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updated 9/19/2012 12:33:47 PM ET 2012-09-19T16:33:47

THE ED SHOW with ED SCHULTZ
September 18, 2012

Guests: Bernie Sanders, Bob Shrum, David Cay Johnston, Richard Wolffe, Michelle Goldberg>


ED SCHULTZ, HOST: Good evening, Americans. And welcome to THE ED
SHOW from New York.

Forty-nine days until the 2012 election. Mitt Romney`s comment about
the 47 percent has America talking. Tonight, more of the hocking
undercover tape and President Obama weighs in for the first time.

This is THE ED SHOW -- let`s get to work.

(BEGIN VIDEOTAPE)

NEIL CAVUTO, FOX NEWS: Others have said that you just kissed half the
electorate good-bye this election year. That you all be called them
moochers. Did you?

SCHULTZ (voice-over): Mitt Romney continues to clean up after last
night`s disaster. "Mother Jones" has released the full video of a Mitt
Romney fundraiser and it gets even worse for the Republican.

Tonight, Senator Bernie Sanders on America`s first glimpse of the real
Mitt Romney.

Bob Shrum and Eugene Robinson on the political disaster for
Republicans. David Cay Johnston on 47 percent of American victims Mitt
Romney is dismissing.

And Richard Wolffe on Romney`s disastrous view of the Middle East.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: We have a potentially
volatile situation, but we sot of live with it. And we kick the ball down
the filed and hope that ultimately somehow, something will happen and to
resolve it.

(END VIDEOTAPE)

SCHULTZ: Good to have you with us, folks. Thanks for watching.

For the better part of the year, Mitt Romney has struggled to let
voters know who he really is. Finally, the real Mitt Romney stood up and
it`s not a pretty sight and very confusing.

The hidden camera video from a Florida closed door fundraiser has now
been released in full. At one point during the $50,000 per plate dinner,
Romney talked about how he is refining his stump speech.

(BEGIN VIDEO CLIP)

ROMNEY: I wind up talking about how the thing which I find most
disappointing in this president is his attack -- of one America against
America. The division of America, based on going after those who have been
successful.

(END VIDEO CLIP)

SCHULTZ: Less than 60 seconds after Romney said President Obama pits
Americans against each other, Romney answered this question.

(BEGIN VIDEO CLIP)

QUESTIONER: For the past three years, all everybody`s been told is,
"Don`t worry. We`ll take care of it." How are we going to do it two
months before the election to convince everybody to take care of
themselves?

ROMNEY: Well, there are 47 percent of the people who will vote for
the president no matter what. All right? There are 47 percent who are
with him, who are dependent upon government, who believe that -- that
they`re victims, who believe the government has a responsibility to care
for them, who believe they`re entitled to healthcare, to food, to housing,
to you name it.

(END VIDEO CLIP)

SCHULTZ: Romney claims the president is causing resentment between
Americans, but Romney himself is outlining a class war between two distinct
halves of the country. Romney stumbled to address the comments he made at
a fund-raiser in a late news conference last night.

But Romney made the matters only worse for himself.

(BEGIN VIDEO CLIP)

ROMNEY: It`s not elegantly stated, let me put it that way. I`m
speaking off the cuff in response to a question, and I`m sure I could state
it more clearly in a more effective way than I did in a setting like that.
And so I`m sure I`ll point that out as time goes on. But we don`t have the
question, given the snippet there, nor the full response. I hope the
person who has the video would put out the full -- the full material.

(END VIDEO CLIP)

SCHULTZ: No, no, no. Ho, ho, ho, wait a minute now. Don`t have the
question? Just a snippet? We played the full question and answer last
night on this program, and we were not alone in doing so.

Romney is just trying to duck and dodge at this point. By the way,
who calls a press conference at 10:00 at night? He bailed on the news
conference before answering a question about what he actually believes.

(BEGIN VIDEO CLIP)

ROMNEY: At a fund-raiser, you have people say, Governor, how are you
going to win this? And so, I respond, well the president has his group,
and I have my group. I want to keep my team strong and motivated and I
want to get those people in the middle. That`s something which fund-
raising people, who are parting with their monies, are very interested in
knowing, can you win or not. That`s what this was addressing. Thank you.

REPORTER: Are all the things that you said in the video are things
you believe? Are those core convictions?

(END VIDEO CLIP)

SCHULTZ: Now, that would be an incomplete performance, would it not?
Maybe the reason Romney walked away so hastily is because these are,
really, his core beliefs.

And to many Americans these beliefs are pretty doggone ugly, saying 47
percent of the country sees themselves as victims might play well in a room
full of millionaires, but it doesn`t go over very well with the rest of the
country.

(BEGIN VIDEO CLIP)

ROMNEY: These are people who pay no income tax, 47 percent of
Americans pay no income taxes. So our message of low taxes doesn`t
connect. And he`ll be out there talking about tax cuts for the rich. I
mean that`s what they sell every -- every four years.

