GOP abandons principles on tax cuts Transcript 10/26/17 The Last Word with Lawrence O'Donnell

Guests: Ron Klain, Daniel Dale, Peter Wehner, Ana Marie Cox

Show: THE LAST WORD WITH LAWRENCE O`DONNELL Date: October 26, 2017

Guest: Ron Klain, Daniel Dale, Peter Wehner, Ana Marie Cox

LAWRENCE O`DONNELL, MSNBC HOST: Good evening, Rachel. It was keeping me up and I have to wait until Monday and a thing that this story shows is just how much what you could call masked spending occurs in campaigns, meaning when you see a big check, all of this has been reported, all the spending has been reported in campaign spending reports, but this spending indicates that money was spent at a law firm.

You never, ever know what that law firm was doing. They might have been having you comply with FEC reports.

RACHEL MADDOW, MSNBC HOST: Right.

O`DONNELL: All sorts of things. You never know what they were doing.

MADDOW: And that`s a good point about what we`re -- if we do end up getting further information on this from that bank subpoena. I mean, it may be very opaque in terms of where -- how those payments were funneled through. I mean, the Democrats have said, the Democratic leaning law firm, Perkins Coie, that was named on being the Democratic funder here, they said in the statement about this, well, listen, we weren`t the only people that funded the research for Fusion GPS. The Republicans should come out and admit it now, too.

The Republicans so far are not doing that and may be hard to figure it out seeing the records.

O`DONNELL: So, my guess is that it was the best funded Republican presidential campaign at the time that was also getting the most criticism from Donald Trump. That`s just my guess.

MADDOW: A low energy campaign?

O`DONNELL: Yes. But a high money campaign, and the campaign that knew how to do this stuff and that`s my guess.

MADDOW: So far, I have to say, on the Republican side, I have looked into this a lot. Like everybody denies it. All their associated PACs deny it. Everybody says wasn`t me, wasn`t me, wasn`t me. The people now simultaneously saying how terrible the Democrats didn`t admit until now it`s them.

O`DONNELL: Right.

MADDOW: But whoever did it on the Republican side, nobody has owned up to it. We`ll see. Watch it. It will turn out to be the Mercers, right?

O`DONNELL: And call me old fashioned, I think the most important thing about that dossier is how much of it is true.

MADDOW: Ding, ding, ding, ding. Whoever funded it, thank you.

O`DONNELL: Right. Thank you, Rachel.

MADDOW: Thanks, Lawrence.

O`DONNELL: Well, there`s nothing quite like a liberated Republican -- a Republican who no longer has to run for office. They just don`t sound like Republicans. And at least one of them who used to be the most powerful Republican in Washington now says the Republicans running things in Washington are knuckleheads, especially the knucklehead in chief.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This was an idea that I had where if we can teach young people not to take drugs, just not to take them --

NANCY REAGAN, FORMER FIRST LADY: When it comes to drugs and alcohol, just say no.

TRUMP: It`s really, really easy not to take them.

SEN. ED MARKEY (D), MASSACHUSETTS: We did not hear what the president is going to do.

TRUMP: We can be the generation that ends the opioid epidemic.

MARKEY: Words without action are nothing more than false promises.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: This budget that we just passed in the House today brings us one step closer to historic tax reform.

SEN. BOB CORKER (R), TENNESSEE: Some of the things we are doing I`m sorry, are ridiculous.

UNIDENTIFIED MALE: In the short run, we will see an increase in deficit. It`s the only thing that we can get through GOP-led Senate.

TRUMP: We are really unified on what we want to do.

CORKER: We could take a lot of this off and throw it in the trash can.

TRUMP: You know, people don`t understand. I`m a very intelligent person.

REX TILLERSON, SECRETARY: Yes, some days I feel like I need to do that. Curl up in a ball.

(END VIDEOTAPE)

O`DONNELL: John Boehner was the last Republican speaker of the House before the Republican Party descended into Trumpism. John Boehner quit his job as speaker of the House in the middle of a congressional session because he thought too many Republican house members had become disconnected from reality.

When John Boehner walked off the Republican stage in the disgust of his fellow Republicans in October of 2015, Donald Trump was putting on a display of ignorance and buffoonery in Republican presidential debates unlike anything ever seen in American politics, and Donald Trump was constantly going up in the Republican polls.

