Guests: Ezra Klein, Rep. Alan Grayson, Arianna Huffington, Robert Greenstein, Rep.
James Clyburn
RACHEL MADDOW, “TRMS” HOST: Good evening, Lawrence.
LAWRENCE O‘DONNELL, HOST: Rachel, I‘m going to be broadcasting from a different place that week, but I‘m not going to tell you where just yet. The only hint is it‘s going to be much warmer than here.
MADDOW: Now, if you keep threatening me, I will give David Bahati your phone number.
O‘DONNELL: All right. Thanks, Rachel.
MADDOW: Thank you.
O‘DONNELL: Some Democrats‘ pain from President Obama‘s tax deal with Republicans has not eased. Those Democrats and many pundits remain confused about why the president had to compromise on anything in negotiation with Republicans on taxes. Needless to say, none of them have ever actually been in negotiation with Republicans on taxes.
(BEGIN VIDEOTAPE)
(MUSIC)
JOE SCARBOROUGH, MSNBC HOST: I‘m stunned by his performance.
MIKA BRZEZINSKI, MSNBC HOST: It‘s our man.
UNIDENTIFEID MALE: Making a deal that some feel was just half-assed -
excuse my French.
CHUCK TODD, MSNBC HOST: Liberal Democrats upset with the president.
O‘DONNELL: President Obama is the man who kicked the hornet‘s nest.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think it is inaccurate to characterize Democrats writ large as feeling, quote-unquote, “betrayed.”
O‘DONNELL: The president refuses to apologize for playing a practical game on compromise on extending the Bush tax rates.
OBAMA: I think the more they look at it, the more of them are going to say this makes sense.
O‘DONNELL: The president‘s prediction is right, of course. But some of them still have hurt feelings.
ANDREA MITCHELL, MSNBC HOST: Tell us what the mood is of the caucus right now?
REP. BARNEY FRANK (D), MASSACHUSETTS: Disappointment.
REP. JAN SCHAKOWSKY (D), ILLINOIS: He got irritated, but I did feel a bit like I was the target of that.
CHRIS MATTHEWS, MSNBC HOST: Is this just grumbling?
O‘DONNELL: Some Democrats in the House continue to insist that the president could have, should have continued to fight.
UNIDENTIFIED FEMALE: Frankly, I have no idea why we would concede to this.
UNIDENTIFIED MALE: They don‘t want any concessions made by the president whatsoever.
FRANK: No, I won‘t vote for it. I don‘t feel that I should be coerced.
SCHAKOWSKY: We‘re going to work toward making some changes.
SEN. BERNIE SANDERS (I), VERMONT: It‘s totally absurd.
MATTHEWS: You blew the election, and you guys are acting like you get the moral high ground.
O‘DONNELL: Supported by a “New York Times” editorial, the White House insists this was the smart thing, the right thing, the only thing to prevent taxes from going up on the middle class on January 1st.
DAVID AXELROD, WHITE HOUSE SENIOR ADVISOR: We would just prolong the fight.
UNIDENTIFIED MALE: Nobody in Congress, including the angry Democrats, wants to be held responsible for tax rates going up.
O‘DONNELL: There are signs that Democrats see the reality that the Obama deal is going to become law.
MITCHELL: Is it going to pass?
FRANK: I‘m afraid that it is. Yes.
MITCHELL: Barney Frank just said he thinks it will pass.
FRANK: I‘m afraid that it is. Yes.
SEN. HARRY REID (D-NV), MAJORITY LEADER: I‘m not going to talk about how I‘m going to change the bill out here.
O‘DONNELL: But what about the angry base?
MATTHEWS: Let‘s look at the talk of a primary challenge to President Obama.
TODD: The president is equally frustrated with members of his own party.
EZRA KLEIN, MSNBC CONTRIBUTOR: They should deal with their base with a bit more grace.
(END VIDEOTAPE)
O‘DONNELL: Good evening from New York. I‘m Lawrence O‘Donnell.
As part of the White House‘s push back against disappointed Democratic lawmakers and some of its angry liberal base, National Economic Council director, Larry Summers, warned that failure to pass President Obama‘s tax cut compromise would, quote, “significantly increase the risk of a double-dip recession.”
President Obama predicted that members of his own party would eventually line up behind the compromise.
(BEGIN VIDEO CLIP)
OBAMA: I think it is inaccurate to characterize Democrats writ large as feeling, quote-unquote, “betrayed.” I think Democrats are looking at this bill, and we‘ve already had a whole bunch of them who‘ve said this makes sense, and I think the more they look at it, the more of them are going to say this makes sense.
(END VIDEO CLIP)
O‘DONNELL: Senate Majority Leader Harry Reid said he hopes to start floor debate on the tax cut compromise in the next day or two.
