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The Rachel Maddow Show, Transcript 09/08/11

Guests: Valerie Jarrett, Jared Bernstein, John Mica, Steve Israel

RACHEL MADDOW, HOST: Good evening, Lawrence. Thank you very much. And thanks to you at home for staying with us for the next very busy hour. We will have an update on the reportedly, quote, "credible, specific, but unconfirmed terror" threat on the United States. Around what is, of course, the tenth anniversary of the September 11th terror attacks. We`ll have that coming up this hour. We will also have the latest on the massive power outage in parts of Arizona and southern California, primarily in the San Diego area where more than a million Americans do not have electricity at this hour. Both of those things happening and breaking in terms of news relatively recently. There`s obviously an enormous amount of news tonight, political and otherwise. But we begin as we must in Washington, D.C. When a president addresses a joint session of Congress, it`s usually for the State of the Union Address. Only very rarely do presidents ever ask Congress to address a joint session for something other than the State of the Union. Before tonight, President Obama had only done that once before when he unveiled his health reform plan -- his health reform plan that ultimately became his health reform law. Republicans now denounce it as Obamacare and lots of other things besides and they pledge that they will it away somehow, but his health reform plan passed. The most significant change to the socially safety net in this country since Medicare passed nearly 50 years ago. He got that done. Tonight, once again, before a joint session of Congress, President Obama faced his stiff political headwinds and called for another big new initiative. One to fend off the unspoken, but looming, threat that the country may be about to plunge back into recession. After barely escaping a depression brought on by the financial system collapse at the end of the George W. Bush administration, after a recovery that tried and tried to bring us back all the way, but now seems to have stopped in its tracks, can Washington act to stop a double economic dip? Can the gleefully obstruction Republicans who control the House and act as a super empowered minority in the Senate be brought on board to take action to try to help the economy -- or can they not? The president`s proposal tonight, a Republican-friendly but still rather bold $447 billion plan, rated 60/40 tax cuts to spending, a plan to try to reduce the unemployment rate now. This was not a high concept speech. This was not a vague goals kind of speech. The president has a piece of legislation with very specific proposals in it -- many of them taken from the Republican side of the aisle. And he would like that legislation passed, please, right now. (BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I am sending this Congress a plan that you should pass right away. It`s called the American Jobs Act. Pass this jobs bill. Pass this jobs bill. Pass this bill. Pass this jobs plan right away. Pass this jobs bill. Pass this bill. You should pass it right away. Pass this jobs bill. Pass it again. Right away. Pass this jobs bill. This plan is the right thing to do right now. You should pass it and I intend to take that message to every corner of this country. (END VIDEO CLIP) MADDOW: Ignoring calls from his Democratic base to name and shame the Republican Party for having blocked economic progress thus far. President Obama instead noted over and over again tonight the Republican origin or past Republican support for many of the ideas he was asking Republicans to vote for tonight. (BEGIN VIDEO CLIP) OBAMA: Everything in here is the kind of proposal that`s been supported by both Democrats and Republicans, including many who sit here tonight. Fifty House Republicans have proposed the same payroll tax cut that`s in this plan. This jobs plan builds on a program in Georgia that several Republican leaders have highlighted. I agree that we can`t afford wasteful spending and I agree there are some rules and regulations that do put an unnecessary burden on businesses, at a time when they can least afford it. Every proposal I`ve laid out tonight is the kind that has been supported by Democrats and Republicans in the past. (END VIDEO CLIP) MADDOW: Sort of a push me/pull you move with the Republicans he needs to get his jobs bill passed, President Obama tonight not only tried to woo them with the bipartisan pedigree of many of his proposals, he also called out the constraints that Republicans may perceive themselves to be under -- constraints that would prevent them from voting for this jobs bill. (BEGIN VIDEO CLIP) OBAMA: I know that some of you have sworn oaths to never raise any taxes on anyone for as long as you live. Now is not the time to carve out an exception and raise middle class taxes which is why you should pass this bill right away. This larger notion that the only thing we can do to restore prosperity is just dismantle government and refund everybody`s money and let everyone write their own rules and tell everyone they are on their own, it`s not who we are. It`s not the story of America. Yes, we are rugged individualists. Yes, we are strong and self- reliant. And it has been the drive and initiative of our workers and entrepreneurs that has made this economy the engine and the envy of the world. But there`s always been another threat running throughout our history, a belief that we are all connected. And that there are some things we can only do together as a nation. (END VIDEO CLIP) MADDOW: Taking aim there at what may be the less politically sustainable positions of the Republican Party`s activist base characterizing it as this notion that the only thing we can do is dismantle government, refund everybody`s money