John Boehner could see that. As impossible as his job had become in those days, it was very clear to him that Trumpism meant that it was only going to get worse and so today in an interview in Germany, former Republican Speaker of the House John Boehner said: Most average Republicans are throwing up over the fact that the knuckleheads are running the show.

John Boehner didn`t list the knuckleheads by name but one of the people running the show was asked today about how the Republican tax cuts might run into trouble from a surprise tweet by the knucklehead in chief.

(BEGIN VIDEO CLIP)

REPORTER: Are you at all concerned that this rollout next week when you detail the tough choices that he`s not going to maybe like some of them and tweet something about it?

(END VIDEO CLIP)

O`DONNELL: Oh, we should have had his answer there. Not just the question.

So, here`s what his answer is. Paul Ryan, who you are about to see on the video, speaker of the House, one of the knuckleheads running the show, according to John Boehner, he was asked, you know, you think there might be problems if Trump tweets about the tax bill while you try to get it done, and Ryan says, he`s going to be in Asia, number one. And then, he laughs and then says, no, I`m just kidding, and then he says that was kind of a joke. And he says, I was sort of joking on that.

Now, kind of a joke and sort of joking is not really a joke. So that means Paul Ryan was, you know, kind of saying what he meant, that the president`s going to be in Asia and he`s implying that having the president out of town is the best thing for Republicans who are trying to get a tax bill passed.

This week, Republican Senator Bob Corker said very clearly he hoped the president would stop commenting on the tax bill.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Is he being a distraction? Are the comments he`s making, the tweets, making it harder to get tax reform done?

CORKER: I would let the tax-writing committees do their work. I think both the House and Senate has done a lot of preliminary work and stay out of taking things off the table and really negotiating against the process before it even begins.

(END VIDEO CLIP)

O`DONNELL: The chairman of the Senate tax writing committee is Utah Republican Orrin Hatch.

Chairman Hatch said this: We need to know what the president wants to do to try to coordinate it with him. So far, I`m not quite sure where he is going.

And no one is quite sure where the president is going in his newly announced war on opioids, a war that Republicans got interested in only when they discovered that white Republicans have serious addiction problems, too. The basics of the president`s announcement today on opioids was the familiar just say no.

(BEGIN VIDEO CLIP)

TRUMP: The fact is, if we can teach young people and people generally not to start, it`s really, really easy not to take them.

(END VIDEO CLIP)

O`DONNELL: One specific action the president promised to take today was to pull a drug off the market.

(BEGIN VIDEO CLIP)

TRUMP: We are requiring that a specific opioid which is truly evil be taken off the market immediately.

(END VIDEO CLIP)

O`DONNELL: OK. Immediately. So like, today or tomorrow at the latest, right?

The administration confirmed that the drug that he was talking about was Opana. Apparently, no one told the president that that drug was already removed from the market in June by the FDA. The Food and Drug Administration has the regulatory authority to do that sort of thing. And that is exactly the kind of regulation that Donald Trump rails against.

(BEGIN VIDEO CLIP)

TRUMP: We`re getting rid of one job killing regulation after another.

(END VIDEO CLIP)

O`DONNELL: So, the regulations are bad president told his regulations are bad believing followers today that he was going to use regulations to take a drug off the market that the FDA had already taken off the market thanks to regulations.

Joining us now, Ron Klain, former chief of staff to Vice Presidents Joe Biden and Al Gore, and a former senior aide to President Obama. Also with us, Daniel Dale, Washington correspondent for "The Toronto Star", and Peter Wehner, senior fellow at the Ethics and Public Policy Center. He worked in the last three Republican administrations.

And, Ron, the knuckleheads are running the show. This is not something I`ve ever heard a previous Democratic speaker of the House look back at Washington and say about the people he left behind.

RON KLAIN, FORMER SENIOR AIDE TO PRESIDENT OBAMA: Yes, because it hasn`t been true before. I mean, like watching Paul Ryan today, and Republican leaders say they want Donald Trump not involved in tax reform is like watching Shep and Curly saying Moe isn`t qualified to be a stooge. I mean, it is just craziness. And it`s not a surprise, though, Lawrence.

You have to remember, we all remember that it was Donald Trump who really singlehandedly botched the Republican effort to repeal Obamacare. He did the wrong things when the bill was in the House. He then said the House bill was too mean. He threatened Republican senators.

