'Countdown with Keith Olbermann' for Monday, December 6th, 2010
podcast missing

Replacement video via MSNBC:
Borrowing from China to pay Bush tax cuts
Democrats cave on taxes
Oddball: Men settle arguments with hands
More bombshells from WikiLeaks
Replacing Michael Steele
McConnell, McCain against DADT repeal

Guests: Sam Seder, Peter Alexander, Sam Stein, Jared Bernstein, Alexander Nicholson, Richard Wolffe

(BEGIN VIDEOTAPE)

(MUSIC)

SAM SEDER, GUEST HOST (voice-over): Which of these stories will you be talking about tomorrow?

In the red to China.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We won't be able to compete with countries like China if we keep borrowing from countries like China.

(END VIDEO CLIP)

SEDER: Tonight, a Countdown special report: how much we'll have to borrow from China to keep the Bush tax cuts? And what the government won't tell us about other countries we'll have to borrow from.

Deal with it. The president announces a framework to extend all of the tax cuts. The consolation prize? Extending unemployment, temporarily. The Democrats - not too happy. Our guest: Sam Stein.

"Don't ask, don't tell," just follow the maverick. Senator McConnell's plan of attack for fighting repeal.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: My personal view is that Senator McCain is correct on this. I intend to follow his lead. We'll find out when we finally get around to debating this bill, which I think will not be before the end of the year.

(END VIDEO CLIP)

SEDER: Assange's insurance file. The poise pill threat as Scotland Yard issues a warrant for his arrest, controversial WikiLeaks founder Julian Assange promises the release of another batch of uncensored documents. Quote, "If something happens to us, the key parts will be released automatically." We'll have the latest details.

And Palin's steel trap. "We need you as chairman of the RNC," writes the leader of Tea Party Nation to the former half-governor of Alaska. "You have an unbelievable ability to light up a crowd."

Her response?

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER ALASKA GOVERNOR: Thanks, but no thanks.

(END VIDEO CLIP)

SEDER: Of course. It would mean work.

All the news and commentary - now on Countdown.

(BEGIN VIDEO CLIP)

PALIN: It's tougher than it looked.

(END VIDEO CLIP)

(MUSIC)

(END VIDEOTAPE)

SEDER: Good evening. I'm Sam Seder, in for Keith Olbermann. This is Monday, December 6th, 701 days until the 2012 presidential election.

Tonight, a Countdown special report: How much money will the U.S. have to borrow from other countries to finance extending the Bush tax cuts? And why won't the Treasury Department reveal how much they will borrow from Middle Eastern countries?

But, first, in our fifth story tonight: the reason for borrowing these countries. The president tonight announcing a deal, all by sealed to extend all the Bush tax cuts for two years, postponing the debate until the 2012 presidential campaign.

President Obama tonight, after meeting with congressional Democratic leaders, announcing bipartisan agreement on a framework for a deal.

(BEGIN VIDEO CLIP)

OBAMA: The Republicans have asked for more generous treatment of the estate tax than I think is wise or warranted. But we have insisted that that will be temporary. I have no doubt that everyone will find something in this compromise that they don't like. In fact, there are things in here that I don't like - namely, the extension of the tax cuts for the wealthiest Americans, and the wealthiest estates.

But these tax cuts will expire in two years. And I'm confident that as we make tough choices about bringing our deficit down, as I engage in a conversation with the American people about the hard choices we're going to have to make to secure our future and our children's future and our grandchildren's future, it will become apparent that we cannot afford to extend those tax cuts any longer.

(END VIDEO CLIP)

SEDER: In return, Republicans would sign off in extending unemployment insurance by another 13 months and a 2 percent decrease in the payroll tax for another year, as well as some other Obama tax cuts aimed at stimulating job creation. Total cost? At least $450 billion in lost revenue.

And just to review, the Democratic plan that Republicans voted down would have renewed tax cuts for everyone in the country. Under both party's plans, Americans making between $50,000 and $57,000 would get cuts of about 1,100 bucks. Under the Democratic plan, those making more than $1 million in one year would get a tax cut of $6,300. The Republican plan, which costs another $700 billion over 10 years give those make mortgage than a billion dollars a year a tax cut of $104,000 every year.

The Senate's number two, Democrat Dick Durbin, said yesterday that Congress is moving in the direction of extending all those tax cuts. Quote, "And we're only moving there against my judgment."

