Five Police Officers shot in Philadelphia. TRANSCRIPT: 8/14/19, The Beat w/ Ari Melber.

Guests: Michael Eric Dyson, Robert Reich, Kimberly Lerner>

CHUCK TODD, MSNBC HOST: All right, Jason, Betsie and Michael, a great intellectually challenging day.  And I really appreciate it. You guys are a great panel for it. Before we go up on Wednesday there is a new ChuckToddcast. Download it now wherever you get your podcast. I appreciate that. That`s all we have for tonight. We`ll be back tomorrow with more MEET THE PRESS DAILY. "THE BEAT" with Ari Melber starts right now.

Good evening, Ari.

ARI MELBER, MSNBC HOST: Good evening, Chuck. Thank you very much we begin with breaking news. In a nation still reeling from gun violence, Philadelphia police say five officers have just been shot there, they`ve been taken to the hospital. An official spokesman says that at this hour they believe these officers are based on the nature of the wounds expected to survive.

All of this new information that we`re getting, the police say the shooter is currently holed up inside a building. Hence it`s what we call an active shooter scenario. Temple University also on lockdown, local transit is skipping the area. The ATF is currently on the scene assisting these local police.

As I mentioned, Philadelphia police having already taken 5 injuries on their force according to local NBC reporting. This is as you can see from the footage we`re getting, a rapidly evolving situation. What we`re going to do is report more on it in this hour.

In fact later, a former ATF agent will join me with an update and the latest. So that is something that everyone is processing here on a week where obviously there`s still been a lot of fallout from the mass shootings and the President`s responses to them as well as the discussions we`ve been having in reporting on regarding potential gun control.

So we have all of that here and as I say, we`re going to bring you more on that story this hour. Right now we turn to the other major crises that are engulfing Washington and this Trump administration. Donald Trump`s spending what is supposed to be a kind of a vacation period, careening from one really self-made crisis to another.

Top agent embroiled in a controversy over this immigration plan that explicitly says the goal is to punish or target poor people. Growing accusations of racism and then this, the markets plummeting 800 points today on new warnings about a potential recession. We`re going to get to all of that.

We begin with these Trump officials on defense over the immigration plan which the New York Times reports is essentially, a view that immigration policy is a ticket to the American dream but the poor need not apply. One of Trump`s top immigration officials meanwhile getting hammered for trying to sort of re write the poem at the base of the statue of liberty, arguing the U.S. will take the tired and poor but only if they can stand on their own two feet.

Now here`s what happened when he was confronted about it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Wretched, poor refuse, right? That`s what the poem says America`s supposed to stand for. So what do you think America stands for?

KEN CUCINELLI, ACTING DIRECTOR, U.S. CITIZENSHIP AND IMMIGRATION SERVICES: Well, of course that poem was referring back to people coming from Europe where they had class based societies, where people were considered wretched if they weren`t in the right class.

(END VIDEO CLIP)

MELBER: The idea that the poem only referred to European immigrants has drawn tons of backlash. Now whatever Mr. Cuccinelli was trying to get at, he has basically been spending several days in this apparent fight that he picked with America`s credo on the statue of liberty.

Democrats are pouncing hard. Beto O`Rourke saying that the gaffe if you want to call it that proves the truth that the Trump mindset is the statue of liberty only applies to white people. As the Trump administration gives mingling within these crises, they are also confronting as I mentioned, the stock market today. The Dow dropping 800 points. That`s the worst day of this whole year of 2019.

Experts say there are troubling signs in the bond market and we could be pointing potentially towards a recession.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: When this happens, this is a sign of danger. Before every recession, the yield curve has turned down. Look at that one. Look at that one. Look at that one. Look at this one. Look at this one. Look at this one and guess what`s happening here, we`ve turned down again. So it is a harbinger, it is a foreshadowing of a recession.

UNIDENTIFIED FEMALE: We also need to remind our audience we have been in an economic expansion, that`s positive territory for 9 years. We are due for some level of a correction.

(END VIDEO CLIP)

MELBER: That depending on the extent of that correction, there could be trouble in Donald Trump`s political planning because remember, what have we heard over and over again including from people who are not only sympathetic to Trump but people who look at him and say well, the economy could be a big help to him, that his best hope for re-election would be maintaining and then trying to sell a strong economy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: If the economy does not slip, the President will win re- election.

UNIDENTIFIED MALE: 3.6 percent unemployment, consistently high growth rates are typically the recipes by which Presidents get re-elected.

UNIDENTIFIED MALE: I think he`s going to get resoundingly re-elected, probably have a 40 state landslide because what are you going to do? You`re going to put a socialist in place and wreck the entire economy.

(END VIDEO CLIP)

MELBER: What if the economy gets wrecked though? That was just a month ago, an eternity in the Trumpian political calendar because that man there, Scaramucci has now said Donald Trump`s failures have driven him to oppose his old boss. And while millions of Americans are going home tonight aware to some degree that there`s at least less money on paper in their retirement accounts and nervous about all the regular life stuff.