You know, he was a one-man wrecking crew on that legislation. So, it`s no surprise that Paul Ryan wants him in Asia if not some place further away when the House does the work on this bill.

O`DONNELL: Peter, compare that to President George W. Bush pushing his tax cut bills that he was obviously a very important force in.

PETER WEHNER, SENIOR FELLOW, ETHICS & PUBLIC POLICY CENTER: Yes. Well, President Bush got the tax cut bill through, he got education through, he got Medicare prescription drugs through, he got a lot through. And other presidents have gotten a lot through.

The anomaly here is Donald Trump and the Trump presidency and the Trump administration because they are utterly inept. But the really focal point of the ineptness is Donald Trump himself. He doesn`t know anything. And he doesn`t care that he doesn`t know anything.

It is an extraordinary thing. You know, your old boss Daniel Patrick Moynihan 1981 wrote a piece in "The New York Times" where he said the GOP has of a sudden become the party of ideas. Thirty-five years later, they have become in large part the party of anti-ideas.

There is a deep contempt for policy and for ideas and for the intellectual side and governance side of politics that explains how Donald Trump got the nomination and now we`re seeing it unfold in real-time and there`s a cost to it.

O`DONNELL: And, Peter, as you recall, Senator Moynihan was opposed to most of the Republican ideas and what he was talking about was the failure of his own party at that time to meet the new Republican ideas of Reaganism with a new set of -- new kind of energetic approach by Democrats.

Daniel, how does it land in this White House that when you have a former speaker of the House, Republican speaker of the House saying the knuckleheads are running the show? Is that just another -- land like another tweet to them? Because in any previous White House, it would be the most devastating comment made that year or that entire presidential term.

DANIEL DALE, WASHINGTON CORRESPONDENT, THE TORONTO STAR: I think we know from what we have seen of Trump in public that he himself will be raging about this. He`ll be raging about former Senator Tom Coburn saying in "The New York Times" today that he has a personality disorder. We know that this bothers him personally.

I think to the White House, though, it`s easy to dismiss this as the, you know, the grumbling of the establishment that he is supplanting. So, it`s easy to spin it publicly and I think they`re used to everyone yelling at them and I think privately, a lot of them know that a lot of criticisms of the president and of the people he`s put around him are true. But, you know, they chosen to be there themselves and trying to power through.

O`DONNELL: We have a poll about the knuckleheads running the show. This is the YouGov poll that says 87 percent -- put that up there -- 87 percent say that Donald Trump says things that are untrue. That`s if you add up everyone there who says all the time, often, sometimes.

On Republicans, it`s actually 63 percent. So, Ron, you got a majority of Republicans who answer the question, how often does Donald Trump say things that are untrue? You know, this very big group there, 47 percent saying sometimes, 11 percent saying often.

They just accept that apparently.

KLAIN: I think they accept it. I think obviously Trump`s core supporters accept it but, Lawrence, we are starting to see first time really in an unprecedented thing since Watergate, members of the president`s own party, Bob Corker, Jeff Flake, John McCain, say that this man is just unqualified, unfit, unable to be president.

And, you know, we kind of let it slide by last week as if it`s normal to have senior members of the president`s own party in the Senate say that the president of the United States is unfit to be president. It`s not normal. It`s extraordinary and Trump`s incompetence is taking the toll and even some Republicans now are speaking out.

O`DONNELL: And, Peter, I want to go back to the point you made about what Senator Moynihan said about Ronald Reagan. It`s -- Barack Obama echoed it, actually, in his first presidential campaign. There came a moment where Barack Obama talked about Reagan actually having the ideas that kind of dominated in the 1980s.

WEHNER: That`s right.

O`DONNELL: In his era.

And when we look at this era, we are seeing the one idea that seems to be clear enough to describe anyway is tax cuts. But at the same time, there`s a massive violation of an old Republican principle of not increasing the debt, not increasing the deficit. Which some Republicans have been willing to do under some circumstances. But this is the most flagrant version of it yet.

And so, I wonder how people will describe this period in Republicanism when it comes to ideas.

WEHNER: Oh, it`s going to be devastating. It`s going to be that the cupboard was empty.

