Tuesday, January 24, 2012

'Countdown: State of the Union' special coverage for Tuesday, January 24th, 2012
video 'podcast'

An early ShowPlug: Special live coverage of The State of the Union, 8-11 ET. Eliot Spitzer, Rep. Grijalva, Markos Moulitsas, others, join me

#ShowPlug 1: Special Three-Hour Countdown tonight: @RBReich, Eliot Spitzer, @RepRaulGrijalva preview the speech

#ShowPlug 2: @Markos on Gingrich call for Open Debates (because you can't turn a crowd into an angry mob if they can't yell)

#ShowPlug 3: Just a coincidence that GOP response will be by Indiana Gov. Daniels as GOP pushes to bust unions there. State Rep joins us

#ShowPlug 4: Worsts: Tennessee Tea Party seeks to strike slavery, native genocide references from textbooks, + Tim Thomas's cowardice

#ShowPlug Last: Then SOTU, with Spitzer & @SenatorSanders joining me for reaction, then on tape delay only, the GOP response.

#ShowPlug PS: @RepRaulGrijalva will also talk about who's sitting next to him tonight at State Of The Union: Rep. Gabby Giffords

SOTU: I intend to fight obstruction w/action & I will oppose any effort to return to the vry same policies tht brot on this economic crisis

POTUS SOTU: It's time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts...

POTUS SOTU Conclusion: "An America built to last insists on responsibility from everybody."

Truth in advertising: office of @RepRaulGrijalva says he is caught in traffic and can't make our show AND sotu. Needless to say we deferred!

watch whole playlist

#5 'State of the Union', Robert Reich

#5 'State of the Union', Markos Moulitsas

#4 'Candidate Calamity', Markos Moulitsas
YouTube, Current.com (excerpt)

# Time Marches On!

#3 'Fight for Right to Work', Matt Pierce (D-IN)
YouTube, Current.com (excerpt)

#2 Worst Persons: Hal Rounds, Arkansas cat murderer, Tim Thomas
Current.com, YouTube

#1 'State of the Union', Eliot Spitzer

# President Obama's 2012 State of the Union address
YouTube (courtesy of C-SPAN)

# Analysis with Eliot Spitzer
YouTube, Current.com (excerpt)

# Analysis with Jeff Madrick and Eliot Spitzer
YouTube, Current.com (excerpt)

# Analysis with Sen. Bernie Sanders
YouTube, Current.com (excerpt)

# GOP response from Gov. Mitch Daniels, and wrap

printable PDF transcript

On the show: , , , , ,

KEITH OLBERMANN: Which of these stories will you be talking about tomorrow?

(EXCERPT FROM VIDEO CLIP) HARRY REID: Tonight, he'll layout a roadmap that sets up the path to fairness instead of inequality.

OLBERMANN: The State of the Union.

(EXCERPT FROM VIDEO CLIP) MITT ROMNEY: President Obama has been building a European-style welfare state.

OLBERMANN: Like conservative France or conservative England or conservative Italy or conservative Germany? Robert Reich on the economics. Eliot Spitzer on the optics. Markos Moulitsas on the union-busting nomination dark horse chosen to give the Republican response. Newest threat from the threatener-in-chief. He'll boycott debates unless the crowd can cheer him again.

(EXCERPT FROM VIDEO CLIP) NEWT GINGRICH: I think he took them out of it 'cause the media's terrified that the audience is gonna side with the candidates, against the media.

OLBERMANN: Because, how can you rabble-rouse without the rabble? Tacit endorsement.

(EXCERPT FROM VIDEO CLIP) WOMAN: He is an avowed Muslim and my - my question is why isn't something being done to get him out of our government? He has no legal right to be calling himself president.

(EXCERPT FROM VIDEO CLIP) RICK SANTORUM: Well - yeah - I'm doing my best to try to get him out of the government. I'm not here to defend the president and the - against, you know, scurrilous attacks. It's not my job.

OLBERMANN: So if she'd say, "He is an avowed Mormon, and my question is why isn't something being done to get him out of our government?" about Romney, you would've gone along with that too? And the hockey goalie and Glenn Beck fan who overshadows his team's White House visit by boycotting it, then doesn't have the guts to admit it was a political statement. Just how many presidents to you expect to get invited to meet, sonny?

All that and more, now, on our special, live, three-hour coverage "Countdown: State of the Union."


OLBERMANN: Good evening. This is Tuesday, January 24th - 288 days until the 2012 presidential election and the start of our "Countdown" special coverage of the president's State of the Union address. We go live for the next three hours with our usual newscast, followed by the president's speech and commentary and analysis from our guests, Senator Bernie Sanders, former New York Governor Eliot Spitzer and economist and author Jeff Madrick. But in the fifth story on the "Countdown" - that's after. This is still before.

(EXCERPT FROM VIDEO CLIP) BARACK OBAMA: May have a few touch-ups left.

(EXCERPT FROM VIDEO CLIP) MAN: Are you pleased with its condition?


OLBERMANN: You'll have to come a little closer to the microphone, sir. None of us can hear you. The White House having released a few pages of excerpts. We know the president will emphasize these themes - an American economy that's built to last. One that reward hard work and responsibility, where everyone plays by the same rules and the rewards are fair. All that based in turn on what he will describe as four pillars - American manufacturing, American domestic energy production, skills for American workers and American values that are reflected in our national policies.

Among the direct quotes released by the White House a few ago, a populist call for action. "We can either settle for a country where a shrinking number of people do really well, while a growing number of American barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share and everyone plays by the same set of rules." The latest Gallup poll showing the president seeming in tune with the majority, at least on picking the issues. More than sixty percent agreeing the president needs to emphasize jobs and the economy. Just seventeen percent favoring the theme that haunts the GOP house majority, the federal budget deficit. With health care, national security and moral values issues trailing well behind. To Mr. Gingrich's joy. It should surprise no one that GOP congressional leaders have already rejected the president's points.

(EXCERPT FROM VIDEO CLIP) JOHN BOEHNER: It sounds like we're going to see a - a rerun of what we've heard over the last three years.

(EXCERPT FROM VIDEO CLIP) PAUL RYAN: More borrowing, more spending and tax increases.

(EXCERPT FROM VIDEO CLIP) ERIC CANTOR: The policies that this president and his administration have been about haven't worked. And it's time to try something new.

OLBERMANN: House Speaker Boehner emphasizing Sunday he thought little of the president's past economic too.


OLBERMANN: Leaving Senate Majority Leader Harry Reid insisting that despite opposition, the president would still reach across the aisle.

(EXCERPT FROM VIDEO CLIP) HARRY REID: - president to include ideas from Democrats and from Republicans.

OLBERMANN: Despite Minority Leader Mitch McConnell seeing little but subterfuge in this State of the Union.

(EXCERPT FROM VIDEO CLIP) MITCH McCONNELL: Based on what the president's aides have been telling reporters, the goal isn't to conquer the nation's problems. It's to conquer Republicans.

OLBERMANN: The minority leader seeing no irony in his apparent lack of awareness but to a huge percentage of Americans, conquering the nation's problems and conquering Republicans are anything but mutually-exclusive. Or that the public has a clear grasp again of what those GOP statements will mean. Just six percent saying they think the divided congress will pass more than half of the president's proposals. 20 percent think some will pass. 66 percent believe only a few. And then there are pessimists and/or realists who think none of them will ever become law. The GOP fighting the president on other fronts today too. The Republican National Committee with an attack ad.

(EXCERPT FROM VIDEO CLIP) MAN: We live in an economy with 13 million people out of work, 4 million people out of work for more than a year.

(EXCERPT FROM VIDEO CLIP) BILL CLINTON: 49 million Americans living below the poverty line.

(EXCERPT FROM VIDEO CLIP) MAN: Undo influence by Obama campaign supporters.

(EXCERPT FROM VIDEO CLIP) CLINTON: Things are not going in the right direction. They're going in the wrong direction.

OLBERMANN: And the GOP presidential candidates also taking aim at the president's speech.

(EXCERPT FROM VIDEO CLIP) MITT ROMNEY: President Obama has been building a European-style welfare state. He's pushed for a second stimulus, deep cuts to our national defense.

(EXCERPT FROM VIDEO CLIP) NEWT GINGRICH: You always have to wonder when Obama speaks which country he thinks he's talking about.

OLBERMANN: Intriguingly, virtually all those European states and their economies, which make ours, at the moment, look like an alchemy kit, are run by conservative governments.

For more on what to expect in the economics of tonight's address and the sort of impact the president's proposals might have, I'm joined again by Robert Reich, former U.S. Labor Secretary, professor at UC Berkeley's Goldman School of Public Policy and author of " Aftershock: The Next Economy and America's Future." Thank you for your time tonight, sir.

ROBERT REICH: Good evening, Keith.

OLBERMANN: Are you - are you surprised that the number of - of these excerpts that have come out all seem to have a populist tone to them? Do you - are you surprised by that? Do you see the - the influence of Occupy -

REICH: I'm not surprised.

OLBERMANN: - in it?

REICH: I'm not surprised. I do see the influence of Occupy. I also the influence of the still likelihood that Mitt Romney is going to be the Republican nominee and the fact that Mitt Romney is sort of a poster boy for everything that's wrong with the economy in the eyes of not only Occupiers but most Americans. I mean, look, we are - have an economy that is working for the top one percent or in Mitt Romney's position, the top 1/10th of one percent, but not for most people. So the president's gonna emphasize tonight - and I think we're gonna hear over and over again the use of the word "fair."

OLBERMANN: The - the president while - while using that term and, again, just the excerpts that we have and I've seen it several times - the president also emphasizes manufacturing and domestic energy production and skills for American workers and American values. Is he going to get specific, in terms of individual programs and if - how specific can he get without people thinking he's just reading a laundry list?

REICH: I think he's not going to get specific, Keith, because there is that kind of laundry and list policy wonk problem and especially this year, when most Americans know the Republicans are not going to allow anything to get through Congress at all. I think the president is going to establish or he probably should try to establish, kind of the - the framework that he is going to approach the economy now that we seem to be slowly coming up. There is some evidence we're slowly, painfully coming out of the depths of the recession. What - what next? And the president is going to offer his view for what we ought to be emphasizing, where he wants to be going.

OLBERMANN: What do you want to hear, then?

REICH: Well, there has to be an emphasis on the American workers, on not only manufacturing but investing in education and skills, also infrastructure, basic research and development. I mean, the fact of the matter is, the big corporations that are based in America are now global. They are creating more jobs abroad than they are in the United States. They are also doing more research and development right now, abroad, particularly in China, than they are here in the United States. And so, the president, I think, has very strong standing to say, "Look, the government is not going to be creating the jobs but government has got to do the basic investment in our workforce, otherwise we're going to be on a downward escalator."

OLBERMANN: So, how does he - obviously, if he emphasizes that the Republicans pile on him for all the things we heard them pile on him for before he even made the speech. Is there a way to couch that to make it - to make it seem different than what he has done before? Because whether or not what he's done before has worked, it has provided Republicans with lots of rocks on the ground to throw at him.

REICH: Well, I think the way to - to couch it is that he wants a government that's going to be working for average working people, not a government that's going to be working for - big corporations and Wall Street. In other words, I think the way that he might position this is to say that the choice is not - big or small government. The real issue is who is government for? And instead of agribusiness and military contractors and Wall Street and the insurance companies and everybody else that the Republicans want to make government work for, he - the president can say, "Look, I'm against corporate welfare. I am against the subsidies. I didn't want to do the Wall Street bailout. That was a necessity but where we are going is - is to emphasize a kind of laser like focus on the American worker, on average working people and that is what this president is going to do and that's what this government is going to do.

OLBERMANN: We have - and you mentioned the word "fair" before. One of the excerpts, which we'll go into depth with Elliot Spitzer on at the end of the hour preceding the speech itself - one of these excerpts mentions, specifically, that we need an economy where everybody plays by the same rules and the regards are fair. Based on your years in Washington, is there value, politically, to taking this sort of populace position? Is it triangulated in a way? If the country responds to this, does that, in fact, put pressure on the - on Congress and the Senate or is it just rhetoric at this point?

REICH: Well, obviously, some of it is campaign rhetoric, but there is a kernel of a very important principal here, Keith, and that is that nothing really good happens in Washington in terms of changing the structure of the American economy unless people outside Washington, good people outside Washington, are mobilized and energized and organized to make it did happen. So the president really needs to over not just this speech, but over the months leading up to election day, layout a predicate, a mandate, for his second term in terms of making an economy that is not rigged for the super rich, where the game is not - is not loaded all ready, but make an economy that really is working for everyone. But, he's got to incorporate. He's got to get everybody behind him to do that because there is so much money in Washington coming from the big corporations in Wall Street, that the only way that it's possible to have an economy that's working for everybody is if people outside Washington are really organized for it.