So, my job is not to worry about those people. I`ll never convince
them to that they need to take personal responsibility and care for their
lives.

(END VIDEO CLIP)

SCHULTZ: Now, if you`re a person struggling to make it, some
adversity in your life, ask yourself this question: how does it make you
feel when a presidential candidate says that you will never take personal
responsibility and care for your life? Mitt Romney says that you will
never be convinced and he`s willing to let you just fall by the wayside.
That`s his planning.

Romney reiterated his position on FOX News today.

(BEGIN VIDEO CLIP)

CAVUTO: You said your wording might have been inelegant, but others
have said that you just kissed half the electorate good-bye this election
year. That you all but called them moochers. Did you?

ROMNEY: No. I`m talking about a perspective of individuals who I`m
not likely to get to support me. I recognize that those people who are not
paying income tax are going to say, gosh, this provision that Mitt keeps
talking about, lowering income taxes, that`s not really attractive to him,
and those that are dependent upon government --

(END VIDEO CLIP)

SCHULTZ: He`s admitting flaws. First of all, many people who pay no
federal income tax already plan on voting for Mitt Romney. More on that
later in this program.

Now, according to Romney, these voters are dependent on government, so
they will never vote for a guy like him who wants to shrink government.
But what about groups Romney is courting like seniors?

(BEGIN VIDEO CLIP)

ROMNEY: Seniors are, of course, people I`m getting in large numbers.
I have great support from seniors because they`re unhappy with the fact
that President Obama`s Obamacare cuts Medicare by $716 billion.

(END VIDEO CLIP)

SCHULTZ: All right. So let`s get this straight. If you`re an Obama
supporter and you use government programs, Mitt Romney has no use for you.
But if your vote is up for grabs and you use a government program like
Medicare, Mitt Romney thinks, hey, you`re the greatest.

For those of us who have been paying attention to Mitt Romney for the
past two years, none of this is really shocking. Romney let us know many
times what he really thinks about people who use government assistance.

(BEGIN VIDEO CLIP)

ROMNEY: If you`re looking for free stuff -- if you`re looking for
free stuff you don`t have to pay for, vote for the other guy. That`s what
he`s all about, OK? That`s not -- that`s not what I`m about.

(END VIDEO CLIP)

SCHULTZ: That`s one of his favorites. Romney loves accusing people
of mooching for free stuff.

When he spoke to the NAACP in July, Romney was booed for saying he
would repeal Obama care. Later that day, he told a fund-raiser crowd, if
you want more stuff from government, tell them to go vote for the other
guy, more free stuff.

This is not just idle talk. This is what voters across America, I
think, need to comprehend. Mitt Romney does not believe Americans should
be given a leg up if they are struggling. No safety net. The proof is in
the policies that he supports.

You don`t have to look much farther than the budget plan proposed by
Romney`s running mate Paul Ryan. Sixty-two percent of proposed cuts to the
Ryan budget plan come from programs for low income people, $3.3 trillion
will be cut from Medicaid, Pell Grants, food stamps, job training and more.

If that doesn`t convince you, take a look at Romney`s tax plan.
Americans making under, I say under $30,000 a year, the moochers that, you
know, Romney is always talking about, they`re going to pay actually more in
taxes under President Romney if he gets there. Millionaires get tax cuts
by at least 6.9 percent.

Now, in the past, Romney`s said the least fortunate among us are
already taken care of by government programs.

(BEGIN VIDEO CLIP)

ROMNEY: I`m in this race because I care about Americans. I`m not
concerned about the very poor. We have a safety net there. If it needs
repair, I`ll fix it.

(END VIDEO CLIP)

SCHULTZ: He`ll fix it all right.

But if Romney and Ryan have their way, the social safety net will be
debilitated, eliminated, gone, privatized. You can count on it.

This is why Romney doesn`t care about getting the vote of the 47
percent of the country. He`s not just talking about winning an election.
He`s talking about an ideology, because he`s getting ready to let them fall
right through the safety net that this country has provided -- you know,
those compassionate conservatives that used to be around to try to sell us
their stuff about how good they are.

Earlier this evening, President Obama taped an appearance on "The Late
Show with David Letterman." The president addressed Romney`s hidden video
comments for the first time.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, COMEDIAN: Mitt Romney at a fund-raiser, I believe,
in Florida, there`s a cell phone videotaping his remarks. And he talks
about -- in very dismissive terms -- why 47 percent of the people voting
don`t matter to him.

What does that mean? Is that just -- is that what rich guys at
country clubs are talking about?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, I don`t know what
he was referring to, but I can tell you this. When I won in 2008, 47
percent of the American people voted for John McCain, they didn`t vote for
me. When what I said on election night was even though you didn`t vote for
me, I hear your voices and I`m going to work as hard as I can to be your
president.

