Tuesday, January 25th, 2011, 8p show

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Read the transcript to the Tuesday show

Guests: Howard Fineman, Rachel Maddow, Chris Matthews, Ed Schultz, Rep. Carolyn McCarthy, Howard Dean

LAWRENCE O‘DONNELL, HOST: On the day when the Academy of Motion Picture, Arts and Sciences issued a slate of Oscar nominees that did not include a single African-American, our first African-American president prepares for his second State of the Union address.

The last time the Oscar nominations were this white, the president was, too. That year, President Clinton delivered his final State of the Union message touting his accomplishments over eight years (AUDIO BREAK) a thriving economy and a ban on assault weapons.

President Clinton had no trouble getting credit for his accomplishments with the American people. But for black actors and a black president, it seems credit is hard to come by.

(BEGIN VIDEOTAPE)

(MUSIC)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hi, guys.

UNIDENTIFIED MALE: How is the speech?

OBAMA: I think it will be OK. I hope so, any way.

O‘DONNELL (voice-over): Speech prep time is over.

THOMAS ROBERTS, MSNBC ANCHOR: At 9:00 p.m. tonight, the president will deliver his State of the Union speech.

O‘DONNELL: President Obama is headed to the House chamber for his second constitutionally-mandated State of the Union message to Congress.

CHRIS MATTHEWS, “HARDBALL” HOST: It‘s the economy, America.

SEN. CHARLES SCHUMER (D), NEW YORK: He is going to have a speech that in certain ways is like Ronald Reagan.

RONALD REAGAN, FORMER U.S. PRESIDENT: Bring those deficits down.

PAT BUCHANAN, MSNBC POLITICAL ANALYST: I think it‘s going to be a winner.

O‘DONNELL: And what specifically will he propose?

MATTHEWS: The president will push a progressive agenda.

UNIDENTIFIED FEMALE: Five-year freeze on non-security discretionary spending.

UNIDENTIFIED MALE: Investment in education and infrastructure.

MICHAEL SMERCONISH, RADIO HOST: The focus will be largely on economics.

O‘DONNELL: After the massacre in Tucson, what will the president say about control of guns and ammunition?

UNIDENTIFIED FEMALE: Will the president mention gun control?

UNIDENTIFIED MALE: There is going to be an open seat on the House floor.

O‘DONNELL: Once the president is finished, the Republicans will respond.

CHUCK TODD, NBC NEWS: Republican Paul Ryan, the congressman, chairman of the House Budget Committee, is going to give the official Republican response.

O‘DONNELL: But he will not get the last word.

JOE SCARBOROUGH, MSNBC ANCHOR: There is a Tea Party response that Michele Bachmann is going to trounce. She‘s going to come and step all over Paul Ryan‘s response.

MATTHEWS: She has zombie-like qualities. You have to use the word balloon head. What is this person doing on the national stage? Go home to grade school.

UNIDENTIFIED FEMALE: What‘s wrong with her?

O‘DONNELL: And that‘s not the only difference from the president‘s first State of the Union.

UNIDENTIFIED MALE: Madam Speaker, the president of the United States.

O‘DONNELL: Congress is turning it into prom night.

DYLAN RATIGAN, MSNBC HOST: Congress, they might be less divided.

UNIDENTIFIED FEMALE: Sixty or so members of Congress from opposite parties will sit together.

REP. ANTHONY WEINER (D), NEW YORK: They are going out to candlelight dinner and dancing.

SAVANNAH GUTHRIE, NBC NEWS: Ken, who will be prom king and queen?

UNIDENTIFIED MALE: The “it” couple would be Republican John Thune and Democrat Kristen Gillibrand.

GUTHRIE: They have one thing in common, good hair.

TODD: There you go.

CONAN O‘BRIEN, TV HOST: So, for no other reason, just tune in for the raw sexual tension.

(LAUGHTER)

O‘BRIEN: Will they or won‘t they do it? Boy.

(LAUGHTER)

(END VIDEOTAPE)

O‘DONNELL: Despite a new Republican-controlled House, President Obama is the one going into tonight‘s State of the Union with the political momentum. His approval rating stands at 53 percent. At the same juncture in their presidencies, President George W. Bush held a 54 percent approval rating; President Clinton was at only 45 percent.

When President Obama steps up to the podium tonight, he will be talking to an American audience where 43 percent think things are going well in this country with no real change in the unemployment rate.

What does the president plan to say to keep his momentum going?

(BEGIN VIDEO CLIP)

VALERIE JARRETT, WHITE HOUSE SENIOR ADVISER: Tonight‘s going to be all about winning the future, making sure that the United States is competitive, investing in innovation and education and infrastructure, making sure that we are responsible about bringing down our deficit.

(END VIDEO CLIP)

O‘DONNELL: Those points are reflected in this just-released excerpt from the prepared text of the president‘s speech.

“Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we‘d beat them to the moon. The science wasn‘t there yet. NASA didn‘t even exist. After investing in better research and education, we didn‘t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs. This is our generation‘s Sputnik moment.”

Joining me, senior political editor of “The Huffington Post” and MSNBC analyst, Howard Fineman.

