MSNBC "The Ed Show" - Transcript: Government Shutdown and Debt Limit

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Now, late this afternoon, the president brought in leadership on the democratic side from the senate and from the house. And I thought that this was somewhat of a no ransom moment. This has been very fluid. It`s almost like the sausage-making season. We think it`s going to taste good but we`re not sure. In that meeting late this afternoon was Congressman Chris Van Hollen of Maryland who is -- who met with President Obama and house democrats. Congressman, great to have you with us tonight.

REP. CHRIS VAN HOLLEN (D) MARYLAND: Good to be with you Ed as always.

SCHULTZ: Where are we? What was this meeting like was with the president? Was this a no ransom moment? Was this a whole dealigned moment? Where are we congressman?

VAN HOLLEN: Well, it`s a very productive moment. The president indicated that he thought they`d been making progress in the senate on a bipartisan basis that that effort had been, you know, coming together.

What we`ve seen on the house side and our clock is the democratic caucus in the house is not fooled at all, is a deliberate effort once again by the reckless Tea Party faction to try to shut down the government and defaults on our debt.

That`s exactly what`s going on here. It`s a deliberate effort to undermine and torpedo the progress in the senate because you continue to have members of the house caucus who think that it`s a good idea if the United States defaults on its debt despite the terrible consequences you just talked about. And I thought that was a really important case to show because it shows the -- this is an impact on millions of Americans. We`re already beginning to feel the damage. We need to stop that now. Pass a bill to keep open the government, pay our bills.

SCHULTZ: OK. So, the democrats tonight are here. Open up the government, pay the bills, set a date, get a conference committee appointed, and let`s get to work on a budget. That basically is where the democrats are right now. You`d vote for that.

VAN HOLLEN: Well, that`s exactly right Ed.

SCHULTZ: OK.

VAN HOLLEN: As you well know, exactly, that`s where we are.

SCHULTZ: OK. Now, what is in there that you don`t like from what you know the republican proposal on the house right now?

VAN HOLLEN: Well, there are number of things but the overriding issue here Ed is a continued effort by House Republicans to try to extract demands by threatening that United States will not pay its bills. We`ve been very clear that you cannot go down that road of political and economic blackmail, because if you start that process, every time the United States faces that issue of paying its bills on time, somebody is going to try to attach something on the way (ph).

SCHULTZ: So what guarantee that you have ...

VAN HOLLEN: Specifically.

SCHULTZ: . do you have congressman that`s not going to happen again? What guarantee do you have it won`t happen again?

VAN HOLLEN: Well, I`ll tell you one thing that will guarantee that it does happen again is if you feed the beast. In other words, if you start adding these extraneous provisions now. So what we`re saying here in the house Ed is stop it. You cannot bring down the full faith in credit of United States by trying to attach these extraneous provisions. And if you let it happen this time around, it will certainly -- they`ll certainly try it again. Now, very specifically here in the house, their proposal would take away from the secretary of treasury their ability to take what are known as extraordinary measures in order to try and prevent a future default.

So, the next time we come up against the debt ceiling, the republican proposal would make it impossible for the secretary of treasury to take those measures to prevent default. So .

SCHULTZ: That`s a nonstarter from the democrats?

VAN HOLLEN: Yeah. Well, anyone who is for that is for dramatically increasing the risk that next time around, the United States defaults with all the negative consequences on millions of Americans and on the entire American and world economy. So, that is absolutely a nonstarter.

SCHULTZ: OK. This just in -- Fitch rating service has maintain its triple A rating for the United States but places it on negative watch siding the prolonged congressional negotiations over a hike to the borrowing limit. This is getting very serious. This is exactly what Harry Reid was talking about earlier today. Will that news -- is there any news that will shake the Tea Party to reality?

VAN HOLLEN: Well, unfortunately Ed, we`ve been hearing from those Tea Party Republicans over the last weeks and they`ve been very open about it.

They actually think going into default is a good idea and they have this theory as you know that somehow it will be OK because United States will be able to pay our debts to the Chinese government and to all the band holders. Of course that would be at the expense of all the folks on social security, all the folks who rely on Medicare, our troops in the field. So republicans continue to push this notion that somehow it would be OK even though it would be terrible not only for all those Americans but it would immediately undermine the credit rate in United States .

SCHULTZ: Yeah.

VAN HOLLEN: . as you`re hearing, just in anticipation of that possibility .

SCHULTZ: Sure.

VAN HOLLEN: . of going over the cliff. Imagine if we actually did. So the damage is already being done. That should be very clear to people.

SCHULTZ: And so tonight, we can expect a very tough conversation amongst democrats when it comes to the treasury and the power of the president to take extraordinary measures. This is the big sticking point at this hour for the democrats. That`s what I get from Chris Van Hollen, correct?

VAN HOLLEN: Well, that`s right.

SCHULTZ: OK.

VAN HOLLEN: Our view is this is a prescription for default .

SCHULTZ: OK.

VAN HOLLEN: . and keeping the government shut.

SCHULTZ: OK. So quickly, what are the chances of Boehner bringing up the senate bill if that passes?

VAN HOLLEN: Well, of course, that`s always been the question whether the speaker will finally stand up to the Tea Party caucus and exert some real leadership.

SCHULTZ: Yeah.

VAN HOLLEN: And at the end of the day, that`s what`s going to have to happen in order to prevent the default because as we`ve been saying, there are lot of members in his caucus who have said they want to see that happen. So, he needs to stand up to them, make it very clear the dangers for the country, and as I say, step up because so far, his sort of approach has been feeding the beast thinking that, you know, maybe at some point, they`ll be satisfied. All they get is hungrier and bigger.

SCHULTZ: OK. Thank you Congressman Chris Van Hollen. And Nancy Pelosi, my thought I had that, I guess I don`t. Let`s bring in Senator Sherrod Brown of Ohio. I appreciated congressman for joining us tonight. Senator, what`s the latest out of the senate at this hour?

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