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The Rachel Maddow Show, Transcript 12/27/12

Guests: Debbie Stabenow

MICHAEL ERIC DYSON, MSNBC POLITICAL ANALYST: THE RACHEL MADDOW SHOW starts right now. Ezra Klein is filling in for Rachel tonight, not Django. Good evening, Ezra. EZRA KLEIN, GUEST HOST: Good evening, Michael. Thank you very much. DYSON: All right, sir. KLEIN: And thank you to you at home for sticking around for the next hour. Rachel has a well-deserved night off. But today, on the Senate, there was a rare sighting on the Senate floor, especially around this time of year. Right now, the Senate is usually a bit of a desolate place, but today at exactly 2:34 p.m. Eastern Standard Time, there was something big afoot. At 2:34 this afternoon, in from the wings of the chamber walked the president of the Senate, Vice President Joe Biden. Joe Biden does not often serve in his capacity as president of the Senate. But today was different. Today, Joe Biden had an incredibly important job to fulfill. (BEGIN VIDEO CLIP) JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Do you solemnly swear to support and defend the Constitution of the United States against all enemies, foreign and domestic, that you will bear true faith and allegiance to the same, that you take this obligation freely without any mental reservation or purpose of evasion, and that you will well and faithfully discharge the duties of the office upon which you`re about to enter, so help you God? SEN. BRIAN SCHATZ (D), HAWAII: I do. BIDEN: Congratulations, Senator. SCHATZ: Thank you. BIDEN: And welcome. (APPLAUSE) (END VIDEO CLIP) HAYES: Congratulations, Senator. Today, the United States Senate got a brand new member. Democratic -- Democrat Brian Schatz of Hawaii. Senator Schatz was appointed by Hawaii`s governor last night to fill the vacant seat of Senator Daniel Inouye, who passed away a week ago. Brian Schatz got on Air Force One late last night. He touched down in Washington early this morning. And he was a senator by this afternoon. That is a big day. So, Senator Schatz, welcome to Washington. Welcome to the U.S. Senate. There is a lot to catch up on. First of all, many of your new colleagues, most of the people you`re about to join, they won their elections back in November. You of course did not. So it is possible that between November and now, like a normal human being, you were not paying all that much attention to what Washington has been up to. Most years, that wouldn`t matter. It`s the end of the year. Things have slowed down. We`re waiting for a new Congress to come in. Usually, you would have time to get your bearings to figure out where the bathrooms are. That is not going to be the case this year. Not with the fiscal cliff. Luckily for you, we here at THE RACHEL MADDOW SHOW, we have been paying attention. We have had absolutely no other choice, unfortunately. And we are here to help you and everyone else trying to figure out how we got to this point we are in. Right after that election, the day after the election, in fact, your new colleagues got to work immediately on the cliff. The day after the election, Republican House Speaker John Boehner put out this stirring call to action. (BEGIN VIDEO CLIP) REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Mr. President, this is your moment. We`re ready to be led. Not as Democrats or Republicans but as Americans. We want you to lead. Not as a liberal or conservative but as president of the United States of America. (END VIDEO CLIP) KLEIN: Mr. President, we are ready to be led. Just show us the plan. That was encouraging. That seemed like we were going to have a deal, no problem. Obama won the election. He`ll hand them a plan. He`ll make some small changes. That`s how Congress works, of course. Pass it and we`ll be done. We`ll go home for Christmas. Not so much. President Obama did hand them a plan as Treasury Secretary Tim Geithner made a special trip all the way to John Boehner`s office on Capitol Hill. He delivered the plan to Speaker Boehner, a plan pretty much identical to the one President Obama just won the election on. You might have thought that would have been leading, the problem would have been solved. Not so much. (BEGIN VIDEO CLIP) BOEHNER: Flabbergasted. I looked at him, you can`t be serious. I`ve just never seen anything like it. (END VIDEO CLIP) KLEIN: So when you said you wanted to be led, you just wanted a plan, that was a joke? So the White House agreed, then, no more leading, that was not what their partners in the House of Representatives wanted. Instead, White House and Boehner entered into intense lengthy negotiations. And by the end of them they seemed really close to a deal. The White House had agreed to cut their tax ask by about $400 billion, to increase their spending cuts by another $400 billion and only ask for about half as much stimulus. They moved towards Boehner by more than a trillion dollars. That was a lot of concessions from the team that had just won the election big. And they made them because they thought Boehner was ready to say yes, the fiscal cliff would be averted, we`d have a good Christmas and happy economic fun times for the economy would be right around the corner. They were wrong. (BEGIN VIDEO CLIP) CHUCK TODD, NBC NEWS: We are nowhere when it comes to the fiscal cliff talks. Let me tell you what`s going to happen today. Speaker John Boehner, the Republican speaker, is going to try to pass what he calls his Plan B, which would just simply address tax rates for those making a million dollars or more and that`s it. (END VIDEO CLIP) KLEIN: John Boehner walked away from the Obama administration`s third offer, a giant, giant compromise. So he didn`t like it when they led. He didn`t like the negotiating. He decided instead to chart his own course called Plan B. Plan B