(BEGIN VIDEO CLIP)
REID: I‘m not going to talk about how I‘m going to change the bill out here, there are some things that I think would make the bill much better, and I‘m going to work on those. Telling everybody here what I would like to do would be a good way to doom whatever I want to do.
(END VIDEO CLIP)
O‘DONNELL: Joining me now are: Congressman Alan Grayson; Arianna Huffington, co-founder and editor-in-chief of “The Huffington Post”; Ezra Klein, blogger for “The Washington Post”; and Robert Greenstein, founder and executive director of the Center on Budget and Policy Priorities, and this year‘s winner of the Daniel Patrick Moynihan prize from the American Academy of Political and Social Science.
I want to begin, everyone, with Bob Greenstein‘s statement today about the deal.
Bob, you wrote, “The deal between President Obama and Republican leaders on tax cuts and unemployment insurance has two substantial positive aspects. It‘s surprisingly strong protections for low and middle income working families. And it‘s stronger-than-expected boost for the economy and jobs. Congress should approve this package. It‘s rejection will likely lead to a more problematic package that does less for middle and low income workers and less for the economy.”
Now, Bob, you may not be as familiar to our audience as some of the rest of our panel, but no one—no one—in Washington has worked on these issues longer than you have. No one has worked harder, representing the interests of the people at the lower end of the tax brackets, and below the bottom tax bracket, the poverty population in this country.
There‘s been much concern about how this agreement is a giveaway to the rich at the expense of the middle class. There‘s been virtually no discussion of the poor in this agreement. There are other elements of the agreement that do affect the poor.
How does that inform your decision about the total assessment of the bill?
ROBERT GREENSTEIN, CENTER ON BUDGET AND POLICY PRIORITIES: Well, Lawrence, the difficult part in assessing this is, is it does have appalling giveaways for the rich that the Republicans insisted on. But it also has very terrific provisions, important provisions, for middle income people, unemployed workers and low income families and children.
It extends for 13 months, the additional weeks of unemployment benefits. No one expects the Republican House that will take office in January to extend those benefits again. This was the last shot. Most people didn‘t think the White House would get more than three or six months. They got 13 months of those additional benefits which are critical.
And in 2009, President Obama secured in the Recovery Act a series of long sought by people who work on behalf of the working poor, long sought tax credit improvements that lift millions of children out of poverty or make them less poor. Those were scheduled to expire at the end of the month. The Republicans were adamantly opposed to them. Those were all extended for two years in the bill.
Here‘s the conundrum: what the Republicans said to the White House is, we insist on this really outrageous provision relating to the estate tax, which is a huge giveaway in the package. The White House originally said, no. The Republicans said fine. We‘ll leave the estate tax provision out, but then all of your provisions for millions of low income working families and children die as well.
So, we got $25 billion of really appalling giveaways for the top one quarter of one percent of the estates in the country. And in return for that $25 billion, there‘s $40 billion in extremely important income support through tax credits for low and moderate income working families.
So, how do you assess that? For me, the bottom line is the following:
I think that if the bill is defeated, a new negotiation will take place with the Congress that comes in in January and will end up with a much less good deal. All the odious parts will remain, and the positive parts on unemployment and for the working poor will get watered-down or disappear.
So, much as I really detest parts of the package, I think the best thing to do is to approve it.
O‘DONNELL: Congressman Grayson, you signed Congressman Welch‘s letter to Speaker Pelosi. We had Congressman Welch on the show last night.
I want to read from that letter quickly. It says, “We oppose acceding to Republican demands to extend the Bush tax cuts to millionaires and billionaires for two reasons.” You then give your two reasons and the speechmaking section, it‘s irresponsible. You say it‘s grossly unfair.
You then go on to say at the end, we should support extending tax cuts in full to 98 percent of American taxpayers as President Obama initially opposed. He should not back down nor should we.
The letter never says—it‘s signed by you and about 40 or 50 other members—it never says you‘ll vote against the bill. It never says anything specific about what you‘ll actually do.
Will you, Congressman Grayson, vote against the bill, given what you just heard from Bob Greenstein?
REP. ALAN GRAYSON (D), FLORIDA: Yes, I will, and I‘ll tell you why.
As the president very aptly put it, the right wing has held this country
hostage, and held the middle class hostage by saying they would not extend
much needed tax cuts for the middle class and the rich, unless we caved in
and I use that term specifically “caved in”—and gave them what they wanted considering tax breaks for huge multinational corporations and also for the rich.
There‘s been a tremendous amount of debate regarding the tax cuts for the rich. If simply look, as I did tonight on the House floor, at the nine years before we had the tax cuts for the rich, and the nine years since we had the tax cuts for the rich, you‘ll realize what a pernicious effect they‘ve had on the economy. But in addition to that, we have a whole new $150 billion tax break that‘s never even floated before, which was slipped into this deal at the last minute without discussing with anybody—and I mean anybody—among the Democrats, the House and the Senate.
