The Rachel Maddow Show, Transcript 11/27/13

STEVE KORNACKI, MSNBC GUEST HOST: Good evening. Thanks to you at home for joining us this hour. I`m Steve Kornacki. Rachel has the night off. You know, it is the day before Thanksgiving in America, because of this. (BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The Office of the Presidency, the most powerful position in the world, brings with it many awesome and solemn responsibilities. This is not one of them. (LAUGHTER) (END VIDEO CLIP) KORNACKI: That is the president today pardoning a turkey with first daughter, Sasha and Malia. The turkey`s name, in case you are wondering, is Popcorn. He is from the state of Minnesota. The president was obviously back at the White House today along with Popcorn. He spent the better part of this week not in Washington. He spent the better part of this week in California where he attended fund- raisers. He visited DreamWorks animation where he joked that his ears were the inspiration for Shrek. And in California, the president gave a big immigration address where he was heckled by a DREAMer who pleaded for an end of deportations. The president said there was only so much he could do himself. He is going to need Congress to act to do more. One thing he did not devote a lot of time of talking about in California, though, is the rollout of his health care. California, which is America`s biggest state obviously, is crucial to the success of Obamacare. President Obama really doesn`t have to sell California on the Affordable Care Act. California is already pretty much sold on the health care law. The state-run exchange, calling it Covered California, is up and running and running well. Paul Krugman wrote about the implementation and said that enrollment is surging. At this point, more than 10,000 applications are being completed per day, putting the state well on track to meet its overall targets for 2014 coverage. As Krugman also pointed out, it matters who is signing up under the law. Young, healthy people are badly needed to help keep costs down. In California, last month alone, one quarter of all enrollees were those healthy young people. They`re between the ages of 18 and 34. You can track this yourself if you want. Covered California actually releases the numbers publicly each week online. Health care law is a success so far in California, and there are many potential reasons for that success. Maybe there has been better advertising there. Maybe Californians themselves are just more into health care. Maybe the home to Silicon Valley couldn`t stand the national embarrassment of creating a Web site that doesn`t work. But one definite reason why the health care law is working in California right now is because of that state`s governor. It`s a Democratic named Jerry Brown. I want to take a minute and talk about him and about what he is doing right now, because I don`t think there is a single politician in America who fascinates me more than Jerry Brown. Right now, he is the oldest governor in the country. He`s also the oldest governor in California`s history. But if you go back four decades ago, he was the youngest, elected in 1974 at the age of 36. It took him just over a year to decide, it was time to run for president. So, he entered the 1976 Democratic race and he entered it very late, in May of that year, months after the New Hampshire primary. Something like that would be unthinkable today. But nominations back then at least theoretically could be decided at dead-locked conventions. So, Brown was the young governor of the nation`s biggest state, jumps into the race for the Democratic nomination in May of `76. And guess what? He starts winning. He wins in Maryland. He wins in Nevada. He wins big in California. It`s too late for him to make the battle in Rhode Island, in New Jersey. So, he tells voters to check off uncommitted on their ballots. Uncommitted wins those states. Jerry Brown was pretty much a national political sensation in 1976. They use all that late momentum from all of those late victories to steal the Democratic nomination from Jimmy Carter at the convention. Those are long shot, but he actually came close to pulling it off. Trying again in 1980, but with Carter facing a challenge with Ted Kennedy, there wasn`t room for anyone else. After that, Jerry Brown`s political career just kind of crumbled. He lost popularity in California. He lost the Senate race in 1982. And then he kind of disappeared. He spent the `80s in Mexico and in India, and in Japan. He worked with Mother Teresa. He studied Zen Buddhism. He came back years later a changed man, a man forgotten by the political world, an outsider, something of a radical even. So, he ran for president again this time in 1982. This Jerry Brown had no patience at all for the political system, no patience for politicians like Bill Clinton. The whole system was corrupt, Jerry Brown. That was his message. He had no problem saying it, no problem saying it to people like Bill Clinton to their face. (BEGIN VIDEO CLIP) BILL CLINTON, FORMER PRESIDENT: You ought to be a shamed of yourself for jumping on my wife. You are not worth being on the same platform as my wife. JERRY BROWN (D), CALIFORNIA GOVERNOR: I tell you something, Mr. Clinton, don`t try to escape it. Ralph Nader called me this afternoon and he read me the article from "The Washington Post." CLINTON: Does that make it true? BROWN: I was shocked by it. I was shocked by it because I don`t think someone in government should be funding money to his wife`s law firm. (END VIDEO CLIP) KORNACKI: It`s just a small taste of what that campaign was like. When that `92 campaign was over, Jerry Brown really was a political pariah. The media thought he was an unhinged madman. Bill Clinton, now President Bill Clinton, he wasn`t about to throw him any life lines. Jerry Brown was all alone. He was done. He was finished. All of the potential from the spring of 1976, this is where he was going to end up. Now, flash