Howard, you‘ve been working the White House hard today to get ahead of this story. What can we expect tonight?

HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Well, what you can expect is a president who‘s being optimistic. This is sort of hope 2.0.

State of the Union speeches, Lawrence, really aren‘t about the State of the Union. They are about the state of the president and the state of the mind of the American people and how the president views that and what he thinks needs to be said. I think this president and his advisers have decided that they need to talk about cooperation because people are tired of the conflict and they need to talk about hope and the future because people are just tired and worried so much that they need something to look forward to not just for themselves, but for their children and grandchildren.

So, that‘s the reason for the sort of determined sense of uplift in this speech. Whether the American people will buy it or not, is another question. But that‘s what the president thinks he needs to say at this moment.

O‘DONNELL: Many activists in his progressive base in Washington have been preemptorily (ph) pushing back against the White House, Howard, as you know, in the last couple of weeks, worrying that the White House might come out with some sort of suggestion that‘s taken from the deficit commission and other reports about long-term financing of entitlements, Social Security, possibly Medicare.

Do we—are we going to hear anything from the president about any possible cuts in benefits to Social Security or Medicare?

FINEMAN: No, not really, Lawrence. And I think the progressive wing should calm down a little bit, at least for now. Be on guard, but calm down. It‘s clear to me that the president—

O‘DONNELL: Well, Howard, can I ask?

FINEMAN: Yes.

OLBERMANN: Should they calm down or take credit for keeping these ideas out of the president‘s speech?

FINEMAN: Well, I think that‘s a very good point. I think they were loud early on. And it‘s part of the strategy of the White House to calm them down here.

It was very clear that aides today wanted to say and you‘ll see in the speech tonight, Lawrence, while the president will mention Social Security, he lays down very strong markers to protect the system as it is, which will be music to the ears of the left in his party. Now, that doesn‘t mean that there won‘t be negotiations down the road. And it doesn‘t mean that Social Security is completely off the table.

But it does mean that the president has laid down principles here, or will, that if he keeps to, I think will satisfy people on the left about protecting Social Security. As far as health care spending is concern, the president is going to argue that his health care reform law will save money in the long run. You‘ve heard these arguments before.

So, I think the White House is prepared to defend the health care bill. And I think they watched what happened in the House last week with that symbolic vote to get rid of it and they didn‘t think much of it. They didn‘t think it caused much of a political stir. So, they‘re emboldened on that point.

O‘DONNELL: Just to stay on Social Security for a second, Howard, known as the third rail of American politics because so many politicians have lost their careers stepping the wrong way on this thing, privatization, any suggestion of privatization of any form, optional or otherwise, was always out of the question with this president. And I think there was a lot of false worry about that. Especially since Paul Ryan, the Republican rebuttal speaker tonight, does have a program that advocates, in effect, privatization for Social Security for everybody under 55 -- it seems to me the White House‘ smart move was just to let Paul Ryan talk about Social Security as much as he wants, and whatever level of specificity he wants because every idea he‘s going to suggest is opposed in very large numbers by the public.

FINEMAN: Yes. I think that‘s right. I think that‘s right, Lawrence. And I think the president feels—you know, we‘ll see if he‘s right. But he thinks by proposing the freeze that he‘s going to be talking with a $400 billion price tag on it, you‘ve already seen, by advocating another fight on the question of tax cuts for the wealthiest Americans, that he can argue that he‘ll be prudent enough and trying to save enough money to win the hearts and minds of independent voters.

He‘s obviously not going to win the Tea Party people who are going to have own speaker tonight in Michele Bachmann. It‘s not enough that Paul Ryan is talking about Social Security, who knows what Michele Bachmann is going to talk about.

But Obama is not aiming for those people. The president is aiming for

reasonable people in the middle, independents who are worried about the

long-term future of the country, because they want the jobs and because

they want development and innovation. But they‘re also worried, frankly,

about the deficit and the debt. And the president will address that

tonight, certainly not to the satisfaction of Republicans. But he‘s not

aiming to bring them over in their entirety, just enough of them to get the

debt ceiling passed in a couple of months from now

O‘DONNELL: No one has more insight of what politicians are up to than Howard Fineman of “The Huffington Post”—but if Howard cannot predict what Michele Bachmann is going to say, no one can.

Howard Fineman, thank you very much for your time tonight.

FINEMAN: Thank you, Lawrence. Thank you.

O‘DONNELL: Word that Tucson hero Daniel Hernandez and the family of 9-year-old shooting victim Christina Taylor Green will sit with the first lady tonight has many speculating, hoping that the president will address gun and ammunition control.

When asked yesterday, Press Secretary Robert Gibbs would only say, we‘ll wait until tomorrow to see what‘s in the State of the Union.

Last week, New York Democratic Congresswoman Carolyn McCarthy introduced a bill in the House that would ban the manufacture and sale of high capacity ammunition clips like the one used to fire 31 bullets in the Tucson massacre. Earlier today, Senator Frank Lautenberg introduced the same bill in the Senate with nine co-sponsors so far, Senators Boxer, Durbin, Feinstein, Franken, Kerry, Levin, Menendez, Reid and Schumer.