I checked on the House and I can tell you, this wasn‘t discussed with anybody. And it applies only to large corporations. They‘re going to let large corporations have a write-off for everything they call investment next year. And they‘re going to reduce the corporate income tax to the tune of—this is White House‘s figures -- $150 billion next year.
Now, I looked last year to see what the revenue was from the corporate income tax and found that last year, the revenue from the corporate income tax was only $138 billion. So, they are giving a 100 percent tax cut to large corporations only. And I mean large corporations only because small corporations already get to write off $250,000 of their investments, but no more than that.
So, taking this tax cut that was meant, this tax benefit that was meant for small corporations and they‘re applying it to Microsoft, they‘re applying it to G.E., they‘re applying it to huge multinational corporations to cut their taxes to zero next year, because some people in the White House evidently think the real problem with the U.S. economy today is that corporations aren‘t make enough money.
O‘DONNELL: Congressman, if the—if you were to succeed at this and kill this bill, all tax rates would increase on January 1st. Do you know which bracket would actually be hit with the largest percentage increase?
GRAYSON: Yes, the people who have dividend income.
O‘DONNELL: Wrong, Congressman. Stop there, it‘s the bottom tax bracket. Not the top tax bracket. The bottom tax bracket would go from 10 percent to 15 percent. That is a 50 percent increase in the bottom income tax bracket. The one—
GRAYSON: I‘m sorry, but—
O‘DONNELL: -- that none of you Democrats ever talk about. You are wrong, sir.
GRAYSON: No, let me respond if I may.
O‘DONNELL: In dollar terms, the money is at the top end, but in percentage terms, the question I asked is tell me—
GRAYSON: OK.
O‘DONNELL: -- when you‘re out of office in January and watching this from the sidelines, and the Republicans control the House of Representatives, I want you to tell me what you would say to Floridians in your district who are now going to be represented by a Republican, tell me what you‘d say to them who are in the 10 percent bracket now, the lowest bracket, that their income tax rate goes up 50 percent, to 15 percent on the first week in that first paycheck they get in January. Tell me what you would say to them about why you allowed that to happen.
GRAYSON: I would say, your facts are wrong. The dividend rate goes from 15 percent to 39.6 percent. That‘s more than doubling. That‘s more than a 50 percent increase. So, let‘s get our facts straight before we ask a question.
O‘DONNELL: We‘re talking about—I‘m talking about income tax brackets.
Now, you address for me the justification you would give to your constituents in the lowest income tax bracket of why their income taxes were allowed to go up by 50 percent in the first week of January. Tell me what you‘d say to them.
GRAYSON: I don‘t think that would happen. But I think you‘re missing the point.
O‘DONNELL: It will happen if you get your way. Stop—be an adult about this, Congressman. If you get you way—
GRAYSON: Oh, please, let‘s not insult each other with that kind of language. This is supposed to be the intelligent network, OK?
O‘DONNELL: If you get your way, the taxes go up.
GRAYSON: No, I have supported a middle class and working class tax cut from day one. So, no, you can‘t blame me for this. You can blame the stubborn Republicans for it for, as the president said, holding this country hostage. You certainly can‘t blame Alan Grayson and by no means should you ask me a question like that based upon a false premise and demand that I answer it.
O‘DONNELL: The correct premise is that in the income tax brackets, the lowest bracket, which no Democrat ever discusses any more, goes up by 50 percent. And that is something that people are willing to let happen on your side of the aisle in order to make an argument point against the irresponsible Republicans.
Congressman, what you‘ve discovered in the Congress is Democrats bear the responsibility of governing with the tax code in a responsible way. And Republicans have no sense of responsibility for it.
Arianna Huffington, I want to bring you in. Some of your best friends used to be Republicans. You know better than any of us how obstinate, how absolutely irresponsible they are when it comes to the tax code. Is it worth risking what would happen with a Republican House of Representatives next year to allow this debate to go past January 31st, and allow those tax rates to increase, and then try to get a middle class tax cut?
ARIANNA HUFFINGTON, HUFFINGTONPOST.COM: Well, first of all, Lawrence, it didn‘t have to be this way. The president was outmaneuvered in checkers. You know, it is really not at all the way it could have been.
You remember before the election, John Boehner went on television and said he would be prepared to accept extending the tax cuts only for those earning $250,000 or below, rather than see them die. So, there, he blinked first.
And the White House and Congress had the opportunity at the time to go ahead and take that vote before the election. But they didn‘t do that, which they should have done. It‘s very clear now they should have done it.