Your rent, your healthcare, just getting by. Well, the President`s been spending this week lamenting that he thinks being President is costing his company`s money to his inflated tune of over 3 bill.

(BEGIN VIDEO CLIP)

DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES: This thing is costing me a fortune being President. It`s probably costing me from 3 billion to 5 billion for the privilege of being and I couldn`t care less, I don`t care. You know if you`re wealthy, it doesn`t matter. I just want to do a great job.

(END VIDEO CLIP)

MELBER: We`ll be joined momentarily about all of this with economist and former Labor Secretary Robert Reich who knows his way around these issues in the White House. We begin here in New York with Michael Eric Dyson, professor at Georgetown University and my colleague who you just saw there breaking it down. MSNBC.`s Stephanie Ruhle.

Good to see you both. What is real here and what are the perils for the Trump White House?

STEPHANIE RUHLE, HOST, MSNBC: So just think about this for a moment. President Trump has been arguing, I`m your money guy and there are lots of people in the middle who you hear say, listen, I don`t like his rhetoric but the economy, I`ve got to stick with the economy.

What happens when the economy falls out? Now here`s what`s noticeable. When President Trump said we need a corporate tax cuts, we need deregulation, the argument was it was going to trickle down to the workers, you were going to see this big spur of growth and that would be positive for everyone.

We haven`t actually seen that though and what`s worse, even though companies got a very big tax cuts and they`re sitting on cash because they have absolutely no idea what the President is doing on trade and fiscal policy, those companies are not reinvesting and they`re not hiring.

They`re sitting on that cash. In the same way that companies sat on cash in the Obama administration because there were fears from corporate America, that they would get more regulation in the Obama administration. That was a fair fear.

Now they`re sitting on cash again because you tell me, the President has shown in the last 24 hours, he doesn`t know how trade works. He sits there and says look at how great the U.S. dollar is. People are flooding to buy dollars. They`re flooding to buy U.S. treasuries because that`s a flight to quality.

You`re looking for the safest asset and it`s not just our economy because yes, our economy is better than others. You have to look at what`s happening around the world. The unrest in China, GDP numbers in Germany are terrible so this global slowdown compared to the uncertainty, everybody likes to know what the path is.

MELBER: Well and so this goes also to what is the sort of buffer for his trade policies. In other words if things are generally better here for whatever reason, does that give him more insulation to play around and if things get worse, do you think Americans, whether they`re really read up on the economy like you are or not, will they say wait a minute, why are we picking fights with China in the first place?

RUHLE: Well, what`s happening right now is Americans are going to start to see that the President has been selling a lot when it comes to how great the economy is. Remember, business sentiment, consumer sentiment has gone up, that`s how do we feel about it because he`s a tremendous salesman.

But now we`re saying what do we actually have and while we`re so scared like this, the example I would give. If you`re going to put a swimming pool in your backyard this spring but now you`re afraid there`s going to be terrible storms all winter and you might need to replace your roof or your windows, you`re not going to buy that swimming pool.

Right now we have absolutely no idea. Yesterday when the President said I`m going to hold off on tariffs, he proved to the world that China is not paying for the tariffs, America is.

MELBER: And maybe you downgrade to a slip and slide.

RUHLE: You might and he also posed, you might, out of the ground pool. He postponed the tariffs when China didn`t even ask him to so the President blinks while China has a weaker hand.

MELBER: That`s a great point. Michael, I want to bring you in as we look at this the slip and slide. Well, because I - you remember those, they`re fun and then they are pretty affordable.

RUHLE: When you`re young, the older you get, when you run and slide.

MELBER: Yes, anything could happen. Professor, this all comes amidst other economic discussion which is Donald Trump claiming through these policies, oh you know we`ve got to deal with these immigrants as if they`re getting so much. I want to give a fact check and then go to your analysis.

The fact check is undocumented immigrants aren`t eligible for social security. The majority of the taxpayer funded programs whether you call them welfare programs or you call them the public benefits people pay into, don`t go to them and then you look at what they pay into.

Immigrants when you take it all together, paid over 300 billion all in on taxes in one of the last years we have, 2014. Why is it so important to Donald Trump not only to go after immigrants, something you`ve talk about but also to mislead or lie and leave people with the impression that this is somehow an economic loss for America.

MICHAEL ERIC DYSON, PROFESSOR, GEORGETOWN UNIVERSITY: I mean this is the ultimate example self-defeating behavior. Look, he can`t make the Chinese do what he claimed they were going to in terms of the tariffs. He can`t make the Mexicans build the wall. He can`t make the Republicans behave correctly.

The only thing he`s in control of is a narrative, a mythology and the more he lies and the more he accretes those lies, people begin to believe in the durability of his lying that is, it`s not the truth, it`s not the stability that he points to is the fact that he says it and he can wave a magic wand.

Now when people know that the emperor has no clothes, that these mendacities are piling up, that the numbers you just gave.

MELBER: Or the emperor has no swimsuit in this too.

DYSON: No swimsuit and no you know, no ability to swim really because we are treading treacherous waters right now and the country is under assault and this is where folklore meets kind of the empirical you know, economic analysis.

