Guests: Mike Viqueira, Kelly O‘Donnell, Rep. Jack Kingston, Rep. Steve Israel, Howard Fineman, Alex Wagner, Chris Hayes, Ezra Klein
LAWRENCE O‘DONNELL, MSNBC ANCHOR: Good evening again from New York.
An agreement has been reached. And a government shutdown has been averted. President Obama is expected to speak in just a few minutes. Just moments ago, House Speaker John Boehner made this announcement following the House Republican caucus meeting.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER ®, HOUSE SPEAKER: Good evening, everyone. I‘m pleased that Senator Reid and I and the White House have been able to come to an agreement that will, in fact, cut spending and keep our government open. I expect that the House will vote yet tonight—tonight on a short term continuing resolution into next week to allow for time for this agreement to be put together in legislative form and brought to the floor of the House and Senate for a vote.
And so I would expect the final vote on this to occur mid next week. But I do believe that we will have a—what we‘ll call a# bridge continuing resolution passed tonight to ensure that government is open.
As you all know, this has been a—a lot of discussion and a long fight. But we fought to keep government spending down because it really will in fact help create a better environment for job creators in our country. Thank you.
(END VIDEO CLIP)
O‘DONNELL: Let‘s go to Mike Viqueira at the White House. Mike, can you translate for the viewer what John Boehner just said. There‘s something in there about a bridge. There‘s something in there about a resolution, something in there about a vote that might be tonight and another vote that‘s in the middle of next week.
MIKE VIQUEIRA, NBC NEWS WHITE HOUSE CORRESPONDENT: I would be happy to. First, let me pass along this programming information. We understand from the press pool that‘s in charge of covering the president that we could see him in as little as ten minutes. President expected to appear from the Blue Room, kind of an unusual venue on the first floor of the White House residence.
Obviously, Lawrence, as we were talking just a moment ago, the president waiting for John Boehner to seal the deal with his GOP conference, some 246 members of that conference. Boehner confident enough of support from the conference to come out and declare there is, in fact, an agreement.
What Boehner is talking about is look, the government is going to run out of money at midnight. So they‘re going to have to do something in the short term to bridge the time—between the time it takes between the government running out of money and to write the actual agreement up, put it in legislative language, put it on the floor of the House of Representatives.
Boehner says that is going to be sometime midweek. You know what, Lawrence? There‘s always time for another last minute glitch, especially in the Senate. In the Senate, anybody can raise their hand, object, and gum up the works, as you know better than I.
This appears to be good news, unless you are rooting for a government shutdown. This appears to be very good news for federal workers, for the military, for anybody who was looking to visit a federal park or museum tomorrow, to get a passport, to get a home loan, to get a small business loan. Great news.
Literally the 11th hour, but they have come to an agreement. At least they have announced it. We‘ve been hearing rumors and we‘ve been hearing reports. And certainly from here at the White House, we have been reporting for the last several hours that this deal was in the offing. Thirty nine billion dollars cut from this year‘s federal budget from the current fiscal year that we are in right now, 39 billion cut.
That controversial provision to defund the Title 10 organizations, Planned Parenthood, chief among them, that fight over abortion funding, dropped, deferred, tabled, however you want to put it. It‘s unclear how they‘re going to handle that part in a parliamentary way.
Apparently they‘re going to do so in a way as to get Republicans a chance to talk about , and dare we say give them some political cover. But that is not expected to pass. It won‘t be included in the larger bill. Again a deal, no government shutdown.
O‘DONNELL: John Boehner said that he was pleased to announce that Senator Reid and the White House have joined him on this. So he made—he made the announcement for all of the negotiating parties in this. And you know, Mike, this seems to be one of the stories where, as complicated as it has seemed to be, as it made its way through this week, coming up to this zero hour, as we sit here now, at—within that final hour approaching midnight, it seems as though it couldn‘t have turned out any other way.
John Boehner was going to have to take his caucus right up to the edge of a government shutdown, let them smell it, let them decide is that really what we‘re going to do? Are we really going to do it over this issue of Planned Parenthood? And only in that last hour before midnight could he have gotten his caucus to the agreement.
VIQUEIRA: Lawrence—and we‘re about to see the president. We‘ve given a two-minute warning. We‘re probably about 60 seconds away.
O‘DONNELL: The president is at the microphone now, Mike. We‘re going to go to the president.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Behind me, through the window, you can see the Washington monument, visited each year by hundreds of thousands from around the world. People who travel here come to learn about our history and to be inspired by the example of our democracy.
A place where citizens of different backgrounds and beliefs can still come together as one nation. Tomorrow, I‘m pleased to announce that the Washington Monument, as well as the entire federal government, will be open for business.
And that‘s because today Americans of different beliefs came together again. In the final hours before our government would have been shut down, leaders in both parties reached an agreement that will allow our small businesses to get the loans they need, our families to get the mortgages they applied for, and hundreds of thousands of Americans to show up at work and take home their paychecks on time, including our brave men and women in uniform.
This agreement between Democrats and Republicans, on behalf of all Americans, is on a budget that invests in our future while making the largest annual spending cut in our history. Like any worthwhile compromise, both sides had to make tough decisions and give ground on issues that were important to them.
