The Rachel Maddow Show, Transcript 12/07/10

Guests:
Simon Johnson, Sherrod Brown
Transcript:

RACHEL MADDOW, HOST:  Good evening.  And thanks for joining us in what will go down as a red letter day in the history of Barack Obama presidency.

The president today convening a hastily called press conference to try to tamp down the political crisis he is after announcing the very, very, very, very, very, very, very, very generous deal he offered to congressional Republicans on taxes.  Rebutting criticism from the left that he gave too much, that he traded away too many bad policies for not enough in the way of good policies, the president today stepped up to that microphone and he talked a lot about fighting.

(BEGIN VIDEO CLIP)

           

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  I will continue to fight before the American people to make the point that the Republican position is wrong.

And, you know, I will be happy to see the Republicans test whether or not I‘m itching for a fight on a whole range of issues.  I suspect they will find I am. And I think the American people will be on my side on a whole bunch of these.

We‘re going to keep on having this debate.  We‘re going to keep on having this battle.  I‘m happy to have that battle.  I don‘t see how the Republicans win that argument.

I understand the desire for the fight.  I‘m sympathetic to that.  I‘m as opposed to the high-end tax cuts today as I‘ve been for years.  In the long run, we simply can‘t afford them.  And when they expire in two years, I will fight to end them.

(END VIDEO CLIP)

MADDOW:  I will fight to end them.  The president today declaring himself a combatant, a man who is willing to fight, fight, fight for what he believes, one who is not only capable of political combat, but in his words, one who is itching for it.  He said in his calm, collected way that he is itching for a fight with Republicans—which made it all the more remarkable when he pivoted sharply to actually looking like he was itching for a fight, raising his voice, getting sarcastic and as animated as he has ever appeared in a presidential press conference while he denounced the supposed purity and sanctimoniousness of who I guess he sees as his real political enemies.

(BEGIN VIDEO CLIP)

OBAMA:  You know, so, this notion that somehow, you know, we are willing to compromise to much reminds me of the debate that we had during health care.  This is the public option debate all over again.  So, I pass a signature piece of legislation where we finally get health care for all Americans, something that Democrats had been fighting for for 100 years, but because there was a provision in there that they didn‘t get, that would have affected maybe a couple of million people, even though we got health insurance for 30 million people, and the potential for lower premiums for 100 million people, that somehow that was a sign of weakness and compromise.

Now, if that‘s the standard by which we are measuring success or core principles, then let‘s face it—we will never get anything done.  People will have the satisfaction of having a purist position and no victories for the American people.  And we will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are, and in the meantime, the American people are still seeing themselves not able to get health insurance because of preexisting condition, or not being able to pay their bills because their unemployment insurance ran out.

That can‘t be the measure of how we think about our public service.

That can‘t be the measure of what it means to be a Democrat.

(END VIDEO CLIP)

MADDOW:  The president today as animated and visibly angry as we have seen him as president, directing that ire at liberals.  Not only denouncing liberals as sanctimonious and in it for their own satisfaction with themselves rather than the good of the country, but also defending his approach to dealing with Republicans against the liberal critique.  At least the liberal critique as it described by the White House press corps.

(BEGIN VIDEO CLIP)

CHUCK TODD, NBC NEWS CHIEF WHITE HOUSE CORRESPONDENT:  Mr. President, what do you stay to Democrat who is say you‘re rewarding Republican structure here.  You yourself used in your opening statement, they were unwilling to budge on this.  A lot of progressive Democrats are saying they‘re unwilling to budge.  If you‘re asking them to get off the fence and budge, why should they be rewarding Republicans?

OBAMA:  Well, let me—let me use a couple of analogies.  I‘ve said before that I felt that the middle class tax cuts were held hostage to the high-end tax cuts.  I think it‘s tempting not to negotiate with hostage-takers, unless the hostage gets harmed.  Then people will question the wisdom of that strategy.

In this case, the hostage was the American people.  And I was not willing to see them get harmed.

Again, this is not an abstract political fight.  This is not isolated here in Washington.  There are people right now who when their unemployment insurance runs out will not be able to pay the bills.  There are—there are folks right now who are just barely making it on the paycheck that they‘ve got.

And when that paycheck gets smaller on January 1st, they‘re going to have to scramble to figure out how am I going to pay all my bills?  How am I going to keep on making the payments for my child‘s college tuition?  What am I going to do exactly?

Now, I could have enjoyed the battle with Republicans over the next month or two, because, as I said, the American people are on our side.  This is not a situation in which I have failed to persuade the American people of the rightness of our position.

I know the polls.  The polls are on our side on this.  We weren‘t operating from a position of political weakness with respect to public opinion.

The problem is that Republicans feel that this is the single most important thing that they have to fight for as a party.  And in light of that, it was going to be a protracted battle and they would have a stronger position next year than they do currently.