Because now we got a President who is throwing gasoline on the already lit reality of our economic downturn and it really bodes ill for those who are the most vulnerable. They stigmatize and scandalize.

RUHLE: Ari, did you know those numbers yesterday?

MELBER: Well, you know, we know lot of numbers around here.

RUHLE: But that`s it. He`s preying on our ignorance and our insecurity.

MELBER: Well, that goes to what I want to ask you. Take a look at here, Donald Trump talking about the immigration rule because if you do go into a downturn, right? You also have a lot of blaming, he can play on that. You know, we were just listening to, some analysts say this hurts him and it could, obviously you don`t want things to be economically down but also who`s going to take the blame for that.

Here is the President. Take a look.

(BEGIN VIDEO CLIP)

TRUMP: I am tired of seeing our taxpayers paying for people to come into the country and immediately go into welfare and various other things. So I think we`re doing it right.

(END VIDEO CLIP)

RUHLE: Here`s why that so unfair. Because there are millions of hard working Americans that went home from work last night and turned on conservative news and said, hold on a second, the President is sick immigrants coming and getting on welfare and those people just like we might not have known don`t realize that the majority of immigrants don`t have access to the welfare system and it`s not just undocumented immigrants.

It`s seasonal workers, temporary workers, H1B visa holders, dreamers, they do not have access to our welfare system but when the President of the United States says that, I`ll tell you my mom and dad are going to sit in their kitchen and go, well, I don`t know Steph, maybe he has a point because they don`t know the truth.

MELBER: By the way shout out to Mr and Mrs. Ruhle.

RUHLE: Louis Frank.

DYSON: Represent. So the reality is this that not only is he lying and not only does he distort the truth, the reality is most of the people who are on welfare look like the people who are mad at the immigrants who are getting it, right?

MELBER: Right.

DYSON: Number 2, this is where the jig is up. Donald Trump now has inherited an extremely strong economy from Barack Obama and the practices and processes that he put in place, regardless if you argue with him on either side. Now he`s got to do it himself. Now he can`t just ride that tide anymore.

What am I going to do? What`s my fiscal policy? What`s my economic integrity? How do I call the nation together? How do I get businesses believing in me once again? I don`t just change with the weather. One day I`m going to have these tariffs, then I`m not. I`m going to beat up the China, no I`m not. Oh I look at, they told me not to do so. This is volatility at its ultimate.

RUHLE: And he doesn`t have a Robert Reich calibre SWAT team around in a case of crisis. Peter Navarro was discovered by Jared Kushner from Amazon search. Never forget that.

MELBER: Look, it almost sounds like you`re saying that Donald Trump has been standing on Barack Obama`s economic shoulders and if there is a downturn, it`ll have to be self-made at a very time that he is lecturing all the immigrants about being self-made and the question is have you ever been at a policy level self-made?

Both of you hang with me.

DYSON: $400 million worth of self-made.

MELBER: Right. You hang with me. I love it. You speak without speaking sometimes. We all see that. Hang with me. I`m going to bring in as mentioned, economists and Clinton Labor Secretary Robert Reich. His latest book is `The Common Good.` Take it away, Sir. What do our viewers need to know about what`s happening tonight?

ROBERT REICH, FORMER LABOR SECRETARY, CLINTON ADMINISTRATION: Well, Ari, I think the economy really is the central issue right now. Everybody knows about Donald Trump`s racism. Everybody has witnessed his xenophobia and his nativism over the past years.

The real new issue is the economy is very, very fragile. It`s not just the stock market. I mean, we know that nothing trickled down. That trickle down tax cut actually was a huge, it was a huge mistake, it was a knowledgeable mistake. He knew exactly what he was doing but it was a mistake in the sense that the American public as we saw in the 2018 election, actually began to understand that there was no trickle down.

It only trickled up and this kind of - this kind of skepticism about Trumpenomics is going to be very, very soon widespread. You know, he`s the only President in since the Second World War never to have favorabilities above 50 percent, that is never has there been more than half of the public who have liked the job he is doing.

And now he is I think, skating on very, very thin ice. Nobody wants a recession but I think the chances of recession are now over 50 percent between now and election day.

MELBER: So let me ask you, you say over 50 percent, that means there`s a high probability, people who know you and know your expertise aren`t going to like hearing that because they`re going to believe you might be right. Nobody wants that as you say. When you look at that, do you think that`s something that Donald Trump contributed to that likelihood or just happens to be in office for it?

REICH: Well, I think they`re two big issues here and he did not contribute to the fact that it`s a very, very long recovery, long in the tooth, you get to nine or ten years and you`re almost definitely going to have a recession but what he contributed to Ari, is number one, this huge tax cut that was kind of steroidal lift, it was kind of a sure high for the - for the entire stock market that could not go on.

I mean, it was - it was temporary. Sugar highs are temporary. The second thing is China and the China - this trade war with China not only is there no strategy but it also is extremely dangerous. This is the largest and second largest economies in the entire world.

MELBER: And I--

REICH: Them going at each other is dangerous for the whole world.

