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The Rachel Maddow Show, Transcript 10/08/13

Guests: Paul Rieckhoff, Alan Krueger

RACHEL MADDOW, MSNBC ANCHOR: The harpoon comes into it. Hi, Andy. He gets up in front of the vote and he throws the harpoon and he hits the whale, which of course is very, very sad for the whale. But it is exactly what our whaling boat crew is trying to do. So hooray for them, they have harpooned the whale. Now here`s the thing. The harpoon has a rope attached to it and they tie the rope on to the boat. By virtue of that rope and that harpoon, that little whaling boat is now essentially tied to a very angry whale which weighs, what, like 40, 50, 60 tons? And the whale, because it has been stuck with a harpoon, inevitably takes off swimming. And because the boat is tied to it, the whale is towing the boat behind it at speed. The whale has just taken off now across the ocean, dragging our little 19th century crew in their wooden boat, across the waves, going more than 20 miles an hour. Our whaling boat is essentially water skiing behind a wounded, furious, huge creature. A creature that doesn`t look like it here but in real life is way, way bigger than them. If that (INAUDIBLE) creature tires out and they are able to complete the kill, our little crew is going to be the richest crew on the ocean tonight. They got their whale. But if something goes wrong, like, say, the whale doesn`t get tired and it runs away with them on this Nantucket sleigh ride over waves the size of houses, how long can the crew survive that in their little boat? And worse, the whale, if it is big enough and strong off, the whale could decide to sound. When a whale sounds, that means it is diving deep to the bottom of the ocean. If a whale is tied to a comparatively small whaling boat and it decides to dive down, down, down to the deepest of the deep where the giant squid lives and sailors die, if the whale dives deep and brings that boat with him, all those sailors on the whaling boat are going to die at the bottom of the sea, which is where the captain comes in. As that bolt is flying across the ocean at 20 miles an hour, over giant waves, being dragged through the sea behind 60 tons of righteous whale fury, our heroic whaling boat captain has one last thing he can do. If he thinks that whale is going to sound, if he thinks that whale is going to kill them all by dragging them down, he can use the most important tool that he has on the ship. He can use his whale boat hatchet. He can use that as a last resort to cut the rope if he needs to do it to save their lives. Tucked under the bow of every 19th century whaling ship was that tool of last resort. It is up to the captain to wield that hatchet when it is necessary. To decide that even if it means we`re not getting a whale today, the crew is not going to die because the whale dragged them to the bottom of the sea. It was the hope of every scurvy, bow-legged barnacle back, whoever took to the sea that the captain would cut that rope when the time came. Do we trust the captain to cut the line? Will he give up the chase even after all this effort? How does a simple fable with -- music down. Thank you. Simple fable with an obvious moral. Do you trust the captain? You would not think of attaching yourself to something with the size and speed and strength of a whale without having the means of getting unattached, right? But only the captain gets to wield that that means of getting unattached. Only the captain has the hatchet. So you better trust him, right? You better trust the captain to know just how much risk you can bear on your little boat before it`s time to stop trying. (LAUGHTER) It is time for you to stop trying to get this thing you so badly want because of the harm it`s going to do to you if you hold on to it. You have to trust the captain to know how much harm is too much harm and too likely to be harmed. You have to trust that captain to know when your quest needs to be over, it`s time to go. In Washington these past few weeks, that has been the surface level question, right? Is John Boehner a good enough captain? Does he recognize that he has the hatchet? Does he know when and how to use it? To stop the plummet to catastrophe if that is where we are heading? It`s an interesting question, right? Still unresolved eight days into the government shutdown. It`s an interesting question about whether or not he has the captain`s wisdom and judgment on that ship. Will he cut that line if they need that line to be cut because they`re all going to die if they don`t? Interesting fable, right? Simple moral interesting fable. Now we have a new problem on our ship. Now we have a whole new modern twist that they never had to deal with on a 19th century whaling ship, which is that the crew on our ship does not think that the captain has to cut the rope ever, no matter what. Turns out the crew is bonkers. The captain sees that the whale is ready to sound, go down to the bottom of the ocean and drag the whole boat down with them. The captain stands ready to cut the rope but the whack-a-do crew says no, don`t do it, we would rather ride this whale all way to the bottom of the sea. We would rather go all the way to the watery depths because we heard somewhere it will be no big deal. Yes, we think we have human gills that`ll work just fine down there. And we also heard the bottom of the sea is not all that bad a place to be this time of year and maybe we`ll make friends with the giant squid. How does it affect the judgment of the captain if his crew is screaming at him and struggling with him that they don`t want to be saved? Because John Boehner`s crew, his Republican caucus in Congress increasingly does not want to be saved. They see no risk. Why cut the rope when everything is