Joining me now: Congresswoman McCarthy.

Congresswoman McCarthy, has there been any indication today from the White House whether the president will address your issue in this speech? I know when there are members of Congress like you who have something like this pending, if they‘re going to nod your way, they sometimes let you know late in the afternoon to expect something.

REP. CAROLYN MCCARTHY (D), NEW YORK: No. We haven‘t been let known whether he‘s going to speak about anything. That‘s been pretty guarded. But I am encouraged mainly because we did ask to make sure that they had some of the survivors and the heroes, you know, on being here tonight. So, I‘m encouraged by that.

Listen, the president has got a lot of on his plate right now. And it‘s very early, as far as—the bill was only introduced about a week ago. I‘m going to be working this hard. Yesterday, we had Mayor Bloomberg endorse my bill. We had the conference of mayors, 1,500 of them endorse my bill.

I‘m working with the members. We got 63 co-sponsors. So, every day, we‘re getting more and more support. That‘s what my job will be and that‘s what I‘m going to be doing.

O‘DONNELL: Well, if the president remains afraid to talk about it in the State of the Union, he will be in the company of most of his predecessors who‘ve also been afraid to talk about it as long as you‘ve been in the Congress.

Let‘s listen to what former Vice President Dick Cheney had to say about this last week.

(BEGIN VIDEO CLIP)

RICHARD CHENEY, FORMER U.S. VICE PRESIDENT: I‘ve always been a gun advocate. And whether or not there‘s some measure there in terms of limiting the size of the magazine that you can buy to go with semiautomatic weapon, we‘ve had that in place before. you know, maybe it‘s appropriate to re-establish that kind of thing.

(END VIDEO CLIP)

O‘DONNELL: Congresswoman, after that, how difficult would it be for a Democratic president to stand up there and say, in effect, maybe it‘s appropriate that we re-establish the ban that existed for 10 years during the ‘90s up until 2003? What would be so politically dangerous after Dick Cheney said that to basically say the same thing?

MCCARTHY: I agree with you, Lawrence, because I happen to think that this time, unfortunately, with the shooting that we saw that the American people are paying a little bit more attention this time. And certainly, for someone like yourself that‘s bringing this up a couple of times a week, I say thank you, because the whole idea, and I mentioned this to you weeks ago, that we have to educate the American people on what we are trying to do.

When Dick Cheney came out and Mr. Levy (ph) who brought the original suit to the Supreme Court, these are people that usually wouldn‘t support the kind of legislation I‘m doing. But you also know that the NRA is pushing back really, really hard at this particular point.

But what they keep mentioning is nobody is going to have a gun to defend themselves when they are home. Well, that‘s not true. You know it. I know it.

But that will be my job to educate the American people and fight to get more and more people on it. This is something I will not give up on. I will not give up on it.

O‘DONNELL: Well, Congresswoman, that‘s what one of the things that gets me about this, is that there are a lot of practical decisions to be made in the Congress and in the Senate about, well, we can win this one, we can only win part of this one. This one is hopeless, you know, so we marshal our energies and we pick our fights.

But every once in a while, there is something worth going after that you cannot be confident you‘re going to win. In fact, there are things worth going after where you actually feel at the outset, you just might lose. Some things are worth fighting for—

MCCARTHY: Absolutely.

O‘DONNELL: -- even if you lose. If this isn‘t one of them, what is?

MCCARTHY: Well, that‘s—you know, I felt that way on a lot of the issues I brought forward on reducing gun violence. I thought that, you know, after Virginia Tech, that we can move forward and have a good discussion. It didn‘t happen.

But this time, it‘s different. You‘ve got to remember, also, the president does side with me on these issues. Certainly coming from Chicago, working on reducing gun violence there, I believe he is on my side. It‘s my job and certainly Senator Lautenberg‘s to convince him this is a win for the American people.

O‘DONNELL: Congresswoman Carolyn McCarthy, thank you very much for your time tonight.

MCCARTHY: Thank you so much.

O‘DONNELL: We‘re less than an hour away from President Obama‘s speech. What does he have to say to reassure progressives who helped him get into office? Governor Howard Dean joins me next.

(COMMERCIAL BREAK)

O‘DONNELL: President Obama‘s approval ratings are back up after his month of legislative wins in December. But with all the success, some progressives worry that the president is too quick to compromise. Governor Howard Dean discusses what tone he thinks the president should set in tonight‘s State of the Union.

(COMMERCIAL BREAK)

O‘DONNELL: As President Obama‘s approval ratings rise and his calls for civility actually materialize into the dramatic visual of Republicans and Democrats sitting side by side tonight, should the president‘s base be cheered by the new momentum that could very well carry him to reelection in 2012, or worried that he is not willing to spend enough of his political capital on their policy priorities?

In “The Huffington Post,” Robert Kuttner writes, “If you liked Bill Clinton as triangulator, you will love the era of triangulation II. The danger, of course, is that the man at the apex of the triangle fares better than his party.”