TODD:  If I may follow, aren‘t you telegraphing, though, a negotiating strategy of how the Republicans can beat you in negotiations all the way through the next year because they can just stick to their guns, stay united, be unwilling to budge—to use your words—and force you to capitulate?

OBAMA:  I don‘t think so.  And the reason is because this is a very unique circumstance.

(END VIDEO CLIP)

MADDOW:  This is a very unique circumstance?  Next time Republicans want something, they‘re not just going to try the same “say no to everything” strategy?  Why wouldn‘t they do that?

(BEGIN VDIEO CLIP)

MARC AMBINDER, THE ATLANTIC:  How do these negotiations affect negotiations or talks with Republicans about raising the debt limit?  Because it would seem that they have a significant amount of leverage over the White House now going in.  Was there ever any attempt by the White House to include the raising the debt limit as part of this package?

OBAMA:  When you say it would seem they‘ll have a significant amount of leverage over the White House, what do you mean?

AMBINDER:  Just in the sense that they‘ll say essentially that we‘re not going to raise the—we‘re not going to agree to it unless, you know, the White House is able to or willing to this agree to significant spending cuts across the board that probably go deeper and further than what you‘re willing to do.  I mean, what leverage would you have—

OBAMA:  Look, here‘s my expectation—and I‘ll take John Boehner at his word—that nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse, that that would not be a good thing to happen.

(END VIDEO CLIP)

MADDOW:  You‘re going to take John Boehner‘s word for that?

Here‘s the thing—I know liberals are very frustrating.  But is frustration with liberals so all consuming that the White House has not noticed all the Republicans in Washington saying they are perfectly willing to see the full faith and credit of the United States government collapse?  They‘re perfectly willing to default on the national debt to make a political point?

(BEGIN VIDEO CLIPS)

DAVID GREGORY, MODERATOR, “MEET THE PRESS”:  Will you vote to increase the debt ceiling?

SEN. JIM DEMINT ®, SOUTH CAROLINA:  No, I won‘t.

SEN.-ELECT MIKE LE ®, UTAH:  I‘m going to vote against raising the national debt ceiling.  We simply can‘t continue to mortgage the future of our unborn children and grandchildren.  It‘s not fair.  It‘s not American.  It‘s a form of taxation without representation.

REP.-ELECT JEFF DENHAM ®, CALIFORNIA:  We just don‘t see the next Congress raising the debt ceiling.  But it‘s certainly a challenge that we‘re going to have to deal with.  I mean, there‘s a lot of things at play during this lame duck section.

UNIDENTIFIED MALE:  So, you think that‘s something you‘ll vote against?

DENHAM:  Absolutely.  Yes.

GEORGE STEPHANOPOULOS, ABC NEWS:  Will you filibuster any attempt to rise the debt limit?

SEN.-ELECT RAND PAUL ®, KENTUCKY:  I think exactly what tactics we‘ll use will have to be discussed.  And I do plan on working with others to see what the best strategy is.  You need some people with principle in Washington who will stand up and say enough is enough.

(END VIDEO CLIPS)

MADDOW:  The president today pretty boldly asserted that no Republicans are going to vote against raising the debt ceiling.

The president today boldly asserted that this negotiation on tax policy should not be seen as a template for future negotiations with Republicans because for this one Republicans were holding the wellbeing of the American people hostage to get their way.  And that certainly won‘t happen again.

The president today also turned withering fire on liberals, on the Democratic base, for expecting too much—turned that withering fire on liberals for expecting too much from a White House that for another hot minute has big Democratic majorities in both the House and the Senate.

The president today also asserted bottom line that what he secured in this latest deal that Republicans trumpeted and complimented him on today, that this GOP-approved plan was at its base a good deal for the American people.  Was it?  Was it a good deal?

Stay tuned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  I think—I think—I think—I am happy to be tested over the next several months about our ability to negotiate with Republicans.

(END VIDEO CLIP)

MADDOW:  Your wish is the country‘s command.  You certainly will be, sir.  You are, in fact, sort of already are being tested.  How did you do on this most recent test?  One of the last for which you will have giant Democratic majorities in the House and the Senate?

Some answers to this that question which may surprise you—coming up next.

(COMMERCIAL BREAK)

MADDOW:  You know what, let‘s get a pizza.  I‘m starving.  You want to get a pizza?  All right, what should we get on it?

I should say at the outset that I‘m a little lactose intolerant, so cheese, even though I love pizza, even though I love everything about pizza, cheese is sort of not my thing.  So, I want to get a pizza.  But if we could get one without cheese, that would be awesome.

All right.  In the interest of compromise, though, I recognize that

you like cheese.  So, you know, I‘ll meet you half way.  I‘ll tell you what

let‘s get fresh mozzarella as one of the toppings, OK?  I can deal with that.

           

OK.  Is that—is that a fair offer?  I‘m going to try to meet you in the middle here.  You‘re good with the fresh mozz on the pizza?  You‘re good?  All right.  Good.

