The Rachel Maddow Show, Transcript 02/01/10

Guests:
Rep. Barney Frank, Kenneth Feinberg, Kirsten Gillibrand, Melanie Sloan
Transcript:

HOST:  Good evening, Keith.  Thank you very much for that.

President Obama appears to have boxed his political opponents into opposing policies they invented and into supporting policies they oppose.  Congressman Barney Frank and the man who plays paymaster with the bank bailout money, Kenneth Feinberg, will be here to analyze what comes next.

Next for the “don‘t ask, don‘t tell” policy is an actual congressional hearing tomorrow, the first one on the policy in 17 years.  New York‘s Senator Kirsten Gillibrand joins us to preview that.

Plus, the president accepts a prayer breakfast invitation from the Family.  He gets props from John McCain‘s economic team and he calls a little college basketball on live television.

There is more, but we have to keep it moving.

Where we start is here in Washington, D.C. tonight.  And I swear this trip was not planned to coincide with this big political development.  But sometimes you just get lucky.

Tonight, we can report that the presidential nominee for the Republican Party in 2012 will not be Republican Chairman Michael Steele.  I repeat, the nominee will not be RNC Chairman Michael Steele.  Mr. Steele confirming to ABC News that he will not seek the presidency in two years.  When pressed, for some reason, on the matter, Mr. Steele said emphatically, “How many different ways can you spell no?”

ABC says they were just asking what they described as an inevitable question about his 2012 intentions—the inevitable question of whether the Republicans would run Michael Steele for president.  Wow!

Nobody knows who the Republicans are going to run in 2012, but in the lead up to this year‘s elections, the Democratic president regaining his momentum seems to have disoriented the Republicans on policy.  Republicans are now frequently voting against things they used to support.

Today, for example, there was this from President Obama.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I have proposed a bipartisan fiscal commission, a panel of Democrats and Republicans who would hammer out concrete deficit reduction proposals over the medium and long-term.  I should point out, by the way, that is an idea that had strong bipartisan support, was originally introduced by Senators Gregg on the Republican side and Conrad on the Democratic side, had a lot of Republican cosponsors to the idea.

(END VIDEO CLIP)

MADDOW:  You know, it did, in fact, have a bunch of Republican cosponsors until President Obama endorsed the idea.  Then, all of a sudden, Republicans started to think of it as a bad idea.  Six Republican senators who originally cosponsored forming a deficit commission voted against it once President Obama signed up for the idea.  Sam Brownback, Mike Crapo, John Ensign, Kay Bailey Hutchison, James Inhofe, and John McCain, profiles in courage against their own policies.

But it‘s not just the deficit commission idea.  This keeps happening over and over again.

(BEGIN VIDEO CLIP)

OBAMA:  It‘s also why we‘re restoring pay-as-you-go, a simple rule that says Congress can‘t spend a time without cutting a dime elsewhere.

(END VIDEO CLIP)

MADDOW:  Now, not everybody loves PAYGO, but it is credited with why we had balanced budgets and even a surplus under President Clinton.  Republican Senators John McCain, George Voinovich, Susan Collins and Olympia Snowe all endorsed PAYGO in recent years.  But then, political crisis!  President Obama endorsed it.

(BEGIN VIDEO CLIP)

OBAMA:  When the vote comes tomorrow, the Senate should restore the pay-as-you-go law, that was a big reason for why we had record surpluses in the 1990s.

(END VIDEO CLIP)

MADDOW:  Despite supporting PAYGO before, now that President Obama is for it, John McCain, George Voinovich, Susan Collins, and Olympia Snowe all voted against it when it came up for a vote last week.  You‘re noticing a trend here?

And it‘s not just economic issues.  Senators John McCain and Lindsey Graham, once sponsors and major supporters of cap-and-trade climate legislation, now say they oppose it.  On national security, Republicans had no problem with the Bush administration trying terrorism suspects in federal courts.  Now that President Obama is doing that same thing, they‘ve decided they‘re against that too.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER:  We now know that was a mistake.

(END VIDEO CLIP)

MADDOW:  We didn‘t say it was at the time, or even think it was at the time when President Bush did it, but now that President Obama‘s doing it—even on taxes, Republicans are now opposed to the one thing we fought for sure they were definitely for.

(BEGIN VIDEO CLIP)

OBAMA:  We cut taxes.  We cut taxes for 95 percent of working families.  We cut taxes for small businesses.

We cut taxes for first-time home buyers.  We cut taxes for parents trying to care for their children.  We cut taxes for 8 million Americans paying for college.

(APPLAUSE)

OBAMA:  I thought I‘d get some applause on that one.

(LAUGHTER)

(END VIDEO CLIP)

MADDOW:  Not this year, Republicans not in favor of tax cuts anymore. 

Not if they‘re Obama tax cuts.

Let this serve as a standing rebuttal to anyone still arguing that this president just needs to support more Republican-friendly policies and then he‘ll get some Republican votes.  This president is not just supporting Republican-friendly policies, he is supporting actual Republican‘s actual policies, and the Republicans are voting no, against their own ideas, just to stick it to him.