And one of the things I`ve learned as president is you represent the
entire country, and when I meet Republicans as I`m traveling around the
country, they are hardworking family people who care deeply about this
country. And my expectation is that if you want to be president, you got
to work for everybody, not just for some. And --

(APPLAUSE)

(END VIDEO CLIP)

SCHULTZ: Ultimately, that`s what the presidential election has come
down to. Do you want a president who will work for every American or just
the most fortunate ones?

Get your cell phones out. We want to know what you think tonight.

Tonight`s question: Should Mitt Romney exercise some personal
responsibility and apologize to 47 percent of America? Text A for yes and
text B for no to 622639. Of course, you can leave a comment on our blog at
Ed.MSNBC.com. We`ll bring you the results later on in the show.

Joining me tonight is Senator Bernie Sanders, independent from
Vermont.

Senator, great to have you with us tonight.

Is Mitt Romney`s characterization of the 47 percent accurate at all?

SEN. BERNIE SANDERS (I), VERMONT: No, it`s not accurate.

And here it is, Ed, coming from a guy born to a millionaire family who
went to elite schools, who believes that the middle class starts at
$200,000, who doesn`t reveal his taxes because he -- his tax returns
because he took so many loopholes.

What really galls me is we`ve got millions of people in this country
who come from families like my own, working class families, people who have
worked hard their entire lives, working 50, 60 hours a week. Now they`re
on Medicare. Now they`re on Social Security, and they`re being lectured by
this millionaire guy that they have got to take personal responsibility and
care for their lives, being lectured by him.

And to me, Ed, this speaks toward extraordinary arrogance on the part
of Romney and his -- if I may use the term ruling class friends who
apparently think that the working people of this country who are struggling
to support their families today, some of whom will be Medicare and Social
Security, are somehow inferior human beings who need guidance, who are not
smart enough to take personal responsibility for their lives and care for
their lives.

What does this tell about his attitude to the vast majority of people?
We`re not smart enough? We don`t have enough dignity to want to work?
People in this country work harder than the people in any other
industrialized country on earth. They don`t need to be lectured by
millionaires and billionaires about the work ethic that they fulfill.

SCHULTZ: Senator, it could be 47 percent, 45 percent, could be any
kind of number. Isn`t Mitt Romney speaking to a philosophy that there are
moochers, that there are takers that earn benefits don`t count anymore and
we have to eliminate them? Isn`t this exactly what the conservative
movement really wants in the end game?

SANDERS: Well, I think it is that, Ed, and it`s something. It`s
saying, if you listen to Romney`s words that people don`t know how to take
responsibility for their own lives and care for their own lives, what we
have to show them is we`re going to cut Social Security, Medicare, Medicaid
and education and because you are too dumb or have no sense of
responsibility and you`re not prepared to work for your living. We have to
teach you how to work and we`re going to punish you. If you don`t work,
man, you`ll be in a whole lot of trouble.

But there is no question that what Romney is about is representing a
philosophy that says if you`re rich and you`re powerful, you have a right
to rule. You get it all.

But if you`re in the middle class, you`re in the working class, you`re
low income, we`re going to teach you a lesson. We`re going to cut and make
it harder for your kids to go to college. We`re going to cut your Social
Security. We`re going to cut your Medicaid. We`re going to make it harder
for you to get the nutrition that you need.

I think that is an outrageous and arrogant statement, and I hope the
American people are listening.

SCHULTZ: Certainly a lot of people in this country, Democrats and on
the left, have known this about Mitt Romney, but now it`s some pretty
severe confirmation.

Senator Bernie Sanders, great to have you with us tonight. I
appreciate your time. I wish we had more time. Thank you so much.

Remember to answer tonight`s question at the bottom of the screen and
share your thoughts on Twitter @EdShow and on Facebook. We want to know
what you think.

Coming up, the Florida fund-raiser, Mitt Romney may have given real
insight into why President Obama is likely to be re-elected. More from the
videotape.

Eugene Robinson and Bob Shrum, how does he mop it up? How does he
turn it around? And Romney`s latest move.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, more of Mitt Romney caught on tape. Mitt Romney
reveals why he thinks Barack Obama will be re-elected. How`s he going to
turn this around and mop it up?

Eugene Robinson and Bob Shrum join me next.

Later, David Cay Johnston and I will look at the 47 percent, just who
they really are.

And Romney`s comments are getting a mixed reaction from the right
wing. Well, some try to make a false equivalency to President Obama`s
caught on tape comments in 2008. We`ll have all the details.

Share your thoughts with us on Facebook and on Twitter using the
#EdShow. We`re coming right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Thanks for watching.

Mitt Romney didn`t just insult half the country in the Florida fund-
raising video, he may have provided real insight into why President Obama
has a strong chance of being re-elected. After a long question about
President Obama not keeping his promises and a lack of government
transparency, Romney explained why it`s so hard to get middle of the road
voters on his side.