Senate Republican Leader Mitch McConnell said yesterday that negotiations were still underway, not about whether to extend unemployment insurance, quote, "but whether to pay for it as opposed to adding to it the deficit."

Overlooked in debate so far is how to pay for the tax cuts, which will cost the U.S. an estimated $4 trillion just over the next 10 years, plus interest.

Earlier today, Mr. Obama said that raising our deficit will make America less competitive.

(BEGIN VIDEO CLIP)

OBAMA: I'm looking at the books back in Washington, and folks weren't doing a real good job with their math for the last decade. So -

(APPLAUSE)

OBAMA: So, now that the threat of a depression has passed, and a recovery is beginning to take hold, reducing our long-term deficit has to be a priority. And in the long run, we won't be able to compete with countries like China if we keep borrowing from countries like China.

(APPLAUSE)

(END VIDEO CLIP)

SEDER: Already, about half of America's debt is bought by China and other countries. In a Countdown special report tonight, we calculated how much extending the Bush tax cuts will increase that debt to China and to other countries. It's an issue that both parties claim they care about.

(BEGIN VIDEOTAPE)

OBAMA: Nothing is more important than us no longer borrowing $700 billion or more from China.

SEN. JOHN MCCAIN (R), ARIZONA: One of the major reasons why we're in the difficulties we're in today is because spending got out of control. We owe China $500 billion.

SEDER (voice-over): In a Democratic poll this spring, more voters named U.S. debt to China as a top concern than any other issue. A nonpartisan group ran a campaign ad imagining the future of our debt to China.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Of course, we owned most of their debt, so now they work for us.

(LAUGHTER)

ANNOUNCER: You can change the future. You have to. Join Citizens Against Government Waste to stop the spending that is bankrupting America.

UNIDENTIFIED MALE: A Tea Party ad with Victoria Jackson imagined a past in which our Founding Fathers reacted to our debt to China.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Congress said the only way out of debt is to get more into debt.

(LAUGHTER)

UNIDENTIFIED FEMALE: And then we borrow money from China.

(LAUGHTER)

UNIDENTIFIED MALE: China?

(END VIDEO CLIP)

SEDER: So, why does U.S. debt to china matter?

HILLARY CLINTON, SECRETARY OF STATE: Hardworking people come and say, "Senator, they're closing this factory down and shipping our jobs overseas. Why can't we get tough on China?" And I say because of the debt that this government under this president has exploded, we are now dependent upon China. And how do you get tough on your banker?

GLENN BECK, FOX NEWS: We're no longer putting China at the top of our list anymore for spying.

UNIDENTIFIED MALE: Really?

BECK: Now, why wouldn't we do that? Why isn't China at the top of our list?

UNIDENTIFIED MALE: They should be. They have earned it. They're always hacking into our computers.

BECK: Right. Same reason why during the Bush administration, when we were having - running these deficits that I was talking about, Bush stopped with the deficits, why aren't we complaining about poison toys that they're sending over?

UNIDENTIFIED FEMALE: Of course.

BECK: Because we need their money.

SEDER: The co-chairs of the president's bipartisan panel on debt reduction wrote in their report last week, quote, "The single largest foreign holder of our debt is China, a nation that may not share our country's aspirations in strategic interests."

Former Bush secretary, Hank Paulson, claims that Russia in 2008 tried to team up with China to sell off big chunks of their holdings in Fannie Mae and Freddie Mac, the U.S. government-backed mortgage financers. Russia denies it, but Paulson says the motive was to try and force a U.S. government bailout.

After the U.S. revealed this February a new round of arm sales to Taiwan, Chinese Major General Lou Yuan told the Chinese government-run magazine, quote, "We could sanction the U.S. using economic means, such as dumping some U.S. government bonds."

The new House majority leader admits extending the tax cuts will force America to borrow more money.

REP. ERIC CANTOR (R), VIRGINIA: If you have less revenues coming into the federal government and more expenditures, what does that add up to? Certainly, you're going to dig the hole deeper.

SEDER: The U.S. is already in the hole, $883 billion just to China.

More than double what it held in U.S. treasuries just three years ago. Already, American taxpayers pay China $50 billion in interest every year right now.

But if foreign powers buy U.S. debt for the next 10 years, in the same proportion they hold now, another ten years of the Bush tax cuts will put news the hole to Russia by another $60 billion, and to China by another $420 billion - nearly half a trillion dollars of new Chinese debt, plus interest. And that's just based on the borrowing we know about.