was supposed to show President Obama that Republicans had their own solution and instead of bothering with his offer, they would just go ahead and pass their own plan without him. That was the idea, anyway. (BEGIN VIDEO CLIP) MADDOW: There is breaking news to report tonight out of Washington, strange breaking news out of Washington. Within the last hour, Republican House Speaker John Boehner appears to have completely lost control of his own caucus. Just about an hour ago, John Boehner was forced to pull his own plan off the floor because it turns out he did not have the votes from his own side to pass it. He didn`t have enough Republican votes to pass the Republican plan. (END VIDEO CLIP) KLEIN: Senator Schatz, this is now your life. I know that Speaker Boehner is in the other chamber, but this is what you need to know right now about Boehner and his colleagues. John Boehner is somebody who just a week ago was essentially humiliated by his own caucus. When he stood before them on that night, on the night Plan B went down, and begged them to please follow him. And then to go before them when they didn`t, he actually read the Serenity Prayer aloud. He read it to his own members. He said to all of his members, "Lord, grant me the serenity to accept the things I cannot change." That is not the prayer you say when you know what you`re going to do next. It is not the prayer you say when you even have a plan. It is a prayer that you say when all of your other plans have, well, gone to hell. John Boehner walked out of that conference with his members, and he released a statement that essentially said, "I tried but I`m out." He wrote, quote, "The Senate must now act." Senator Schatz, that is where you and your chamber come in. Now, at times in the last couple years this has actually worked. When the house can`t come to an agreement with the president, the Democratic leader in the Senate, harry Reid, and the Republican leader Mitch McConnell have come together and they have saved the day. They did it again and again. It happened in 2010, when Mitch McConnell actually worked with Joe Biden to extend the Bush tax cuts and they got a bunch of stimulus passed. It happened in 2011 when Reid and McConnell were key in resolving the debt ceiling fight. And people thought maybe it could happen again this time. What`s different now is that Mitch McConnell is up for re-election. And it is -- it is weird to say this aloud, what I`m about to tell you. I have never even thought about how weird it is to say until tonight`s broadcast. But the person Mitch McConnell has in his head right now, the person he`s maybe a bit afraid of, is Ashley Judd. Yes. That Ashley Judd. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Don`t cry. Don`t cry. You`re going to be fine. ASHLEY JUDD: OK. (END VIDEO CLIP) KLEIN: Mitch McConnell`s up for re-election potentially against Ashley Judd. She might be running against him. And she`s polling well. They`re only about four points apart. And so, he doesn`t want any trouble. He certainly does not want a conservative primary challenge that will weaken him before the Judd juggernaut. So he`s decided to not really take any part in these negotiations right now. Instead he came out and said, "It is the president`s job" -- this is a quote -- "It is the president`s job to find a solution that can pass Congress. He`s the only one who can do it. This isn`t John Boehner`s problem to solve." Seriously. That is what he said. He said don`t blame us, we`re just the speaker of the House of Representatives and the minority leader of the U.S. Senate, and the guys who aren`t allowing the president to pass his plan. But you know, we`ve got nothing to do with this. You know, Congress comes first in the Constitution. Tax bills -- and this is going to fundamentally be a tax bill when we pass it -- they have to begin in the House of Representatives. They can`t originate in the White House. The president can`t write legislation or pass itself. The Founders would have been shocked to hear congressional leaders talking this way. But put that aside. McConnell basically said to Reid, I`m not helping on this one. I`m out. And how did Harry Reid respond? This way. (BEGIN VIDEO CLIP) SEN. HARRY REID (D-NV), MAJORITY LEADER: Speaker Boehner should call members of the house back to Washington today. He shouldn`t have let them go, in fact. They`re not here. They are not here. John Boehner seems to care more about keeping his speakership than about keeping the nation on firm financial footing. (END VIDEO CLIP) KLEIN: Right. So that`s pretty much where we are now. Boehner`s out, McConnell`s out. Reid says it`s up to Boehner. White House can`t get Boehner to talk to them. It`s kind of a -- or at least really negotiated with them -- it`s a kind of mess, Senator Schatz. And it is now part of your party. So what is the next move? There is late news tonight that President Obama will convene a meeting of congressional leaders at the White House tomorrow afternoon to discuss the current impasse. And to give you a spirit of the compromise and sense of goodwill towards men in which Republican House Speaker John Boehner is approaching this meeting, here is a statement that we were e-mailed tonight from his press secretary Brendan Buck. Quote, "Tomorrow, Speaker Boehner will attend a meeting with congressional leaders at the White House, where he will continue to stress that the House has already passed legislation to avert the entire fiscal cliff and now the Senate must act." So that`s helpful. Senator Schatz, I know you probably just checked into the Marriott Capitol Hill or something, but I don`t know, you got any ideas? Joining us is someone who I hope will have some ideas, Democratic Senator Debbie Stabenow of Michigan and member of the Senate Finance and Budget Committees. Senator Stabenow, thank