(BEGIN VIDEO CLIP)

ROMNEY: We speak with voters across the country about their
perception perceptions. Those people I told you, the 5 percent or 6
percent or 7 percent that we have to bring out on our side, they all voted
for Barack Obama four years ago. So -- by the way, when you say to them,
do you think Barack Obama is a failure, they overwhelmingly say no. They
like him, but when you say, are you disappointed that his policies haven`t
worked? They say yes.

And because they voted for him, they don`t want to be told that they
were wrong, that he`s a bad guy, that he did bad things and he`s corrupt.
Those people that we have to get, they want to believe they did the right
thing, but he just wasn`t up to the task. They love the phrase that he`s
over his head.

(END VIDEO CLIP)

SCHULTZ: If President Obama wins re-election it may be because the
first part of what Romney said is correct, but the second part is wrong.

People who voted for the president four years still like him. Though
they may be disappointed, they do not believe he is in over his head.

Let`s turn to Democratic strategist Bob Shrum with us tonight. Also,
Eugene Robinson, MSNBC political analyst and associate editor and Pulitzer
Prize-winning columnist for "The Washington Post".

Gentlemen, great to have you with us.

Bob, let me ask first. How damaging is this to Romney? I mean, he
better be Mr. October if he`s going to turn it around?

BOB SHRUM, DEMOCRATIC STRATEGIST: Well, I think it`s really damaging.
There`s a thing called water cooler conversation, which is most people
don`t sit around paying attention to politics the way we do. There are
things that break through because they happen, and you meet somebody at the
water cooler at the office the next morning and you say did you see what
that guy said? And what he said was callous and it was idiotic and was
untrue.

But it was a revelation of the real Mitt Romney. He`s the guy who
likes to fire people. This is the guy who ran Bain.

If you watch and listen to him in that tape, he is so much more
comfortable sitting -- talking to those people sitting there, paying 50,000
bucks a piece and dumping on people who live a more ordinary life.

SCHULTZ: Yes. Eugene, there`s no question that Mitt Romney went on
the offensive today defending himself. But he looks incompetent. He looks
unsure of himself. How damaging is it?

EUGENE ROBINSON, WASHINGTON POST: You know, this is the second week
in a row, because after his inappropriate Libya comments, he came out and
looked unsure. He looked unsteady on his feet. He did again today.

You know, I`d be unsteady, too, if I were trying to run for president
on a platform of, you know, no more coddling the servants, which is
essentially his platform. You know, we uber mention must be tougher with
those down below and make them work harder. It`s appalling and insulting.

So I think I would be shaky, too, if that`s what I was left with.

SCHULTZ: I mean, Eugene, how does he come back and connect with the
largest voting bloc in this country, the middle class in all of this?

ROBINSON: Well, he hasn`t been able to do that to this point. And I
just -- I don`t know frankly. I mean, I really don`t know. You`re wearing
the jeans doesn`t seem to work. Not wearing the tie doesn`t seem to work.

He doesn`t have that sort of faculty, that sort of ability to connect
with people on that level. Now, he`s announced that he really doesn`t care
to do so, as a matter of fact. He wants to connect with the folks at that
fund-raiser.

SCHUTLZ: NBC news just released a brand-new poll, and the numbers are
very bad for Mitt Romney. The poll was taken before the fund-raising video
surfaced. President Obama leads by five points among likely voters.

On the economy, the president now ties Romney. On looking out for the
middle class, President Obama holds a nearly 20-point lead.

Bob, what do these numbers mean, and what`s your reaction to how the
president handled the 47 percent question from David Letterman?

SHRUM: Well, I thought the president handled the Letterman question
brilliantly. He was -- he acted like somebody who could be commander-in-
chief, who is president, who can speak for and to the whole country.

Look, Mitt Romney wishes he could etch-a-sketch this fund-raiser. In
fact, he wishes he could etch-a-sketch the whole last three weeks because
Eugene is absolutely right. Last week, he had Libya. This week, he has
this.

His campaign has become a permanent damage control machine dealing
with one crisis after another. He`s going to hope that he can do something
in the debate. I just don`t think he`s going to suddenly morph into John
F. Kennedy.

He looks awkward when he`s talking to us. The only time I`ve seen
look really, really comfortable in this whole campaign is in that tape out
of the fund-raiser.

SCHULTZ: Eugene, will he lose seniors over this?

ROBINSON: I think he`ll lose some. He won`t lose them all. But I
think he`ll lose some. I think he`ll probably lose some support across the
board. It would be very interesting to watch the tracking polls and other
polls as this kind of filters out and settles in.

This certainly didn`t do him any good.

SCHULTZ: Gentlemen, great to have you with us tonight. Bob Shrum and
Eugene Robinson here on THE ED SHOW. Thank you so much.

Up next Mitt Romney attacks the 47 percent of Americans who don`t pay
taxes. It turns out a lot of them are -- what? Republicans?

We`ll show you exactly why this could be a huge problem for Mitt
Romney. We`ve got more of Romney`s comments through his donors.

