The Ed Show for Tuesday, November 27th, 2012

THE ED SHOW with ED SCHULTZ
November 27, 2012

Guests: Chris Van Hollen, Jan Schakowsky, James Hoffa, Steve Benen, David Cay Johnston, Joan Walsh

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

President Obama is set to launch an offensive to save 98 percent of
Americans from a Republican tax increase.

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

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We should not hold the
middle class hostage while we debate tax cuts for the wealthy. We should
at least do what we agree on and that`s to keep middle class taxes low.

SCHULTZ (voice-over): The president is taking into the people on
preserving tax cuts for the middle class.

Tonight, Congressman Chris Van Hollen and Congresswoman Jan Schakowsky
on the latest on the fiscal cliff.

The report out of today`s labor meeting with the president looks very
good for progressives. We`ll get the scoop from labor leader James Hoffa
of the Teamsters.

Plus, breaking news: Republicans running the Benghazi witch hunt
remain disturbed and troubled.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I`m more disturbed and
significantly troubled.

SEN. KELLY AYOTTE (R), NEW HAMPSHIRE: I`m more troubled.

SCHULTZ: Joan Walsh on today`s big meeting with Susan Rice.

And yesterday Ricks rolled FOX News.

TOM RICKS, AUTHOR: I think that the emphasis on Benghazi has been
extremely political probably because FOX was operating as a wing of the
Republican Party.

SCHULTZ: Today, FOX News strikes back.

(END VIDEOTAPE)

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

The White House is keeping the message simple and keeping Republicans
in a box. President Obama is hitting the road to push the extension of tax
cuts for income, for folks under $250,000 a year. The president will kick
off his tour in southeastern Pennsylvania on Friday.

Today, the president met with small business owners at the White House
and tomorrow, he plans to meet with a group of middle-class families.

Republicans are going to be countering with their own events, led by
the Republican B-team. House majority whip Kevin McCarthy is holding a
meeting with small business owners next week. He`s a week late.

The small business owners in the meeting with the president today were
on top of the game, top of the issues and understood the solution to the
deficit plan.

(BEGIN VIDEO CLIP)

LEWIS PRINCE, OWNER, VINTAGE VINYL: What grows jobs in America are
consumers spending money. And the average person needs that $3,000 or
$2,000 a year in his pocket to help drive the economy.

Saying that tax breaks for the rich drive consumers lower down to
spend is like saying you could jump-start you -- you could start your car
by pouring gasoline on the hood. There`s no proof, there`s no factual data
to support it. It`s completely a sham to say that.

(END VIDEO CLIP)

SCHULTZ: And he`s a business owner. We need more members of Congress
to sound like that, don`t we?

If the president is trying to achieve solidarity on raising the top
tax rate, these are the voices that can come through for them with that
message in a big way. An owner of an automobile supply company in Michigan
said she supports the president`s deficit reduction plan even though if it
means her own personal rates will go up.

(BEGIN VIDEO CLIP)

ANDRA RUSH, OWNER, RUSH TRUCKING: Yes, I would have higher tax rates,
but more importantly and more crucial, the middle class would be spending
about $2,000 or $3,000 more dollars.

(END VIDEO CLIP)

SCHULTZ: Senate Majority Leader Harry Reid kept the focus on the
president`s winning campaign message of letting the Bush tax cuts expire on
incomes over $250,000 a year.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: The people who have done so
well during this difficult time we`ve had with the economy, the richest of
the rich are going to have to pay a little bit more to solve the financial
problems we have in this country.

(END VIDEO CLIP)

SCHULTZ: This is what the campaign has been all about. The White
House and congressional Democrats are making sure the message is simple,
consistent, to the point and easy to consume.

Recent comments from the White House adviser David Plouffe, as well as
Democratic lawmakers on Sunday talk shows left the president`s strategy
open to interpretation. Progressives were concerned the social safety net
programs were on the chopping block.

But today, Democrats were unified in their approach. They are all on
the same page. "The New York Times" reporting the president was reluctant
to agree to a deal cutting Medicare and Medicaid benefits. In talks with
congressional leaders, President Obama is seeking $1.6 trillion in
additional revenue over 10 years and $340 billion in health care savings.
"The Times" says the deal would not affect benefits.

And, folks, that is the keyword, "benefits". The president and some
Democrats in the Congress are willing to squeeze savings from Medicare by
trimming payments to drug companies, hospitals and other health care
providers. They are generally ruling out structural changes that would
increase costs for a typical beneficiary.

Now, this is really what it`s all about -- the money. Who is going to
get it? Senator Dick Durbin, a little more specific today. In prepared
remarks released by his office, he said, "Progressives," that would be you
and me, "should be willing to talk about ways to ensure the long-term
viability of Medicare and Medicaid but those conversations should not be
part of a plan to avert the fiscal cliff."

Democrats are prepared to discuss reforms to Medicare and Medicaid,
but not as a part of the deficit reduction plan. Not right now.

FOX News tried to get budget committee chair member, Congressman Chris
Van Hollen to agree to changes to the eligibility age for Medicare. Van
Hollen stood firm.