forward to 2010, two decades later. He found a way to crawl back to at least a little bit of relevance in the 1990s. He turned 60 and he started all over again, at the bottom of the ladder, became the mayor of Oakland, California. He did that job for eight years and then got himself elected attorney general in 2006. Then, the governor`s office opened up in 2010 and he ran for that and he won the Democratic nomination. He found himself in a dogfight in the general election. He needed some help. He needed a late boost. So, with his comeback on the line, Jerry Brown seemed turned to that same guy he had relentlessly savaged back in 1992. (BEGIN VIDEO CLIP) BROWN: President Clinton -- now, he was great in office, he`s great after office. He didn`t retire to Palm Springs to play golf. He is out there doing stuff. He`s helping people in Haiti, he`s fighting AIDS, he`s dealing with the victims of tsunamis. He is a guy who is mobilizing the highest spirit, the angels of our better spirits. He is doing it. And that`s the spirit I would like to bring to California. (END VIDEO CLIP) KORNACKI: I have to tell you, that is what I love about politics, scenes like that, with all that rich, complicated history, just beneath the surface. Anyway, Brown won that governor`s race and he was back at the age of 72. He was back in the governor`s office of the country`s biggest state all over again. And since that time, it has gone pretty well for Jerry Brown. His popularity is high. His re-election prospects are bright. For the first time in California history, Democrats have a super majority in the state legislature. Jerry Brown has a mandate in California and he is using it. One of the things he is using it to do is to make sure the health care law works in his state, to show the most populous state, a state of 38 million people, can actually make the Affordable Care Act work. Implementing Obamacare is one of the reasons Jerry Brown is seen as a successful governor right now, why he is suddenly attracting national attention again, just like he did all those decades ago. Implementing Obamacare successfully is one of the reasons that there are actually people and I can`t quite believe I get to say this, but it`s true. There are actually some people in politics who are touting him as a perspective presidential candidate for 2016. That is what being a successful governor, what making Obamacare work has done for a man who had fallen to the bottom of American politics. In the Washington that President Obama returned to yesterday, the news for Democrats seems grim. Look at these headlines, "Democrats lose 2014 edge following Obamacare uproar." "Is a Republican way of building?" Quote, "The national political climate is starting to resemble 2010 when Republicans won control of the House of Representatives by riding a wave of voter anger." It`s just from today. If the midterm election were today, according to the Beltway press, Democrats would get trounced. But the election, of course, is not today. The election is a year from now. And so, what happens if the health care law ends up working nationwide, just way it`s working in California. What happens if three or four or five months from now, health care coverage in the nation looks like health care coverage in the most populous state in the nation? The health care law has been a success and helped create another chapter in presidential buzz all over again in the career of one very unique politician. Joining us now is Norm Ornstein. He`s a resident scholar at the American Enterprise Institute. And he`s also the author of "It`s Even Worse than It Looks: How The American Constitutional System Collided with a New Politics of Extremism." Norm, I really appreciate you taking the time tonight. And I thank you also in advance for indulging me in my Jerry Brown fascination. I just -- the idea that somebody who could run for president in 1976 could be theoretically touted 40 years later I thought endlessly amusing. But I also wonder if there is a lesson there? If this is sort of a refreshing message in this season of bad news all around in politics, that sometimes good policy does make for good politics? That he can implement a law like this so far successfully in California and get a real political reward for it. NORMAN ORNSTEIN, AMERICAN ENTERPRISE INSTITUTE: Steve, first, let me say. I`m not indulging you. Every time I am on w you, you provide history and context, which is so rare in modern television. That`s why we all love you. KORNACKI: Now, you are flattering me. But I`ll take that too. ORNSTEIN: But you know, if you look at what`s happening in California. Jerry Brown is a significant part of that. His wife, too, by the way, who is a former business executive with The Gap and they really govern together. But they, along with the state legislature that wants to see this work in an extremely complicated state, shows what the prospects are. We see the same thing with Steve Beshear in Kentucky, in a state that is hostile to the law but it`s working extraordinarily well. Then, we look on Thanksgiving Eve at the states where governors just because they don`t want Obama to have a victory are denying their citizens the ability to get health care in Georgia, where we`ve got five navigators, they have tried to block people from being able to get the information, all the states where they are denying Medicaid. I think what we can see is we are going to have models out there by 2014 hitting a lot of states that show the great potential for expanding insurance and lowering the cost for large numbers of people and opening things up. But let`s face it, we are also going to have states including those where they are actively undermining it where it isn`t going to be working so well. KORNACKI: On that point, then, because today was sort of a day where you have this confluence in Washington about the political damage at least potentially for Democrats from the rollout problems they have had so far. In