And I certainly did that. Some of the cuts we agreed to will be painful. Programs people rely on will be cut back. Needed infrastructure projects will be delayed.
I would not have made these cuts in better circumstances. But beginning to live within our means is the only way to protect those investments that will help America compete for new jobs. Investments in our kids‘ education and student loans, and clean energy and life saving medical research.
We protected the investments we need to win the future. At the same time, we also made sure that, at the end of the day, this was a debate about spending cuts, not social issues like women‘s health and the protection of our air and water.
These are important issues that deserve discussion, just not during a debate about our budget.
I want to thank Speaker Boehner and Senator Reid for their leadership and their dedication during this process. A few months ago, I was able to sign a tax cut for American families because both parties worked through their differences and found common ground.
Now the same cooperation will make possible the biggest annual spending cut in history. It is my sincere hope that we can continue to come together as we face the many difficult challenges that lie ahead, from creating jobs and growing our economy, to educating our children and reducing our deficit.
That‘s what the American people expect us to do. That‘s why they sent us here.
A few days ago, I received a letter from a mother in Longmont, Colorado. Over the year, her son‘s eighth grade class saved up money and worked on projects so that next week, they could take a class trip to Washington, D.C.. They even have an appointment to lay a wreath on the Tomb of the Unknown Soldier.
The mother wrote that for the last few days, the kids in her son‘s class had been worried and upset that they might have to cancel their trip because of the shutdown. She asked those of us in Washington to get past our petty grievances and make things right.
She said “remember, the future of this country is not for us. It is for our children.”
Today we acted on behalf of our children‘s future. Next week, when 50 eight graders from Colorado arrive in our nation‘s capital, I hope they get a chance to look up at the Washington Monument and the sense of feel pride and possibility that defines America, a land of many that has always found a way to move forward as one.
Thank you.
O‘DONNELL: Going back to Mike Viqueira at the White House. The president spoke for almost five minutes, Mike. He was ready to go about 4:30 after 11:00 p.m. with a written speech set in the teleprompter, not much in the way of specifics, but he did say, and he seemed to be proud to say it, that this is the largest annual spending cut in our history.
VIQUEIRA: Isn‘t it amazing that that is the one thing that the president chooses to emphasize now. You talked about John Boehner and he sort of looked over into the abyss and decided to take a step back. They‘re going to dispute that interpretation. That may not surprise you, and emphasize the fact that we began this week with the White House saying that look, we met the Republicans in the House more than half way. They want to cut 61 billion. We are agreeing to 33 billion dollars in cuts.
John Boehner and his lieutenants and allies are going to say we brought the president up to 39 billion, six billion dollars more.
In the larger context of things, we‘re talking about a trillion dollar spending bill, Lawrence, to last for the rest of the year. It is small potatoes, no question about it. But politics is symbolism. A deal has been struck.
I thought it was very interesting. Number one, one we know why he was in Blue Room now, so he could have the Washington Monument behind him out the window, looking directly south, and he could make that point about the fact that those—the national monuments and for all the people that are here for the Cherry Blossom Parade—it sounds like a trivial thing when you talk men and women in uniform not being paid to talk the monuments and the zoo and the pandas and so forth, but they‘re strong symbols, certainly.
Second of all, the president going out of his way to emphasize the fact that this is a compromise, much like the compromise that he reached on the tax cut with Mitch McConnell, Republican leader in the Senate, back in December, emphasizing his willingness to compromise.
All through this debate, all through the course of the last difficult days of these negotiations, we have seen the president sort of present himself as above the fray, at one point talking about Republicans and --
O‘DONNELL: Mike, Mike. Senator Reid has taken the floor. We‘re going to go to Senator Reid.
SEN. HARRY REID (D-NV), MAJORITY LEADER: -- as well as short term bridge that will give us time to avoid a shutdown while we get agreement through both houses and the president.
We will cut 78.5 billion dollars below the president‘s 2011 budget proposal. And we‘ve reached an agreement on all—on the policy riders.
In the meantime, we‘ll pass a short term resolution to keep the government running through Thursday. That short term bridge will cut the first two billion dollars of the total savings.
Mr. President, I, first of all, want to express my appreciation to the Speaker and his office. It has been a grueling process. We didn‘t do it at this late hour for drama. We did it because it has been very hard to arrive at this point.
I also want to express my appreciation to my counterpart, Senator McConnell. We‘ve talked during this process on a number of occasions. We have, as we say here, on many occasions turned out to be—we have really a terrific relationship.
We do our best to protect each caucus. We have our battles here. But he‘s really a pleasure to work with. I admire and appreciate his work for the people of Kentucky and the country.
Mr. President, this has been a long process. It has not been an easy process. Both sides have had to make tough choices. Tough choices is what this job is all about.
I think it is important to note, Mr. President, as we said in this statement, this is historic what we‘ve done; 78.5 billion dollars below the 2011 budget that we have been working off of. We‘ve worked on many riders.
It‘s—what we‘ve done has been difficult, but important for the country. We all agree that there are many cuts that have to take place in the future. We understand them. We must get this country‘s fiscal house in order.