As I said, it`s possible that they don`t have the ideas. There seems to be within some parts of the Republican Party certainly in the person of Donald Trump a kind of contempt for ideas. They view politics as theatrics, not politics is governance and there`s almost a prideful disdain of it.

We saw during the campaign, you know, during these debates, Donald Trump couldn`t string together three coherent policy sentences and this was not a state secret that he didn`t know these things. It was advertised and people saw and didn`t care about it. There was something else about him, his personality and this theatrical side of politics, the grievance side of politics that attracted people.

Donald Trump is a serious problem. He`s president, but the fact that so many Republicans are a Republican base were attracted to him and are staying committed to him despite the fact that we know what he is like is an even deeper problem in some respects.

O`DONNELL: Ron Klain, Daniel Dale, Peter Wehner, thank you all for joining us tonight. I really appreciate it.

WEHNER: Thanks.

KLAIN: Thank you.

O`DONNELL: Coming up, Mitch McConnell strikes back. We have never seen this kind of warfare inside a political party.

And today, Republicans continued their forced march toward tax cuts which is sacrificing one of what they claim to be, their most important principles.

(COMMERCIAL BREAK)

O`DONNELL: There is open warfare inside the Republican Party and so, of course, the president tweeted this morning: Do not underestimate the unity within the Republican Party.

And it`s so much unity that he has to use upper case letters for every letter of the word unity.

He did that after waking up to a "Washington Post" front page lead story under the headline: Republicans target Bannon. The story said: allies of Senate Majority Leader Mitch McConnell declared open warfare on Wednesday against Steven K. Bannon, the former White House chief strategist and leader of an insurrection aimed at defeating mainstream Republican candidates in next year`s midterm elections.

We have never seen warfare like this inside a party. Anyone who tries to tell you that the Democrats have ever experienced anything this bad is simply wrong. And we have never seen anyone like Stephen Bannon trying to destroy a political party.

(BEGIN VIDEO CLIP)

STEPHEN BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST: Right now, it`s a season of war against a GOP establishment. So, all of you folks that are so concerned that you`re going to get primaried and defeated, you know, there`s time for mea culpa. You can come to a stick, a microphone and you can say, I am not going to vote for Mitch McConnell for majority leader.

(END VIDEO CLIP)

O`DONNELL: "The Washington Post" story tells us a super PAC aligned with McConnell revealed plans to attack Bannon personally as it works to protect GOP incumbents facing uphill primary fights. The effort reflects the growing concern of Republican lawmakers over the rise of anti-establishment forces and comes amid escalating frustrations over President Trump`s conduct which has prompted a handle of lawmakers to publicly criticize the president.

Senate Majority Leader McConnell`s former chief of staff, Josh Holmes, told "The Hill", in 2018, we ought to revisit this question and find out if these people are still happy to be associated with Bannon when you`re facing voters. I`d take one of the most successful majority leaders in history over a white supremacist any day.

Joining us now, Charlie Sykes, author of the new book, "How the Right Lost Its Mind", and an MSNBC contributor, and Ana Marie Cox, host of the podcast "With Friends Like These".

And, Ana, they have shown on the McConnell team that they intend to go after Trump personally. They are going to publicly label him a white supremacist and an anti-Semite based on information revealed by his wife in their divorce proceedings, that he opposed to his daughters going to a certain school in Los Angeles because he said there are too many Jews there. They`re going to make Steve Bannon personally the issue for Republicans who associate with him.

ANA MARIE COX, PODCAST HOST, "WITH FRIENDS LIKE THESE": I actually really appreciated you misspoke a tiny bit at the opening there. You said Trump. They`re going to old Trump personally responsible, and that would actually be the thing that might make a difference, right?

O`DONNELL: Yes.

COX: Right now, I mean, I`m not sure, like, going after Bannon, your average, you know, voter still probably doesn`t think of him as like a super power player. I mean, this is really -- this is inside baseball that`s erupted into an outside brawl, right? And I think that the sad thing is I`m not sure there`s winners here because even -- so you either have the reactionary Bannon people winning or the GOP running establishment candidates whose biggest contribution of anything about Trump is to say some sort of critical things about him. And not actually do anything.

I mean, I guess the real, you know, threat here is Democrats actually winning once these -- I`m trying to think of a nice way to describe some of the candidates that --

O`DONNELL: You can say knuckleheads. You can say knuckleheads because John Boehner has authorized you to say that about these Republicans.