And instead, for me the main problem with this deal—this deal is that it doesn‘t address the question of how do you create jobs? It doesn‘t address the fact that Larry Summers himself contradicting what he said today back in September. He has said that instead of extending all the tax cuts, we needed to have targeted investments that would help create jobs.
Today, he fearmongered. It reminded me of the fearmongering that was going on before the Iraq war, when we were told there were going to be mushroom clouds. It was the same fear of a double-dip depression or recession if we did not extend all tax cuts.
So, it‘s back to fearmongering. It‘s back to contradicting even things that the White House officials had said a few months ago, not even a few years ago, not even during the campaign. And it‘s a real lack of trust in what has happening, and we are not dealing with the fundamental problem, that we‘re simply extending the status quo. And the status quo has given us 27 million people out of work or underemployed. There‘s absolutely nothing in this bill that‘s going to cost us close to $900 billion that‘s doing anything to change that.
O‘DONNELL: Ezra Klein, quickly, Arianna‘s absolutely right that John Boehner was willing to make this compromise. It was Nancy Pelosi and the House of Representatives who made the decision to not go for the vote. Why didn‘t—as soon as Boehner said he was willing to make a compromise, publicly said he would vote for, you know, the Democratic version this bill if that was all he could vote for, why didn‘t Nancy Pelosi immediately put that vote in front of John Boehner?
KLEIN: There‘s not a great answer. Thirty-seven Democrats sort of threatening to defect on the vote, but also there were internal divisions in the White House, and the Senate Democrats began negotiating among themselves. They had the chance to get their initial ask very early on, but they simply left it alone. They didn‘t do what they began talking about in the temporary extension.
But, I think, quickly, before we go to break, I can‘t agree with Representative Grayson‘s perspective on the business tax cut. That tax cut isn‘t a secret. It‘s proposed by the Obama administration in September.
What it does is it takes investments—you usually get a deduction for that over time. And instead of giving it to them over 10 years, it gives it to them in one year. So, you‘re trying to pull investment forward from the future, into 2011. Over 10 years, it would cost $30 billion, not $150 billion. And it isn‘t a zeroing out of the corporate tax rate.
I take his point that, you can argue that corporations pay to it already, they have mountains of profits they‘re sitting on, and so, there are arguments about how effective it would. But it isn‘t—it isn‘t just a giveaway. It‘s an attempt to try to move investment from the future to here. And I think it does make some sense in the current situation when they have this level of profits they could spend if they wanted to.
O‘DONNELL: We will continue—
GRAYSON: Well, I‘d like to respond to that. Can I respond to that?
O‘DONNELL: Congressman, you will respond as soon as we come back. We will continue this discussion after the break.
GRAYSON: All right.
O‘DONNELL: And still to come, the vice president headed to the Hill today to win the minds, if not the hearts of House Democrats. How did he do? Congressman James Clyburn gives firsthand details in tonight‘s spotlight.
And it‘s a bird, it‘s a plane, it‘s a witch. No, it‘s just Christine O‘Donnell talking about the tax deal. What does it have in common with Pearl Harbor? Nothing, and that‘s why she gets tonight‘s “Rewrite.”
(COMMERCIAL BREAK)
O‘DONNELL: By a vote of 216 to 198, the House of Representatives tonight has passed their version of the DREAM Act. Eight Republicans joined Democrats, backing the bill that would provide a path to citizenship for children of illegal immigrants who are contributing to American society. In spite of the Congressional Budget Office saying it would cut 2 billion from the deficit, it still has to go to the Senate where Republicans say they will filibuster everything until they‘re done with the tax cut bill.
Congressman James Clyburn is ahead.
And later, Christine O‘Donnell has a new racket.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: To my Democratic friends, what I‘d suggest is, let‘s make sure that we understand this is a long game. This is not a short game. And to my Republican friends, I would suggest—I think this is a good agreement, because I know they‘re swallowing some things they don‘t like as well. And I‘m looking forward to seeing them on the field of competition over the next two years.
(END VIDEO CLIP)
O‘DONNELL: Joining me again are: Congressman Alan Grayson; Arianna Huffington, cofounder and editor-in-chief of “The Huffington Post”; Ezra Klein of “The Washington Post”; and Robert Greenstein, founder and executive director of the Center on Budget and Policy Priorities.
Congressman, you wanted to respond to what Ezra just said about the business taxes in this thing.
GRAYSON: Yes, what this bill does is it let‘s you deduct all the depreciation you would have for the next 19 years, going all the way out to 2030 on any investment that you make and do it next year. It‘s as if you bought house for $300,000 and got a $300,000 tax deduction in the year that you bought the house. And that‘s what the administration has done.
Now, it‘s the administration that says that this is a $150 billion giveaway. The way you get to $30 billion instead of $150 billion is to say that this money would be given out anyway over the next 19 years. But that‘s ridiculous. It‘s $150 billion next year.