But if the American people have to make touch choices, and they‘re doing it everyday, so should their leaders. That‘s our responsibility, all 100 of us, and 435 members of the House.
The speaker and I have reached an agreement that I read will cut spending and keep the country running. We‘ve agreed to a historic level of cuts for the remainder of this fiscal year, as well as a short term bridge that will give us time to avoid a shutdown while we get this agreement through both houses and to the president.
I repeat, we will cut 78.5 billion dollars, and we‘ve reached an agreement, I repeat for the second time, on the policy riders. I do that because that has not been easy.
In the meantime, we‘ll pass a short term resolution to keep the government running through this coming Friday. That short term bridge will cut the first two billion dollars of the total savings. We‘ve already talked through the 78.5.
Mr. President, I, with the permission of the Republican leader, ask unanimous consent for the Senate proceed to counter number 28, HR-1363, that a Reid-McConnell substitute amendment, a seven day continuing resolution, which is at the desk, be agreed to a bill, as amended, be read a third time, and the Senate proceed to vote on passage of the bill as amended, that the motion to reconsider be considered made and laid on the table, with all of the above concurring, with no intervening action or debate.
UNIDENTIFIED MALE: Is there objection?
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Mr. President—
UNIDENTIFIED MALE: The REpublican leader.
MCCONNELL: Let me thank my friend the majority leader and Speaker Boehner for their outstanding work during this difficult negotiations. Mr. President, we had an opportunity tonight to decide whether we wanted to repeat history or make history.
Had we chosen to repeat history, we would have allowed a government shutdown. Instead, we decided to make history, by implementing in the middle of this fiscal year, as the majority leader has indicated, substantial reductions in spending.
Now these reductions, Mr. President, are in the billions. Once we get through this process, by the end of next week, we will move on to a much larger discussion about how we save trillions, and I think hopefully on a bipartisan basis a budget that genuinely begins to get on top of this problem.
And the problem, as we all know, is 14 trillion dollars in debt and over 53 trillion dollars in unfunded liabilities. The president has asked us to raise the debt ceiling. Senate Republicans and House Republicans, and I hope many Democrats as well, are going to say, Mr. President, in order to raise the debt ceiling, we need to do something significant about the debt.
My definition of significant, Mr. President, is that the markets view it as significant, the American people view it as significant, and foreign countries view it as significant.
So for tonight, again, I congratulate the majority leader and the speaker. This is an important first step, but just the beginning of what we need to do to get our house—our fiscal house in order.
REID: Mr. President?
UNIDENTIFIED MALE: Majority leader?
REID: The Republican leader is right. We have a lot of work to do. The one thing I want to mention is how much I appreciate the support of the American people. Of course, they knew we needed to get this done. but also the business community of our country.
I had a conversation earlier today with Tom Donahue, the president of the Chamber of Commerce. It was so important to his organization that we complete this. The Business Roundtable and organizations all over America understand how important this is.
But I want to mention one more person. I know the night is late. Always an unsung hero, but really hero among heroes, and that‘s the chairman of the Appropriations Committee. Dan Inoue is here behind me tonight. He has been with his staff—tireless staff working so hard.
I applaud his person, Charlie Hoi (ph), who
O‘DONNELL: That‘s Majority Leader Harry Reid on the Senate floor announcing the agreement reached with John Boehner and the White House on the budget bill that will avert a government shutdown. He has now asked the United States Senate for unanimous consent to proceed to a temporary extension of the current budget bill that will take them through to next Thursday to avoid a government shutdown.
That will give them the time to work out the details on the rest on the bill that will take them through the rest of the year.
Joining me now is Republican Congressman Jack Kingston, who represents the first district of Georgia. Congressman Kingston, thank you very much for joining us tonight.
REP. JACK KINGSTON ®, GEORGIA: Thank you, Lawrence. It‘s an exciting moment.
O‘DONNELL: It‘s an exciting moment. The Tea Party is excited. I‘m going to read you a Tweet from Tea Party Nation. The Tweet says “Boehner is selling us out tonight. We will primary Boehner next year.”
Are you going to vote for this bill that sells out the Tea Party?
KINGSTON: You know, I am planning to vote for this, but this is not where it‘s going to stop. We‘re going to continue with the Ryan budget. We‘re going to continue with the debt ceiling. We‘re going to continue with he passage of the appropriation bills for FY ‘12.
All these battles will be major in their own right. Today wasn‘t a year‘s work. It was a good day‘s work. And I think 39 billion dollars is hard to come by in this town, as we have just seen, but it is a cut. And it is 79 -- 79 billion dollars less than what the president wanted back in the Fall.
So to say that our election hasn‘t made a difference would be incorrect.
O‘DONNELL: Well, that‘s not what they‘re saying. The Tea Party is not saying you didn‘t make a difference. They‘re saying Boehner sold them out tonight. Do you expect there will be—and they‘re threatening a primary challenge against the speaker of the House. Do you think there will be other primary challenges threatened against Republican who vote for this agreement?
KINGSTON: Well, I don‘t think there will be. I think that people would really—I think everybody would love this to be 100 billion dollars or 500 billion dollars. But we did not win the Senate. We did not win the White House.