and let everybody write their own rules and tell everybody they are on their own, taking aim at that position of the Republican Party`s activist base tonight. The president pivoted and also took aim at what he sees his own base. Saying tonight that he would be willing to consider changes to Medicare. Since he would be opening Medicare for surgery in Washington under the care of a Republican minority which says they`d like at it with a chain saw, please -- that was a line about Medicare that will cause some sleepless nights on the left and among America`s seniors and elsewhere. But President Obama leavened that tonight with, frankly, the reappearance of Obama, the political fighter. The confident knows where he is going guy who knows how, among other things, to win elections. (BEGIN VIDEO CLIP) OBAMA: I reject the government that says for the economy to grow, we have to roll back hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from short-changing patients. I reject the idea we have to strip away collective bargaining rights to compete in a local economy. (APPLAUSE) OBAMA: Regardless of the arguments we have had in the past, regardless of the arguments we will have in the future, this plan is the right thing to do right now. You should pass it. And I intend to take that message to every corner of this country. (APPLAUSE) (END VIDEO CLIP) MADDOW: Joining us now from the White House is White House senior adviser Valerie Jarrett. Valerie, thank you very much for your time. It`s nice to have you here. VALERIE JARRETT, SENIOR WHITE HOUSE ADVISOR: My pleasure. Hello, Rachel. How are you? MADDOW: I`m -- you know, I`m great. Every night there is an address by a joint session to Congress, it`s a tiny little Christmas for somebody like me. JARRETT: It`s a good night for you. MADDOW: Well, tell me -- I mean, you look back at this president`s choices about big speech venues. He, of course, has had two State of the Unions sessions before joint session of Congress, the other address happens after the president is inaugurated, that sort of a State of the Union but not really. The only other time he addressed a join session was unveil his health reform plan. Is this as big a deal to his presidency as his health reform plan was? JARRETT: Absolutely. There is nothing more important to the president right now than getting our economy going, putting people back to work, putting a little extra money in the pockets of folks who are struggling as they face this tough, tough economic time. And I think the message that he made very clear tonight is the Congress should pass this plan and they should do it right this minute, and that it`s fully paid for. It is bipartisan in nature. These are -- provisions in here both the Democrats and Republicans supported before and no reason we can`t move forward this minute. There are benefits in here for small business. There are opportunities for construction. In fact, Rachel, I was thinking about you this morning. When I woke up, I turned on the TV and I saw the commercial that you have standing in front of a bridge and you`re saying that, you know, the private sector can`t do everything. There are certain things that Americans expect their government to do. Our infrastructure is vitally important. Putting people back to work with construction is important. Our roads, our bridges, our sewers, our waterways, our dams -- this is what makes our country so special. And as we try to compete in this global marketplace, we need to rebuild our infrastructure. We need to rebuild our schools. We need to make sure that teachers and first responders and veterans who are coming home from serving our country so proudly have jobs waiting for them. We know all across the country companies are discriminating against people who have been out of work for a long time. This bill has a very important provision where if you`ve been out of work for over six months will give a company a benefit if they will hire you so that we can get the long term unemployed back to work with the skills that they need. And so, there`s no reason why we can`t move forward decisively and promptly. The president is going to draft the legislation, make the job a little easier for Congress and send it up there next week. MADDOW: Next week? JARRETT: Next week. MADDOW: Does that mean the president has a plan for passage here? Has he met with the individual committee chairman or is he planning to meet with the individual committee chairman? Is he planning on doing a full- court press to lobby for this passage? JARRETT: The president plans to do a full-court press with the American people. So, he`ll be in Virginia tomorrow. He`ll be in Ohio next week. As he said this evening, he intends to take this message all over the country. The reason why he wanted to do the speech this evening before Congress was not just speak to the members of Congress yet important they hear the message, but it was also important that he have a chance to speak directly to the American people. They are the ones who are out there struggling trying to make end`s meet. They are the ones who elected the people who are representing them here in Washington. And now is the time for Washington to remember that and act. MADDOW: Congressional Democrats, among a lot of other challenges this year, have been sort of delighted about the prospect of running against congressional Republicans who voted for the Paul Ryan plan to kill Medicare. Democrats feel like they broadly speaking running a congressional races, Senate races, even dog catcher races, are delighted to be a part of the party standing up for Medicare given that so many Republicans voted to get rid of it by turning it into a coupon program, by voucherizing. Given that, the president unilaterally offering tonight to essentially tinker with Medicare himself. Does the White House not recognize the