It is the biggest corporate tax giveaway I‘ve ever seen in my entire life. And it‘s not just on the incremental investments they make, not the extra investments they make. It‘s on investments they would have made anyway.
In fact, in a material they gave to Congress, it isn‘t even limited to domestic investment. They would literally be paying people to build a plant in China, to take jobs out of the United States and put them in China.
KLEIN: I must respectfully disagree with you.
(CROSSTALK)
O‘DONNELL: Go quickly. And I want to get Bob Greenstein here.
KLEIN: But number one, I‘ll start (INAUDIBLE) he explain, number one, this is domestic, not foreign. I can‘t speak to the materials you got on this. But number two, this does get paid back. I don‘t believe you‘re suggesting, or maybe you are, that over the next—they are not—there‘s not a depreciation that‘s going to get ratcheted back, because what you‘re doing is moving an existing tax break into one year rather than over a period of time.
But one, I‘ll let Bob speak to this because he knows it better than anyone.
O‘DONNELL: Bob Greenstein, go ahead.
GREENSTEIN: You know, Lawrence, I‘m not sure any group in town has put out as many reports over the years attacking as many corporate giveaways as we have.
O‘DONNELL: That‘s correct.
GREENSTEIN: This isn‘t one of them. Congressman Grayson is misinformed, Ezra‘s right.
What this provision does is it accelerates into the next year or two tax deductions that corporations would have taken anyway in subsequent years. They get $150 billion in the next year or two, but they get $120 billion less. They pay $120 billion more in taxes than they otherwise would in the years after that.
Those are the official figures. They‘re not from the White House. I think they‘re from Congress‘ own official estimator on this.
That‘s not what‘s egregious in the package. What‘s egregious in the package is the Republican insistence on extending the tax cuts for people over a quarter of a million a year and further weakening the estate tax. And I think the bottom line, what I‘d like to see here is that we need to get the package through now. It will add about 1.5 million jobs, by the end of 2011. It should take about one full percentage point off the unemployment rate.
The real question is at the end of two years, do the high income tax breaks continue? And what we really need is for the president in 2012 to vow to veto any continuation of these tax—upper income tax breaks, take that to the American people and run on it in 2012.
O‘DONNELL: Arianna, assuming this bill goes through, and I see every sign that it will. There are small noises about it. I think Congressman Grayson will vote against it. A handful of Democrats will vote against it. But it‘s going to go in the House and Senate in some form, with minor refinements.
And we do get to the spot that Bob Greenstein just identified that is so crucial here, is when these expire again two years from now, as we will then be in a presidential election situation that this may have to be dealt with in a lame duck session then. It may be dealt with earlier in the year.
What do you think—looking forward, this is hard to do with Barack Obama—what do you think his approach to this will be during his own presidential reelection year?
HUFFINGTON: Well, first of all, Lawrence, I want to comment on the shrinking of our national debate. It‘s really sad when Bob Greenstein, somebody I admire a lot, is saying, that the most important thing, though, going forward is to not extend the tax cuts for the richest Americans beyond 2012. I mean, this is it? This is all we can hope for, right? That the president will actually veto them or promise to veto them after 2012?
So, we‘ve gone from making the deficit the most important thing to now making not extending the tax cuts beyond 2012 for the richest Americans the most important thing, and the debate about what‘s really happening in the country which is that we have this massive long term unemployment.
We‘re not even discussing the fact that those who have been unemployed for over 99 weeks are not getting anything more. We‘re not even discussing the fact that we‘re talking about unemployment benefits of $300 a week for people who have been unemployed for weeks on end without any prospect of being reemployed. We‘re not discussing the fact that we have millions of kids graduating from college not being able to get jobs.
That debate around jobs and job creation has really disappeared. And that, for me, is the saddest thing, and the highest priority for the president right now will be to bring that debate back into the center of the national awareness, no matter what happens to this deal.
O‘DONNELL: Congressman Grayson, Arianna is absolutely right about how much we‘ve narrowed the boundaries of possibility here, especially with what is now the looming Republican takeover of the House of Representatives. Having worked only in a Democratic House of Representatives, what do you imagine the workings of the Republican-controlled House of Representatives are going to look like next year?
GRAYSON: Well, they‘ll do what they always do, which is to try to enact selfish legislation that benefits only their benefactors, the greedy rich. That‘s what you‘re going to see, and bill after bill presented to the House of Representatives on the floor. But regarding this particular bill, before we move on from this, I have to tell you, you‘re going to see well more than a handful of people who are Democrats vote against this bill. I‘ve heard dozens upon dozens of Democrats talk about this bill in its current form in the caucus, and the number of Democrats who said they voted for it so far is four. That‘s four.