A health reform still simmers in the background, the next item on the president‘s agenda is, of course, financial reform.  Thanks to Sam Stein at “Huffington Post,” we‘ve got the Republican strategy memo for trying to defeat that.  Included in the “words that work” section of the memo, quote, “We don‘t need another federal government agency.”  Frank Luntz, the Republican strategist, notes, quote, “The single best way to kill any legislation is to link it to the big bank bailout.”  Thus, Republicans should rename Wall Street reform the big bank bailout bill.

Joining us now is Democratic Congressman Barney Frank of Massachusetts.  He, of course, is chairman of the House Financial Services Committee.

Mr. Chairman, it‘s good to see you.  Thanks for coming in.

REP. BARNEY FRANK (D-MA), HOUSE FINANCIAL SERVICES CMTE. CHAIRMAN: 

Thanks, Rachel.  Great to have you in town.

MADDOW:  You have seen the Frank Luntz memo, the Republican blueprint for trying to kill Wall Street reform.  What‘s your reaction to it?

FRANK:  Well, first of all, it includes one major lie.  He, apparently, gave people choices as to what was their biggest reason for being against the Consumer Financial Protection Agency that‘s focused on trying to stop the agency to protect consumers from credit card abuses, overdraft abuses, payday lending abuses, et cetera.

And one of the choices is, it needs another bank bailout.  They are totally unrelated.  The Consumer Financial Protection Agency is a stand-alone section of a larger bill.  By the way, we, in our bill, put an end to the bank bailout policies.

Go back to your original theme by the way.  One of the striking things about the Republican Party is, on January 21st, I have to quote my partner, Jim, on this, we had one of the worst mass disease outbreaks in American history.  Widespread amnesia struck the Republican Party.  Everything that had happened before January 20th, 2009, disappeared from their minds—unemployment, deficits, the financial crisis, and the bailout.

I was going about my business, trying to do some financial reform when in September, the two top Bush administration economic appointees, Ben Bernanke, who before Bush made him chairman of the Federal Reserve was chairman of Council of Economic Advisers under Bush, and Henry Paulson, a very decent guy, came to us, the Democratic and Republican leadership, and said, we need to do this bill.  Otherwise you go back a step.

On the Tuesday of that week, Mr. Bernanke and Mr. Paulson came to us and informed us, didn‘t ask us, that they had decided to provide money to AIG.  That was a Bush administration unilateral decision.  They then came back two days later and said, “Would you vote on $700 billion?”  We said, “Well, here‘s what we‘ll do.  Because you‘ve announced that the world will collapse if we don‘t do it.”

And, frankly, I think they were right that there was terrible trouble. 

But when the two top presidential appointees come to tell you that if you

don‘t do this publicly, there‘ll be a collapse, then there‘ll be a collapse

because confidence is so important.  So we were the ones who insisted on putting some pay controls on there.  You‘re going to have Ken Feinberg on later.

               

We also said, “No, you can‘t do the $700 billion all at once, you‘ve got to do it in sections.”  If you look at the way it was administered under President Obama, it was administered in a much fairer way.  Moreover, because of some of the things we did, we put restrictions in there about repayment so that where the banks are concerned, not the auto companies, but where the banks are concerned, we made some money.

The one thing when Mr. Luntz talks about don‘t support the consumer agency because of bailouts, let‘s be very clear, every single activity of the federal government that‘s considered a bailout, AIG, the TARP for banks, the automobile companies, everything, was done by George Bush.  And it‘s just astounding that they say no.

Now, the other issue was he talks about the loopholes in the consumer agency, because some entities were exempted.  Yes, by Republican votes.  What happened, in a few cases, a minority of Democrats voted with a majority of Republicans to exempt them.  We still covered almost everybody.

So, the fundamental thing is to say that the consumer agency is meek to the bailout, it‘s just a lie.  It‘s just made up.

MADDOW:  Well, is there a Republican counterproposal?  I mean, it seems—it seems clear to me just in pure politics terms that if this was a bill to say, “Happy Mothers Day” to the moms of America, Republicans would be opposing it and saying it was going to be, you know, a socialist dictatorship dawning from sea to shining sea.  It seems like they‘ve got to say no to everything, no matter what it is.

But is there a Republican counterproposal on financial reform?

FRANK:  Well, there is on the consumer agency was—right now, by the way, we‘re not—we are creating a new agency by taking power away from existing agencies.  Consumer regulation now is done by the Federal Reserve that controls the currency and who‘s the bank regulator, and other regulatory bodies whose main job it is to keep the banks healthy.  We have found them to have done a lousy job so we want to take it away.

The Republican proposal was to take all of those agencies that are doing a bad job and have them come together as a council, who would then do a bad job.

But the thing on the Republican‘s financial reform here is the key.  The answer is, when they got serious, no, they unanimously voted, the Republicans in the House, for zero additional regulation.  No more regulation of derivatives.  No more diminution of the excessive leverage that the banks have owing too much money.

We in our bill could kill the power under which the Federal Reserve gave money to AIG.  Section 133 of the Federal Reserve Act that lets them to give money out in unlimited ways, we put an end to that and put some severe restrictions going forward on a different proposal.

When the final vote came to the House, and you people know the procedure, it‘s called the motion to recommit.  It‘s the minority‘s right to offer whatever they want.  And they offered a motion to recommit to the financial reform package that said, cut off the TARP.  But, of course, we stopped giving out money under the TARP, they didn‘t want us to use some of the TARP money for job creation.  And the rest of it said nothing, kill everything in the bill.

