The Rachel Maddow Show, Transcript 10/10/13

RACHEL MADDOW, MSNBC HOST: And thanks to you at home, for staying with us for the next hour. We do have breaking news right now out of Washington, D.C. Tomorrow, of course, set to be the tenth day of the government shutdown. Still no deal tonight to avert the debt ceiling crisis that is set to arrive in seven days, according to the U.S. Treasury Department. But tonight there is action and active negotiation right now around those political standoffs. And that counts as news, because that was not previously happening around these standoffs. Now, whether or not the action tonight, the ongoing action tonight actually constitutes movement as a resolution of these twin crises, that is the question of the hour and maybe the question of the year. Early this evening, 20 House Republicans went to the White House to meet with President Obama at the president`s request. The president had actually requested a meeting with the full Republican conference, but the Republicans said no to that. They said they wanted to limit it to only 20 of their members. I don`t know why, but that`s what they did. On the table in that hour-and-a-half meeting between those 20 Republicans and the president was a House Republican offer. They said they would finally relent and agree to increase the federal debt ceiling, but only for six weeks. And they said they would only do that in exchange for negotiations with President Obama on larger budget issues and tax reforms. That deal was to suspend the debt limit until November 22nd, until the Friday before Thanksgiving, and the deal would not reopen the government. The deal did not address the current government shutdown. Well, coming out of that meeting, "The New York Times" reported very quickly that President Obama had rejected that Republican offer. Shortly thereafter, reporting suggested that the offer maybe had not been completely rejected. Congressman Paul Ryan came out of that meeting and said, quote, "The president didn`t say yes and didn`t say no. We`re continuing to negotiate this evening." Then, the House Majority Leader Eric Cantor, the number two Republican, echoed that sentiment. (BEGIN VIDEO CLIP) REP. ERIC CANTOR (R-VA), MAJORITY LEADER: We had a very useful meeting. It was clarifying, I think, for both sides as to where we are. And the takeaway from the meeting was our teams are going to be talking further tonight. We`ll have more discussion. (END VIDEO CLIP) MADDOW: Useful, clarifying, more talking, more discussion. See? That`s the news. So the stalemate has turned into a negotiation, at least according to the Republican leadership. That is actually news. Shortly after that, Republican Congresswoman Lynn Jenkins told CNBC that the House Republican leadership is now debating whether or not to re- open the government. Not to just not hit the debt ceiling, but also to reopen the government. Whatever is happening around the government shutdown, and the raising of the debt ceiling, these twin manufactured, unnecessary political crises, whatever is happening around them is happening right now, and where this all leads, late tonight or tomorrow or very soon after that is unclear, to say the least. And that is why we have joining us now, Luke Russert, NBC News Capitol Hill correspondent, whose whole professional life revolves around this story now and forever more. Luke, thanks for being here. LUKE RUSSERT, NBC NEWS: Yes, eat, live, and sleep it, whole nine yards, Rachel. Quite a day, huh? MADDOW: It`s been hard to tell what`s wishful thinking and what is actual progress. I know, Luke, that you spoke to House Republicans after, at least some of them met with President Obama tonight. What did they tell you about that meeting? What are you able to report happened there? RUSSERT: Well, the talking point that circulated through the members who left that Congress was that they had constructive talks, that they were moving in a positive direction. That tonight, now as we speak, Rachel, just around the corner from me, staffers, Hill staffers, Republicans, are apparently figuring out a way to move forward on extending the debt limit, as well as possibly funding the government with their counterparts at the White House. So, when we woke up this morning, we were still under the idea that if the government was funded without any concessions, that was unconditional surrender, as the speaker said, the president said he would not negotiate. So, apparently they`ve backed off of that a little bit and negotiations are now underway. But what`s fascinating is, talking to Republicans throughout the day. There has really been a change. And the idea behind that change, I would associate with these two polls that have come out. Yesterday, Gallup putting the approval favorability of the Republicans at 28 percent. Then our own "Wall Street Journal"/NBC poll, which actually showed that because of the government`s shutdown, that the president`s health care law has become more popular. Those have both really resonated with a lot of Republicans here on Capitol Hill who said, you know what, maybe it`s not worth just the absolute destruction of our brand to continue up this fight. And that`s why I think you`re starting to see these negotiations start this evening and very well could come to some sort of conclusion to avert all these things by this weekend and perhaps even by Monday, like Miss Jenkins said. MADDOW: Well, on that point, about what Congresswoman Lynn Jenkins said, all day long we were hearing, even once the Republicans were willing to talk about extending the debt ceiling, even if it were only for a few weeks, they were saying consistently, no, this is not about a continuing resolution, this is not about restarting the government, this is just about the debt ceiling. We need negotiations before we talk about reopening the government. And then on CNBC tonight, Lynn Jenkins said they hope to have the government reopened by Monday. Was that progress made during the meeting with the