(BEGIN VIDEO CLIP)

MARTHA MACCALLUM, FOX NEWS: If you prolong the program and you make
the age later, people are living longer, isn`t that age sort of outmoded
and isn`t that a good thing to address long term insurance of --

REP. CHRIS VAN HOLLEN (D), MARYLAND: There are a lot better ways to
have doing it.

MACCALLUM: So, that`s a no, I`m hearing. You`re not willing to
change the age? That`s a no?

VAN HOLLEN: No, because there are much better ways of dealing with
Medicare costs.

(END VIDEO CLIP)

SCHULTZ: It`s just so heart warming that somebody on FOX News thinks
I`m going to live a little bit longer. Social Security, by the way, is off
the table. White House press secretary Jay Carney dismissed any deal
involving changes to Social Security, saying that it is not, it is not the
driver of the deficit.

Senator Bernie Sanders of Vermont applauded the White House and that
commitment. "This is a step in the right direction for more than 55
million Americans who have earned Social Security benefits today and every
working American who will receive Social Security benefits in the future."

Republicans know they are pretty much boxed in on this, especially
with the public. House Speaker John Boehner, he`s running out of options.
According to "Politico", he told President Obama over the holidays he could
hold the debt ceiling hostage in order to get a deal the Republicans like.
Boehner said to the president "There`s a price for everything."

Now, that is exactly the attitude that has gotten the Republicans into
trouble with the American people -- our way or the highway.

Senator Dick Durbin was quick to shoot down the speaker`s threat.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), ILLINOIS: We`re not going to find ourselves
with some big party celebrating in February and turn around in March and
have another doomsday scenario with the debt ceiling. We`ve got to get
this done as a package and I think we should.

(END VIDEO CLIP)

SCHULTZ: Interpretation, we might like the deal? Republicans need to
start coming around to reality.

The Bush tax cuts for the wealthy, going to be gone. Entitlement
reform can wait. It`s not that the Democrats don`t want to talk about it,
but it isn`t going to happen now during a budget conversation this year --
maybe next year.

Right now, the goal is tax cuts for the middle class. If there was
any kind of mistake in part of the Democrats not being on the same page,
they fixed that today. You see, the bill to pass the tax cuts is already
on the table and being presented. The president is basically daring the
Republicans to reject it.

I think he`s giving the Republicans political cover. They are going
to be able to go home and say, hey, you know, I voted for the tax cut.
Don`t blame me.

But they want to protect the wealthy, and that`s the key.

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

Tonight`s question, will Republicans say no to tax cuts just to spite
President Obama?

Text A for yes, text B for no to 622639. And our blog is there for
you at Ed.MSNBC.com. We`ll bring you the results later on in the show.

Joining me tonight, Congressman Chris Van Hollen of Maryland, who sits
on that Budget Committee.

Congressman, good to have you with us.

VAN HOLLEN: Ed, always good to be with you.

SCHULTZ: I guess the interpretation here with all of the news
packaging put together is that the Democrats want a tax deal now and you`d
be happy with that. Do the other stuff later. Where are we?

VAN HOLLEN: Well, that`s exactly right. The president was crystal
clear in this campaign. This was not some side issue. This was central to
the debate.

And he said to the Republicans in Congress -- look, pass the middle
class tax cuts right now. Don`t hold the middle class hostage to try to
get another round of extra tax breaks for higher-income individuals.

After all, Ed, I think everyone needs to recognize that the president
has proposed that everybody -- everybody -- in the country gets continued
tax relief on the first $250,000 of income they earn. What the president
has said is let`s do that right now.

What Republicans are saying is uh-uh. Nobody gets tax relief on the
first $250,000 until folks with income higher get a bonus tax break on the
amount they earn above $250,000. That`s the Republican position.

SCHULTZ: Yes.

All right. Can a deal be done without affecting the social program
benefits for millions of Americans? I mean, you know where the Republicans
are going to be. They want the entitlements on the table and they want
them there now. Where does that take us?

VAN HOLLEN: Well, Ed, what we have always said with respect to
Medicare, for example, is that the best approach is to reduce the overall
costs of health care in that system, which is why the Affordable Care Act
ended up changing the way we reimbursed hospitals. So we don`t simply pay
based on the volume of care people get. We pay them now more on the value
of care they provide.

That`s the best way to deal with health care. That`s not just a
problem in Medicare. We have rising health care costs in the rest of the
system. The Affordable Care Act will begin to bring those down. That`s
the way to deal with these rising costs.

SCHULTZ: Yes.

VAN HOLLEN: The Republican answer is not to reduce the cost, but
simply to transfer rising health care costs on to the backs of seniors.
That`s what their voucher plan would do. That`s what their other proposals
would do.

Instead of containing costs, they transfer rising health care costs on
to seniors whose median income is under $22,000.

SCHULTZ: So --

VAN HOLLEN: So, they`re insisting on another round of tax breaks for
very wealthy individuals and saying, let`s put the burden on seniors on
Medicare with median incomes of $22,000 and under.

SCHULTZ: So what happens to the automatic cuts to Medicare if we go
over the cliff? Don`t get a deal done, January 1st, now where are we?

VAN HOLLEN: Well, under the sequester provision, there are some
across-the-board cuts to some of the Medicare providers.