There‘s a phrase that you use when you want to kill a bill, quote, strike all after the enacting clause, which means everything‘s dead, on derivatives, on reducing bank leverage, on the Federal Reserve‘s unlimited power to bail out, in every case, here‘s a Republican counterproposal: strike all after the enacting clause.

And so, if they had won the vote and every single Republican voted for this, there would have been zero change in financial reform.  The banks, the investment houses, the hedge funds, the derivative ball games, nothing would have changed.

MADDOW:  Would be left intact the system that brought us.

FRANK:  Totally—totally intact.

MADDOW:  And, of course, the first line—the overall premise of the Frank Luntz memo for killing Democrat‘s financial reform proposals is to make sure that voters know that Republicans think the status quo is not OK, that things has to be changed, that there has to be realistic change, meanwhile they‘re voting.

(CROSSTALK)

FRANK:  Quickly, and just to recap, the bailouts—the lack of regulation that caused the crisis was Republican-explicit policy, then came the bailouts that they asked us to do.  We modified some, but I think, frankly, given the situation we were in, we couldn‘t have nothing at all done.  They then proposed that no changes be made.

And one last point: part of what we do, they keep blaming liberals, because we wanted people to buy homes that couldn‘t afford them.  In fact, I‘ve been an advocate of rental housing for American people.  But we began in 2004 when we were a minority and they wouldn‘t allow us.

In 2007, we did in the House pass a bill and we passed it as part of this bill, in the House again, to restrict bad loans, bad subprime loans.  We said, no, you can‘t lend people to people who can‘t pay it back.  They voted against it.

The “Wall Street Journal,” which says, “Oh, you liberals gave these poor people homes,” denounced the bills that we passed as an interference with free-market.  They called it a Sarbanes-Oxley for mortgages.  What we said was, please do not give mortgages—not please, you may not give mortgages to people who can‘t afford it.

Let me give you one example what they opposed.  One of the biggest problems we had is that it used to be that if you borrowed money, you would have to pay back the person who lent it to you, and that meant he or she was pretty careful about lending it to you.  They came up with a new system called securitization, where I make a bunch of loans and then I sell the right to be repaid 100 percent of the people.  I don‘t care as much.

MADDOW:  Right.

FRANK:  We said, no, you can‘t do that, you have to retain some of the risk, up to 10 percent.  They‘re opposed to that.

MADDOW:  Yes.

FRANK:  So, anything we try to do to prevent the recurrence of the mess they created, they vote no.

MADDOW:  They vote no, emphatically with an exclamation point at this point.  Democratic Congressman Barney Frank of Massachusetts, chairman of the House Financial Services Committee, it‘s always a real pleasure to have you.

FRANK:  Thank you.

MADDOW:  Nice to see you here.

The hearing to discuss repealing the military‘s disastrous “don‘t ask, don‘t tell” policy starts tomorrow.  It is the first hearing in 17 years, what this means in politics is that the fierce urgency of now starts in about 15 hours.  One of the senators leading the push to repeal “don‘t ask, don‘t tell” is New York‘s Kirsten Gillibrand.  She joins us in just a moment.

(COMMERCIAL BREAK)

MADDOW:  Within the last few hours, the top federal prosecutor for New Orleans recused himself from the case against the four men arrested in Senator Mary Landrieu‘s office last week and charged with entering federal property under false pretenses for the purposes of committing a felony.  The prosecutor is named Jim Letton.  He‘s a holdover from the Bush administration.  His fellow Republican, Senator David Vitter, had put holds on three other nominations for that prosecutor job, demanding assurance from the Obama administration that Mr. Letton would keep the job.

Well, today, Attorney General Eric Holder named Mr. Letton to a federal advisory committee that prompted Senator Vitter to announce that he would now lift his hold on Obama‘s nominees.  All of this motion around this particular prosecutor job still doesn‘t explain why Mr. Letton has recused himself from this case.  Neither the Justice Department nor the prosecutor‘s office are going to be commenting today, apparently.

We‘ll continue to follow this story and keep you updated as it unfolds.  But as of this point, this recusal is a mystery.

(COMMERCIAL BREAK)

MADDOW:  Here in Washington today, the president unveiled his new budget.  And he name-checked what Democrats are fast realizing could be the funniest thing in it.

(BEGIN VIDEO CLIP)

OBAMA:  There are other steps we‘re taking to rein in deficits.  I proposed a fee on big banks to pay back taxpayers for the bailout.

(END VIDEO CLIP)

MADDOW:  Making banks pay back the bailout.  This is turning out to be the best thing for Democratic politics since Michael Steele.

(BEGIN VIDEO CLIP)

OBAMA:  And we‘ve recovered most of the money we spent on the banks.

(APPLAUSE)

OBAMA:  Most, but not all.  To recover the rest, I‘ve proposed a fee on the biggest banks.  Now.

(APPLAUSE)

OBAMA:  Now, I know Wall Street isn‘t keen on this idea, but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need.

