The Ed Show for Tuesday, January 20th, 2015

Show: THE ED SHOW
Date: January 20, 2015
Guest: Bernie Sanders, Chris Van Hollen, Sherrod Brown, Brad Woodhouse,
Josh Earnest, John Garamendi

ED SCHULTZ, MSNBC HOST: Good evening Americans and welcome to the Ed Show
live from Washington D.C.

Let`s get to work.

(BEGIN VIDEO CLIP)

SEN. JONI ERNST, (R) IOWA: Isn`t it a great day to be a Republican?

SEN. MITCH MCCONNELL, (R-KY) MAJORITY LEADER: Senator Joni Ernst will be
delivering the response to the State of the Union...

UNIDENTIFIED MALE: A hidden face for the Republican Party.

REP. DEBBIE WASSERMAN SCHULTZ, (D) FLORIDA: That woman is an onion of
crazy.

ERNST: I grew up castrating hogs on an Iowa farm.

MCCONNELL: She`s a perfect choice.

D.W. SCHULTZ: That woman is an onion of crazy.

MCCONNELL: A perfect choice.

UNIDENTIFIED MALE: Joni is (inaudible)...

ERNST: I do believe in the right to carry.

MCCONNELL: Perfect choice.

PRES. BARACK OBAMA, UNITED STATES OF AMERICA: Join me in putting aside the
political gains...

ERNST: I think it`s a little disingenuous.

Let`s make them squeal.

(END VIDEO CLIP)

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

Tonight President Obama will lay out common sense proposals to move America
forward in his sixth State of the Union Address. Now, right after the
President` address, all eyes are going to be focused on this law maker, the
new Senator from Iowa Joni Ernst. Senator Mitch McConnell has selected --
let`s call it like it is a fringe Tea Party senator to respond to the
President.

Senator McConnell thinks that Ernst represents the change America is
looking for.

(BEGIN VIDEO CLIP)

MCCONNELL: Senator Joni Ernst will be delivering the response to the State
of the Union for our side this year. She`s a perfect choice, Americans
voted for change and Senator Ernst will explain what the new Congress plans
to do.

(END VIDEO CLIP)

SCHULTZ: Well, let`s take a look at Senator McConnell`s perfect choice.
First of all Joni Ernst opposes the federal minimum wage. Across the
board, not even what it right now. She wants to privatize social security
that is one of her options to reform the program.

Ernst wants to eliminate the internal revenue service, the Department of
Education and the EPA. She made all these clear in her debates.

(BEGIN VIDEO CLIP)

ERNST: We`ve already talked about closing the door to the IRS. I think
that would be a wonderful start. Let`s close the door, let`s scrap the tax
code and again let`s find something that`s fair, flatter and simpler. But
then there`s the other departments that we could be looking at also. And
I`ve talked about these before but, closing the doors to the Department of
Education at the federal level and not just because it would save taxpayer
dollars but because I do believe that our children are better educated when
it`s coming from the state and the locality.

Let`s shut down the federal EPA and focus on those issues here in the state
where the state knows best how to protect resources.

(END VIDEO CLIP)

SCHULTZ: Here`s more from the perfect choice. Ernst said that she would
have voted against the farm bill in the middle of the country. She called
the clean water act damaging for business. And of course Ernst isn`t
schooled up on science of climate change either.

(BEGIN VIDEO CLIP)

ERNST: I don`t know the science behind climate change. I can`t say one
way or another what is the direct impact from, whether it`s manmade or not.
I`ve heard arguments from both sides but I do believe on protecting our
environment but without the job killing regulations that are coming out of
the EPA which is what Congressman Braley set for us.

UNIDENTIFIED MALE: Just to clarify, you accept that climate change does
exist?

ERNST: I do believe that our climate is changing but again, I`m not sure
what the impact of man is upon that climate change.

(END VIDEO CLIP)

SCHULTZ: So, Joni Ernst is another denier. Ernst wants to repeal
Obamacare. She opposed the same-sex marriage. She supports a personhood
amendment for unborn fetuses. Ernst says -- called President Obama
dictator and flooded (ph) the idea of impeachment.

(BEGIN VIDEO CLIP)

ERNST: Yes, absolutely he is overstepping his bounds. And I do think
that, yes, he should face those repercussions. Now, whether that`s removal
from office, whether that`s impeachment. But as a U.S. senator,
absolutely.

(END VIDEO CLIP)

SCHULTZ: The National Riffle Association has given Ernst an A ratings.
Speaking to an NRA gather back in 2012, Ernst said that she would use a gun
to defend herself from the Government.

(BEGIN VIDEO CLIP)

ERNST: I have a beautiful little Smith & Wesson, 9 millimeter, and it goes
with me virtually everywhere. But I do believe in the right to carry, and
I believe in the right to defend myself and my family -- whether it`s from
an intruder, or whether it`s from the government, should they decide that
my rights are no longer important.

(END VIDEO CLIP)

SCHULTZ: So what`s the bottom line here? Joni Ernst being selected to
respond to the President of the United States makes a mockery of the State
of the Union, if the Republicans want to get on. Joni Ernst, chosen to
respond is an absolute joke. Americans, you know what we`re looking for?
Solutions.