the headline from this like CNN poll that came out, in the generic ballot next year, Republicans have recovered from the shutdown a month ago and are suddenly in a lot better shape. But if you dig a little bit deeper and you ask the question, do you think that the problems right now with Obamacare will be fixed or is it just -- you know, will it not be fixed? Is it a failure? Overall, people are saying 54 to 45. They think it will be solved. If you look among Republicans, it is overwhelming. Three-quarters say it won`t be solved. It seems to me, the entire Republican calculation for the election year in 2014 depends on nothing changing from this moment today, this being the reality of Obamacare for the next 365 days. ORNSTEIN: Absolutely. You know, Greg Sargent of "The Post" has been particularly good at pointing out the closed information loop for Republicans. They are all convinced that the law is already in tatters and can`t possibly work. It`s somehow just going to fall apart on its own. Deep within that poll is also another reality. The younger voters, the younger people in the electorate are very much convinced that the law will end up working and what we see in California, which is particularly important, is that these younger people, the so-called invincibles are signing up in reasonable numbers. What matters is not so much the number of people in the end that sign up for the Affordable Care Act, it is the proportions. And if we do get in the end a lot of younger voters and insurance companies are going to make a strong effort to get them, because it is in their interest. And they will focus on convincing their parents as much as these younger people, then we`ll be in a different place a year from now. And, of course, all of these news stories that look at where the electorate is today, if we look at it seven weeks ago, it would be a disaster for Republicans. The idea that extrapolating from today the next year means anything, it just fills up some news space. KORNACKI: All right. Well, speaking of filling up new space, the next time we have you on, we will discuss Jerry Brown`s potential running mates for 2016. I think that`s the next thing. Anyway, Norm Ornstein -- ORNSTEIN: Linda Ronstadt has to be on the ticket. KORNACKI: They were together once before. Norm Ornstein, resident scholar of the American Enterprise Institute, author of "It`s Even Worse Than It Looks," thank you for joining us on Thanksgiving -- ORNSTEIN: Happy Thanksgibakah (ph). KORNACKI: Thank you. This is a piece of the Dead Sea Scrolls and this is a letter on presidential stationary which was so hard to read, but it came with its own translation. The story of my surprising presidential pen pal. I will tell it to you, coming up. (COMMERCIAL BREAK) KORNACKI: So, I want to tell you about the time that me and Bill Clinton became pen pals. I mean, we sort of became pen pals, I`ll explain. There`s a reason for this. But I think if I`m going to explain, you probably need to first understand something about where I`m from. This was the paper that me and my family got every day when I was kid, "The Lowell Sun". Lowell, Massachusetts. It`s a tough, old mill city on the Merrimack River in Massachusetts. If you remember the movie "The Fighter" from a few years ago with Mark Wahlberg playing the boxer Micky Ward, Christian Bale as his troubled brother, that movie was set in Lowell and they pretty much got it right. Now, I admit, I didn`t I grew up in Lowell myself. I`m not actually that tough. I`m from one of the towns outside of it, one of the less tough towns outside of it. But still, when I was growing up, Lowell was the closest city to us. We were connected to it in a lot of ways. It was a city that had seen better days. When it got attention from anybody outside our area, it was usually for the wrong reasons. Mostly, though, the part of Massachusetts where I`m from didn`t get any attention. When I was 12 years old, it suddenly got a lot, and it got a lot of very positive reasons, a very exciting reason, it`s because of this guy -- Paul Tsongas. He was born in Lowell, he come back to Lowell after college and after the Peace Corps. He`d gone into local politics. And now, in 1992, he was running for president. This is just when I was starting to get interested in politics. I didn`t know much about the difference between the two parties. But I did know that it was really cool that someone that lived a few miles from our house was running for the White House, the most important job in the world, a guy from Lowell. I became kind of obsessed with his campaign. Every afternoon, "The Lowell Sun" would land on our doorstep. I would devour the latest updates from the trail. I wanted him to win. And for a brief moment there, it actually looked like he might. He won New Hampshire. He won Maryland, he had momentum, and then, well, and then Bill Clinton overwhelmed him. And that was pretty much that. There were a lot of reasons that he beat Tsongas that year, reasons I didn`t fully appreciate or fully understand when I was 12 years old. But one thing I did know was that he`d gotten rough. Clinton had pushed the line in some of his attacks. He crossed the line. I was mad at Bill Clinton then. I`ll admit, I held a bit of a little bit of grudge. So, now, fast forward to 2007. I am writing a column for "The New York Observer". I`m a freelance columnist. I`m getting paid almost nothing. I`m not doing TV. I`m in thousands of dollars of debt. That might even be understating it. I`m a nobody. But with Hillary Clinton setting out to run for president, I find myself thinking back to that 1992 campaign, to how the Clintons had beaten Tsongas. Then, I decide to write a column about it, with a warning I guess I was supposed to be to Hillary`s Democratic opponents of what they might be in for. And like all of my columns back then, it ran and nothing happened. One woman from the Upper West Side wrote to me, but she always wrote to me usually to tell me