political impact, not just on the president`s re-election chances, but on Democrats down on every ticket in the country for muddying those waters and making it seem like maybe Democrats can`t be trusted with Medicare either? JARRETT: No, it doesn`t muddy the waters at all. In fact, if you listen carefully to what the president said and if you look at the bill, he intends to strengthen Medicare. He intends to protect existing beneficiaries and you`re right. The Republicans intended to dismantle it completely. So there is a clear contrast. The president is fighting to make sure that Medicare is available for future generations and that we protect those who are depending on it right now. So, no, I don`t think we muddied the waters at all. I think he clarified the waters and he strengthened his position because he made it very clear that he intends to protect Medicare. We do have tough choices ahead, Rachel. I think he laid that out this evening and there are some pretty clear choices. The Republicans for example said they want to protect the income of the very wealthy and corporations that are extremely profitable. The president said we need a fairer system. We need balance. We need to make sure that those who most depend upon government have government when they need it. We need to extend the unemployment benefits for people who are out of work. We need to make sure that youth and disadvantaged families have jobs available in the summer and throughout the year, so that they can experience what it`s like to have money in their pocket and develop lifelong skills that will keep them employed over the long haul. We need to make sure that we have the ability to offer mortgage refinancing for people who are under water with their mortgages and restructure those and make sure that our neighborhoods that have been blighted by all of these mortgage foreclosures have tools they need to get rejuvenated again. And we need to make sure our teachers are employed. We have so many states around our country who are facing these tough budget times and are having to lay off teachers. We want to make sure that we put those teachers back to work and that we put them in schools where our children are in good schools where the roofs are protected and they are renovated and they have the technology and the labs that they need so that they can compete in this global marketplace. Everything I`m describing to you, Rachel, is a part of the American Dream. It`s a part of the fabric. It`s what makes our country so special and the president really wanted to call on Congress to remind them of what our mutual responsibilities are to each other and to the country that the Americans who elected them. And I think that it was an optimistic message. He is confident that if we put politics aside, that we really can work together and that is what he is going take to the American people beginning tomorrow morning. MADDOW: Valerie Jarrett, one last question for you on a different topic I did not expect to be asking you about tonight and that is this potential terror threat that we have heard about in the last few hours. Can you let us know if the president has been fully engaged, if he`s been fully briefed in on this issue alongside with his responsibilities with the speech tonight? JARRETT: Absolutely. He was briefed this morning. He has received updates throughout the day. He has ordered his team to redouble our efforts as we go into this weekend where we are having, obviously, the tenth anniversary of 9/11 and he is absolutely vigilant in doing everything he can to protect the American people. MADDOW: White House senior adviser Valerie Jarrett, many thanks for your time tonight. I know you get up early if you were seeing those ads with me in the hard hat. JARRETT: I love those ads. I love leaning forward. MADDOW: You know, the argument sounds much better without the blue hat on, so that was a good move you guys didn`t go with that tonight. Thank you very much, ma`am. It`s nice to see you. JARRETT: You`re welcome. MADDOW: All right. The latest on the terrorism alert we have been notified about tonight. Also, a big blackout in San Diego and other parts of the far southwest tonight -- millions of people affected. Plus, coming up we have a rather ecstatic reaction to tonight`s speech from President Obama from an economist who is used to finding himself more on the president`s left flank. That`s all coming up. (COMMERCIAL BREAK) MADDOW: Three days after Barack Obama defeated John McCain in the 2008 presidential election, three days after that election victory, Mr. Obama called his first press conference as president-elect of the United States. From his transition headquarters in Chicago, a victorious and -- look at him -- notably much younger-looking Barack Obama announced to Congress and to the American people what his first priority would be as president. (BEGIN VIDEO CLIP) OBAMA: The one thing I can say with certainty is that we are going to need to see a stimulus package passed either before or after inauguration. I want to see a stimulus package sooner, rather than later. If it does not get done in the lame duck session, it will be the first thing I get done as president of the United States. (END VIDEO CLIP) MADDOW: A stimulus package. That stimulus package ultimately wasn`t passed during the lame duck session of Congress. That followed the election, but while Bush was still president. But when President-elect Obama, boy king, said there that the stimulus would be the first thing he would get done as president, he was not kidding. Less than a month after being sworn into office, President Obama got that stimulus package. Inaugurated in late January, Congress passed it in February, and he immediately signed it into law. They move really fast on that. Why did we move really fast on that stimulus? Well, we happened to be right