president? RUSSERT: I think the progress was made definitely during the meeting with the president, because the president said, look, we need to find out a way to make sure the government stays open, and it was implied from the White House and from the Republicans that they will not accept any debt limit bill unless they had some movement on funding the government. What I would also say, though, Rachel, is that there is a group now that spoke up in the House GOP conference today. It wasn`t the southern conservative members, it was the Republican members from the Northeast, from the Midwest, from the coast that said, this government shutdown is really hurting us. The polling is reflecting that. You`re also seeing some discussions happening now in the Senate. Susan Collins of Maine has been tasked by Mitch McConnell to try to sort of figure out, is there a way to have a year-long extension of the debt limit? Is there a way to have government funding extended for a long time so you don`t come back to these problems once again? So, you`re starting to see some break within the GOP ranks against the Ted Cruz ideology to shut it down over all else. And I just come back, though, to the NBC poll, "Wall Street Journal" poll today, Rachel, I can`t emphasize enough the effect that had in this building. It went around here like wildfire. These numbers, as Peter Hart, the pollster said to our own Chuck Todd, in his 40 years of polling, he`s only seen a negative number move this quickly for a party in four or five years, after 40 years of polling. That has a lot of folks worried. When these guys hear, you can have a Democratic wave if the elections were this November, that gets ears perked up and that gets them to say, hey, you know what? Let`s stop the government shutdown. Let`s extend the debt limit. And let`s go after the president`s health care law, which has had problems with enrollment, and we haven`t been able to talk about that, because the media, rightfully so, has been focused on the government shutdown, the people suffering from that, as well as the economic catastrophe that could hit the world, if the debt limit was not extended. MADDOW: Well, Luke, what is happening with the Southern conservatives and the sort of Tea Party wing of the House Republican caucus. You`re talking about how the other members of the House Republican caucus, who aren`t used to getting as much ink, are speaking up and saying, these poll numbers look back, we`ve got to get out of this, but they`ve been saying that all along and it`s been the Southerners and the Tea Partiers who have been driving us to this point that we can`t seem to otherwise get out of. I mean, are they going to go along with this? Is Boehner going to have to defy them in order to do this? Is he going to have to do this with Democrats? RUSSERT: Well, that`s the big question, Rachel, and it all depends on what exactly comes out of these negotiations. But when you have a guy like Paul Ryan, who`s referred to here as sort of the Tea Party conservative whisperer, who the guy is associated with leadership is trusted by the most right-leaning members of the House Republican or conference, when he is single-handedly in the negotiations with the president, trying to say, hey, guys, let`s try to figure out a way forward, that carries a lot of weight and that carries a lot of capital. Now, I think the debt limit being extended, they shouldn`t run into any problems with that so far. The issue of government funding, though, will face an uphill battle in the House of Representatives. Something will have to be conceded to -- by the White House for them to get something. Will that be a medical device tax, means testing the for those who are on the president`s health care law, Medicare means testing might be a little bit extreme, they might not give all of that way, but something there, especially in the context of a larger deal. But I just think when we`ve had this shutdown for 10 days and these guys who have be leading the charge on it had no plan for what to do if the polling suggested it was a complete and utter disaster, and they`ve really lost the sway with the 50 to 60 or so members who kind of go along with them, but still have an ear with leadership. And those folks are kind of going in and saying, hey, enough is enough. MADDOW: Yes. And on that issue of whether there`s going to be any concessions for them, guys whose political prospects have gone down the toilet as fast as the Republicans have in this process, are not in any position to be demanding concessions from the White House. RUSSERT: And if you do see anything, it would be for a year-long deal. It wouldn`t be for a 60-day deal, by any means. MADDOW: Absolutely. Luke Russert, NBC News Capitol Hill correspondent, you have a long night ahead of you, sir. Thanks for being here. Appreciate it. RUSSERT: Thanks for having me on. Be well. MADDOW: What Luke was talking about in terms of "The Wall Street Journal"/NBC News poll, and it having a solitary effect, not just on Republican who is fared very poorly in the poll, but on the actual pollsters who were described today as having their jaws dropped by what they found in the new poll, we`ve got the details on that poll coming up next -- and it is, even for a jaded person who doesn`t care about polls, pretty freaking shocking. That`s next. (COMMERCIAL BREAK) MADDOW: We have found something this week on which our nation can agree. The American people agree that it would be bad for the nation to go totally, catastrophically bankrupt all at once, so that we all have to move out of our houses and take up living in yurts and milking goats. The American people agree that that, even though it might be fun for a weekend, is a bad idea for the country as a way forward. In a new poll released just this happening by NBC and "The Wall Street Journal," nearly two-thirds of Americans say that Republican doubts aside, failing to raise the debt ceiling would be a, quote, "real and serious problem." Ten days now into this government