What do the Clinton administration‘s last six long years of triangulation tell us about what the Obama administration will do in the next two years?

Joining me now is former presidential candidate and chair of the Democratic National Committee, Governor Howard Dean.

Governor Dean, thank you very much for joining us tonight.

HOWARD DEAN, FORMER DNC CHAIRMAN: Thanks for having me on, Lawrence.

O‘DONNELL: I was trying to think today—

DEAN: Welcome to the 8:00 hour.

O‘DONNELL: Thank you. I‘ve been here before, as you have here sitting in the substitute chair.

Governor, did the Clinton administration accomplish anything in its last six years of triangulation that the progressive base of the Democratic Party can be proud of?

DEAN: Yes, there should be one thing which I think is his probably his biggest achievement was the balance of the budget. The was done, although that was actually—the seeds for that were sown with Marjorie Margolies-Mezvinsky is incredibly courageous single vote that cast the budget balancing amendment when the Democrats were in charge. After the Republicans took over in ‘94, Bill Clinton balanced the budget. No president has done that since Lyndon Johnson. No president has done since.

And, you know, you can be as progressive as you want, but if you can‘t balance the budget, you can‘t have any of the kind of reforms that we need to have.

Secondly, to be just blunt about this, I have seen the speech. As you know, it was leaked. It is a very, very good speech. I am delighted. I‘m frankly a little surprised.

The president is mindful of the deficit. He makes it clear he wants to work with the Congress, but with the most extraordinary thing about his speech is he laid down the gauntlet. Millionaires will have to pay more taxes if we‘re going to cut kids and other folks who are dependent on it.

He has made it very clear that this is going be a shared sacrifice and the tax cut that was extended for the people who make $1 million a year is not going to be extended again if anybody is going to do anything about the deficit. I thought that was extraordinary thing.

There‘s a lot of great stuff in there about the environment. So, I think—I have to say, in print, we‘ll see how he delivers it. It‘s one of the speeches, substantive speeches I‘ve seen him make.

O‘DONNELL: You know, to take—to complete the full picture of how the budget was balanced in 1993, Bill Clinton did raise taxes.

DEAN: Yes.

O‘DONNELL: But he also, half of that package was Medicare cuts. Then going forward through the decade, Newt Gingrich imposed even larger cuts on Medicare and other social programs, in order to get to that balanced budget. So, we can‘t leave Newt Gingrich out of the story of how the budget got balanced, which is that triangulation outcome of Clinton doing business with Gingrich to, you know, in those final six years.

DEAN: But they‘re going to do some business. I actually think that the speaker is likely to be somebody he can do business with. I think he‘s going to have a huge problem with his caucus. I saw Michele Bachmann on HARDBALL tonight—she looks like she‘s from another planet. I mean, she doesn‘t know anything about American history. I don‘t know how she can talk about the Constitution.

And Boehner is going to have to deal with about 80 people like that in his caucus. But the fact of the matter is, you know, I think the leadership of the Republicans is willing to do business with the president. I think the president really has made it clear, we‘ll see if he carries it out.

I agree. You know, the progressives have a right to be concerned, but I have to say, this evening, I‘m very pleased with the president of the United States.

O‘DONNELL: Governor, we‘ll be wondering about this for a while, this question of which came first, the White House decision not to include Social Security cuts of any kind in its proposals tonight or the progressive pushback against the White House, even thinking about it. The White House was relatively welcoming to its deficit commission report that called for all sorts of changes, including increases in the Social Security retirement age. That got people—a lot of people nervous in Washington, who started lobbying the White House right away not to do those things. Now, the White House isn‘t proposing those things.

Who gets credit here?

DEAN: I think—I do think the progressive, it was a huge coalition that got together on the issue of Social Security.

The problem is not so much that we have to do some things to save social security. Eventually we will. The problem is the timing is wrong. You can‘t come off just having giving tax breaks to people who make $1 million a year and then expect little old ladies who are dependent on Social Security to give up something. That‘s not right.

So, the timing was abysmal. I think the progressive coalition which was huge, stretching across pretty much the entire gamut of the progressive wing of the Democratic Party, which is about ¾ of the party anyway. And I do think they get some credit. Who knows what really went on in the White House in the calculus?

I—you know, I have to say I‘m jubilant about what the president is about to say. I didn‘t expect it. I didn‘t expect the tone. It‘s a statesman like tone. But he makes—sets down markers that I think Democrats can be proud of.

And the progressive community will make up their own mind when they see this speech in a little more than half an hour. But I was very pleasantly surprised and I‘m very pleased.

O‘DONNELL: There‘s the preliminary judgment.

DEAN: It‘s not perfect. It‘s not perfect, but it‘s very, very good.

O‘DONNELL: What State of the Union ever was perfect?

Governor Howard Dean, former head of the Democratic National Committee

thank you very much for joining us tonight with your preliminary judgment on the speech.

DEAN: Thank you.

O‘DONNELL: In the House chamber, the representatives and senators are jockeying for good seats for the State of the Union. How will a mixed seating arrangement affect the political atmosphere there tonight, and how will the president‘s speech be received by the Republican-controlled House? We‘ll be back with Rachel, Chris and Ed.