COX: Knuckleheads is a good, good word for them. They`re conspiracy theorists knuckleheads and the problem is, though, that because we live in such a gerrymandered country right now, these knuckleheads could win, even if -- even if they`re knuckleheads. So, I`m really concerned here. I unfortunately don`t see any winners at all in this situation except for I guess maybe some knuckleheads.

O`DONNELL: Well, Charlie --

COX: I`d be very interested to hear what Charlie has to say.

O`DONNELL: Charlie, the Democrats are happy to see just how much money and resources the Republicans will have to spend in their primary elections before they stagger into the general election against a Democrat for the Senate race.

CHARLIE SYKES, AUTHOR, "HOW THE RIGHT LOST ITS MIND": Yes. Well, they are -- what a bizarre threesome when you think about it. This triangulation that`s going to go on.

Look, Steve Bannon is a -- you know, is a nihilistic troll whose only goal appears to be to tear down the Republican establishment. But I think Donald Trump sees him as his enforcer.

So I think the dynamic that`s created right here and we saw this during the campaign, is that Donald Trump always has some muscle off at the side. You know, somebody who is, you know, the flying monkeys and trolls who are going go after you if you do not support him.

And I think Lindsey Graham actually did capture the dynamics of this when he said, look, this is why we have to pass this tax bill, this is why we have to pass this budget because if we don`t pass this tax budget, the Bannonites are coming for us. It`s not -- we`re not talking about just the public policy or the Democrats, this now becomes the insurance policy against the Bannonites bringing back crazy town to the Republican Party.

O`DONNELL: Ana, here`s something that no candidate for the Senate wants -- a staff person associated with his campaign or her campaign who is more famous than the candidate. And that`s where Steve Bannon stands tonight in relation to all of the candidates he wants to support.

COX: Yes. I mean, yes. He is a nihilist. I don`t understand like what his ultimate goal is. I mean, I guess he has a weird history with the rise of some kind of nationalism. I mean, he wouldn`t call it white nationalism but he certainly believes in a vision of America that is not the democratic one we have today. I don`t know if that`s actually possible.

I am concerned because as Charlie said, I mean, this is a win-win for him if he gets to play enforcer because he either elects these people who are going to enact these what I think are objectively bad policies or he frightens the good Republicans into enacting what they seem to admit are not great policy. They`re only enacting them not to get primaried, right?

That`s not much of an argument for tax reform really, or health care reform or any other kind of reform. And again I just am concerned that, yes, they`re going to be spending money on the primaries and yes they might get some real knuckleheads in there, but I`m concerned that Democrats won`t be able to do anything with that opportunity because of, you know, voter suppression, gerrymandering, all the kinds of dirty trick that is we have in the modern world of politics. I`m hopeful but, you know, not --

(CROSSTALK)

SYKES: Senate elections.

O`DONNELL: Go ahead, Charlie.

SYKES: That won`t affect Senate elections because those, of course, can`t be gerrymandered.

COX: Yes.

SYKES: But I do think it`s an interesting strategy and understand, I mean, McConnell`s folks are very, very frustrated about Bannon and what Bannon is doing and they feel they have to push back. On the other hand, you know, try to imagine the Republican primary electorate that, you know, trying to convince them that Bannon is not acceptable but Trump is acceptable? I mean, this is an electorate that is OK with Donald Trump. They were OK with his promotion of Steve Bannon.

So, I guess I`m skeptical of how effective that will be. By the way, a race to watch, this will be in the home state of Wisconsin where Steve Bannon has decided to parachute in. He has endorsed the Republican candidate Kevin Nicholson in this particular race, and I`m guessing his support of one of the candidates will be an issue in this race and I`m not sure it will be an asset here in Wisconsin for Nicholson.

O`DONNELL: Ana, I know you were tweeting your responses to the president`s speech today about opioids and I just wanted to give you a chance here to respond on -- to what the president had to say today.

COX: Yes. Well, you know, as someone who`s in recovery, you know, there`s nothing quite so wonderful as being lectured about just saying no by someone who`s boastfully a teetotaler, of course. Not that he would be better if he had some experience with drugs or alcohol.