Solving the Israeli/Palestinian conflict has been a goal for
presidents from both parties. Yet, Mitt Romney says if he becomes
president, he won`t do anything to help it along. Richard Wolffe will join
me to discuss Romney`s unbelievable comments. Stay tuned.

(COMMERCIAL BREAK)

SCHULTZ: Good to have you back with us on THE ED SHOW.

Mitt Romney comments about the 47 percent of people who don`t pay
income taxes, it`s wrong on a number of levels. Now, we`ll break down the
numbers and explain why he`s insulting his strongest supporters in a
moment.

First, here`s what Romney said.

(BEGIN VIDEO CLIP)

ROMNEY: There are 47 percent people who vote for the president no
matter what. All right? There are 47 percent who are with him, who are
dependent upon government, who believe that they are victims, who believe
the government has a responsibility to care for them, who believe they`re
entitled to health care, food, housing, to you name it. That that`s an
entitlement, and the government should give it to them.

And they will vote for this president no matter what. And -- I mean,
the president starts off with 48 percent, 49 percent, 40 percent, he starts
off with a huge number. These are people who pay no income taxes.

My job is not to worry about nose people. I`ll never convince them
that they should take personal responsibility and care of their lives.
What I have to do is convince the 5 percent to 10 percent in the center
that are independents.

(END VIDEO CLIP)

SCHULTZ: Well, what you say behind closed doors is really who you
are. I`m joined tonight by David Cay Johnson, who is a Pulitzer Prize-
winning columnist and author of the book "Fine Print."

Romney was basically right about one thing; 46.4 percent of Americans
don`t pay federal income taxes. But here`s the real break down from the
Tax Policy Center: two-thirds of Romney`s 47 percent actually do pay
payroll taxes. David, the rest are elderly who make less than 20,000
dollars a year.

DAVID CAY JOHNSTON, AUTHOR, "FINE PRINT": That`s right. They are
either elderly, so they used to work and pay taxes, or they are working
very hard at jobs that pay very little money.

SCHULTZ: So who is Romney insulting here by the chart?

JOHNSTON: He`s insulting people who come from the states that, first
of all, supported McCain, by and large. He`s insulting people who worked
hard at businesses run by people like Mitt Romney, that paid very low
wages.

SCHULTZ: Here`s another way to look at these numbers. Look at the
states in red. The Tax Foundation says that in 2008 these southern states
had the highest percentage of nonpayers. David, Florida of course has a
very elderly population.

This just totally goes against the people that have supported the
Republicans, especially Romney.

JOHNSTON: Absolutely. And eight of these 10 states were McCain
states in 2008. It shows how Romney is really not sophisticated about
these things. He hasn`t thought through what he`s saying. And he`s
managed to insult people, including today I`ve talked with college
graduates who were insulted, because for various reasons like credits they
get for having gone to college. They`re not paying taxes the year after
they get out of school.

SCHULTZ: Sure. Now let`s look at how those people in the same states
voted in 2008. The Republicans rely on the elderly and working poor who
don`t pay federal income tax. David, Romney is insulting basically his
base.

JOHNSTON: Yes. And he`s not doing anything to attract people who may
not like Obama and perhaps could be won over with this at all. He is going
on the attack against these people and saying you`re not really worthy.

SCHULTZ: Now, let`s break down this. More than 10 percent of the
people Romney complained about are elderly. Seventy percent of them voted
in 2008; 53 percent picked McCain. The latest "New York Times"/CBS poll
shows that 53 percent support Romney.

David, doesn`t Romney understand that these non-tax paying people out
there are supporters that were with McCain and ought to be with him?

JOHNSTON: Well, either the Republican party depends on moochers and
the strivers, therefore, must be the ones voting for the Democrats, or
Romney just hasn`t thought this through.

SCHULTZ: There`s one more thing that we need to say about Romney`s 47
percent. Romney says those 47 percent are dependent on government
assistance and should take personal responsibility for their lives. But
the poor actually carry a heavier tax burden than the rich guys like
Romney. Correct?

JOHNSTON: That`s exactly right.

SCHULTZ: So people on the bottom rung of the economic ladder pay an
average 12 percent, and their income is, of course, in state and local
taxes. That`s where that`s going. The middle class pays 11 percent. And
the wealthiest Americans pay almost half of what the poorest Americans pay.

In other words, the poor do pay taxes and they pay, I think arguably,
an unfair share.

JOHNSTON: Absolutely. They pay very heavily. This is a really
killer chart about your state tax burden, 50 percent higher for the poorest
Americans than for the top one percent.

SCHULTZ: In economic terms, in presentation to the American people,
how bad is his campaign?

JOHNSTON: I think this is worse than McGovern`s campaign in `72,
which was a disaster from the beginning. It`s astonishing to see someone
who holds himself out as a businessman, didn`t have a plan for this
campaign, didn`t think through how to appeal to people, so that he could
take those people who feel Obama may be a good guy but isn`t doing a good
job and draw them over to him. Instead he`s alienating those people.