MELBER: I wonder about that given the President you worked for and I`m here reading from a piece here late last year. The lower the market drops, the more Donald Trump worries he`s losing his most potent argument for re- election said officials speaking to Washington Post.

That was just - just at the end of last year. You had a President that was laser focused he told us on the economy and did a lot of things including you know, reaching compromise with Congress, balance budget, other things. Do you see this as a President who can roll up his sleeves and be that focused?

REICH: No, I mean this is the most unfocused President and he doesn`t - I mean this is a President who not only knows - doesn`t know detail but he lies about the details he does know. So no, there`s not going to be any focus, there`s no economic strategy. There`s nobody around him who is capable of even advising him and having him listen to an economic strategy.

DYSON: The trickle down didn`t work when it was supposed to work with George Gilder before and it certainly isn`t working now.

RUHLE: And remember, the President at times resonates with people because the spirit is in the fact that he wants to take on China, people like that idea. It`s his execution of these things that don`t work. Now, his tax cut temporarily helped the market because it goosed the stock market but that was very short term.

Even corporate America said we don`t need a tax cut this big but once the market is done being goosed, the market isn`t the economy and as far as the economy goes, remember, he said GDP would be 3 percent, 4-5-6. We`re at 2 plus and that`s where we`ve been for 10 years.

MELBER: Stephanie Ruhle, Professor Dyson, Robert Reich, thanks to each of you. Really appreciate it. You can always catch Stephanie of course right here at 9:00 AM and 1:00 PM on MSNBC. Now moving forward because we have that breaking news out of Philadelphia that I mentioned.

Police saying five officers have been shot and taken to the hospital. Police spokesman telling us, they are expected to survive at this hour and we have just received in our news and you`re about to hear for the first time, new audio of the emergency communications during this shooting.

(BEGIN VIDEO CLIP)

OFFICER: Cars stand by. 3750 North 15th, shots fired. Shots fired.

OFFICER: Need SWAT ASAP. Long guns ASAP.

OFFICER: God--

OFFICER: Cars stand by.

(END VIDEO CLIP)

MELBER: America taking in another terrible shooting based on what we know. Five offices shot as I mentioned and much we don`t yet at this hour. Now we`re turning our breaking coverage to former ATF special agent in charge, Jim Cavanaugh. Jim, what can you glean from the initial reports that we have?

JIM CAVANAUGH, RETD ATF SPECIAL AGENT IN CHARGE: Well Ari, SWAT`s already on the scene. They`ve got that places surrounded. They know where the shooter or shooters are and the residents there so they are getting the civilians out of the nearby houses. You could see that on the news photographs. Officers initially were down behind their vehicles and you could hear on the radio, you just played from the Philadelphia PD radio, they were calling for long guns ASAP.

So they really patrol went into a hornet`s nest there. Five officers shot. You know, as you said, not supposed to be life threatening but they got this barricaded one or more in the house so what the on scene, SWAT commander`s got to determine is how many shooters are in there and how many innocents could be in there.

This could all be settled by one SWAT long rifle if the shooter comes to the window once SWAT`s in position so they`re going to - they`re going to slow it down and lock it down. I mean if they can stop the shooting from inside, we`ll try to negotiate but if the shooting continues, look for it to be solved by police gunfire.

MELBER: And Jim, as you mentioned, we`re looking at some of this footage and some of these are far away shots that just give us a sense of this neighborhood there in Philadelphia, an area called Nicetown, Tioga. We`re also looking at times at some of these overhead shots where we can see as you mention, the police presence, the organization, the kind of ways that that we can see just basically birds eye anecdotally how they`re trying to control their lines of sight and their perimeter.

What happens next? What is based on your training? The ways that we determine whether this is something that is resolved in the near term or whether safety considerations make this a much longer stake out because I could tell our viewers right now are looking at these overhead shots and again anecdotally, some of the officers are in place, others are moving about but some look somewhat casual around the corner.

It doesn`t look to an untrained eye like they`re about to move this second.

CAVANUGH: Right, well, what`s going to decide is, is there active gunfire from the barricade house. Is there active gunfire. If there us, then you know, it`s going to be the officers responding like I say, it could be solved by one shot from the SWAT long rifle.

If there`s no active gunfire, it`ll slow down. They`ll try to negotiate. They may use robots to see who`s in there. You could have wounded shooters in there. They could have already been shot by officers and so it`s just going to determine. Is there active shooting coming or not? That`ll be the main thing right now.

MELBER: Jim Cavanaugh, thank you very much and we will stay on that story there. Five officers shot in Philadelphia. An active shooter situation. Coming up later on the show, we are joined by an attorney for an alleged Jeffrey Epstein accuser filing a new lawsuit today saying she is just beginning the quest for justice.

Later, the billionaire activist and Presidential candidate Tom Steyer live on the program. He`s been pushing impeachment. Now he wants to get on that debate stage. Also veterans speaking out and tackling what they call Donald Trump`s failures as Commander-in-chief.

I`m joined by veteran and Rob Reiner back on THE BEAT. Tonight all that plus anymore updates we get on this tragic situation unfolding in Philadelphia. I`m Ari Melber, you`re watching THE BEAT on MSNBC.

