in election spending to the FEC, while still
purportedly claiming to be C-4 social welfare groups. So there is a lot to
solve, but I think that a bright line rule would really do that, as well as
actually comprehensive disclosure legislation, because that would
disincentivize people from attempting to abuse these vehicles of dark

KORNACKI: I`m just trying to picture a Congress that right now, won`t pass
anything. Suddenly the Republican House passing something that empowers
the -- I (INAUDIBLE), but anyway, I have got to thank -- I have got to
thank Liz Kennedy from the progressive think tank Demos, Marc Elias with
the law firm Perkins Coie. I said Cole, I am an idiot, I`m sorry. Kim
Barker with the investigative website Pro Publica.

A building collapse in Bangladesh with political consequences here in the
United States after this.


KORNACKI: With the death toll now at 1,127 from last month`s factory
collapse in Bangladesh, and with three more people dead just this Thursday
after a ceiling collapsed at a Cambodian factory that makes A6 (ph)
sneakers, worker safety overseas has emerged as a big issue for politicians
here in the U.S. On Friday Secretary of State John Kerry discussed the
Bangladesh disaster with that country`s foreign minister.


JOHN KERRY, SECRETARY OF STATE: (INAUDIBLE) collapse which cost more than
1,000 lives. Everybody in America shared the agony of those losses, and
our hearts go out to the families. We hope that this will be able to help
all of us cooperate on the issue of labor and labor standards and workers,
and workers` rights, obviously.


KORNACKI: Getting that cooperation, however, requires both carrots and
sticks. The Department of Labor is going to fund Bangladeshi efforts to
improve factory inspection there, but the administration is also
considering stripping Bangladesh of an import tax breaks unless the country
improves labor conditions. This week, Bangladeshi officials said they will
raise the minimum wage for garment workers and make it easier for them to
form unions.

Retailers are also taking action in the wake of the deadliest garment
industry disaster in history. As of this week, roughly 40 companies
worldwide have signed on to an accord drafted by labor groups to improve
workplace safety in Bangladesh. The agreement would establish binding
independent factory inspections and require companies to help finance
renovations for worker safety. However, only two U.S. companies --
Abercrombie & Fitch and PVH, the parent company of Tommy Hilfiger and
Calvin Klein -- have signed on to the agreement. On Tuesday, Walmart, the
world`s largest retailer, said it would not accept the agreement and
instead would conduct its own inspections in Bangladesh. On Thursday,
eight Democratic senators wrote to Walmart and other major U.S. retailers
who hadn`t signed the agreement.


SEN. SHERROD BROWN, D-OHIO: American retailers, European retailers
purchase some two-thirds of Bangladeshi garment production. We are asking
a number of the largest retailers of America to sign on to this legally
binding global accord to help ensure worker safety in Bangladesh.


KORNACKI: The next day the National Retail Federation blasted the pact as
a quote, "one-size fits all approach, without any recognition as to how the
industry operates around the world."

I want to bring in Chaumtoli Huq, professor at New York Law School, with
expertise in labor, employment and human rights. Michael Kazin, editor of
the political magazine "Dissent" and a professor of history at Georgetown
University, and Brenna Schneider, founder and CEO of 99 Degrees Custom,
U.S. clothing manufacturer. She also worked with struggling textile
businesses in India.

So -- the story is just -- you read the accounts of this. I think I saw
last Monday was the first day since the collapse that a corpse had not been
found. That was sort of the milestone. Obviously, just you read these
stories of horror, and I think everybody`s instinct is what can we here in
America be doing to, you know, prevent this from happening again?

CHAUMTOLI HUQ, NEW YORK LAW SCHOOL: Right. I think that -- just to step
back a little bit in order to really understand (INAUDIBLE) for Americans
here, we need to look at sort of global economic policies that have been
sort of the last 20 years. We have sort of declining labor standards and
we have health and safety issues not just for Bangladeshi workers, but also
for U.S. workers. Recall that fast food workers are -- have walked off
their jobs, and fast food chains have said the same thing, that retailers
like Wal-Mart are saying. We are not accountable because of the franchise
subcontractor system.