It`s truly astonishing. That combined with his gaffes about the
Middle East and in London has to make you wonder what kind of judgment the
man has. And after all, that`s the only test we have: what`s your judgment
as president?

SCHULTZ: If you look at all of these charts, which we have put out
there and who he has insulted, let`s look at it from Romney campaign`s
position. Oh we really didn`t mean that, but still, he`s got a lot of
explaining to do in a short period of time. David Cay, thank you for
joining us tonight. Appreciate it so much.

There`s a lot more coming up in the next half hour of THE ED SHOW.
Stay with us.

Another shocker from the Romney video. Forget leading from behind;
Mitt Romney doesn`t want to lead at all when it comes to Middle East peace.

(BEGIN VIDEO CLIP)

ROMNEY: Kick the ball down the field and hope that somehow something
will happen.

(END VIDEO CLIP)

SCHULTZ: Richard Wolffe on the other disaster from the Romney tapes.

And some righties call Mitt Romney`s 47 percent remarks arrogant and
stupid. Then there`s Rush Limbaugh.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: This is a golden opportunity.
And we know Romney has got it in him because of what he said to these
people.

(END VIDEO CLIP)

SCHULTZ: We`ll show you mow how the righties are reacting to Romney`s
disaster.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Let`s talk foreign policy.
Mitt Romney says he doesn`t believe in the president`s leadership abilities
when it comes to foreign policy. Romney and his surrogates have repeatedly
accused the president of the United States and the Obama administration of
leading from behind. As president, Romney says that he would take a
different approach to solve conflict in the Middle East. He would do
nothing.

Back in May, speaking to the same group of donors at the private
fundraiser, Romney dismissed prospects for peace between Israel and the
Palestinians.

(BEGIN VIDEO CLIP)

ROMNEY: These are problems -- these are very hard to solve. And I
look at the Palestinians not wanting to see peace anyway, for political
purposes, committed to the destruction and elimination of Israel. And
these thorny issues, and I say there`s just no way. And so what you do is
you say you -- you move things along the best way you can. You hope for
some degree of stability, but you recognize this is going to remain an
unsolved problem.

I mean, we live with that in China and Taiwan. All right, we have a
potentially volatile situation but we sort of live with it. And we kick
the ball down the field and hope that ultimately somehow something will
happen and resolve it. We don`t go to war to try and resolve it.

On the other hand, I got a call from a former secretary of state -- I
won`t mention which one it was. This individual said to me, you know, I
think there`s a prospect for a settlement between the Palestinians and the
Israelis after the Palestinian elections. I said really?

You know, his answer was yes, I think there`s some prospect. And I
didn`t delve into it.

(END VIDEO CLIP)

SCHULTZ: Joining me tonight, MSNBC political analyst Richard Wolffe,
who has spent a lot of time in his journalism career studying foreign
policy, no question about it. The White House says that Romney is offering
the wrong approach. A top Palestinian diplomat told "Bloomberg News" that
Romney shows complete ignorance of facts and realities.

But kick the ball down the field; doesn`t this fly in the face of all
of the criticism that Romney has thrown at President Obama? Unpack if for
us.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Look, I`m not a
psychologist, but I think this is what they call projecting. You say that
the other person is doing something, but that`s really what you intend. If
you believe, as I think most of us do, that American leadership in the
world is absolutely critical -- and that`s certainly what Mitt Romney has
said -- if you believe, and this is the Romney position -- this is the
Republican position -- that actually this president has been running a
feckless -- that`s their word, feckless foreign policy. He hasn`t engaged,
hasn`t shown leadership, then you should be offering, behind closed doors
and in public, this sense that America can do anything.

What he said was, you just hope that somewhere, something will change.
That`s not the American way. If it had been, Bill Clinton wouldn`t have
intervened in Northern Ireland, which seemed just as intractable as the
Israeli/Palestinian conflict. That was resolved. And that peace has been
enduring, in spite of many hiccups along the way.

Jimmy Carter, the man they disparage day in and day out, would never
have got together for the Camp David Accords. Those elements of American
leadership have led to real changes in the world. And I don`t understand
why Mitt Romney would say one thing in public and another thing in private.

SCHULTZ: Every president, both parties, has had a commitment to
resolving the Israeli/Palestinian conflict in the Middle East. The
Israelis, I will take the liberty to say that they have been very strong on
all of the American presidents demanding support, and full-throated
support, and unwavering.

Doesn`t this make the Israelis think a little bit about what Mitt
Romney is all about. Mr. Netanyahu was on a number of programs over the
weekend here in the United States and he says that he doesn`t want to get
roped into this election. Wait a minute, if you listen to Mitt Romney,
this really puts Israel on the map as far as having to take a position
about who they are going to support.

WOLFFE: The Israeli prime minister is a personal friend of Mitt
Romney. He certainly should intervene and say we don`t want to be some
side thought here. Now there are significant parts of Israeli political
opinion that think that the Palestinian problem is unresolvable. That`s
one aspect of it.