in the middle of catastrophic economic free-fall at the time! Here`s what the economic picture looked like at the time when he was sworn in. In the third quarter of 2008, just before the presidential election, the economy wasn`t just not growing, it wasn`t just stagnant, it was actually shrinking, getting smaller. That is very, very bad. The economy shrunk by half a percentage point during that quarter which is a big deal when the economy is as big as ours is. But then in the fourth quarter of 2008, look at that. It went off a cliff. The economy shrank -- shrank another 3.8 percent That is the situation President Obama walked into -- free-fall. And so, we got the stimulus -- a piece of legislation that was responsible for not only stopping the free-fall but for propping up an economy that was, frankly, plunging toward depression. Instead of the economy shrinking at that rate of 3.8 percent, the stimulus is credited with adding one or two percentage points to the GDP in 2009. It grew the economy. Because of the Stimulus Act, up to 2.9 million people had jobs who otherwise would not have had them. So, in that sense, even though nothing turned up roses, the stimulus did work and did what it was supposed to do. It made things a lot less bad than they otherwise would have been. Stop the freefall. But it was not enough. It managed to help the economy, but things were still unspooling at the end of 2009, so much so that in December 2009 -- and this is lost to history -- in Decembers 2009, President Obama called for a second round of stimulus. Remember? (BEGIN VIDEO CLIP) OBAMA: Even though we have reduced the deluge of job losses to a relative trickle, we are not yet creating jobs at a pace to help all those families who have been swept up in the flood. My economic team has been considering a full range of additional ideas to help accelerate the pace of private sector hiring. (END VIDEO CLIP) MADDOW: It`s one of those things that sort of been lost to the political memory hole the last few years, mostly because that second stimulus effort he went on to describe in that speech didn`t end up happening. David Corn of "Mother Jones" wrote about this today, the lost second stimulus speech. In December 2009, the White House recognized that we needed more stimulus, that we had done some good with the previous stimulus but more was needed. The problem was really bad but nothing materialized. We got health reform but we didn`t get a second stimulus. There`s essentially been no additional stimulus for the economy since then. And since then -- here`s the most important thing -- since then, we have also learned that the whole problem that the stimulus was designed to address, the whole economic problem was way, way worse than we thought it was all along even when they thought it was really bad. Remember I said the economy shrunk by half a percent in the third quarter of 2008? That`s we originally thought. It turns out it did not shrink by a half percent. It actually shrunk by 3.7 percent. Ugh! Remember that big, scary 3.8 percent that we thought the economy shrunk by in the last quarter of 2008? It turns out it wasn`t 3.8 percent, actually, it was 8.9 percent! That is not a typo. That`s how fast the economy was shrinking. Republicans look at this chain of events and say, oh, see? Well, the stimulus didn`t work. Everybody else looks a at these numbers and say, well, the stimulus did something but given what we now know what we were up against, it`s clear that it was not enough. It`s clear that we actually did need that second round of stimulus the president was sort of pushing for back in December of 2009 but not that hard. What we are seeing in the economy is the effect of not getting further stimulus. Not only given that the economy has proven to be resiliently bad but also because it was way worse than we thought it was when we initially designed the things that we were going to do to try to fix it. The hope it is not too late but time is up and time is up but we got to do something now. (BEGIN VIDEO CLIP) OBAMA: The people of this country work hard to meet their responsibilities. The question tonight is whether we`ll meet ours. The question is whether in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy. (APPLAUSE) OBAMA: Ultimately, our recovery will be driven not by Washington but by our business and our workers, but we can help. We can make a difference. There are steps we can take right now to improve people`s lives. (END VIDEO CLIP) MADDOW: Joining us now is Jared Bernstein, a former member of President Obama`s economic team and former economic adviser to Vice President Biden. He`s now a senior fellow at the Center on Budget and Policy Priorities and an MSNBC contributor. Jared, thanks very much for your time tonight. JARED BERNSTEIN, MSNBC CONTRIBUTOR: My pleasure, Rachel. Thank you for inviting me. MADDOW: I have been watching your tweets and so I know that vaguely happy. But let me get your baseline impression of the relationship between the scale of the problem and the scale of the solution that the president offered tonight. BERNSTEIN: That`s where I thought the speech was particularly strong. I mean, I was looking for something that would move the needle on unemployment and not just a little bit, but significantly -- something at least a point, maybe a point and a half, and when the number was floating around $300 billion, I thought that could help, but I was a little nervous about the magnitude, given the depth of the weakness. And so, now that we are talking about a program in the $450 billion range with lots of components that I think could be fast acting, that struck me as a very positive note. The other thing is the bipartisan nature of these ideas. The president really hammered on this point that these are measures that in normal times, partisans on both sides of the aisle would