In March, economist Simon Johnson spoke to the U.S. China Economic and Security Review Commission about a $170 billion increase in the U.K.'s holdings of U.S. treasuries. A great deal of that increase he said, quote, "may be due to China placing offshore dollars in London-based banks."

At the time, the U.K. held a told of $279 billion in U.S. debt. In the six months since then, that has increased by another $180 billion, making the U.K. and its unknown customers the third largest holder of U.S. debt.

Caribbean banking centers and their unknown customers come in at number six, with $145 billion in U.S. treasury securities.

But what about countries less friendly to the U.S.? The U.S. Treasury Web site lists oil-exporting countries as the fourth largest holder of U.S. debt, with $230 billion in U.S. treasuries.

This summer, Secretary Tim Geithner travelled to Saudi Arabia and the United Arab Emirates, selling them more U.S. debt. How did he do? He won't tell us. In fact, the Treasury Department won't reveal how much individual oil-exporting countries hold, or have ever held in U.S. treasuries.

In 1974, Treasury Secretary William Simon struck a deal with Saudi Arabia for the Saudis to start buying billions of dollars of U.S. debt, secretly.

A secret treasury memo to then-Secretary of State Henry Kissinger explained that, quote, "Purchases under this agreement over the next six months are expected to be approximately $2.5 billion. The sine qua non for the Saudis in this arrangement is confidentiality and we have assured them that we will do everything in our power to comply with their desires."

And so they have. From the Carter administration and through today, other OPEC countries also buying U.S. debt in secret. Treasury refusing to break out dollar figures for countries such as the United Arab Emirates, Libya, and Iran.

Iran? Treasury forms for those buying U.S. treasuries include a country code for Iran, 42307. The list of major foreign official institutions includes the central bank of the Islamic Republic of Iran and other Iranian entities.

How much debt they hold and will hold if the Bush tax cuts continue only Washington and Tehran know for sure.

(END VIDEOTAPE)

SEDER: Today, we asked the White House White House and congressional leaders in both parties specifically these two questions: (a), how much are they willing to borrow from each of these countries to finance extension of the Bush tax cuts? And (b), whether they will reveal how much U.S. debt is bought by oil exporting countries to finance extension of the Bush tax cuts.

No comment from the Republican Party tonight.

Speaker Pelosi also no comment so far.

We have a guest from the White House standing by to join us.

And Senate Leader Harry Reid's office replied by e-mail. Quote, "Not sure what to say. Needless to say, your question does not lend itself to quick answers. If the choice is borrowing money from these countries or doing nothing, which is the reality we find ourselves in and that the economy could tank and millions could lose their jobs if we do nothing, which would you choose?"

No one has said so far that they will tell the American public how much they'll borrow from whom.

Joining us tonight from the White House is Jared Bernstein, chief economic adviser to the vice president.

Thanks for your time tonight.

JARED BERNSTEIN, CHIEF ECONOMIC ADVISER TO THE V.P.: My pleasure, Sam.

SEDER: Now, we'll get to the framework itself. But I want to start with who we're borrowing from to finance it. The president mentioned this morning that there is a danger in China financing our debt since he raised this issue. Well, how will the White House reveal to the American people how much they end up borrowing from Saudi Arabia, the United Arab Emirates, and other oil-exporting countries to pay for extending these tax cuts?

BERNSTEIN: Well, I think what the president has consistently stressed when he's talked about his opposition to extending the high-end Bush tax cuts is that we're talking about over 10 years $700 billion of borrowed money, borrowed from abroad, borrow from Chinese - borrowed from the Chinese, borrowed from oil-producing countries, borrowed from countries with whom - who come here to buy their debt with their sovereign funds.

Now, you know, one important thing from an economic perspective is that the U.S. remains a very strong investment on the cost of borrowing is low. So, the dollar remains a reserve currency, and that's a very positive thing. We are able to finance our debt at low levels. But this is not a plan for long-term budget sustainability.

SEDER: Well, let's talk about that. Excuse me. Let's talk than plan for long-term sustainability. In terms of the framework, Republicans argued that this tax cut for upper earners is stimulated for economy. Does the administration agree with the Republicans on this or do they agree with the CBO chief, Doug Elmendorf, who testified they aren't?

BERNSTEIN: We very consistently and starkly disagree with the contention that there is anything growth-oriented about those high-end tax cuts. But we are in a place where political compromise is essential if we don't want to let this stalemate result in increases in taxes for middle class and working families come January 1st.