you for being with us tonight. SEN. DEBBIE STABENOW (D), MICHIGAN: Absolutely, Ezra. And I wanted to thank you for what is a very good summary of where we are. And it is the most frustrating thing I`ve ever gone through in my entire life, I think. KLEIN: I appreciate that. And covering it, what has been striking to me is the level of not just substantive disagreement on things like tax and spending, but the procedural breakdown. Every procedural effort that gets begun to solve this, either negotiations or the House Plan B or maybe Reid and McConnell negotiations, it is dissolving very, very quickly. So what comes now? What is actually the process by which we can move forward? STABENOW: Well, Ezra, first of all, we have to be able to govern. We have to have an adult conversation, getting people in the room who actually want to solve this problem. And I think it`s very important to step back and see the fact that we have already -- there are three parts of this deficit reduction stool. We`ve already in the last two years passed $1.6 trillion in spending cuts. We have passed over $700 billion in savings in Medicare through reforms like cutting back on overpayments to insurance companies. The one piece of this puzzle that we`ve not been able to get any support for is making sure that the wealthiest among us help solve this problem by being willing to pay a little bit more to be part of the solution. And so, we have sent a bill to the House back in July, bipartisan bill that says what -- I mean, everybody says they don`t want middle-class families to have their taxes go up, well, fine. Why don`t we start with something we can agree on, which is that? And just pass that. Why doesn`t the House just pass that? But as we know, the speaker couldn`t even pass his own plan to say that up to a million dollars was exempt from tax cuts. So what they`re doing is holding middle-class families hostage right now, trying to find some maneuver where the wealthiest people continue to get extra tax cuts that we just can`t afford. So I`m not sure what`s next. I can tell you the Senate`s here. We`re in session. We had votes tonight. The president`s here. I`m the eternal optimist. There are certainly things we can do including pass the farm bill that we passed last June that has $24 billion in savings by cutting subsidies for wealthy farmers. So there`s a lot of things that we can do, but it`s going to take the speaker deciding he wants to work across the aisle to get it done. KLEIN: But can the speaker work across the aisle? One thing that has been very -- I think an important theme of the last couple years but particularly the last month or two is whether or not Boehner has the influence in his own conference to pass these bills, whether or not he is actually a negotiating partner who can be negotiated with. And certainly before January 3rd, when he comes up for re-election as speaker, do you think that anything can actually happen before then, or do you think some of this is about Boehner trying to wait until after that election is done and at least he is entrenched for another two years? STABENOW: Well, the prevailing thought now is that the speaker won`t do something until after his election vote on January 3rd. Could he? Yes. In fact, he could take at least half of his caucus or more, combine them with at least half the Democrats or more, and actually govern. And frankly, as -- people in Michigan are telling me, my family and friends, over Christmas, is that they really want us just to sit down and work together and get something done. And when we`re talking about an average of $2,200 in increased taxes potentially on a middle-class family, you know, I have one woman say that`s four months` groceries for her kids. So, you know, people here may think this is some kind of chess game. This is serious business. It`s serious for the economy. It`s serious for families. And you know, it`s pretty hard to see this thing go round and round and round like it is. KLEIN: Senator Debbie Stabenow of Michigan, thank you very much for your time tonight. STABENOW: You`re welcome. KLEIN: So maybe the super dangerous mess in Washington is the fault of both sides. That`s what people say. I mean, there are plenty of people who say that in public all the time. Except that it is not. And we can prove it to you. That bit of business is coming up. (COMMERCIAL BREAK) KLEIN: Have you ever been to Hobby Lobby? If you`re in the market for fake flowers or beads or yarn, you may find yourself in a Hobby Lobby. Now, me, I`m not so good at the crafting. I mean, this is my handwriting. I can barely use a pen, much less actually fold anything or use scissors. You don`t want me around scissors. But many Americans do know their way around a hot glue gun, as evidenced by the existence of 525 of these Hobby Lobby stores spread all across the country. The Hobby Lobby chain was founded by a guy named David Green. He`s still the CEO and worth $4.5 billion, which is a lot. According to the store`s statement of purpose, however, Mr. Green`s main goal in founding his crafting empire was not to sell scrapbooks or construction paper or even to make billions of dollars. It was to honor the Lord and operate the company in a manner consistent with biblical principles. Those principles included refusing to provide insurance coverage for emergency contraception to his more than 13,000 employees. Under the terms, however, of the Affordable Care Act, which is now the law of the land, beginning on January 1st, Mr. Green has to provide that coverage. He does not have a choice. So he sued. Quoting Mr. Green, "We simply cannot abandon our religious beliefs to comply with this mandate." Supreme Court Justice Sonia Sotomayor has weighed on the case yesterday. Justice Sotomayor declined Hobby Lobby`s request to deny emergency