My favorite part, though, was when he said this was his idea. It was his idea that maybe we did a bunch of advertising about, you know, how terrible drugs are, then maybe kids would never try them. Abstinence is not a policy that is worked as something to keep kids away from sex and it`s not going to keep kids away from drugs.

It actually sort of harkens back not just to the policies of an era that largely is considered disaster, the war on drugs cost a lot of money and put a lot of people in jail, but is actually kind of retrograded. Does a lot of harm to put -- to put our fight in the opioid epidemic in terms of a moral contest, in terms of some things are good and some things are bad.

I get angry a lot about what this president has to say. I think a lot of the policies or lack of policy that he talks about endanger people`s well- being and health, and I thought his health care bill, you know, would definitely kill people.

This is yet another example of where his kind of cavalier and callous attitude towards whether the real facts on the ground -- I mean, there`s going to get people killed. There are already, you know, thousands of Americans dying, 175 a day, as he said and telling these people that are big plan, what he called the biggest most important part of the -- of the plan is a really big, really huge, really great advertising campaign I think speaks to -- I mean, you know, I`m in recovery. So, I want to think things are going to get better. So, I`m just going to -- I`m going to hold on to hope that there are people out there that know better than he does and that`s where the solution will come from because it has to come from somewhere.

LAWRENCE O`DONNELL, MSNBC ANCHOR: Yes. And the war on drugs is still putting a lot of people in jail.

COX: Yeah.

O`DONNELL: We`re going to talk about that later in the program. Ana Marie Cox, Charlie Sykes, thank you both for joining us tonight.

CHARLIE SYKLES, MSNBC CONTRIBUTOR: Thank you.

COX: Thank You.

O`DONNELL: Coming up, it`s been a full week now since John Kelly went into a Whitehouse Press Briefing room and told a completely untrue story about Congresswoman Frederica Wilson and he still has not apologized

(COMMERCIAL BREAK)

O`DONNELL: Congressional Republicans continued to show remarkable weakness in their forced march toward tax cuts today. The budget resolution that paves the way for those tax cuts passed the House of Representatives in a remarkably close vote of 216-212 with 20 Republicans voting against it and all Democrats voting against it. Tax cuts are supposed to be the one thing that all Republicans, always agree on. They all vote for it but not anymore.

Support for the Republican Tax Cuts in the House is even weaker than that vote indicated because Republicans from states with higher taxes in those states are opposed to a Republican proposal to eliminate the Federal Deductibility of state and local taxes. And that`s why House Republicans from New York State, New Jersey and Pennsylvania opposed the resolution. But all 14 of the Republican members of Congress from California voted for the resolution today which doesn`t actually cut the taxes.

It just sets up the parliamentary procedure for cutting the taxes. Now, all of those 14 California votes could be lost if the tax bill does eliminate state and local tax deductibility which is now the single most controversial aspect of the Republican Tax Bill. And that would be a tax increase in all of those states. Every Republican who voted for the budget resolution today voted against his or her principles which is no surprise now that the Republican Party has become the Trump Party. And principles have absolutely no meaning.

They don`t even pretend to have any meaning to Republicans anymore. The principle that they all violated today was fiscal conservatism. They all voted to dramatically increase the deficit and the national debt. Something they all ran against.

And no one`s been noisier about that in the past than Congressman Mark Meadows. He claims to be a principled anti-deficit conservative, one of the most conservative members of the house. He voted for this resolution. Here he is this morning confessing to violating his principles.

(BEGIN VIDEO CLIP)

MARK MEADOWS, UNITED STATES CONGRESSMAN: You`re right. the deficit continues to increase and certainly as we look at tax reform, the $1.5 trillion that`s in the Senate Budget that will pass later today in the House, you know, it does not shed a good light in terms of the deficit.

(COMMERCIAL BREAK)

O`DONNELL: Today Paul Ryan proved he has no problem telling the big lie in order to pass tax cuts. Here he is claiming that the tax cut that will explode the deficit and dramatically increase the national debt is fiscally responsible.

(BEGIN VIDEO CLIP)

PAUL RYAN, SPEAKER OF THE UNITED STATES HOUSE OF REPRESENTATIVES: Today, we passed a budget that is fiscally responsible. it strengthens our national defense and really good for taxpayers. This budget we passed in the house brings us one step closer to historic tax reform.