Why don‘t we also get one of the stuffed crusts on the pizza where they just inject the cheese right into the crust of the pizza?  OK.  You good with that?

And you know what?  We should also get a little parmesan on top, too.  Is that OK with you?  We got a deal?  Excellent.  We‘ve got a deal.  This was so easy.

I admit the lactose intolerant pizza negotiation metaphor may be a little wanting, particularly because I‘m not lactose intolerant.  But I otherwise can‘t quite get my head around the tactical work that was done here.

In the president‘s deal with Republicans on tax policy today, the White House has been at great pains to explain that they got a great deal.  In exchange for the Republicans getting what they wanted, this massive tax break for the rich, Democrats got something much smaller that they wanted, too.  And then Republicans ended up getting lots of other things they wanted as well, like an adjustment to the alternative minimum tax, and a giant adjustment to the estate tax.

If you went into these negotiations with Republicans not wanting cheese on the pizza, you ended up ordering extra cheese for the pizza, right?  Extra cheese with a side of cheese, and some cheese dipping sauce for the side cheese.  That, of course, is not the way the White House wants this deal to be seen.

(BEGIN VIDEO CLIP)

OBAMA:  There are a bunch of things they are giving up.  I mean, the truth of the matter is, from the Republican perspective, the earned income tax credit, the college tuition tax credit, the child tax credit, all the things that are so important for so many families across the country, those are things they really opposed.

(END VIDEO CLIP)

MADDOW:  Not really.  One of the things President Obama mentioned there was the child tax credit.  He was able to get Republicans to agree to an extension of the child tax credit.  Republicans are sort of really overtly for that.

Here‘s the GOP Pledge to America, this is page 14.  Quote, “During the 1990s, a Republican Congress enacted pro-family policies such as the child tax credit.  Unless action is taken, a $3.8 trillion tax hike will go into effect on January 1st, 2011.  The child tax credit will be cut in half.”

Be afraid.  Don‘t cut the child tax credit.  We Republicans love the child tax credit.

Here‘s incoming Republican House Speaker John Boehner warning on his Web site back in September that unless something is done, quote, “Horror of all horrors, the child tax credit will be cut in half.”

Republicans are for the child tax credit.  So, getting them to agree to an extension of it is not exactly an awesome concession.

As I mentioned before, as part of this deal, Republicans also got President Obama to agree to a fix in the alternative minimum tax, as well as the estate tax.

So, if you‘re keeping score at home, here‘s what Republicans got out of President Obama.  They got a bonus tax cut for the richest Americans.  They got a fix to the alternative minimum tax cut, which is essentially a tax cut.  And they got an agreement on the estate tax, which is another tax cut, a giant one.

An exchange for all of those tax cuts, Republicans bit their tongues and allowed three more tax cuts to go forward.

(BEGIN VIDEO CLIP)

OBAMA:  The earned income tax credit, the college tuition tax credit, the child tax credit.

(END VIDEO CLIP)

MADDOW:  Where did those tax cuts, tax credits come in—come from in the first place?  Do you remember how Democrats watered down the stimulus bill last year?  They put in a whole bunch of tax cuts in order to attract Republican votes for the stimulus, even though the tax cuts weren‘t nearly as stimulative as the spending?  Remember that?

Well, those things the president is talking about today are the things that just got extended.  That‘s the big Republican concession.  The stuff that was put in there as a sweetener for Republicans in the first place was just left in place—a thing originally designed to appeal to Republicans stays.  That‘s their concession.

How about a slice of cheesecake with your cheese pizza?  Maybe I could melt some cheddar on top.  We could have fondue as well.

The White House argument on this is that whatever you think about their negotiating skills, the end result of all this, is that it is good for the country, is that this is good policy for the American people.  Is it?

Joining us now is Simon Johnson.  He‘s the former chief economist for the International Monetary Fund.  He‘s now a professor of economics at MIT, as well as a contributing business editor at “The Huffington Post.”  In other words, he‘s way, way over-qualified for a discussion that started with a really bad long cheese metaphor.

Professor Johnson, thank you very much for joining us tonight.

SIMON JOHNSON, MIT ECONOMICS PROFESSOR:  Nice to be with you.

MADDOW:  Am I right that from what we know about this deal that none of it is offset, this is just $900 billion added to the debt?

JOHNSON:  Absolutely.  As far as we know, it goes straight into the debt.  It expands the deficit.  It‘s completely irresponsible.

MADDOW:  Give us a perspective on how big adding $900 billion to the debt is.  Nine billion dollar is obviously a big number.  All the debt and deficit number seem sort of equally big from a human distance.  How big a deal is this in terms of adding to our debt problem?

JOHNSON:  It‘s a very big deal.  Look, contrary to almost every other country in the world, we are continuing to run a big deficit.  We‘re ignoring the pressure from financial markets around the world.  We are continuing with these very irresponsible policies put in place by President Bush, and this is asking for trouble.  We are going to get trouble because of these tax cuts.