OLBERMANN: Robert Reich, former U.S. Labor Secretary, Professor at UC Berkeley, great, thanks for your time, sir.

REICH: Thanks, Keith.

KEITH OLBERMANN: Markos Moulitsas will be joining us in a moment, too. First, there's a note about what you're going to see tonight in the crowd. Congresswoman Gabby Giffords will be attending tonight's State of the Union and is expected to sit between Arizona Congressman Jeff Flake and Raul Grijalva. This after she introduced the bill on cross border smuggling that is expected to pass.

Of course, she announced on Sunday that she will be stepping down from the House to focus on her recovery from last year's shooting during the appearance in Tucson and, of course, this will be her appearance, if not her final act as a congresswoman, at least this time around. Certainly the final act or one of the final acts of her term, which will then be followed by a special election in near order.

Now, as promised, joining me, founder of Daily Kos, "Countdown" contributor, Markos Moulitsas. Markos, good evening.

MARKOS MOULITSAS: Good evening, Keith.

OLBERMANN: All right, what we've seen in the excerpts, populace sounding, do they address the needs of the country at the moment? Do they address the expectations of the base at the moment?

MOULITSAS: Well, I think that the base component is actually very, very important.


MOULITSAS: The needs of the country? The needs of the country, I don't think we're going to get there because we have a Republican arty that is completely obstruction - obstructing every step of the way. And finally, I think this is the first time I've seen the president really forcefully call that out that he's not going to stand for that any longer, per to the excerpts.

So I think for the base, this is refreshing, finally we're seeing a president that says he wants to fight, and I think nationally that will play well because people have seen Obama bend over backwards trying to make things happen, trying to work with Republicans. They rebuffed him every step of the way. Obama has looked weak because of that. So finally, we're seeing a president that looks like he has some fight in him, and I think that will play very well.

OLBERMANN: One of the quotes that they have released - now, it's probably an hour and a half ago, since they put them out: "As long as I'm president, I will work with anyone in this chamber to build on this momentum, but I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place. No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits." Does that sound like a president who seems less plastic than he has previously in his regards to the Republicans?

MOULITSAS: Well, I don't know if "plastic" is the right word. I would say accommodationist and almost surrenderous, if that's actually even a word. I mean, here's a president that was willing to give Republicans anything they wanted to the point where he adopted their very agenda, like the individual mandate in the health care law. That is a Republican proposal through and through. And yet, when - as soon as Obama adopted any of these Republican proposals, which weren't the best policy, of course, they rejected him.

So he tried so hard, and I think that really did not play well nationally. We saw that with his numbers collapse as he tried time and time again to just concede on issue after issue. Finally, I think Obama got the message. Republicans want to destroy them - destroy him. They've wanted to destroy him since day one, and finally, he's saying I'm not going to take that anymore, and I'm going to take that fight to them. That is so refreshing on so many different levels that I wish it hadn't taken three years to get there. But, it's better than the, you know, the status quo as the way it was just even a few months ago.

OLBERMANN: And whatever their virtue as economic policy or economic inspiration, do they fly as politics, what he was saying tonight, these - what the excerpts indicate?

MOULITSAS: I think it absolutely will. I mean, I think we've seen - I don't think - I know we've seen Obama's numbers improve in the last couple of weeks as he's taken a much more confrontational and populace tone.

I mean, remember, this is not a message that does not resonate with America, even economic populism. We have a Republican primary right now that is being won by Newt Gingrich on economic populism. I mean, his attacks on Bain Capital are very much attacks on sort of crony capitalism that exemplifies what Republicans stand for. So when you have a Republican primary being decided on Occupy Wall Street type rhetoric, you know that is a message that is actually universally accepted and embraced by the American people.

OLBERMANN: Well then, that leads to the question, is there anything the president can say in the State of Union address that doesn't sound like a political speech but is in fact enough of a dart that it can pass through a car wash without getting wet and, you know, hit Romney where he lives the way Gingrich has without knocking Romney out and putting Gingrich in as the nominee?

MOULITSAS: I think this speech is being seen as political by absolutely everybody. I don't think anybody is going to pretend that this is a serious policy speech. But, I think what it does do is it lays out a marker. It's going to talk- Obama needs to talk about what his vision is for the next four years. This is, sort of, almost a campaign kickoff in a lot of ways. I mean, he accomplished a significant amount with his first term agenda. Whether he went as far as we would have liked is a different story, but he - when he was elected, he was elected on health care law, and he was elected on stimulus for the economy and trying to get people back to work and so on and so forth. He actually fell through - came up short in very few areas, immigration was one of them, cap and trade was probably the other one. But, other than that, what he ran on in 2008, he actually got most of that agenda through. So now, he needs a new agenda moving forward into the next term, and this is what the speech, I assume, is going to mostly lay, and - you cannot look at this in a non-political term. I mean, no State of the Union is non-political to begin with, but this one in particular, giving that it sets up his epic reelection battle this November, I think is very much political, and it should be. It should be. People need to know what the stakes are, and they need to know what the differences are between Gingrich, Romney and Obama. And the differences are vast, and I don't think it's going to be very hard for Obama to make - to lay down that marker and make those distinctions clear starting today.

OLBERMANN: All right, I want to talk about the other end of that equation with you in a moment, if you'd be kind enough to stick around. Specifically, Mitt Romney's taxes, Rick Santorum's enabling of a birther, and Newt Gingrich complaining there's not enough yelling and applause at the debates. Well, get some better material. Next.


KEITH OLBERMANN: You can't get an angry mob angry if they're not allowed to scream. Newt Gingrich threatens to walk out if the debates aren't on his terms. He wants, you know, and open debate. Yesterday he went along with it when a crack told him President Obama was a "avowed Muslim." Today he's trying to wriggle out of that. Is it an accident? The State of the Union rebuttal will be given by the GOP's latest union busting governor. And this was no accident. Former U.S. Olympian who stood up the president and embarrassed his team at the White House yesterday, now trying to get out of it by claiming it wasn't a political statement. And you thought hockey goalies were brave.


OLBERMANN: There's a little breaking news about tonight's State of the Union Address which is still about 50 minutes away, or there abouts. From Sam Stein, The Huffington Post. Sam Stein has been given access to part of what the president will announce tonight.

There's one very specific thing that will turn heads, certainly. During the State of the Union Address tonight, Sam writes, "the president will announce the creation of a special unit to invest gate misconduct and illegalities that contributed to both the financial collapse and the mortgage crisis. It will be put under the head of Eric Schneiderman the New York attorney general called 'Unit on Mortgage Origination and Securitization Abuses'. Four goals: To hold institutions accountable, to compensate victims, to relieve homeowners in distress and to turn the page on this period of American economic history."

So a special investigation shared by the attorney general of New York into Mortgage Origination and Securitization Abuses will be announced by the president during the State of the Union Address in just about 50 minutes hence. Elsewhere, the silence was deafening, at least to Newt Gingrich. There was another deafening silence form Rick Santorum. Happily Mitt Romney could just lest his tax returns do the talking for him.

In our fourth story, the day after 883rd debate the leading republicans and the third guy each answered the rhetorical question about whether they stood for anything besides self interest. Guess what the answers were? Last night's debate took a different tone than previous ones. There was no booing of soldiers, cheering for dying patients, or ominous threats against the media. Just a lot of Newt Gingrich on defense.

(EXCERPT FROM VIDEO CLIP) MITT ROMNEY: Mr. Speaker, you were on this stage at a prior debate. You said you were paid $300,000 by Freddie Mac for an historian. As an historian. They don't pay people $25,000 a month for six years as historians.

OLBERMANN: Gingrich today reacted by blaming the media, this time complaining that the moderator did not allow the audience to interrupt the candidates with cheering.

(EXCERPT FROM VIDEO CLIP) NEWT GINGRICH: I wish in retrospect I had protested when Brian Williams took them out of it because I think it's wrong. And I think he took them out of it because the media is terrified that the audience is going to side with the candidates against the media which is what they've done in every debate.

OLBERMANN: Uh-Huh. Mitt Romney's tax returns also a topic of discussion in the debate last night. This time around he seemed prepared for it.

(EXCERPT FROM VIDEO CLIP) ROMNEY: I pay all the taxes that are legally required and not a dollar more. I'm proud of the fact that I pay a lot of taxes and the fact is there are a lot of people in this country that pay a lot of taxes. I'd like to see our tax rate come down.

OLBERMANN: Today we found out just how much he was legally required to pay when he released his 2010 and estimated 2011 tax returns. Despite the stump speech claim of being unemployed her earned $42.5 million in income while unemployed. The tax rate Romney would like to see jump down, 13.9 percent in 2010 and expected 15.4 percent in 2011. Much lower than the rate of an average middle class family. And even after South Carolina, Rick Santorum remaining in the race, looking for an edge yesterday. He threw in his hat with a conspiracy theorist. Agreeing with a supporter's assertion that President Obama is an avowed Muslim.

(EXCERPT FROM VIDEO CLIP) WOMAN: He is an avowed Muslim. And my question is, why isn't something being done to get him out of our government? He has no legal right to be calling himself president.

(EXCERPT FROM VIDEO CLIP) RICK SANTORUM: Well, yeah, I'm doing my best to try and get him out the government.

OLBERMANN: One, avowed means you boast about it and say it's true. Two, even John McCain showed more class than that in 2008. Three, this morning Santorum attempted to defend his lack of defense.

(EXCERPT FROM VIDEO CLIP) SANTORUM: I'm not here to defend the president against, you know, scurrilous attacks. It's not my job.

OLBERMANN: And let's turn again to Markos Moulitsas. I'll get to Santorum in a moment. About the debates, all of us who have ever moderated them have been told to and tried to discourage crowd partisanship simply as a factor of time so you can get all the questions in. So people can answer the questions. But Gingrich for the republican debates, he's got a point here doesn't he? If you can't get the crowd yelling you can't turn them into an angry mob. If there's no rabble there's no rabble rousing, right?

MOULITSAS: I'm with Gingrich on this one on a couple levels. One, it's, I mean, the format, last night's format really only suited robots debating. So granted, that was really good for Romney but it's not really what you look for in a primary presidential debate. I mean, this is the passion, this is all about passion. It's about partisans finding the person they want representing them to run for president in the fall. So you want to encourage that sort of partisanship, that passion because that really speaks to what the whole process is all about.

Now, on the other hand, not the other hand, but in addition from the partisan in me says this is good because every time they boo a gay service member. Every time they cheer at the dying unemployed. That means just another independent, another maybe wavering democrat solidifies on our camp. So in either way from both ways to look at it I think they should allow as much partisanship as possible in those debates.

OLBERMANN: Possibly the throwing of rocks and garbage as well. Romney's tax returns, I've heard several experts on the subject say they look clean as whistle legally but he's still at risk and I don't think he knows it, does he? Because there are people who really did not know until today that you could make $42 million and pay less tax on it that if you made $42,000.

MOULITSAS: Yeah, nobody ever thought that this was going to be a legal issue. I mean, it was always sort of eye raising, like, this is what Romney is really all about. Now the tax rate, that is obviously a big one. There's two other items that really stood out to me. One is the fact that he has a Swiss bank account. Who the hell has Swiss bank accounts other than international criminals? I mean, this is, it's almost a -. Monocle. Is he going to where a monocle now? I mean, the guy is a walking stereotype on the nouveau riche. Of the arrogant and rich.

But the other thing that really stood out to me was the fact that he donated $1.5 million to the Mormon church. Now obviously I don't care what religion he is. I don't care anything about that. But the republicans had made a habit of deciding what's right and what's wrong on the matters of religion. And I've got to imagine for a guy whose been trying to really get away from the Mormon thing, that can't play very well.

OLBERMANN: Well, exactly to that point which brings us to Santorum. Let me replay that clip but I changed a couple of words in it. Then I want to ask you a question about that poor old lady with the can that Santorum was defending. How could I possibly have slammed her? Oh, it's not my job. I'm not supposed to correct people. Here's the revised sound bite.

(EXCERPT FROM VIDEO CLIP) WOMAN: "Romney" is an avowed "Mormon" and my question is, why isn't something being done to get him out of our government?