So what needs to happen is that U.S. retailers need to sign the -- the
safety accord, and really need to get along with other international
retailers. The majority of the retailers that have signed on have been UK
retailers, and I think that -- the United States and American public really
need to push on our retailers to sign on to health and safety measures.
This is a human rights issue. This is not a different labor standards for
different country issues.

KORNACKI: Although I want to put a quote up. And this is from Faisal
Hasan Abed (ph), who wrote in "The New York Times" earlier. She is an
anti-poverty activist in Bangladesh, and she says -- she is talking about
the idea of holing these companies accountable for American citizens. She
said, "I appreciate the unease a Westerner might feel knowing that the
clothes on his or her back were stitched together by people working long
hours in dangerous conditions, but ceasing the purchase of Bangladeshi
manufactured goods would not be the compassionate course of action.
Boycotting brands that do business in Bangladesh might only further
impoverish those who most need to put food on their tables."

She is basically saying, look, you know, the collapse is terrible, but the
garment industry is good for us and we need you to keep buying.

MICHAEL KAZIN, DISSENT MAGAZINE: What you need is regulation. What you
need is to empower workers to make sure those regulations get enforced. I
mean, that`s true in garment industries around the world.

SMITH: Yeah. I don`t think it is that easy. So --

KAZIN: It is not easy. It is not an easy thing to do.

SMITH: I don`t -- I don`t think it is that easy in terms of -- I don`t
think that solves the fundamental problem or gets at your fundamental
problem. The issue here -- I mean, just to take it back a little bit, is
that the people of Bangladesh don`t have lots of options. They are very
poor. Many of them are very desperate. That`s why they take these jobs,
right? The more difficult you make it for these jobs to be created, that
pushes them back into the desperation they have -- they had before. That`s
always the danger when do you this.

Now, perhaps if you have an enormous amount of local knowledge, you can
tailor the perfect solution, but it is highly unlikely the U.S. State
Department and large retailers adopting some big system is going to be the
one that assures the right thing happens for Bangladeshi workers and it
does not push the people back into the lack of opportunity at all that they
had before.


HUQ: -- distinction between boycotting and in terms of having safety
standards and regulations. What this accord does, which has been actually
advocated for the Bangladeshi workers, solidarity center in conjunction
with labor unions here and other civic minded individuals is to inspect
factories, is to make sure that the products are made under wage conditions
that we have here.

I think that no one in the United States would say we shouldn`t have the
Fair Labor Standards Act, we shouldn`t have OSHA, because somehow it is
going to impede our economy. So we are saying the same thing. I think
that (INAUDIBLE) is saying, don`t boycott, don`t say I`m not going to buy
something from Bangladesh. Don`t do that. But pressure and advocate for
human rights standards and legal norms that uplift the labor standards so
that Bangladeshi workers do not have to make that catastrophic life-
threatening choice between job and life. That`s not something acceptable
in 2013.

The number is over a thousand. In the Triangle shirt factory, we saw 146
dead. We are going backwards. We are not going forward in terms of labor

KORNACKI: But where is -- I mean, the reason that all of these factories
have sort of proliferated in Bangladesh and the reason all these Western
companies are doing business with them is, you know, it is cheap. Right.
It started in New England. It started near where I grew up, in Lowell,
Massachusetts. It used to be textiles, and now we are talking about
Bangladesh because the labor is so cheap. So where is that line where we
talk about -- I`m all for improving standards, too. But these companies
set up shop over there because it is cheap. So if you raise the standards,
do they just leave?

SMITH: Right. And it is such a huge point, because you are from
Massachusetts, I`m from North Carolina, and I -- you know, my mother worked
in a textile mill, and they came from Massachusetts, from -- to North
Carolina for that reason. And, you know, I show this great (INAUDIBLE) for
100 years, factories moved from Massachusetts to North Carolina because
North Carolina was the poorest state in the nation, the lowest wages in the
nation. They had free rein to do what they wanted to do.


SMITH: That employed my mother. That gave me the life that I had, and
that, you know, pushed forward our state. And we have done a lot of great
things from that.