This is a long battle all the way to November 2012, where we hope to win the Senate and the White House. And we can get a lot more done. But we are moving the ball in the right direction. And a 39 billion dollar cut is not a small matter.
O‘DONNELL: Congressman Kingston, apparently nothing changed in the last 24 hours. The House has agreed to leave Planned Parenthood out of this—this bill and not try to zero out its funding. How can you vote for a bill that does not zero out the funding for Planned Parenthood?
KINGSTON: Well, I tell you what we did get in there. The Senate will have an up-and-down vote on Planned Parenthood funding. So there will be a recorded vote for 12 senators who are up for re-election on Planned Parenthood. That is going to be a very difficult vote for many of the Democrat members.
Same thing with the repeal of Obama care. They have promised a floor vote on that, an up and down vote. That is going to really be very difficult on some of these senators. We believe we have a great opportunity to win the Senate in 2012. And these votes are going to be crucial in that process.
I also want to point out that we have a lot of good stuff on auditing the impact of Obama care, of Dodd-Frank, and outlawing tax-funded abortions in D.C. So many of the policy riders did get in this continuing resolution. So we did have victories on it.
O‘DONNELL: The temporary bill has just passed the United States Senate by unanimous consent. It is on its way to the House of Representatives for you to vote on it, and make it the law of the land for about a week or so before it will be replaced by the bill that will be negotiated—details be negotiated in the meantime.
When you face the final package, is there anything that could happen in the negotiations of this—the details of the final package between now and possibly Thursday when you have to vote again that could lose your vote?
KINGSTON: Lawrence, there always is because you have 435 independent contractors in the U.S. House. You got to have 216 votes. And so anybody could peel off. But we believe that right now moving this bill forward, taking the 39 billion dollars, fighting another day on the Ryan budget, fighting on the debt ceiling and the appropriations.
We‘re going to continue to move the ball down the field until we cross the goal line, which is to reduce spending and change the direction of our country.
O‘DONNELL: Congressman Jack Kingston, thanks for joining us tonight.
KINGSTON: Thank you, Lawrence.
O‘DONNELL: Joining me now is the Democratic Congressman Steve Israel, who represents part of Long Island, New York . And he is the chairman of the Democratic Congressional Campaign Committee.
Congressman, thank you for joining us tonight.
REP. STEVE ISRAEL (D), NEW YORK: Thank you, Lawrence.
O‘DONNELL: You know, I did not think at the beginning of this year or at any time last year that in this year, when were still in a—essentially a jobless recovery—the jobs are not coming back—that the president would be proud to announce what he calls the largest annual spending cult in our history. This is the stimulus president. This is the president who was trying to use government to stimulate the economy to create more jobs.
Now the largest annual spending cut in our history is his proud accomplishment for this week.
ISRAEL: Well, look, the—we do not want a shutdown of this government. These Republicans—these radical extremist Republicans were willing to take us to a shutdown of the government. So we did find common ground with Republicans on some spending issues. But you know what? We didn‘t surrender our principles and we didn‘t compromise on the higher ground.
The higher ground is not being a country that restricts women‘s right to go get the health services they need at centers like Planned Parenthood. We wouldn‘t surrender the high ground on issues of profound importance like the Environmental Protection Agency continuing to monitor our air and water quality.
So, you know, we are going to have those fights ahead. There is no question about it. But while we found common ground on some spending issues, we will not surrender the high ground on those profound issues that make us Democrats.
O‘DONNELL: Congressman, the Democrats and the president got some help late in the afternoon from a very, very unlikely source. I think Congresswoman Michele Bachmann. who sent out this Tweet late this afternoon: “I am ready for a big fight that will change the arc of history. The current fight in Washington is not that fight.”
That was her message to the Tea Party and to the extremists who she associates with that this was not the fight to have, don‘t shut down the government tonight, get what we can get before midnight and get away from this thing.
ISRAEL: Look, I hate to agree with her, but the fact of the matter is she is right. Here is the bad news in this. The bad news was that this was a just a sneak preview for what is about to come. This week, they were welling to take the government to the brink over the issue of whether women have the right to get health care.
Next week, they have promised—you just heard Jack Kingston say it. Next week, they‘re going to force a vote on the Ryan Budget, which privatizes Medicare, ends the guaranteed Medicare benefit for seniors, and according to the Congressional Budget Office, will add 12,000 dollars to medical expense for senior citizens.
So maybe Michele Bachmann is right. Maybe this fight was temporary, and we have a cease-fire today. But the real battles lie ahead, Next week‘s battle will be one group of extremist who want to privatize Medicare and end that guaranteed Medicare benefit for seniors, and Democrats who will protect and defend that right of seniors to get affordable and accessible health care.
That is going to be next week‘s battle.
O‘DONNELL: Congressman, a vote on the Ryan budget is all you could ever ask for in running Democratic Congressional Campaign Committees. Congressman Steve Israel, thank you very much for your time tonight.
ISRAEL: Thank you. Thank you.
O‘DONNELL: The politics of the budget crisis; who stands to win the most? And who has lost most already? Our coverage continues with Ezra Klein coming up.