Tonight President Obama will outline his vision for America in the last two
years. The President wants free community collage tuition. He wants to
expand high-speed internet even in rural America where Joni Ernst comes
from. He`s going to talk about Cuba tonight and immigration and climate
change.

He will outline his new tax plan to end loopholes for the mega rich in
America and help the middle class. Americans are not looking for a
partisan hack to degrade and dismiss the President of the United States.
The country wants Congress to work with President Obama. Ernst is just
another Republican against everything the President wants to accomplish in
on every issue.

The best thing Republicans can come up with is a monkey senator from Iowa?
Joni Ernst got loads of special interest money to win that election in
Iowa. And for McConnell to select her is not what America is looking for.
America wants you Mitch, Mitch McConnel or John Boehner should be
responding to the President tonight. This is a real opportunity to unite
with the President and move the country forward.

Now whether the GOP agrees with the President or not, it should come from
leadership directly. People are going to be walking away from tonight
thinking, well, this is just more of the same. Mitch McConnell I think is
missing an opportunity to lead. And I think it speaks volumes of what
really their mission is. Republicans have no desire to work with this
president their mission is to defeat President Obama.

This election of Joni Ernst, when it first came out I really thought it was
a joke, I thought they we`re kidding. Here are the Republicans they have
not had both chambers, the House and the Senate for some six years. And
this an opportunity for them to show the country that they`re serious after
all this obstruction, they`re going to put the biggest obstructor right in
front of the American people tonight.

I think it`s a bad move and the Republicans are off to a bad foot
nationally because the country is paying attention to this tonight. This
is the biggest platform the President has every year, and the best thing
they can do is throw out (ph) somebody who opposes the President on
everything? Does Joni Ernst, does she have the authority to step out
tonight after the State of the Union speech and say, this is where we can
work with the President, this is where we`re going to have a problem.

That`s what the country wants. She wouldn`t offer (ph) any of that.

Get your cellphones out. I want to know what you think. Tonight`s
question, is Joni Ernst the perfect choice to deliver the Republican
response? Text A for yes, text B for no to 67622, leave a comment on our
blog on this at ed.msnbc.com, we`ll bring you the results later on in the
show.

Now tonight, there`s going to be a big emphasis on the wage gap which is
something that we have been talking about a lot. In fact 4/6/9, April 6,
2009 was my first show here on MSNBC. And I said at that time I want to
focus on the middle class. I think the middle class in their country needs
attention, it`s the largest voting block in the country and it`s also the
economic engine of this country.

Disposable income is shrinking in this country. So here we are, six years
later, we`re talking with the President tonight about the middle class.
And what are the Republicans going to do? They`re going to put an
obstructor up there, it`s a fact.

Let me bring in Senator Bernie Sanders of Vermont and also Congressman
Chris Van Hollen of Maryland, gentlemen great to have both of you with
tonight.

I love the President`s focus tonight, Senator you first, you`ve talked
about it all the time and of course Congressman you have just put out a
proposal on what to do to raise the middle class and opportunity for all.
What can the President accomplish tonight Senator?

SEN. BERNIE SANDERS, (I) VERMONT: Well what he can accomplish is making
the very important point, that despite huge Republican obstructionism the
economy today is much, much better than it was six years ago. But Ed, what
he is also got to make clear is that, it is no where near where we need to
be, real (ph) unemployment 11 percent, highest rate of childhood poverty in
the industrialized world, huge gap between the very rich and everybody
else.

And what he`s got to do is present a program to create millions of jobs to
deal with income and wealth inequality and let the Republicans say no. Let
them go back to their usual formula of more tax breaks to billionaires,
cutting social security and Medicare and let the people decide.

SCHULTZ: Senator what`s your response to (inaudible) leadership respond
over the President tonight? And I think it`s important because they now
have both chambers, this is their legislative opportunity.

SANDERS: I think what the tactic is, is to trivialize what the President
is saying. It is so trivial, it is so unemployment -- unimportant that
we`re not even bringing forward our leadership to respond.

SCHULTZ: Chris Van Hollen, your proposal and what you`ve laid out last
week is going to parallel what the President is going to talk about
tonight, crucial to the middle class, what`s the message here tonight, you
think?

REP. CHRIS VAN HOLLEN, (D) MARYLAND: Well, the message is twofold. First,
as Bernie indicated that it is important to recognize that the December
jobs reported -- have lots of good news in it, in terms of the recovery.
And I should say that not a single Republican in the House voted to help
make that recovery possible.

It also had this wage issue, these flat wages, frozen paychecks, that`s
where the President`s focus because we need an economy that works for all
Americans and we need to incentivice higher paychecks and we also need to
make sure that folks in the middle who were being squeezed are able to keep
a little bit more of their paychecks and that`s what the President said...

SCHULTZ: It`s well-documented what the senator from Iowa did in her
campaign and the way she badmouth the President, said she was against him
on every issue, Twitted that out at one time. What`s your reaction to the
Republicans putting Joni Ernst up to respond to the President? It`s almost
like that they`re not serious about wanting to work with the President
again.

VAN HOLLEN: Well that is what, that`s the signal it sends, because ever
since the election, the Republican leader in the Senate, Mitch McConnel has
said he wants to find practical common sense steps that he can take to work
with the President. What he is saying tonight, by picking this particular
person to respond is he was just kidding, he didn`t mean it, because as we
talked about, her whole campaign was run, on simply trying to rollback the
progress that we`ve made over the last four years.