OLBERMANN: So, even poll after in this country says there actually is 22 percent of Americans who for whatever prejudices they might have could not accept a Mormon president. If that had been what that woman had said could Santorum's campaign have survived another 24 hours if he had not slammed her. If his answer to her had been as is was, well yeah I'm doing my best to try and keep him out of government.

MOULITSAS: Well in all fairness Santorum's campaign ended after New Hampshire.

OLBERMANN: Well, okay.

MOULITSAS: He's sort of the walking dead. If it was Romney or if it was Gingrich maybe we'd be getting more attention. But I think you make a good point that there is a double standard when it come to the president. That the president is allowed to be subjected to all manners of scurrilous attacks as Santorum called them. And the media's fine with it. They shrugged. This is expected. This is normal. But, god forbid, somebody talk about Romney saying that there's something weird about Romney. Remember that? There was a hyperventilating about Romney being weird because that was an attack on his Mormonism. He's just weird. It's got nothing to do the Mormonism part. The guy's weird. He's got a Swiss bank account. That's weird. So you're right. There is a double standard here that would have played a lot different had it come from our side.

OLBERMANN: Now, how did it not get into the debate last night? That one question. Not at the lead question but somewhere in there. When McCain did it he was given a round of applause for, you know, gently correct the crazy woman in the crowd who said that, you know, Obama was from whatever, Mars.

MOULITSAS: Yeah, I don't know. I mean, the debate, I mean, I got to say, I mean, they went out of the way to make last night's debate to be as boring as absolutely possible at exactly the right time in when this republican primary is really getting interesting.

OLBERMANN: Founder and publisher of Daily Kos, "Countdown" contributor Markos Moulitsas. Great thanks for your extra time today.

MOULITSAS: Thank you very much.

OLBERMANN: Back to the State of the Union. Funny isn't it? The guy mentioned as one of those dark horse favorite son candidates around whom a brokered republican convention might just be built. He's the one giving the republican response tonight. Coming up.


KEITH OLBERMANN: The Tennessee Tea Party wants the state's textbooks to erase all references to the founding fathers owning slaves or killing natives because, you know, everybody was like that then. Coming up.

First, the "Sanity Break," and on this date in 1722, Harvard College appointed the first divinity professor in the history of the American colonies. Wigglesworth. Edward Wigglesworth. Professor Edward Wigglesworth. He held the chair for 42 years. Wigglesworth chair.

"Time Marches On!"

Professor Wigglesworth. We begin in Portugal. When this group of friends gets bored, they do what anybody else does. They decide to roll a giant tire down the side of a mountain, into a lake.

VIDEO: Giant tire.

And down she goes. Anybody down there, by the way, should look out. There's something so tranquil about watching a tire roll down the side of a hill. Rolling, rolling, rolling, keep the tire moving, rolling, rolling, rolling - tire. And release, rotation, splash.

Geez, hopefully they cleared the swimmers out of the lake first.

Travel to the U.K. where Caylee here is trying to blow out a candle. Doesn't look like Caylee would be the right person to call in case of a fire. With her dad's encouragement, she tries with all her might to blow it out.

VIDEO: Candle triumph.

After several attempts, Caylee is finally successful at extinguishing the flame. And of course the tire then rolls down the hill. Whoops. The lesson here of course is if you try to succeed, try, try, try, try, try, try, again.

Finally, we end as we always do with amusement park thrill rides. Nobody's tougher than a marine recently back from Afghanistan. So the young man on the left should be able to deal with anything. Then he sat down on the giant sling shot ride in Orlando, Florida.

(EXCERPT OF VIDEO CLIP) MAN #1: Hey, can you give me like, a countdown?

(EXCERPT OF VIDEO CLIP) MAN #2: You guys want a countdown before you go?

(EXCERPT OF VIDEO CLIP) MAN #1: Ahhhh! Ahhhhh! That was not a countdown! Ahhhhh! Ahhhh! What kind of countdown was that?

VIDEO: Everyone loves a countdown.

OLBERMANN: What kind of countdown was that? I've said it before and I'll say it again. People hate when they don't get a real countdown.

"Time Marches On!"


OLBERMANN: The President leaving the White House moments ago for the Capitol, where at about 9:10 P.M. or 9:11 P.M. Eastern, he will deliver his third formal State of the Union address. Four years and three days after taking office. It was no chance it's going to be cancelled now. He's already in route and, what the heck. We are here each night at 8:00 P.M. Eastern and Pacific. Tonight we will be here through the State of the Union address. Senator Bernie Sanders and economist Jeff Badger will be among our guests after the President speaks. We will then tape and then air the Republican response at the very end of our coverage tonight.

Speaking of which, just a coincidence, the man who will give that rejoinder, he's leading the latest Republican anti-union march off a local cliff.

In our third story on the "Countdown," Democratic lawmakers in the Indiana house resumed their boycott after Republicans blocked legislation calling for a voter referendum to decide the fate of a contentious "Right to Work" bill. Governor Mitch Daniels' proposal still passed by only 28 to 22. Nine Republicans joined all 13 Democrats in opposition. Scores of labor supporters protesting inside the state house say "Right to Work" lowers wages and weakens unions because it bans union dues in private sector contracts. In his State of the State address, Governor Daniels tried to ignore the protestors hollering in the hallways against the bill.

(EXCERPT OF VIDEO CLIP) MITCH DANIELS: In survey after survey, by margins of two to one or more, Hoosiers support the principle known as "Right to Work." After a year of studying the proposal, I agree.

OLBERMANN: And he's saying Hoosiers, not Hooters. The Republicans today roll out part two of the same plan they tried in Wisconsin and Ohio. The GOP Speaker upping the fines on 13 absent Democrats to $4,000 each. Let's bring in state Democratic rep. Matt Pierce of Indiana. Representative Pierce, thanks for your time tonight.

MATT PIERCE: Good evening, Keith.

OLBERMANN: I'm guessing that you don't think it's a coincidence that Governor Daniels is delivering the GOP response to the State of the Union tonight?

PIERCE: No, I think he's done a really good public relations job nationally making people believe there's some kind of oasis here in Indiana as far as his fiscal management of the state and his business friendly environment, and that all feeds totally into the, into the Republican message.

OLBERMANN: I'm also assuming that, that, your Republicans do not think, particularly Governor Daniels, they do not think that residents of Indiana can get the news from Wisconsin or from Ohio. Why are they trying this and where would you, in an honest assessment, place your efforts to fight it?

PIERCE: Well, it's an unbelievable arrogance of power. After the last election, you know, in the House of Representatives where I served, out of the 100 members, 60 are Republicans. There's more than two thirds, in the Senate, so the only place you can put any breaks on this un-checked power now that Republicans control all the Government of Indiana, is for House Democrats to break a quorum, deny a quorum, and that forces the process to slow down. And, in fact, when we arrived here the first week of January to start doing business, it became very clear to us that they wanted to roll the "Right to Work" bill through the legislature in about one week before the public could really understand what was at stake. And they're also, I think, a little worried about maybe the Super Bowl here in Indianapolis getting a little messed up by some controversy.

OLBERMANN: That, not to make too bad of a pun here, that is, in fact, partially at least one of your goal lines in this, is it not? I mean, the Super Bowl is in Indianapolis 12 days from now. The head of the NFL Players Association said, let me read the quote, "if the issue is still percolating by the time of the Super Bowl, I can promise you that the players of the National Football League and their union will be up front about what we think about this and why." Will it still be percolating two weeks from this past Sunday? In what way, and what do you expect from the football players?

PIERCE: Well, it's hard to know what the NFL Players Association will do. They've written some letters. Some of our Hoosier players who are in the NFL and playing have written letters saying they don't think it's a good move from their home state. And I think that did catch some people's attention, and the final votes on these bills at the earliest will be next week, and that is Super Bowl week. So I think that there's a possibility it can get mixed together. And I think that is one reason why tried really hard. First they didn't want the public to know what they're really doing. And then secondly, I think they'd like to have this thing off the table before the full spotlight of the nation comes to Indianapolis.

OLBERMANN: Of course, if you're only sending sports writers, there's a distinct possibility they might miss any story that's right in front of them. But I'll let that pass. Let me explain, I asked you to explain one thing about this that jumps out at me. The vote on this bill was 28 to 22, 13 Democrats in opposition, nine Republicans in opposition. What about those nine Republicans?

PIERCE: Well, that's interesting thing, that vote, Keith, was over in the Senate because they have a parallel bill that they're moving, and so, it was interesting that some Republicans peel it off over there. We think probably what was happening is the leadership was just handing out some passes to people because they have such tremendous majorities. They're going to afford to kind of release some people and still have the bill passed. Now over in the House, we've seen up to this point a complete lockdown, because the Democrats in the House basically said "let's let the people decide." If you think this is so popular, this is so great for job creation, let's just put it to the people in the upcoming election, because after all, the Republicans never campaigned on this during the last election. Nobody even knew what "Right to Work" was until this came up. And so, we added an amendment that would have put this to the people in the form of a referendum, and every single Republican in the House voted no.

OLBERMANN: Silly me, I thought those nine votes might have suggested there was some sort of wave of conscience going through the State Senate, but you live and you learn. Uh, State Representative Matt Pierce of Indiana, many thanks for your time and good luck with this.

PIERCE: Thanks Keith.

OLBERMANN: It's not so much that he tried to show up the president as much as it is that he managed to overshadow what was supposed to be a celebration of his team. And he tried to show up the Presidency and then embarrassed himself by claiming all that he did was not political, the hockey goalie on thin ice tonight, next in "Worse Persons."


OLBERMANN: The countdown to the State of the Union with former New York Governor Eliot Spitzer joining me next. First, because whatever we might be sound about that state, it is in spite of these helots and not because of them, your "Countdowns" nominees for today's "Worst Persons in the World."

The bronze to Hal Rounds, an attorney acting as spokesman for a group Tea-Parties in Tennessee, you can tell that from his beautiful shirt. He and his little band of merry men presented State Legislators with a list of five priorities for 2012. They want health care reform rejected by the state. They want the Attorney General replaced by a Chief Litigator and they want all the states school books altered. "No portrayal of minority experience in the history which actually occurred shall obscure the experience or contributions of the Founding Fathers, or the majority of citizens, including those who reached positions of leadership." The translation from Mr. Rounds, "...an awful lot of made-up criticism about, for instance, the founders intruding on the Indians or having slaves or being hypocrites in one way or another."

Even though, he's admitting they began genocide against the natives, they did have slaves, and they were often hypocrites. Rounds and the other Tea-Partiers say the bottom line is to get the country back to the vision the Founding Fathers had for it. Okay, but remember part of that vision was that Tennessee was not a state, just a back woods portion of North Carolina and then in the south west territory, but if that's what you kids want.

The runner-up: whoever killed the family cat of Jake Burris. Burris is the campaign manager for the democratic congressional candidate in the third district in Arkansas, Ken Aden. He got home to find his children's Siamese cat killed, head bashed in, the word "liberal" written on its body in ink and the body left on the porch.

To their credit, the campaign that Aden's Republican rival, Steve Womack condemned the act, calling it, "beyond any standard of decency," and demanding no tolerance for it or its perpetrators.

But, our winner, Tim Thomas, goal tender of Hockey's Stanley Cup champion Boston Bruins. His team was honored at the White House yesterday and as a past U.S. Olympian and the only American native on it, you would have thought that he might have welcomed that honor, instead he upstaged it.

Thomas not only boycotted the event, but wrote a rambling defense of his insult to the office of the president that it wants claimed his right to make a political statement while insisting he wasn't making a political statement. "I believe the Federal government has grown out of control, threatening the Rights, Liberties and Property of the People...Because I believe this, I exercised my right as a free citizen, and did not visit the White House. This was not about politics or party." You know what's not in the Constitution? A U.S. Olympic team, especially not one for professional athletes like Tim Thomas.

Actually, I would defend his political statement if he had had the courage to admit that that's what it was. Instead of hiding behind the mealy mouth language of his favorite commentator, any guesses? Right, lonesome roads Beck, but instead of being a good team mate and making his comment after the visit, or, hell, show some guts goal tender, make the comments during the visit. His hissiness served only to overshadow the shot at the honor of the rest of the team, immigrants and foreigners, all by the way. They obviously embraced.