(COMMERCIAL BREAK)
O‘DONNELL: Tonight‘s breaking news; minutes ago, a budget deal was reached, barely an hour before the United States government was set to shut down. A continuing resolution, a stopgap has just been approved in the Senate. It was passed by a voice vote.
And the House is expected to follow in short order. A final deal is expected to be hammered out over the next few days. The controversial riders, including one to strip funding for Planned Parenthood, will have a separate up or down vote in the House and the Senate. President Obama says some of the cuts will be painful. But the White House protected its priority.
Joining me now, MSNBC contributor Ezra Klein of the “Washington Post.”
Ezra, thanks for coming back.
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You were with us in the 8:00 hour leading up to this. It‘s one of those dramas that once we come to the end of it, we just see it couldn‘t have gone any other way. John Boehner, it seems to me, had to take his caucus to within the midnight hour, to some point after 11:00 p.m. before he could come out and publicly announce, as he did, that he had reached an agreement with Harry Reid and the president on what is going to be a resolution that gets them from about here to Thursday.
And then by Thursday, have a vote on a bill that will take them through funding for the rest of the year. Who won? Who lost in these final details of what is in these final two packages that have come out of this agreement?
KLEIN: The Tea Party won. John Boehner won. Democrats, Republicans, and I would argue, depending upon your perspective, but I would argue the economy lost. Let‘s put the deal in context. Barack Obama‘s budget request for 2011 had 40 billion dollars more than the budget request for 2010 -- than what we spent in 2010. I‘m sorry.
That was what he thought would be best for the economy. He already thought that was something of a compromise. He doesn‘t tend to come out with what he thinks is the ideal position. This is not only 40 billion less than that, so back to 2010 levels. It is then 39 billion—or 38.5 billion underneath that.
So it is a huge, huge downward move from what Barack Obama and his economists in the White House thought would be good for the economy this year. I understand why he had to do that. The Republicans won the election. They do get to drive these negotiations.
But to watch Obama come out and call it an historic compromise, the largest spending cuts we‘ve passed in one year ever, when I had a day—and I dropped a couch on my foot, locked myself out and lost my keys, got to work late. That wasn‘t historic. It was a bad day. I decided not to have it happen again the next day.
Watching the Democrats celebrate a compromise that they hate is very peculiar.
O‘DONNELL: Well, we saw some of this during the Clinton administration, when the Republicans took over. They dictated the terms of welfare reform, which for them was welfare repeal. Bill Clinton had proposed increasing welfare spending by about 18 billion dollars. He ended up signing a bill that decreased welfare spending by a net amount of close to 70 billion over five years.
So you had that very similar gigantic—gigantic loss on the scorecard by Democrats. But because there were some tiny little victories toward the last week of Clinton‘s negotiation with the Republicans on this, it was never reported as the complete wipe out that it was for the Clinton position.
So we have seen this kind of thing before.
KLEIN: And right. This is not only the playbook, but it is the same players. You remember he brought in Bill Daley from the Clinton administration, Gene Sperling, who is running the economic side of things. you have Bruce Rhee (ph) from the Clinton administration.
What is disturbing about it are two pieces. One, Bill Clinton is remembered as a successful president because the economy roared to life in the middle of his term, driven by the Internet boom, global boom.
So he looks very, very good in retrospect because things went very, very well. The reason we were able to cut the deficit by so much and move to surplus was this remarkable economic growth we had.
We are in a very different economic moment right now. We‘re in a very deep downturn. We have much too little demand in the economy. There are very few drivers of growth on the horizon. To take this much money out of the economy right now is very dangerous.
If Barack Obama is not capable—does not have a good economy in a year, much less in two or three, he will not be remembered as a successful president. People mistake the politics for the outcomes. Right now, the deal they have struck is a deal that will create worse outcomes down the road. That will not be good politics for Obama.
O‘DONNELL: This is the great lost center of this argument. The argument has spun around everything except hey, wait a minute, in the economy in this position, without a jobless recovery in the economy, why should we be cutting government spending? I think I can hear the counter to that only from Paul Krugman, you and occasionally myself.
It‘s just been lost in the debate about let‘s cut government spending in order to create jobs, which is a novel approach to that.
KLEIN: Let‘s put it back in perspective. Again, a couple months—actually it was weeks—Reid was touting estimates ranging from Ben Bernanke‘s 200,000 jobs lost from the Republican budget request to Mark Zandi‘s 700,000. This is only in 2011, 200,000 to 700,000.
The agreement Reid is celebrating tonight, an historic compromise, the largest spending cuts, if you use those numbers and just apply them down, it is 120,000 to 450,000 jobs lost. It is a lot of jobs gone.
And not only that, but as they prepare for the debt ceiling fight, as they prepare for the fight over Paul Ryan‘s budget, they have accepted the frame that spending cuts are a terrific thing that we should have a lot of right now. And it is going to be very, very difficult for them to walk that back.
If you watch those speeches tonight, you would have thought Barack Obama and Harry Reid were the guys pushing for spending cuts. And John Boehner came out and gave a short, business like, just the facts statement, was the guy who had been trying to moderate the deal. The optics of it are very confusing, and are not going to lead to better policy down the road.