And so it was horrible for Massachusetts, but on that, we felt like that
was good, right? We felt like coming after -- coming here was good and
employing us was good. And so it helped North Carolina. It improved
standards in North Carolina overall, because what you had was farming, you
know, hilly soil. That was your alternative. Right?

BRENNA SCHNEIDER: So you are looking at the short-term versus the long-
term investment in the workers and the labor force. So you are looking at
in the short term, these jobs are moving women into the formal economy.
There are opportunities for employees in both the U.S., in North Carolina,
in Massachusetts where my business is operating, in Lawrence,
Massachusetts. In Bangladesh, around the world. But you are also looking
at the long-term growth of Bangladesh`s economy, how do we empower workers?
It`s not easy, it is not an easy question, but it is good for business.
And I think the business and opportunity for retailers and manufacturers
alike to say worker empowerment can be good for business, productivity,
efficiencies, things that we can achieve when workers aren`t worrying about
how they are going to pay bills, taking care of health concern. When they
are empowered to be efficient productive parts in building a company,
building a global economy.

KAZIN: Every society goes through the same process. You start with cheap
labor, you start with people who are more expendable, like women were in
the 1930s and 1840s in Lowell. And then they start to form unions, they
start to better their conditions, they get politicians pressured to help
make things better as well. You have big strikes like in Lawrence in 1912,
for example. And then labor (INAUDIBLE), and then companies -- if they can
leave, they lave and go to cheaper places, but then the same process has to
start in those places. But now we have a global economy, and I think it
makes sense to have global standards. For companies like Walmart--


SMITH: You are slowing the process of those companies moving, right?


KORNACKI: Right after this.


KORNACKI: You were going to say?

HUQ: Yes, I just wanted to comment on the social cost of raising level
standards. What we are talking about is ten cents per garment. The
Workers Rights Consortium did a study. So we are not talking raising a
certain level of standard in terms of the United States. We are talking --

KORNACKI: What would that get you? What would ten cents get you?

HUQ: Would get -- ten cents per garment, and it has been in an op-ed, that
has been written by Mohammed Younis, who is the founder of micro finance,
it would get some -- greater inspection into the local factories. Some
fund, for example Walmart, Gap and -- and Gap have refused to provide
compensation for such a tragedy that is going to have ripple effects in
terms of families. It is going to have a partnership with local officials
as well as with retailers.

Companies have to care about where their product is being sourced. It is
good business. It is good corporate responsibility. And that is really
what -- so we are not talking about impeding the progress. We are talking
about a human dignity and basic level of rights and standards.

KORNACKI: But there was a -- I want to put this -- this is Matt Yglesias
at Slate, who is talking about -- basically he makes the case that you have
to accept a certain level of tragedy, I guess. He says, "Bangladesh may or
may not need tougher workplace safety rules, but it is entirely appropriate
for Bangladesh to have different and indeed lower workplace safety
standards than the United States. Safety rules that are appropriate for
the United States would be unnecessary immiserating in much poorer

And it, again, gets to that point. I, when I read some of these stories, I
think of the stories I read growing up about Lowell (INAUDIBLE) factory
collapse in Lawrence about 120 years ago, I think, something like that.
And I see parallels. I see, you know, there were the mill girls from sort
of small towns in New England, who went to these mills, they eventually,
you know, labor activism began, the mills moved away. And I read about
Bangladesh, where these are women who previously would have been married
off at extremely young ages, are going to work at these factories, and it
is actually in a way a form of empowerment for them.

HUQ: There is no question that the garment industry that`s been existing
in Bangladesh since the inception of Bangladesh in the `80s has been a boon
for the Bangladeshi women in terms of the work force. What we are saying
is not to boycott that industry or to have the industry leave Bangladesh,
but to accept human rights standards and norms.

We cannot accept in 2013 that certain people in certain countries are
entitled to different human rights and labor standards than those of us in
the United States.

And the one point I want to make is oftentimes we make this analogy, you
know, in terms of turn of the century, 20th century American economy and
now. We are in a global economy. And that every local economy interacts
with the global economy. So any solution to any kind of business model has
to respond to that. It has to be a local solution, it has to be an
international solution, and it has to be a human rights solution. It
cannot be isolated and left to a local -- to the local government.