And beyond the disrespect to his team, I don't get the disrespect to the presidency or the White House. First time I was invited there I was shaking, so nervous, I got lost during the two block walk from my hotel. I couldn't convince my feet to turn around, had nothing to do with the President or a President. I already met that guy, this was the White House, you know, FDR, Teddy Roosevelt, Lincoln, whoever you liked, those guys. And their successor had invited me in. I mean, I stood on a street corner in my home town when I was a kid. When I waved madly a Richard Nixon as his motorcade barreled through our two street downtown and I already knew that guy was going to be impeached. It was still a thrill. And I interviewed Ronald Reagan once and when George H. W. Bush called me a sick puppy, I got a tremendous thrill out of that. I would have even gone to see his son. Although, we would have been smart to stick to baseball. There's only one president at a time.

You're assuming Tim Thomas that you're going to be asked back by another one, ever. Why?

Tim Thomas of the Boston Bruins: today's "Worst Person in the World."


KEITH OLBERMANN: One breaking bit of news, procedural news in any event, that does not directly pertain to the State of the Union address - from The Huffington Post: "Gabby Giffords will submit her formal letter of resignation from the House on Wednesday. In it, she will write, 'I will recover and will return.'" And there, as if on cue, is Congresswoman - still Congresswoman - Gabby Giffords getting a huge ovation, and seated - standing, now - between Jeff Flake and Raul Grijalva with the Arizona delegation.

Our number one story on "The Countdown," we are just minutes away from the State of the Union address, the third from this president, scheduled to enter the chamber at 9:01:30 Eastern. Could easily be 9:10 before he speaks. He's got to make that gauntlet go.

And I'm joined now by the man who served as 54th Governor of the state of New York, Eliot Spitzer, who will be here with me throughout our coverage tonight. It's good to see you, sir.

ELIOT SPITZER: Keith, thank you for inviting me.

OLBERMANN: Well, our pleasure. I want to preview some of those excerpts that the White House press office released two and a half hours ago, but, first, I have to ask you about this, since it's right - it is down your - down your strike zone here. The report from The Huffington Post that - Sam Stein reported there will be announced during this a unit on mortgage origination and securitization abuses headed by the attorney general of New York, Eric Schneiderman, who I know you know very well.

SPITZER: Indeed.

OLBERMANN: Which is designed to compensate victims, relieve homeowners, and hold institutions accountable. Can you translate it for us?

SPITZER: Yeah, look. There's a backdrop here. The federal government, the White House, has been trying desperately to broker an overarching deal that would permit it to announce some sort of mortgage progress, meaning the write down of the face value of the mortgages. A comprehensive investigation. State A.G.'s, Eric Schneiderman, Beau Biden, in particular, have been saying no, we are not - they have not been satisfied with what the White House has done, justice department has done, HUD has done over the years. I have been speaking to these guys. Can't tell you exactly what I've been speaking to them about, obviously.


SPITZER: But does this reflect some sort of understanding between the White House and A.G.'s? We have to see more to understand it. Notice it's Eric Schneiderman - not Beau Biden - involved. May mean Eric said yes, and Beau Biden said no. Is there going to be an agreement with the banks? The number being kicked about is $25 billion to write down the mortgages. If that's the number, it's not enough.


SPITZER: Not enough. Not enough. Not enough. I could say it ad nauseam. So, it's interesting to see how this plays out. Good to investigate, but where have they been for three years? Where has justice been? That's the big question.

OLBERMANN: And what would $25 billion do to the people who are in trouble with mortgages? Give them about $25 off?

SPITZER: You know, that's the point. I mean, this is like one of those class action settlements the Republicans and others love to deride, 'cause 10 cents goes back to the real victims. Not enough if it's only $25 billion. And ultimately, also, that's going to be money that comes out of our pockets, and, you know, it's not the right settlement that I've heard yet, but we have to wait and see how this emerges.

OLBERMANN: The first lady has just entered the chamber. We'll keep you updated on what you're seeing at we continue to look in advance of what's happening here. You'll hear the call of, "Ladies and gentlemen, president of the United States" and the rest of the that, but we wanted to fill this time rather than with little trivia about who's sitting where. You can see that. That's why it's television rather than radio.

One of the excerpts: "Think about the America within our reach," the president is going to say tonight. "A country that leads the world in educating it's people. An America that attracts a new generation of high-tech manufacturing and high-paying jobs. A future where we're in control of our own energy, and our security and prosperity aren't so tied to unstable parts of the world. An economy built to last, where hard work pays off, and responsibility is rewarded." I don't know of one political leaning in this country that isn't included in that one excerpt. He seems to be hitting isolationists, America firsters, people who believe in drilling more, green energy folks. He's got everything in here, except employees must wash hands.

SPITZER: Look, that will be in the next paragraph.

OLBERMANN: Of course.

SPITZER: This is a great campaign speech. We all know it. This is the kickoff, the opening gun to the campaign. The statements will be overarching, all encompassing, hard to disagree with until you get down to the specifics. How do you get from here to there? And after three years, obviously, this country is riven with division over how we're supposed to do that. You may or may not see that reflected in how the audience

responds tonight, but certainly, the words have a populist tenor that is reemerging as we get closer to November.

OLBERMANN: Now, here, ironically, as we talk about populist tenor, there is the secretary of the treasury, Mr. Geithner, as the cabinet has walked in. I don't think this is a speech that he was necessarily involved in the designing of or the -


OLBERMANN: It isn't written to him. Let's put it that way.

SPITZER: This is the speech that he said to the president - he said, Mr. President, okay, you have free leave between now and November to say whatever you want as long as, the day after, I can do what I want to keep my friends in the banks happy. Because the reality is, Tim Geithner, as treasury secretary, has been the banks' best friend, and that has been the real ideological tension between President Obama and many within the Democratic party, and I think many editorial boards and economists, as well.

OLBERMANN: Attorney General Holder just appearing in the picture now. This is another one, as every president since Nixon has had these human props. They sit with the first lady, usually. Tonight, the co-founder of Instagram will be seated with the first lady, which is a good time to remind all of you Instagram users that, unless you set it otherwise, Instagram photos are automatically sent to the Internet, which could be a problem if you don't know it's happening.

Anyway, he'll be there in large part to let the president segue into a discussion of the American promise: "The defining issue of our time is how to keep that promise alive. No challenge is more urgent. No debate is more important. We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What's at stake are not Democratic values or Republican values, but American values. We have to reclaim them."

Again, a lot of different points sort of melded together.

SPITZER: And also, in a way, echoing that great line from his Boston Democratic convention speech. "And there's no red American, blue America. There's just the United States of America." So the rhetoric is beautiful. Of course, where this will then take us on tax policy is going to be right into the vortex of vicious disagreement between the president and the Republican party. And, frankly, even between the president and many in his own party, who, you know, who are saying, "Where have you been for three years with rhetoric here from Teddy Roosevelt?" sort of echoing that great Al Smith, Teddy Roosevelt, FDR - I go back to the New Yorkers. I apologize. But, those great voices that stand for these propositions, but acted on them. People are still waiting on the president to see the president follow through.

OLBERMANN: New Yorkers have influenced American history greater than any other state.

SPITZER: Oh, we -

OLBERMANN: We know that. The two New Yorkers.

SPITZER: Well, there you go. I'm glad you said it.

OLBERMANN: All right, but, exactly to the point versus the Republicans, as, again, now we see Secretary Clinton greeting Congressman Grijalva and Congresswoman Giffords. "As long as I'm President, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place. No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits. Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that's built to last - an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values." So, a little bit of the too malleable president being erased there?

SPITZER: Well, you know, I think the question is, does the public buy it now? Because we have heard this same rhetoric, and it's beautiful, and he is going to deliver it exquisitely well, and those of us who are in that business wish we had that skill, but the question is, can he make actually make these policies real? I thought there was a stupendous article in the Times this past Sunday detailing Apple, that great iconic American company. But almost all the jobs are now in China. And the question is, can we bring back - not just the manufacturing jobs, but the engineering jobs and the high-value, value-added jobs, as economists call them, back to the states, and where does he give us the policy to do that that will have an impact in the near term? But, we know how to do it over 50 years. We educate, and with all sorts of other, more complicated, long-term policies. We need to hear - to see how he flushes this out.

OLBERMANN: Four excerpts were released, and it's now about nearly three hours ago that they came out. The last one is the one that most people just went "ooh" and "ahh" when they saw it. People quoted it and referenced it, and said, "Oh, we think the president's going to say this." We think that because they released these quotes in advance.


OLBERMANN: Here it is: "Let's never forget, millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same. It's time to apply the same rules from top to bottom. No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody." Is he channeling Occupy Wall Street?

SPITZER: Sure, he is. But then again the question emerges immediately, wait a minute is this the same Treasury Department that Tim Geihtner - I hate to make him the bad guy in this, I loved him as a person just put in out there, I disagree with everything he does. Is he the guy who gave Goldman Sachs $12.9 billion in a check to payoff their exposure to AIG credit default swaps for no reason whatsoever, and has not removed the single CEO of a major financial services company where justice has not brought any significant cases. There is a real division here between the rhetoric and the reality.

OLBERMANN: Also in that quote is there not a huge risk politically? If he says, and he's going to unless he's changed his mind completely, keep the shot up - we don't want to see us in the two shot. Keep the shot up. No bailouts, no handouts. The Republicans can come back and say and it's incomplete, but it's not a total falsehood as we wait for - here it is.

HOUSE OF REPRESENTATIVES SERGEANT AT ARMS PAUL D. IRVING: Mr. Speaker, the president of the United States.

OLBERMANN: All right, so as we see the president enter, now becomes the two things we look for every year, where is Eliot Engel standing, the Congressman from New York who is better at getting a good location here than he is at a Mets game.

SPITZER: He camps out there longer there than I used to at a Springsteen concerts.

OLBERMANN: He's been there since December getting that right spot the way several - Michele Bachmann used to be the foremost of those when Mr. Bush was president. We'll see Elliot's familiar mustache appearing in frame at some point her. This gauntlet can take up to 10 minutes. So if you've got to make a snack and you want to watch this - we're recommending - just I'll tell you if he gets to the podium, leave the TV for the moment. This is the glad handing and everybody is fine, and it's nice - it's the ten calmest minutes in American politics. Everybody says hi, Eric Cantor is smiling, same people who shake his hand shake President Obama's hand.

SPITZER: Unless you're Justice Scalia who protests. Who doesn't show up.

OLBERMANN: Protests everything. Or the one idiot Congressman who says he's not showing up for Lord knows whatever reason. It has nothing safety, security or the emergency condition. Back to my question about this phase, no bailouts, no handouts - there is Elliott.

SPITZER: There he is.

OLBERMANN: All right.

SPITZER: Your Congressman from the Bronx. This is how he's known to the public.

OLBERMANN: Screen caps. Got at least six screen caps. There he is covered for another election. God bless him. If he says - the Republicans come back and go didn't at least the GM, and Michigan, and Detroit bailouts were they not on President Obama's watch? How to do you say no bailouts, no handouts?

SPITZER: There is a attention here, on the other hand I think the president when it comes to the auto industry can say it worked. And I think that's one of the great success stories, and I would argue and I think many people would that shows how smart government intervention at the right moment with the right conditions with take an industry and bring it back. GM as of a couple weeks ago is once again the largest auto manufacturer in the world. Still major structural issues but it worked. And I think anybody who says we should have let it go bankrupt and said to them good bye and so long, we don't care is simply not dealing with reality.

OLBERMANN: But that was said by Rick Santorum again last night during the Republican debate. Again for the 35th time.

SPITZER: Keith as I said, he is not dealing with the reality. This is Rick Santorum.

OLBERMANN: And he is not that far away from the other Republican candidates. There are still people that say let the economic system work and only those of us who have $42 million in investments that paid off, we are the ones who should get the money and the rest of you should starve in the streets.

SPITZER: Mitt Romney's great frustration must be he looks at the other Republican candidates and says these guys really are in la la land. Romney at least is within some zone of normalcy, most of the time. And you say have Santorum even Gingrich who says things that are shocked the conscious, and yet they are doing well within that primary system. Hard to quite fathom how that's happened.

OLBERMANN: One thing you may have already noticed in checking the seating arrangements here, we're going to go through rather remarkable thing - we're going to have bipartisan seating. Where it's more or less going to be not boy, girl, boy girl, not Congressman, Senator but Republican, Democrat. I know this was meant sincerely. Does it have any possible practical impact except making the standing ovations look bigger because they will be more spread out?