So, what he it says to me is Senator McConnell really wasn`t serious when
he said he want to work together. If he were serious, he would have, you
know, may be put himself forward as the Republican leader. Don`t we want
to hear what the Republican stand for? Is this the person who expresses
what Republican stand for? I don`t know.

SCHULTZ: Senator, the White House is saying today that they feel like
they`re out of the crisis zone for the economy. That this is in sorts, and
these are my words not theirs, that it is going to be somewhat of a victory
lap because the Republicans have had no hand in this recovery whatsoever.
58 months of private sector job growth has nothing to shake your head at,
you got 10 million jobs. You`ve got the recovery of the automobile
industry. But the next level, is it important for the Republicans to
engage for the next two years in the economy if we`re going to continue
this growth?

SANDERS: Absolutely it is. Absolutely it is. So we`re beginning to see a
few signs of that. For example, everybody in America knows that the $7.25
minimum wage is a starvation wage. We have got to raise the minimum wage.
Right now Ed, people are working as "supervisors" are working 60 hours a
week and making $25,000 a year, not getting any overtime. Clearly, we`ve
got to change that as well.

And clearly we need to rebuild a crumbling infrastructure and we need to
get rid off, and I know Chris has worked hard on this, some of this
outrageous loopholes that enable enormously profitable corporations to pay
nothing in taxes.

SCHULTZ: If the Congress does not work with this President, what`s the
economic outlook? Right now, America has one of the better economies
that`s out there in the globe right now. And the President is now siding
with the Republicans on the Trans-Pacific Partnership and there are some
Democrats who are for it as well.

Congressman, how is the President going to make the case for the middle
class and then turn around and support a trade deal that many people who
opposed and say it`s definitely going to be depress wages and it`s going to
gut American jobs. That`s a tough balancing act.

VAN HOLLEN: I now want to get that, let me just start with your first
point which is our economy compared to what out European partner`s
economies look like right now. Because Republicans wanted to practice the
austerity approach that they took in Europe, right? And we see where that
got Europe. We have a much stronger economy, now look.

The President is going to have to make the case for how a trade agreement
can in fact help American workers. And I hope every member of Congress
when they look at any agreement, they should look at it with two standards
in mind. How is it going to help the American worker, how it`s going to
help the American economy. If they can`t meet those tests, then we
shouldn`t support it.

There`s another big piece to it, which is the issue of currency
manipulation which -- as I understand right now is not really a part of
this discussion, but it`s something that really has put American workers
back on their heels because other countries rely (ph) to change their
currency in a way that makes it harder for us to export.

SCHULTZ: Can the Democrats stop this trade deal? And there are some
Republicans who are against it as well. The Tea Partiers are concerned
about the sovereignty issue about who is going to be making some rules if
there are any irregularities, the legalities that are going to be
challenged, it`s not going to be done by American lawmakers.

VAN HOLLEN: Yeah.

SCHULTZ: So can it be stopped?

VAN HOLLEN: Look, I think Ed, that people are going to see what the
President is going to present and then people are going to decide exactly
how to move forward. But I couldn`t agree with you more, the focus of
tonight`s speech -- and I don`t know how much the President is going to
talk about trade tonight. I hope the focus of his speech tonight is on the
things that we are talking about here, helping the middle class, making
sure we have a tax system, that doesn`t help people who make money off of
money more than it helps people who make money off of hard work and that`s
going to be...

SCHULTZ: Senator, do you agree with what the President is trying to do on
this tax plan?

SANDERS: Well I think it`s a great step forward. We would maybe take it a
little bit differently but basically what he is saying when it richest
people are getting richer, you know what? They`re going to have to stop
paying their fair share of taxes and help the middle class. In term of
trade, I respectfully disagree with the President, I think NAFTA, CAFTA
(inaudible) normal trade relations with China have been a disaster loss of
jobs, raised to the bottom, I don`t think we should go forward with TPP.

SCHULTZ: 45 percent of the American people now say the economy is in
pretty good shape, that`s the best number in a decade. I kind of feel like
the President has amended his back tonight. He will speak with more
credibility on the economy than the obstructors that he`s going to be
facing. But here`s what I think liberals want out of the President
tonight. They want the President to remind the Republicans that they
haven`t had a hand in this. Congressman, is it asking too much to be that
direct?

VAN HOLLEN: I think that the President will talk about all the good news.
I`m not sure he will say what you`re asking tonight so let`s tell them
right now. Not a single Republican in the House, not one voted for the
economic recovery bill. Not one voted for a Wall Street reform, meaning
they were perfectly happy to leave it where tax payers we`re on the hook
for the gambling on Wall Street. That was the Republican record. And I
hope the President, you know, somehow says it tonight, I`m not sure.

SCHULTZ: Congressman Chris Van Hollen, Senator Bernie Sanders, gentlemen
thanks so much for your time tonight. I appreciate you coming in.

VAN HOLLEN: Thank you.

SCHULTZ: Remember to answer tonight`s question, there at the bottom of the
screen. Share your thoughts with us on Twitter @edshow and on Facebook, we
want to know what you think.