O‘DONNELL: Well, Congressman, what I have in mind at the moment, is how many Democrats over 100 said they were absolutely going to vote against any health care bill that did not have a public option in it, every single one of them who said they were going to do that reversed their decision, voted for it.
I think you—I don‘t know, you and I can guess about it. It could be as many as 40 or 50 who vote against it. But it won‘t matter. They‘ll pick up the Republican votes to do it.
We‘re going to come back to this as this story continues. I want to thank you all tonight.
Congressman Alan Grayson, Arianna Huffington, Ezra Klein and Robert Greenstein, thank you all very much for joining me tonight.
GRAYSON: Thank you.
GREENSTEIN: Thank you.
O‘DONNELL: Coming up: she stole the show at President Obama‘s town hall with her pointed comments. Now she‘s back with her take on the tax deal. How is the president‘s plan playing with voters? Velma Hart gets tonight‘s last world.
And he reminded us all how to imagine through his music and his words.
Tonight, we celebrate the life of John Lennon.
(COMMERCIAL BREAK)
O‘DONNELL: In a newly published “Rolling Stone” interview, an interview conducted 30 years and three days ago, John Lennon said “what they want is dead heroes, like Sid Vicious and James Dean. I‘m not interested in being a dead hero.”
Three days after that interview, exactly 30 years ago today, John Lennon was shot to death here in Manhattan by Mark David Chapman. In the cold winter air today, crowds gathered around the “Imagine” mosaic in Central Park‘s Strawberry Fields, near Lennon‘s last home, to celebrate his life and share his music.
John Lennon‘s life ended when he was only 40 years old.
(COMMERCIAL BREAK)
O‘DONNELL: In the Spotlight tonight, last night House Democrats met behind closed doors to discuss the tax deal President Obama struck with Republicans. According to “Politico,” those who spoke in favor of the plan were greeted with silence. Those who opposed received lusty ovations.”
Congressman Chris Van Hollen told colleagues “our guys got taken to the cleaners.” Van Hollen took issue with the 35 percent estate tax, which exempts the first five million dollars of inheritance.
(BEGIN VIDEO CLIP)
REP. CHRIS VAN HOLLEN (D), MARYLAND: There are a lot of folks on the Republican side, some of the Republican leaders, who were frankly amazed that the White House gave on that provision and provided the so-called Senator Kyl‘s version of the estate tax, which is a huge bonanza to the folks at the very top, without any economic benefit for the rest of the country.
(END VIDEO CLIP)
O‘DONNELL: Vice President Biden met with House democrats today to address their concerns with the deal. In that meeting was House Majority Whip and Democratic Congressman from South Carolina James Clyburn.
Thanks for joining me tonight, congressman. Congressman, you were in the meeting with the vice president with the Democrats in the House. How did that meeting go?
REP. JAMES CLYBURN (D), SOUTH CAROLINA: It was a very good meeting, I thought. The vice president laid out exactly what they did, and why they did it. And the caucus listened. They‘re allowed their questions, and, of course, I left before the meeting concluded, because I had to go to the White House for the signing of the Native American Black Farmers Bill.
O‘DONNELL: Congratulations on that bill passage, Mr. Clyburn. I know how important it is to you, and what an important ultimate justice has been achieved in that.
CLYBURN: Thank you.
O‘DONNELL: And we‘ve covered that on this show. And I‘m glad to see it got there. Now isn‘t the reason that we‘re having this discussion now is that you in the House leadership, and the Senate leadership and at the White House, made a giant tactical mistake in not voting on tax rates early in this Congress? You were elected to the Congress just in time to cast one of your early votes for the Clinton tax increase, a very significant increase in 1993 but—
CLYBURN: That‘s true.
O‘DONNELL: Bill Clinton and you and the Congress were smart enough to get that vote done as one of the first votes, not to let it wait until an election year. Waiting for a tax vote in an election year is politically impossible. And isn‘t that why you‘re stuck in this spot, that Nancy Pelosi, Harry Reid and the president made the mistake of allowing this to go into the election year?
CLYBURN: Well, you know, if you go back and look, I think the House passed a lot of things. We passed tax cuts that never passed the Senate. So I think it‘s a bit unfair for us to keep saying Nancy Pelosi this and Nancy Pelosi that.
We passed these things in the House that never got passed in the Senate. So let‘s be fair when we say exactly what the problem was. The problem was always can we get 60 votes in the Senate. Our caucus, on a lot of things, said we‘re willing to vote for this if we can have some assurances that this thing will be taken up by the Senate or passed by the Senate.
When you couldn‘t get the 60 votes to even get the thing discussed in the Senate, our caucus had real problems with that. And that‘s what was causing the pressure on our side, not anything else.