And if you look at this framework that the president decides today, whether it's unemployment insurance, whether it's an important and new and generous payroll tax cut holiday for working families, or whether it's tax credits for low income people, whether it's business expensing for businesses to expand - in every case, we're talking about a framework that I think is far better than anyone could have expected given where this debate is in the past few days relative to jobs and incomes.

SEDER: If we're talking about the middle class - I mean, doesn't this agreement give some political fodder to the incoming GOP Tea Partiers and the present Republican Party, who are obsessed with the deficit, to cut programs which actually stimulate the economy, and for that matter to attempt to raid Social Security?

BERNSTEIN: Well, first of all, on Social Security, I think you're referring to this payroll tax cut -

SEDER: No, I'm actually referring to the argument by the deficit commission that they should cut Social Security.

BERNSTEIN: Sure.

SEDER: So, isn't this giving fodder, as you increase the size of the

deficit, which will end up hurting those people that supposedly are helped

by this?

BERNSTEIN: No, by no means. I mean, first of all, it's interesting -

both fiscal commissions got behind the idea of a payroll tax cut holiday.

And by the way, while the payroll tax falls 2 percent for the employees, this is a tax benefit that workers begin to get immediately through their paychecks, 2 percent of their salary, up to the Social Security cap. Any lost revenue to Social Security would get a credit from general revenue. So, that would - that would be replaced -

SEDER: Well, I'm not suggesting - excuse me, I'm sorry. I'm not suggesting that Social Security is contributing to the deficit. I'm suggesting that this gets political cover to cut Social Security.

BERNSTEIN: Yes. Look, there is certainly going to be that kind of noise out there. But this president is consistently been about jobs and incomes for middle class families. And if you look at where this framework is strongest, it's exactly on those issues. Unemployment insurance for folks who, through no fault of their own, face long-term unemployment, there is probably no better way to both help folks make ends meet and stimulate economic growth.

We believe this measure will add 600,000 jobs to the economy over the next year. The payroll tax cut holiday adds $1,000 to the paycheck of a $50,000 earning family, $1,500 if that family earns $75,000. Put that on top of the 2,000 bucks they get from making sure their middle class taxes don't go up, and you're actually talking about real money, tax relief, pumped back into this economy. We think this is a very positive jobs framework.

SEDER: Jared Bernstein, chief economic adviser to the vice president

thanks for joining us.

BERNSTEIN: My pleasure.

SEDER: How the White House ended up with this deal and what it lost, next with Sam Stein.

(COMMERCIAL BREAK)

SEDER: Good news for 98 percent of Americans: the estate tax is back and it won't affect them. Good news for the other 2 percent: the estate tax is a lot smaller. The Mac attack, McConnell and McCain team up slow down and potentially stop any deal on "don't ask, don't tell."

And when asked by the Tea Party to step up and take a job for them, she says "thanks, but no thanks."

(COMMERCIAL BREAK)

SEDER: As we reported in our previous segment, the U.S. will have to borrow at least $420 billion from China, plus interest, plus another $1.5 trillion from other countries to pay for just the next 10 years of the Bush tax cuts.

But in our fourth story tonight, the president says he's on the verge of signing a deal to extend the Bush tax cuts for two years. It means breaking both his pledge to renew the middle class cuts permanently and to end the tax cuts for the rich, permanently.

And although Republican Senator John McCain tweeted his approval of the framework tonight, along with other Republican leaders signing off, the big question now is: Democratic members of Congress, some of whom suggest this weekend they would rather let all the tax cuts expire than give in to Republican demands to increase the deficit for additional tax cuts for the rich.

For details on the deal, or the lack thereof, let's bring in "Huffington Post" senior political reporter Sam Stein.

Thanks for your time tonight, Sam.

SAM STEIN, HUFFINGTON POST: Thanks, Sam. You have a great first name.

SEDER: Oh, I appreciate that. Yes, you, too.

Now, Senate Leader Harry Reid's spokesman tonight says he plans to discuss the proposal with Democratic senators tomorrow. Does the president have a deal or not?

STEIN: I think he has a deal, and I think it's going to be built on the back of congressional Republicans, Democratic leadership, and however many Democrats those leadership members can corral. I don't think they would go forward with this deal if it didn't have the votes. I think there will be progressive members, very vocal, very upset about this.