Coming up, Republicans are already attacking the social safety net.
Senator Sherrod Brown tells us how Democrats plan to fight back. And
later, the President prepares to set the tone for his last two years in
office. Rapid Response Panel weights in.

Stay with us, we`ll be right back at the Ed Show.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to the Ed Show.

Tonight, President Obama needs to be laser-focused on protecting Social
Security, the safety net.

House Republicans passed a rule attacking Social Security on the first day
of the new Congress. It blocks a routine transfer of tax revenue between
the retirement and the disability funds.

If this goes through folks, 11 million people could see benefit cuts of 20
percent by as early as 2016. Republicans spent it like this.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL, (R) KENTUCKY: There`s always somebody who`s deserving but
everybody in this room knows somebody who`s gaming the system.

You know, what I tell people is, if you look like me and you hop out of
your truck, you shouldn`t be getting a disability check. You know, over
half of the people on disability are either anxious or their back hurts --
join the club.

REP. TOM PRICE, (R) GEORGIA: It is important to save and strengthen and
secure Medicare and Medicaid and Social Security. Save, strengthen, and
secure.

The other side apparently believes that they`re all right with them going
broke. Because every one of those programs is going broke.

(END VIDEO CLIP)

SCHULTZ: Social Security is not broken.

In fact, Social Security has $2.76 trillion in trust fund reserves. Social
Security has worked for 75 years.

And tonight President Obama, I think has to stop them dead in their tracks
and let them know that the Democrats are going to fight for this. Senator
Sherrod Brown who is a ranking member of the Senate Finance Committee,
Social Security subcommittee joins us tonight here in the studio.

Senator, great to have you with us.

SEN. SHERROD BROWN, (D) OHIO: Good to be back, thanks.

SCHULTZ: I mean did they put a shot over the bow on the first day of what
they want to do? I mean, they have privatization in mind, don`t they?

BROWN: They can`t help themselves. When they had a Republican President,
a Republican House and Senate in 2005, they went right at Social Security,
it didn`t work. Whenever -- go back 10 years before that when Gingrich was
elected -- when Gingrich became speaker and -- they went after
privatization of Medicare. I mean they don`t like social insurance.

And, this really -- they`re aiming -- they`re aiming in many ways the most
vulnerable, they may (ph) disabled workers not just -- you know, Social
Security -- they don`t go after Social Security directly because those are
-- everybody has mothers and fathers and grandparents. They go after
Social Security disability and you hear people like Rand Paul...

SCHULTZ: Well...

BROWN: ... demagogue this...

SCHULTZ: I was going to ask you about that.

BROWN: ... saying about that everybody`s...

SCHULTZ: ... he`s claiming that people are gaming the system and go so far
as to say that half the people who are getting this benefit don`t deserve
it. I mean, that`s how I take that sound byte. How do you take it?

BROWN: Abraham Lincoln was pushed by his staff to stay in the White House,
win the war, free the slaves, preserved the union. He said, no I going to
go out and get my public opinion, I have to go out and listen to people.
And, a lot of my colleagues in the Senate don`t ever talk to real people.
They don`t talk to people who are -- the average Social Security disability
check is $1,100 a month.

So these are a lot of people that can work through their disability, they
may have lost their jobs so they do sign up for disability but they just
can`t work. Their bodies give out in many cases.

SCHULTZ: But Senator does the system need to be refined? I mean, are
there too many takers and too many people gaining it? I want you to be
clear on this. You do not think that`s happening?

BROWN: I don`t think that`s happening. I think that -- in any major
country with 320 million people, any major -- anything is going to have
their facts (inaudible) will be able to find a story of somebody who`s
cheating.

They can find the same story of some rich person that`s cheating on their
taxes, they don`t tend run those. But you can always find somebody in the
country this big, but the fact is this programs worked. You can make a
minor fix as you said at the beginning of the show. We`ve done it 11 times
bipartisanly but this crowd wants to -- they go after -- it really is a
worst kind of class warfare to go after people who are on disability.

SCHULTZ: So, what are the conversations in your subcommittee about this?
They really want to throw this to the free market, don`t they?

BROWN: Yeah.

SCHULTZ: They want to take the obligation away from the government all the
way across the board. That would be their perfect world.

BROWN: Well, they don`t say that. They say that there`s fraud and we want
to fix it and we can`t keep spending money, but they don`t tell you there
real goal which is to eliminate a number of these things privatize, shift
more clause to Medicare on the seniors, I mean it`s always been their gain
that they don`t like the (inaudible) social insurance.

They don`t like it because it`s government that works and that really
undermines. They argue about everything when governments -- clean Lake
Erie, when government provides Social Security uninterrupted, never delay
payment since 1940. When Medicare has helped so many people out of
poverty, when disability insurance has helped people provide for their
family when they`re insured. Those worked and they don`t like it if the
government worked.

SCHULTZ: Senator Brown, so much -- Ohio always comes in to the
conversation about the polls of the country, it`s the heartland, it`s the
middle of the country. What do people in Ohio want to hear this President
say tonight? What do they want out of this you think?

BROWN: They want to hear about jobs, the last two years the President has
talked about advanced manufacturing in Youngstown, Ohio and we`ve passed
legislation. I introduced with the Republican from Missouri to replicate
those around the country and signed by the President in December. We`re
going to see more of that kind of advanced manufacturing good-paying jobs.