how much she didn`t like me. Besides that, I didn`t hear from anybody. Then, a month or so later, this comes in the mail. It`s from Harlem, Bill Clinton`s office. Look at the upper right. I guess when you are an ex-president, your signature counts as a stamp. So, I opened it. I figured it`s some kind of a form letter. I must have been added to a mailing list. Maybe it`s an offer to meet him for a round of golf, which I don`t play, for a donation of $50,000, which I don`t have. I don`t know, something like that. But it turns out t was actually this, I have it right here. It was a personal letter, handwritten, almost four pages long and almost completely indecipherable. His penmanship was a little sloppy. It looks like he used a marker or something. Fortunately, though, it also came with this, a typed translation. "Dear Mr. Kornacki," Clinton writes, "I rarely answer articles like yours, but it was so selective in its use of the facts, I can`t resist pointing out a few things you overlooked." I read the whole thing feeling a weird mix of emotions. I was flattered to get it. Some of what he was saying in it made sense to me. Some of it kind of irritated me. Mostly, I was confused. Did the former president of the United States really take time to write to me, a complete nobody, to write a four-page handwritten letter litigating details of the 1992 presidential campaign? I had really gotten under his skin, I realized. As I started to think about it, I kind of got it. I mean, the Clinton/Tsongas race had become really personal. Tsongas died in 1997. And one of his friends told me that when he did, he had really never forgiven Clinton for how that `92 campaign went down. I was saying about Clinton in that column things he probably never stopped hearing from Tsongas` friends, from people who devoted themselves to Paul Tsongas. I couldn`t deny a lot of the media in 1992 had painted Tsongas as the good guy and Clinton as the villain. I had no problem with it at the time because I believed it. But now, I can see a little bit for more of the complexity. "I wish the conflict hadn`t become so personal", Clinton wrote to me. "As your article demonstrates, the premise of your campaign was, in part, its purity and the fact that anyone who disagreed with you was a pander bear." I also realized at that moment that Bill Clinton apparently thought I was around 40 years old and had worked for the Tsongas campaign. Anyway, I decided to write him back, to tell him the story I told you. Like I said, though, I basically had no money, I had no printer, no fancy stationary or anything like that. My letter to Clinton had to look professional. So, I went to Kinko`s and I paid to print it on fancy paper. And I tried to cut the paper into the same small size that Clinton`s note to me was written. Of course, I ended up botching it and the paper was all uneven and slanted and diagonal and everything but I didn`t have money to buy new fancy paper. So, I sent the letter anyway. And a few weeks later, I got another note back from Clinton. This one was much shorter. There was no translation. "Dear Steve," it said, "thanks for your letter. I read it carefully and I was very moved by how deeply Paul Tsongas touched your life. He was lucky to have a supporter like you and have his commitment to public service live on in you. I hope we get to meet someday. Sincerely, Bill Clinton." Well, I`m not sure how much he meant the last part. I have requested a few interviews with him in the years since then. The answer keeps coming back no. But I`m trying not to take that personally. Anyway, the reason I am sharing this with you, because of this. It`s the latest outrage prop for the right. It was supposed a handwritten note from Barack Obama to a Texas man named Thomas Ritter, who wrote to him to argue against the health care law and to say that, quote, "any citizen that disagrees with your administration is targeted and ridiculed." Obama`s response is respectful. He tells Ritter that he welcomes dissent, he understands the health care law isn`t that popular, but he still believes it`s the right thing to do. Now, the right is all upset about this because Obama uses the word teabagger in the note. But he is using it to address Ritter`s claim in his own letter that, quote, "you make fun of teabaggers." Anyway, we don`t have official word this is an authentic word from the president, but Ritter is now trying to sell it for $24,000 online. "The letter is just words on a paper", Ritter told "The New York Post". ":It doesn`t mean anything to me because Obama doesn`t mean any of it." And I got to disagree with Ritter right there, because to me, it is a very healthy sign, when a former president like Bill Clinton or a sitting president like Barack Obama sends a note like this, it is prove they aren`t quite as insulated as we all fear they are sometimes. Criticism does get through to them. They hear it. They feel it. They carry it around with them. Sometimes, they just can`t help letting someone know. (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) SEN. TED CRUZ (R), TEXAS: If President Obama forces a partial government shutdown and if Republicans stand together and say, we will not fund government that funds Obamacare, you`ll have an impasse. If you have an impasse, one side or the other has to blink. How do we win this fight? Don`t blink. (APPLAUSE) (END VIDEO CLIP) KORNACKI: Well, we all know that Republicans did give up and blink on that idea. That was back in October. The shutdown was probably their lowest moment to date in the Obama presidency. But that don`t blink strategy didn`t just come from Ted Cruz. It came from the folks that made that huge defund Obamacare sign behind him there. A group that was not that long ago widely respected even by Democrats, a serious ideas factory. They are now deeply divided and at war with itself. That war is getting a very public airing. We will tell you all about it right after this. (COMERCIAL BREAK) (BEGIN