SPITZER: I think this is the height of superficiality. It has absolutely no bearing on what will happen tomorrow morning when the Democrats go off to our caucus, their caucus, the Republicans went off to their conference last week. It will have no impact whatsoever on the substance of governance over the next couple of weeks or months, but what it does it gives the members of Congress an opportunity to say look at how good we are, we sat next to each other. Come on guys, get real on the issues, forget the superficial stuff.

OLBERMANN: And this bipartisanship will extend until what happens? We have a drinking game, or money - we have bets down, somebody saying - standing up and going you lie? Do we have another Supreme Court Justice making a fool out of himself as Scalia did? What do we got? Somebody ripping off their clothes and running down the other direction, or what the hell?

SPITZER: It is not going to be anything that exciting. It's going to be Mitch Daniels, who is hardly the most exciting speaker. Very serious guy. I knew him we served simultaneously, Mitch was the budget director under President Bush -

OLBERMANN: There is our moment of the day.

SPITZER: That is a great picture. Even though she is leaving office that's a great picture.

OLBERMANN: She's leaving office for now. In that statement she will give on Wednesday. My friend Congresswoman Gabby Giffords will say she intends to be back. And if she's in good enough shape for her to be back, you want to bet on a dark horse President for 2020 or 2024, bet on Gabby Giffords. That's my thought. Anyway, you are assuming too much. Would you have believed that someone could stand up - in our lifetimes we have had Richard Nixon stand up her in the middle of a crisis that was an attempt to eliminate one of the parties in a two party system, and nobody shouted you lie at him. Could you imagine just you lie?

SPITZER: That was a ridiculous, horrendous moment and frankly it was redounded against the speaker. You don't - as you said earlier in the show, the presidency deserves respect. The office, the stature of the position. It is the embodiment of the Democratic system. You deal with it with that type of respect. And I think anybody who doesn't do so makes grievous political errors as well as the error of judgment.

OLBERMANN: All right. We'll judge now to be quiet until the president has had his 60 minutes or more. Eliot Spitzer will rejoin me afterwards, Senator Sanders will be here too. Ladies and gentlemen, the president of the United States.


PRESIDENT OBAMA: Mr. Speaker, Mr. Vice President, members of Congress, distinguished guests, and fellow Americans:

Last month, I went to Andrews Air Force Base and welcomed home some of our last troops to serve in Iraq. Together, we offered a final, proud salute to the colors under which more than a million of our fellow citizens fought - and several thousand gave their lives.

We gather tonight knowing that this generation of heroes has made the United States safer and more respected around the world. For the first time in nine years, there are no Americans fighting in Iraq. For the first time in two decades, Osama bin Laden is not a threat to this country. Most of al Qaeda's top lieutenants have been defeated. The Taliban's momentum has been broken, and some troops in Afghanistan have begun to come home.

These achievements are a testament to the courage, selflessness, and teamwork of America's Armed Forces. At a time when too many of our institutions have let us down, they exceed all expectations. They're not consumed with personal ambition. They don't obsess over their differences. They focus on the mission at hand. They work together.

Imagine what we could accomplish if we followed their example. Think about the America within our reach: A country that leads the world in educating its people. An America that attracts a new generation of high-tech manufacturing and high-paying jobs. A future where we're in control of our own energy, and our security and prosperity aren't so tied to unstable parts of the world. An economy built to last, where hard work pays off, and responsibility is rewarded.

We can do this. I know we can, because we've done it before. At the end of World War II, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known. My grandfather, a veteran of Patton's Army, got the chance to go to college on the GI Bill. My grandmother, who worked on a bomber assembly line, was part of a workforce that turned out the best products on Earth.

The two of them shared the optimism of a Nation that had triumphed over a depression and fascism. They understood they were part of something larger; that they were contributing to a story of success that every American had a chance to share - the basic American promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.

The defining issue of our time is how to keep that promise alive. No challenge is more urgent. No debate is more important. We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What's at stake are not Democratic values or Republican values, but American values. We have to reclaim them.

Let's remember how we got here. Long before the recession, jobs and manufacturing began leaving our shores. Technology made businesses more efficient, but also made some jobs obsolete. Folks at the top saw their incomes rise like never before, but most hardworking Americans struggled with costs that were growing, paychecks that weren't, and personal debt that kept piling up.

In 2008, the house of cards collapsed. We learned that mortgages had been sold to people who couldn't afford or understand them. Banks had made huge bets and bonuses with other people's money. Regulators had looked the other way, or didn't have the authority to stop the bad behavior.

It was wrong. It was irresponsible. And it plunged our economy into a crisis that put millions out of work, saddled us with more debt, and left innocent, hard-working Americans holding the bag. In the six months before I took office, we lost nearly four million jobs. And we lost another four million before our policies were in full effect.

Those are the facts. But so are these. In the last 22 months, businesses have created more than three million jobs. Last year, they created the most jobs since 2005. American manufacturers are hiring again, creating jobs for the first time since the late 1990s. Together, we've agreed to cut the deficit by more than $2 trillion. And we've put in place new rules to hold Wall Street accountable, so a crisis like that never happens again.

The state of our Union is getting stronger. And we've come too far to turn back now. As long as I'm President, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place.

No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits. Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that's built to last - an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.

This blueprint begins with American manufacturing.

On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world's number one automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs.

We bet on American workers. We bet on American ingenuity. And tonight, the American auto industry is back.

What's happening in Detroit can happen in other industries. It can happen in Cleveland and Pittsburgh and Raleigh. We can't bring back every job that's left our shores. But right now, it's getting more expensive to do business in places like China. Meanwhile, America is more productive. A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home. Today, for the first time in fifteen years, Master Lock's unionized plant in Milwaukee is running at full capacity.

So we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it. Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.

We should start with our tax code. Right now, companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it.

So let's change it. First, if you're a business that wants to outsource jobs, you shouldn't get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home.

Second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here.

Third, if you're an American manufacturer, you should get a bigger tax cut. If you're a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers.

My message is simple. It's time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I'll sign them right away.

We're also making it easier for American businesses to sell products all over the world. Two years ago, I set a goal of doubling U.S. exports over five years. With the bipartisan trade agreements I signed into law, we are on track to meet that goal - ahead of schedule. Soon, there will be millions of new customers for American goods in Panama, Colombia, and South Korea. Soon, there will be new cars on the streets of Seoul imported from Detroit, and Toledo, and Chicago.

I will go anywhere in the world to open new markets for American products. And I will not stand by when our competitors don't play by the rules. We've brought trade cases against China at nearly twice the rate as the last administration - and it's made a difference. Over a thousand Americans are working today because we stopped a surge in Chinese tires. But we need to do more. It's not right when another country lets our movies, music, and software be pirated. It's not fair when foreign manufacturers have a leg up on ours only because they're heavily subsidized.

Tonight, I'm announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China. There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders. And this Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing finance or new markets like Russia. Our workers are the most productive on Earth, and if the playing field is level, I promise you - America will always win.

I also hear from many business leaders who want to hire in the United States but can't find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job. Think about that - openings at a time when millions of Americans are looking for work.

That's inexcusable. And we know how to fix it.

Jackie Bray is a single mom from North Carolina who was laid off from her job as a mechanic. Then Siemens opened a gas turbine factory in Charlotte, and formed a partnership with Central Piedmont Community College. The company helped the college design courses in laser and robotics training. It paid Jackie's tuition, then hired her to help operate their plant.

I want every American looking for work to have the same opportunity as Jackie did. Join me in a national commitment to train two million Americans with skills that will lead directly to a job. My Administration has already lined up more companies that want to help. Model partnerships between businesses like Siemens and community colleges in places like Charlotte, Orlando, and Louisville are up and running. Now you need to give more community colleges the resources they need to become community career centers - places that teach people skills that local businesses are looking for right now, from data management to high-tech manufacturing.

And I want to cut through the maze of confusing training programs, so that from now on, people like Jackie have one program, one website, and one place to go for all the information and help they need. It's time to turn our unemployment system into a reemployment system that puts people to work.

These reforms will help people get jobs that are open today. But to prepare for the jobs of tomorrow, our commitment to skills and education has to start earlier.

For less than one percent of what our Nation spends on education each year, we've convinced nearly every State in the country to raise their standards for teaching and learning - the first time that's happened in a generation.

But challenges remain. And we know how to solve them.

At a time when other countries are doubling down on education, tight budgets have forced States to lay off thousands of teachers. We know a good teacher can increase the lifetime income of a classroom by over $250,000. A great teacher can offer an escape from poverty to the child who dreams beyond his circumstance. Every person in this chamber can point to a teacher who changed the trajectory of their lives. Most teachers work tirelessly, with modest pay, sometimes digging into their own pocket for school supplies - just to make a difference.

Teachers matter. So instead of bashing them, or defending the status quo, let's offer schools a deal. Give them the resources to keep good teachers on the job, and reward the best ones. In return, grant schools flexibility: To teach with creativity and passion; to stop teaching to the test; and to replace teachers who just aren't helping kids learn.

We also know that when students aren't allowed to walk away from their education, more of them walk the stage to get their diploma. So tonight, I call on every State to require that all students stay in high school until they graduate or turn eighteen.

When kids do graduate, the most daunting challenge can be the cost of college. At a time when Americans owe more in tuition debt than credit card debt, this Congress needs to stop the interest rates on student loans from doubling in July. Extend the tuition tax credit we started that saves middle-class families thousands of dollars. And give more young people the chance to earn their way through college by doubling the number of work-study jobs in the next five years.

Of course, it's not enough for us to increase student aid. We can't just keep subsidizing skyrocketing tuition; we'll run out of money. States also need to do their part, by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down. Recently, I spoke with a group of college presidents who've done just that. Some schools re-design courses to help students finish more quickly. Some use better technology. The point is, it's possible. So let me put colleges and universities on notice: If you can't stop tuition from going up, the funding you get from taxpayers will go down. Higher education can't be a luxury - it's an economic imperative that every family in America should be able to afford.

Let's also remember that hundreds of thousands of talented, hardworking students in this country face another challenge: The fact that they aren't yet American citizens. Many were brought here as small children, are American through and through, yet they live every day with the threat of deportation. Others came more recently, to study business and science and engineering, but as soon as they get their degree, we send them home to invent new products and create new jobs somewhere else.

That doesn't make sense.

I believe as strongly as ever that we should take on illegal immigration. That's why my Administration has put more boots on the border than ever before. That's why there are fewer illegal crossings than when I took office.

The opponents of action are out of excuses. We should be working on comprehensive immigration reform right now. But if election-year politics keeps Congress from acting on a comprehensive plan, let's at least agree to stop expelling responsible young people who want to staff our labs, start new businesses, and defend this country. Send me a law that gives them the chance to earn their citizenship. I will sign it right away.

You see, an economy built to last is one where we encourage the talent and ingenuity of every person in this country. That means women should earn equal pay for equal work. It means we should support everyone who's willing to work; and every risk-taker and entrepreneur who aspires to become the next Steve Jobs.

After all, innovation is what America has always been about. Most new jobs are created in start-ups and small businesses. So let's pass an agenda that helps them succeed. Tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow. Expand tax relief to small businesses that are raising wages and creating good jobs. Both parties agree on these ideas. So put them in a bill, and get it on my desk this year.

Innovation also demands basic research. Today, the discoveries taking place in our federally-financed labs and universities could lead to new treatments that kill cancer cells but leave healthy ones untouched. New lightweight vests for cops and soldiers that can stop any bullet. Don't gut these investments in our budget. Don't let other countries win the race for the future. Support the same kind of research and innovation that led to the computer chip and the Internet; to new American jobs and new American industries.

Nowhere is the promise of innovation greater than in American-made energy. Over the last three years, we've opened millions of new acres for oil and gas exploration, and tonight, I'm directing my Administration to open more than 75 percent of our potential offshore oil and gas resources. Right now, American oil production is the highest that it's been in eight years. That's right - eight years. Not only that - last year, we relied less on foreign oil than in any of the past sixteen years.

But with only 2 percent of the world's oil reserves, oil isn't enough. This country needs an all-out, all-of-the-above strategy that develops every available source of American energy - a strategy that's cleaner, cheaper, and full of new jobs.

We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I'm requiring all companies that drill for gas on public lands to disclose the chemicals they use. America will develop this resource without putting the health and safety of our citizens at risk.

The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don't have to choose between our environment and our economy. And by the way, it was public research dollars, over the course of thirty years, that helped develop the technologies to extract all this natural gas out of shale rock - reminding us that Government support is critical in helping businesses get new energy ideas off the ground.