KAZIN: And no company should accept a subcontractor who -- who sets up
workers in a place that will collapse. I mean, we are forgetting that
almost 1,200 people died in this accident. And I don`t know if Matt in
that piece realized the death toll. I think he wrote that when only 50 or
60 people--

HUQ: The beginning.

SMITH: And there are a lot -- the issue here for Matt and people who are
trying to think about it like this is that is emotionally horrifying to
everyone, but what we think about (INAUDIBLE) is how many people are dying
from poverty because they don`t have these opportunities. And if we can
strike the perfect line where we don`t have any of the guys who have shady
factories, but we do move people out of dollar a day poverty, then that
would be wonderful. But to the extent --

KAZIN: Why but? It should not be either/or.

SMITH: It is either/or because that`s the reality that we usually face, is
that we don`t have perfect enforcement, it is not easy to tell where the
line is. Ten cents a garment might sound cheap, but people in Bangladesh
are really poor, and I`m not exactly even sure if that`s a huge amount --
that might be a huge amount. Ten cents for many people in the world is a
lot of money.


HUQ: -- is what I`m saying. Because what you said earlier is that it is
going to slow down the economic processes. What we are talking about is
ten cents per garment. And the average worker in Bangladesh earns $38 a
month. So we are not talking about --

SMITH: They seem like comparable numbers. So when -- when Walmart is
saying we -- or whoever`s sourcing it is saying it, you are raising the
cost as something that is similar to a worker`s wage. So you may be
doubling, effectively doubling the labor cost of Bangladesh. It is not

HUQ: Let`s talk about U.S. workers. It is not surprising that Walmart is
one of the major retailers that is involved in the outsourcing. But it is
Walmart, there`s serious labor issues in the United States with respect to
American workers, U.S. workers. So when we make this calculus that we are
willing to have this hierarchy, right, that we`re willing to accept the
sort of spiraling down of labor standards, it actually impacts American
workers, and that`s another perspective. We are thinking about Bangladesh
far away, but we are forgetting that when we spiral down and lower overall
labor standards, we are lowering labor standards for American workers, and
we have seen that decline in the last 20 years. Decline of union
membership, low minimum wage, and so those battles are happening here. So
we need to really look at it in a --


KORNACKI: There also is the issue of -- you know, we said it started here,
it ended up in Bangladesh, and it also raises the question -- you know, if
companies start leaving Bangladesh, is there anywhere else left for them to
go? We`ll get to that next.


KORNACKI: So I want to look at this chart here of the average wages in
Bangladesh, compared to a couple of other countries. And you can look at
it here. The average worker wage per hour in Bangladesh is at 24 cents.
Cambodia, is almost double. Pakistan, Vietnam, China, you know, is five
times higher. It raises the question to me, you know, if companies now end
up abandoning Bangladesh, is there anywhere else left for them to go? Can
you kind of get lower on the chain than that?

SMITH: And it is, because China is now investing in Africa, right, which
is our next big frontier. And China, China was at least lower than Vietnam
and Pakistan, maybe not Cambodia and Bangladesh, just 20 years ago. One of
the poorest countries on earth. Most of the poorest children in the world
lived in China 20 years ago. Now it is the highest on that list. Soon it
will be higher than that. Right? Soon they will be a larger economy than
the United States. And so that`s caused a lot of problems for people all
around the world. Lost factories in the town where I was born. It puts
pressure on Bangladesh. But there are 1.3 billion people there. And we
are improving their lives. And we are building cities for them, and
trains, and ports, and hospitals, and schools. And that if anything is a
beautiful thing. That`s a wonderful thing.

KAZIN: And they have no guaranteed health care, and the cities are
incredibly polluted.

SMITH: Not yet.

KAZIN: I mean, you are making China seem like a paradise.

SMITH: It is not a paradise.

KAZIN: The Chinese don`t seem it is.

SMITH: It is progress. But now they have the security to stand up and say
we want even more. We want accountability from our government. You don`t
say that when you are worried about, you know, does my child have food
tomorrow? You are not going to be complaining about some political thing.
But now that -- now that they do have a job, now I want, you know, a
government that`s accountable to me. Now I want, you know, a better
retirement. Now I want these things.