(COMMERCIAL BREAK)

MELBER: Quick update on this breaking news in north Philadelphia. Six police officers have now been shot. The shooter holed up inside this building and it is and remains an active shooter situation. The standoff between police and what we know to be at least one shooter.

A government spokesman saying all of the officers are expected to survive at this hour. Temple University on lockdown. As I mentioned throughout our hour, we will continue to update when we have new information. And now we turn to a different story, a new front opening in this case of Jeffrey Epstein.

His apparent suicide represents one of the great law enforcement breakdowns in the Trump era and after his death, one of the immediate major question, I`m sure you heard it, was now how would Epstein`s alleged victims find justice.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: So some of these alleged victims wanted Epstein to lie so that he could face justice but tonight some actually plan on pursuing some civil suits against Epstein`s estate and others want authorities to actually prosecute his alleged accomplices.

(END VIDEO CLIP)

MELBER: New tonight, an alleged victim filing the first lawsuit against Epstein`s estate. Accuser Jennifer Araoz saying that Epstein raped her when she was just 15. Her lawsuit claims several people around Epstein basically built an alleged sex trafficking ring.

Now she spoke to our NBC colleague Savannah Guthrie. This was just last month and discussed some of these issues including alleged recruiters that would help Epstein.

(BEGIN VIDEO CLIP)

SAVANNAH GUTHRIE, HOST, MSNBC: Did he say he could help you with your career?

JENNIFER ARAOZ, EPSTEIN ACCUSER: That was a big part of it.

GUTHRIE: And when you think of her now, you use the phrase, you said the recruiter, you felt like she was--

ARAOZ: Oh sure.

GUTHRIE: - working for someone.

ARAOZ: Oh 100 percent yes.

GUTHRIE: Did Jeffrey Epstein rape you?

ARAOZ: Yes and I mean, he raped me, forcefully raped me, knww exactly what he was doing and I don`t think cared.

(END VIDEO CLIP)

MELBER: The new suit comes as investigators continue to probe whether those guards who were under the Trump administration`s oversight made mistakes, errors, fell asleep during guarding this valuable prisoner. Epstein reportedly went hours without being checked on by staff, another violation of the rules. Here on THE BEAT we`re joined now by Jennifer Araoz`s attorney Kimberly Lerner. Thanks for joining me tonight.

KIMBERLY LERNER, ATTORNEY FOR JENNIFER ARAOZ: My pleasure.

MELBER: Before we get to the legalities at bottom, what is this suit about, why does it matter?

LERNER: This is about Jennifer having her day in court and getting justice. Since Jeffrey Epstein killed himself, she will never have the closure of confronting him in a court of law. However she`s still going to go forward and go after his accomplices and go after help the U.S. attorney if she can help bring justice to all the victims.

MELBER: You think about what he`s accused of doing and what your lawsuit in build on in alleged details and your client had already said, she didn`t just want to see him out of his town house or being held before trial but wanted to see justice done which in her view was she was hoping for a conviction and a lengthy jail sentences.

You say that death extinguishes that. Here she was talking about that. Let`s hear her words.

(BEGIN VIDEO CLIP)

GUTHRIE: What would justice look like to you?

ARAOZ: Justice for me would be for him to really spend the rest of his life in prison and make sure that people like this, you know, are not allowed, you know to harm young kids.

(END VIDEO CLIP)

MELBER: Can you tell us how she views his suicide? Does she view it as - apparent suicide is the DOJ`s term, does she view it as denying that that justice, does she view it as cowardly?

LERNER: You know, at first there was an element of relief because she did give up her anonymity and there was a bail package that they were - that they were proposing, there was always that fear that he would get out of jail. Obviously that sense of relief was quickly - was quickly taken over by anger and bitterness, disappointment.

You know he took the cowardly way out and she will never get to face him eye to eye and say you hurt me, you victimized me, I was a child. She has to live with this for the rest of her life and he took the easy way out.

MELBER: The last thing is as promised the legalities there that you work in a field that has a lot of bad news, a lot of tragedy.  And a lot of folks watch these programs and watch this news and they say, OK, it seems like things are just terrible.

And for many people including according to your client`s testimony, it is obviously terrible.  And yet there are policy changes that have even made this suit possible which many advocates like yourselves say are an improvement.  Explain that and why that means we`re here now?

LERNER:  We`re here because of the children`s Victims Act that was passed on February 14, 2019, but went into effect today.  And what this allows people like Jennifer to do is a one year look back on the statute of limitations whereas her claim has been time-barred for many, many years.

There are 365 days where anybody of any age can sue their abusers and that`s a big deal.  That creates a mechanism for redress and it hopefully will help the healing process for those people suffering in silence.

MELBER:  Yes.  And that`s a big change as you`re spotlighting and educating us about it, a change that a lot of folks said was long overdue.  Kimberly Lerner, thank you so much.

LERNER:  Thank you.

MELBER:  I appreciate it.  Democratic Presidential Candidate Tom Steyer could qualify for the next debate.  He`s here live in 30 seconds.