going to be fine? (BEGIN VIDEO CLIP) REP. JOE BARTON (R), TEXAS: This talk about default by the U.S. Treasury is nonsense. We are not going to default on the public debt. (END VIDEO CLIP) MADDOW: Republican Congressman Joe Barton explaining that it is nonsense to worry about hitting the debt ceiling. Republican Congressman John Fleming also does not think there is anything to worry about with the debt ceiling. He told the "New York Times," quote, "Economists, what have they been doing? They make all sorts of predictions. Many times they are wrong, so I don`t think we should run government based on economists` predictions." Asked by "Politico" if he`s willing to not raise the debt ceiling, Congressman John Fleming said that he was willing to not raise the debt ceiling. He says, quote, "Technically it is not possible to default." What happens in his mind if we do hit the debt ceiling? In his mind, quote, "nothing happens," so says Louisiana Republican Congressman John Fleming. Florida Republican Congressman Ted Yoho explained his even happier view to the "Washington Post" this week, saying that if we hit the debt ceiling, it will be good for us, good for the whole world even. He says, quote, "I think we need to have that moment where we realized we are going broke. I think personally it would bring stability to the world markets." Republican Congress Mick Mulvaney tells the "National Journal" this week, "We`re not going to default, there is no default." Republicans Congressman Justin Amash of Michigan says, "Democrats have a different definition of default than what we understand it to be." Republican Congressman Tim Huelskamp says, "Nobody thinks we`re going to default." And here`s Republican Congressman Steve King of Iowa. (BEGIN VIDEO CLIP) REP. STEVE KING (R), IOWA: I think that all this talk about a default has been a lot of demagoguery, a lot of false demagoguery. (END VIDEO CLIP) MADDOW: I know. I know. Finding tape of that particular congressman saying stuff that sounds cuckoo is not exactly like hunting for a white whale. Not exactly depth. But what he`s saying there, that it is false demagoguery to worry about default, to worry about hitting the debt ceiling? This is increasingly becoming the new Republican normal. That if we hit the debt ceiling for the first time in history, ah, no big deal, we have gills. (BEGIN VIDEO CLIP) SEN. TOM COBURN (R), OKLAHOMA: There is no such thing as a debt ceiling in this country, I would dispel the rumor that is going around that you hear on every newscast that if we don`t raise the debt ceiling we will default on our debt. We won`t. (END VIDEO CLIP) MADDOW: We won`t. Why would we? Senator Tom Coburn of Oklahoma articulating what is an increasingly normal thing for Republicans to say. Republican senators from Orrin Hatch to Rand Paul to Richard Burr to Pat Toomey to Mike Crapo have all articulated a version of the same argument. They think it is possible to hit the debt ceiling for the first time in history, possible for us to blow through it but avoid economic catastrophe anyway because somehow we can skillfully slalom through the debts and responsibilities and promised payments of the United States government indefinitely. That has never been done before. There is no mechanism for doing that. The Treasury Department, which would be responsible for doing it says that it cannot be done. Even if it could be done. And estimate from Deutsche Bank -- Deutsche Bank analysts that was published by "The Washington Post" today projects that that idea, even if it were possible, even if it were true, they project that that idea would drop 1500 points off the stock market straight away. An analysis by Goldman Sachs says it would reduce the rate of economic growth in this country by 4.12 percent. And that`s if the magic we won`t default scheme is even possible, which again it probably isn`t possible. But Republican Senator Richard Burr says worth getting worked out about all this is just scaring ourselves. Senator Mike Crapo says it`s one of the best things that could happen for young people. Bloomberg News started off the week this week with a long reported piece that you have to believe was trying to convince Republicans that the debt ceiling is a real thing. Quote, "Among the dozens of money managers, economists, bankers, traders and former government officials interviewed for this story few view a U.S. default as anything but a financial apocalypse." Again this is Bloomberg. Anyone who remembers the collapse of Lehman Brothers a little more than five years ago knows what a global financial disaster is. A U.S. government default just weeks away if Congress fails to raise the debt ceiling will be an economic calamity like none the world has ever seen. The debt shockwave that threw us into the worst recession since the Great Depression five years ago that started with the collapse of Lehman, the collapse of just the first direct tier of debt we`d be talking about with the debt ceiling next week? Just the first tier? Just what would be directly affected? That first tier is 23 times the size of the bankruptcy and collapse of Lehman. Remember what the Lehman collapse did? Republicans in Congress increasingly say they are not worried and that apparently is starting to worry the president of the United States. (BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I want to talk about this for a minute because even though people can see and feel the effects of a government shutdown, they`re already experiencing it right now, there are still some people out there who don`t believe that default is a real thing and we`ve been hearing that from some Republicans in Congress that default would not be a big deal. So let me explain this. If Congress refuses to raise what`s called the debt ceiling, America