shutdown, the same survey from NBC and "The Wall Street Journal" finds that Americans are also really quite clear about who they`d blame for this mess. They blames, by a margin of 22 points. It is not close. And that, of course, is not good news for the Republican Party. Now, to be fair, it`s not like it`s roses for anybody, for things to be this bad. Look at this. President Obama is about six points above water, his favorable/unfavorable. So, his positive ratings are six points higher than his negative ratings. The Democratic Party is actually underwater by a single point. Their positive ratings are one point lower than their negative ratings. OK. Look at this. House Speaker John Boehner, whose Republican Party is blamed for the shutdown, he`s at minus 25. The Tea Party movement, they`re at minus 26. The Republican Party, the entire Republican Party, checks in at minus 29. That`s the end of the world. That`s terrible! That`s 28 points south of the Democrats on the favorable/unfavorable scale. That doesn`t exist in two-party states. The Republican Party has never polled lower than they are polling right now in the history of this poll. Why do people dislike them so much right now? Well, in the same poll, 70 percent of people say Republicans are putting own political agenda ahead of what is good for the country. These are horrifying, finger vision numbers for Republicans, these numbers in tonight`s brand-new NBC/"Wall Street Journal" poll. And these arrived on top of yesterday`s Gallup numbers, which were also historically bad numbers for the Republicans. The Gallup survey, over the last 20 years, shows that in the past 20 years, Republicans have really never been as unpopular as they were in that moment, in December 1999, when they voted to impeach President Clinton. I mean, nothing could compare to -- December 1998, sorry. Nothing could compare to the plunge in the polls they took there in December 1998, right? Nothing could compare to how bad that was, until now. Now they are even worse than they were then. Americans disliking the Republican Party right now more than they ever have in modern history. And maybe this avalanche of seriously bad news for the Republican Party explains more than anything else why we may have started to see the very beginning of the beginning of the start of the beginning of the end of this crisis today. Maybe? Hopefully. Possibly. Joining us now to talk about whether the policies being put forward as a way out of this political crisis make any sense as policy, regardless of the politics, is the great Ezra Klein, MSNBC policy analyst, editor of "Wonk Blog" for "The Washington Post." Ezra, thank you for being here. EZRA KLEIN, THE WASHINGTON POST: Thank you for having me. HAYES: So, on the debt ceiling thing, the market went through the roof today on excitement that the debt ceiling catastrophe might be averted. Then we found out, well, it`s not a done deal yet, and it would only be for six weeks. Was the market right to be so happy? KLEIN: The market -- I think they were, actually. I think the fundamental thing the Republican Party decided over the last two days was they do not want to fight over the debt ceiling. And what was interesting about it, it wasn`t just the Republican Party, right? Because that no longer matters. Also the Tea Party decided it. The big thing that happened today was the Heritage Action Fund, which now apparently for some reason, runs the Republican Party, they came out and they said, if you guys vote a clean debt ceiling increase, we will not be mad at you. We will be OK with you. MADDOW: They said, we don`t want a debt ceiling -- but we won`t score it, won`t hold it against you. KLEIN: Yes, we won`t be mad at you. MADDOW: So, mealy-mouthed -- KLEIN: Very mealy-mouthed. But that was a very big deal. Because that meant both Boehner`s team -- and Boehner, originally, he had wanted to not do a shutdown, but have a debt ceiling fight. And the Tea Party now are both saying, a shutdown is much better than a debt ceiling fight. We don`t want to mock with any of that. It`s not a good idea. So I think the market is right to read that as Republicans actually in serious way backing off the debt ceiling, although what happened tonight, and I don`t think we 100 percent know what happened at the White House, and both sides seem fairly positive about it. But the White House kind of said, look, we`re not necessarily interested in a short-term debt ceiling increase if you don`t reopen the government, too. MADDOW: Right. KLEIN: So, It`s not clear we`re at a deal yet, but I think the Republican Party is backing down on that in a big way. MADDOW: If the deal remains the same later on tonight, we may be here very late tonight, if the deal remains the same into tomorrow, where the only thing they`re talking about in terms of the debt ceiling, even with that relief of political pressure from their own side is a short-term thing, is six week or five minutes or whatever it`s going to be, do you except that the White House would continue to hold out to a longer fix to that problem, because it is such a dire problem if we run up against it again? KLEIN: So, the White House has actually said they`re open to a short- term debt ceiling. MADDOW: What do they consider to be short-term? KLEIN: I actually don`t know about that. But what they`re not open to is one that does not reopen the government. That is their sticking point right now. The Republicans are saying, we want to put the debt ceiling off, but we won`t reopen the government. We`re going to keep the shutdown going, to fight over the shutdown, to try to get concessions out of you to end the shutdown at some point. And, actually, now, you`re seeing sort of the opposite thing happen. The Republican Party used to want to move to a debt ceiling because more dramatic, catastrophic consequences would give them leverage. In a little, in a way, it almost seems now like the Democratic Party is taking a bit of that approach and saying, we are not going to let you