embrace. And I was also looking to see if the president had the kind of fight that it`s going to take to carry this forward and that, I think, we saw very clearly tonight. MADDOW: In terms it of the overall package and the contours of it, it`s 60/40 weighted tax cuts to spending. And generally speaking, we think of spending being more spending as tax cuts. But it strikes me as sort of an economics idiot, but one who pays attention, that these particular tax cuts that the president is describing here, tax credits for businesses for hiring, payroll tax cuts for people that they`re going to feel right away in their paychecks, $1,500 for the average family with the payroll tax extensions, these are the kinds of tax cuts are the most stimulative. Is that right? BERNSTEIN: It is right. Tax cuts don`t help you if they are saved or if they leak out on imports. As far as the saving goes, if you`re someone who is pretty wealthy and you`re not income constrained, then there is really no multiplier associated with the tax cut. I suggest that these are well targeted in that regard. And, you know, over the past few weeks, you and have talked about this. And I keep saying that this payroll tax cuts is a great idea, we got to renew it, but it doesn`t put the foot down on the accelerator any more. All it does is keep something that`s in the economy going. Well, in fact, now it does push the foot down a little bit more on the gas pedal because it was a 2 percent credit, now, it`s 3 percent credit. So, what was 1,000 bucks extra in your paycheck becomes $1,500 if you`re earning around $50,000. That`s going to help. MADDOW: In terms of the spending here you and I have also talked about the idea of investing in American schools as physical places, as buildings, as a physical plant where we send our kids to get educated. In terms of the president`s infrastructure discussions tonight, there was talk about trying to prevent teachers from being laid off but talking about school buildings themselves and investigating in them. Is this the fast program we were talking about? BERNSTEIN: This is the fast program. And you and I talked about this about a week ago. We had suggested maybe $50 billion for this program. It looks like it`s in there for $30 billion. And I think that`s great. I`m more than 3/5ths pleased about that addition. Remember, this is a program that can be stood up quickly which infrastructure that`s not always the case. You`ve got a backlog that`s very deep in the public schools. You`ve got a distribution mechanism, something called title one where you can get the dollars out there quickly and it`s labor-intensive work and work you see there in your community. So, I view this as a big win for the American people. MADDOW: Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities, MSNBC contributor, and somebody I have not seen this uniformly happy about a thing in Washington since I`ve met you. BERNSTEIN: Yes. Well, let`s see where the politics go but we have had a good discussion so far. Bring that in. MADDOW: Thanks very much, Jared. Appreciate it. BERNSTEIN: Sure. MADDOW: All right. I`m willing to talk about rebuilding America`s crumble infrastructure pretty much anytime over drinks or not. But when a Florida Republican who is the chairman of the House Transportation Committee wants to come on this show and talk about it with me? I don`t need cocktails. That is a full on 100 percent win and that Republican will join me next. I couldn`t be happier. (COMMERCIAL BREAK) MADDOW: Just about 30 minutes before President Obama was scheduled to deliver his jobs speech to Congress tonight, a bit of breaking news crossed the wires concerning about a terror threat -- one believed to be linked to this weekend`s tenth anniversary of 9/11. Here`s what we can tell you right now. At some point, late last night, U.S. law enforcement officials received intelligence what`s being described as a specific and credible, but the unconfirmed, terror threat involving New York City or Washington, D.C. Officials are not saying at this point what exactly is being targeted but counterterrorism officials tell the "Associated Press" today that the threat was so specific that it could not be ignored. U.S. government officials telling NBC news tonight the intelligence originated in the tribal areas of Pakistan and relate to a plot to set off car or truck bombs in Washington, D.C. or in New York City. The information indicated that three people would travel to the United States from Pakistan to carry out the attack. But the timing and the exact targets of that attack remain unknown. President Obama was reportedly briefed on the threat this morning. We heard that just moments ago from Valerie Jarrett as well. The president reportedly reported the counterterrorism communities, such as it is, to redouble its effort in response to this new intelligence. Shortly after the president addressed to Congress tonight, Republican Congressman Peter King of New York, chairman of the House Homeland Security Department Committee spoke about this threat to NBC`s Luke Russert. Watch. (BEGIN VIDEO CLIP) REP. PETER KING (R), NEW YORK: What I can tell you, it is very specific. It`s credible but it`s not confirmed. But you combine the specifics and also the fact it`s credible with this being the weekend of 9/11, it`s being taken very seriously. I have faith that federal law enforcement, all of our agencies, federal, state, and local are appropriate and doing everything that has to be done. There`s absolutely no need for any panic. And -- but, again, with abundance of caution and also knowing that al Qaeda in the past does look for anniversaries, looking for landmarks, it`s being taken very seriously. But, again, certainly no need for any type of panic. (END VIDEO CLIP) MADDOW: Again, as Congressman King noted, this threat remains unconfirmed at this