would not be able to meet all of our financial obligations for the first time in 225 years. Now the last time that the Tea Party Republicans flirted with the idea of default two years ago, markets plunged, business and consumer confidence plunged. America`s credit rating was downgraded for the first time. And a decision to actually go through with it, to actually permit default, according to many CEOs and economists, would be -- and I`m quoting here -- insane, catastrophic, chaos. These are some of the more polite words. Warren Buffett likened a default to a nuclear bomb, a weapon too horrible to use. Nobody in the past has ever seriously threatened to breach the debt ceiling until the last two years. And this is the creditworthiness of the United States that we`re talking about. This is our word, this is our good name. This is real. When I hear people trying to downplay the consequences of that, I think that`s really irresponsible. And I`m happy to talk to any of them individually and walk them through exactly why it`s irresponsible. (END VIDEO CLIP) MADDOW: If you stay tied to the harpoon rope, while the harpooned whale is diving to the bottom of the sea, you will die at the bottom of the sea. Republican members of Congress are not convinced. The harpoon is set, the rope is tied on and it turns out next week the whale is diving and it`s really deep water. The Republicans increasingly have decided not just that they don`t want to cut that rope, but that they don`t need to. If you are Captain John Boehner, holding the whale boat hatchet looking at that rope right now, what do you do? Joining us now is Alan Krueger. He`s an economics professor at Princeton University, the former chairman of President Obama`s Council of Economic Advisors. Professor Krueger, thanks very much for being with us. ALAN KRUEGER, FORMER CHAIRMAN, OBAMA COUNCIL OF ECONOMIC ADVISORS: My pleasure. MADDOW: I`m sorry that I -- had to introduce you with a long story involving people in fishing -- fishermen outfits and a whale. But the point we`re trying to dramatize here is sort of denialism about the consequences of breaching the debt ceiling. Do you think the denialists have a point? Or do you think that a breach of the debt ceiling would be catastrophic? KRUEGER: You know, this is reckless. Mistakes happen, accidents happen. The closer we get, the more likely we are to have this kind of an accident. And I was thinking when I was listening to your piece, Alexander Hamilton must be rolling over in his grave right now. I mean, to think that you would threaten to default or to say we go over this debt limit, where the Constitution says, you know, you shouldn`t put the debt -- public debt in doubt, that they`re playing this reckless, irresponsible game. And that they`ve done it before, it`s not the first time. It`s -- as the president said, it`s irresponsible. MADDOW: If we did breach the debt ceiling, obviously we don`t know how long it would last for or how quickly we`d be able to respond to any shocks that it created in our own economy and around the world, but do you have any sense of -- or can you give us some sort of layman`s terms any sense of the potential magnitude of the impact as compared to, say, what we went through in 2008 and 2009? KRUEGER: Well, the potential is catastrophic. You know, if it goes -- if we go past October 17th for some length of time, it`s going to lead to uncertainty about whether our obligations will be met, it will cause a very sharp contraction in the amount of money the government is paying out to private sector contractors or helping the Defense, to Social Security recipients. And the contraction, some estimates I saw are as high as 16 percent for the quarter, which is -- MADDOW: Wow. KRUEGER: You know, about double the worst of the great recession. MADDOW: That`s astonishing. We have heard that if Congress doesn`t allow the U.S. to pay its debts and if we do this, there will be the kinds of consequences that you just described and those numbers are almost impossible to get your head around. We just have never seen anything like that, not just in modern times. We`ve just never seen anything like that as a country. As an economist, do you ever worry that sometimes when predictions are so dire nobody can even afford to believe them? (LAUGHTER) That if you predict some sort of mild downturn, people can absorb that? Or when you`re predicting some catastrophic or apocalyptic that people just can`t hear it and they turn to other more comforting theories? KRUEGER: Well, you have to hope that cooler heads prevail. And what I worry about is, you know, what I described was just the effects of contraction because the government would be spending less. But you could find the financial markets all freeze up. You could have a run on money market funds. And the closer we get to that date, the more likely we run that risk. And if we stay over, you know, the debt ceiling for any length of time, I think we`re going to see extremely adverse effects for the economy. MADDOW: The president today talked about why he does not think he should and maybe think he can act unilaterally to go around Congress to raise the debt ceiling under his own authority as president. Obviously that`s a legal question, a constitutional question, and in some cases, in some ways a political question. But as an economist, do you have a view on whether or not the president has that ability and whether or not it would actually save us from the worse consequences if we didn`t do it? KRUEGER: You know, I think most economists would agree that we would be better off without the debt ceiling. That`s a position that Alan Greenspan, for example, took, so it`s not really a left-right type of issue. The debt ceiling is an unnecessary constraint. Congress orders the administration