contraception coverage to its employees. She said, essentially, they failed to prove their case. A lower court had already ruled against Hobby Lobby by pointing out that while churches and other institutions do not have to provide birth control if doing so violates their beliefs a for-profit arts and crafts store, no matter how religious the founder, is not a church or religious organization. So, no, you can`t tell your employees what kind of contraception they may get through their insurance. So that happened. It is another legal victory for the Affordable Care Act at the Supreme Court. It didn`t get as much attention as the last time the court ruled on Obamacare, but it`s a big deal. It`s one more thing the bill does not have to worry about. We have talked about the Affordable Care Act for so long, it seems almost theoretical, like a dragon, and when we talk about it it`s almost always conditional. Would it pass? Would it survive the Supreme Court? Would it be repealed? And partially, that has been an organized and orchestrated Republican strategy to fill the country with doubt about whether or not the bill is actually a real thing. But now the bill is actually really happening. Parts of it are going into effect as we speak. 2014 is the really big year for the Affordable Care Act. That is the year when it really begins insuring millions and millions of Americans. But a lot of important parts of it are going into effect in 2013, this year, this coming year. My "Washington Post" colleague Sarah Kliff put together a really handy list over at Wonkblog, about how Obamacare is going to change health care in this country starting in just a few days. Number one is, starting in January, families making more than $250,000 a year are going to pay significantly higher taxes. That new revenue is going to add up to more than $200 billion in the next decade to finance Obamacare. It`s a fact about the law that`s often missed, even as we`re arguing about raising taxes on rich peel. Obamacare does raise taxes on rich people to pay for health insurance for poor people. So, that -- that is fact number one. Number two, as you are ringing in the New Year, think about the fact that health care for the poor will actually be improving this year. There are more than 50 million people on Medicaid. Medicaid is the main program used to give health care to the poor and to the children in this country. Medicaid is super cheap. It is way, way cheaper than private insurance or Medicare. And in part it is so cheap because it pays doctors a lot less than those programs do. That means a lot of doctors, particularly primary care doctors, don`t want to participate in Medicaid or they can`t afford to. So a lot of folks on Medicaid have trouble actually getting care. Doctors who accept Medicaid coverage are going to see a 73 -- primary care doctors I should say -- a 73 percent raise in 2013. Which means those folks will have more access to more doctors. So we`re not just expanding health care for the poor in 2014. Starting in 2013, we`re making it better health care. That is fact number two. Number three, your insurance plan will no longer be an impenetrable document filled with legalese. It will probably look more like this. Still words on a page. You`ve got to read something, but not that many of them. Straightforward, easier to navigate, and thus harder for your insurer to fool you about what is actually covered. That is change number three. And starting in October of 2013, the online health insurance markets at the core of the bill, they will open up for business. Any American will go able to go online and compare plans, maybe even read reviews and buy health insurance. It`s going to be like Amazon.com for health care. So, happy New Year. 2013, the year of the Affordable Care Act becomes actual, real reality. (COMMERCIAL BREAK) KLEIN: Once upon a time, there was a lot of the world to explore. Now, not so much. We`ve been pretty much everywhere on earth, up almost all the mountains. Although nobody has made it to the summit of Canada`s Mount Saskatchewan yet. Filmmaker James Cameron this year made a solo dive seven miles down to the bottom of the Mariana Trench. We`ve had a guy parachute from the stratosphere, 24 miles up. And so, now, we are at the point where we`re having to go back to what were once the big landmarks and do them again but in harder ways. It`s not enough to go to the South Pole before. That`s been done. Norway got there first. Heck, going to the South Pole, it`s so easy these days the prime minister of Norway has done it. And there were microphones there when he did. Not enough to cross Antarctica. That`s been done, too, a number of times. It`s not even enough to cross it on foot. So, the next big adventure at the end of the earth, to cross Antarctica in winter. And the expedition that is going to do it set out earlier this month from England. But wait, you say, it`s winter here. Then right now, it`s summer in Antarctica. And you`re right. But don`t call shenanigans yet. The expedition is going to take a bit of time to get to Antarctica. Then the explorers have to do some prep work to set up. And then they will head out on foot followed by tractors across the vast iciness that is Antarctica in what will be pretty much total darkness for months, enduring temperatures at 94 below zero, 94 below zero. This is the guy who is leading the expedition. He is kind of an amazing guy. The Guinness book of world records calls him the world`s greatest living explorer. He`s a member of the British aristocracy, the third baronet of Banbury. You can look him up in your copy of Debrett`s Peerage. I mean, we looked him up in our copy. You got one right? His full name: Sir Ranulph Twisleton-Wykeham-Fiennes, OBE. Sir Ranulph was once considered to play the role of James Bond before the