O‘DONNELL: MSNBC contributor and “Washington Post” columnist Ezra Klein, thanks for joining us again tonight, Ezra.
KLEIN: Thank you, Lawrence.
O‘DONNELL: Spending totaling a fraction of a percent brings the government to the brink of a shutdown. The politics of the budget crisis with Howard Fineman, Alex Wagner and Chris Hayes, next.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: We protected the investments we need to win the future. At the same time, we also made sure at the end of the day this was a debate about spending cuts, not social issues like women‘s health and the protection of our air and water.
REID: We have agreed to an historic amount of cuts for the remainder of this fiscal year, as well as a short term bridge that will give us time to avoid a shutdown while we get the agreement through both houses and the president.
We will cut 78.5 billion dollars below the president‘s 2011 budget proposal. And we‘ve reached an agreement on the policy riders.
BOEHNER: I expect that the House will vote yet tonight on a short-term continuing resolution into next week to allow for time for this to—agreement to be—put together in legislative form and brought to the floor of the House and Senate for a vote.
So I would expect the final vote on this to occur mid next week.
(END VIDEO CLIP)
O‘DONNELL: So the drama ends. The government shutdown averted tonight, as the Democrats are pointing out historic cuts made to the 2011 budget. This is a special live Friday night edition of THE LAST WORD.
Joining me now, Howard Fineman, MSNBC political analyst and editorial director of the “Huffington Post,” Alex Wagner, also of the “Huffington Post” and MSNBC analyst, and Chris Hayes of “The Nation” magazine and MSNBC contributor.
Chris Hayes, you were anchoring earlier in the night, the 10:00 p.m. hour as this deal was coming closer and closer to reality. We heard John Boehner say that he is pleased that Senator Reid and I and the White House -- those are the three players. Reid, the Speaker and the White House have reached this agreement.
We now have a statement from Nancy Pelosi, who was not included in any of this.
CHRIS HAYES, “THE NATION”: No, she was not.
O‘DONNELL: The Pelosi statement is very interesting. She commends the president for his hard work and perseverance. She then says, “House Democrats look forward to reviewing the components of the final funding measure. The American people‘s top priority is creating jobs.”
Now, that is not a ring of approval and you have our votes. You can count on us and we are there for you. And this thing is going to sail through with all the Democratic support you want.
HAYES: No, it is not. In fact, it was clear—I mean, the Democratic minority in the House was completely out of the negotiations. Part of that is just the math, right. Boehner, if he has his caucus in line, can pass whatever he wants. They‘re not one of the operative players.
It was interesting to talk to—we had on our air tonight Congressman Clyburn, who is in the leadership team. He‘s one of the top lieutenants. He had no idea what was in the package. I said to him, doesn‘t it matter what is being cut?
All that we got today—it was so sort of maddening, and remains so, is that we got this top line number, 39 billion dollars. Well, there is a lot of different places—from a stimulative effect, the 39 billion matters. In terms of human impact, what is being cut, to what programs, whose shoulders this is resting on, really matters? We haven‘t seem them yet.
I think Nancy Pelosi is just annunciating that common sense position that it matters what the substance of the cuts are.
O‘DONNELL: Howard Fineman, Mitch McConnell said that tonight we had a chance to repeat history or make history. And they chose to make history, and not repeat that government shutdown history of the past. Mitch McConnell seems to, by John Boehner, have been the ignored man here. He did not include any reference to Mitch McConnell in his announcement of the final deal.
This bill cannot pass. None of this can pass through the Senate without Mitch McConnell‘s cooperation. We just saw how high that cooperation is. He got a unanimous consent agreement to proceed to that bill and then allow it to be passed by a voice vote in the Senate. The one voice heard in the room voting no was, of course, Senator Rand Paul.
This is a very high level of cooperation between the Democrats and the Republicans in the Senate on what is the most difficult, most contentious thing they have pass so far this year, done by a combination of unanimous consent and a voice vote.
HOWARD FINEMAN, “NEWSWEEK”: Couple things, Lawrence. First of all, the Senate is not the problem for the Republicans. The problem remains the House. And according to our reporting tonight on the “Huffington Post,” they may think they—they have got smooth sailing in the House, for this vote later this coming week, but I think it is going to be very interesting.
As the Chris was pointing out, and you pointed out, Nancy Pelosi and the Democrats might not necessarily be on the boards, depending on what is in the package of 38 billion dollars worth of cuts. According to our reporting, there—there are a lot of Republican who, whatever they might have said behind closed doors listening to John Boehner, just an hour or two ago, are not necessarily going to be excited to vote for this package.
The Tea Party people are also saying they‘re going to try to primary John Boehner. I think a lot of Republicans from the Tea Party wing are not going to vote for this, even though I think on—in objective terms, as Ezra Klein was saying, and as Chris was sort of saying, Boehner won the poker game here.
He didn‘t do it according to the Tea Party. So he has got a lot to deal with. One other thing I would say is this: I‘m fascinated by President Barack Obama‘s ability to seem to be pushed in the places that politically he wants to be.