(COMMERCIAL BREAK)

MATTHEWS: Much has changed on Capitol Hill since last year‘s State of the Union address. Tonight, President Obama will speak to a House that is now controlled by Republicans. We will see a Speaker Boehner sitting behind the president.

And on the House floor, there will be an empty chair in honor of Gabby Giffords as she recuperates from the failed assassination attempt against her. That attack provoked a call for more civility in our politics.

One of the biggest divisions of the night, though, is within the Republican Party. Congressman Paul Ryan will deliver the Republican response to the State of the Union. But Republican Congresswoman Michele Bachmann will deliver her own response on behalf of the Tea Party.

We‘ll get to all of that with Rachel, Chris and Ed after the break.

(COMMERCIAL BREAK)

O‘DONNELL: Welcome back to MSNBC‘s special coverage of President Obama‘s State of the Union Address to Congress. A much different political climate than this time a year ago. Republicans run the House. Speaker John Boehner will sit behind the president for the first time.

Civility is the word of the night, as members cross party lines in a show of unity after the attack on Gabby Giffords just 17 days ago. The president is not expected to talk about gun or ammunition control.

We know he is now expected to talk about jobs and a five-year freeze on some discretionary spending, including a plan by Defense Secretary Robert Gates 78 billion in spending from the Pentagon.

He will call for Social Security to be strengthened, not privatized. He will defend the health care law, which the House voted to repeal. The president will try to strike an optimistic tone. But Republicans like Mitch McConnell warn he won‘t win Republican support without compromise.

The president is expected to respond tonight with these words from his prepared text, “we will move forward together or not at all.”

Joining me now, my MSNBC colleagues Rachel Maddow, from “THE RACHEL MADDOW SHOW,” Chris Matthews, host of “HARDBALL” and Ed Schultz from “THE ED SHOW,” which can now be seen weeknights at 10:00 p.m. Eastern.

Rachel, I begin with a disappointment. Our staff has been scanning the speech now. It‘s been released. “The National Journal” has it. The words gun, the word bullet, ammunition do not appear in the speech anywhere.

RACHEL MADDOW, MSNBC ANCHOR: With Daniel Hernandez in the First Lady‘s box—

O‘DONNELL: It is the prepared text. As Chris can tell you, prepared text is always—almost always some adjustment between prepared text and final delivery. We have an half hour to hope.

MADDOW: The president will not ad lib something about gun control tonight. It is striking, though. We have a situation where gun control is a known third rail in politics. The White House is very good at all sorts of political messaging.

But with Daniel Hernandez, the hero who saved Gabby Giffords‘ live, in all likelihood, by giving her first aid, her intern, with the family of Christina Green, who was killed in that horrible incident—and since Thursday, 14 police officers have been shot in this country. Four of them have been killed, with Mayor Bloomberg leading a new national consensus around gun and ammunition control, that really leaves the NRA looking Cro-Magnon in comparison—the politics on this—the idea that it is a third rail and can‘t be discussed, those are old politics.

And to see the president following old politics, rather than leading towards new politics, is a progressive disappointment.

O‘DONNELL: Chris, you know it was discussed in the White House in the weeks leading up to this speech. You know that in the discussions of the speech they were thinking can we do any paragraph about it. After what Dick Cheney said last week, that we should consider—we should consider restoring the ban on the magazine clips that allowed Jared Loughner to do what he did—just consider restoring the ban, this White House, in the prepared text, couldn‘t bring itself to write a paragraph that sounded like Dick Cheney.

CHRIS MATTHEWS, MSNBC ANCHOR: There is going to be a special presidential address on gun control. It‘s not been scheduled yet, but there‘s going to be one.

O‘DONNELL: This is breaking news from Chris Matthews.

MATTHEWS: In the near future. Yes. You can take it from me.

O‘DONNELL: Ed—

MATTHEWS: So he‘s not overlooking. I think must have made a tactical decision that it would be the headline tonight, and they are looking for an economic jobs headline tonight.

O‘DONNELL: I see what you are saying. It would have stolen what they really wanted delivered tonight.

MATTHEWS: With a lot of the country it‘s the issue. It makes no sense to some people in the suburbs and in the cities and perhaps some places in the rural areas. But in other areas, in western Pennsylvania, guns are it. I don‘t think he wanted to depress the news that he is trying to make about jobs tonight.

He is trying to be a forward-looking jobs president tonight, future jobs. In many ways, I think he‘s—you mentioned Clinton. I think he is giving that future budget speech that Bill Clinton intended to do give in this time of year in ‘93, but didn‘t because he was warned off because interest rates would spike.

Remember? Alan Greenspan and all that? He was told unless you cut the deficit, you will not get any help from the federal—the central bank. This time around, interest rates are zero. It gives him some latitude. I think that‘s why he‘s going to talk about a future budget of R&D and education and infrastructure tonight.

I‘m not sure it is going to be enough for a lot of progressive people. But I think it is at least adapted—I was thinking an adapted screen play tonight. He should get the award, because he is adapting progressive economics to the situation today.