You know, and fundamentally what the President has done already tonight
even before the speech is change the debate on taxation. All you hear
across the Capitol is we`ve got to cut the corporate tax rate, but wait a
second, the corporate tax rate, you know, debate that, but the fact is
corporations are highly profitable now. The stock markets has gone up but
wages are flat so shouldn`t we be talking about building economy for the
middle class out the way you do in this show.

You give tax relief for the middle class. You provide community colleges
admissions for working class kids. You help -- you increase the minimum
wage. That creates demands that help that demand -- that`s how the economy
grows. This whole trickled down thing, more tax cuts for corporations and
individuals.

10 years of -- 8 years of George Bush, no growth in jobs because it was all
trickled down. It simply didn`t work. We`ve had 55 consecutive months of
job growth since auto bail out which made such a difference as this shows
has covered and beginning to grow the economy and we should continue it and
not go back to trickled down.

SCHULTZ: The tie you got on has got Ohio State written all over, have you
taken it off since the big game?

BROWN: It is kind of Ohio state (inaudible) isn`t it?

SCHULTZ: I want to give you a few seconds to congratulate your team.

BROWN: They`re pretty exciting. This quarterback from my hometown in
Cleveland who only played three games and all of them were three of the
most important games in the last decade in he won them all and he`s going
to back to school. He`s not going in the NFL. So...

SCHULTZ: Should the playoff be -- the format be expanded? I know Urban
Meyer is against it.

BROWN: They`re doing exactly the way they did at this year.

SCHULTZ: I suppose the same (inaudible), right?

BROWN: There`s a guy named Bob and there`s a guy named Gann who started
the Gann Academy in Cleveland and he`s made such a huge difference in the
lives of so many of these young men from Cleveland that didn`t have a lot
of breaks growing up.

SCHULTZ: Yeah.

BROWN: I just wanted to do a little commercial for him because...

SCHULTZ: Absolutely.

BROWN: ... he really encouraged these young men to stay in college and get
on education. When he probably wouldn`t (inaudible)...

SCHULTZ: Well, I`m going to extend this interview one more minute here.

The President had talking about community college. Republicans obviously
aren`t going to be for it because they say it`s a give away. How do you
view this? This is a pretty bold proposal. This is a Kennedy-like.

BROWN: Yeah, this is a big deal. I mean, I know what St. Clair and Lorain
Community College, and Stark State and...

SCHULTZ: Yeah.

BROWN: ... (inaudible) state. These community colleges are a big deal,
they give a lot of working class kid.

If you want to -- one of the most fun things I get to do in this job is
speak in community college graduation just to -- the cross section of
America...

SCHULTZ: Yeah.

BROWN: ... (inaudible) people come with their children. People go back to
school at 50, people get their GED then go to Community College. And they
end up almost always with decent-paying jobs close to home so they can see
their Granny (ph). It`s what we ought to be doing.

SCHULTZ: So home run for the President?

BROWN: Yes, it really is...

SCHULTZ: Great to have with us Senator.

BROWN: Well, thanks Ed.

SCHULTZ: I appreciate your time tonight. Thanks so much. Senator Sherrod
Brown from Ohio with us.

Still to come, the President heads into the last two years of his term
facing unprecedented opposition. Rapid Response Panel is going to weight
in on that and what it all it means.

And later, new threats from ISIS and unrest across the globe. Congressman
John Garamendi joins me, the future of foreign policy.

Stay with us. We`ll be right back.

(COMMERCIAL BREAK)

SCHULTZ: Still to come. White House Press Secretary Josh Ernst gives us a
preview of tonight`s State of the Union.

And next, the Rapid Response Panel looks back of the President`s State of
the Union highlights and Republican response blooper reel coming up.

Stay tuned. You`re watching the Ed Show from Washington. We`ll be right
back.

AMPTON PEARSON, CNBC CORRESPONDENT: I`m Hampton Pearson with your CNBC
Market Wrap.

A volatile day for stocks. The Dow ends with a 3-point gain after rising
about 70 then falling triple digits. The S&P also adds 3 and the NASDAQ
climbs by 20 points.

Share of IBM are lower after hour despite reporting earnings that easily
beat estimates, the revenue was light and guidance disappointed.

Netflix shares are surging up more than 10 percent after the bell. Profits
far exceeded targets. The company said U.S. subscriber growth was inline
with expectations.

That`s it from CNBC, first in business worldwide.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to the Ed Show.

President Obama has never had a dull address to the Congress. He couldn`t
even make it through his early speeches without interruption.

(BEGIN VIDEO CLIP)

OBAMA: There are also those who claim that our reform efforts would insure
illegal immigrants. This too is false -- the reforms I`m proposing would
not apply to those who are here illegally.

REP. JOE WILSON, (R) SOUTH CAROLINA: You lie.

OBAMA: That`s not true.

(END VIDEO CLIP)

SCHULTZ: Congressman Joe Wilson heckled the new health care reform plan.
This disrespectful outburst set the tone for the Republican obstruction he
would face later on.

And the first State of the Union received another disrespectful blow.

(BEGIN VIDEO CLIP)

OBAMA: Last week, the Supreme Court reversed a century of law that I
believe will open the floodgates for special interests, including foreign
corporations to spend without limit in our elections.