But actually, it doesn`t help Israel to be isolated like this. It
doesn`t help Israel to have American leaders disengaged. And you just have
to go back to the Bush administration. I suspect we all know who these
secretary of states he`s been talking to are. They are Republicans. The
last Republican secretary of state, Condoleezza Rice, believed that peace
was within reach. And President Bush needed to do more. They could have
achieved more to achieve a real peace there. Whether or not that`s real,
engagement makes a difference.

SCHULTZ: OK. Now two months after the fundraiser, Romney visited
Israel and told an Israeli newspaper that he was hopeful for a peaceful
resolution. He says, "I believe in a two-state solution, which suggests
that there will be two states, including a Jewish state." That`s not what
he told his donors. Are we to believe that or is this lip service?

WOLFFE: Well, he doesn`t give any time frame. So maybe he believes
that some other president will achieve a two state solution. But when you
put that on that same trip alongside what he said about the, quote unquote,
cultural problems the Palestinians have, I think you`re looking at a very
bleak and frankly un-American view of what America can achieve with
diplomacy.

At the end of the Bush term, I was speaking to the European diplomats
who were deeply engaged with the Middle East. They said there`s only one
way, one way for the Israeli/Palestinian problem to be resolved. That is
with presidential babysitting, presidential engagement, in America, hand
holding both sides, as President Clinton tried to do at the end of his
term, and as President Carter successfully did.

Remember, Egypt wasn`t just another Arab country that faced off
against Israel. It was its most formidable enemy. An American president
changed that. That`s what you can do with engagement.

SCHULTZ: Here`s what former Bush Secretary of State Richard Armitage
said -- he had to say about Romney`s comments, "it`s difficult to criticize
the president in the Middle East policy on one hand and then suggest, on
the other hand, that the best you could do is kick the ball down the
street."

At what point does the GOP abandon this guy completely? You have
seasoned senators who are on the Senate Armed Services Committee and
Foreign Relations as well, that they couldn`t warm up to this comment.
They know it`s not feasible.

WOLFFE: Right. And the person you really want to hear from right now
is former Secretary of State, former General Colin Powell. Obviously, he
endorsed President Obama last time around. He hasn`t said what he would do
this time around.

But if there`s a Republican secretary of state who believed peace is
in reach if you have American engagement, it would be him.

SCHULTZ: Richard Wolffe, great to have you with us. Thanks so much
for your time tonight.

WOLFFE: Thank you.

SCHULTZ: Coming up, Rush Limbaugh is jumping for joy over Mitt
Romney`s 47 percent remarks. Other Republicans, well, they are not so
happy. "Newsweek`s" Michelle Goldberg will weigh in. Stay with us. I`ve
got commentary as well. We`re right back.

(COMMERCIAL BREAK)

SCHULTZ: We are back. And thanks for staying with us tonight. We
have breaking news now. The Chicago Teachers strike is over. The first
strike in some 25 years is over. Union delegates have agreed to suspend
the strike and allow Chicago`s 25,000 teachers to vote on the city`s
contract offer.

Mayor Rahm Emanuel says the union agreed to extend the school day.
Union leaders say it`s not a perfect contract. The teachers have been on
strike since last week. Students are set to go back to school tomorrow.

SCHULTZ: Tonight in our survey, I asked should Mitt Romney exercise
some personal responsibility and apologize to 47 percent of America?
Ninety five percent of you say yes; five percent of you say no.

Coming up, Romney`s video controversy is causing a riff in the
Republican party. It`s also putting Republicans in down ballot Senate
races across the country in a tough spot. "Newsweek`s" Michelle Goldberg
will join the conversation, next.

(COMMERCIAL BREAK)

SCHULTZ: In the big finish tonight, is there a big riff in the
Republican party over Mitt Romney`s video controversy? I`d say so. Some
righties are being critical of Romney and some are asking where the real
Mitt Romney has been all along?

First, let`s start with the critics. Columnist David Brooks called
his op-ed "Thurston Howell Romney." He said, quote, "Romney`s comment is a
country club fantasy. It`s what self-satisfied millionaires say to each
other. It reinforces every negative view people have about Romney."

Bill Kristol called Romney`s remarks "arrogant and stupid." He wrote,
"it remains important for the country that Romney wins in November unless
he chooses to step down and we can get the Ryan/Rubio ticket we deserve."

On the flip side, you have the Romney cheerleading squad. Who is
leading the way? Rush Limbaugh. He`s so excited, he`s come down with a
case of gold fever.

(BEGIN VIDEO CLIP)

LIMBAUGH: This is such a golden -- this could have been -- could be
the opportunity for Romney and for that campaign to finally take the gloves
off and take the fear off and just start explaining conservatism.

This is a golden opportunity and we know Romney has got it in him
because of what he said to these people.

(END VIDEO CLIP)

SCHULTZ: Eric Erickson is also on board. He wrote on his blog, "the
Romney campaign should double down on what he said. They should own it."