So having that economic base allows you to demand even more. And that we
have been able -- that -- I guess (INAUDIBLE) global -- you think -- that
China has been able to achieve that transition, it`s been amazing. And it
has been costly for lots and lots of people. Pollution has been awful.
Wages have gone down in America. You know, part of my town died. There
are lots of things that have been bad. But --


KAZIN: People in Bangladesh have to start demanding the same things. And
then yes, the wage--


SMITH: But that`s why I said, the people in Bangladesh from the position
of strength that they have now. But if you -- if you put these standards
on, that don`t allow them to build the base, then they won`t have the
strength themselves to say --


SCHNEIDER: You are talking about (INAUDIBLE), but labor costs in apparel
is a function of two things. The cost, the hourly cost, which we just
looked at, but it is also a function of productivity. This is a business
opportunity. An opportunity to become more productive and efficient, and
you can do that with a strong workforce. You can do that when your
workforce is safe and working in good conditions. You can do that when
your workforce is earning a living wage and not worried about living in
poverty. When they are free from the worries of taking care of a health
concern. We are building a strong workforce that`s not only good for
business, but it is also good for the economy of Bangladesh, the economy of
China, the economy of the U.S. You are building a workforce that`s good
for progress in these countries that need it. It is not a short-term
solution in paying the least amount that we can. It is a long-term
solution in looking at growing Bangladesh`s economy.

KORNACKI: There is another issue here, too, I think, just in terms of the
responsibility of consumers in the United States, and where it is always --
you know, we respond to the lowest possible price on anything, and in that
way, if we -- we reward companies by spending the extra nickel, dime,
dollar, whatever it is. If we reward companies that are maybe being a
little bit more responsible, that could help alleviate the problem, too.

HUQ: And we do. Think about the food movement, the organic movement, that
we do. Some of us do pay more for some of our products, because we are
concerned about the processes by which certain things are produced, and as
consumers, and so we are open and willing to pay for -- for more.

But what I want to be clear is that we are not talking about a substantial
increase from American consumers. And, also, you know, this notion that
the Bangladesh industry in terms of garment from its inception has been
connected to the international community -- economy. And so through trade
adjustments and trade policies. So to say that oh, Bangladeshi people just
need to work it out on their own ignores the economic reality.

Yes, there needs to be unions and there needs to be sort of local support.
But there needs to be pressure on retailers to adopt standards. Not
boycott so that it goes -- leaves the industry, but to adopt standards, and
the notion that retailers are rejecting standards to me is really
concerning. Because it is not saying that you are going to be liable here.
It is saying the products that you are producing have corporate
responsibility and corporate accountability to what you are producing that
comes into Gap and Walmart. And that`s really what these safety agreements
are about.


KAZIN: -- years ago, at the Triangle factory, the first time you had some
serious regulation of workplaces, especially workplaces like that, garment
factories, and it took 146 people to die, and that`s going to be -- that`s
true with Bangladesh, too. I am sure you probably know much more about
what`s going on in Bangladesh than I do, but I`m sure right now there were
riots and there were strikes and there is going to be more of that. People
in Bangladesh are not going to let this continue. But it took that
sacrifice of those people to do that.

KORNACKI: All right. What should we know for the news week ahead? My
answers after this.


KORNACKI: So what should we know for the week coming up? We should know
that Democratic Congressman John Tierney of Massachusetts has introduced
legislation inspired by technology seen in the latest James Bond film. In
proposing the bill, Tierney writes quote, "Bond escapes death when his
handgun, which is equipped with technology that recognizes him as its
owner, becomes inoperable when it gets into the wrong hands. The
technology already exists in the form of pin code fingerprint scanners and
specialized bracelets." In his bill, the Personalized Handgun Safety Act,
would require all new guns to have this personalized technology within two
years. We should note that this bill wouldn`t take away any guns or even
limit magazine size. It would just prevent them from being fired by anyone
but the owner.