(APPLAUSE)

(END VIDEO CLIP)

MADDOW:  And that‘s the political money shot right there.  Should Wall Street pay back taxpayers for the bailout?  Democrats—applauding, thundering applause, leaping to their feet.  Republicans—time to fidget and maybe grumble.  Definitely no applause.

Republicans siding with Wall Street against paying back the bailout money is pure political gold for Democrats at a time when Democrats really need some of that.  On the substance, though, there‘s one fact about the bailouts and the whole idea of paying it back that hasn‘t really sunk in politically.

When it comes to TARP funds, that $700 billion bailout, most of the banks have already paid back their loans.  JPMorgan paid back its loan.  American Express paid its loan back.  Capital One paid its loan back. 

Goldman Sachs paid its loan back.  Morgan Stanley paid its loan back.

Except for a handful of companies, much of the TARP money‘s been repaid already.  Why are the banks so eager to return these loans?  It‘s in part because they are afraid of our next guest.

Joining us now is Kenneth Feinberg.  He‘s the special master for TARP Executive Compensation, also known as the pay czar by people who know that the word “czar” in this case is hyperbole and that he‘s probably not even really Russian.

Mr. Feinberg, thanks very much for coming on the show.

KENNETH FEINBERG, SPECIAL MASTER FOR EXEC. COMPENSATION:  Thank you.

MADDOW:  As I understand it, your job is very narrowly-defined by Congress.  You are to set executive pay limits at companies that received the most bailout money, and only why they still have bailout money outstanding, is that right?

FEINBERG:  That‘s exactly right.  That‘s the way the statute reads.  I started with seven companies.  Bank of America and Citigroup repaid the taxpayer.  That was my primary objective under the law.  They‘re out.  In 2010, I‘m down to five companies, AIG, G.M., GMAC, Chrysler, and Chrysler Financial.

MADDOW:  When you say it was your primary objective, it was your primary objective to get those companies to pay the money back?

FEINBERG:  Clearly.  The secretary of the treasury made that clear, the president made that clear.  We‘ve succeed with those two banks.  My secondary objective, an important one, is try and align executive compensation, so that it avoids the type of risk-taking that helped bring on this financial debacle, and we are trying to influence, voluntarily, how Wall Street aligns its compensation so that it better reflects value rather than risk-taking.

MADDOW:  So executive pay, in this case, being done in a sort of demonstration project, because you‘re not talking about a large number of executives or a large number of firms here, but essentially defining executive pay as part of financial reform, saying the way that people are paid is part of the problem for why these institutions are taking on too much risk?

FEINBERG:  That‘s right.  Give them low base cash salaries, no guaranteed salaries, no guaranteed bonuses other than a base salary.  Give the remaining compensation in the form of stock, so that your individual compensation is tied to the success, the financial success of that company.  And don‘t let that stock be transferred until three, four, five years out so that long-term growth in the company will also influence your own individual compensation.  That‘s the goal in terms of how we structure pay going forward under my program.

MADDOW:  Could it—could there be changes made in corporate law, corporate governance structure, regulatory structure, so that that‘s the way it had to be, rather than you demonstrating that this is the way it ought to be?

FEINBERG:  Absolutely.  The best way to look, I think, at what the administration is trying to do with executive pay, is look at the menu of initiatives.  Not just me.  My role, as you say, Rachel, is rather limited.

But look at what else is being tried, corporate governance reform.  You heard Congressman Frank.  Regulatory reform, new compensation prescriptions at the Federal Reserve, at the SEC, at the FDIC.  And to rein in the huge excessive bonuses, you have the bank fee legislation proposed by the administration, you‘ve got the Volcker proposal in terms of breaking up powerful banking entities.

When you look at the whole menu, not just what I‘m doing, you see a rather concerted effort here to rein in pay.  And when you add the G-20 principles, proposed by Secretary Geithner, you get an international effort here to try and do something about excess of compensation on Wall Street.

MADDOW:  It is—it is something that feels like an issue of

fairness, because it‘s taxpayer money.  It feels symbolic in terms of the

harm done to the country by the financial services industry and the non—

the departures from common sense that led them down the roads they went

down in the last few years.  You‘re making the case that it‘s also part of

good regulatory reform in the sense that it would make these companies less

less driven towards risk, as a matter of their incentives.

               

But there‘s sort of a philosophical question here, too, and I think it‘s the reason that your job has captured a lot of people‘s imagination, more than other reformers.  It didn‘t used to be so, in this country, that the difference between the lowest paid person at a corporation and the CEO was as big as it is now.  There‘s never been that big a gap before.

Is that—is there a normative judgment to make about that?  Is that bad for the country?

FEINBERG:  Yes, I think it is bad.  I think the gap is much narrower in Europe and Asia.  The gap in the United States in the last 25 years has become so wide that the perceptions here on Wall Street versus Main Street are incredibly difficult to overcome.  And I can do something, the Treasury Department and the Special Masters Office, can make some effort to try and narrow that gap.  I think the administration‘s various other proposals will further help narrow that gap.

MADDOW:  Kenneth Feinberg is the Treasury Department‘s pay czar, and I use that term with affection, the czar part of it.

FEINBERG:  My grandmother in Russia would be very surprised.

MADDOW:  Well, see, now, you‘ve just opened up a whole another level of conspiracy theory.  Congratulations.  Nice to meet you, Mr. Feinberg.  Thank you very much.