(COMMERCIAL BREAK)

MELBER:  Update on this breaking news out of Philadelphia.  Six police officers now confirm shot.  Moments ago, police tell us the suspect holed up in the building and still firing which speaks to the dangerous live shooter situation.  A spokesman also saying these injuries are quote not life-threatening.  As promised we`ll continue to update this important story throughout the hour.

I want to turn to another interview that I mentioned we`re going to do right now.  You know, these Democratic presidential debates have featured many, many candidates.  21 have been on this stage so far, if you remember that kind of applause for all of them.

Well, there`s a new one on the way.  Billionaire Tom Steyer who`s cleared now one of the two key requirements to make the next debate in Houston next month.  And under the Democratic Party rules, that next debate will-will down basically from 20 people to about nine so far or ten if Steyer scores high enough on the other requirement for polling.

He`s been in the race just five weeks and he joins us now, his first time on THE BEAT as a presidential candidate.  Thanks for joining me.

TOM STEYER (D), PRESIDENTIAL CANDIDATE:  Ari, thank you very much for having me.

MELBER:  Put it succinctly, why now?  Are you late?  Were you thinking of supporting someone else and then you decided none of them were good enough?

STEYER:  Well I am late.  I don`t think there`s any question about that, but I really couldn`t sleep, Ari, because I felt that what I care the most about wasn`t being addressed in a way that would be effective.  I believe that we have a broken government in Washington D.C., that corporations have purchased it, that we have to restore government of by and for the people.

And as somebody who has spent the last ten years as an outsider in politics organizing coalitions of ordinary American citizens to take on that unchecked corporate power, I felt as if there was an awful lot of talk about policy, about all the things that we`d like to have whether it was the improvements in our medical system, improvements in our educational system, dealing with our climate crisis, but there was no real talk about how you get that stuff to happen.

MELBER:  Right.  And you see yourself -- you see yourself as results- oriented.  And you`re mentioning concerns about the financially powerful purchasing things.  That`s what the other candidates are starting to say is what you`re all about.  They say it`s a problem with you.  Take a look.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (D-VT), PRESIDENTIAL CANDIDATE:  Because we have a corrupt political system.  Anybody who just --

GOV. STEVE BULLOCK (D), PRESIDENTIAL CANDIDATE:  -- spent $10 million to get a 130,000.  We`re getting to the point where we`re spending money online as opposed to actually talking to voters.  Elections are about people talking to people, not billionaires being able to spend you know, a whole lot of money to buy Facebook ads.

(END VIDEO CLIP)

MELBER:  Your response.

STEYER:  Look, I think for everybody who wants to be the Democratic nominee, the question is the same.  Do you have a message that connects with Democratic voters?  And my message and I was in Iowa talking directly to voters this weekend, I`ve been in all four of the early primary States in person over the last five weeks, my message is resonating with voters because they know that corporations have bought the democracy.  They know that my record over the last ten years, I`m the person who`s organized one of the biggest grassroots organizations registering, engaging, and turning out young voters and voters of color.  That`s exactly what I`ve been doing.

MELBER:  But isn`t that -- isn`t that the challenge for you?  Isn`t that the challenge?  I think it`s certainly true that there are a lot of liberal activists who think you`ve been supporting and investing those efforts and they agree with the goals.

But what we`re pressing you on here is that your competitors are saying OK, but now you want to buy your way in, that you wouldn`t be in this without your money.  And that the question for the Democratic Party running against Donald Trump who many Democrats call a fake billionaire is do they want to have another billionaire in that race.

And let me add to that question for specifics, when you look at private prisons, when you look at energy, you look at some of the investments, here I`ll put on the screen, you`ve got $34 million there in the Corrections Corporation of America which runs these migrant detention centers.  It`s been used by ICE.  You got questions about fossil fuels.  Do your investments past or present shape policies you`re running on and will you release your tax returns to let everyone assess that?

STEYER:  Well, Ari, I will release my tax returns.  When we were -- when I was an investor, we invested in every part of the economy.  I understood about 12 years ago that the results of fossil fuels in terms of climate change were dramatically important and negative for our country.  I divested from all fossil fuels.  I took the giving pledge, and I`ve organized people in terms to change on climate for the last twelve years successfully and beaten oil companies.

MELBER:  And when would you -- when would you release --

STEYER:  Let me finish, please.  Let me finish, please.

MELBER:  Yes, go ahead.

STEYER:  In terms of private prisons, we made one investment.  I thought about it 15 years before anybody brought it up.  I decided it was a mistake and sold it because I thought that was the wrong thing to do.  It was a mistake.  I recognized it and took action on it before -- 15 years before this.

MELBER:  And I`m short on time.  I`m not -- I`m not trying to catch you u but we`ve had a lot of breaking news including out of Philadelphia.  With the time we have, what about the tax returns?  When would you release them?  I don`t have a firm date but I will release them I believe before the first debate that I participate.

MELBER:  So you don`t intend -- if you make the stage, you don`t intend to walk on that stage and talk about Trump`s tax returns without having released your own?