(END VIDEO CLIP)

O`DONNELL: Joining us now, Stan Collender, contributor of forest magazine and served on the staffs of both House and Senate Budget Committees. Also with us Josh Barro, Senior Editor for Business Insider and a MSNBC Contributor and Stan, we have come a long way in our politics that a giant tax cut that explodes the deficit and dramatically increases the national debt can be called by someone like Paul Ryan fiscally responsible.

STAN COLLENDER, MSNBC CONTRIBUTOR: Well, in one sense it`s just a continuation of tax cuts that we have under the Reagan Administration, under the Bush Administration. Remember, Reagan had to sign 10 tax increases afterwards to get the deficit back down. This is not just a biggest tax cut in history, it`s going to be the biggest increase in the deficit and debt that we have seen from any president legislated increase probably in history. I think we are talking about permanent increase, permanent annual deficit of about a trillion dollars.

O`DONNELL: Josh, I was surprised at how close that vote was in the house today and it could have been worse, obviously, if the California delegation didn`t all just hold hands and say, we will vote to allow this to go forward but we know that the California delegation is opposed to the elimination of state and local deductibility.

JOSH BARRO, MSNBC CONTRIBUTIOR: It was close although if you watched the vote happening what you saw was a number of members, especially from the New York area, who are waiting to see make sure that there were enough votes to pass the budget. And then they went and voted no and clear that leadership gave permission to a number of people to vote against the budget to go back and to New York and New Jersey and talk about how they opposed eliminating the state and local tax deduction and never going to be a lot more votes than you needed to pass the budget. That`s the easy part of this.

They got it done with health care several months ago. The budget resolution isn`t a law. It`s just a framework that allows Congress to go pass a later that would have the tax cuts. They`re going to have that fight over the state and local tax deduction and over dozens, hundreds of little provisions that are going to have opposition either from communities like people who pay a lot of state and local taxes in places like New York, businesses with particular interests about thing that is will get changed in the corporate income tax. So I think like with health care we see this is the easiest part and then once they coming out with a bill November 1st that actually has the detail on what their going to do it`s going to become a lot harder to get enough people to agree to pass something.

O`DONNELL: Let`s listen to one Republican, Leonard Lance, of New Jersey, who voted no.

(BEGIN VIDEO CLIP)

LEONARD LANCE, United States Congressman: New Jersey sends more funds here per capita and gets less back than any state in the nation. And it`s very important to the people of new jersey that we continue to have the ability to deduct state and local taxes.

(END VIDEO CLIP)

O`DONNELL: Stan, do you think this bill is in trouble? I mean, technically, they have enough time to get it done. But I am surprised at how much trouble they have had and of course they have got the President tweeting out his opposition to certain elements of the bill whenever he feels like it.

COLLENDER: Yeah. Josh is right. I mean, the real problem is not going to be the budget or never was going to be and in addition, we have the 401K problem. Where the President says he`s against doing anything that would hurt 401K. And Chairman Brady the Ways and Means Committee says it`s still a live option. And every time one of these provisions goes down, every time they realize the leadership realizes they can`t go forward with them the bill gets more and more costly and the Freedom Caucus which is a bunch of hypocrites on this, at some point the freedom caucus throws up the hands and say we cannot agree to a deficit that`s this large.

O`DONNELL: Josh, I`m not so sure about the Freedom Caucus. What they went along with today was a pretty stunning choice

BARRO: Right. But it`s not just about what they`re willing to agree to. It`s about what this says. This sets out the framework that governs what kind of law they can pass in the coming months. And so it says they can have a tax cut to grow the deficit about a trillion and a half dollars over a decade.

But they wanted do about $5 trillion worth of tax when you add up the things they want to do on corporate tax, small businesses that are taxed through the individual tax code, individual tax cuts, getting rid of the death or estate tax. So the way they have designed it to do that is $5 trillion or so in tax cuts and their going to have $3.5 trillion or so in tax increases with thing like getting rid of the state and local tax deduction, getting rid of personal exemptions to allow every taxpayer to deduct $4,050 simply for living and breathing.

If those provisions become politically impossible to do, you can`t those pay forms then you have to lose offsetting tax cuts. So I think they`ll pass something in the end and you could do something that was just a small or smallish across the board tax cut much less ambitious than the tax reform they proposed to do. And you could do that without raising taxes on anybody.