separate these two things. You`re going to have to end both of them or take the pain. And you can see in the polls, that they will be the ones to take the pain for the debt (INAUDIBLE). MADDOW: The NBC News/"Wall Street Journal" report out today, and I don`t think it`s self-serving of NBC News correspondents talking about it going around like wildfire today, everything that I could tell about was happening in Capitol Hill was about -- KLEIN: It was an earthquake. MADDOW: Yes, it really hit like a ton of bricks. One of the things it showed in terms of policy is that something about the shutdown process has made Obamacare more popular. Last month, 31 percent of people thought it was a good idea. Now, 38 percent of people think it`s a good idea. People who used to like the idea of maybe shutting down the government even as a way of trying to defund Obamacare no longer like that idea. Do poll results like that, and the way these negotiations have gone thus far mean that, actually, the ongoing discussions here and the ongoing fight is not going to be on health reform at all? KLEIN: I think that`s completely right. I mean -- and it is worth saying, the totality of the Republican Party`s strategic failure here on Obamacare almost cannot be overstated. This has been a much worse launch than even skeptics thought they would have. The fact that people s can`t on their first try buy health care insurance, that is a huge failure on the Obama admiration`s part, on the simple running government correctly, running it well function they have to carry out, separate from all the political fights. If the Republicans had not done this, all this week would have been about -- and last week would have been about, nothing but how badly Obamacare`s launch is going. And maybe they could, they usually have to make an argument for delay that would have made sense to people. As it is, they have picked a tactic so much more unpopular than Obamacare, they`ve made Obamacare look good in comparison, and they have moved away, there`s not actually been as much, I think for most people who are not that obsessed with the news on that stuff, the A-1 coverage is shutdown, it`s debt ceilings, it`s fights. The Obamacare stuff, they know there`s problems and not a lot of demand, but there`s not nearly as much focus on it as there probably otherwise would have been. So, people are probably getting hazier thing and you might actually just be having some (INAUDIBLE) not just from Republicans. But now, just people are hearing, a lot of people want it, you know, it`s probably not working that well in part because Republicans have shut down the government. This is a very bad thing for a party that wanted nothing but to damage Obamacare. They`ve helped it. MADDOW: And what it got for the people implementing the Affordable Care Act was the benefit of a soft launch. If you launch something soft and don`t put ads out about it if you think it`s going to be a lousy thing when it comes out, so you want to work out the kinks while nobody`s paying attention. Now, they get that chance, by the time we get the government open, people may actually be able to get health insurance. KLEIN: Yes. MADDOW: Ezra Klein, editor for "The Washington Post" "Wonk Blog", Ezra, thank you for being here. If you do end up being here all night, I will buy the coffee. KLEIN: Thank you. MADDOW: Thank you. MADDOW: All right. There`s an added element of scary to everything that happens during a government shutdown. Like, for example, how would we respond if there was, say, a major, major oil spill? Not a rhetorical question and Barney Frank joins us just ahead. Stay with us. (CMNMERCIAL BREAK) (BEGIN VIDEO CLIP) PETER BYRD, CAPITOL GUIDE SERVICE: We`re standing just a few feet away from the main entrance to the United States Senate chamber in the north extension of the capitol. The clock behind me here is the oldest clock in the United States Capitol. It was commissioned for the United States Senate in the year 1815, ordered from a Philadelphia clockmaker named Thomas Voight. (END VIDEO CLIP) MADDOW: Just one of the many reasons why the C-Span video archives are so amazing. I love your red jacket, sir. That clock, known as the Ohio Clock, is not in Ohio. It is just outside the U.S. Senate chamber and it is famous not just for being a handsome old clock, but also because it is a popular meet-up place for senators and reporters. Many a press conference has happened in the Ohio Clock corridor. See, you can spot the clock hanging out in the background here at this one. Also, here. Also, here. The Ohio Clock makes for a helpful meeting place, because of where it is and also because it`s a clock! Because it`s easy to note the time when you are meeting people there, because it`s a clock, and there it is. Tells you what time. At least, it was easy to note time on the Ohio Clock, in the Ohio Clock corridor. It`s not so much easy anymore, because the Ohio Clock has now stopped. There it is, frozen in time, as of yesterday at 12:14. It`s 12:14 forever now in the United States Senate, because the Ohio Clock has not been wound since last week. The curators who are in charge of winding the Ohio clock have been furloughed. Government shutdown, everybody! It stops time. It does not, however, stop things from going horribly, horribly, horribly wrong -- including way outside Washington, in places like North Dakota. That story is coming up, as is the interview tonight with former Congressman Barney Frank. Stay with us. (COMMERCIAL BREAK) MADDOW: In March, an oil pipeline and operated by ExxonMobil blew up underneath a suburban neighborhood in Mayflower, Arkansas. We covered this pipeline explosion a lot when it happened. That Exxon pipeline was carrying crude oil. The people who lived right on top of it did not even know the pipeline was there until it blew up. And when it did blow up, it rendered an entire neighborhood essentially uninhabitable. Some of the houses, Exxon ended up just buying them outright. This week, they started knocking