SCHULTZ: What about benefits?

VAN HOLLEN: No, it does not touch Medicare beneficiaries
specifically.

SCHULTZ: OK. So you could go over the cliff and still be in good
shape as far as campaign promises and the mission here?

VAN HOLLEN: Well, as you know, we want to avoid going over the cliff
because you have the across-the-board cuts in other areas. So the
president is absolutely right. We want to replace the sequester with a
much more sensible, long-term approach.

But if Republicans continue to refuse to provide tax relief to 98
percent of the people, in fact, to 100 percent based on the first $250,000,
if they insist on driving us over the cliff, then the American people are
going to be left scratching their heads.

And it will become crystal clear, Ed -- just think about this.
January 1, January 2, January 3, the president goes around the country or
on national television explaining that the reason people`s tax cuts are at
risk is because Republicans are holding out for this extra bonus tax break
for folks at the top.

SCHULTZ: Yes.

VAN HOLLEN: I mean, that`s just not sustainable.

SCHULTZ: The risk is you would run into another recession of if all
the tax cuts were to expire and nothing is done about it. That`s the fear.

Congressman Chris Van Hollen --

VAN HOLLEN: That`s right. That`s why we want to avoid.

SCHULTZ: -- great to have you with us tonight. Thanks so much.

VAN HOLLEN: Good to be with you.

SCHULTZ: Now let`s turn to Congresswoman Jan Schakowsky of Illinois.

Congresswoman, always a pleasure to have you with us.

REP. JAN SCHAKOWSKY (D), ILLINOIS: Thank you, Ed.

SCHULTZ: Is the Progressive Caucus satisfied with the way the debt
deal is being pushed by Democrats in the White House right now?

SCHAKOWSKY: Well, here`s what we think -- that the framing is not
about the base of the Republican Party or the base of the Democratic Party.
It`s really about the 99 percent versus the 1 percent. That it`s not a
matter of widely spreading the debt fix. It`s about fairly spreading the
debt fix.

And for the Republicans, even to hold out for a minute on continuing
tax breaks for the wealthiest Americans is absolutely outrageous and, in
fact, the entitlement cuts -- I mean, are they saying that the United
States of America is poorer today than we were 50 years ago when Medicare
and Medicaid went into effect or 70 years ago with Social Security? We`re
not.

SCHULTZ: And I think that`s a key point. How nervous are
progressives in Congress, in the House especially, that the big three will
be on the table. Now, Social Security is off the table. They made that
clear. But if the Republicans were to show up with a lot of revenue, do
you think you`d be able to still keep it off the table, Medicare, in this
session?

SCHAKOWSKY: I`ll tell you what, the Democrats will risk not only the
base of their party, but the majority of our party, the majority of
Americans. The majority of Americans are very clear about Social Security
and Medicare. This very idea of raising the age, you know, the people
proposing it, the CEOs, the Fix the Debt group -- do you know each one of
them has an average of $9 million in their retirement fund? You know?

SCHULTZ: Yes, they are totally disconnected with the American workers
and the middle class of this country.

SCHAKOWSKY: And the Congress is in danger of being out of touch with
the American people if we cut or raise the age or cut benefits for the
entitlement programs.

SCHULTZ: So the final point here, are you confident that the White
House will hold the line? That they will be able to get what they want and
not allow Medicare, Medicaid to be chipped away at the way the Republicans
really want to?

SCHAKOWSKY: Well, the way they want to is bad. But I agree with
Chris Van Hollen. We can make Medicare more efficient, cut some costs from
the Medicare program, and make it work better. But not cut the benefits,
particularly since employers have ended guaranteed health care for their
employees and certainly for their retirees. We cannot afford to do that.

SCHULTZ: OK.

SCHAKOWSKY: We can`t afford to do that.

SCHULTZ: Congresswoman Jan Schakowsky -- thank you for joining us
tonight.

SCHAKOWSKY: Thank you.

SCHULTZ: Appreciate it.

SCHAKOWSKY: Thanks, Ed.

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

Coming up, labor is ready and able to back up President Obama`s
position on the fiscal cliff negotiations, as long as he keeps looking out
for the middle class. Teamsters president James Hoffa, next.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Coming up, labor leaders and White House officials met to
discuss the fiscal cliff. We`ll have the details next.

Then, Senators John McCain and Lindsey Graham say they have even more
questions after U.N. Ambassador Susan Rice tries to clear the air on
Benghazi.

And Black Friday shoppers bust another Republican myth about this
Obama economy. David Cay Johnston will set the record straight.

Share your thoughts with us on Facebook and Twitter using #EdShow.

We`re right back.

(COMMERCIAL BREAK)

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

President Obama can and should rely on labor to bolster his position
in the fiscal cliff negotiations. Labor is a major ally in protecting the
middle class.

Today, senior White House officials met privately with representatives
of labor and other progressive groups. And attendees of the meeting say
they were encouraged.

One attendee said, "They expect taxes to go up on the wealthy and to
protect Medicare and Medicaid benefits. They feel confident they don`t
have to compromise."

Another attendee said the White House did not want to go over the
fiscal cliff but would do so if necessary. "Would they do it if it`s
between that and compromise on their core principles, I was left with the
impression they would."