point but it is being taken seriously. Congressman King is chairman of the House Homeland Security Committee. The FBI and the Department of Homeland Security are reportedly working on a bulletin to send out to local law enforcement officials about this tonight, which may result in further information. We are monitoring also a press conference set to begin soon by New York City Mayor Michael Bloomberg and New York Police Commissioner Ray Kelly. If there are any further developments this hour, either from that press conference or elsewhere, we will, of course, bring them right to you. Also, as we noted earlier on the show, there is a massive power outage right now primarily affecting the San Diego, California area. It`s left millions of people without power and it has shut down two nuclear reactors in the area. Again, to be clear, the blackout caused the nuclear reactors to shut down. The shutdown was not caused by the reactors. Our NBC affiliate in Los Angeles reporting that an event happened somewhere between Arizona and California affecting major power line connections, causing the outage. But we can`t get more specific with you than that. Nobody -- not only has that main electric utility for San Diego County said that all of its 1.4 million customers are without power possibly until tomorrow. But "The Los Angeles Times" is reporting that these two reactors at San Onofre Nuclear Power Plant have also been shutdown. A spokesman for the utility saying the outage caused no safety issues and that the overall plant continues to have power, but they have been shut down in reaction to the overall blackout affecting that large area of southern California. We will, of course, keep you posted on the terror threat report and this western power outage as more information becomes available. And we will be right back. (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) OBAMA: Everyone here knows we have badly decaying roads and bridges all over the country. Our highways are clogged with traffic. Our skies are the most congested in the world. It`s an outrage. Building a world class transportation system is part of what made us a economic super power and now we are going to sit back and watch China build newer airports and faster railroads at a time when millions of unemployed construction workers could build them right here in America? (APPLAUSE) (END VIDEO CLIP) MADDOW: President Obama tonight calling for $50 billion in immediate new spending on transportation, on infrastructure for his new proposal the American Jobs Act. Everybody likes to say they are for infrastructure -- whether you`re wearing a hard hat while you`re saying. But the way it gets done is through Congress. Infrastructure goes through lawmakers and through lawmakers committees -- lawmakers like, in particular, Republican Congressman John Mica of Florida. Mr. Mica chairs the House Transportation and Infrastructure Committee. You may remember him the man who forced a partial shutdown of the Federal Aviation Administration this summer because he and other Republicans wanted to make it harder for transportation workers to join a union. Mr. Mica and his committee now face another deadline, a gas tax we use to pay for highway construction in this country and set to expire at the end of this month. Tonight, it looks like a short term extension is in the works. But to re-up that gas tax that pays for highway construction projects and to keep those highway construction projects going for the long haul, Mr. Mica says he wants to bill that cuts transportation funding -- just when President Obama is calling for more investment in roads and bridges, both for the sake of those roads and bridges and for the economy that they drive and for the people who would be employed to do that work. Something has got to give. Joining us now is Congressman John Mica, chairman of the House Transportation and Infrastructure Committee. Congressman Mica, really delighted to have you with us tonight. Thank you so much for staying up and joining us. REP. JOHN MICA (R), FLORIDA: Always good and always interesting, too, to be with you. MADDOW: I appreciate that. You`ve said that one of your concerns about the way we invest in infrastructure is that we need to spend our money as efficiently and effectively as possible. Tonight, President Obama said no more earmarks, no more boondoggles, no more bridges to nowhere. Is that persuasive for you? Do you think you can back what he was talking about tonight? MICA: Well, he also mentioned two specific projects which would be earmarks. I guess the bridge between Connecticut and Ohio and then the Houston Transit System. But, I -- the president gave a very good speech. I think he is interested in the same thing we are interested in, and that`s getting people working building the nation`s infrastructure. He`s a little bit light on details tonight and my particular area which is -- which is transportation. But -- and I have to say I would take exception with the one major specific proposal and that was for a national infrastructure bank which is a proposal by a Massachusetts and Texas senator, bipartisan. But I think it`s wrong based. MADDOW: Why do you oppose an infrastructure bank? The idea I think behind that at least politically was it would harness both private and public investment in a way that could sort of allow market forces to play role in where things got built rather than allowing it to be decided by who is the most powerful congressman with the best connections. MICA: Well, what you described, Rachel, about, you know, harnessing private sector investment and participation and getting projects moving people working is right. But the problem I have is creating one more Washington-based program where you have to come on bended knees to Washington. You have to go through the red tape of Washington. You have to go