What's true for natural gas is true for clean energy. In three years, our partnership with the private sector has already positioned America to be the world's leading manufacturer of high-tech batteries. Because of federal investments, renewable energy use has nearly doubled. And thousands of Americans have jobs because of it.

When Bryan Ritterby was laid off from his job making furniture, he said he worried that at 55, no one would give him a second chance. But he found work at Energetx, a wind turbine manufacturer in Michigan. Before the recession, the factory only made luxury yachts. Today, it's hiring workers like Bryan, who said, "I'm proud to be working in the industry of the future."

Our experience with shale gas shows us that the payoffs on these public investments don't always come right away. Some technologies don't pan out; some companies fail. But I will not walk away from the promise of clean energy. I will not walk away from workers like Bryan. I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. We have subsidized oil companies for a century. That's long enough. It's time to end the taxpayer giveaways to an industry that's rarely been more profitable, and double-down on a clean energy industry that's never been more promising. Pass clean energy tax credits and create these jobs.

We can also spur energy innovation with new incentives. The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there's no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation. So far, you haven't acted. Well tonight, I will. I'm directing my Administration to allow the development of clean energy on enough public land to power three million homes. And I'm proud to announce that the Department of Defense, the world's largest consumer of energy, will make one of the largest commitments to clean energy in history - with the Navy purchasing enough capacity to power a quarter of a million homes a year.

Of course, the easiest way to save money is to waste less energy. So here's another proposal: Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings. Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing, and more jobs for construction workers who need them. Send me a bill that creates these jobs.

Building this new energy future should be just one part of a broader agenda to repair America's infrastructure. So much of America needs to be rebuilt. We've got crumbling roads and bridges. A power grid that wastes too much energy. An incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.

During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge. After World War II, we connected our States with a system of highways. Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

In the next few weeks, I will sign an Executive Order clearing away the red tape that slows down too many construction projects. But you need to fund these projects. Take the money we're no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.

There's never been a better time to build, especially since the construction industry was one of the hardest-hit when the housing bubble burst. Of course, construction workers weren't the only ones hurt. So were millions of innocent Americans who've seen their home values decline. And while Government can't fix the problem on its own, responsible homeowners shouldn't have to sit and wait for the housing market to hit bottom to get some relief.

That's why I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won't add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust.

Let's never forget: Millions of Americans who work hard and play by the rules every day deserve a Government and a financial system that do the same. It's time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody.

We've all paid the price for lenders who sold mortgages to people who couldn't afford them, and buyers who knew they couldn't afford them. That's why we need smart regulations to prevent irresponsible behavior. Rules to prevent financial fraud, or toxic dumping, or faulty medical devices, don't destroy the free market. They make the free market work better.

There is no question that some regulations are outdated, unnecessary, or too costly. In fact, I've approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his. I've ordered every federal agency to eliminate rules that don't make sense. We've already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years. We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill - because milk was somehow classified as an oil. With a rule like that, I guess it was worth crying over spilled milk.

I'm confident a farmer can contain a milk spill without a federal agency looking over his shoulder. But I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf two years ago. I will not back down from protecting our kids from mercury pollution, or making sure that our food is safe and our water is clean. I will not go back to the days when health insurance companies had unchecked power to cancel your policy, deny you coverage, or charge women differently from men.

And I will not go back to the days when Wall Street was allowed to play by its own set of rules. The new rules we passed restore what should be any financial system's core purpose: Getting funding to entrepreneurs with the best ideas, and getting loans to responsible families who want to buy a home, start a business, or send a kid to college.

So if you're a big bank or financial institution, you are no longer allowed to make risky bets with your customers' deposits. You're required to write out a "living will" that details exactly how you'll pay the bills if you fail - because the rest of us aren't bailing you out ever again. And if you're a mortgage lender or a payday lender or a credit card company, the days of signing people up for products they can't afford with confusing forms and deceptive practices are over. Today, American consumers finally have a watchdog in Richard Cordray with one job: To look out for them.

We will also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people's investments. Some financial firms violate major anti-fraud laws because there's no real penalty for being a repeat offender. That's bad for consumers, and it's bad for the vast majority of bankers and financial service professionals who do the right thing. So pass legislation that makes the penalties for fraud count.

And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.

A return to the American values of fair play and shared responsibility will help us protect our people and our economy. But it should also guide us as we look to pay down our debt and invest in our future.

Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let's agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay.

When it comes to the deficit, we've already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices. Right now, we're poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans. Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary.

Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else - like education and medical research; a strong military and care for our veterans? Because if we're serious about paying down our debt, we can't do both.

The American people know what the right choice is. So do I. As I told the Speaker this summer, I'm prepared to make more reforms that rein in the long term costs of Medicare and Medicaid, and strengthen Social Security, so long as those programs remain a guarantee of security for seniors.

But in return, we need to change our tax code so that people like me, and an awful lot of Members of Congress, pay our fair share of taxes. Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes. And my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you're earning a million dollars a year, you shouldn't get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn't go up. You're the ones struggling with rising costs and stagnant wages. You're the ones who need relief.

Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.

We don't begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it's not because they envy the rich. It's because they understand that when I get tax breaks I don't need and the country can't afford, it either adds to the deficit, or somebody else has to make up the difference - like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet. That's not right. Americans know it's not right. They know that this generation's success is only possible because past generations felt a responsibility to each other, and to their country's future, and they know our way of life will only endure if we feel that same sense of shared responsibility. That's how we'll reduce our deficit. That's an America built to last.

I recognize that people watching tonight have differing views about taxes and debt; energy and health care. But no matter what party they belong to, I bet most Americans are thinking the same thing right now: Nothing will get done this year, or next year, or maybe even the year after that, because Washington is broken.

Can you blame them for feeling a little cynical?

The greatest blow to confidence in our economy last year didn't come from events beyond our control. It came from a debate in Washington over whether the United States would pay its bills or not. Who benefited from that fiasco?

I've talked tonight about the deficit of trust between Main Street and Wall Street. But the divide between this city and the rest of the country is at least as bad - and it seems to get worse every year.

Some of this has to do with the corrosive influence of money in politics. So together, let's take some steps to fix that. Send me a bill that bans insider trading by Members of Congress, and I will sign it tomorrow. Let's limit any elected official from owning stocks in industries they impact. Let's make sure people who bundle campaign contributions for Congress can't lobby Congress, and vice versa - an idea that has bipartisan support, at least outside of Washington.

Some of what's broken has to do with the way Congress does its business these days. A simple majority is no longer enough to get anything - even routine business - passed through the Senate. Neither party has been blameless in these tactics. Now both parties should put an end to it. For starters, I ask the Senate to pass a rule that all judicial and public service nominations receive a simple up or down vote within 90 days.

The executive branch also needs to change. Too often, it's inefficient, outdated and remote. That's why I've asked this Congress to grant me the authority to consolidate the federal bureaucracy so that our Government is leaner, quicker, and more responsive to the needs of the American people.

Finally, none of these reforms can happen unless we also lower the temperature in this town. We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction; that politics is about clinging to rigid ideologies instead of building consensus around common sense ideas.

I'm a Democrat. But I believe what Republican Abraham Lincoln believed: That Government should do for people only what they cannot do better by themselves, and no more. That's why my education reform offers more competition, and more control for schools and States. That's why we're getting rid of regulations that don't work. That's why our health care law relies on a reformed private market, not a Government program.

On the other hand, even my Republican friends who complain the most about Government spending have supported federally-financed roads, and clean energy projects, and federal offices for the folks back home.

The point is, we should all want a smarter, more effective Government. And while we may not be able to bridge our biggest philosophical differences this year, we can make real progress. With or without this Congress, I will keep taking actions that help the economy grow. But I can do a whole lot more with your help. Because when we act together, there is nothing the United States of America can't achieve.

That is the lesson we've learned from our actions abroad over the last few years.

Ending the Iraq war has allowed us to strike decisive blows against our enemies. From Pakistan to Yemen, the al Qaeda operatives who remain are scrambling, knowing that they can't escape the reach of the United States of America.

From this position of strength, we've begun to wind down the war in Afghanistan. Ten thousand of our troops have come home. Twenty-three thousand more will leave by the end of this summer. This transition to Afghan lead will continue, and we will build an enduring partnership with Afghanistan, so that it is never again a source of attacks against America.

As the tide of war recedes, a wave of change has washed across the Middle East and North Africa, from Tunis to Cairo; from Sana'a to Tripoli. A year ago, Qadhafi was one of the world's longest-serving dictators - a murderer with American blood on his hands. Today, he is gone. And in Syria, I have no doubt that the Assad regime will soon discover that the forces of change can't be reversed, and that human dignity can't be denied.

How this incredible transformation will end remains uncertain. But we have a huge stake in the outcome. And while it is ultimately up to the people of the region to decide their fate, we will advocate for those values that have served our own country so well. We will stand against violence and intimidation. We will stand for the rights and dignity of all human beings - men and women; Christians, Muslims, and Jews. We will support policies that lead to strong and stable democracies and open markets, because tyranny is no match for liberty.

And we will safeguard America's own security against those who threaten our citizens, our friends, and our interests. Look at Iran. Through the power of our diplomacy, a world that was once divided about how to deal with Iran's nuclear program now stands as one. The regime is more isolated than ever before; its leaders are faced with crippling sanctions, and as long as they shirk their responsibilities, this pressure will not relent.

Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal. But a peaceful resolution of this issue is still possible, and far better, and if Iran changes course and meets its obligations, it can rejoin the community of nations.

The renewal of American leadership can be felt across the globe. Our oldest alliances in Europe and Asia are stronger than ever. Our ties to the Americas are deeper. Our iron-clad commitment to Israel's security has meant the closest military cooperation between our two countries in history. We've made it clear that America is a Pacific power, and a new beginning in Burma has lit a new hope. From the coalitions we've built to secure nuclear materials, to the missions we've led against hunger and disease; from the blows we've dealt to our enemies; to the enduring power of our moral example, America is back.

Anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn't know what they're talking about. That's not the message we get from leaders around the world, all of whom are eager to work with us. That's not how people feel from Tokyo to Berlin; from Cape Town to Rio; where opinions of America are higher than they've been in years. Yes, the world is changing; no, we can't control every event. But America remains the one indispensable nation in world affairs - and as long as I'm President, I intend to keep it that way.

That's why, working with our military leaders, I have proposed a new defense strategy that ensures we maintain the finest military in the world, while saving nearly half a trillion dollars in our budget. To stay one step ahead of our adversaries, I have already sent this Congress legislation that will secure our country from the growing danger of cyber-threats.

Above all, our freedom endures because of the men and women in uniform who defend it. As they come home, we must serve them as well as they served us. That includes giving them the care and benefits they have earned - which is why we've increased annual VA spending every year I've been President. And it means enlisting our veterans in the work of rebuilding our Nation.

With the bipartisan support of this Congress, we are providing new tax credits to companies that hire vets. Michelle and Jill Biden have worked with American businesses to secure a pledge of 135,000 jobs for veterans and their families. And tonight, I'm proposing a Veterans Job Corps that will help our communities hire veterans as cops and firefighters, so that America is as strong as those who defend her.

Which brings me back to where I began. Those of us who've been sent here to serve can learn from the service of our troops. When you put on that uniform, it doesn't matter if you're black or white; Asian or Latino; conservative or liberal; rich or poor; gay or straight. When you're marching into battle, you look out for the person next to you, or the mission fails. When you're in the thick of the fight, you rise or fall as one unit, serving one Nation, leaving no one behind.

One of my proudest possessions is the flag that the SEAL Team took with them on the mission to get bin Laden. On it are each of their names. Some may be Democrats. Some may be Republicans. But that doesn't matter. Just like it didn't matter that day in the Situation Room, when I sat next to Bob Gates - a man who was George Bush's defense secretary; and Hillary Clinton, a woman who ran against me for president.

All that mattered that day was the mission. No one thought about politics. No one thought about themselves. One of the young men involved in the raid later told me that he didn't deserve credit for the mission. It only succeeded, he said, because every single member of that unit did their job - the pilot who landed the helicopter that spun out of control; the translator who kept others from entering the compound; the troops who separated the women and children from the fight; the SEALs who charged up the stairs. More than that, the mission only succeeded because every member of that unit trusted each other - because you can't charge up those stairs, into darkness and danger, unless you know that there's someone behind you, watching your back.