VIDEO CLIP) MITT ROMNEY (R), FORMER PRESIDETIAL CANDIDATE: It is a politicians dream, you`ve got to admit, standing at the top of this pedestal here and now, I`ve got a little step underneath to get even higher. So, obviously, I want to express appreciation for Cecil B. DeMille (ph) for organizing this event this morning. (END VIDEO CLIP) KORNACKI: That`s how you want to kick off the Thanksgiving holiday, some vintage Romney there for you, April 2006, basking in the glow of a big political achievement for the then-Massachusetts governor. It was the signing of his landmark health care reform bill. 2006 was Romney`s last year as governor of Massachusetts, and he wasn`t running for re-election. So, pretty much everything he was doing was positioning him for a presidential run in 2008. That signing was going to be the photo-op that captured his good side, his best side, his presidential side and his team made sure that the signing was a showcase. They had Senator Ted Kennedy, the big champion of health care reform up on the stage, representatives from the Massachusetts legislature, health care industry people and some D.C. think tank folks. You see that guy on the left there, that is Robert Moffit, PhD. He was the director for the Center for Healthcare Policy Studies at the top conservative think tank in the country, the Heritage Foundation. Governor Romney`s people had insisted that the spot on the stage with the governor would be reserved for that guy from the Heritage Foundation. Romney even made a point to give Heritage a shout-out in his speech, thanking them for being the architects of one of the, quote, "centerpieces of the insurance reform." Romney made sure that Heritage was represented on stage that day, to get their conservative stamp of approval in the Heritage Foundation warrant to be there because it was their idea he was signing into law. In 1989, the Heritage Foundation had put out this policy paper. It was called "Assuring Affordable Healthcare for All Americans." And the paperback in 1989 proposed a new idea for health reform, the individual mandate, a requirement that all household purchase private insurance. With that, the Heritage Foundation staked out the conservative poll on the issue of health care. And then in 2006, the basic Heritage health care framework was established as law in a major state by a Republican governor that was going to go out and run for president. Of course, Romney didn`t win in 2008. Barack Obama did. One of his first orders of business was health reform. His model was, I think you know this right now, the plan that was working in Massachusetts, the Romney plan, the Heritage Foundation plan. But in the political climate of the Obama era, those subtleties may have been lost on the right. They were lost on the right. They`ve wanted an all-out war on the Democratic president and any policy ideas he advances, which means for a conservative movement that had helped lay the foundation for the Affordable Care Act has been nearly four years of all- out war on Obamacare. When Congress was debating health care in 2009, Republican Senator Jim DeMint predicted it would be Obama`s Waterloo. We are going to break him on this, he said. The right hasn`t stopped trying to do that ever since. It`s a quest that DeMint has continued at the Heritage Foundation, which he`s been running since he quit his Senate job last year. The Heritage Foundation that DeMint took over was and is very different than the one that produced that health care policy paper all those years ago. It is one where the think tank wing has taken a back seat to the political action wing, something called Heritage Action. It`s Heritage Action with its legislative score cards serving as measurements of conservative purity that set a radical goal this year -- the end of Obamacare through the shutting down of the federal government in the threat of a debt-ceiling default. It was the threat of landing on the wrong side of Heritage and of getting a bad number on the scorecard that kept all those Republicans in line for so long this fall, as the government closed down, as their poll numbers dropped, as they asked themselves, wait, why are we doing this all again? Twenty-four years before shutdown, it was the Heritage Foundation that conceived of a conservative, market-friendly alternative to the Canadian style health care, a concept that is now etched into law under the name Obamacare. In that way, the revolt the Heritage Foundation led was a revolt against itself. A generation after that 1989 health care paper, a group that had been the preeminent source of conservative policy ideas has become less of a shot in the arm for the right than more a shot in the foot. This week, "The New Republic" is out with a piece that gives insight into the organizations decline, quoting one Republican staffer, bitterly noting that, quote, "If Nancy Pelosi could write an anonymous check to Heritage Action," she would. Joining us now is the author of that story about the Heritage Foundation, she is Julia Ioffe. She`s a senior editor at "The New Republic." And, Julia, we appreciate you being here tonight. So, the story of Heritage is interesting obviously because in my mind, they went from coming up with the idea for the Affordable Care Act essentially, to shutting down the government over its enactment and implementation. When a lot of people think of that story, they think of Jim DeMint, the South Carolina senator who now runs Heritage. But your story says it`s actually -- it`s this duo, it`s two guys who are a lot younger than Jim DeMint that have taken it and turned it away from being a think tank into just a pure sort of partisan warfare machine. Tell us who they are and how they`ve done this. JULIAN IOFFE, THE NEW REPUBLIC: Sure. So, the -- my piece actually focuses on one guy, Michael Needham. He`s 31. He`s the CEO of Heritage Action. I think that title CEO is significant. He has a lieutenant, Tim Chapman, who is the COO. They