the houses down with heavy equipment. There goes the neighborhood. That Mayflower, Arkansas oil spill was a spill of about 5,000 barrels of crude oil. It was a big spill. About a year and a half before that, another oil pipeline blew up along the Yellowstone River in Billings, Montana. That, again, was an Exxon pipeline. And, again, the environmental impact was just disgusting and disastrous. Toxic crude oil pouring into the previously pristine Yellowstone River. That Yellowstone River oil spill was a spill of nearly 2,000 barrels of crude oil. So 5,000 barrels in Arkansas, 2,000 barrels in Montana. A year before Montana, there was another big oil spill along the trans-Alaska oil pipeline system, just outside of Fairbanks. That was the third largest spill ever along that pipeline. The spill in Alaska was about the size of the big Arkansas spill, about 5,000 barrels. These are all considered to be big, big spills. These were serious accidents. Well, today, we learned about a brand-new U.S. oil spill that was not 2,000 barrels like Yellowstone or even 5,000 barrels like Alaska or Arkansas. But the new one that we`ve got now is 20,000 barrels. Four times larger than the spill that crippled the city of Mayflower, Arkansas, earlier this year and that largest spill in Alaska. This latest spill happened in North Dakota, a pipeline operated by a Texas-based company, and it just dumped 20,000 barrels of crude oil into a rural North Dakota field. The leak was actually first discovered about week and a half ago by a local wheat farmer, but we`re just now starting to learn about the scope of it. This appears to be the biggest U.S. oil spill since 2010, when Enbridge oil pipeline dumped about the same amount of oil, about 20,000 gallons into the Kalamazoo River in Michigan. That spill is still being cleaned up three years later. Officials today in North Dakota say they have no idea what caused the new North Dakota spill or how long the pipeline was spewing for. They also say that as best as they can tell, right now, it doesn`t threaten any major source of water, for which they are very grateful. We keep having oil pipeline spills in this country. The federal agency that regulates the transportation of oil by pipeline in this country is called the FERC, the Federal Energy Regulatory Commission. Back on October 1st, which was government shutdown day, the agency said that the government shutdown would not affect them right away. They said their offices would remain open for business during the shutdown. But by today, that has now changed. A spokeswoman for the agency said they have had enough money to operate through this week, but, quote, "I don`t know how long we n operate next week." So the agency that regulates oil pipelines in this country, that agency looks like it`s going dark in a few days. Even the specific agency that is responsible, not just for regulations, but for guaranteeing the safety of our oil pipelines, for making sure that no more of them pop off like geysers in a cul-de-sac in Arkansas, the pipeline safety organization has already furloughed nearly two-thirds of its staff. We`re not shutting down the pipelines. We`re just shutting down pipeline safety. Back in North Dakota, a "Reuters" reporter started calling around to find out about the environmental impact of this latest big oil spill, but, alas, quote, "the regional EPA office could not be reached because of the government shutdown." If you live in North Dakota or if you are particularly concerned about oil spills or maybe this is the story that makes you concerned about government shutdown if you hadn`t been already. But there`s a story like this everywhere right now. Take your pick. What are you mad about? Are you mad about the oil spill in North Dakota that the location EPA office is not there to even try to respond to? Are you mad about the 7,000 kids who have already been thrown out of preschool with more thousands to come? Are you mad about the families of soldiers killed in Afghanistan not receiving death benefits after their loved ones were killed in the war that didn`t stop, just because the government did? Are you mad about your local national park being shut down? In one Utah county, they said they`re so mad about it, they`re going to engage in county-wide civil disobedience. They`re considering reopening the park illegally in that one county. That`s how mad they are. The shutdown is not a Washington thing. And it`s not an amorphous political story. It has these real, practical consequences, increasingly all over the country. And whether you are mad about it in the abstract, or you are mad about it in the specific way that it affects you specifically in your town, it turns out that Americans are really mad about this. People are mad. People are more mad about this shutdown than they were about the last shutdown back in 1995 and 1996, and that one went on for twice as long as this one has already. People were really mad about that shutdown back then. But new numbers about NBC/"Wall Street Journal" poll that`s out tonight, the new numbers out tonight show that Americans are even more angry about this shutdown than they were that one. Why are people more mad this time around? And is this going to change the government works and how people feel about government once it finally, some day, opens back up? Joining us now for the interview is Barney Frank. He`s a former Democratic congressman of Massachusetts. He was serving in Congress during the `95 shutdown. Mr. Chairman, it`s good to have you back on the show. Thank you for being here. BARNEY FRANK (D-MA), FORMER U.S. CONGRESSMAN: Thanks, Rachel. MADDOW: Why do you think people were more angry about the shutdown -- why are people more angry about the shutdown now than they were back in the 1995? FRANK: Well, for one thing, people are just angrier in general today, and I think, I`m trying to write about this now, but there has been an erosion in the economic position of the average American. People are angrier today about