to spend a certain amount of money and sets tax rates and orders the administration to collect a certain amount of revenue. That implies a certain amount of borrowing. So that`s what determines the deficit, not the debt ceiling itself, so that the debt ceiling in my view and the view of, I think, most economists is an unnecessary constraint. Now the Treasury Department has said that they have not been able to find a legal and responsible way to get around this constraint and, you know, that`s going to be up to the lawyers and Secretary Lew and the president to decide what to do if we do pass this point, in my view, this point of no return. They`re faced with just horrible options and just think about all of the uncertainty caused by whatever choice they make. If they do what some Republicans have been calling for, which is to pay bond holders, to some extent, you know, foreign bondholders, and then not pay federal contractors, not pay federal workers, not pay disability insurance recipients, I don`t think that that will go by unchallenged. So I think there will be a tremendous mess on our hands which will take quite some time to resolve and would cause really a financial collapse. MADDOW: I used to think that that was an -- it would be an easy way out for the president to unilaterally find some way to do this because of those consequences you just described. I no longer think there is any way to do this other than through Congress getting its act together. Alan Krueger, Princeton economics professor, former chairman of President Obama`s Council of Economic Advisors. Professor Krueger, thanks very much for being here. It`s nice to have you here. KRUEGER: Thanks for having me. MADDOW: All right. There were members of Congress, congressmen and congresswomen, who were arrested today. But not for any dereliction of duty. These particular Congress people wanted to get arrested today in Washington and it turns out to be kind of an amazing piece of tape and kind of an amazing story. That story is coming up. And I think I have to thank the whaling boat crew for having done that. Thank you very much, guys. It was very good. (LAUGHTER) (COMMERCIAL BREAK) MADDOW: Hey, so eight members of Congress got arrested today in Washington. It was not a corruption sting or anything like that. No, that`s the New York state legislature you`re thinking of. No, these eight members of Congress today got arrested at a protest in Washington, D.C. Even though everything in national politics right now feels like it has come to a halt because of the government shutdown and the looming debt ceiling deadline next week with its threat of total economic apocalypse, even though all that is still going on, today in Washington there was a big, colorful, boisterous crowded reminder of the opportunity cost of our Congress doing nothing right now other than lurching from self- imposed crisis to self-imposed crisis. Back in June the Senate passed a comprehensive immigration reform bill for our country then that bill went to the House where Republicans are furiously ignoring it to death. They are not saying they will kill it, they are just ignoring it. Killing it by their inaction and hoping that the Latino community, in particular, does not notice them killing it. The Republican Party just this week announced that it hired seven new people to try to engage the Republican Party with Latinos. They call them their Hispanic engagement staff. They hired seven new people. Well, today among the peaceful sit-in protesters outside the Capitol were a bunch of members of Congress who were all Democrats calling for immigration reform to finally, finally, finally be brought up in the House where the Republicans have let it languish. Calling for immigration reform to pass the House along with hundreds of other protesters. And then one by one the eight Democratic members of Congress submitted peacefully to the police to be arrested in an act of civil disobedience. With a loud applause and cheers from their fellow protesters, it was Congressman Al Green who was arrested first, followed by Congressman Joe Crowley, then Congressman John Lewis was arrested. You can see him there. Jan Schakowsky, the congresswoman from Illinois, was arrested. Then Raul Grijalva. Then Keith Ellison then Charlie Rangel there. Then Congressman Luis Gutierrez. Eight members of Congress in all got handcuffed and led away today -- under arrest at this protest. Politics have survived the government shutdown. There was fury and anger and multiple arrests today over what the Congress is not doing while they instead struggle to just try to get things back open. But there was also widespread fury today not just in Washington but really across the country over some things that the government usually does that they have stopped doing right now because of the government shutdown. The interview tonight is somebody who`s here live in studio and it is on a subject of such national outrage and upset today that it very nearly unified the entire country. For once, something horrible, but it brought the whole country together. That story is coming up. Stay with us. (COMMERCIAL BREAK) MADDOW: The war in Afghanistan turned 12 years old yesterday, which means we`re now at the start of year 13 of that war. We have never before as a nation had a government shutdown at a time of war. Never. And so we are on new ground here. We do not know exactly how the shutdown is going to affect our troops who are fighting the war. How it`s going to affect the immense and complicated government infrastructure that supports them while they are fighting that war. Piece by piece the Congress and the administration have been trying to shove together piecemeal fixes to the problem of the government being shut down. Fixes that will at least try