We're already reporting tonight that Representative Peter Welsh of Vermont is opposed to the deal, is circulating a dear colleague letter urging House Democrats to oppose it. But I just don't see the opposition sustaining anything close a filibuster in the Senate.

SEDER: So, lay out what we know about the specifics of the deal and how much it will cost us, if you would.

STEIN: Sure. Well, right now, we know that everything is basically two-year extension, except for unemployment benefits, which is going to be a 13-month extension. The cost of extending the tax cuts just for the rich is going to clock in about $95 billion. The cost of everything else, the tax goodies, the unemployment extension that the administration secured is about $215 billion.

So, right there and then, you have a small victory for the administration. They got more in terms of tax goodies than they did in giving up in terms of tax cuts for the wealthy.

But to say it's anything but a capitulation by this administration is to not do it justice. Clearly, this White House wanted to end the Bush tax cuts for the wealthy. They wanted to decouple it from tax cuts for the middle class. And they're going home tonight admitting that they couldn't do it, they didn't have the votes, and they're going to have to re-litigate this battle in two years.

SEDER: Sam, do you have any sense that it ever occurred to the administration to maybe threaten a veto? I mean, George Bush did this during his time in office.

STEIN: Yes.

SEDER: Why nothing of that sort?

STEIN: It's a great question. And that is something that reporters are going to be asking in the weeks, if not months ahead when they look back at this fight. It was clear as early as or as late as a month ago that this White House was not going to allow any of these tax cuts to expire.

Press Secretary Robert Gibbs said so in multiple press briefings and that sort of gave away the game, right? If the White House wasn't willing to let anything expire, and they were in a difficult negotiating tactic because - or a negotiating stance, because what do you say to Republican members? All you're doing is inviting them to hold out longer than you are.

SEDER: Right.

STEIN: And so, they gave it up there and then. And I think what ended up happening is that Democrats ended up having to find the best deal they could get.

SEDER: Does President Obama think he's going to have better luck ending these tax cuts in 2012? I mean, is it going to be a better climate to close things on the verge of a presidential election?

STEIN: I've asked a few administration officials that question tonight, and they seemed eager to re-litigate this thing. It's sort of funny because it was such a tortuous process already. It's almost masochistic that you would want to do it again. But they said -

SEDER: On what side are they going to re-litigate this?

STEIN: It's a good. That's a very good question. They want to see these rates expire. And, you know, Jared Bernstein, your previous guest, I think this says it all. In an interview over the summer he did with "The Huffington Post," he said the problem with the temporary extension is that you're simply inviting members of Congress to continue to kick the can down the road.

SEDER: Right.

STEIN: And that's what this administration did tonight. And they're going to have a real uphill battle earning the trust of the Democratic Party that they actually want these rates to expire after what happened.

SEDER: Sam Stein of "The Huffington Post" - thanks for your time tonight.

STEIN: Thanks, Sam.

SEDER: Coming up: what's been on ice thanks to this Bush tax cut fight - and thanks to Mr. McCain and Mr. McConnell why "don't ask, don't tell" may stay on ice. Next.

(COMMERCIAL BREAK)

SEDER: Mitch McConnell decides John McCain knows better than the troops on the ground what's best for the troops on the ground, next.

But first, on this day in 1973, Gerald Ford was sworn in as vice president under the terms of the 25th Amendment, replacing Spiro Agnew. Later, Ford was to become president under the same rule, making him the first, and so far only president who was never elected as president or vice president.

He also deserves a lot of credit for making Chevy Chase the star that he is today. Let's play Oddball.

We begin in Stowe, Ohio, where we find another scofflaw attempting to outrun the police. Usually if you're going to lead the police on a chase, you look for something with speed. But this guy goes the opposite route, instead grabbing a slow dump truck. This should be over quickly, or maybe not.

After some fancy backwards driving, the driver gets serious, and gets on the highway. But it's only after a matter of time before the long arm of the law compacts this trashman. Using the generically named Stop Stick, the police were able to puncture a front tire, forcing the truck into the guardrail, and then it's the cops' turn to take out the trash.

To Nantz, France, where authorities have just discovered a manuscript written by Leonardo da Vinci. The writing was found in a pile of documents which were given to the city's library in 1872 by Pierre Antoin Le Boucher (ph). Researchers still have not been able to decipher it. Well, I took a backwards Italian class in elementary school. Let me see if I can make it out.

Oh, this is an easy one. I believe it says don't write any crappy books about me and my code. Why are they just discovering this now?