the general circumstance, because they have seen a progression of this trend, in which half of the people are very, very rich and the other people are not well off. Now, there`s a paradox here. Sadly, that has led to people being angry about government. So I think if you had polled a month ago and asked people, what was their attitude toward government, it would have been more negative than it was before the shutdown in `95. And therefore, it`s, to me, frankly a pleasant surprise that people are now even angrier at the shutdown. And I would say two things about it. First all, I have never seen a spectacle of bare-faced hypocrisy, compounded by stupidity, than my former Republican colleagues, whose basic position is this: one, we are going to shut down the government. And two, we are now unpleasantly surprised that this government function isn`t happening and that government function isn`t happening, and the other government function isn`t happening. You have to ask them, what the hell did you think was going to happen when you shut down the government? Did you not understand that that meant that these government functions, whether it`s the national parks or death benefits or health research, that they were going to be shut down? It is a disassociation from reality that is bizarre. But the second thing it has done is to remind the American people that government`s a good thing. We`ve had this kind of disconnect. We`ve created, somehow, in this country, with regard to government, a whole that is smaller than the sum of the parts. You ask people if they like government and they say, I don`t like government. What about Medicare? What about Head Start? What about the parks? What about the environmental protection? Oh, I like that. Well, what people have now been reminded is, that this abstract entity that they said they dislike is not an abstract entity, it`s a collection of vital service that are important to the quality of their lives and I hope out of this will come some renewed understanding of that point. MADDOW: One of the things that has made tonight kind of an exciting night in this process, at least night where we`re anticipating that something might happen, is that the Republicans for the first time tonight said they might be willing to at least go forward with a short-term extension of the debt ceiling. Who knows how that`s going to work out. But one of the reasons I wanted to talk to you about that, you were the chair of the House Financial Services Committee in your tenure in Congress. And we have seen in this fight a lot of Republicans in the House, including some of them who are on that committee, like South Carolina Congressman Mick Mulvaney saying, ah, hitting the debt ceiling is no big deal, I don`t think it would cause that much harm to the country, I don`t think we need to worry about breaching the debt ceiling. That`s what made that part of this crisis possible up until tonight when it seemed like it finally might start to get resolved. Could you address that sort of denialism among Republican members of the House on that? FRANK: Sure, although I want to preface my criticism of my former colleague of Mick Mulvaney with my continued affection f his willingness to join us in cutting the military budget, a project you and I care a lot about, Rachel. I will give Mick Mulvaney credit for being one of the intellectually honest budget cutters on the Republican side, because he does understand the Pentagon should be on the table for that. But beyond that, look, there is a concept I`m going to borrow now from my think theology, invisible ignorance. You`re a better scholar than I. You can correct me if I`m using it wrong. But I think that`s what you have here. People who are just determined to ignore one truth after another. I mean, I`m trying to remember what the character said, I can believe so many impossible things before breakfast. Well, that was apparently the Tea Party. And, yes, this denial on the debt limit is just astounding. Fortunately, and again, there`s a silver lining to this cloud. They have denied that there is climate change going on. They`ve denied a number of things, like where President Obama was born. But I think the implausibility of this denial is so great that it`s calling into question the denial reflection in general. And in particular, one of the groups in this country who have most disappointed me in the last few years has been the leaders of the financial community, our business people, highly educated, very sophisticated, who are so angry at Democrats, me among them, because we tried to regulate them and we tried to stop them from the reckless practices that caused economic disaster, that they were funding and supporting whackos -- people who actually were acting against what they knew to be the case, people who were trying to undermine the ability of the federal reserve to help the European crisis. And it`s now, finally gotten to the point where even some of these financial people, whose feelings we hurt, to the point where they weren`t thinking clearly, they are finally saying to these right-wing Republicans - - no, you`re going too far. And I think the dynamic, Rachel, if I may, is this -- and this is what I`ve been saying all along, I think this is how it`s going to be resolved. The people driving this, the very right-wing Republican who is run that par now, because of the domination of the Republican communications machinery and the primary voters, they won`t lose their seats. But I think enough other Republicans have now come and said, look, if you keep this up, we will lose our seats, and you may not care about that, except for the fact that you`ll be in the minority. And the dynamic here, politically, I think is very clear. Enough Republicans who were afraid to stand up to the Tea Party, afraid of maybe a primary challenge in their own situation, are now going to the speaker and going to the Tea Party people and saying to them, you will hold your seats and be in the minority. And it is the