White House officials also reportedly said they will insist
Republicans deal with the debt ceiling now as part of the fiscal cliff
negotiations and not later.

Also today, AFL-CIO local leaders from 33 states are putting pressure
on congressional lawmakers to let the Bush tax cuts expire for the wealthy
and to keep Social Security off the table.

Let`s turn to James Hoffa, general president of International
Brotherhood of Teamsters.

Mr. Hoffa, always a pleasure. Good to have you with us.

JAMES HOFFA, PRESIDENT, INTERNATIONAL BROTHERHOOD OF TEAMSTERS: It`s
a pleasure, Ed.

SCHULTZ: Sometimes when you get politicians and supporters and
voters, everybody, it`s like hurting cats, so to speak. Everybody goes in
their own direction and they all want their own thing.

How do you feel right now about the unity of where all this is going
for the Democrats? What`s your understanding of how the White House
meeting went today?

HOFFA: Right now, people are saying, we have to stand tall. We had
an election. These were the issues in the election. And what organized
labor is doing is urging this administration to stand tall. That was the
message that was delivered today. We won and these were the issues.

Remember, they wanted to send you a voucher for your Medicare. They
want to reform everything basically take it away. We won the election.
And now, we have to stand tall to make sure we protect the safety net of
Medicare, Social Security, and Medicaid.

This is what it`s all about. And we should stand tall and if we go
over the fiscal cliff, let`s do it, because there`s no sense kicking the
can down the line. And what they are doing is trying to hold the 98
percent hostage for the 2 percent who aren`t paying their fair share.

SCHULTZ: Yes.

HOFFA: Now, every American realizes the rich should pay more money.
I`ve talked to many Republicans that believe that. And that`s the message
we have to deliver.

So, if they are playing that game, it`s a losing hand and we`re on the
right side of this.

I think we should go all the way and say this is what it is. Let`s
have reform. Let`s make sure we keep tax cuts for 98 percent of the
people. But the 2 percent have to pay their fair share.

SCHULTZ: But, Mr. Hoffa, if we go off the fiscal cliff, you`re
prepared to do that. That would hurt a lot of your members. Are your
members, do you think middle class Americans are prepared to go down that
road and bare the brunt of a tax increase just because Republicans are
stubborn?

HOFFA: Well, no one wants to see that happen, but guess what? This
is something that`s not going away. They have done this for the last two
years. They have held hostage every issue from fixing the roads, the FAA
reauthorization, unemployment benefits, we can`t keep letting them hold us
hostage every time we want to do something that`s good for the country.

And I think, yes, it would be very damaging, but I don`t think it
would last very long because the pressure on the Republicans would be so
strong that they`re going to have to do the right thing. They`re not going
to sacrifice their future for the 2 percent and basically hurt the 98
percent of the people that would keep the basic changes that they have.

SCHULTZ: So you`re saying political Russian roulette, bring it on.
You think the Democrats are in a solid position now and that will hold with
the American people. That`s interesting.

Now, I also want to bring up this. Here`s what the CEO of Goldman
Sachs said about entitlements. Here it is.

(BEGIN VIDEO CLIP)

LLOYD BLANKFEIN, CEO, GOLDMAN SACHS: You`re going to have to
undoubtedly do something to lower people`s expectations. The entitlements
and what people think they are going to get because they are not going to
get it. Social Security wasn`t devised to be a system that supported you
for a 30-year retirement after a 25-year career.

So, there will be certain things that -- you know, the retirement age
has to be changed. Maybe some of the benefits have to be affected, maybe
some of the inflation adjustments have to be revised.

But in general, entitlements have to be slowed down and contained.

(END VIDEO CLIP)

SCHULTZ: We got to point out -- the average worker gets 16 years of
Social Security benefits.

What`s your response to that mentality and that misinformation he`s
throwing out?

HOFFA: Well, it`s so outrageous. Here`s a guy that`s a billionaire.
And he`s telling people that go out and work every day, work 40, 50 years
and try and get some benefits for a short period of time that they
shouldn`t get it? They paid into the system. It`s so wrong and so wrong
headed.

It`s funny that the rich people really resent basically the average
American out there, the guy that works every day. They resent him getting
anything from the government, while they are the ones getting the TARP,
getting all the benefits that the government gets.

SCHULTZ: Yes.

HOFFA: They are the ones that are billionaires. But they resent the
average worker, even getting Social Security. It`s really an odd
mentality. And it`s wrong. And it just shows you how selfish they are.

SCHULTZ: If that comment by that CEO doesn`t unify Democrats, I don`t
e know what will.

Mr. Hoffa, good to have you with us tonight. Thanks so much.

HOFFA: Thank you.

SCHULTZ: John McCain continues his attack on Susan Rice even after
she met with him today about Benghazi. Where`s this all going? Joan Walsh
weighs in.

Then, the fight over the filibuster. This has been quite a discussion
on liberal talk radio. A small rule change sparks a big debate over the
future of the United States Senate. What`s at stake? That`s next.

Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: And we are back.