FEINBERG:  Thank you very much.  Thank you.

MADDOW:  For all of the controversy it has caused and all of the lives it has ruined, the merits of the “don‘t ask, don‘t tell” policy have not been debated at a congressional hearing for 17 years.  That changes tomorrow.  The senator who led the fight for that hearing, New York‘s Kirsten Gillibrand joins us next.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  This year, I will work with Congress and our military to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are.  It‘s the right thing to do. 

(END VIDEO CLIP)

MADDOW:  That was not the first time, just the most recent time that President Obama clearly enunciated his opposition to the military‘s “Don‘t Ask, Don‘t Tell” policy.  It‘s the policy that kicks qualified gay servicemen and women out of the military, simply for being gay. 

Interestingly, new Department of Defense figures say that the number of people kicked out of the Army, the Air Force, the Navy and Marines during President Obama‘s first year in office actually declined by about 30 percent from the year before. 

In 2008, 619 people were kicked out.  In 2009, the number was down to 428.  Tomorrow, for the first time since 1993, “Don‘t Ask, Don‘t Tell” will be debated at a Congressional hearing.  The Senate Armed Services Committee will hear testimony from Defense Secretary Bob Gates and the chairman of the Joint Chiefs-of-Staff, Admiral Mike Mullen.  They are expected to lay out the Pentagon‘s coming effort to end the ban.

Joining us now is Democratic Senator Kirsten Gillibrand of New York.  Senator, thanks very much for coming in.  It‘s nice to see you. 

SEN. KIRSTEN GILLIBRAND (D-NY):  It‘s my pleasure. 

MADDOW:  Nice to have you here.  Can you give us any sort of preview about what you‘re expecting at the hearing tomorrow? 

GILLIBRAND:  Well, I think Admiral Mullen and Secretary Gates will lay out some of the strategy for a repeal policy.  I think we will get testimony that this policy does undermine the military readiness of our armed services.  So I‘m looking forward to it. 

MADDOW:  In terms of the Pentagon‘s options for implementing this, a number of proposals have been made by people who advocate getting rid of the policy, including an immediate moratorium.  That‘s something that you tried to introduce legislation, calling for a moratorium, implementing the policy until a full repeal could be arranged.  Why do you think the White House hasn‘t pursued that? 

GILLIBRAND:  Well, I think it‘s been focused on a lot of things, but I do think now is the time to act.  And I think Congress can take its own action and repeal the policy.  And during that time, the president can also issue a stop-loss or do a moratorium. 

So there‘s a number of measures we can take immediately to stop the enforcement of this very, very corrosive policy.  It completely undermines the military readiness and strength of our armed services.  And it‘s something that degrades and undermines the trust and integrity of our entire armed services. 

MADDOW:  As a senator who‘s taken a keen issue in this subject, though, do you have a preference on whether this is done slowly or quickly, I guess? 

GILLIBRAND:  I would like it to be done quickly. 

MADDOW:  Yes. 

GILLIBRAND:  We have two wars.  We have terrorism threats everywhere in our United States.  And we have to make sure that we have all the best and the brightest that are able to serve. 

As you said, in this past year alone, we‘ve lost over 600 personnel.  We need to keep all the best and brightest.  And as you‘ve covered in the past, we‘ve lost, you know, 10 percent of our foreign language speakers in Arabic and Farsi languages that we really need in fighting terrorism. 

We‘ve also lost over 800 personnel in mission-critical areas, meaning they cannot be easily replaced.  So now is the time to repeal this policy, because we have urgent security concerns that we need all the best and the brightest serving. 

MADDOW:  This is going to be one of those issues in which the issues of - in which the issue of the relationship between the military and the political world has to be addressed overtly.  I‘m trying to be sort of sensitive about this, but essentially, what I mean is that there will be questions as to whether or not the military knows what‘s best or politicians know what‘s best, in terms of how to proceed here. 

When you hear from Admiral Mullen, when you hear from Secretary Gates tomorrow, is there a line for you?  Is there a bright line where you think that what they‘re saying isn‘t - won‘t be fast enough, won‘t be enough, which you will push them to go faster than they my want to go? 

GILLIBRAND:  Well, I hope that they lay out their plans about how they will repeal this policy and how they will implement a repeal. 

MADDOW:  OK. 

GILLIBRAND:  Congress can act individually to do the repeal.  And in other countries, if you look at the U.K., for example, Britain repealed a similar policy in 1999, and it took only less than a year, the following year, to implement their repeal, their policy, and so no suffering of military readiness or moral in their armed services. 

So it can be done.  It doesn‘t have to take a long time.  I trust the military to make a decision about what the best way to implement is.  But Congress can take action now and provide the leadership that‘s necessary to repeal this policy immediately.

MADDOW:  In terms of building support for a repeal and highlighting the harms of this policy, as you see, I know that you‘ve been trying to highlight the stories of people who have been kicked out of the military.  You‘ve got a Web site - linked to your Web site are the stories of some of the people who have been kicked out.  Why did you do that and how does that work? 

GILLIBRAND:  It‘s not my Web site.  It‘s “DADTStoryProject.com.” 

MADDOW:  OK.