were helped to be put in place by the chairman of the Heritage Foundation Board, a guy named Saunders, who was a Wall Street banker in the `80s. He pushed -- when he was elected to the board in 2009, he pushed for a more aggressive approach, for Heritage to take a more aggressive approach on the Hill and to create a lobbying arm. By this point, Michael Needham had served as chief of staff to Heritage Foundation`s creator and president, Edwin Feulner. He had gone off to work with the Giuliani campaign. He went like his father to Stanford Business School. He has a very sterling pedigree. He`s from the Upper East Side. He went to Collegiate and Williams (ph). He was also a proponent of this. He was brought back to run this lobbying arm in 2010 whether it was created. And because a lot of the organizational details were left vague, how the money was spent, where it would come from, who would call the shots, he and Tim Chapman basically called the shots because there was nobody else calling it for them. And then by the time the Heritage elders woke up, they had radically changed the Heritage brand. They had alienated a lot of people on the Hill for their aggressive, sharp elbow tactics. And the elders at Heritage Foundation kind of woke up one day and realized that the organization has radically changed. KORNACKI: So, right, that`s what your piece brings out, the tension between the elders, as you call them, and this sort of new guard. What`s interesting to me is, I think this sort of illustrates a challenge that more broadly faces the right now, because when you look at Heritage, you can say politically, obviously, the shutdown was a disaster for the conservative movement and the Republican Party. And traditionally, the role of heritage is this sort of role of policy ideas for the conservative movement. That might be changing. But at the same time, leading this charge to defund Obamacare has meant a windfall in terms of grassroots donations for Heritage and other groups like it. How do people sort of reconcile those two things that with the grassroots, they can turn and make an appeal and bring in big money even if they are not doing what they used to do? IOFFE: Well, I think the jury is still out on that. If you talk to people at Heritage or people who were pretty senior there who have recently left, they would tell you the same thing. Heritage Action -- Heritage Foundation, excuse me, is a very old, well-respected brand on the right, an $82 million annual budget. So, they burn through $82 million every year and have plenty left for the next year and the year after that. Heritage Action raised $5 million last year. Their biggest donation was from the Koch brothers for $500,000. Everything else comes from smaller grassroots donations. And we have yet to see what they did with the shutdown and bringing the U.S. to the brink of default with nothing to show for it, how that will affect the bigger donors. A lot of people on the right and business groups are angry at them. And as the Heritage elders are happy to point out, you can`t run an $82 million organization on $25 donations. KORNACKI: Yes, I think that is one of the interesting things to watch on the right now, that tension between the big money -- more sort of corporate donor class and the grassroots side that wants more of the sort of all-out partisan warfare. Anyway, Julia Ioffe, senior editor at "The New Republic". It`s a great story. I encourage you to read it if you hadn`t. Thank you for joining us tonight. What happens when political partisans try to hop on the swing side and ride it to their side of the aisle? Sometimes they fall off. Hold on for a bumpy ride, up next. (COMMERICAL BREAK) KORNACKI: Last year, 130 million Americans voted for president. In the final margin, it was Barack Obama with 51 percent plus a little, Mitt Romney with 47 percent plus a little. In Virginia, the final margin was Barack Obama with 51 percent plus a little, to Mitt Romney with 47 percent plus a little. No other state came this close to the exact national margin. And so, we can safely say that Virginia is a bellwether state, which is why Democrats were so excited earlier this month in 2009, Virginia had elected a trio of Republicans to the three state-wide offices. This year there was a backlash. The governor elected in 2009 had been caught up in a scandal and the candidate Republicans ran to replace him, state Attorney General Ken Cuccinelli was so far to the right, especially on culture issues, that scared off the swing voters Republicans have to win in Virginia. So Virginia instead elected a Democratic governor, Terry McAuliffe. In fact, elected Democrats to the other two statewide posts as well. At least it looks that way. Just today, the race to attorney general went to a recount. But if the results from election do hold, Democrats will have a lock on Virginia statewide offices for the first time since 1969. You might hear national Republicans swearing off the events in Virginia as not that big of a deal. But it`s hard to deny it, Virginia is a classic bellwether state, and it just gave the GOP a warning of what happens when you field far right candidates in a truly competitive state. Here is another bellwether state, Colorado. After Virginia, it was Colorado voters who most closely reflected 2012 voters overall nationwide. So, you`ve got bellwether Virginia and bellwether Colorado. And it is fascinating because in Virginia, the state-wide offices have been held by Republicans. The voters seem to have rejected their way of governing. But in bellwether Colorado, it is the Democrats that have been in control. Governor John Hickenlooper has had the benefit of a legislature controlled by his own Democratic Party and he`s used that power to sign major gun reforms and civil unions and new laws about renewable energy. Then he`s come at something of a political cause. Back in September, voters recalled two Democrat senators who had supported the gun reforms, which