STEYER:  I don`t.

MELBER:  Great.  Look, we`re getting some interesting answers.  Tom, you know, I`ve had you on before as an analyst.  You come on as a candidate.  We push even harder.  You know how it works.

STEYER:  But Ari, I`d say this.

MELBER:  Yes, sir.

STEYER:  I have a record for ten years of taking on corporations and beating them.  I`m an outsider.  If you look at the other people, the leading people in the polls are all senators or former senators.  The top four have more than 70 years combined in Washington.  I would ask you.  If the problem is a broken government, do you think the answer is going to come from an outsider, from the grassroots, or do you think it`s going to come from the inside the beltway in Washington D.C.?  I`ll take the former.

MELBER:  It`s your position -- if the --- if the Democrats nominated incumbent Washington figure, you think they lose to Trump?

STEYER:  I wouldn`t say.  Look, I think every single Democrat in this race is head and shoulders better than the criminal in the White House.  Let`s just start with that.  We need to not just beat Trump.  We need a broad- based smashing victory across this country for a new mandate for what the future of America looks like.  It`s not just Mr. Trump.

MELBER:  Yes, sir. I got to fit in a break.  Mr. Tom Steyer, I appreciate you coming on.  I appreciate you taking the questions, sir.

STEYER:  Thank you, Ari.

MELBER:  Thanks.  I hope you come back.  Coming up, how Donald Trump`s own words may be haunting him in a crucial way for what we were just discussing 2020 vulnerability.  But up next, Rob Reiner is here along with his brand- new project.  We`ll explain.

(COMMERCIAL BREAK)

MELBER:  Donald Trump famously claimed to be a law-and-order president but he`s under fire for his administration running in jail where Jeffrey Epstein just died under mysterious circumstances.  Donald Trump claims to be the economy president, but as you`ve seen tonight that is on edge with the market plunging the worst day of the entire year closing tonight.

Donald Trump has long claimed to be the military president, but a new group of veterans are now speaking out against him in this video which you`re about to see airing for the first time.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I didn`t lose a limb in service for this president to disrespect and not follow the Constitution.

UNIDENTIFIED MALE:  This is the only time I felt like the president was not supporting me as an American citizen, as a Muslim American.

UNIDENTIFIED FEMALE:  The president had declared the transgender people even though we had a history of serving honorably, would no longer be allowed to serve.

UNIDENTIFIED MALE:  Trump can`t be relied on.  He lies.  Integrity matters in military.

UNIDENTIFIED FEMALE:  The biggest enemy right now is sitting in the White House.

UNIDENTIFIED MALE:   I don`t think the oath means anything to the current president.  It doesn`t mean anything to him.  He`s never served.  He`s never been selfless about anything.

(END VIDEO CLIP)

MELBER:  That film was directed by Hollywood legend and Liberal Activist Rob Reiner.  It features U.S. Army Veteran Robert Pearson who served in Afghanistan as a paratrooper in 173 airborne.  Good to see you both.  Robert, what made you want to speak out this way?

ROBERT PEARSON, ARMY VETERAN:  Well, thank you for having me, Ari.  First of all, the opportunity to work with Rob Reiner was an opportunity I wasn`t going to pass up.  And I saw an opportunity to get up and use a voice that I have as a veteran.

I think veterans across the country have an obligation to use our voice where we have an important one.  And anytime I have the opportunity to do so, I`m going to do it and I`m proud of all the veterans in the video they took that opportunity.

MELBER:  Do you see this is a difference over policy the way Donald Trump has run U.S. foreign policy and military decisions, or do you see it as something deeper, and as we just saw some of your colleagues speaking about really the -- what they see is the lack of respect and dignity that he holds the military in?

PEARSON:  I think the most important thing that we need to focus on is his inability to uphold his oath to the Constitution.  He said he was going to protect us from all enemies foreign and domestic and he`s not doing that.

Our elections were attacked, our country was attacked, and he continues to not do anything to stand up to that.  And until he does, he`s going to continue to fall short of that oath that he took.

MELBER:  And then finally, before I let you go, why do you think there is this view out there that well, a lot of enlisted men and women, as well as veterans, do support Donald Trump?

PEARSON:  It`s a really interesting dynamic.  I think that organizations like VoteVets are doing a fantastic job to make sure that that tide begins to change.  You know, the Republican Party seems to have a strong hold on the veteran community and the military community as a whole, and I think that`s going to start to change.

When you -- when you start to put voices out on cameras and making sure that veterans are being heard, and you can hear the issues and the concerns that they have with the current occupant of the White House, I think you`re going to see a shift in that.  And I think 2020 is just going to be the beginning of it.

MELBER:  Robert Pearson, thank you very much.  It`s interesting to see you in this project working with Rob.  I appreciate your time.

PEARSON:  Thank you for your time.

MELBER:  Yes, sir.  Rob Reiner, I learned that your new friend, that gentleman and I have something in common which is we love any chance to work with Rob Reiner.  I`m not ashamed to say it.  Thanks for being here.