Susan Rice heads to Capitol Hill to clear the air over Benghazi, but
Republicans won`t let up. John McCain is continuing his crusade against
the U.N. ambassador who is thought to be the president`s top choice to
replace Hillary Clinton as secretary of state. Rice volunteered to meet
with her critics and they still aren`t satisfied.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: We are significantly troubled by many
of the answers that we got and some that we didn`t get.

GRAHAM: Bottom line, I`m more disturbed now than I was before.

(END VIDEO CLIP)

SCHULTZ: (AUDIO GAP) acknowledge today that she was wrong about a key
detail. There was no protest in Benghazi, but Rice based her statement on
the intelligence provided to her by the CIA.

Today, Rice was accompanied by acting CIA Director Mike Morell.

But that didn`t stop McCain and others from publicly lashing out
against the ambassador. And now, Graham and Ayotte say they would block
her nomination.

Meanwhile, McCain`s old buddy, Joe Lieberman, also met with Rice
today. He sees no reason why she shouldn`t be nominated. But Lieberman is
leaving the Senate at the end of the year.

The president has indicated that he`s willing to fight for Rice. And
so are Senate Democrats.

One Democratic Senate aid tells NBC News, "People are happy to fight
for her. She`s obviously qualified. No one on our side thinks there`s any
substance whatsoever to the Republican criticisms."

I`m joined tonight by Joan Walsh, editor at large at Salon.com, and
author of the book "What`s the Matter with White People?" Tonight, it
would be -- what`s the matter with John McCain and his friends? How
fitting.

JOAN WALSH, SALON.COM: Yes.

SCHULTZ: It just seems like she`s walked into a political trap here.
They made it a political trap after she was the one that wanted to set up
and explain things. What do you make of it?

WALSH: She does them the courtesy of going to see them. She
absolutely didn`t have to do that. Nothing compelled her to do that. But
she thought it would make things better. She would show them some respect
and instead she comes out and she gets disrespected. I mean the only thing
-- according -- what it sounded like from McCain and Lindsey Graham, the
only thing that would have made them happy was if she had come out that day
and she divulged classified information. They are more interested in
getting to the bottom of what she said on a Sunday show -- on Sunday shows
than they are to what actually happened in Benghazi.

SCHULTZ: Where is the intel committee? Why aren`t they calling for
more hearings? If John McCain meets with her and so does Lindsey Graham,
and they say that there are many answers, just not one on report from the
CIA, but many answers. I mean, that has my curiosity up. So, what does
McCain want from Susan Rice?

WALSH: I think he wants to publicly humiliate her and to publicly
humiliate Barack Obama. There is no way around it. There is -- if you
have a problem with what the story was about what happened in Benghazi and
if there was -- I`m not saying there was a coverup, but if there was
anything they were doing , it wasn`t about politics, it was about not
wanting all the information about what the CIA was doing in Benghazi to
come out. That was not her decision. And if you have a problem with
either the policy or the story about the policy, go to David Petraeus. Go
to Mike Morrell. Those are the people who should be answering questions
about why that information -- what they were doing there.

SCHULTZ: It`s interesting that -- they didn`t mention Morrell.

WALSH: Yes.

SCHULTZ: They mentioned Susan Rice.

WALSH: What is he?

SCHULTZ: I mean, he`s been around the CIA. He`s now the acting
director. I mean he was there, but all of a sudden, that`s the U.N.
ambassador`s problem ...

WALSH: He`s arm candy.

SCHULTZ: And she didn`t -- she didn`t put together the dossier that
was going to be presented. All right. This seems to really have united
the Democrats. Is this -- if she is nominated to the secretary of state`s
position to follow Hillary Clinton, is this a fight worth fighting?

WALSH: Oh, absolutely. It has to be fought. If that`s what the
president wants, she`s eminently qualified. She`s very intelligent. She`s
been a great U.N. ambassador. There`s no reason not to fight for her.
And, you know, the theme of your whole show is Democrats are showing some
backbone.

SCHULTZ: Yeah.

WALSH: And I think this is another thing. He cannot -- his plans
cannot be hijacked by the man he defeated in 2008, John McCain.

SCHULTZ: Sure.

WALSH: This is too important.

SCHULTZ: To show you how desperate John McCain is, here he is earlier
comparing Benghazi to the bin Laden raid?

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R ), ARIZONA: We knew within hours all the details
when we got bin Laden in the raid there. Every bit, one of them. They are
making a movie out of it. Now, here we are, ten weeks later, and finally
our ambassador of the United Nations who appeared on every national Sunday
show has now said that she gave false information concerning how this
tragedy happened.

(END VIDEO CLIP)

SCHULTZ: We should point out the bin Laden raid was a planned
operation.

WALSH: And it was ours.

SCHULTZ: How do they compare the two?

WALSH: They don`t. I mean this is why he`s sounding more and more
deranged. That is a crazy thing to say. That was our operation. We
planned it. Of course, we could answer questions. And even then they got
some details wrong, as it turned out. But this is an attack on us and it`s
complicated by, I think, some discomfort about knowing all the details
about what was going on there.

SCHULTZ: And finally, is Susan Rice in an untenable position? It`s
unusual for an ambassador to come out and defend his or herself. What is
her -- she`s just got to be cool and stay away from the interviews and just
go business as usual?