O‘DONNELL: Do you think it‘s fair to blame Barack Obama, as so many have been doing this week—all the blame for having to settle for this compromise with Republicans is being visited upon the president of the United States. None of it is being visited upon Nancy Pelosi or Harry Reid or anyone else involved in making the decision about when to vote on the tax rates?
And Democrats have, in fact, chosen their weakest possible time to vote on tax rates?
CLYBURN: Well, let me tell you something, I have no idea when all this was done. But on Sunday, I was on a conference call, stepped out of the sanctuary of my home church down in Charleston, went into the pastor‘s study, spent an hour and 15 minutes on the phone with my caucus‘ leadership.
Nancy Pelosi was on that call. We talked about a lot of things. I never heard one discussion about a five million dollar inheritance tax exemption or a 10 million, no discussion about dropping the rate from 45 percent down to 35 percent.
My question is when did that occur? It certainly didn‘t happen while we were discussing it on Sunday. But all of a sudden, I wake up Monday morning and that‘s what I‘m hearing. So something happened somewhere and unless some of the leadership in my caucus is not being fair and square with me, that discussion was never had by us.
I‘m being told that this came into the bill—or the proposal by two members of the Senate and never was discussed by the House. So unless Nancy Pelosi was in discussions nobody else was in, how could I blame her?
O‘DONNELL: Well, what I‘m talking about is why this wasn‘t scheduled last year. Never mind earlier in 2010, as a vote in the House and Senate.
But let‘s move beyond that. There has been much discussion in the last
couple days of abandoning the president‘s agreement, of standing and
fighting. One senator has threatened, I think falsely, a phony threat to -
a Democrat—to filibuster this in the Senate. I don‘t believe that will happen.
You have correctly identified that the problem has always been 60 votes in the Senate. And we showed on Saturday that there were exactly 53 votes in the Senate --
CLYBURN: Absolutely.
O‘DONNELL: -- for the president‘s position. So realism going-forward from the 53 votes in the Senate for the president‘s position tells us that there‘s going to have to be a compromise to get to 60. Are you willing to allow the Bush rates to expire, and on January 1st, allow taxes to increase in order to continue the fight into 2011, when the Republicans will control the House of Representatives?
There are many liberals who have been on this network and elsewhere, who are advocating exactly that strategy.
CLYBURN: Well, let me tell you this: I don‘t think that that has to be the case. We can do what we got now. We can let it expire. But I think there are areas in between that could be explored. I just mentioned one to you. Why don‘t we put the bill on the floor? Why don‘t we go through the Rules Committee, allow certain amendments to take place, and let us put an amendment to drop that five million down to 3.5, that 10 down to seven.
Let‘s do that and then go forward with it. So I‘m perfectly willing to vote on all of this. But I also believe that we ought to have room for modifications, for amendments to be made. Let‘s have some discussions. There may be a little bit of wisdom among us in the House that nobody has even considered yet.
O‘DONNELL: Congressman Clyburn, I‘m sure we‘re going to see some input from the House and some wiggle room in the Senate. There will surely be some amendments, some refinements of this bill as it moves towards what I think is going to be inevitable passage. And I want you to come back to join us as we see that process develop.
Thank you very much for joining us tonight, congressman.
CLYBURN: Thank you so much for having me.
O‘DONNELL: Velma Hart stood in front of the president of the United States on live television and told him she was tired of defending his record and he should fight harder. How does she feel about the tax deal? Velma Hart gets tonight‘s Last Word.
And it‘s no surprise that Christine O‘Donnell said something lacking clear logic. And it shouldn‘t be a surprise that she gets tonight‘s Rewrite.
(COMMERCIAL BREAK)
O‘DONNELL: Time for tonight‘s Rewrite. After a Tea Party gathering in Northern Virginia yesterday, Christine O‘Donnell announced that she‘s starting an issues oriented political action committee, tentatively calling it Christine-PAC. No doubt inspired by this PAC.
But that‘s not the only thing Christine O‘Donnell said that‘s getting attention. She also said this yesterday: “today marks a lot of tragedy. Tragedy comes in threes, Pearl Harbor, Elizabeth Edwards passing, and Barack Obama‘s announcement of extending the tax cuts, which is good, but also extending the unemployment benefits.”
No, Pearl Harbor didn‘t happen yesterday. What Christine O‘Donnell seems to be referring to is Pearl Harbor Day yesterday, the day when we commemorate the attack by Japan‘s Imperial Navy that drew this nation into World War II.
So what she‘s saying is that Elizabeth Edward‘s death and the combat deaths of 2,342 soldiers, sailors, Marines and airmen, along with 48 civilians at Pearl Harbor, equal the moral equivalent of extending unemployment benefits for 13 months.