to alleviate the worst of the impact in the troops on the field. This weekend Defense Secretary Chuck Hagel said he found a way to recall to work hundreds of thousands of civilian employees for the Pentagon who had all been sent home last week without pay. Congress also passed something they called the Pay Our Military Act which they thought might handle all of the other means of support for members of the military and their families that had been shut down by the shutdown. But apparently they were wrong. Apparently they had not figured out a way around trying to protect -- a way to protect our members of the military and their families from the effects of the shutdown. Apparently what they thought was a good shield was not a good shield. It didn`t work at all. This was Andrea Mitchell`s report on just how wrong they were for the "Today" show early this morning on NBC. (BEGIN VIDEOTAPE) ANDREA MITCHELL, NBC NEWS: Out of all the outrage in Washington over the government shutdown, this one really hits home. The families of five U.S. troops killed over the weekend in Afghanistan got a second call from the government. That the government cannot pay their death benefits, the immediate benefits to help with funerals and flights to meet their loved ones` coffins because of the government shutdown. Far from the furloughs on the front lines, Marine Lance Corporal Jeremiah Collins worked Saturday, one of the most dangerous government jobs there is, on patrol in Afghanistan. The 19-year-old was killed in Helmand province. Back home in Milwaukee, a mother`s grief. Collins was one of five U.S. service members killed in Afghanistan over the weekend. On Sunday, four U.S. troops were killed in an IED attack. They died on the 12th anniversary of a war which has claimed more than 2,100 members of the U.S. military. But unlike those killed before, these service members` families won`t receive the $100,000 so called death gratuity, typically wired to families within 36 hours to help with the immediate expenses like the funeral, until survivor benefits are paid. No money either to fly the family to Dover Air Force Base in Delaware for the dignified return of their loved ones` flag-draped coffin. UNIDENTIFIED FEMALE: Washington may be shut down, but it`s still asking people to go to war. When people realize that they can serve and fight for their country, but that their families will get an IOU until the shutdown is over, I think they`re just shocked. MITCHELL: Shannon Collins still shocked back in Milwaukee. She can`t wait for Washington. She`s already grieving. Officials say that the law passed last week to pay civilian members of the military during the shutdown does not allow this immediate death benefit to be paid to families of the fallen. A senior official told me that he is disgusted by the dilemma. And the Pentagon is hoping for a way to correct it perhaps as early as today. (END VIDEOTAPE) MADDOW: There were few answers about this today, but plenty of outrage coast to coast and across the political spectrum. This is apparently part of what happens when you shut down the entire federal government, which is outrageous no matter who shuts down the government and no matter why they shut it down. Everybody agrees today that this, if nothing else, this has to be unacceptable. Everybody agrees. So, will it be fixed? I know how to figure out the answer to that question. And that`s the interview tonight, next. (COMMERCIAL BREAK) MADDOW: Marine Lance Corporal Jeremiah Collins went off to boot camp just a few weeks after graduating from Milwaukee`s Hamilton High School last year. He was on his first tour of duty in Afghanistan when he was killed on Saturday while on patrol from Camp Leatherneck in Helmand province. He`s 19 years old. This week, his mother was told that due to the government shutdown, she will not receive he benefits that military families are given to bury their loved ones. (BEGIN VIDEO CLIP) SHANNON COLLINS, MOTHER OF LANCE CPL. JEREMIAH COLLINS: For the sacrifice that our kids are making, at the age that they`re making them, I don`t understand how this can be a benefit that`s withheld. I will not -- I won`t ever understand it. With the benefits in limbo, I think that in the end the government is hurting the wrong people. (END VIDEO CLIP) MADDOW: Hurting the wrong people. The shutdown of course is hurting people across the board. But when you cannot take care of the families of fallen soldiers, I think everybody agrees with we have hit a new low. Joining us now for the interview is Paul Rieckhoff. He`s founder and executive director of Iraq and Afghanistan Veterans of America. And full disclosure: my buddy. Paul, it`s nice to see you. PAUL RIECKHOFF, IRAQ AND AFGHANISTAN VETERANS OF AMERICA: Good to see you, Rachel. MADDOW: For most civilians, the idea of military death benefits is kind of a new -- kind of a new concept. What does that -- what does that mean for the families in these circumstances? RIECKHOFF: Well, it`s a crisis benefit that`s cut to them usually in the first couple of days, usually in the first 36 hours. It was actually originally 1,500 and we advocated to increase it to $100,000. So, that money go to the family, right away, helps them with travel, helps them with miscellaneous expenses, and it gets them money immediately. So, this is a whole new level of stupid. I mean, this is outrageous and I hope this shakes America to help them understand that the government may be shut down, but we`re a country at war. I mean, we never had a shut down during a war. So, our community is under tremendous pressure right now and they`ve already been under pressure for the last decade. So, we`re seeing it across our community, active duty, veterans, and military families. It`s severe and it`s getting worse by the hour. MADDOW: We saw an announcement from the V.A. spokesperson yesterday about the regional centers or V.A. benefit centers being shut down, the G.I. call center being shut down. That came as both very bad news and as somewhat of a surprise, because a lot of the V.A. was insulated from the worst effects of the shutdown, specifically because you guys advocated for and won advanced funding for the V.A. So the V.A. essentially funded a year in advance of all the other agencies. Did you do this because you wanted the V.A. to be insulated? RIECKHOFF: We wanted to be insulated from the annual budget fight. We never knew a shutdown was coming. So, it`s had that positive impact. But that only covers health benefits. It doesn`t cover -- sorry, emergency health coverage and health care, it doesn`t cover the benefits of the administration. It doesn`t cover the G.I. bill, it doesn`t cover all the paper work processing that`s going on right now. So, it only covers the section of the V.A. Nine thousand V.A. workers were furloughed today. The G.I. bill hot line is down, regional offices are closed and veteran`s organizations all around the country are absorbing that impact. We have seen calls to our education support line quadruple in the first couple of days. MADDOW: Wow. RIECKHOFF: They`re coming to us. They don`t know what`s happening. They don`t know if their next G.I. bill check is coming. The next disability check is coming. I was with five national guardsmen in my office tonight -- in our office here in New York. Three of them just had their reserve drill cancelled this weekend. That`s training so they`re not going to be as ready for war. But that`s also about $400 in their pocket that`s going right now. We`ve got a frequently asked questions section on our Web site. We continue to update it as we get information from DOD and V.A. every couple of hours. And we appreciate it, folks. Check it out. Spread the word because there`s a lot of confusion right now across the -- MADDOW: In terms of the G.I. bill thing, I notice when -- I know that you guys were telling everybody through your web site and through the means that you contact people through social media and everything that people can place calls reopen. Just think about the timing of that, we`re in early to mid-October. RIECKHOFF: Yes. MADDOW: What that means is for people who are using G.I. Bill benefits to go to school, it`s sort of awkward to get the money move around and to get those benefits to the bursary at your schools so you can pay for books and all those things. Now people get no help. RIECKHOFF: Yes, it`s a couple of hundred thousands people who have just started school or turning new page in their life. They`re doing the right thing and they don`t know if they`re going to get their next check. But also, the Department of Defense, just now, I think in the last few hours, confirm they`re actually going to pay their troops on October 15th. So, this is, you know, a real time crisis within our country that I don`t think folks are really understanding. And we`re not getting involved in partisan battles here. We`re talking about practical realities and what are impacting our veterans and troops right now on the ground. So, Washington`s got to find a way to at least protect this group of people who are literally in harm`s way right now. MADDOW: The thing that is -- this is not just true about veterans and military issues, but I feel like it is most acutely true for those issues. We are learning that you can`t just break things and pick up the pieces up one by one and try to make it seem whole for the parts of it that hurt the most. I mean, they all thought and they sort of advertise when they were shutting down the government -- don`t worry, we took care of the troops, we took care of the veterans, they`ll all be fine. We`re just going to shut down parts of the government that we don`t like. They have not been able to put it back together. RIECKHOFF: Well, for our members, and we got about 200,000 around the country, 15 percent of them work in the government. They`re veterans who have come home and are now working in the government. Many of them are defense contractor who were already hit by sequester and now they`re going to be hit by the shutdown and maybe hit again by the debt ceiling. So, this is, you know, a tumultuous situation over and over again for the group of folks who have been sacrificing for the last decade. So, this should be a wakeup call for all Americans. We have got to fix this and we have got to recognize what damage it`s doing to our people who are in harm`s way and who are fighting on our behalf. MADDOW: Is it frustrating to you to see members of Congress express chest pounding outrage about this story today, to see members of Congress go down to the World War II Memorial and express chest pounding about how sad they are that the World War II Memorial is closed, along with the rest of the national parks, when those same members of Congress are responsible for the shutdown? RIECKHOFF: Yes, but our veterans and military are America`s favorite political chew toy. MADDOW: Yes. RIECKHOFF: Both parties do this. And both parties are doing it now. And they love to hold us up as the first group that`s getting impacted and still not deliver for us. They know it resonates with the American people. But they`re talking and not delivering. The American people have got to demand that they deliver for our veterans, our military and our families right now, because I`m going to go back to the office and our inboxes are full, our phone lines are going to be full and our case workers are working overtime. And when they shut down the government, that overflow demand goes somewhere and right now, it`s going to community based nonprofits around the country. MADDOW: In terms of how this