O‘DONNELL: I always learn something when I talk to Chris Matthews.

If he gives this speech tonight—

MATTHEWS: There will be a gun speech coming up very soon. I was privileged to be at the briefing today. I can‘t say where I heard it from. But I heard it from fairly good sources that there‘s going to be a special night on guns. Obviously, that will be gun control. He is not going to defend the freedom to use a gun in every circumstance.

O‘DONNELL: Right. Ed, is this speech, as we now know what it contains—most of what we know it contains, is it a victory for progressives who have been pushing this White House for the last couple of weeks to stay away from this talk of entitlement reform, this talk of balancing budgets through Social Security cuts and Medicare cuts?

ED SCHULTZ, MSNBC ANCHOR: Well, this is one thing liberals are looking for tonight: definitive language, crystal clear that Social Security is off the table. It is not a negotiating point, not now, not next year, not in 2012. If the president can‘t stand strong on that, he is going to lose a lot of support.

As far as the gun thing is concerned, I find it very interesting that the president is going to separate this out, Chris, because he can win on this. The country is with him on this. There are enough mayors around the country, there‘s enough stories around the country. So that will be a victory that he doesn‘t have to get tonight. He knows where the public is on that. I actually think that he can really get something done when he separates it out.

Back to the budget for a moment, Sputnik moment. What does that mean?

We have 60 percent of schools in this country that are over 50 years old. Do you need a Sputnik moment to invest in schools? Do you need a Sputnik moment to invest in bridges? I come from a state where a bridge fell down and killed 13 people.

We have infrastructure in this country that is crumbling. And the Republicans don‘t want to spend a dime on any of this. This is going to be the big fight, I think.

O‘DONNELL: House chamber is filling up quickly. Stand by. We will continue our coverage of President Obama‘s State of the Union Address, as everyone gathers inside that House chamber.

(COMMERCIAL BREAK)

O‘DONNELL: The State of the Union Address now just minutes away, as senators enter the chamber. We are back with Rachel Maddow, Chris Matthews and Ed Schultz.

Rachel, the quick scan produces a couple of other phrases that are not

repeat not in the State of the Union prepared text, global warming or climate change. A speech given in a body that passed a cap-and-trade bill during the last Congress and now maybe not a word about it.

MADDOW: The house passed it and the Senate didn‘t.

O‘DONNELL: The House passed. That is the room it passed in.

MADDOW: Right after the election, the White House was giving these indications that they still thought that energy was one of the issues on which they might be able to make some progress in this new Congress. I‘m not sure anybody else believes that other than the White House. If it is left out of the State of the Union, which, as we know, always contains a little bit of a laundry list of things the administration would like to achieve, that would be a sign that they are not expecting the progress on that that they previously predicted.

Another sign, of course, Carol Browner, who heads of energy and environment issues at the White House, announcing unexpectedly last night that she is leaving. To do that on the eve of the State of the Union is a message for people who care about those issues and this administration.

O‘DONNELL: Chris, when an administration gets its wings clipped in a Congressional election like this one did, one of the things we are looking for in this speech is what they are not going to talk about. That is one of the ways of projecting what directions they are going to go in in the coming Congress.

On this climate change, global warming not being in the speech—what other global indicators do you find here, in terms of a predictive capacity of where this president and this congress is going to go in the next two years?

MATTHEWS: Well, the country—I looked at a map today. It was in “the Washington Examiner,” which I try to read to keep up with the conservative thinking in this country. They have a map of where the Congressional districts are in this country. If you look at the map, it blows you away. It is red until you get to the coast.

Most of the country is red in terms of Congressional districts. So the high tech, the opportunities for innovation, for higher education, for clean energy, I think he is still going to try to feed the areas of the country which believe in him already, the higher educated country, Silicone Valley, of course, 128 --

O‘DONNELL: The president is leaving the White House.

MATTHEWS: He is going to try to get the research on North Carolina. he is going to try to get the areas that he is good in now already, and bolster up the future economically of those areas. Hi is somewhat of a politician. He is feeding the troops.

MADDOW: But doesn‘t he bridge that a little bit by focusing on manufacturing as the outcome of an investment in green tech?

MATTHEWS: Well, of course, that would be the Midwest.

MADDOW: Yeah.

MATTHEWS: Of course, that is what I call Scranton to Oshkosh and the challenge he faces, which is the Democrats were swept out of office from Scranton all the way across to Wisconsin, with the lone exception of Illinois, where they have that sort of east coast/west coast reality there, because of the old rail head.

But they are really in trouble with the guys who go to football games, regular white guys, if you will, in that part of the country. They‘re really hurting in Scranton, all the way across to Erie, certainly Allentown, places like that. They have a real struggle on their hands to get re-elected next time.

I believe this president, with all his current popularity, could lose a general election right today because he would lose a lot of those states.

O‘DONNELL: Chris, you are sitting beside a regular white guy who goes to football games. Ed Schultz, what do they have to hear? You know that part of the country better than anybody?