Ezra its right that in terms of stimulus, in terms of macroeconomic theory, this runs totally against the grain of the Democratic liberal tradition. But politically, this is where Barack Obama wants to be. He wants to be the budget cutter. He has an unerring instinct for middle of the political spectrum.
The American political conversation generally among independent voters right now is about budget cutting. So politically he is making the gamble that he has moved to the right political place, and that economically the economy is recovering fast enough now—we have had good growth—job growth numbers in the last couple months.
He is making a bet that those job growth numbers will continue. And whatever stimulus is removed by this will not adversely affect the economy enough to counter balance what he thinks is a smart move to the center. And he looks like he has been pushed there. But politically that‘s where he wants to be.
O‘DONNELL: Alex Wagner, it took Harry Reid literally minutes to get this temporary bridge bill passed that will take them to Thursday. He got it passed by unanimous consent and a voice vote in minutes. It has been—according to my watch, I think it got over to the House of Representatives, 11:30. They literally take the paper and run it to the House of Representatives after they passed something like this in the Senate.
John Boehner has 16 minutes to get it passed in the House of Representatives in similar fashion before midnight. How much of a problem does he have there?
ALEX WAGNER, “POLITICS DAILY”: Someone is on roller skates going through the Capitol right now. Look, I think it it‘s—what is miraculous is how quickly Congress can move when it wants to. And I think this is part and parcel.
O‘DONNELL: There are no rules when the Congress decides there are no rules.
WAGNER: Same hour Fed-Ex. The point the fat lady hasn‘t sung. She is in the dressing room warming up and doing her scales. Let‘s remember that the 1995 shutdown was not over a C.R. It was over the federal debt ceiling. That debate has not yet come. That‘s coming in the next couple weeks.
And then the big kahuna is the 2012 budget. That—if you look at President Obama, part of the reason I think he is pivoting on this and trying to make this look like a teachable moment and sort of a great example of American democracy is because he knows what is ahead of him.
If he doesn‘t put some kind of positive spin on this, the American public is already exhausted. Let‘s look at what is going to happen over the course of the next three to six months.
O‘DONNELL: He did put as positive a spin as you can possibly imagine on it when he came out and made his speech. We have to take a break. More with our panel will be coming up on this special live edition of THE LAST WORD.
(COMMERCIAL BREAK)
O‘DONNELL: We‘re back with our panel, Howard Fineman, Alex Wagner, Chris Hayes.
Howard Fineman, we get word that the House of Representatives, of course, has the Senate bill. It has already passed the Senate, passed the Senate in minutes. They‘re going to try to convene by 11:55. They may make a rushed unanimous consent attempt to get this bill done before the strike of 12:00 midnight.
They don‘t actually have to. It is—since the bill is in process, there is no threat to anything and the federal government actually being shut down. But I think symbolically, John Boehner is going to want to say he got this done before midnight. Isn‘t he?
FINEMAN: Yes, I think so. You know, the amazing thing is, remember the other week, Newt Gingrich was in town. Of course, he was speaker at the time that the—of the shutdown in the—in the middle of the Clinton administration.
And behind closed doors, Newt Gingrich said to the Republicans in the
House get the budget cuts you can, get as much as you can, but don‘t take a
take it from me, don‘t shut the government down.
And I think the combination of Newt Gingrich having been the veteran of—of that shellacking politically, and John Boehner having been around as a young congressman during that time I think is what made the Republican leadership, in the end, decide that they—they get what they could get, and they got a lot, but don‘t shut it down.
So that 00 I think that 00 that experience from Newt Gingrich really had something to do with it.
On trying to do it before 12:00, it doesn‘t really matter. I can just tell you knowing what has been going on behind the scenes with the lawyers and the government, they have been so crazy about the details here that I think nobody wants to take any chances. Because, as you recall, people were going to have to turn in their Blackberries. They were going to have to, you know, not talk to anybody after Monday morning, all that business.
I think they just assume make it clean before midnight if they can. Don‘t forget, Lawrence, Alex is exactly right about the other things coming down the road in terms of the debt ceiling and the 2012 budget.
I‘m telling you that when they get around to voting for this in the House next week, it‘s going to be a mixed bipartisan vote, with a lot of people in both parties voting against it. And I bet you while they‘re probably get the number, it‘s not going to be all the Republicans by any means. There could be a lot of Republicans going the other way.
The riders that they wanted in there on Planned Parenthood, et cetera, are not in the bill.
O‘DONNELL: I think you are right, Howard. There are certainly more than a handful of Democrats who aren‘t going to go along with the size of these cuts.
FINEMAN: Republicans too.
O‘DONNELL: Chris Hayes, Michele Bachmann, of all people, offered a great deal of help to John Boehner today speaking from the Tea Party edge of the Republican party. She Tweeted “I am ready for a big fight that will change the arc of history. The current fight in Washington is not that fight.”
She Tweeted that around 5:00 p.m. today. That was a release to Tea Party members in the House of Representatives. That was a release to any Republican, support whatever Boehner bring back. I won‘t criticize you. She‘s been very consistent saying separately that, oh by the way, I personally will vote against it, as Rand Paul just did, the only senator who did vote against it by voice vote.