WALSH: I think she -- I mean she doesn`t ...

SCHULTZ: I mean when do you start defending yourself against these
crazy?

WALSH: Well, you know, she did defend herself. And then -- and she
made a statement last week and then she did go meet with them. So she`s
done what she can do. I do think at this point, she should go about her
business, she should answer questions about other things ...

SCHULTZ: Yes.

WALSH: But she should let other people speak up for her. Because
there are plenty of people willing and ready to do it.

SCHULTZ: Thank you, Joan Walsh for coming in. I appreciate it.

There`s a lot more coming up in the next half hour of "The Ed Show."
Stay right with us.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, ( D), NEVADA: Americans believe Congress is broken.
Once again, the only ones who disagree are Mitch McConnell and Republicans
in Congress.

SCHULTZ: Harry Reid moves towards the nuclear option to stop the
Republican obstruction in the Senate. Steve Benen joins me next on the
latest on the filibuster showdown.

TOM RICKS, AUTHOR: I think that the emphasis on Benghazi has been
extremely political. Probably, because Fox is operating as a wing of the
Republican Party.

SCHULTZ: First, Thomas Ricks rolled Fox News. Today Fox News
responds by trying to smear Thomas Ricks.

And the right wing bubble on the economy bursts again.

REP. JOHN BOEHNER (R-OHIO), HOUSE SPEAKER: The president`s economic
policies have failed. The American people know it.

ERIC BOLLING, FBN: I have a new term. It`s called Obamanoma.
Obamanoma, because he`s such a cancer to the economy.

MCCONNELL: To call this a recovery is an insult to recoveries.

SCHULTZ: The numbers just don`t lie. We`ll lay them out for you,
tonight.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

SCHULTZ: Thanks for staying with "The Ed Show" tonight. The story
goes to the heart of what we deserve as American voters. If we elect
someone to the Senate, we expect them to do what? Get something done.
Unfortunately, the Republicans have been using the filibuster to block
legislation. Now the Democrats want to change the rules to keep the next
group of Republicans from doing the same doggone thing. We`ll talk about
those changes in a moment.

But first, Republicans have used the filibuster and really abused it as
well. It`s normally a great tool for the minority to have a voice. It can
slow down a discussion of a bill. It allows the minority to make changes
before a vote. Filibuster can also kill a bill, even if the majority of
senators want to pass it. Now, over the last four years, the Republicans
have been using the filibuster as really a political weapon to cripple the
Senate and stymie government movement at all.

Here`s a comparison. Lyndon Johnson, back in the good old days, served as
Senate majority leader for the same amount of time as Harry Reid. Now, the
former president saw one filibuster during his tenure as Senate majority
leader. One? That`s right. Harry Reid has seen 386. Do we see a pattern
here at all? So Reid is proposing the following rule changes. Republicans
can`t filibuster after having a debate over a bill. Democrats shouldn`t
have to wait as long for a filibuster to be resolved. And if Republicans
want to filibuster, they should have to talk about it. They shouldn`t be
able to hide in their offices while all this filibustering takes place.

Come out and talk it over, again and again and again for a lengthy
period of time. The Republicans, they claim that these changes well --
they are just not fair. Blocking legislation for another four years isn`t
fair to the American people or the process either. It`s Harry Reid`s call.
What does he do? Joining me tonight, Steve Benen, MSNBC political
contributor and producer for the "Rachel Maddow Show." Great to have you
with us. Thanks for your time. These rule changes that Harry Reid and the
Senate Democrats are talking about, how drastic are they and how much of an
effect would they have?

STEVE BENEN, MSNBC PRODUCER, "THE RACHEL MADDOW SHOW." Well, given
the apoplexy we`re hearing from Mitch McConnell, one might think that they
are outrageous. And these are extraordinary new measures that Democrats
are proposing. In reality, the measures that you just identified are
actually quite modest. For many people who are eager to see major changes
in the Senate, because of its dysfunction, this is actually something of an
underwhelming proposal that we see coming from the Senate Democrats. The
kind of changes we`d see are really quite -- are actually quite minor. And
ultimately the 60 vote super majorities that we have seen become so
standard throughout the Senate in recent years would actually remain in
place. These changes are actually quite minor.

SCHULTZ: Well, do you think it would be enough? I mean I think that
Harry Reid wouldn`t be proposing this if he didn`t think this was going to
remedy the situation. But there still is a way that the Republicans could
throw up a bunch of filibusters, correct?

BENEN: Absolutely. The right of the minority to filibuster would be
maintained regardless of whether these forms are adopted or not. I think
Harry Reid is correct that some changes are necessary, and that this would
be a step in the right direction. But at the same time, I don`t think
anyone on either side would be able to characterize this fairly as some
kind of sweeping overhaul of Senate rules. They are just not that -- they
are just not that sweeping.

SCHULTZ: Do you think it would work?

BENEN: I think it would have some effect. I mean there are all kinds
of different possibilities in terms of reforms. Some are going -- have
gone so far as to suggest that the filibuster should be removed all
together and that it should just be a majority rule institution the way it
used to be. But I think that that kind of changes that Democrats have in
mind would make a difference. I just don`t know how much. Keep in mind,
we also don`t have all the details yet. Harry Reid is ...