Finally, to the Internet, where these two men appear to be angry because they wore the same shirt on television. Suddenly things get real. Yes, there is only one way to settle wardrobe duplication, a good old-fashioned slap fight. Not in the face, not in the face!

The host attempts to regain order, but it's far too late. The fight spills out on the set, but apparently stays behind the magical floating desk. Despite the fact that this clip was in another language and resulted in a slap fight, it still made more sense than anything on Fox News.

Coming up, Senator Mitch McConnell's plan for Don't Ask, Don't Tell; whatever John McCain says, that's what we ought to do, next.

(COMMERCIAL BREAK)

SEDER: The fate of repealing Don't Ask, Don't Tell may still rest with the irrational and increasingly bogused objections of the senator from Arizona, John McCain. In our third story tonight, the Senate minority leader, Mitch McConnell, says he will follow McCain's lead. But Senator Joe Lieberman says that the Senate should remain in session until Don't Ask, Don't Tell is repealed.

But is that an empty demand? The senate minority leader, McConnell, sided with McCain without citing any substantive reason to keep the discriminatory policy. Senator McConnell also threw in the favorite GOP excuse: we're running out of time.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: You know, people are talking like that is the only issue. That defense bill also has abortions and military hospitals. Once you get on the defense bill, it typically takes two weeks. I don't see how we can possibly finish the defense authorization bill, a two-week bill. Wholly aside from these controversial items that are in it, there are a whole lot of other things in it before the end of the year.

My personal view is that Senator McCain is correct on this. I intend to follow his lead. We'll find out when we finally get around to debating this bill, which I think will not be before the end of the year.

(END VIDEO CLIP)

SEDER: So the defense authorization bill typically takes two weeks, according to McConnell. And even that is a revision from September when McConnell claimed that the defense authorization bill requires four or five weeks to debate.

But neither claim is true. A senior Democratic aide did some research according to Brian Butler of "Talking Points Memo" and found that in the past 20 years, the defense authorization bill has taken longer than seven days only four times. On nine different occasions, it took five days or less. One year during President Bill Clinton's term, it took one day.

Meantime, Senator Joe Lieberman has endorsed the idea of the "Washington Post's" Jonathan Capehart. Quoting Lieberman's Tweet, "keep Senate in session until Don't Ask, Don't Tell repealed. If not now, when?"

But if Don't Ask, Don't Tell is placed last on the Senate agenda, there will be nothing to effectively force Republican senators to stay in town rather than just go home. And now Defense Secretary Robert Gates has expressed concern about whether Don't Ask, Don't Tell will be repealed in this Congress.

Speaking in a town hall type meeting aboard the USS Abraham Lincoln, he said, quote, "I'd have to say I'm not particularly optimistic that they're going to get this done. I would hope that they would. My greatest fear is that we'll be told this law will be overturned by a court and we'll have to implement it without any time for preparation."

As for Senator McCain's most recent objections? Senate Majority Leader Harry Reid has expressed his deep frustration. Quote, "and his latest trick, he said yesterday that he opposed repealing Don't Ask, Don't Tell because of the economy. I repeat, the senior senator from Arizona said he couldn't support repealing Don't Ask, Don't Tell because of the economy. I have no idea what he is talking about, and no one else does either."

Joining me now is Alexander Nicholson, a former U.S. Army human intelligence collector who was discharged under Don't Ask, Don't Tell in 2002. He is now the executive director of Service Members United and the plaintiff in the Log Cabin Republicans' lawsuit against Don't Ask, Don't Tell. Thanks for your time tonight.

ALEXANDER NICHOLSON, EXECUTIVE DIRECTOR, SERVICE MEMBERS UNITED: Of course.

SEDER: Is it disheartening, if unsurprising that the Senate minority leader would line up behind Senator McCain?

NICHOLSON: It really is, if for nothing else than simply because Senator McCain really is representing the far fringe of his party on this issue. I mean, 80 percent of the American public wants to get rid of Don't Ask, Don't Tell. You can't even get 80 percent of the American public to agree that the sky is blue.

You have a majority of Republicans, independents, weekly church goers, self described conservatives, even Tea Partiers saying that Don't Ask, Don't Tell needs to go. So you have Senator McCain here now to the right of the Tea Party.

So if the Republican party is thinking now that the policies of the Tea Party are liberal, then I think they're in big trouble moving forward.