But she definitely gave John Boehner a pass on this, didn‘t she?
HAYES: Yeah, I think, I mean I think she—I mean, whatever Tea Party action Tweets are out there and whatever grassroots anger that might be, I think they have to look at this as they got a ton. Not only do they get a ton, they got a ton. They got more than Paul Ryan‘s initial offer when they came in, and the Tea Party made him back down, when he first put out for 30 billion dollars in cuts.
They got more I think than anyone could have thought they would get, knowing as Howard just pointed out, that ultimately it probably would have been really bad for them if they had a shutdown. When that was the end point, that was the thing that happened if they called the bluff, they were still able to negotiate themselves what looks like I think a victory.
I think that it also sets up like Alex is mentioning. It sets up the dynamic for the next two fights. The question is if you are not willing to sort of call the bluff here—I‘m glad the government didn‘t shut down, I should say.
But if you are not willing to call the bluff here, then you are sure as heck not going to call it on the debt ceiling, which is truly cataclysmic.
O‘DONNELL: Alex, the Republicans got 78.5 percent of what they were frying to get, which a lot of people in politics and in government would call a win. The Tea Party, some of them don‘t. They are 100 percent crowd. If you settle for 78.5, as we read in an earlier Tweet, they want to do a primary against John Boehner for settling for 78.5 of what he was trying to get.
WAGNER: It is the Tea Party‘s world and we are just living in it. Look, I think the 78.5 -- the 78 billion dollar figure that we‘re looking at is from President Obama‘s ideal budget. And actually Ryan Grimm on the “Huffington Post” has a great analysis of this.
If we look at the Sessions/McCaskill bill that we being debated in December of last year, which had broad bipartisan support, I mean, we have the gone down 59 billion from there. It is really—we are in a very bad place if you are talking Democrats and what they have conceded.
The idea that we still have two very big debates to come, and that Bachmann is effectively saying a storm is a-coming is reason to strike fear in the hearts of many.
(CROSS TALK)
O‘DONNELL: Chris, we got to go. I‘m sorry. Chris Hayes, Alex Wagner and Howard Fineman, thank you very for joining us tonight.
HAYES: Thank you.
O‘DONNELL: The midnight deadline to avoid a government shutdown would have been just a few minutes away at midnight. After a break, we will go to Capitol Hill as the House of Representatives is just about to convene and vote on a continuing resolution that will prevent that government shutdown. This is a special edition of THE LAST WORD.
(COMMERCIAL BREAK)
O‘DONNELL: The clock is about to strike midnight in Washington, D.C., but the government will stay open. The shutdown has been averted. The specifics of the final bill are still being worked out.
A short time ago, the Senate passed a temporary funding bill by voice vote that will fund the government until Friday. The House is about to reconvene to pass the same Senate bill.
Let‘s go to NBC‘s Kelly O‘Donnell on Capitol Hill. Kelly, what is the House of Representatives doing at this moment? Can they get this done in minutes before midnight?
KELLY O‘DONNELL, NBC NEWS CONGRESSIONAL CORRESPONDENT: It appears the vote probably will not happen until just after midnight. And apparently they‘re just pressing forward and they‘re not going to let the striking of the clock kind of derail all of this after so much difficulty. Of course, we have been counting down all night. There was this sense of urgency to get it done.
They have not yet in the House chamber come back on to the floor. And there is a few questions that you have been talking about among some members who may choose to vote no, who are expressing their concerns. There‘s a bit of a rumbling of that.
The Senate side had its own bit of a big exhale. There were certainly senators that I spoke to who felt a sense of relief, a sense of frustration that it took so long and it was so difficult. But it appears that there is a sense also of—kind of congratulating each other, not that they did such a fantastic job by taking the country to the brink, but the fact that they actually found a way to work together in the end.
Whatever that may suggest for the weeks and debates to come, at least this is a point where we have a sense of where people are on some of the issues, and what can get done in the new configuration of having the House in Republican hands, the White House and Senate still in Democrats‘ hands.
So it has been a night with a lot of tea leaf reading and now this sort of collective exhale as they try to put the fine point on it. We were thinking that the House would be able to convene before midnight. It does not appear that is going to be the case. They‘re still doing the business of the Senate. A few procedural things cleaning that up. They have not adjourned yet.
Privately, aides to the speaker and the majority leader are talking to reporters, trying to give us some insights about what‘s in this and where we go next. So there will be more details coming out in the wee hours here.
And for people who work here, there was a sense of relief that they will have either a day off tomorrow or they will not have to worry about no paycheck come Monday.
O‘DONNELL: Kelly, we saw—we left the camera on in the Senate to show, just how fast the Senate can act when it wants to. Harry Reid brought the bill up by unanimous consent, got a voice vote, which takes a couple of seconds in the Senate.
As far as we could hear, the only no of the voice votes was Rand Paul, who yelled out his no, and then put out a statement saying he was voting against it.
But that—that is how quickly the Senate can act. They got it done in minutes. They rushed that bill over to the House of Representatives. The House has now taken longer to read that bill than the Senate took to pass it, although we are getting indications that the House may take it up as soon as 12:05.
END
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