MADDOW:  The White House says, yes, this does add $900 billion to the debt, but it will have some stimulative effect on the economy.  The president making the case today that the best thing anybody can do for every sector of the economy is that the economy grows overall.

Do you see this as good bang for the buck in terms of economic stimulus?

JOHNSON:  No, it‘s not good bang for the buck.  You do get some stimulus, but it‘s a small amount of stimulus.  There are much better ways to stimulate the economy, if that‘s your goal, in return for the increased deficit and the increased debt, which is the cost I‘m afraid of those policies.

MADDOW:  If you could be economic dictator for a day, if you had $900 billion to devote to trying to make the economy better, trying to bring down unemployment in particular, what would you spend that $900 billion on?

JOHNSON:  Well, I would pay teacher.  We got states and local governments laying off employees, particularly teachers.  That really hurts us immediately and over the long run across the country.  That‘s devastating.

I would expand community colleges.  That‘s where the unemployed go to get retrained, go to get the new skills they need in the modern economy, skills they don‘t have.

And, of course, I would properly extend unemployment benefits.  Unemployment benefits, by the way, are going to remain at this 99-week limit.  So, in Nevada, for example, there‘s 96,000 people who are about to run out of benefit, the agreement today does nothing for those people.  They‘re still out of benefit.

MADDOW:  What about the GOP argument that they really, really, really want tax cuts for the richest people in the country because rich people are the job creators?  What about that sort of trickle-down, supply side argument?

JOHNSON:  Look, I have nothing against rich people.  Some of them are a great entrepreneurs, I‘m sure.  But there‘s no evidence that this kind of tax cut is going to generate jobs of that kind.  In fact, the people who study carefully the spending habits of those very same wealthy Americans are saying very clearly the evidence is this will not generate new jobs.

Businesses are constrained by the lack of demand right now more than anything else.  These taxes or the income tax and the estate tax, and so on, are not at all what is holding back employment and why we have record unemployment.

MADDOW:  In terms of the—in terms, of the U.S. situation with tax rates right now, when you hear people who are arguing for tax cuts, they talk about the country as if we have unreasonably high taxes compared to other major economies in the world.  When you talk about people who are willing to see tax rates go back up.  People talk about them as if they‘re contextualizing them as relatively reasonable.

What is your view in terms of the overall size of the U.S. tax burden right now?  Do we have high taxes?

JOHNSON:  No, we have low taxes as a percent of GDP compared to almost any other country at our income level.  We have a pretty inefficient tax system.  We should reform it.  That‘s without question.

If you reform the tax system, you will get more revenue and less distortion.  So, that‘s good.  Unless, of course, you don‘t want the extra revenue, unless you don‘t want to pay for two foreign wars, 11 aircraft carrier groups, and a lot of other commitments that the government got itself into over the past decade.

MADDOW:  Professor Johnson, one last question for you.  We‘re going to speak with Senator Sherrod Brown of Ohio in just a moment.  And one of the things I wanted to discuss with him is how much wiggle room there is in this framework.

The White House is describing this as a framework, which implies that the deal is not totally nailed down, although the basics of the agreement they expect to remain in place.  You described a radically different approach to spending $900 billion on trying to improve the economy spending on teachers and community colleges.

Is there something that within this basic framework could be done to significantly improve it?  To make it more stimulative?  To make it worth more in terms of what we‘re spending here?  Or is the overall framework just too toxic to do any good?

JOHNSON:  I‘m afraid this framework will not substantially help stimulate the economy.  It will not significantly bring down unemployment.  If that is your goal, and it‘s a very legitimate goal, and if you‘re willing to incur some extra deficit to bring down unemployment, which I think is entirely reasonably, you should spend those dollars wisely.  You should not blow it all on yet another irresponsible and from this purpose, ineffective tax cut that increases the deficit, increases the debt and makes us more vulnerable to a financial market attack, the kind now being seen in Europe.

MADDOW:  Simon Johnson, professor of economics at MIT, contributing business editor at “Huffington Post”—thank you very much for your time tonight.  It‘s very good to have you here.

If the tax cut deal was a compromise, should we think it‘s weird that so many Democrats are completely miffed about it and Republicans are basically doing a touchdown dance that obscene to warrant a good-sized fine in the NFL?  Democratic Senator Sherrod Brown of Ohio will join us on that in just a moment.

(COMMERCIAL BREAK)

MADDOW:  In just a moment, we‘ve got Senator Sherrod Brown of Ohio joining us to talk about the capital “D” Democratic reaction in Congress to the deal that President Obama cut with Republicans on taxes.  That is the biggest story in politics right now.  It is one of the biggest developments in the entire Obama presidency thus far.

I do, however, want to hit pause on that continuing coverage for just a moment to note a very sad passing.  Elizabeth Edwards was the wife of former senator and vice presidential and presidential candidate John Edwards.  She was also a political force in her own right, not only playing an integral operational role in her husband‘s campaigns r, but also emerging as a powerful speaker and advocate herself.