(END VIDEO CLIP)

SCHULTZ: The President spoke out against Citizens United. Justice Samuel
Alito shook his heads and mouth not true.

The official responses to the State of the Union brought out the
Republicans Party`s greatest hits and misses.

(BEGIN VIDEO CLIP)

GOV. BOBBY JINDAL, (R) LOUISIANA: Good evening, and happy Mardi Gras. I`m
Bobby Jindal.

FRM. GOV. BOB MCDONNELL, (R) VIRGINIA: Many Americans are concerned about
this administration`s effort to exert control greater control over car
companies, banks, energy, and health care.

REP. PAUL RYAN, (R) WISCONSIN: Health care spending is driving the
explosive growth of debt. And the President`s law is accelerating our
country toward bankruptcy.

FRM. GOV. MITCH DANIELS, (R) INDIANA: When President Obama claims that the
state of our union is anything that grave he must know in his heart that
this is not true.

SEN. MARCO RUBIO, (R) FLORIDA: In the short time that I`ve been here in
Washington, nothing has frustrated me more than false choices like the one
the President laid out tonight.

(END VIDEO CLIP)

SCHULTZ: Believe it or not, only one of those politicians is facing jail
time.

President Obama was the first commander-in-chief to deal with this.

(BEGIN VIDEO CLIP)

FRM. REP. MICHELE BACHMANN, (R) MINNESOTA: The Tea Party is a dynamic
force for good in our national conversation and it`s an honor for me to
speak with you.

(END VIDEO CLIP)

SCHULTZ: Michele Bachmann couldn`t find the camera but she still delivered
the first Tea Party rebottle in 2011.

By 2014 GOP party was fractured even further. Three separate Republicans
gave responses to the State of the Union. We`re waiting for Joni Ernst`s
contribution tonight.

Joining me now in our Rapid Response Panel, Michael Beschloss who is an NBC
News Presidential Historian, and Brad Woodhouse with us tonight, former
Democratic Party Communications Director. Gentlemen, great to have you
with us tonight.

MICHAEL BESCHLOSS, NBC NEWS PRESIDENTIAL HISTORIAN: Thank you, Ed.

SCHULTZ: I love the State of the Union. It`s like the Masters, it`s like
the U.S. Open. It`s like, you know, the Super Bowl...

It`s the biggest platform (inaudible) for the President.

BESCHLOSS: Yeah.

SCHULTZ: Michael, give us some historical perspective of what President
Obama is going into tonight. He is going into the State of the Union
speech. He`s got a good economy behind his back, some accomplishments and
he`s facing a legislative body that is in the majority against him.

BESCHLOSS: Yeah, and it`s not ever very good a President going into his
7th year in any case. You know, Harry Truman in 1951, 7th year had both
houses of Congress couldn`t get much done because a lot of this is just
exhaustion. Even Lyndon Johnson who was inaugurated, we should mention 50
years ago today came in a second most Democratic Congress in the 28th
century yet all these things we think of is big great society measures, you
know, education, poverty, voting rights.

Most of those things happened within the first half of 1965. Even Johnson
for the rest of that term did not have an easy time. So, to some extent,
this is exhibition baseball tonight.

SCHULTZ: So where is the opportunity for the President tonight as you see
it?

BESCHLOSS: One is to say, this is what the Democratic Party should stand
for particularly in 2016. And one of the things that Truman did for
instance in 1951 is to say, essentially I know that I`m not going to get
universal health care and things to help -- the federal government provide
aid to education and other things like that but, I`m going to state this
program and hope that a later Democratic President will do this.

And sure enough a lot of what JFK in particularly and LBJ did in the 1960s
build exactly on what Harry Truman have forecast.

SCHULTZ: Brad isn`t this a moment tonight where the President can say, OK,
here`s my plan. I`ve been talking about it for a couple of weeks. Here is
my speech. Show me some game. I mean this is a real, you know, the
Republicans got to come to the game now too. They got both House.

BRAD WOODHOUSE, AMERICAN BRIDGE 21ST CENTURY: Well, absolutely. It really
is a time for him to lay a marker down and I think in his mind, he`s not so
much setting up the table for 2016.

He is saying, here`s what I`ll run on. Here are things that even you and
some of your candidates for president are talking about. I mean, even Mitt
Romney is, I think given a portents to talk about the problem with wages
and poverty.

So, here are some ideas. Now, come back with some of your own. I mean
what he`s run into has been -- that he put the ideas on the table and
Republicans don`t even show him enough respect to offer -- to come halfway,
to offer their own ideas, take a few of his, a few of their own and
negotiate.

They`ll send bills over to the Senate or they`ll try to get bills to the
White House that they know the President won`t sign. That`s not governing
and, you know, they have responsibility now Ed. They are the majority in
the House and in the Senate, and they need to show that they can govern.

The President is going to show tonight that he can govern, that he can put
plans on the table, they need to meet him halfway.

SCHULTZ: So, what changes here? I mean, you`ve got on the hills of
obstruction at a level that`s never been done before, to a Republican Party
that has both chambers, I mean shouldn`t the American people expecting them
to do something?