role went to Roger Moore. He circumnavigated the globe the hard way, from pole to pole. He ran seven marathons over seven days in six continents only missing Antarctica because of bad weather. Of course he`d already crossed Antarctica by foot when he missed it that time. He has survived a literal heart attack on the slope of Mount Everest. And he once had such a bad case of frostbite he amputated the ends of his own fingers with a micro saw. That is the rather bad-ass dude who is setting out to make what he is dubbing the coldest journey. Now, Mr. Twisleton-Wykeham-Fiennes, that is an amazing name, is also the third cousin of Ralph Fiennes, the actor. Now, don`t get, fine, Ralph Twisleton-Wykeham-Fiennes is a great actor. He played the heck out of Voldemort, which is not easy. But as far as I can tell, Ralph Twisleton-Wykeham-Fiennes has never had to put his hand in a vise so he can cut off his own fingers. And that -- that I have decided is a standard by which all Twisleton-Wykeham-Fiennes will be judged from here on out. So good luck and Godspeed to you, Sir Ranulph the finest of the Twisleton clan. That story, I love it. I love it because it includes two of my favorite things, celebrity gossip and crazy feats of awesome human endurance. What it doesn`t include is my most favorite thing, charts. But this show does. We have the very best charts of the whole year, including Paul Krugman`s favorite chart -- coming up later. (COMMERCIAL BREAK) KLEIN: We joked a bit on last night`s show about Starbucks` plan to solve the fiscal cliff by writing the words "come together" on people`s peppermint mochas and their other cups of Joe. Tonight I want to take this more seriously because I admire this effort. CEOs and coffee drinkers alike should want to engage in politics. They should be angry at what they see happening. They should be trying to work out ways to make things work a bit better. But this ideology of "come togetherism" that animates the effort, it`s very common, and it`s not just wrong. It`s actually I think part of the problem. The idea that the problems in Washington would be solved if the two sides would just, quote, "come together," it`s actually I think at this point one of the reasons nothing in Washington ever seems to get solved and the two sides never seem to come together. It`s counterproductive. And to see why I think we need to get specific. Here are three facts about the budget debate we`ve been having over the last couple of years that say a lot about what it would mean for Washington to come together. Fact number one: Simpson-Bowles, a bipartisan debt reduction plan that people hold up as the very platonic ideal of coming together, Simpson- Bowles is by any reasonable accounting far to the left of anything the White House has ever proposed. It`s got $2.6 trillion in tax increases, $2.6 trillion. More than twice as much as what the White House is currently asking for. It`s got many, many more defense cuts than the administration has ever even considered. Republicans hate it, Simpson-Bowles, the come together plan. Paul Ryan, the big deficit guy, or so he says, he was on the Simpson-Bowles commission, and he voted against it, as did every other House Republican on the commission. The White House saw no reason to embrace something that raised taxes sky high and cut defense spending and would never pass. So the White House brought out something that was frankly to the right of Simpson-Bowles. Their budget was to its right and they thought it had a better chance of passing. They thought it was a compromise. But the House Republicans did not respond the same way. When they brought out the Ryan budget, which was their budget alternative, they didn`t compromise. They went way to the right. There was no compromise in it at all. That is fact number one. OK. Number two, in 2010 Republicans won the midterm election. 2011, the White House agreed to a deal that was all spending cuts. It`s called the Budget Control Act. It is a law right now. And it cuts spending by $1.5 trillion over the next decade. Except for an increase in Pell Grants funding, a small bone, the bill is all cuts, no taxes. And Democrats agree to that. They agreed. That is fact number two. Fact number three: at this point, even after winning the most recent election, the White House has moved much farther toward Boehner than Boehner has moved to the White House. From their first offer in November to the last one the White House has dropped what they want on taxes by $400 billion, raised their proposed spending cuts by the same amount and lowered their demand on stimulus by about another $250 billion. And they`ve stopped asking end the debt ceiling forever entirely. Boehner has increased his offer on taxes by about $150 billion, dropped his spending cuts by $330 billion, and has never offered significant stimulus or a major concession on the debt ceiling. So, in every category, since Obama won the election, he has moved further towards Boehner than Boehner moved towards him. And yet, it`s Boehner who walked away from the talks with his Plan B, who failed to pass it and said it`s the Senate`s problem now. Democrats won the election. They got more votes at presidential level, at the Senate level and at the House level. Boehner is speaker today because of the way the districts are drawn. But his arguments did not win. And yet he`s not really moved. I don`t think you can look at the last three years and say the White House has not tried to come together with Republicans. I also don`t think you can look at the last three years and say the Republicans have tried to come together with the White House. And so here is what is supposed to happen. The American people who overwhelmingly say they want compromise, who, in fact, say they want a plan similar to what the White House is offering, a plan