That`s the approach of the Bush Tax Cut in 2001. George W. Bush sold it as a tax cut for everyone that pays income taxes which was true. So you could take that approach. It would have to be smaller. You couldn`t do stuff like they`re saying their going to do

You couldn`t cut the corporate tax rate to 20. You could repeal the estate tax. So I think they could end up there and not just about them having pangs of conscious about how much they grow the deficit. They made rules for themselves that actually be difficult to follow in the coming months.

O`DONNELL: But Donald Trump promised the biggest tax increase in history. So I don`t know if he`s going to follow the Josh Barro formula.

BARRO: Tax cut.

O`DONNELL: Stan Collender and JOSH BARRO, thank you both for joining us, really appreciate it.

BARRO: Thank you

COLLENDER: Thank you.

O`DONNELL: Coming up, Republicans have a new attitude toward the war on drugs now that they see how many white Republicans have addiction problems.

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O`DONNELL: A Republican President launched the war on drugs in 1971. There is no war that America has lost more spectacularly than the war on drugs, America`s most expensive war. Every Republican President since Nixon has continued the war on drugs which they saw as a war to be waged on both the sellers of drugs and very much the consumers of drugs. Indeed the consumers of drugs have suffered the most in the war on drugs.

Democratic Presidents continued the war on drugs. But with rhetoric that was never as harsh about the consumers of the drugs as the Republican rhetoric. The only sane response to drug addiction is treatment not arrest. And only now after 46 years of the failed Republican launched war on drugs have Republicans finally for the first time ever, shifted their focus to treatment now that they`ve discovered that so many of their white Republican voters have deadly addiction problems.

(BEGIN VIDEO CLIP)

DONALD TRUMP, UNITED STATES PRESIDENT: This epidemic is a national health emergency unlike many of us, we`ve seen -- and what we`ve seen in our lifetimes, nobody has seen anything like what`s going on now. As Americans, we cannot allow this to continue. It is time to liberate our communities from this scourge of drug addiction.

Never been this way. We can be the generation that ends the opioid epidemic. We can do it.

(END VIDEO CLIP)

O`DONNELL: Joining us now is Ekow Yankah, a Professor of Law at Cardozo School of Law. And Professor, you`ve written about this, and I want to get your reaction to the President saying, we`ve never seen anything like it.

EKOW YANKAH, MSNBC CONTRIBUTOR: Yeah, I mean, it`s bittersweet, right? As you pointed out, it took not just a generation, but two generations of lost bodies. And not accidentally, lost brown bodies before we decided that wow, this is something we`ve never seen anything like this. It`s to ignore that we have very much seen something like this before.

O`DONNELL: And the stop and frisk movement in law enforcement was all about seeing if you could find any kind of seed or crumb of illicit drug in someone`s pocket. That would be arrest. And now you`re seeing in these white communities all over the country the police department is saying if you`re having a problem with this come to us, and we absolutely will not arrest you. We will help you get treatment.

YANKAH: Well let`s be very clear the war on drugs was a war on minorities. It`s a war on in particular young black men. And it was a war that was motivated by the panic of keeping the drugs out of neighborhood.

It was not a war about saving those who were addicted to drugs. Whatever they did in those neighborhoods could be cordoned off of militarize policing, ones who didn`t cross into our neighborhoods. And now people look and say, wait a minute. These are real people with souls. And I don`t know why I didn`t see that before many.

O`DONNELL: Do you see any hope of this new sympathy for the white victims of addiction, extending beyond just the white victims.

YANKAH: Actually, I have to admit, I`m startled and a bit of whiplash, what we heard from the President today was the combination of as you say, sympathy and real humanity, humanizing people. He spoke about his brother and his loss to alcohol addiction. So that is a wonderful step forward.

But then all the policies he suggested to the extent he suggested policies were a replay from generations past. For me it`s the worst of both worlds, right? It`s a loss of real humanity across the board. The solutions seemed remarkably antiquated. I really think it`s the worst of both worlds in a way.

O`DONNELL: We`re going to have to leave it there for tonight. Ekow Yankah, thank you for joining us tonight.

YANKAH: Thank you for having me.

O`DONNELL: We appreciate it. Tonight`s Last Word is next.

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END

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