SCHULTZ: True. We got a lot of talk about a budget freeze tonight, right? Where is the money going to come from? We are going to be robbing Peter to pay Paul. Now when the president talks about investment, he is going to have to explain, I think in detail, where this money is going to be coming from, because that isn‘t going to go up the flag pole for the Republicans.

Now, the Rust Belt I think that you are talking about, Chris—is that we do not have in this country a manufacturing strategy. We have lost 50,000 factories in this country over the last 10 years, if you count factories that have under 30 employees. Now, those are the working folks. Those are the lunch bucket Democrats that he has to have in Michigan. He‘s got to have them in Indiana, in Ohio, in Pennsylvania.

So what is the strategy? Where is the manufacturing plan? And, you know, look—

MATTHEWS: That is why I like rail, because rail brings back steel. Rail brings back heavy industry, where the old neighborhoods we used to have heavy industry jobs, where a lot of them were African-Americans living in those neighborhoods where I used to grow up—or did grew up. I don‘t know why we don‘t do that?

SCHULTZ: People want to drive their car to work. We‘re not used to rail.

(CROSS TALK)

O‘DONNELL: Rachel, how do we talk about infrastructure spending and deficit reduction at the same time? And should we?

MADDOW: In the same way that you talked about it with the stimulus. It‘s interesting. You look at a guy like Eric Cantor; when high-speed rail was proposed as part of the stimulus plan, Eric Cantor mocked it and said it was stupid. Then he realized it was going to mean 186,000 jobs in the area of Richmond, Virginia, which he happens to represents. He came out and said actually, this is going to be great for my district.

Then he becomes majority leader in the House, and all of a sudden, he decides he is against it again. Now the reason that is important is not just to show Eric Cantor flipping in the wind on that, but rather to show that when it comes down to whether or not that works as an economic strategy, these guy know it works.

MATTHEWS: Why do they want to cut Amtrak? Because they don‘t take Amtrak? Because it is an East Coast thing.

MADDOW: They hate the idea of there being government run anything. So the idea that the passenger rail system in this country is government supported—it‘s the same reason that in Britain, when the conservatives took over, they privatized it to disastrous effect. Conservatives hate the government running anything, even when the government runs it well.

O‘DONNELL: With the very attractive bipartisan couple of Kristin Gillibrand and John Thune now entering the chamber, on what has become prom night in the House of Representatives.

Chris, you and I have been in that chamber for these things. This is about as strange—but this one we‘ve never seen. We‘ve never seen the prom night version, where they are matching up across parties to sit with each other. Do you think it will make a difference?

MATTHEWS: Well, it is going to be interesting to watch as we watch the waves tonight, as we watch people bounce up. The old thing was if you say cut taxes, the Republicans would all go up. If you say save Social Security, the Democratic side and a few of the Republicans would jump in the air. So it will be almost like this Slinky or whatever going on, the seesaw.

Tonight, the seesaw is going to be all mixed up, because you‘re going to have Chuck Schumer sitting next to Tom Coburn, and you‘re going to Kristin Gillibrand standing next—sitting next to—is this going to work with their marriages, this thing here?

MADDOW: Their marriages are going to be fine, but their politics are going to be all screwed up. They all count on looking to see what everybody else on their side of the aisle is doing for whether or not to applaud. And they‘re going to be confused.

MATTHEWS: I see red. Red is very important, Lawrence. Women wear red these nights. I think that is Claire McCaskill from Missouri. I think people do wear red because they believe the camera will catch them.

MADDOW: But she is, of course, standing next to a woman wearing white and a woman wearing chartreuse.

O‘DONNELL: Even after the right wing bloggers accused Michelle Obama of wearing China Commie red.

We are just minutes from the 9:00 pm Easter, when President Obama will enter the House chamber for his State of the Union Address, followed by the Republican response. Then the Tea Party Republican response.

MSNBC‘s special coverage of the State of the Union Address is back after the break.

(COMMERCIAL BREAK)

O‘DONNELL: We‘re back with Rachel Maddow, Chris Matthews and Ed Schultz, as we await the president‘s arrival. There is the most uncomfortable bipartisan couple of the evening, Vice President of the United States and the Republican Speaker of the House.

Rachel, the president is in the building. We are minutes away. They never thought that they‘d be delivering this speech to a Republican speaker. It seems to have affected the text in ways we have been anticipating already. Is there a way for the president to deliver a speech that offers realistic possibilities in working with Republicans and maintain support and enthusiasm with his progressive base?

MADDOW: I think the question is whether or not the president will strike a different tone, a tone that is different from the substance of the speech. What progressives have criticized the president for is not his policy positions. His policy positions have mostly hewed closely to what he said he wanted to do as a candidate.

There‘s been some things that he said he wanted to do, like say close Guantanamo, that he has found himself unable to do, at least that is the way that he has described it. But the question that progressives have, in addition to some policy things that they are going to quibble with him—the bigger question that progressives have is whether he is willing to win a fight with Republicans, whether when Republicans not only disagree with him, but whether when the president thinks those Republicans are wrong, he can go up against them and win.

That is a matter of tone. That is what people are going to be watching for in part tonight.