that raises taxes on the rich and cuts spending, they`re supposed to punish the Republicans for not compromising. And arguably they did that this year. Democrats won the election. But what`s weird is at the elite level and the elite level, for better or worse, matters in politics. The elites get through to politicians in between elections. At the elite level, you`ve got folks in the media, powerful CEOs, people who run interest folks, and a lot of these folks, they want to keep up good relations on both sides of the aisle, and so they find it safer to blame both sides for not coming together than to blame one side for not allowing any coming together. (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: The battle over how to avoid going over the fiscal cliff ramped up today as both sides were long on rhetoric and threats but short on actual movement. STEPHEN MOORE, WSJ: I think both sides deserve some blame here. UNIDENTIFIED MLALE: Chris, I`m not certain there`s not politics on both sides. DICK HARPOOTLIAN, SOUTH CAROLINA DNC CHAIRMAN: Again, I thinks there`s intransigence on both sides. UNIDENTIFIED MALE: With all respect, it seems like both sides seem to be we`re waiting for them, we`re waiting for, this we`re waiting for that. But the fact is, nothing ever gets done. (END VIDEO CLIP) KLEIN: Blaming both sides instead of pointing fingers when pointing fingers is warranted breaks the system. It hurts the mechanism, the fundamental mechanism of accountability. It protects Republicans or anybody who doesn`t want to compromise. They can be intransigent, and they won`t feel the full consequence of their position. They can refuse to take good deals. And while they`ll get blames for that so will the other side. The Democrats will get about half the blame. D.C. is not equivalent right now. The two sides are not the same in their willingness to come together. And those of us who want to see these problems solved, who want to see everyone come together, who want to see compromise get struck, we don`t just need to talk about how politicians should work together. We need to actually point our fingers at the people breaking it apart. "Washington Post" columnist E.J. Dionne and also senior fellow at the Brookings Institution joins me to talk a little bit more about this. E.J., it is good to see you, sir. E.J. DIONNE, WASHINGTON POST: It`s good to come together with you against false balance. KLEIN: See? We come together. I actually want to ask you something, E.J., about the business community on this. You`ve had this big group of CEOs, Fix the Debt, which Schultz is a part of. And I`ve been surprised that early on, it seemed they were going to exert a lot of influence and they`ve not actually seemed that powerful and certainly not that powerful in moving the Republican Party. Why do you think that is? DIONNE: You know, I think that the business community never acts as a unified bloc. There are lots of pieces of it. Secondly, the business community over the last 20, 25 years has moved to the right of where the business community used to be. In some ways you can see that in the political views of George Romney versus the political views of Mitt Romney. And third, I think that in the Republican House Conference, John Boehner is far more worried about 35 to 70 of his most right-wing members for now anyway, especially going up to the vote on January 3rd for speaker than he is about the business community. But I also think this false balance is part of it, that the business community, like some in the media, seem to think you have to pretend to be equidistant from the parties even though the parties themselves are not at all equidistant from the center or not at all as inclined to compromise, one as opposed to the other. As you showed, President Obama has given a lot more ground, sometimes to the consternation of his own party, than the Republicans have. KLEIN: When you -- when I watch the sort of political strategy of a group like Fix the Debt or just many folks in general, many in the media, the animating underlying impulse seems to be a belief that what will lead to compromise is kind of a spirit of cooperation, everyone being nice to each other. And so when people stop being nice, they get upset. And I kind of wonder, I`ve begun to real wonder in Washington whether or not that is right. Because what seems to happen is you get that spirit of cooperation and negotiations and then they break apart as the outside interests come in. It seems at this point possible, at least in terms of the White House`s strategy, that they would be more effective at getting compromise by being somewhat less cooperative with Republicans, by using more of an outside game, bringing more pressure to bear, instead of negotiating just kind of pressuring the Republicans until presumably they might break, at least if the White House is on the side of public opinion. DIONNE: Well, you`ve already seen a little of that from the election. After the blowup of 2011, where we almost wrecked the country`s credit over the original debt ceiling fight, the president said, OK, they`re not willing to agree to anything, I`m going to have a big public fight about this. And even flawed as it was, at least Plan B acknowledged that it was time to raise taxes. So by going on the offense, the president actually changed the terms of debate. The problem is that in the House, there are still enough Republicans to block the party as a whole from saying all right, we`ll agree to some tax increases. And my view is that there is an easy way out, which would be -- not easy for John Boehner, but it`s structurally easy. Let the house work its will. You could easily put together a coalition of Democrats and Republicans who want to govern around something like what President Obama put on the table. But that is not allowed