Meanwhile, this riff is causing headaches for Republican Senate
candidates in down ballot races across the country. Republican Senator
from Massachusetts Scott Brown is in a tight race against Elizabeth Warren.
He said today, "that`s not the way I view the world."

There`s also a close Senate race between Republican Linda McMahon and
Congressman Chris Murphy in Connecticut. McMahon released a statement
saying, "I disagree with Governor Romney`s insinuation that 47 percent of
Americans believe that they are victims."

Congressman Murphy`s campaign objects to McMahon`s statement. They
were quick to post this video earlier today.

(BEGIN VIDEO CLIP)

LINDA MCMAHON (R), CANDIDATE FOR SENATE: I`d like to see everyone pay
their fair share; 47 percent of the people today don`t pay any taxes.

(END VIDEO CLIP)

SCHULTZ: For more, let`s turn to Michelle Goldberg, senior
contributing writer for "Newsweek" and "the Daily Beast." Michelle, great
to have you with us tonight.

This has created an unexpected riff. Who is right? Who is wrong?
Who has the potential upside in all of this?

MICHELLE GOLDBERG, "NEWSWEEK": I think it`s pretty obvious that Rush
Limbaugh`s incentives are different from the incentives of Republicans who
actually want to win elections. Right? I mean, he just has to speak to
the base in the most inflamed segment of the party. He actually does as
well financially either way, whether Republicans win or lose, probably a
little bit better when they lose, because if there is one party that loves
to play the victim, I think we all know who it is.

But what`s interesting is that Romney clearly feels like he has to
listen to the Rush Limbaughs and the Eric Ericksons. You know, that`s the
advice he seems to be taking.

SCHULTZ: I think Limbaugh`s right. I think he`s correct on this. I
think that this is really a golden opportunity for Romney to make a last-
ditch run. He had a bad spring, a bad summer, not a very good convention
at all. And now he`s had a rough run out of the convention. If he`s going
to make a turn to the conservative base, this gives him an opportunity to
do that.

We all know that the right wing is after the new deal. They want to
get rid of all earned benefits, all entitlements, as they call them. Why
wouldn`t this be seen as an opportunity by the Romney camp?

GOLDBERG: Partly because he put a number to it, right. It`s one
thing to talk about moochers and parasites and those other people. But
when you identify that as half the country, I think that that`s basically
their message. But that`s not a message that anybody with any interest in
winning an election wants to make publicly.

SCHULTZ: Scott Brown obviously in a tight race with Elizabeth Warren.
Politically calculated, that`s not how he views the world. That`s what his
comment was. How many other Republicans out there do you think that are
very concerned about this lingering 47 percent effect story and this
undercover tape that has been released and revealed? It`s just a treasure-
trove of anti-Romney stuff.

GOLDBERG: Right. And especially I think it`s worth pointing out, as
I`m sure somebody`s already pointed on your show, that in many of the
states where Republicans dominate, that`s where, you know, you have kind of
a lot of these 47 percent.

SCHULTZ: The southern states.

GOLDBERG: Right. So in as much as Democratic candidates can make
clear that when he says 47 percent, he`s talking about you, it seems like
it would be immensely damaging.

SCHULTZ: But it gives the Democrats an opportunity on the stump to
use this, that this is who they really are. They ought to be able to peel
away at seniors. They ought to be able to peel away at anyone who has ever
had any kind of government assistance whatsoever. What about people who
have been unemployed, who have gotten an unemployment check in tough times
and bounced back into the economy? There`s a wide array of people that
Romney has --

GOLDBERG: Has written off.

SCHULTZ: Written off, alienated. This is -- it`s his own voter
suppression program right now.

GOLDBERG: I mean, that`s why I think, you know, often Republicans say
things that leave a lot of us shaking our heads or kind of clucking or
expressing outrage. I think this has genuinely shocked a lot of people.

SCHULTZ: Do you think this is a two day story or do you think that
this lingers?

GOLDBERG: I think it lingers in part because it`s not just a gaffe.
It`s not just a slip of the tongue. When Romney said earlier on that he
didn`t care about poor people, you remember that, people could say that he
was just misspeaking. When he said that inequality -- that people who talk
about inequality are just envious of other success and that inequality
should be spoken about in quiet rooms, again, you might think that he was -
- you know, that he was just speaking extemporaneously. But he`s now kind
of made it incredibly clear that this is who he is.

SCHULTZ: It`s a clear admission that this nominee of the Republicans
has had an innate ability to alienate himself to the middle class, and has
not been able to communicate any kind of a plan of how he`s going to make
America better for them, or even give them a road map to a better country
and to a better life. He`s so disconnected with the middle class, it is
amazing.

Michelle Goldberg, thanks for your time tonight. That`s THE ED SHOW.
I`m Ed Schultz. "THE RACHEL MADDOW SHOW" starts right now. Good evening,
Rachel.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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