When in 2008, her husband‘s political career exploded amid denials and then half confirmations and then confirmations of infidelity and ultimately fathering a child with a woman who was not his wife, Elizabeth, the two were separated.

Elizabeth continued to fight the aggressive breast cancer with which she had been diagnosed on the day after the 2004 elections.  She wrote a book about her experiences and her values.  She became a strong progressive advocate in her own right for the issues that she cared about.

(BEGIN VIDEO CLIP)

MADDOW (on camera)  Elizabeth, your recent book, “Resilience” is in part about what‘s been a hell of a few years for you, with your own fight with cancer, with your husband‘s infidelity becoming public. 

And you‘ve written about both eloquently in the new book.  I don‘t usually ask guests this, but I feel like it‘s OK to ask you this for some reason.  Tell me if it‘s not.  But how are you doing? 

ELIZABETH EDWARDS, HEALTH CARE ADVOCATE:  Actually, I‘m doing well.  This is actually one of the reasons that inspire me to continue to speak out on health care.  Because I‘m doing well with a condition that many women - and women I have met that I have spoken to, are also fighting and they don‘t have the resources that I have. 

So when I - you know, when I was writing this book I thought not just about what I was going through, but what they were going through every day and how much worse it was for them, you know.  I certainly have a lot to lament as we all do.  Everybody has their grief.  But the grief we can fix - shouldn‘t we go about fixing them? 

(END VIDEO CLIP)

MADDOW:  Elizabeth Edwards died today of breast cancer.  She was 61 years old.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, UNITED STATES PRESIDENT:  To my Democratic friends, what I‘d suggest is, let‘s make sure that we understand this is a long gain.  This is not a short gain. 

And to my Republican friends, I would suggest - I think this is a good agreement because I know they‘re swallowing some things that they don‘t like as well.  And I‘m looking forward to seeing them on the field of competition over the next two years.

(END VIDEO CLIP)

MADDOW:  The president himself today and a lot of folks on the left and in the center who are defending the president‘s deal with the Republicans this week on taxes are doing the defending by arguing that, hey, neither side got what it wanted here. 

Sure, Democrats aren‘t happy with the president capitulating to all these bad Republican ideas, but it was a compromise.  Nobody is happy.  The Republicans aren‘t happy either. 

Actually, Republicans are pretty happy.  You can tell because they‘ve already sent out their triumphant fundraising letters, telling Republican donors about how much their investment in the Republican Party is paying off in the form of the Democratic president now endorsing their Republican agenda. 

Quote, “The Democrats are in disarray.”  Quote, “None of this would have been possible without your generous support, Republican donor.” 

Everybody defending this deal keeps talking about how it was bad for Republicans, too.  Somebody forgot to tell the Republicans that. 

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY):  Well, good afternoon, everyone.  Let me just say we‘re pleased a large majority of the members of the Republican conference will find this proposal worth supporting.  I think the vast majority of the members of the Republican caucus in the U.S. Senate feel that this is a step in the right direction.  I think the vast majority of my members will be supporting it. 

(END VIDEO CLIP)

MADDOW:  If your argument on behalf of this White House is political skills right now, is that the president got some hard-fought concessions out of the GOP here, your argument is wrong.  It may be comforting, but it is not based in fact.  On the other side of the aisle, however, in the president‘s own party, the unhappiness is real. 

(BEGIN VIDEO CLIP)

SEN. CHARLES SCHUMER (D-NY):  We think it‘s wrong for tax breaks to go to millionaires.  We think it‘s correct that it goes to the middle class. 

REP. NANCY PELOSI (D-CA), SPEAKER OF THE UNITED STATES HOUSE OF

REPRESENTATIVES:  I think it‘s fair to say that there‘s a certain amount of unease with the proposal that was put forth by the president, the test that we have to subject these proposals to on both sides of the ledger, the president‘s side and the Republican side is do they create jobs? 

Give me a tax cut to those making over - the upper two percent of our country does not create jobs.  It simply adds to the deficit.  So both tests, it fails.  It does not create jobs.  It increases the deficit.  So there is unease with the proposal and members are expressing that right now. 

(END VIDEO CLIP)

MADDOW:  Another member of the Democrats House leadership today, Congressman Chris Van Hollen said this, quote, “I have very, very serious reservations with this deal.  The House never signed off on this so it‘s certainly not a done deal.” 

Vermont Congressman Peter Welch is organizing and rallying House Democrats to oppose the president‘s tax cut compromise with Republicans.  In a letter to Speaker Pelosi signed by some of his own colleagues, Congressman Welch said, quote, “We support extending tax cuts in full to 98 percent of American taxpayers, as the president initially proposed.  He should not back down.  Nor should we.” 

Two incoming co-chairs of the congressional progressive caucus said in a letter today, quote, “We call on our congressional leaders in the House and Senate to hold firm on passing a middle-class tax cut with no strings attached.” 