through the approval and then the political process you talked about last. That`s not what we need to do. You know, I have 33 states that already have infrastructure banks. I can empower those states. What they need is probably that financial backing. And also rather than pay administrative overhead in Washington and more bureaucracy and approval here, I can get it done quicker and faster and more directly at the local level. MADDOW: The local level funded by what, though? MICA: The same that they would be doing in Washington, except, against I cut through that bureaucratic process, the administrative overhead creating a new bureaucracy. I have 33 states that have infrastructure banks. They just don`t have the backing and the financial wherewithal right now. Why create that model in Washington? I think we could do it there. So, that`s just one thing and I think we can work with the president on finding better ways of streamlining the process. I still have, as of last week, 35 percent of the $63 billion in infrastructure money that was in our particular area stuck here in Washington because shovel-ready has become -- you know, it`s a national joke. It doesn`t exist. But we can streamline that process, speed up the process and actually get people to work on long-term jobs and get those big projects under way that hire people for more than just putting in a sidewalk or repaving, which may be necessary, but it`s short term, temporary employment. MADDOW: Sure. I think Republicans have tried to make the idea of shovel-ready into a joke, but I`m not sure outside of Republican circles, it seems that funny. (CROSSTALK) MADDOW: I don`t mean to be disrespectful. MICA: No, no, the president -- I`ve been with the president and he just, you know, he gets it, I think, that you`ve got to streamline the process. It is a joke. I mean, it takes 78 years just to go through the standard approval process for a federal transportation project. MADDOW: Specifically -- MICA: That`s too long. MADDOW: In what the president was talking about tonight, let me get one specific other things he talked about. He talked about infrastructure investment to modernize 35,000 public schools -- 35,000 public schools across the country doing that sort of investment. I realize your area of the area in which people come on bended knee to you for permission to do things is transportation specifically. But do you foresee something like that investing and upgrade in America`s public schools spending $30 billion on investing in America`s public schools and their buildings? Could that be something that Republicans could get behind? MICA: Well, again, I don`t know the specifics. I deal in transportation, not school construction. But if we can speed up the process -- and, again, I think the president made a commitment to pay for these projects as we go. You know, we have been borrowing 43 cents on every dollar from China or whoever to pay for projects now. So, we want to do it responsibly. I`m not opposed to do that. I thought the president had some other good ideas. I think a tax credit for people who have lost a job. I would probably base it on a percentage of the salary rather than just a $4,000 dollar amount, but I think that`s a good beginning because there are people have been out of work a long time. We need to get them working and we need incentives for people who create jobs, private sector employers to employee employ and expand employment of people. MADDOW: Congressman Mica, talking to you, I realize that I`m struck by how much we are all counting on you as a country right now. To the extent that if we believe that the government needs to do something to try to put people to work right now and one of the things we know that puts people to work right now is, quite literally, transportation infrastructure projects and the president wants a big infusion to do that right away in a rushed way with a sense of urgency. I find myself really desperately wanting you to say that you have a sense of urgency about this too. Do you feel like this is something that can be done urgently or do you think this is all long-term stuff? MICA: Rachel, that`s a very good point. Really, you go back and your heart aches for people who are losing their homes. They have been out of a job. And it`s affected so many America`s 14 million Americans. And I think in our committee, we have that ability. Today, we marked up legislation. We do a lot of things that don`t get attention. Tomorrow, I`ll introduce an FAA bill. I didn`t close down the FAA before. I had the bill to the senate in time. But, you know, I wrote the last bill in 2004, it expired in 2007, and I agreed to 20 some extensions. And, finally, I said, let`s just cut this baloney out. We need to do a long-term FAA bill, a long-term transportation bill, because these are the bills that can actually get people working again. So whatever it takes. Today, I sat with Mr. Rahall, who is the ranking Democrat. I sat last time with Barbara Boxer. We`ve done bipartisan hearings. We`ve got to get this resolved because people are counting on us and we can`t play games, particularly on our nation`s infrastructure. MADDOW: Congressman Mica, appreciate the time to talk with us tonight. And I hope you know that I mean it earnestly that really the eyes of the nation are upon you in terms of trying to turn all of this talk into something moving through the Congress. Thank you for speaking with us, sir. MICA: Thank you so much. MADDOW: Thank you. We`ll be right back. (COMMERCIAL BREAK) MADDOW: For decades, one of the most effective political tools Democrats have had during campaigns has been the promise to protect programs like Social Security and Medicare, which they invented and voted for and helped protect, and which Republicans have sort of had a chainsaw out for quite some time. The guy who`s in charge of electing