Before we get to a lot of other stuff, what are you trying to say through this?  Why is this important and why now?

ROB REINER:  Well, I mean, if you look at Trump just throughout the course of his two-and-a-half years of his presidency, he`s emotionally unstable.  He`s not reliable.  You see it in the markets, you see it and how he treats people of color and immigrants, you see it with our allies.

MELBER:  Could he have cameoed in Wolf of Wallstreet?

REINER:  Yes.  He would have been the guy hopefully that would have gone to jail because you know, the military, they need somebody that they can rely on.  You look to a commander-in-chief as somebody you can count on.  You can`t count on this guy from one minute to the next.  He has no ideology.  He listens to Fox News and makes a decision, and then goes back on his decision.

He has absolutely no basis for any of his thoughts.  So we wanted to put this out because we know there are a lot of people in the military who just don`t trust this guy.  He`s just not a reliable commander-in-chief.

MELBER:  You have been an early advocate for dealing with what Bob Mueller`s report and evidence found, the obstruction evidence against Trump.  You know, it seems that you were ahead of the politics of Washington in the Democratic Party.  You were -- you were very clear and very big on this early.  As you know, Pelosi and other party leaders were not.

But something has happened this summer amidst all these other important stuff.  As you know, and we could report tonight, the Democratic House caucus has now hit a majority of those Democrats back impeachment, 123.  That`s what`s going to greet Pelosi when she comes back into town.  Lawsuits continue to get the actual witnesses not just Mueller to be forced to speak.  Your view of all that and is the politics shifting?

REINER:  Well, the politics obviously has shifted.  And I think what you`ll see -- I mean, we had basically won a hearing with Robert Mueller -- and everybody talked about his bad performance and so on, but the fact of the matter is he laid out no uncertain terms five solid criminal acts.

And those things once they`re putting forth in front of the American public, you`re going to see the politics shift even more.

MELBER:  Right.  People look at the evidence and they think about that.  One more thing before I lose you.  On this very program, you battled the Mooch.  Take a look.

(BEGIN VIDEO CLIP)

REINER:  Why do you think that he lies all the time?  Why is that?  Why does he lie every -- like every --

ANTHONY SCARAMUCCI, FORMER COMMUNICATIONS DIRECTOR, WHITE HOUSE:  There`s different shades of that.  Now you`re going to say OK, he`s trying to parse and I`m really not.  He is an embellisher of stories.  He is a macro wave surfer, if you will.  And so he will tell a big tail and a big story.

(END VIDEO CLIP)

MELBER:  He defended Trump, now he says Trump is dangerous and it`s got to go.  Your thoughts.

REINER:  Well, I feel bad for the Mooch.  He`s come to the party late.  The country hopefully will come to the party and realize we`ve got an incompetent man in the White House who lies.  He`s a criminal and he`s a racist.  And I don`t think you want those qualities in a president.  But Mooch, come on in.  The water`s fine.

MELBER:  From Rob Reiner, to Scaramucci from a debate to, as we say in the business, to a collabo now that you two apparently agree about Trump.  You know, stranger things have happened.  It`s 2019.  I really appreciate you making the time and also telling us about your new veterans project, Rob.

REINER:  Thanks.

MELBER:  Thank you, sir.  I`m going to fit in a break.  And when we come back, you`re going to see Donald Trump politically owned himself -- this is footage that could be coming to a campaign ad near you.  And more updates on that other story in Philadelphia throughout the hour.

(COMMERCIAL BREAK)

MELBER:  Breaking news out of Philadelphia Police and their standoff with a suspect after shooting six police officers.  Those injuries that we`re told are not life-threatening.  The suspect is still holed up in a building and still firing as of a few moments ago.  That is what we know and we`ve been updating you as promised throughout the hour.

Now to an issue that cannot be spun or distracted away because Americans are feeling it.  Today, the Dow dropping 800 points.  That makes it the worst day of the entire year stoking fears that trade wars, Washington dysfunction, and Donald Trump`s general management of the economy could pave the way for even more losses or potentially a recession.

On the one hand, every president faces the risk of economic blowback, but on the other Donald Trump has told voters judge him on the markets and the economy.  And he said that more than most modern presidents which means tonight you should know his own words could haunt him on the campaign trail if these market jitters continue.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  We have the strongest economy in history.  The greatest anywhere in the world by far.  The economy is thriving like never before.  An economic miracle is taking place in the United States.  We`re the hottest economic country in the world.  We have the number one economy on earth.

(COMMERCIAL BREAK)

MELBER:  With everything going on, we wanted to tell you one more thing.  We have a special guest tomorrow joining me to talk about Donald Trump`s approach to business, his interests, and history with gambling, and how that might affect these market jitters, and how he is shaping our approach as a country to the global economy.

Donald Trump famously gambled with his casinos in the `80s and `90s.  Some say he is gambling with this economy and picking trade fights and he doesn`t know how they`ll end.  A former Trump casino executive who saw Trump working firsthand is here, our special guest on THE BEAT tomorrow night.  Don`t miss it.

And don`t go anywhere now because "HARDBALL" is up next.

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