So it is with America. Each time I look at that flag, I'm reminded that our destiny is stitched together like those fifty stars and those thirteen stripes. No one built this country on their own. This Nation is great because we built it together. This Nation is great because we worked as a team. This Nation is great because we get each other's backs. And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard. As long as we're joined in common purpose, as long as we maintain our common resolve, our journey moves forward, our future is hopeful, and the state of our Union will always be strong.

Thank you, God bless you, and may God bless the United States of America.

OLBERMANN: The president of the United States in his third State of the Union Address. Certainly as a speech it was a strong effort and well delivered, and forcefully delivered from the beginning to the end. Perhaps in terms of content, gained any heft that it had based on what I think is not that much of an exaggeration, principally regarding the economy but in other areas of this nation as well.

The president proposed everything: More fracking, more regulations of fracking, lower corporate taxes, higher corporate taxes, more drilling, tougher drilling codes, he extolled wealth, and he wanted to bar insider trading by congressman, which nearly caused several of them to pass out. More peace, more military strength. He co-opted Abraham Lincoln. He invoked the Bush presidency and its Secretary of Defense and the hypothetical Hilary Clinton presidency, and his Secretary of State. Everything was in that speech that could fit into an hour of public speaking. Not to say that it wasn't meant in most respects heartfeltly, but there was an awful lot in there, and it was in terms of performance, an extraordinary one.

I'm rejoined here at "Countdown" headquarters with the former Governor of New York Eliot Spitzer. Before we get into the substance, you've done speeches like this, slightly different stage, same sort of context, same relative importance. This was a great presentation, was it not?

SPITZER: Absolutely. This is his best venue. He speaks with power, passion, control, ebbs and flows. Has the cadence. Look, he is a master of performance, and nobody can surpass him if the presidency of the next election were to be determined based on the capacity to deliver a speech like this, he would win in a landslide. And as you point out, in terms of structure, my only critique is there was so much in there, that in a way the members of Congress themselves didn't know what is to latch on to, what to grasp on to. Some great applause lines that evoked no response. I'm not quite sure why. In a way the speech read at moments better than it was delivered. And he is the master of delivery, on par with Bill Clinton and President Regan, but it was a great bravado performance always from President Obama. That's what one expects, and that's what we got.

OLBERMANN: For the purposes of people who are not political creatures, and possibly the ones not watching us or anybody else carrying this at the moment, does it - did it straddle that fence between being the campaign launching thing that the Republicans are going to claim that's all that was, and the other part where it was topical, substantial, inspirational for people who don't like the way things are in their lives are right now in this country?

SPITZER: I think the answer to that question will depend entirely on where you sit. It will be a Rorschach test for are you a supporter of President Obama in which you will see this as substance, wisdom, thoughtfulness or if you are not a supporter of his you will see it as pure campaign rhetoric. I think the issue is was it so diffuse. As you pointed out in the beginning, he was for drilling but against it, for regulations but for profits - was it so - in a way internally contradictory and therefore, lacking in a pure singular linear message that he loses some of that. Brilliantly written, appealed and had something in there for virtually every constituency and that is what makes the State of the Union. That is the upside, it's also the risk.

OLBERMANN: Was there one linear thought to it, that whenever he could he called out Congress, he called out partisanship. He did finally - if he's been investing in the idea of being somehow above the fray on the tight rope across that chamber right there. That this was the it paid off for him. He was able to come by and slap over here to his left, and slap over there to his right.

SPITZER: He was able to rap the knuckles of the do-nothing Congress as President Truman had done. But if I think if there is one over-arching thematic it is that he is an activist. In other words, contrast this to President Clinton's State of the Union in which he said the era of big government is done. This is just the opposite. This is President Obama rationalizing, justifying, explaining a government that will do a great deal. I will be populist, I will be activist, I will be there by your side, I'm not going to shy away from a government that helps you. Clearly he believes in it. He also thinks it will get him re-elected. And whether the public buys it remains to be seen.

OLBERMANN: If you were to debate him from a different political point of view, and that was the approximate text of what he would say in the debate, were there vulnerabilities? Were there doors left open that an opponent could walk through? Because I don't know that I heard them going through this and I know from personal experience that he is probably a more impressive speaker ad lib than he is reading off a teleprompter or reading a speech. When he is on his own and speaking, you just hope you're able to be in the same room as him because it goes very fast.

SPITZER: I think the intellectual vulnerability is the lack of limits. He invoked President Lincoln at the end saying we should do that which an individual cannot do better than himself. That is a theoretical line in the sand, but if you listen to the speech at the end I can see Mitch McConnell saying what are you not going to do for us. What's left? Are you going to be telling me what to eat for breakfast? In other words, I think the emotional vulnerability is that he is creating this gargantuan government without limits, too much debt. Now he has an answer it to, but I think that's where the other side will pounce. Mitch Daniels might do that.

OLBERMANN: Several - and we'll be playing that later in the hour. The Republican response from Governor Daniels of Indiana. But there were several touches we were talking about beforehand the likelihood and the excerpts indicated there were things that were clearly inspired by Occupy Wall Street. But there were a couple of things that were really inspired by Occupy Wall Street, including - let alone the no insider trading by members of Congress, which they have never been able to pass since the day the idea of Congress was passed. Alexander Hamilton went we need to make sure we can still get a little money on the side here even if it's only a couple grand. But also a financial crimes unit? This must have been near and dear to your heart when you heard that.

SPITZER: It sounds great, but as someone who's been in that world as a prosecutor for a fair number of years, there are more financial crimes units all over the place than you can shake a stick at. The real question is why have they not produced more until now. I applaud this, it's great, it talks about cooperation with leading state AGs. I thought he might have mentioned one or two of them that had been out there. But is there anything really new there at the end of the day that will lead to cases being made on that particular point, I don't know.

OLBERMANN: As you saw the president made his way out of the chamber, and that concludes the formal part of this, but I did want to point out that while you were watching, this was sent out to American news organizations, "An America Built to Last" literally designed as a blueprint. The whole thing is not done on that although every heading is in blueprint blue to quote Steely Dan, and there are essentially elucidations of many of the generalities of the speech. So as an economic speech in an economic time of some optimism but prolonged downturn, did it - did it to use President Lincoln's term, scowl? Did it work?

SPITZER: I think it set a tone as with every State of the Union. The question is how long does it last? You inevitably as a citizen as someone who wants to be patriotic and who's involved in the politics of this nation, you watch that and the grander the excitement you feel good when you are done. The question is tomorrow morning when we see another headline about layoffs or when we see the Euro is crashing or when we see the reality unvarnished as it is in a speech like this, do we begin to get pulled back? And so the question is, even after the Bin Laden bump after his greatest foreign policy accomplishment, two weeks later he was back down in the low 40s I think it was in terms of poll numbers. How long does it last is I think the better question rather than do we feel good at this moment.

OLBERMANN: That's why you heard at Bin Laden at the start of the speech and 54 minutes later at the end as well. Just because the bumps these days are about 53 minutes long. An excellent point taken Governor Spitzer.

I'm going to bring Jeff Madrick the economist and author. The Senior Fellow at the Roosevelt Institute, the author of "The Age of Greed." Jeff, score this for me economically. What did you hear in there that had some heft to it?

JEFF MADRICK: I defer a little bit with you guys. I thought it was a tougher speech than I expected. He went after manufacturing right at the top. A lot of economists, Democratic economists say don't worry so much about manufacturing. He said forget about all those constraints, let me go after the Chinese, let me develop some tax breaks, let me develop some tax penalties. I thought that was pretty impressive. I think it is important to bring manufacturing back. Will he bring manufacturing back? Again, as always you have to wait for the details, but he did go after Republicans in Congress, he did go after big oil. He said some pretty nasty things about Wall Street. And Wall Street doesn't like that nasty tone. He said it anyways. So I thought there was some toughness here, and I think one of the sub themes was the constant mention of jobs, thanks goodness. I think that came through.

What we didn't really talk about is what I think the Republicans will begin to pick on is whether we have the money to do all of this. I do think as Eliot said it was a statement for government. More than he has done in the past. I think he brought it to the Republican Congress and challenged the Democrats. I am delighted to see that. We started a project on the purpose of government in the Roosevelt Institute because we think that dialogue is so empty, but maybe this is a beginning. I do think he - it was a tougher speech than I expected. I would have liked some more details.

OLBERMANN: Did you think the toughness extended internationally? Everything about the trade enforcement unit, and investigating unfair trade practices in countries like China which of course ended with one of the raw-raw moments of his presidency, our workers are the most productive on Earth, and if the playing field is level I promise you American will always win. It was delivered in a World War Two, Winston Churchill manner as opposed to a Barack Obama manner.

MADRICK: Yeah. It was certainly, Keith, a cheerleading speech. But I do not think the Chinese will be happy about this speech. I don't think this was an empty couple of phrases and everything will disappear. I think he said they are culprits. The fact is there is no free market in manufacturing anywhere in the world.

SPITZER: Jeff, can I disagree on one - perhaps not just a small point. If the administration really wanted to get tougher with China they would do more on the currency issue. There is no question that the Chinese government manipulates its currency, drives it down in value. And yet Secretary Geithner time and time again perhaps for diplomatic reasons that are unavoidable, has refused to say that China is statutorily manipulating its currency. That would do more for our manufacturing base than anything else. They have talked the talks, but haven't yet walked the walk in terms of real enforcement.

MADRICK: But Eliot he is not going to talk about currency manipulation in a State of the Union speech. He's just not going to do it. But he did talk about taking tax action. That in effect does have consequences for the currency. I would definitely like to see them have a currency battle with the Chinese. But I think going after manufacturing right at the top, and talking about China directly was a step in the right direction. And I think it will be helpful for the American economy.

OLBERMANN: How does it practically result in this conclusion he reached that soon there will be new cars on the streets of Seoul imported from Detroit and Toledo and Chicago?

MADRICK: I don't know if that is going to happen, but he made a bipartisan, a deal with Seoul to reduce tariffs on certain products. So maybe that was part of the deal, I don' know the details. But je made three bipartisan deals with these individual countries. I myself happen to not believe in that approach, but it may result in that kind of thing. Is the economy going to come back as a consequence of all this? No, we need to do more. But this was a pretty tough speech. I think we should give him some credit for that. Yeah, he promised everything to everybody and there was stuff I did not like. Talking about making serious compromises on Medicare and Social Security for example in order to get his millionaires tax. But the idea that he said that we've subsidized oil for a million years let's cut it out. That was a pretty hard hit on some of those Republicans.

SPITZER: Can I add one other notion here that was buried here which is the use of government as a purchaser to affect behavior. When he talked about using the Defense Department in a contracting context saying we will buy energy from clean energy sources and thereby affect the marketplace. This is non-regulatory way of using government power to change the structure of the economy that is underutilized by our government. It is one of the largest buyers of all sorts of stuff. If it said we will only buy from companies that do A, B, and C it could have huge consequences. They are beginning to go in that direction.

MADRICK: I think that's one of the fresh points that came up. In fact a bit of history. It was the U.S. Army that bought the Springfield rifles that enabled us to develop new manufacturing techniques that allowed us to become the envy of the world even back in the mid-1800s. So it's a continuation of the process.

OLBERMANN: Of course, it was stocking for the Civil War which also enabled the beginning of the military industrial complex. That can be taken too far. One other thing Jeff, he hit infrastructure - all of us have been screaming for years about spend the money on infrastructure. Rebuild these roads before they fall on top of someone in Minneapolis again or on New York or Hawaii. And he discussed nation building here at home. Is that the sort of thing that translates both in terms of economics and also in terms of somebody watching at home saying the 400 potholes I have to navigate between here and my office a half an hour from here, we could do pothole refilling too.

MADRICK: I think everybody understands this is a fraying infrastructure. America has a second-rate transportation infrastructure. And to some degree a second-rate communications infrastructure. He did talk about broadband as well. So I do think it hits home, and it's right about the economy, a better infrastructure is very important for economic growth, and it creates jobs. What of course he didn't do, he really didn't give us a number, he really didn't give us a plan. He talked about using half of the savings from the end of wars. I don't know what the savings from the end of wars are, because we seem to be hanging around all the time.

SPITZER: I would make these observations about the infrastructure issue. First the question is what does infrastructure mean these days. You have transportation, you have communications. The question is 30 years from now what will we need that we should be thinking about now and investing in? Some people are saying high-speed rail may be antiquated. Payback isn't what it should be, should we be doing only broadband. The other question is when do you get the payback? In other words it will not be something that effects this electoral cycle. These are long term investments and hence more difficult for politicians, because you are looking at somebody ten years from now being there to cut the ribbon or see something get to fruition whereas we're paying for it right now.