fear of losing the majority, which I think is now very plausible. Those numbers that you were showing, they are jaw-dropping. No party can hold the house with those numbers. I don`t care how gerrymandered it is. MADDOW: Barney Frank -- Gerry Frank, I was going to say -- Barney Frank, former Democratic congressman of Massachusetts, Congressman, thank you for being with us tonight. It`s great to have you here. FRANK: Thanks, Rachel, as always. MADDOW: So the congressman used the word "whackos" in its technical sense. For those of you who have ever wondered if America`s particular brand of conservative whacko translates abroad in foreign countries, we have an incredible story of a uniquely right-wing American export coming up on the show. This is an exclusive, we have been working on this story for a long time and it`s coming up. Stay with us. (COMMERCIAL BREAK) MADDOW: OK, visual quiz. There are two things wrong in this video. There are two things wrong here in this tape. This kind of adorable, aging athlete, running with what is supposed to be the Olympic torch. One of the things wrong is, obviously, that the torch has gone out. But what is the other thing that is very wrong in this picture? We have been waiting to do this story for a long time. It is an amazing story. And it is next. (COMMERCIAL BREAK) MADDOW: OK. See if you can tell what is wrong with this picture. This is in Russia. You can see it`s from Russian TV. This is a former world champion swimmer who`s been given the honor of running with the Olympic torch. There is a problem with the torch. It is not on fire. There is frantic gesturing, can I get a little help here? Yes, the torch has gone out. But, finally, he gets help from a guy who seems like he I a plainclothes cop. He`s at least a smoker because he pulls out his Zippo and we pretend like the whole thing never happened. Can you spark this up for me, buddy? Yes, thanks. This is the Olympic torch. It is never supposed to go out, right? I mean, they set the Olympic cauldron on fire with great fanfare, to start the lead-up to the Olympic Games in February. And then they start the torch relay. But on day one of torch relay, the torch goes out. So, that was Sunday. Then, on day two of the torch relay, on Monday, it happened again. You see the guy running with the torch, people gathered on the street to watch and cheer. The torch flickers a couple times. Then, you know what? I think it`s out. Stop everything. They bring in some other torches. They try fiddling with it for a while. This goes on a minute or two. Finally, after a long time with lighters, with other torches, they finally get the thing sparked up. The cheer goes up from the crowd. They`re off again. And then it goes out again. This time it is a very happy runner, waving, yes, finishing, that part of the torch relay. It`s time for the follow up. Hand off the flame. Torch to torch to the next person. Oh, jeez, it`s out. And they can`t figure out how to get it started again. This one goes on for a long time. It goes on for a few minutes. Finally, somebody find their lighter and piece of kindling or paper or something. And they, there we go. Both torches going again. But they`re out for a long time. This is not the way it is supposed to go, right? This is not the way Russia`s Olympics are supposed to start. Also, here it`s the other thing. Here is the other thing wrong. Russia seriously using the rainbow flag as your outfit for, your rainbow torch bearers. Rainbow flag, Russia, seriously? There`s been a worry building for a while now over how really radically anti-gay Russia has become under Vladimir Putin. It is not a new phenomenon, after violent attacks on gay pride parade in Russia, Moscow decided they would temporarily ban gay pride parades. The term of the temporary ban in Moscow is 100 years, 100-year ban. So, problem solved for the next century. As the Olympics approach, Russia really stepped it up. In June, they passed a law that criminalizes even saying that gay people should have equal rights. They say it`s an anti-propaganda law. Then came their new law that bans Russian kids from getting adopted by any same-sex couples from other countries. The new law bans any single people or even unmarried straight couples from adopting Russian kids if the country that you live in allows same-sex marriage. So, even unmarried American straight people are not allowed anymore to adopt one of the 600,000 Russian kids up who are up for adoption because America is too gay for Russia. The flurry of new anti-gay laws in Russia has caused some consternation about the Olympics. It`s raised the question -- even in places like the president`s interview on the tonight show about whether or not participating in the Russian Olympics implies some sort of tacit approval for what Russia is doing now to gay people. This becomes particularly acute now that Russia`s moving on to their next big idea, which is they want to go into people`s homes, and start removing kids from their parents if their parents are gay -- adopted kids, foster kids even your biological children will be taken away from you if you are gay, under the next bill that they`re moving. And so, it is an interesting question. For countries that believe they shouldn`t have their children stolen. It`s an interesting question for other countries in the world, as Russia keeps moving on this stuff, as to whether or not participating in the Russian hosted Olympics implies some sort of tacit consent, some sort of tacit approval for what Russia is doing. But what about not tacit approval, not silent approval. What about totally out loud overt approval of what Russia is doing? (BEGIN AUDIO CLIPS) BOB VANDER PLAATS: Putin`s saying, you know what? Don`t bring this homosexual propaganda into my country for the Olympics. We believe in one man, one woman marriage. There is no homosexual marriage in Russia. BRYAN FISCHER: Which president is the lion of Christianity, the defender of Christian values, the president that`s calling his nation back