to come to a vote, and the Republicans are still scared of their right wing even though this election showed them that they can`t keep moving to the right and expect to win. KLEIN: E.J., you`re always balanced and you`re never false. Thank you for being here. DIONNE: Bless you. Good to be with you. KLEIN: Not only can I explain this whole year using lines and grids, I cannot wait to do it. A 2012 graphic geek-out deluxe Paul Krugman approved, coming up. (COMMERCIAL BREAK) KLEIN: Imagine that in the past couple of months there had been mass defections in the U.S. government. Imagine the speaker of the House denounced the president and defected, fleeing the U.S. for, say, Canada and taking with him a couple of people from the president`s cabinet and high- ranking generals. The spokesman for the State Department, she defects too, and not only does she apparently denounce her loyalty to the Obama administration and the whole American government, she does so after promising the world that the president would never, ever use chemical weapons on his own people. She says he won`t do that. And then she disappears. Then a prominent attorney general and the chairman of the Joints Chiefs, they denounce the government too and they flee. They leave the United States. And now, imagine these are just a few of the more than 70 high-level defections from President Obama`s government. That is obviously not happening here. It is what is happening in Syria. That is what is happening to Bashar al Assad -- dramatic high-level defections that show no signs of slowing down while a civil war rages on. More and more, it seems people in the regime do not believe the government will win, and so they are abandoning it. Assad`s chief of military police, his defection enforcer, this week was almost poetic. Before defecting, his job was to stop other people from defecting. His department was literally tasked with shoring up the loyalty of the armed forces. And he didn`t just easily and casually walk out of the country -- according to opposition figures, who talked to the "New York Times" -- he planned his escape for weeks and it, quote, "ended with a four-hour sprint by motorcycle to the Turkish border, driving through woods and on muddy roads." The Syrian spokesperson, the one who said publicly that the Assad regime would not use chemical weapons on his people, he supposedly left weeks ago, and now, no one seems to know where he even is. "The Guardian" reports he might be in the United States working with intelligence officials. Something the State Department denies. Meanwhile, an opposition activist makes public this conversation he reportedly had with a guy over Twitter overt summer. In it, the spokesman says he`s sympathetic to the opposition. And yet today, he`s still missing. What is happening in Syria right now is chaotic on every level, in the streets and in the government, and it is deadly. More than 40,000 people have been killed, according to human rights groups. When you have that much chaos and that much destruction and so many possible branching outcomes with this many lives at stake, you turn to an expert. And we have one. Joining us now from Cairo is Ayman Mohyeldin, foreign correspondent for NBC News. Ayman, thank you. It`s great to see you tonight. AYMAN MOHYELDIN, NBC NEWS FOREIGN CORRESPONDENT: Thanks, Ezra. KLEIN: Give me your broader take for a minute. Where are we on the scale of regime collapse? MOHYELDIN: Wow, that`s a very tough question. I think by anyone`s estimates, including intelligence analysis and even opposition activists, it`s very difficult to gauge that. Those who are fighting on the ground will tell you that in the last few weeks there have been significant gains and many people have used the expression "This is the beginning of the end," not the end but the beginning of the end. How long that lasts for depends on all kinds of variables. But the term is being used more frequently among opposition activists and those players here in the region. KLEIN: Are these defections, are they going to be replaced? Is the Assad regime at a point where it can -- I`m sorry, replenish itself? MOHYELDIN: Well, there is no doubt that over the course of the last several months, in terms of high level defection, every time there is a defection, the government is quick to fill that gap. And, in fact, President Assad has addressed this issue in many interviews and actually in many statements that he`s given. He says that it kind of withers down the hard-core loyalists in the regime, those that are in power, those that leave. He always says openly they have the right to leave. But people see it more to the complete shock to the morale of the regime, when such high level people defect, including the prime minister, the former prime minister, former military general and others, it`s more of a psychological blow as well as a tactical blow to the regime and its ability to carry out its daily functions. And that`s why the Syrian opposition continually calls for these defections. There is no doubt that the defections themselves have had a tremendous impact on the circle of President Bashar al-Assad. Russia is signaling that it would accept a transitional government in Syria. Is that a significant turning point here? How do you read that development? MOHYELDIN: Well, you know, the Russian position over the course of the last several months has slowly shifted a little bit. Now, when you look at it in details, you can clearly see from the time of the Geneva meeting that took place a short while ago, in early December, and until now, the Russian government says there has been no change in its position. But they are willing to accept a transitional government. But the term that they constantly refer to is that it is up to the Syrian people to decide. It is not up to the West. It`s