GILLIBRAND:  And we have about 12 stories highlighted of individuals, about what happened to them and how this policy affected them.  For me, it all started when Lt. Dan Choi came to me and told me about his personal story. 

And this is a man who has accomplished so much in our military, one of our greatest heroes.  And he talked about how he was being asked to lie every day about who he fundamentally is, who he loves, who he spends his free time with, and the corrosive effect that has on the basic command structure. 

And so his story is so moving and powerful and inspiring to me, personally.  I thought that the more stories we could bring to bear into the public discourse, it will move this debate forward to a place where we will earn the 60 votes we need to repeal it. 

MADDOW:  Well, after Dan Choi came out on the show, I can‘t tell you the number of people that we heard from, both in the military and people who were moved by his story and wanted to do something about it.  So at least in his case, I can tell you from personal experience, it moves people, absolutely. 

Sen. Kirsten Gillibrand, it‘s really nice to have you here in person and good luck tomorrow.  See you at the hearing, huh? 

GILLIBRAND:  See you at the hearing.  Take care. 

MADDOW:  Great.  Thanks.  Still ahead, men in shorts with a president in the broadcast booth.  Kind of amazing tape of something the president‘s been doing in his extracurricular time. 

And also men in skirts, hundreds of them on parade in New Orleans.  It is a celebration of football that‘s not at all what you think.  That‘s all coming up, stick around.

(COMMERCIAL BREAK)

MADDOW:  Still ahead, are two of the politicians who supported a law that called for the execution of gay people coming to the National Prayer Breakfast, which President Obama is also going to attend? 

And THE RACHEL MADDOW SHOW‘s Super Bowl Mardi Gras confabulation starts tonight.  We will explain in just a moment. 

But, first, a conclusion in the case of the State of Kansas versus Scott Roeder, a conclusion that will likely have the convicted murder in prison for a very, very long time. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  In the case of the State of Kansas versus Scott Roeder, case number 09-CR1652, we, the jury, find the defendant, Scott Roeder, guilty of the crime of first-degree murder. 

(END VIDEO CLIP)

MADDOW:  Scott Roeder murdered George Tiller, a doctor who provided abortion services at his Wichita, Kansas clinic.  The next step in the case is sentencing, scheduled right now for March 9th. 

Under Kansas law, a person convicted of first-degree murder must be sentenced to life in prison, but normally, the person is eligible for parole in 25 years.  Prosecutors in the Tiller case, however, are asking the judge to ensure that Mr. Roeder is not eligible for parole for 50 years, at which point, he would be 102 years old. 

It took the jury just 37 minutes to find Scott Roeder guilty.  After the verdict, Dr. Tiller‘s widow and family released a short statement.  I‘ll read it in full. They said, quote, “The family of Dr.  George Tiller would like to thank the journey, District Attorney Nola Foulston, and her office and law enforcement for their service in this difficult matter.  Once again, a Sedgwick County jury has reached a just verdict.  We also want to thank George‘s countless friends and supporters in Wichita and around the country who have offered their comfort.  At this time, we hope that George can be remembered for his legacy of service to women, the help he provided for those who needed it, and the love and happiness he provided us as a husband, father, and grandfather.” 

In light of the conviction, the Center for Reproductive Rights is calling on the Justice Department to make good on its announcement to investigate whether or not Scott Roeder planned this murder with anyone else. 

And former John McCain campaign economic advisers have turned off their Blackberries and gone way, way, way off message.  At least as far as the Republican message right now is that George W. Bush never existed and Barack Obama created today‘s projected deficit, all on his lonesome. 

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ):  What we‘re hearing tonight is a BIOB - let‘s call it that from now on - Blame It On Bush.  Whatever‘s gone wrong, let‘s blame it on Bush. 

UNIDENTIFIED MALE:  Will that new budget, like your old budget, triple the national debt and continue to take us down the path to increasing the cost of government to almost 25 percent of our economy?

SEN. MITCH MCCONNELL (R-KY):  With the stimulus bill and the massive increases in optional spending, the Democrats in Congress simply spent too much and took us into record territory. 

(END VIDEO CLIP)

MADDOW:  Yes, well, a couple copies of that Bush-who memo have been lost in the mail, apparently, because two former campaign advisers to Sen.  John McCain have been saying inexplicably reality-based things about the economy, beginning with what the deficit would have been under a hypothetical President McCain.

DOUGLAS HOLTZ-EAKIN, FMR. MCCAIN ECONOMIC ADVISOR:  There probably

wouldn‘t be a record deficit, considering what we just talked about -

UNIDENTIFIED MALE:  We would probably still have a record deficit. 

MARK ZANDI, FMR. MCCAIN CAMPAIGN ADVISOR:  I think stimulus was key to the fourth quarter.  And the decline in government spending would have been measurably greater without the money from the stimulus.  So the stimulus was very, very important in the fourth quarter. 

EAKIN:  This year, you simply would have to give the administration, by and large, a pass.  It did inherit a very weak economy.  It inherited programs that weren‘t intended to compensate for that.  They‘re very expensive. 

(END VIDEO CLIP)

MADDOW:  Pulling the economy bank from the brink of extinction was expensive, it‘s true, although not as expensive as complete economic collapse, right?  This far out from the campaign, we can all agree on that, right?  Can‘t we?