a Democratic majority to the House of Representatives in the next election said in May that his strategy for electing a Democratic majority in the House in the next election was a three-part strategy. The three parts were Medicare, Medicare, and Medicare. (BEGIN VIDEO CLIP) REP. STEVE ISRAEL (D), NEW YORK: That is the defining issue. We`re going to continue as Democrats to fight for Medicare in any congressional district, no matter how high the hill, no matter how great the odds. (END VIDEO CLIP) MADDOW: Tonight, did the hill get higher and did the odds get greater -- when President Obama said in his speech to joint address of Congress that he, too, has some ideas for Medicare. (BEGIN VIDEO CLIP) OBAMA: Millions of Americans rely on Medicare in their retirement. And millions more will do so in the future. They pay for this benefit during their working years. They earn it. But with an aging population and rising healthcare costs, we are spending too fast to sustain the program. If we don`t gradually reform the system while protecting current beneficiaries, it won`t be there when future retirees need it. We have to reform Medicare to strengthen it. (END VIDEO CLIP) MADDOW: Joining us now is Democratic Congressman Steve Israel from the great state of New York, chair of the Democratic House Campaign Committee. Congressman Israel, thanks very much for joining us. ISRAEL: Happy anniversary. Three years on the air. Congratulations. MADDOW: Thank you very much. I forgot and got a nice love letter to the show, written to me by my dear old dad this morning, which reminded me about it. It was nice. Thank you. When Republicans talk about Medicare, their policy as far as I can tell is to kill Medicare. But what they say is they want to save it or strengthen it. Now, we`ve got the president saying he, too, wants to strengthen Medicare. Does that give you the willies at all? ISRAEL: No, not all. Look, we have always said consistently from day one that we will negotiate to improve Medicare, reform Medicare, strengthen Medicare. We will not negotiate to end Medicare. It`s not what the Republicans say. It is what they have done. Paul Ryan budget ends the guaranteed Medicare benefit. It turns Medicare into a coupon program. And so, Democrats united, Democrats in the House, Democrats in the Senate and Democrats in the White House, that we are open to ideas for efficiencies in Medicare to extend its solvency. But we will not negotiate what Republicans have been trying to do 20 years now, and that is to end Medicare. MADDOW: In terms of that as a potent political issue, one of the reasons I wanted to talk to you about this, you`re in charge of converting that issue into electoral gains for Democrats. And I know you`re confident you can do that. Does that also apply to Social Security? Are Democrats planning to draw a bright line between a Democratic plan to protect Social Security and Republicans putting it at risk? ISRAEL: Well, this election in 2012 is going to be very much a referendum. Do you want a crowd that is dedicated to terminating Medicare and privatizing Social Security? Or do you want a majority of Democrats who are going to promote pro-growth agenda, create jobs and protect Medicare and Social Security? And I have to say, Rachel, that we found a new ally in this fight, surprises me, but Rick Perry. Rick Perry called Social Security a Ponzi scheme. I have to give Rick Perry credit. At least he`s honest. He has unmasked what the Republicans sought to do. They talk about strengthening Social Security. Rick Perry told the truth. They believe that it is a Ponzi scheme and they want to end Social Security. And the American people are going to face that contrast and I`m confident they`re going to make the right decisions. MADDOW: The Beltway media is so much better at covering conflict among politicians that it is at covering policy. I feel like we also got a this great blessing when Mitt Romney attacked Rick Perry for having said that because it made the Beltway media start covering this issue of how at risk Social Security would be under a particular Republican politician. My question to you, though, is Mitt Romney`s position on Social Security substantively any different than Rick Perry`s, or is he planning on putting it at as much risk as Rick Perry would? ISRAEL: Well, look, Mitt Romney can say what he wants, dance around it. The fact of the matter is, the Ryan budget that passed the House of Representatives and has been embraced by every single Republican presidential candidate ends Medicare. It turns it into a coupon. It costs the average American senior an additional $6,000. So, they can speak in sound bytes, but I think the American people are going to hold them accountable not to their words but their actions. The Ryan budget, as a matter of action, that passed the House of Representatives, endorsed by every single Republican presidential candidate, ends the guaranteed Medicare benefit. MADDOW: Democratic Congressman Steve Israel of New York, chairman of the Democratic House Campaign Committee -- thanks for joining us tonight, sir. ISRAEL: Thank you. MADDOW: We`ll be right back. Excuse me. (COMMERCIAL BREAK) MADDOW: Update on the breaking news on the terror threat concerning New York City and D.C., New York Police Commissioner Ray Kelly saying moments ago that the department had already been preparing security precautions in advance of the 9/11 anniversary this weekend. It`s now going to be more measures on top of that, including vehicle checkpoints in the city. The mayor is saying the threat is credible but not corroborated. He`s encouraging the public to remain vigilant but not to be intimidated by the threat. We`ll keep you posted as we learn more here at MSNBC. That does it for us tonight. Now, it`s time for "THE ED SHOW." THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END