not up to the United Nations or the U.S. to decide what kind of transition takes place. They emphasize it must be the Syrian people. But many inside Syria and in the region interpret that as a softening of the Russian position, that they don`t necessarily have to stay with President Bashar al Assad. They see that as an opening that they would be willing to have some kind of process that would call for his removal and bringing about a new government. And that is what we heard from the U.N. special envoy who once again emphasized the Russia would accept the transitional process so long as it is decided on by the Syrian people. KLEIN: Ayman Mohyeldin, foreign correspondent for NBC News and live in Cairo tonight, thank you very much for joining us. One of the most beautiful words in the English language: graphs. Sexy, sexy graphs, coming up. (COMMERCIAL BREAK) KLEIN: When I`m not sitting in for Rachel, I`m at "The Washington Post" writing a blog called WonkBlog.com, with a bunch of very cool people who want to talk all day about disruptions in the economy and factors affecting health care costs and obscure laws that make a gallon of milk 8 bucks. Each year, for the end of the year, we ask our fellow travelers in the great wide wonkish-sphere to send in their favorite graph. We want the one graph they thoughts was the most essential to understanding America in 2012. North Dakota Senator Kent Conrad, the outgoing chairman of the Senate Budget Committee, he sent a graph this year that would be particularly useful on Capitol Hill right now. It shows the last five budget surpluses we had when tax revenue was always near or above 20 percent of the overall economy, about five points higher than it is now and a couple of points higher than Republicans want. And, yes, tax revenues right now, about the lowest we have seen in six decades. No wonder we`re broke. Note to Congress, you want to balance the budget, you need more taxes. Sheila Bair, the former chair of the FDIC, sent a terrifying two-line graph. You see the growing divide here between the rich and the poor when it comes to the amount of debt that they have. The graph was all the way back to the Reagan era. Red line shows the debt by the top richest 5 percent of Americans as a percentage of their income. That percentage has never been high. And it`s falling now. The blue line shows the line for the bottom 95 percent. Debt takes up much more of their income and it`s taking up more all the time. Sheila Bair says this kind of inequality in debt simply cannot hold. Her chart ends in `07 when the economy collapse. The situation, she says, has not really changed. The great economist Paul Krugman graced us with a related and equally terrifying one-line graph. That long folder, that is the share of the national product that is going to workers rather than capitol, the CEOs and investors and so forth. This is what inequality looks like, someone is getting rich and instead of workers, it`s the people who own stuff. And remember when Mitt Romney said that almost half of all Americans, they are free loaders? (BEGIN VIDEO CLIP) MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: There are 47 percent of the people will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe that the government has the responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that`s an entitlement. And the government should give it to them. And they will vote for this president no matter what. And I mean, the president starts off with 48, 49 -- he starts off with a huge number. These are people who pay no income tax. (END VIDEO CLIP) KLEIN: Bob Greenstein, from the Center on Budget and Policy Priorities, put that question into chart form. You can see here, other folks who didn`t pay income taxes is 61 percent pay federal taxes. So, they were working and they were paying federal taxes. The rest, 22 percent, were elderly, who presumably been allowed to retire. We do allow that. They pay no federal income tax. The final slice of people not paying the federal income tax, was sick and disable or they were in school or they retired early or they were unemployed. Not a whole ton of moochers here. Speaking of Mitt Romney, something he found out this year -- demographics matter. It`s the lesson from (INAUDIBLE) emerging Democratic majority and also from the chart he sent in, just population density from 10 people per square mile on the left, to 36,000 people per square mile on the right. So, it`s country mice on the left, .big city mice on the right. The red line shows support for Mitt Romney, strong where not many people live, thin where they are a lot of voters. And the blue line support for Obama who won big in the cities and thrust him to White House. This graph is part of the story of the 2012 election and maybe the next several elections. While we`re on the topic, Princeton, of the election, Sam Wang, a Princeton neuroscientist, who, like Nate Silver, had just an incredibly accurate election forecasting model. He sent us a cartoon rather than a chart. It`s from a brilliant (INAUDIBLE) for comic SKCD and who weighed in on the furious attacks being launched at people like Wang and Silver who are using data to predict the election. Wang and Silver, of course, turned out to be right, prompting this cartoon from Monroe. It says, quote, "Breaking, to surprise a pundit, numbers continue to be the best system for determining which of two things is larger." It`s good word to the wise. At my blog WonkBlog.com, we posted these charts and a bunch of others that are bit complicated for TV, but I`ll work your time. I`ll tweet a link to them after the show. That does it for tonight. We`ll see you again tomorrow night. Now it is time for "THE LAST WORD WITH LAWRENCE O`DONNELL". Have a good night. THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END