(COMMERCIAL BREAK)

MADDOW:  We all know that President Obama likes basketball.  We also know he plays it as often as he can and he goes to as many basketball games as he can.  For example, on Saturday, President Obama went to see the Duke Blue Devils take on the Georgetown Hoyas. 

He was there with Vice President Joe Biden, White House Press Secretary Robert Gibbs, Senior Adviser David Axelrod, D.C. Mayor Adrian Fenty, and a skill none of us knew he had. 

(BEGIN VIDEO CLIP)

OBAMA:  This was a terrific spin move and he didn‘t get any help coming back. 

CLARK KELLOGG, CBS BROADCASTER:  That‘s well done.  You can handle

this job, if you need to.  Obviously, you‘ve got one that‘s requiring a lot

of your time and attention.  But it looks like -

OBAMA:  After retirement, I‘m coming after your job, partner.  Just letting you know. 

KELLOGG:  OK.  All right. 

OBAMA:  So you either have three more years or seven. 

(LAUGHTER)

(END VIDEO CLIP)

MADDOW:  President Obama went on to tell CBS broadcaster Clark Kellogg that if he did take over his job, he‘d rather be an excellent one-term announcer than a mediocre two-term announcer.

(COMMERCIAL BREAK)

MADDOW:  Should the president of the United States attend an event sponsored by the Family, the group that operates the C Street house in Washington and that has troubling ties to the so-called kill-the-gays bill under consideration in another country? 

For several months now, we‘ve covered the story of this proposed law.  It would execute people for the crime of being gay.  Now, the law is proposed in another country, in Uganda, but it‘s connected to American politics. 

When Republican Governor Mark Sanford of South Carolina confessed tearfully this summer to his extramarital affair, he said that he‘d received counseling on the matter at a Christian fellowship house in Washington called C Street. 

When Republican Senator John Ensign also confessed to his extramarital affair this summer, it emerged that he, too, received counseling about his affair at C Street.  He was living at the C Street house when the affair was going on. 

When former Congress Republican Chip Pickering was named in his wife‘s alienation of affection lawsuit over his alleged extramarital affair, it emerged that in that case, too, Congressman Pickering was living at the C Street house while allegedly having his affair. 

Now, the C Street house is technically a church - at least it was listed that way for tax purposes by The Family, which is a secretive religious group that operates the C Street house and that is tied to the kill-the-gays bill. 

For decades, The Family‘s operated as a shadowy, secretive religious group which cultivates relationships with powerful people in Washington and around the world, but itself tried to stay out of the spotlight. 

They are in the spotlight now, thanks to its Congressional frat house featuring in not one, not two, but three Republican sex scandals in the past year, thanks to Jeff Sharlet‘s landmark reporting on the group and thanks to the kill-the-gays bill. 

It was a member of The Family who introduced the kill-the-gays bill in the Ugandan parliament.  The highest level of support for the bill has come from the minister of ethics and integrity in that country‘s government, who is also of The Family.

The idea for the kill-the-gays bill was first floated at an event associated with the Uganda National Prayer Breakfast, an event sponsored by The Family.  Now, a member of The Family, Bob Hunter, broke the group‘s silence and came on this show a few weeks ago to say that The Family did not support the kill-the-gays bill but he couldn‘t dispel the group‘s myriad connections to the bill either. 

One thing The Family does openly take credit for in politics is the National Prayer Breakfast.  They just do it in Uganda; they do it here every year.  They have for decades.  Every U.S. president since Eisenhower has attended these annual prayer breakfasts. 

They‘re seen as nonpartisan, relatively innocuous, if vaguely insulting to the idea of separation between church and state.  But this year, The Family‘s sponsorship of the National Prayer Breakfast seems rather less innocuous, even beyond the sex scandals and cover-ups of the C Street house.

There‘s also the fact that two family members behind the kill-the-gays bill, David Bahati and James Buturo, both said in recent weeks that they it were planning on traveling to the U.S. to attend this year‘s prayer breakfast, alongside President Obama and all the other dignitaries who are expected to make appearances. 

We can report tonight that despite their claims, neither Mr.  Bahati nor about Mr. Buturo will actually be attending the prayer breakfast.  The State Department confirmed that for us late today. 

Even without those two there, though, should the president of the United States still be planning on attending The Family‘s prayer event? 

Joining us now is someone who thinks not.  Melanie Sloan is the executive director of CREW, Citizens for Responsibility in Ethics in Washington. 

CREW has sent a letter calling on the president and members of Congress to not to attend the breakfast.  Melanie, thanks very much for being here. 

MELANIE SLOAN, EXECUTIVE DIRECTOR, CITIZENS FOR RESPONSIBILITY IN

ETHICS IN WASHINGTON (CREW):  Oh, it‘s a pleasure. 

MADDOW:  So what is your argument, in short, against the president not attending this? 

SLOAN:  That the president shouldn‘t give his imprimatur, the suggestion of legitimacy to such a questionable organization.  It really has cult-like status and has been involved in tax problems, has been involved with unethical politicians. 

And this event, as your video showed, looks like it‘s somehow official.  There are presidential seals and other indicia that it‘s a government-sponsored event. 