gets fixed, one of the reasons I wanted to talk to you, Paul, is I feel like you`re not only somebody who`s lived it and who has a pretty good analysis of how veterans get use in the politics, but you have been able to turn that into some really concrete advocacy wins. For example, the size of the debt benefit is because of your advocacy, the advanced funding of the V.A. is because of your advocacy. The new G.I. bill is because of your advocacy. IAVA and other veteran service organizations have absolutely figured out how to turn all of this emotional shrapnel laying around the country that`s about you guys but not of you guys into concrete gains for your community. Do you as a practical political guy see a way out of this? RIECKHOFF: Yes, maybe we`re the reason they`ll resolve this. Veterans and military should be the folks who we can all rally behind. And you brought up another important point about all these wins. Look, we are also making progress on the backlog. MADDOW: Yes, finally. RIECKHOFF: You reveal the backlog, we finally removing the backlog, helping the V.A. remove the backlog by about 30 percent. That stopped. The mandatory over time is gone. They`ve shut the regional office. They can`t even continue to develop the new digital electronic processing system. That`s shut down. MADDOW: Yes, the systems that let them say they have the backlog cleared by next year, they`re not working on that. RIECKHOFF: They have thrown a giant wrench in all that. So, any of the progress is now going to be reset, it`s going to be delayed, it`s going to be stalled, and that`s going to impact literally millions of folks around the country. MADDOW: Well, the emotional impact and the political impact of the way this is affecting military families and veterans is something that`s impotent unless it`s s turned into action and the people that are going to turn it into action are you guys. RIECKHOFF: Actually, more importantly, it`s going to be the American public. That`s who it`s going to be. We are small in number, we need everybody to step up and get behind us. MADDOW: But you guys have figured out a way to turn it into practical action when people are mad, or people are sad, or people are having their emotional feelings that -- (CROSSTALK) RIECKHOFF: Yes. MADDOW: So your leadership here is need more than ever. Paul Rieckhoff -- RIECKHOFF: Thank you, Rachel. Appreciate it. MADDOW: -- of Iraq and Afghanistan Veterans of America -- thanks for being here, Paul. RIECKHOFF: Thank you, as always. MADDOW: All right. Teenagers, you`re immature, that`s not me. That`s a state Supreme Court ruling that will chap your hide and it has nothing to do with the shutdown. And that story`s coming up. (COMMERCIAL BREAK) (BEGIN VIDEO CLIP) REPORTER: Do you believe this will be one the most important, if not the most important, economic decisions you will make in the remainder of your presidency? BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is definitely one of the most important decisions I will make in the remainder of my presidency. The Federal Reserve chairman is not just one of the most important economic policymakers in America, it`s -- he or she is one of the most important policymakers in the world. And that person presumably will stay on after I`m president. So, this, along with Supreme Court appointments, is probably as important a decision as I make as president. (END VIDEO CLIP) MADDOW: As important as Supreme Court appointments. Well we have some late breaking news to report tonight. Is that we now know who the next chair of the Federal Reserve is likely to be. The current Fed chair, of course, is Ben Bernanke. He was appointed Fed chair by George W. Bush in 2006. He was then reappointed by President Obama in 2010. Now, we know that when his term expires in January, the person who will take over for him in all likelihood will be this person, Janet Yellen. Janet Yellen is currently the vice chair of the Federal Reserve. Tonight, we have learned that President Obama intends to officially nominate her as Ben Bernanke`s successor as chairman of the Federal Reserve. The news was first reported tonight by "The Wall Street Journal", and just a few moments later, the White House confirmed it, and said that the announcement will come at a White House event tomorrow afternoon at 3:00 Eastern. If she is confirmed by the Senate, Janet Yellen would make history as the first woman ever to head up the Federal Reserve. Ms. Yellen, the second woman to head up a bank in the developed world. Her nomination became more of certainty recently when President Obama`s former top economic adviser Lawrence Summers withdrew his name from consideration last month. Lawrence Summers potential nomination as chairman of the Fed drew lots and lots of opposition particularly from the political left. His withdrawal from the process under that pressure left Janet Yellen as President Obama`s most likely choice. Chair of the Federal Reserve is a big, big, big, high-profile position. We have only had two Fed chairs over the last 25 years. Alan Greenspan, and Ben Bernanke, and they both became household names. This is a consequential position among consequential positions. And Janet Yellen is set to join the list if she is confirmed by the U.S. Senate. But again, the news confirmed tonight by the White House, President Obama will officially nominate Janet Yellen to become the next chair of the Federal Reserve tomorrow 3:00 p.m. in the East Room of the White House. Set your DVRs now. (COMMERCIAL BREAK) MADDOW: First thing you need to know, this has nothing at all to do with the federal government shutdown. It would probably be the top politic story in the country right now if the shutdown were not happening. All right. Here`s what is going on. January 2011, the state senator