Michigan Congressman John Conyers got on board with “fight the president express” as well with this statement, quote, “I will do everything in my power to make certain that legislation along these lines does not pass during the lame duck session.” 

Not to be outdone by the people‘s House, Democratic senators are also making known their unhappiness with the deal. 

Louisiana Senator Mary Landrieu slammed the deal, saying, quote - it was describing its, quote, “moral corruptness” and saying, quote, “This is beyond politics.  This is about justice and doing what‘s right.” 

Independent senator from Vermont, Bernie Sanders, never to be outdone on the job of fight-leading said, quote, “I intend to do everything that I can to defeat this proposal.” 

Of course, we saw Sen. Chuck Schumer there in the segments saying, “We think it is wrong for tax breaks to go to millionaires.  We think it‘s correct that it go to the middle class.” 

One of the questions that was shouted at the end of the president‘s press conference today as he walked away from the podium was, “Is this a done deal, Mr. President?”  I thought as I was with watching the press conference, that‘s a good question. 

I never this things to go longer.  This time I would love to hear an answer to that.  This deal was between the president and Republicans.  Is Democratic disgust with this deal enough to stop it? 

Joining us now is Democratic Senator Sherrod Brown from the great state of Ohio.  Senator Brown, thank you so much for your time tonight. 

SEN. SHERROD BROWN (D-OH):  Good to be back, Rachel.  Thanks. 

MADDOW:  I know the vice president, Mr. Biden, has been personally trying to make the case to Democratic senators to win over support for this deal in the Senate.  Do you feel like he‘s making a strong case?  . 

S. BROWN:  Well, he made it sound the cases he could make on it are for a bad deal.  I think that he‘s always persuasive.  People always like him.  He‘s a decent guy.  He‘s smart. 

But it fell short.  I mean, we tried these tax cuts for the rich.  I mean, a lot of us voted against it, but we tried them as a country 10 years ago.  We got literally negative private sector job growth in the eight years of Bush.  Negative private sector job growths. 

Contrast it with 22 million jobs during Clinton‘s year.  So this didn‘t work when we had a budget surplus.  Why would it work when we had this (UNINTELLIGIBLE)?  What I fear is going to happen if we go along with the deal is in the next two years, the next three years, all the talk will be - all the talk will be about we got a deal with this huge growing deficit.

So what Republicans do is they go after social security and go after Medicare.  That‘s what they always do as an answer to budget deficits.  And the budget deficits are going to grow bigger and bigger because we just gave $700 billion if we agree to the plan.  The president‘s plan is with the Republicans‘ $700 billion increased deficit.  I mean, what‘s good about that? 

MADDOW:  Is there room to change this deal, do you think, to improve it in your eyes?  The White House is calling it a framework, not necessarily a deal that‘s fully done. 

S. BROWN:  I hope they‘re open to that, and even if they are, I think we worked to force the issue.  There‘s no - if this was a deal, mostly between a Democratic president and Republican leaders in the Senate, that doesn‘t mean that the Democrats go along with it in the Senate or the House.  It doesn‘t mean we have to follow that lead.  And there are a lot of changes we want to make. 

Why would they do the worst - why would they include the worst possible estate tax proposal out there, the one that clearly puts us even more behind the eight ball on long-term debt? 

I mean, there‘s so many things about this that don‘t work.  And we‘re going to get unemployment extension anyway.  It‘s not a question if we got unemployment extension and we gave all these things away. 

Because the Republicans always in the end cave on unemployment as it got closer to Christmas.  A lot of us said to Sen. Reid, “Keep us here until we pass unemployment.  We‘re willing to stay as long as it takes.” 

And Republicans, eventually a handful of them, will vote to extend unemployment because they get too much pressure at home to not do that.  So there‘s ball - we were - somebody said to me tonight, you know, the Democrats look like they punted on third down. 

I mean, I hate sports metaphors, but that one works pretty well.  I mean, we could have done a lot better on this deal no matter what some of the leaders might have said. 

MADDOW:  What you just described there about your enormous certainty that unemployment benefits could be extended, that‘s a key point of disagreement between your perspective and the White House. 

The White House is arguing that there‘s no chance they could have gotten unemployment extended without this, that it would have put unemployment insurance as an entire program as risk, because it not only would have been extended now.  That would have put the whole program in jeopardy. 

Do you feel like you have a better sense about what‘s feasible in

the Senate than the White House does -

S. BROWN:  No.

MADDOW:  That they‘ve just got a misinterpretation of how things work in the Senate right now? 

S. BROWN:  I don‘t know that I would claim any more knowledge of the White House.  But I would say this, Rachel - every day, as we were the last two weeks, one of us goes to the Senate floor, ask to extend unemployment benefits, the Republicans object. 

You do it day after day after day.  See, the president didn‘t win on the road to Maine.  He went on the road to Massachusetts.  He went on the road in an industrial state with a lot of unemployment where there‘s a Democratic senator or any one of a number of states where there‘s a Republican senator that was up for election in 2012. 