to embracing its identity as a nation founded on Christian values? Those, ladies and gentlemen, are quotes from Vladimir Putin, the president of Russia. VANDER PLAATS: He`s taken what used to be our strengths, which has now defaulted into our weaknesses because of Barack Obama, no leadership, and he`s making them his strengths and heap`s emerging now on the world stage as a newly discovered leader. Ladies and gentlemen, this is why you need to rise up. The people here, this is why we rise up. FISCHER: What Russia`s done here with the law they have expressed the values that we have been advocating for years and years and years. Exactly what Russia has established as official public policy. So, in my mind we ought to be celebrating this. This is public policy that we have been advocating, and here`s a nation in the world that is putting it into practice. (END AUDIO CLIPS) MADDOW: It turns out actually that the anti-gay American right has been more than just applauding Russia and Vladimir Putin as they enact anti-gay laws that they want for us here too. Turns out they haven`t just been cheering him on, anti-gay right has been helping Russia do this. Right Wing Watch, People for the American Way, and Human Rights Campaign and Council for Global Equality they have been trying to r the alarm bell in the U.S. about how American anti-gay group called the National Organization for Marriage, has been working with the Russian parliament, they worked with the Russian parliament on passing that country`s adoption ban for not just gay people, but for whole countries that are too positive on gay rights. It was June 11th when the Russian parliament passed the propaganda bill, the you can`t talk about being gay bill. That was June 11th. Two days later, on June 13th, the Russian parliament got a visit from Brian Brown. He`s the head of the American anti-gay group, the National Organization for Marriage. This is the Russian language Web site about the committee testimony that day. Now, we will use Google translate, so here it is minus the Cyrillic, you can zoom in there to, the speech delivered to the Russian parliament by Brian Brown, president of the National Organization for Marriage. And the head of it now -- Brian Brown is confirming that he was there. He says, Russian anti-game activists invited him to Russia to address lawmakers there about their anti-gay laws. He did so. They even posted a Russian summary of his remarks on line which we have now translated you. You can see both versions tonight at Maddowblog.com. All right. Brian Brown wrapped up his remarks to the Russian parliament by saying he thought his visit to Russia will enable the development of this movement around the world. We will ban together. We will defend our children and their normal civil rights. Every child should have the right to have normal parents. He also did interviews with the Russian media while he was there, talking about how important it is for the Russian people to fight gay people on marriage and on adoption. (BEGIN VIDEO CLIP) BRIAN BROWN, NATIONAL ORGANIZATION FOR MARRIAGE: Right now, you are having the fight over adoption, but the adoption is indivisible from the marriage issue. If you don`t defend your values now, I`m afraid we`re going to see very negative developments all over the world. (END VIDEO CLIP) MADDOW: Anti-gay American activists in Russia urging Russia to defend their values and crack down on marriage rights for gay people and also to crack down on kids in gay families. And five days after the visit to Russia and his speech to parliament and interviews on Russian TV, Russia did pass their adoption ban -- targeting not just gay couples but smart people who support gay rights. Though there are hundreds of thousands of kids up for adoption in Russia those kids would be better off in an orphanage than living with a mom or dad who is gay. That passed five days after the American National Organization for Marriage went over to Russia and told them to pass it. Now, Russia is moving on to the next step. The legislative calendar has been set for them to debate their new bill, which would forcibly remove kids from existing families if the parents in those families are gay. You`ll be stripped of your custody rights of your own kids if the Russian government thinks you are gay. The debate on that bill its set to start in February. The Russian Olympics are set to start in February. That should be interesting. Meanwhile here at home, the same American activist group, bringing you a virulently anti-gay Russia, they remain right at the center of American Republican politics. Here is Marco Rubio agreeing to make robocalls for the National Organization for Marriage. Here`s Ted Cruz at National Organization for Marriage sponsored summit in Iowa, trying to seem presidential. Tomorrow kicks off the Values Voter Summit in Washington, D.C., where Paul Ryan and Ted Cruz and Marco Rubio, are all scheduled to speech. I actually think Senator Rubio might be bailing tomorrow. Don`t tell them. We called and asked. He wouldn`t commit. The first day session has confirmed speeches from Ted Cruz, from Paul Ryan, from Rand Paul, basically the whole 2016 presidential field. Also, speaking -- first day session, Brian Brown, in the National Organization for Marriage, because presumably all the Republican 2016 candidates will be pledging their fealty to his organization, just like every major Republican candidate did in the 2012 presidential election, Presumably the Russian in tomorrow`s event will have to be in subtitles. The present and future of the Republican Party kissing the ring. So, everybody will know they signed with the parts of the conservative movement, that have been traveling to Russia egging them on to step up their campaign to destroy gay people`s lives and rip kids out of their families and throw them into orphanages because family values. Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL". Have a great night. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END