MADRICK: But I got to say Eliot, few things are as unambiguous of a need as updating the American infrastructure.

SPITZER: Could not agree more.

MADRICK: And it will be a jolt to the economy in time. And I'm not only worried about 2012, I'm worried about the future of the country.

SPITZER: You and I are optimists. We think long term.

OLBERMANN: We'll think long term too. The rest of our hour here in the wake of the president's speech will be - forgive me - will be a quick visit from Senator Bernie Sanders, and also the Republican response which we will be showing you on tape delay at the end of the hour. Right now this is "Countdown"'s coverage of the State of the Union address.


OLBERMANN: Back with our coverage in the wake of the president's State of the Union Address. His third formal one in four years and three days on the job. And of all of the many economic points that were made during this speech, there is none that perhaps hits so hard and so close to home than the subject of the home, the mortgage crisis, the one in five homes underwater and all of the other nightmare data that you know about and have wondered how in the hell a country like this could let happen. The president went into some detail about that. Let's review part of what he said.

(EXCERPT FROM VIDEO CLIP) BARACK OBAMA: Let's never forget, millions of Americans who work hard and played by the rules every day deserve a government and a financial system that do the same. It's time to apply the same rules from top to bottom, no bailouts, no handouts, and no copouts, an America built to last insists on responsibility from everybody. We have all paid the price for lenders who sold mortgages to people who couldn't afford them. And buyers who knew they couldn't afford them. That's why we need smart regulations to prevent irresponsible behavior. Rules to prevent financial fraud, or toxic dumping, or faulty medical devices, these don't destroy the free market. They make the free market work better.

OLBERMANN: Eliot Spitzer to some degree that was what I was what I was referring to as soon as the speech ended. There were about four different angles on the same point. Four seemingly divergent and mutually exclusive points made in there with an idea of selling enthusiasm about addressing these needs for Americans?

SPITZER: I think he is touching every possible base, but I think what is the overarching linkage among them is he is justifying government intervening. He's justifying and activist government. And that's what I found fascinating about that litany at the end, financial regulation, medical markets, the environment, he is basically saying hey, guys you are about to hear an onslaught of attacks against government from my opposition, Mitt Romney, Newt Gingrich, whoever. I'm telling you we are protecting you. Whether it's your mortgage, the safety of our drinking water, the product that you buy at the store, and that's why I think a very settle message saying I'm protecting you. And what I'm doing is good for you, not the fat cats. It was persuasive, what struck me oddly Keith the absence of applause. There was deafening silence after what I thought was - the no bailouts, no copouts, no handouts, that line was supposed to be a huge applause line. It was silent. I am kind of amazed they hadn't cued the applause there.

OLBERMANN: Jeff Madrick did that surprise you too, or is there a great lesson in the fact there was no applause at that point?

MADRICK: There may be a lesson, maybe they were a little shocked he spoke so boldly, but I think Eliot is right about this. This was a pro-government statement, constantly we hear talk about all these regulations getting in the way. It's like an alternate universe. The lack of regulations is what got us in this mess. The rhetoric from the Republicans and some Democrats is let's not over-regulate, let's water down these regulations. He is telling the American public, you know, you need these regulations. They keep your babies safe, they keep you safe in your automobile. Maybe some of them are not good, but we need them, and we need good ones. In my view, we need more of them because the economy is so much more complex. We need smarter people in Washington doing those kinds of things, but I thought that was actually - while it was maybe all over the place, I thought it was a pretty effective point and an accurate one.

OLBERMANN: The issue of the deficit, of course, although it had been moved to a secondary position largely by the influence of Occupy Wall Street from August on, was still touched on in one - one comment by the president, that discussed how the deficit will be reduced long term which concludes that, again, to use that phrase from this America built to last. Let's play that clip from the president's address tonight. Well, we don't have it. I - I can't explain why that will be the case. I'll read it. "They know this generation's success is only possible because past generations felt a responsibility to each other and to their countries future. And they know our way of life will only endure if we feel that same sense of shared responsibility. That's how we will reduce our deficit. That's an America built to last." Translate that into what we're expected to do?

SPITZER: I would take a slightly different perspective on this. It's amazing how little the deficit was the focus of this address. And you make the point because of Occupy Wall Street or give credit wherever you wish, I think they deserve a lot of it. Since last fall, the entire discussion politically has shifted. Until last fall every night on programs like this, it was the deficit for or against cutting it. But the deficit was the focus of the conversation. Tonight because of Occupy Wall Street, the transition to notions of equity, the Buffet rule, tax fairness, suddenly the president is in an position to be pro-government, pro-equity, pro-investment. And the deficit, he kind of says yeah, we cut $2 trillion and we'll need to do more, but it was regulated to three quarters into the speech, two or three paragraphs, that is pretty remarkable.

OLBERMANN: This touches, Jeff, on something you had expressed concern about before, that one of the means to addressing at least the larger issue to surrounding the deficit was his willingness stated again in no uncertain terms to play with the safety net.

MADRICK: Absolutely. It worries me a lot. His willingness to compromise on Medicare was very disturbing. Raising the eligibility age. We talked about that in one of your programs earlier. I do think you are both right - and I'm a big supporter of Occupy Wall Street. It has changed the nature of the conversation. One funny point, you know that fancy do and dabbos where all of the corporate chieftains come and financial chieftains come every year to talk about what they do, for the first time ever I was told inequality was on their agenda, and it was the first item on their agenda. On the other hand, to pick a question you asked Eliot, if I were the Republicans I would go after the deficit. The lack of talk of how to pay for this. And while this might sound like heresy coming after what the president said, I don't think we can get by in America by preserving the current tax rates for those in the middle and upper middle class. I think we have to at some point return to the tax rates of the 1990s. That would be a third rail in the 2012 election, I guess. But that is reality.

OLBERMANN: He did touch on demanding that increase for people like him and people making more than a million dollars who shouldn't pay less than 30 percent. So if it was a third rail he at least spit on it.

With that unfortunate predecessor to the introduction, I would like to welcome in the Independent Senator of Vermont Bernie Sanders who has been good enough to stop by our camera. Thank you for doing so Senator. I will just open it up on a wild card basis. There was a lot of stuff in there and I guess the point of view of a progressive might be there was a lot more progressive stuff in there than perhaps you would have expected or come to have expected after the first couple of these States of the Union by this president.

BERNIE SANDERS: I think, as some commentators have pointed out, the American people are becoming very cognizant about the fact that we have massive income and wealth inequality in America. You have 400 of the wealthiest people in this country owning more wealth than the bottom half of America. 150 million Americans, top 1 percent earn more income than the bottom 50 percent. And as the president pointed out you have large corporations that in some cases make billions of dollars in a given year and pay notion in federal taxes. I think that is a theme that will resonate with working families, a theme that will resonate with those people concerned with a $15 trillion national debt. You cannot continue to give tax breaks and provide loopholes for corporations and wealthy individuals if you are serious about deficit reduction.

OLBERMANN: $40 out of every paycheck for the average if the payroll tax cut is not extended. There is a quick clip from the president that I would like to play and get your reaction to when you address this exact point.

(EXCERPT FROM VIDEO CLIP) OBAMA: So let's agree right here, right now. No side issues, no drama, pass the payroll tax cut without delay. Let's get it done.

OLBERMANN: Senator it look him a couple of seconds, but even Majority leader Cantor of the House stood up and applauded with a slight delay to that. And it sounded absolutely plausible and absolutely doable and absolutely practical that this would happen without another holding the entire government hostage to get it passed and then getting only a two month extension. Is it as easy as saying let's separate this out for partisanship.

SANDERS: No, there are two issues there. First of all people can talk about extending the payroll tax - a payroll tax holiday, and I have got problems with that, because what you are essentially doing is diverting huge sums of money away from the Social Security trust fund. We've done it for two years in a row and I worry we will do it for a third year and a fourth year. Long term that could be a disaster for Social Security. But more to the point in terms of what happens in the next few months, if you are talk about a significant tax break for the middle class. How are you going to pay for that? Where's the money going to come from? So I think you haven't begun to see the kind of debate that we will be seeing. And I hope the president hangs tough in demanding that it is funded in a fair and progressive way not through cuts in Medicare or Medicaid or other attacks on a struggling middle class.

OLBERMANN: Did you see enough in there, Senator to give you hopefulness, optimism about that very point?

SANDERS: Well, I get nervous when the president talks about working with Republicans to, quote unquote, reform the entitlement programs. Reform is frankly a code word for cutting, and I will do everything I can to prevent cuts to Social Security. Social Security has not contributed one nickel to the deficit, it is funded by the payroll tax, has a huge surplus, can pay out benefits to every eligible American for the next 25 years. And when you have 50 million people without any health insurance I don't think we should be cutting Medicare as well. There are ways you can reform it, make it stronger, make it more cost effective. So I get a little bit concerned in that area. On the other hand Keith, I think the president was strong about pointing out the issue of the day is creating the millions and millions of jobs our country desperately needs. Unemployment is going down a bit, but we should never forget that 25 million people in this country today, 15 percent of our population are either unemployed or underemployed, he is right in saying that we need to rebuild our crumbling infrastructure, transform our energy system and when you do those things not only do you make the country stronger, more independent but you also create million of jobs.

OLBERMANN: Tax reform, he said, should follow the Buffet rule. If you make more than $1 million a year you should not pay less than 30 percent in taxes. He didn't promise that. Is that something that has any legs to it whatsoever --

SANDERS: I think it does. Keith, I think it does.


SANDERS: Again, I think when you have one of the richest guys in the world Warren Buffet saying every single day that it is absurd he ends up paying a higher effective tax rate than his secretary when most of us understand that while the rich are becoming much richer, the real effective tax rates that they pay are the lowest in decades. Most Americans, including many Republicans by the way do not think that that makes a lot of sense. I think the president has got to remain strong on that issue, but the Republicans are on the defensive, and at the end of the day if he does that, we will win that struggle both in terms of public policy creating the laws that we need, also win it politically.

OLBERMANN: Senator Bernie Sanders of Vermont, again, great, thanks for stopping by our cameras tonight.

SANDERS: My pleasure. Thank you.

OLBERMANN: Speaking of the Republicans on the defensive, we promised you some of, if not the entirety of Republican Response, which we will bring to you. And this you might want to take notes on after this quick break.


OLBERMANN: As we mentioned several hours ago it is no coincidence that the former Bush budget director, now Governor of Indiana, Mitch Daniels embroiled in his own union cutting and union gutting efforts in that state, complete with Democrats leaving the state Senate and not being there for a quorum and all of the rest of that was chosen to give the Republican response. He had a lot to try to achieve and not a lot to work with. Here is some of what he gave tonight.

(EXCERPT FROM VIDEO CLIP) MITCH DANIELS: No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others. As in previous moments of national danger, we Americans are all in the same boat. If we drift, quarrelling and paralyzed over a Niagara of debt, we will all suffer, regardless of income, race, gender or other category. If we fail to shift to a pro-jobs, pro-growth economic policy, there will never be enough public revenue to pay for our safety net, national security or whatever size government we decide to have.

As a loyal opposition who put patriotism and national success ahead of party, or ideology, or any self-interest, we say that anyone who will join us in the cause of growth and solvency is our ally and our friend. We will speak the language of unity. Let us rebuild our finances and the safety net and reopen the door to the stairway upward. Any other disagreements we may have can wait. You know, the most troubling contention in our national life these days isn't about economics or policy at all. It's about us, as a free people. In two alarming ways that contention is, that we Americans just can't cut it anymore. In word and deed, the president and his allies tell us we just cannot handle ourselves in this complex, perilous world, without their benevolent protection. Left to ourselves, we might pick the wrong health insurance, the wrong mortgage, the wrong school for our kids. Why unless they stop us, we might pick the wrong light bulb.

A second view, which I admit, some Republicans also seem to hold, is that we Americans are no longer up to the job of self-government. We can't do the simple math that proves the un-affordability of today's safety net programs, for all the government we now have. We will fall for the con-job that says we can plow ahead and someone else will pick up the tab. We'll allow ourselves to be pitted, one against the other. Blaming our neighbor for troubles, worldwide trends or our own government has caused.

OLBERMANN: Don't write those rebuttals before you see the speech. The president said, "When Americans talk about folks like me paying my fair share of taxes, it's not because they envy the rich it's because they understand that when I get tax breaks that I don't need and the country can't afford. It either adds to the deficit or somebody else has to make the difference.

Point: Obama. Goodnight.