You can put a lot of pressure on them.  You think by Christmas Day when we said to the Republicans, “OK you‘re going to be here Christmas Eve, Christmas Day, the day after, most Democrats are willing to work through that. 

I want to go home to my family, but I also want to get this done.  And if we would have put enough pressure on them, they would have eventually said yes to unemployment extensions, because 80 percent of the public are with us. 

And they don‘t want - you know, I mean, I don‘t care if we ruin our Christmases.  We ruin the Christmases of a whole lot of workers by not extending unemployment.  It‘s still not done. 

On December 1st, 90,000, last Tuesday night - a week ago, 90,000 Ohioans lost their unemployment.  They‘re still wondering if they‘re going to have any kind of a decent Christmas, let alone next year. 

And we just could have kept putting the pressure on Republicans until they did it instead of getting all these - instead of their holding hostage unemployment to get all the tax cuts for millionaires and billionaires.  It‘s just immoral. 

I mean, it‘s absolutely morally reprehensible that they would do that.  They would hold unemployment out there in order to get their tax cuts for the richest people in the country that already are doing so well. 

MADDOW:  Sen. Brown, when hearing you describe not only your passion on this issue, but your view of how it could politically work, it makes me want to know how typical you are of your caucus at this point, if you are feeling from your Democratic colleagues in the Senate a similar sense about the political possibilities here and about the priorities. 

Certainly, we‘re hearing a lot of criticism of the deal, but it‘s hard for me to tell from outside the Washington world just how feasible it might be to pursue a different way forward than what the White House has offered. 

S. BROWN:  Well, if the vice president came in today and said, “Here‘s what we‘re going to do.  We‘re going to - every day, we‘re going to turn on all our ability to talk to the national - to talk to the public in all 50 states in the White House. 

They have a pretty good machine there to do it.  We‘re going to put all our efforts into that to get unemployment extended.  And then the president is going to fly around the country to places and put pressure on Republicans. 

You, every day, on the Senate floor, will do it in the House, too.  You stand up and ask to extend unemployment benefits.   And you say, “We‘re staying here until New Year‘s.”  You don‘t think eventually Republicans would have finally said, “We give up”?  They would have no choice in the end. 

We would have gotten not two or three of them, but I think we would have gotten six or eight or 10 of them to extend unemployment benefits.  If the vice president walked in today and said that instead of doing what he did say to defend this package, that is really the opposite of what a lot of us campaigned on.  It would be a very different place. 

MADDOW:  Do you the time is out?  Do you that time has run out? 

S. BROWN:  No, I don‘t give up that easy.  No, Rachel.  I think we keep fighting and we keep speaking out.  We keep asking the president to reconsider.  And we work with our allies in the House. 

I had dinner with five House members tonight in a little Chinese (UNINTELLIGIBLE) restaurant in our neighborhood nearby - near the capitol.  And we talked about some of this.  Let‘s get the House to work with us and I think some good things can happen. 

MADDOW:  Ohio Democratic Senator Sherrod Brown, thank you for speaking with us tonight.  Hope we didn‘t interrupt your dinner, sir. 

S. BROWN:  Not at all. 

MADDOW:  Appreciate it.  All right.  Coming up on “THE LAST WORD,” Lawrence O‘Donnell hosts Democratic Congressman Peter Welch of Vermont who is becoming nationally famous right now as he is trying to lead the charge against the president‘s tax deal with the Republicans in the House of Representatives.  Very important interview coming up with Lawrence O‘Donnell on “THE LAST WORD” tonight. 

Coming up on this show, one way that President Obama is on the ladder of success, but climbing down it instead of up it.  That‘s next.   

(COMMERCIAL BREAK)

MADDOW:  And now, for something completely different.  Last year and early this year, we spent a lot of time on this program covering one of the weirdest and spookiest offshoot of the C Street scandal. 

C Street, you‘ll recall, is the Washington, D.C. outpost of a secretive religious organization known as The Family.  C Street house is essentially a dorm for members of Congress.  Rent is subsidized by The Family and members of Congress who live there have more or less overt ties to this religious group. 

The scary, creepy detail we covered in full about The Family and C Street is The Family‘s ties to a piece of legislation known around here by its cute nickname the Kill The Gays Bill. 

The Family‘s right hand man in the nation of Uganda introduced and promoted legislation in that country to make homosexuality a crime punishable, in many cases, by death.  He made case for his bill in part by bringing to his country American evangelical activists who claim to be able to cure homosexuality through a variety for-profit and quackery prayer cures. 

Now, as we reported on the Kill The Gays bill, Americans associated with it and with The Family and C Street started to disassociate themselves from the legislation.  The legislation itself was then widely reported to be dead. 