Although by all appearances, Christine O‘Donnell is unemployed, she may not need to file for unemployment benefits, because she has been supporting herself off campaign money. During the primary campaign, O‘Donnell‘s former campaign manager called the candidate a complete fraud and recorded a robo call for her Republican primary opponent, Mike Castle. That robo call stated: “this is her third Senate race in five years. As O‘Donnell‘s manager, I found out she was living on campaign donations, using them for rent and personal expenses, while leaving her workers unpaid and piling up thousands in debt.”
So if the past is prelude here, we now know how Christine-PAC is going to spend the money that any poor fools contribute to it and why the unemployed former Senate candidate can sneer at unemployment benefits.
(COMMERCIAL BREAK)
O‘DONNELL: Before September 20th, Velma Hart had never spoken to a president of the United States. Then she said this.
(BEGIN VIDEO CLIP)
VELMA HART, DEMOCRATIC VOTER: I‘m exhausted of defending you, defending your administration, defending the mantle of change that I voted for, and deeply disappointed with where we are right now. I‘ve been told that I voted for a man who said he was going to change things in a meaningful way for the middle class. I‘m one of those people. And I‘m waiting, sir. I‘m waiting. I don‘t feel it yet.
(END VIDEO CLIP)
O‘DONNELL: Just before Thanksgiving, Velma Hart felt the impact of the struggling economy when she was laid off from her job. To get beyond the politicians and the pundits and hear what actual voters are thinking about the Obama deal with Republicans, who better to turn to than Velma Hart?
Thank you very much for joining us tonight. Velma, we have to ask you, what do you think of the agreement that the president has now made with Republicans on taxes and unemployment benefits?
HART: Well, I have to say that, at the end of the day, I think the president made the deal he had to make to make sure that the interest of the American people was satisfied. The deal itself causes me some concern. And certainly it‘s an amazing thing, once you hit your 15 minutes of fame, how connected you become to so many people. I get e-mails, phone calls all the time from Americans.
And my phone has been ringing, quite frankly, for the last day and a half now about this, because people are concerned. They look at this from a perspective of where‘s the reality in this? For the last two years, what we‘ve heard from the Republican side is that they didn‘t want to add to the deficit. And from the Democrats‘ side, we heard they want to make sure that they protect the future.
And even from the Tea Party side, fiscal responsibility was important. Some of these actions and certainly what led us to this point, and the president taking a bold leadership stance—I mean, this is an unpopular position, a bitter pill. But he‘s taking this position, and that‘s, in fact, what we need right now to advance this country.
It all seems very, very confusing. I—from the voters that I‘m talking to, from the people who are inside my space, they are telling me they want leadership and results from this Congress. And they‘re not seeing it.
O‘DONNELL: Now, you heard that there‘s a lot of comment on the left, liberals and the Democratic party, talking about this president now seeming very weak, seeming like he surrendered to Republicans. And he entered a negotiation with Republicans in which he wanted some things, Republicans wanted some things. The president got some things, Republicans got some things.
Does that surprise the average voter that when a Democrat and a Republican negotiate, each one of them has to get something?
HART: Not at all. I don‘t think the average voter thinks for a second that political pondering, grandstanding and positioning is not a reality of politics. But they don‘t care about that. They assume that that will happen, and it will be managed, and there will be a realistic outcome at the end of the day.
What we‘re all frustrated with right now, and just worried—I think, in some cases, especially those of us who are unemployed, worried to death about is what is our reality going to be on January 1st? How are we going to manage our houses for this time of recession? And how are we going to come out of this on the other side a stronger economy?
We‘re just not certain right now because there‘s really no clear path of leadership. And again, I thought the president—while I do have some concern about adding to the deficit in such big numbers, I applaud his leadership yesterday. You know, it took a bold man to come out and say, this is what I think is the right thing to do, when there was clearly going to be opposition from both sides of the aisle.
O‘DONNELL: And, you know, it seems to me that there‘s a mythology that grows out there among the electorate, that if I just cast this vote for a president, everything will come out the way I want it. Do you think the public is now learning, well, yeah, you vote for president, but then Congress actually has to make the decisions about what they‘re going to do? And there‘s a limit to what the president can persuade them to do.
HART: I think that‘s an excellent point, Lawrence. And I think a lot of Americans are waking up to that reality, slowly but surely. In fact, I got a message today that said, Velma, you know, we know you want to be hopeful and we know you want to support. But in reality, do you really think that‘s going to happen?
And my response back is that it has to. I am not giving up on this government. I‘m not giving up on the electorate. I‘m not giving up on the American people. I just believe that the right thing will happen, that somebody will be—with exhibit some true leadership and move us to the next point to protect this country and to make sure that we recover.
O‘DONNELL: Velma, we have to leave it right there. You get THE LAST WORD tonight.
HART: Thanks so much.
O‘DONNELL: “COUNTDOWN” is up next.
END
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