We should know that John Edwards, yes, that John Edwards, appears to be
making his way back into public life. Edwards recently reactivated his
lawyer`s license and is scheduled to speak at a retreat for the marketing
firm PMP (ph) on June 6th. With Mark Sanford returning to Congress and
Anthony Weiner reportedly prepping a New York City mayoral run, we should
know that we shouldn`t be surprised that less than a year after his
acquittal on federal campaign finance charges, Edwards is beginning his

And speaking of former presidential nominees, or people on national
tickets, we should know that with the addition of Walter Mondale and
Michael Dukakis this week, all living Democratic presidential nominees now
support marriage equality. We should also know that all the likely 2016
Democratic presidential candidates support marriage equality, although the
same cannot be said for Republicans, at least not yet.

With all the focus on the scandals or non-scandals in Washington this week,
we should know that Canada is experiencing quite the scandal of its own.
On Thursday, the editor of Gawker reported that he had seen a video of
Toronto Mayor Rob Ford smoking crack cocaine. Two "Toronto Star" reporters
who have also seen the video believe the man in question is in fact the
mayor. We should know that whomever took the video is now trying to sell
it for $200,000, and Gawker has started a crowd sourced campaign to
purchase it, called quote, the "Rob Ford Crack Starter."

In a press conference on Friday, Ford called the allegations ridiculous,
and said that "Toronto Star" reporters were, quote, "pathological liars."
We should know that Mayor Ford has already had an incredibly colorful
career. He once walked around a parking lot putting "Rob Ford mayor"
magnets on strangers` cars. He once pleaded no contest to drunk driving,
and he was once involved in a drunken altercation at a hockey game. We
should also know that after Ford once said politics is too male-driven, he
invited any women interested in running for office to coffee so he could,
quote, "explain how politics works."

Here`s how politics works -- don`t get caught smoking crack. That`s my
first advice. I want to find out what my guests think we should know for
the week ahead. Start with Chaumtoli.

HUQ: On Friday, (INAUDIBLE) endorsed Bill de Blasio in the mayoral
candidate. And in the past week, legal services workers went on strike.
We`re hoping that this will signal a labor`s renaissance, especially with
the Bangladesh tragedy, on labor standards and labor rights in the United

KORNACKI: Michael?

KAZIN: What we should know for the week ahead is what we should know for
the week behind as well, and we`ve been talking about it today. How are
you going to get fair treatment at work? You have to demand it. Frederick
Douglass, the great abolitionist, said power yields nothing without a
demand. It never has and it never will. We can`t depend on corporations
or the government to do it for us. We have to do it ourselves.

SMITH: What we should know is that the Congressional Budget Office just
lowered its estimate of how big the deficit is going to be over the next
ten years. But I still think that`s too high, and that the deficit
hysteria has been overhyped, and we`re probably going to see a surplus
pretty soon if things are on track.

SCHNEIDER: We should know that we`re on the cusp of the next industrial
revolution. We`ve looked -- you look at the U.S. and you look back to the
mill girls in Lawrence and Lowell, you look back to Henry Ford and mass
production, and now we`re looking forward to customization and the changes
and innovation in machinery and advancement in manufacturing, especially in
apparel, that are happening. And so we look forward to that change and the
next industrial revolution.

KORNACKI: And I know that I got a reference to Lowell, Mass. and Michael
Dukakis into the same show, so it`s a successful day for me.

My thanks to Chaumtoli Huq from New York Law School, Michael Kazin from
"Dissent" magazine, Karl Smith of the Modeled Behavior blog at,
and Brenna Schneider with 99 Degrees Custom. Thanks for getting UP and
thank you for joining us. We`ll be back next weekend, Saturday and Sunday
at 8:00 a.m. Eastern time. Our guests will include author Michael

Coming up next is "MELISSA HARRIS-PERRY." On today`s "MHP," Angelina Jolie
has sparked a national conversation about breast cancer. Melissa will dive
in deep on the corporate interests at play here, as well as the disparity
in access for women not so fortunate as Ms. Jolie. Also, President Obama`s
commencement address at Morehouse College in Atlanta, Georgia.

All that and more on "MELISSA HARRIS-PERRY." She is coming up next. And
we`ll see you next week here on UP.


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