BESCHLOSS: I think they do and I think the Republicans actually have a
motive to cooperate at least to some extend. And I think you`re seeing
that a little bit in terms of what Mitch McConnell and Speaker Boehner have
said which is that, if they`re too far out, if they`re too confrontation,
if they go wild, it`s going to be a very much harder for them to make the
case in 2016 to independent voters and some Democrats who might at least
consider voting for Republican presidential nominee, give us the keys to
both the executive and legislative branches.

So to some extent they`ve got to keep this under control.

SCHULTZ: Brad, the President does not think the county is as divided as
Washington. Do you agree with that?

I mean he is polling numbers, I mean there`s been a big story about him not
going to France, well wait a minute...

WOODHOUSE: Right.

SCHULTZ: ... these are the best numbers he`s had in 20 months.

WOODHOUSE: Right. I there is some truth to that. I think that we have
kind of cesspool of activity that goes on in Washington, probably there`s a
better term for it than that, but it does make it seem divided and of
course you will get much of the news particularly on another network. You
would think there`s nothing going on well in the country. And too many
people I think, you know, in Washington at least that`s all they pay
attention to.

I do think that the country is probably less divided, also probably a
little less tuned in -- some of these. But I think they`ll tune in
tonight.

SCHULTZ: OK, Brad Woodhouse, Michael Beschloss, gentlemen great to have
you with us tonight.

BESCHLOSS: Absolutely.

WOODHOUSE: Thanks Ed.

SCHULTZ: Thank you so much.

Up next, we`ll give you a live shot from the White House and a State of
Union preview from the Press Secretary. Stay with us we`ll be right back.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to the Ed Show. We`re a little more than three
hours from President Obama`s State of the Union Address. There will be a
heavy emphasis on America`s wage gap.

For more on this, I`m joined tonight by White House Press Secretary Josh
Earnest. Josh, good to have with us tonight, I appreciate your time.

What is the tone of this speech going to be tonight, because as I see it
the President could take a victory lap on the economy and highlighting some
things that have really been accomplished without any Republican help, or
is this going to be a challenge to the Republicans. Now that you`ve got
the legislative body, show me some game. What`s the tone of this tonight?

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: Yeah. Thanks Ed -- thanks for
having me on the show. I appreciate the opportunity to be here to talk
about what the President`s focus on.

The President is going to be focus on middle class economics and this is
something that I know that you talk a lot about on this show. And this is
certainly been a priority of the President over the last six years and it`s
certainly too early for a victory lap but there`s no question that we had
made substantial progress in turning the page from an era of the fiscal --
of a financial crisis that almost led to the second great depression. But
because of the policies of this administration put in place, many of them
over the extraneous objection of Republicans, we`ve actually made
substantial progress in strengthening our economy, digging out of that
hole.

We`ve now laid a new foundation for economic progress for this country and
the question is, are we going to allow those at the top of the income scale
to yield all the benefits of that resilience in that recovery? Or are we
going to make sure that some people on the middle class have an opportunity
as well?

And so what the President is going to put forward are a package of ideas
that essentially will be investments in middle class families. How can we
stretch the paycheck of the average middle class family? What can we do to
make sure that middle class workers are getting access of the education and
training and skills that they -- that we know they need to get a good...

SCHULTZ: Yeah.

EARNEST: ... middle class job and we can do all of that in the feasible
(ph) responsible way by asking those at the top to pay just a little bit
more.

SCHULTZ: Josh -- and it`s going to be hard to get some takers on the
Republican side on that. They`re claiming that more money is coming to the
treasury than even before and we don`t need to go down that road.

That could be a tough lift but, is the President going to ask for the order
tonight? Is he is going to ask for the sale that, you know, come to the
table with me. I`m willing to work with you. And I asked that question
because the backdrop of the last Congress was a record number of
filibusters and now tonight it`s Joni Ernst from Iowa who is giving the
response, who has been opposed to everything the President has tried to
accomplish.

I mean, you know, the picture here is reality, or is there something else
that you think that the Republicans are showing tonight?

EARNEST: Well, it`s an interesting environment, I mean, you know, the fact
of the matter is a couple of these tax proposals that we`re talking about
are actually originated with Republicans. You know, this idea of asking
the most highly leveraged, largest firms on Wall Street to pay a little bit
more is actually an idea that was put forward by the Republican Chairman of
the House Ways and Means Committee just last year.

And you know, we would have raise to the capital gains tax rate back up to
28 percent for those who on a highest tax bracket. That`s actually the
rate it was -- that`s actually the rate that was in place when President
Reagan was sitting in the office behind me.

So, the fact the matter is this, you know, there`s reason to think that
Republicans should support these proposals. Now, it also wouldn`t be
unprecedented for Republicans to repute (ph) an idea that they previously
supported.

Now that President Obama is putting it forward, but there is an opportunity
for us to find some common ground. And I do think that there is some
pressure on Republicans now. You know for the six years, they had styled
themselves as the opposition party and they had tried to seek a political
benefit by opposing every single thing that the President wanted to put
forward.

But now, Republicans are in a different position. Republicans did do well
on the midterm elections and they now are in the majority in both the House
and the Senate. This means that they have a responsibility not just to be
the opposition party anymore but they actually need to govern the country.
And we`re going to see whether or not they`re willing to accept that
responsibility.