O‘DONNELL: Ed Schultz, are you surprised that we are at this point in the prosecution of two wars simultaneously, and those two wars take such a distant back or third back seat to all these domestic governing issues that we‘re talking about?

SCHULTZ: It is the gorilla in the room. We are throwing billions of dollars month after month at Afghanistan and Iraq. The country is losing confidence that we are going to get out. We keep being told that we‘re going to get out.

When is this going to happen? I think the president tonight would serve his administration very well, and his future aspirations to get re-elected, to be strong with the American people and tell them, look, we are getting out. We are going to cut the military budget. You are talking about 58 billion dollars. Mr. Gates said the other day one of the things that is blowing the Pentagon budget up is health care costs.

So they have an array of problems. A lot of it has to do with where we are. We have no exit strategy. We think we do, but we are not executing it the way the American people want it.

This has turned against the president. This has become a problem for the president. This is something that he campaigned on, that he was going to get resolution on. Instead, it is just bleeding us.

MADDOW: In the midterm election, there was almost no mention of Afghanistan or Iraq. Foreign policy as a whole almost didn‘t surface at all.

SCHULTZ: That is where the money is going.

MADDOW: But the question is whether or not the president wants to make American politics again about the wars and about foreign policy. I‘m expecting a perfunctory address of those issues tonight in the State of the Union. I don‘t think they want to pivot away from domestic issues yet. And I think that Republicans think they will be able to split Democrats on the issue of Afghanistan. They think that they can divide Democrats on that issue.

So it will be interesting to see how much attention he gives it.

O‘DONNELL: Chris, don‘t we see some Republicans who are splittable on the issue of Afghanistan?

MATTHEWS: Sure. I think the business community isn‘t exactly ideological about the war. They tend to be self-interested and somewhat pragmatic about it. People like Jack Welch, who you hear from, they are not exactly thrilled with this war in Afghanistan. That is not new.

I want to defend the president in this regard: I think when he has had the votes, or enough votes to hold it, I have never seen party discipline like this in my life. On fin reg, on health, on the stimulus, almost entire party unity. I have never seen anything like it.

You can say fight as a metaphor. But in the end, you have to get people to vote your way, or you don‘t get the 218 and the 60 votes you need. You can only get the votes you can get. So you can squeeze them on issues like DADT and it worked. I think he brought over a big complement of Republicans that he needed.

He didn‘t get a single vote on health care. But I‘ve never seen party unity—you are talking about Ben Nelson, Bill Nelson, a lot of pretty conservative people joining in that coalition. So he held the party on health care. He held them on fin reg. Got no Republican help really on health care.

On the stimulus package, again, he had to squeeze those three Republicans from the northeast or they were not going to give them their votes. You can say fight as a metaphor, again. But in the end, you have to get the votes. In the end, that‘s all that matters is governing, not posturing.

We are allowed to posture. We can fight and push and yell. That is our job. But in the end, he needs a majority. And by the way, they were watching, the Supreme Court. I think these guys got a little mud on their hands now with this Scalia thing. I don‘t think he should have been speaking, just to take a swipe here, to the Tea Party types, to Michele Bachmann, of all people, although she dearly needs an education.

(CROSS TALK)

O‘DONNELL: This is the week when the president comes and addresses the Congress. And Rachel, that is the week when a conservative Supreme Court justice decides to go over there and address the Tea Party Caucus, the freakiest section of the Congress.

MADDOW: It was an event that was convened by the Tea Party Caucus. It was open to all members of Congress. Some Democrats attended. Justice Scalia does speak on events like this.

But it is remarkable. We have Scalia and Thomas and Alito as the three justices who are not attending tonight. Those, of course, are the far right wing of this current crop of Supreme Court justices.

The fact that Chief Justice John Roberts tonight is the only thing that‘s keeping it from looking like a partisan showing by the judiciary tonight, which is itself remarkable. It‘s one thing for them to be complaining about politicization when those three are the three not showing up.

MATTHEWS: Not for the last night tonight, I‘m going to recall the fact that Michele Bachmann believes that slavery was not in the U.S. Constitution, an incredible statement.

SCHULTZ: I want to throw out one more thing before we go on here with the president tonight. The president is going to call for lower corporate tax rates. How much more can he do for business?

O‘DONNELL: How much more can he do for Republicans, in terms of a step across the aisle to Republicans? The president is in the building.

SCHULTZ: I have been in the chamber. It is fun to watch this. It is who‘s who, and it is amazing how the lawmakers look around to see who is looking where.

MATTHEWS: And Ed, they wait for hours to get those seats.

(CROSS TALK)

SCHULTZ: It is fun. I‘ve been to four of these.

MATTHEWS: You know who is in a swing district by who wants to sit there.

O‘DONNELL: As we near tonight‘s speech, a few remaining program notes. I will be back again with a live late edition of THE LAST WORD, following the speech at 11:00 pm Eastern. Among my guests, David Axelrod, Senator Barbara Boxer and the hero of Tucson, Daniel Hernandez. And Rachel will have a live late edition of “THE RACHEL MADDOW SHOW” beginning at Midnight Eastern.

MSNBC‘s coverage of the State of the Union Address starts now.

END

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