And whenever high-level congressional officials and the president attend, you‘re basically giving it the imprimatur of the U.S. government.  And this is an event, by the way, that The Family uses for fundraising and networking. 

MADDOW:  The White House today told us that the president is going.  They said it‘s a bipartisan, congressionally-hosted event.  They said every president since Eisenhower has attended and just because he walks into a room doesn‘t mean that the president agrees with everything everyone else in the room says or does. 

SLOAN:  Well, I doubt he‘s going to walk into, say, a neo-Nazi gathering.  And it seems to me that‘s kind of a bogus argument.  And the fact other presidents have done it, well, I mean, that‘s like what you tell your mom, “All the other kids are doing it, so I want to do it, too.” 

MADDOW:  Do you think the White House could change its mind on this? 

Have you had any response from them on your letter? 

SLOAN:  We haven‘t heard anything from the White House and I don‘t think they will change their minds.  They obviously are also interested in cultivating the Christian right where they can. 

And I think that they would see it as a real problem to pull out at this point.  But I do think people - Americans ought to know where the president is going to and know who is behind this event.  They will see it on television and it will look innocuous and it isn‘t innocuous. 

And that‘s the key thing.  People should know about it and they call the White House if they think it‘s inappropriate for the president to attend. 

MADDOW:  In terms of your worries about The Family, obviously, we‘ve reported on a lot of different things about them over the last few months.  But in terms of why you see it as an ethical reason in Washington, is secrecy the main issue for you? 

SLOAN:  Well, there‘s - an awful lot of it is secrecy issues.  They‘re so hidden.  Doug Coe, the head of The Family, won‘t even generally get up on the platform at his own event because he recognizes that it would be a problem if people knew he was associated with it. 

And they have very shadowy fundraising.  And it‘s unclear who their donors are, who‘s supporting this fellowship.  And then there‘s the issue of all the politicians in addition to the ones you named. 

Kansas Representative Todd Tiahrt has also been associated with The Family.  And he is now being under investigation for his part in the PMA scandal, a lobbying group that‘s been involved in a lot of earmark problems. 

MADDOW:  Melanie Sloan is the executive director of Citizens for Ethics and Responsibility in Washington(sic).  Let us know if you hear anything.  Thanks for your time tonight.  It‘s good to see you.

SLOAN:  Thanks. 

MADDOW:  Thanks.  OK.  Coming up on “COUNTDOWN,” Keith asks Arianna Huffington about her close encounter with Roger Ailes. 

But first, on this show, many lovely frocks.  I will say no more.

(COMMERCIAL BREAK)

MADDOW:  I have a quick programming note for you.  This show will be broadcasting live from the French quarter in New Orleans on Friday night, for real.  Who knows, there might even be a few football fans celebrating down there this week, we hear. 

Kent Jones will be there with me.  And in anticipation, he‘s already in a New Orleans state of mind.  Aren‘t you, Kent? 

KENT JONES, MSNBC CORRESPONDENT: Oh, yes.  Hi, Rachel.  You know, men in New Orleans need a special occasion to parade in drag like I don‘t know, a damp Wednesday afternoon.  But now, the saints are in the Super Bowl.  Hundreds of hairy he-man showed up at that superdome to honor a man who could not be there.  Take a look. 

(BEGIN VIDEOTAPE)

(voice over):  Legendary New Orleans sportscaster, Buddy Diliberto, vowed to wear a dress if his beloved but frequently inept Saints ever made it to the Super Bowl. 

Well, that day has finally come.  But sadly, Diliberto died five years before he could see it.  But yesterday, to honor Buddy and his cross-dressing oath, hundreds of Saints fans paraded in front of the superdome like this.  Who that, who that, who that man wearing that dress? 

UNIDENTIFIED MALE:  Dress make me look fat? 

UNIDENTIFIED MALE:  I saw this dress.  It was like a light was shining down on it.  It was destiny and I knew Buddy D. wanted me to wear this dress. 

JONES:  And here‘s the tasteful ensemble Buddy himself would have worn on this occasion.  Among the glammed-up faithful was former Saints quarterback Bobby Abare and Buddy Diliberto‘s son, Chris. 

UNIDENTIFIED MALE:  He always wanted the Saints to - for this moment, it would really be special for him.  He wouldn‘t be able to talk.  He would be so excited.  I guarantee you, he would be shedding some tears. 

JONES:  Hail Buddy and hail the city that knows how to laissez les bon temps rouler.

UNIDENTIFIED MALE:  They‘re not doing this in Indianapolis.  This is New Orleans.  This is what we‘re all about. 

JONES:  Who that? 

(END VIDEOTAPE)

MADDOW:  I take that as a challenge to Indianapolis.  Indianapolis, can you do that, too?  Be (UNINTELLIGIBLE) with Kent? 

JONES:  Bring it on!  Let‘s see it. 

MADDOW:  Bring it on.  Kent, I‘m very much looking forward to going to New Orleans with you.  Thank you for bringing that in advance.  Appreciate it. 

JONES:  Me, too. 

MADDOW:  All right.  That does it for us tonight here in Washington.  We will see you again tomorrow night.  Until then, you can E-mail us, rachel@msnbc.com.  “COUNTDOWN” with Keith Olbermann starts right now.  Have great night. 

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

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