SCHULTZ: Will the President try to reinforce that he`ll take more
executive action? I mean -- and also he has talked about the possibility
of vetoing the Keystone XL Pipeline Project which now has got another legal
wrangling mixed to it with all of these landowners who were going imminent
domain.

My question is, climate change, you got a lot of deniers in that chamber
tonight on the Republican side. How much will the President push on
climate change?

EARNEST: Well the President believes that dealing with the climate change
and reducing carbon population in this country is one of the most important
issues that is facing our country both as an economy issue but also as a
national security issue. And what we`re actually finding is, because of
some of the steps that the President pursued using his executive authority,
we actually has been able to make some impactful policy decisions that will
reduce carbon pollution that`s emitted in this country.

And what that`s done Ed, is it`s actually enhanced American`s credibility
to go to other countries and say look, we have made some painful difficult
choices here in this country to reduce carbon pollution.

SCHULTZ: Yeah.

EARNEST: Now, we`ve also done that in the way that`s going to be pretty
good for our economy because we`re going to invest in renewable energy, but
that`s enhanced our credibility to go to China and other countries and say,
you need to make these tough decisions too, our planet depends on.

SCHULTZ: All right, Josh Earnest, good to have you with us tonight.

EARNEST: Thank you Ed.

SCHULTZ: White House communications director here on the Ed Show. You
bet.

Coming up, how international unrest will play in tonight`s State of Union
speech? Congressman John Garamendi on than when we come back. Stay with
us. You`re watching the Ed Show on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to the Ed Show from Washington D.C. tonight.

The President will focus on foreign policy in a good section of his speech
tonight with all of the things that are unfolding in Middle East. The
White House on record saying that they think Assad has to go under any
scenario. And the development of deployment of more troops is also an
issue.

Joining me tonight is Congressman John Garamendi of California who sits on
Armed Services on the House.

Congressman, what do you need to hear from the President tonight as this
whole thing on the Middle East unfolds?

REP. JOHN GARAMENDI, (D) CALIFORNIA: Well, first of all, he should been
has been very, very strong on the Middle East. Obviously, he`s sending
troops into Iraq to deal with ISIL and that needs to be done, but we need a
broader strategy. We need diplomatic strategy pulling together the
countries in the area.

They are much more at risk than either Europe or the United States, not
that we`re not.

SCHULTZ: The President has been very clear Congressman that he does not
want more sanctions on Iran and he`s going to talk about that tonight. How
big a fight is this going to be in Congress?

GARAMENDI: I think it`s going to be a big one. The question is, one of
timing. Clearly, the sanctions have worked. Are more sanctions are going
to be useful? Probably, but it`s a question of timing. He`s going to need
to be very clear not just tonight but as the days and weeks go by.

SCHULTZ: The White House feels like that could blow up the deal, that that
could blow up the opportunity of a nuclear agreement, and really we could
find ourselves isolated. Your thoughts.

GARAMENDI: I don`t think that`s going to be the case. Iran with the
nuclear weapons not in anybody`s interest except perhaps Iran, so Russia
and the other of the P5 all of those folks are similarly situated as United
States, but it may come about in the next month or so that the President
needs some additional support and that could be the sanction bill.

SCHULTZ: Does the President need to spell out how we`re going to protect
this country tonight, with this new wave, this new genre of terrorism that
we`re seeing with ISIL?

GARAMENDI: I think he will and he should. One of his principal jobs is to
protect the country and he -- I believe he is going to do that. And there
are many different pieces to it, obviously ISIL dealing with that in Iraq
and Syria but also on the home front.

How do we deal with these folks that have gone off to fight in Syria? I
don`t know why we don`t just pull their passports so they can`t travel.

SCHULTZ: Senator, did we blow -- or Congressman, did we blow it with
Syria? Did we miss something big here? The Republicans are really talking
(ph) about how the President just has misjudge this entire thing and which
has really elevated the explosiveness of these radical groups.

GARAMENDI: I think it`s going to be a lot of second guessing going on, it
always is. But clearly Syria has been a serious problem all along. Should
we have sent troops? Should we have sent arms along the way? It`s never
been easy to sort out who is the good guy in Syria.

It`s just the whole lot of bad options. Right now, we`re on a path where
we need to isolate, degrade ISIL but we don`t need to have troops on the
ground.

SCHULTZ: Yeah.

GARAMENDI: You need to have Turkey and the other countries involved in
that (ph).

SCHULTZ: And finally, cybersecurity, your thoughts.

GARAMENDI: I`m sorry, the...

SCHULTZ: Cybersecurity.

GERAMENDI: Critical, absolutely critical. You can talk to Sony and
Japanese about that but you can talk to our own military when they`re able
to get in. We need to really work on this and it`s also in the home front.
It is our infrastructure that is at risk here.

We have to act aggressively to make sure that our infrastructure that we
have the security here at home on cyber, and that`s going to require a lot
of these big national corporations to back down and to accept the reality
that this is a critical element of our nation`s security.

SCHULTZ: Congressman, good to have you with us tonight. I appreciate your
time.

GARAMENDI: Thank you Ed.

SCHULTZ: Thanks so much. Congressman John Garamendi from California with
us.

That`s the Ed Show, I`m Ed Schultz.

"PoliticsNation" with Reverend Al Sharpton starts right now.

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