left Colorado Democrats clinging to a one- vote majority in the state senate. Then, opponents of the gun laws went after a third Colorado senator. Her name is State Senator Evie Hudak. They were about to submit the signatures needed to put her up for a recall when Senator Hudak resigned. By leaving now rather than risking the loss of her seat, she gives Democrats the chance to appoint a replacement and then run that person for office next year. Colorado Democrats thus have kept their hold on power in the bellwether state. But this is what it took, it took getting one of their own to fall on her sword, hoping it doesn`t lead to a bigger backlash later. And look at this, Democrat, Mark Udall, he has to defend his U.S. Senate seat next year in Colorado. He won by 10 points last time. Now, he is up over his closest challenge by just three. Governor Hickenlooper, he won his job in 2010 by 14 points. In 2010, that was a very Republican year, in case you haven`t forgotten. He still won by double digits in that climate. But now, he is up by just five points over his possible challengers. Virginia is very promising bellwether for Democrats. How do they make sense of what is happening in the bellwether of Colorado? Joining us is Perry Bacon, he`s the national political editor for "The Grio" and an MSNBC contributor. Perry, thanks for joining us. So, the events today in Colorado were just kind of, to me, extraordinary to me watch, a state senator resigning and giving up in the face of a recall, just so her party can control the chamber for another year. I wonder, though, what lesson you think Democrats should be drawing nationally from what`s happening in Colorado right now? Because, as we say, you looked at Virginia last month, and Democrats said, well, look, when Republicans put the far right up, we are fine. But in Colorado, you have Democrats in control and they are pursuing a Democratic agenda, but it`s really, I`d say, a moderate agenda. And they are facing an awful lot of backlash for it. How do you make sense of that nationally if you are a Democrat? PERRY BACON, THE GRIO: What you`ve seen in Virginia and Colorado is the candidates who do best are the ones who play down the kind of cultural issues. I`d say guns in Colorado, talk abortion and contraception, which Cuccinelli talked about a lot in Virginia. John Hickenlooper, the governor now of Colorado, ran a very non- ideological campaign, kind of like what Mark Warner did when he won in Virginia. And Hickenlooper was a surprise by being so adamant on his gun control issue, and I think you`re seeing Republican voters there outraged by that. What you saw in Hickenlooper`s numbers is that Democrats still like him. Independents still like him. Republicans went from 26 to 46 in the last few months. You are seeing a backlash mainly among Republicans that didn`t care about him before and now are pretty opposed to him. The same thing you saw in Virginia where Cuccinelli was a much more controversial candidate than McAuliffe who pretty much ran in the center and won in Virginia. KORNACKI: You know, I mean, we are coming up on the one-year anniversary of Newtown. I think that`s just a few weeks away. Now, you had the shooting in Aurora, just over a year ago, those are sort of the events that got Hickenlooper on board with gun control in Colorado. It becomes sort of a depressing message for Democrats when you look at what`s happened in the last year for gun control supporters, wherever they are in the political spectrum, that it could not happen at the national level. It could not happen in the U.S. Senate and the Democrats in Colorado are paying such a price for this. I understand that the point you are making is certainly politically, when you look at the sort of the third rail that sort of represents culture in the state like Colorado. But is there a way, is there a lesson we can draw anywhere in the last year for how Democrats, for how gun control supporters in a state like Colorado can pursue that and not pay this kind of a price? BACON: It looks like from looking at the polls that, Hickenlooper doesn`t tell a little bit as well, is that background collection are still supported by a majority of people in Colorado versus the limits on magazine clips or for whatever reason have been more unpopular. That may be a sign where background checks are a more palatable issue. I will say there are two different lessons here is that -- on issues. I do think Democrats will be more wary of gun control because Colorado is such a centrist state in the country. But I think if you look at health care, Medicaid expansion, Terry McAuliffe ran on very hard in Virginia and he won on that issue in part. So, I think you`ll see more Democrats being emboldened on the Medicaid issue in particular next year versus gun control. I do think you`re going to see a chilling effect. We`re talking about recalls, important to note. Very few people are voting in these elections. But I still think you`ve seen a slowing in gun control up in Colorado, and you saw most states passed it that were effective, Maryland and New York, for instance. Those are states where liberals don`t have to worry about any kind of backlash. I think there will be some chilling right now in Colorado, in states like Colorado. KORNACKI: That`s right. When you get out of the safely blue states. That`s the story of our politics these days. Anyway, Perry Bacon, political editor for "The Grio" and MSNBC contributor -- thanks for your time tonight. We will be right back after this. (COMMERCIAL BREAK) KORANCKI: Fifty years ago tonight, 50 years ago around this exact time, nearly every American household that had a TV was gathered around to watch this. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Live from the Capitol in Washington, D.C., NBC News brings you coverage of President Lyndon B. Johnson`s first message to the Congress of the United States. (END VIDEO CLIP) KORNACKI: It was November 27th, 1963, 50 years ago tonight that Lyndon Johnson addressed a joint session of Congress for his first time as president. The nation was still in a state of trauma after the assassination of John F. Kennedy, just five days earlier. And while transition of power to LBJ had been smooth, millions of Americans watching at home that night were wondering the same thing that NBC`s Chet Huntley wondered allowed just a few days earlier. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Now, the question in the national mind, of course, is who is Lyndon Johnson? (END VIDEO CLIP) KORNACKI: Well, the answer to that question had changed dramatically in the five days between the death of JFK and Lyndon Johnson`s speech to Congress that night, because LBJ who awoke in November 22nd, 1963 was vastly different than the one frantically sworn in as president less than 12 hours later. Only eight weeks before the assassination, this was the defeated slow moving, Lyndon Johnson, dressed informally in khakis, meeting with a local Houston affiliate for an interview at his ranch. The interviewer was Ray Miller of KPRC TV. Johnson replied to his question with the body language of a man just going through the motions. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: A lot of people thought when you -- when you gave up the majority leadership in the Senate to become vice president that you would find it a comedown. How do you find it? LYNDON JOHNSON, FORMER PRESIDENT: Well, I can`t imagine why anyone would think that. I don`t think that, vice presidents can come down from anything. (END VIDEO CLIP) KORNACKI: No one thought Johnson was the second powerful man in Washington. "Life" magazine profiled the, quote, "number two man in Washington", they were talking about the president`s brother, Robert Kennedy, who was perhaps LBJ`s most bitter rival in the administration, in all of Washington, in all of politics. But to call them rivals at the moment that would have been a gross distortion of the concept of rivalry. Johnson had told House Speaker Sam Rayburn, quote, "being vice president is look being a cut dog." That`s who LBJ was in the months, weeks, minutes, seconds before the shots rang out in Dallas. And for personal indignities aside, Lyndon Johnson back then, back in pre-Dallas, was also in very serious political trouble. A scandal, secretary of the Senate`s office was unfolding, one that involved, LBJ`s protege, Bobby Baker, graft, illicit sex, influence peddling. The Baker affair sparked new interest on how Johnson had amassed a fortune worth millions of dollars after 30 years on a government salary. In November 1963, the powder keg was about to blow. November 22nd, the presidential motorcade rolling through Dallas, the editors of "Life" magazine were meeting to delegate assignments and their investigation into a project they called Lyndon Johnson`s money. The Senate began sniffing around the Baker controversy. Lyndon Johnson`s shelf life as a national politician was rapidly expiring. Talk was beginning Johnson would be bounced from the 1964 ticket by Kennedy. Once that "Life" story ran, once all that dirty laundry was aired in the Senate hearing, it will be a no brainer then. It was during that Senate hearing, though, into the Baker affair, with the documents, invoices and checks linking the vice president to illicit behavior. It was during the hearing, some one burst in to say the president had been shot. The shot radically changed Lyndon Johnson`s life and so many others. It triggered an instant transformation. He wanted to be president all his life and he knew what he was supposed to do. He was calm. He was decisive. He took action. He told every Kennedy aide that needed them more than President Kennedy ever had. He brought in congressional leaders, and governors. He addressed the join session of Congress, 50 years ago tonight. (BEGIN VIDEO CLIP) JOHNSON: No memorial, oration, or eulogy could more eloquently honor President Kennedy`s memory than the earliest possible passage of the civil rights bill for which he fought so long. (END VIDEO CLIP) KORNACKI: Over the last week and a half, we had remembered the 50th anniversary of JFK`s death for all that was lost and so much was. But it also ushered in one of the most momentous consequential periods in American history. It was LBJ who channeled the grief over JFK`s death, who harnessed his own ability to count votes and twist arms on Capitol to etch a Civil Rights Act into law, to see through the tax cut bill installed under Kennedy, to push for his own wildly ambitious war on poverty and to get his way. JFK`s death gave way to the LBJ landslide of 1964. It was one of the most thorough presidential victories ever amassed. It gave us the 89th Congress, perhaps most productive, influential legislative session in American history -- a Congress that set a standard for sweeping change that no future Congress has lived up to. John F. Kennedy`s tragic death gave rise to what we might today remember as one of the greatest presidencies in history, were it not for a military entanglement in Southeast Asia, an entanglement that would come to eclipse, to erase so much of what LBJ achieved on the domestic front. But all that was still to come. In 1964, at the national Christmas tree lighting, Johnson said, quote, "These are the most hopeful times in all the years since Christ was born in Bethlehem." The events that would lead a president say a thing like that, that would make a country believe him when he said, that would make a Congress act as if it were the case -- those events began 50 years ago tonight. That speech to Congress marked the start of what was one of the most consequential presidencies in modern American history from a man whose rise to power as of literally five days earlier was essentially unfathomable. That does it for us tonight. Be sure to catch my show this weekend, Saturday and Sunday, from 8:00 to 10:00 p.m. Eastern Time. And 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