SCHULTZ: Yeah.

BENEN: Kind of keeping his cards closer to the vest. We don`t know
exactly -- to what extent he wants to make changes. But based on what I
know so far, it looks like we`d see an incremental step in the right
direction.

SCHULTZ: It`s interesting to view the Republicans on this. Mitch
McConnell quoted the late Democratic senator Robert Byrd today, saying that
Byrd would have wanted these rule changes. Is he correct?

BENEN: It`s hard to speculate. Senator Byrd is no longer with us, and we
can only imagine what he`d be saying. Keep this detail in mind, when
Senator Byrd was elected to the Senate in 1959, in that Congress, there was
literally one filibuster, one, for the entire Congress. In the last
Congress, there was 137. So while Robert Byrd certainly was an
institutionalist and wanted to protect the norms and traditions of the
Senate, I don`t think he could have imagined a situation, the dynamic we
find ourselves in now, which is one where Republicans are filibustering
literally every bill of any consequence. Robert Byrd could not have
imagined that. Neither could the founding fathers. Neither could anyone
who created the Senate, because the Senate wasn`t designed to work this
way.

SCHULTZ: And to be clear, Mitch McConnell was saying that Senator Byrd
would not have wanted these rule changes, which is of course would be going
against what the Democrats want right now.

The bottom line here is the danger in changing the filibuster rule. I
mean, I see both sides of it. Let them go ahead and filibuster
politically, let them go hang themselves politically with the American
people. The next election cycle is going to come around, and the
Republicans could pay a heavy price in the next election. The question is,
is it worth that? And can we afford as a country to have that many
filibusters again, and not move forward, especially on things like the
economy. Steve Benen, great to have you with us. Appreciate your time.

He dared to speak the truth on Fox News so now Fox News is going after him.
The Thomas Ricks saga. Day two. Beware, future guests on Fox. Stay
tuned. You`re watching "THE ED SHOW."

(COMMERCIAL BREAK)

SCHULTZ: We want you to interact. We love hearing from our viewers on
Twitter @edshow, and on our Facebook page. Many of you are responding to
the news President Obama is hitting the road this week to make the case for
preserving middle class tax cuts. Irvin Collin (ph) predicts, "President
Obama will need to take the Republicans over the fiscal cliff before they
will compromise." The Twitter user named whatrugonnado, hopes President
Obama and the Democrats fight for Medicare, Social Security and Medicaid as
hard as they fight for Susan Rice. And Georgia Harrison urges President
Obama to keep weaker Dems fighting with him for the middle class.

Keep sharing your thoughts with us on Facebook and on Twitter using the
hashtag edshow.

Coming up, Fox News fakes an apology from a journalist Thomas Ricks, but
doesn`t refute his claim that the network is a wing of the Republican
Party. And a big finish, coming up. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Defense reporter and Pulitzer Prize winner Thomas Ricks tells the
truth, and Fox News doesn`t like it a bit. Yesterday, Ricks called Fox
News out for its politization of Benghazi.

(BEGIN VIDEO CLIP)

THOMAS RICKS: I think Benghazi generally was hyped, by this network
especially.

UNIDENTIFIED MALE: When you have four people dead, including the first
U.S. ambassador in more than 30 years, how do you call that hype?

RICKS: How many security contractors died in Iraq, do you know?

UNIDENTIFIED MALE: I don`t.

RICKS: No. Nobody does because nobody cared. And I think that the
emphasis on Benghazi has been extremely political, probably because Fox was
operating as a wing of the Republican Party.

(END VIDEO CLIP)

SCHULTZ: That interview was cut short, and following his appearance, Ricks
tells Politico he saw some surprised faces in the hallway over at Fox after
that hit. "One staff person said she thought I had been rude. My feeling
was that they asked my opinion and I gave it."

And it doesn`t end there. Fox Executive Vice President Michael Clemente
tells the Hollywood Reporter when Mr. Ricks ignored the anchor`s question,
it became clear that his goal was to bring attention to himself and his
book. He apologized in our offices afterward but doesn`t have the strength
of character to do that publicly.

But Ricks says, no, that`s not what happened. "Please ask Mr. Clemente
what the words of my supposed apology were. I`d be interested to know.
Frankly I don`t remember any such apology." To which Clemente fired back
at Ricks. "I`m surprised by the general`s utter dishonesty. I`ll refresh
his memory. What he said following the segment was, `sorry, I`m tired from
a nonstop book tour.` Perhaps now he can finally get some rest."

So here`s where we`re at. Fox is taking issue with the way Mr. Ricks
criticized the network. They don`t like to be publicly challenged, but
nobody at Fox is taking issue with the substance of Mr. Ricks` critique.
Guess they must agree.

Tonight in our survey, I asked, will Republicans say no to tax cuts just to
spite President Obama? 95 percent of you say yes, 5 percent of you say no.

Coming up, I`ll show you why Black Friday has Republicans seeing red. Stay
tuned.

(COMMERCIAL BREAK)

SCHULTZ: And in the big finish tonight, Republicans love to lie and create
an alternative reality to try to damage the president. Time and time
again, for years Republicans have been lying about our economic recovery.
But recently they have gone out of control.