in Nebraska named Lydia Brasch introduced legislative bill, 690. This is Senator Brasch discussing the bill on the floor of the state legislature in Nebraska. LB 690 was an anti-abortion bill, specifically it`s what the anti-abortion side calls a parental consent bill. It said that if somebody under the age of 18 in Nebraska wanted to have an abortion, she would have to get written permission from a parent or guardian or she couldn`t have it. Previously, you had to notify your parent or guardian. But you didn`t need their written permission. But Senator Brasch`s bill would change that, said blocking a young woman from getting an organization unless she could get written consent, quote, "is the best option for young women`s safety, well-being and peace of mind." Young women`s safety, well-being and peace of mind. That was the idea. Senator Lydia Brasch`s bill said that you cannot get an abortion without written consent from your parents. And it soared through the Republican- dominated Nebraska state legislature. She introduced it in January, 2011. By May, it passed, 41-6. And that very same day, Nebraska`s Republican governor signed it into law. When it was signed into law, the anti-abortion group Americans United for Life, they were ecstatic. Nebraska`s new parental consent law based on Americans United for Life model legislation, they`re very, very psyched to get the bill passed in Nebraska. Of course, they`re psyched to get bills like this passed all over the country. Well, this past weekend, two years after the bill became law, the Nebraska state Supreme Court issued their first verdict in a case under this new antiabortion parental consent law. This is the headline from the "Obama World Herald". Nebraska Supreme Court rejects foster child`s abortion request. Five out of the seven judges on the Nebraska Supreme Court, quote, "refused a 16-year-old foster child`s request to get an abortion without parental consent." The 16-year-old girl is unnamed in the court case because she is a kid. Her identity has been protected. But as a kid, living in Nebraska, she has not been protected. She cannot get parental consent for her abortion because her parents no longer have the right to be considered her parents. A Nebraska court dissolved their parental rights because they physically abused and neglected their daughter. And it was during the hearing where the 16-year-old girl`s parents were getting their parental rights stripped by the state, because they abused her, it was during that hearing that the teenager told the court in this confidential proceeding that she was pregnant and that she felt she could not have the baby. She told the court that she wanted to have an abortion because she did not have the financial resources to support a child, or she said, quote, "to be the right mom that I would look to be right now." The district court judge hearing her plea looked this young woman up and down and asked her whether she knew that, quote, "when you have the abortion, it is going to kill the child inside you." Then he ruled she would not be allowed to have the abortion. With no parents available to give written consent, even if that made sense in this case which it doesn`t, that judge decided that he would decide to whether or not she would be allowed to have an abortion. And he decided she would not have one. He ruled that the young woman had not shown she is sufficiently mature and well-informed enough to decide on her own whether to have an abortion. And so, the state of Nebraska will instead force her to give birth to a child, even though she doesn`t want to, because they say she is too immature to choose not to. That was the district court ruling in her case. Now, the Nebraska state Supreme Court has upheld that judge`s ruling. Thus, forcing the 16-year- old girl to give birth by order of these state judges even though she does not want to give birth. Abortion is legal in Nebraska, but not for her, because she was beaten up and neglected by her family. And so, now, the state decides what she gets now, and the state has decided she can`t have that particular choice. We spoke to the attorney who was representing this young woman at the center of the story today. Her attorney Katherine Mahorn (ph), she told us today there will be a meeting in Nebraska next week to try to determine the next step forward in this case, specifically to decide whether or not to further appeal this decision. And what that might mean in very practical terms for her young client. Time, of course, is of the essence here. The girl at the center of the case is now more than 4 months pregnant. She was only ten weeks pregnant when the state of Nebraska first denied her permission to have an abortion. She was 10 weeks pregnant when she started asking. They have just finished saying no. And now she is more than 4 months pregnant. We asked her attorney tonight, what her client think as but this latest ruling from the state Supreme Court on her case. The attorney told us that she has not yet discussed what this ruling means with her client. The attorney told us today, quote, "She is busy. She is a high school student." And an American state is forcing her to give birth against her will on the ground that as a high school student, she is too immature to have an abortion, but not to immature to be forced to become a mother. We`ll bring you updates on this case as we get them. If the government shut down were not going on in Washington right now, this would be one of the biggest political stories in the country. You otherwise may not have heard about it. Watch this space. That does it for us tonight. We will see you again tomorrow night. Now, it`s time for "THE LAST WORD WITH LAWRENCE O`DONNELL". Thanks. END THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END