But it turns out the Kill The Gays bill is not dead.  The Ugandan lawmaker from The Family who is promoting it says it is on the docket and he says it is due to pass.  He will be my guest for the interview on this program tomorrow, 9:00 p.m. Eastern.  I hope you‘ll watch.

(COMMERCIAL BREAK)

MADDOW:  There is a quote that is attributed to Gandhi.  That was probably not said by Gandhi, but I don‘t know who did say it.  So since everybody thinks he said it, he‘s maybe still the best reference. 

It goes like this, “First they ignore you.  Then they laugh at you.  Then they fight you.  Then you win.”  I always found this very inspirational as a kid who felt like I was always going to be part of the world that at best would be laughed at and a typical day would be ignored. 

The idea was that this is how you, as an outsider, you as somebody who is initially dismissible, you can eventually, if you are persistent and if you do your work well, you can achieve great things.  You can, in fact, defeat the people who would dismiss and laugh at you and fight you. 

We are seeing right now the reverse of this.  We are seeing quite literally this process playing out backwards with the presidency, this historic presidency that came about because of a brilliant and country-changing campaign. 

So, this is the Gandhi quote backwards for this presidency.  First, in this case, for this presidency - first, you win.  This presidency was not a culmination of a grand career in politics for Barack Obama.  He was catapulted to the presidency by the brilliance of his campaigning and by a country that desperately wanted something dramatically different from what we‘d had before.  So, first he won.  Then, they fight you.  Then, after he won, they fought him. 

(BEGIN AUDIO CLIP)

SEN. JIM DEMINT (R-SC):  If we‘re able to stop Obama on this, it will be his Waterloo.  It will break him. 

(END AUDIO CLIP)

MADDOW:  That, of course, is Republican Senator Jim DeMint of South Carolina charmingly plotting last year to politically destroy President Obama over health reform. 

Turns out health reform was not Barack Obama‘s Waterloo.  No one thing has been Waterloo for this president.  But Republicans have adopted the Jim DeMint Waterloo strategy for every fight, for every single piece of legislation of any significance. 

The goal is to stop it and stop it at any cost because any political advancement is advantage for this president and this president must be destroyed. 

It‘s not surprising - these are not surprising tactics.  If you were a Republican Congressional leader you probably would have done the same thing.  The way they decide to fight the president was by unified opposition to everything he proposes or that can be linked to him. 

And why do they want to do that?  Because they want to defeat him. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  You told “The National Journal,” quote, “The single most important thing we want to achieve is for President Obama to be a one-term president.”

(END VIDEO CLIP)

MADDOW:  So, first he won.  Then they fought him.  He got a lot of legislation passed in his first two years as president.  But by fighting him in this way, the Republicans destroyed him in the midterms.

And in the first big test of whether those midterm losses had seriously wounded the president, or whether he was going to come back stronger after that defeat, the president face-planted, calling a hastily-arranged press conference to try to defend an inexplicable capitulation, even before his opponents have taken power, even with public opinion on his side. 

So first he won.  Then they fought him.  And now, with the way he lost this fight, we have arrived at the part you would hope would be the worst of this process, but it isn‘t. 

What is happening now is that this presidency is at risk of becoming a punch line.  It‘s not that he has lost a fight or two or three or four.  It‘s that the very idea that he knows how to win or even wants to win has become a joke. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  He said I will fight again in two years for these tax cuts to expire for the richest Americans.  Was there a fight that the American public missed? 

(END VIDEO CLIP)

MADDOW:  Started off by winning.  Then they fought him.  Now, it‘s punch line time.  But the worst stage, the one that cannot be reversed, is when this president starts to be ignored, when what he wants, his political vision becomes irrelevant. 

Is not just a face-value harm for this president‘s political power.  It is actually a substantive harm for the presidency itself.  Either the president of the United States matters or he doesn‘t. 

And if the president cannot win when his party is the majority in Congress, if no one can even conceive of the president winning fights when his party is in the majority, let alone the minority in Washington, then the presidency itself starts to atrophy.  It starts to disappear. 

The White House either figures out how to reverse this now, how to start winning now, how to assert the president‘s relevance now - they either do that or fill in the blank. 

In the metaphor, when you transition from them, ignoring you to them fighting you, to you winning, what you‘re doing is moving from irrelevancy.  You‘re moving from the wilderness into a place where you are in power.  When you do that in reverse, you are starting in power and you are ending up irrelevant. 

That does it for us tonight.  We will see you again tomorrow night.  Now, it‘s time for “THE LAST WORD” with Lawrence O‘Donnell.  Good evening, Lawrence. 

LAWRENCE O‘DONNELL, HOST, “THE LAST WORD”:  Thanks, Rachel. 

MADDOW:  Indeed. 

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

END   

Copyright 2010 CQ-Roll Call, Inc.  All materials herein are protected by

United States copyright law and may not be reproduced, distributed,

transmitted, displayed, published or broadcast without the prior written

permission of CQ-Roll Call. You may not alter or remove any trademark,

copyright or other notice from copies of the content.>