(BEGIN VIDEOTAPE)

BOEHNER: The president`s economic policies have failed. The American
people know it. This election is about jobs.

STUART VARNEY, FOX NEWS : He wants to transform exceptional private
enterprise America into neo-socialist Europe.

BOLLING: I have a new term. It`s called Obamanoma. Obamanoma, because
he`s such a cancer to the economy.

MCCONNELL: To call this a recovery is an insult to recoveries.

LAURA INGRAHAM: We have really 11.7 percent unemployment, not 8.1 percent.

BILL O`REILLY, FOX NEWS: The cold truth is that the president has not
improved the American economy.

(END VIDEO CLIP)

SCHULTZ: Sorry, Bill. The cold truth is President Obama has improved the
economy. America has reelected the president who has helped bring the
economy back from the verge of collapse. So let`s take a look at some
recent economic numbers, indicators, because unlike Republicans, they don`t
lie. A record 247 million shoppers visited stores and shopped this Black
Friday weekend. They spent an estimated $59 billion over the four-day
period. Sales up over 12 percent from last year. And you know, the
housing market is looking pretty good these days. Average home prices rose
for the sixth consecutive month. Home prices are up 3 percent from this
time last year. We have seen 32 months of private-sector job growth, and
finally, here`s a whopper, consumer confidence index is at a what? Four-
year high? How could that be? It rose to 73.7, the highest level since
February of 2008. President Obama is always the first one to say there`s a
lot more we can do on the economy if they just of course pass the jobs
bill, but the Republicans, they have been dead wrong about the economy all
along. The lies about the economy didn`t pay off. And the American people
are leaving the Republican Party behind. I would say that the Republicans
are just in a real bad place when it comes to explaining where the economy
is. Let`s turn to David Cay Johnston, Pulitzer Prize winning journalist
and author of "The Fine Print." David Cay, great to have you with us
tonight.

DAVID CAY JOHNSTON, AUTHOR: Glad to be here.

SCHULTZ: How wrong are they? There`s been this litany of comments and this
narrative out there. Then all of a sudden we get some numbers like this.
What`s it mean?

JOHNSTON: Well, if all those quotes that you heard were accurate, of
course Obama would have lost and lost almost every state in the union. The
economy has been getting better. Not as fast as you or I or I think
anybody would like it to get better, and the Republicans could if they
wanted do a lot to remove the uncertainty about what`s going to happen to
our taxes by recognizing, as they said when George W. Bush was elected,
that the president has a mandate from the voters, and he should get what he
wants. So all the indicators are things are getting a little better,
steadily.

SCHULTZ: Well, consumer confidence at a four-year high. Isn`t that -
consumer confidence is the economy. If people have money in their pocket
and they`re confident they`re going to get more, they are going to go out
and spend it.

(CROSSTALK)

JOHNSTON: And there are other numbers that show the same thing. The
number of people voluntarily quitting their job because they are confident
they can get another job, that`s up. Housing prices are coming back up.
The misery index, that`s the combination of inflation and unemployment,
it`s trending down. Hourly wages and hours worked are trending up. And
everything is going generally in the direction you want it to go. There`s
noise in the data, one month to the next, but the trend lines are on the
right place.

SCHULTZ: David Cay, let`s talk about this fiscal cliff negotiation that`s
taking place. What if we do not get a deal? What does that do to the
economy? All taxes are going to be going up. Going to be $4 trillion in
the economy over 10 years. That would fix a lot of stuff. But obviously,
the concern is that we may fall into a deep recession. What`s your take on
all that?

JOHNSTON: People`s paychecks will immediately experience -- they will be a
little smaller. There will be 2 percentage points more going to Social
Security, and your tax cut will be higher (ph). But Congress can
retroactively change the tax law. Remember, the Republicans themselves did
this when they raised taxes on teenagers who work six years ago. So the
immediate effect is less than the bogeyman effect, which is there will be
horror if we don`t take care of this now. I think the thing to watch for
is do the Democrats and President Obama hold firm, or do they betray the
people who put them in office?

SCHULTZ: Would it be a betrayal at this point, do you think?

JOHNSTON: Well, I think that if we come up with a gimmick that really
makes the tax burden not fall on the very wealthiest of people, not on the
Sheldon Adelsons, who just arranged to collect over $1 billion in dividends
this year from his company, but on upper middle class Americans and middle
class Americans, I think that would be something of a betrayal, yes.

SCHULTZ: What does this do to Republicans` credibility on the economy?
After they have gone through this era of obstruction, they have talked down
the economy for months on end, and then numbers like this come up, you`d
think they`d be concerned about that.

JOHNSTON: I think what they are trying to do here, Ed, is if they are
unable to get their own troops in line to make a deal, if they are going to
pledge more allegiance to Grover Norquist than to their oath of office,
which I believe the people who signed Grover`s pledge are violating, and we
do have a downturn in the economy in January, then the Republicans are
going to say, see, we told you, even though they created the problem.

SCHULTZ: David Cay Johnston, great to have you with us on "THE ED SHOW."
Appreciate it. 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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