SEDER: So McCain is basically just lending himself as some type of cover for this whole thing, isn't he?

NICHOLSON: Yeah, I think so. It has really come to the point of ridiculousness. I really just don't even know what else to say. I used to have so much respect for John McCain's independence, for his maverick personality, as they used to say. But so many people I have talked to have said that exact same thing. I used to have so much respect for John McCain's politics, but not anymore.

He is really just coming across as a grumpy old man now, who just wants to obstruct at any cost. It really seems - I'm not a psychiatrist, but it seems like there is a big element of ego in there and a lot of bitterness in there. It's just really disappointing to see him come to this point.

SEDER: Now part of the GOP strategy, possibly its chief strategy is to simply run out the clock on repealing Don't Ask, Don't Tell, push to it the next Congress which will obviously have a greater Republican minority in the Senate. Do you see anything to stop that strategy from working?

NICHOLSON: Yeah. I think the one thing that could stop it from working is if Senator Reid would give the bill about five or six days of floor time. We have the votes lined up. That's the bottom line. We have the votes lined up. We know the conditions for those votes for the couple of Republican votes we need. And those conditions are a reasonable number of amendments, so 10 to 20, and then a reasonable amount of time to debate each amendment, a half an hour, an hour, whatever they can work out.

We have the votes lined up. If Senator Reid will give the bill, the defense bill, a reasonable amount of floor time, that's what can defeat their obstruction.

SEDER: Is it simply about the length of time? Or does it concern you that debate of the Start Treaty will precede any debate on Don't Ask, Don't Tell. making it less likely that there is incentive for people to stick around for a Don't Ask, Don't Tell debate?

SEDER: That's a really good question. The Start Treaty, some of the other issues too, like the Dream Act coming up before the defense bill has a chance to come up is a big concern for us. You know, the defense bill needs to up, be voted on. You have to run the clock out on a couple of motions. And then it goes to conference for a week or so.

The natural I think schedule for dealing with these issues after the tax cuts deal I think is to bring the defense authorization act up, start the process on that, and then while the defense bill has been finalized, while it's in conference, then tackle those other issues, tackle Start, tackle Dream, whatever you want to do. But do the defense bill first.

You know, with Start, they could even easily do that in the next Congress. I think they'll have the votes to do that even with more Republicans coming into the Senate. But it is a big concern that they want to tackle the Dream Act and Start and a couple of other things before they even get around to NDAA.

SEDER: Alexander Nicholson, executive director of Service Members United, thank you for joining us tonight.

NICHOLSON: You're very welcome. Thanks to be here.

SEDER: Coming up, a batch of documents set to hit the web if someone arrests or kills Wikileaks founder Julian Assange. A look at what company and scandal he has threatened to expose.

And who would want a job that pays in a year what you can make in just one episode of walking around in the woods? It turns out no one.

(COMMERCIAL BREAK)

SEDER: Elizabeth Edwards has stopped treatment for cancer at the recommendation of her doctors, who say that the disease has spread to her liver. Edwards, the estranged wife of former Vice Presidential Candidate John Edwards, first received a breast cancer diagnosis in November 2004. Doctors now say that the cancer has spread too far for treatment to be effective.

This afternoon, Edwards posted a message to her friends on Facebook:

"it isn't possible to put into words the love and gratitude I feel to everyone who has and continues to support and inspire me every day. To you I simply say you know. With love, Elizabeth."

Edwards is currently in hospice care at home in North Carolina and with friends and family. John Edwards is reportedly at her side.

Up next, the founder of Wikileaks may come face-to-face with British police tomorrow. What he is threatening to do if they arrest him.

(COMMERCIAL BREAK)

SEDER: Wikileaks founder Julian Assange is threatening to release a so-called poison pill of classified documents thought to contain secrets about BP, Bank of America, and Guantanamo Bay. In our number two story tonight, Assange, who is currently hiding out in southern England, has distributed to a network of hackers a nearly 1.5 gigabyte file of confidential reports to be made public in the event that he is arrested or harmed.

This latest move by Assange comes after Scotland Yard obtained a warrant for his arrest relating to Swedish charges of sexual misconduct. NBC's Peter Alexander has more.

(BEGIN VIDEOTAPE)

PETER ALEXANDER, NBC NEWS CORRESPONDENT (voice-over): It's become a high stakes international standoff between defiant computer hacker Julian Assange and the American government. The latest release marked by the government not for Internet distribution reveals what the State Department calls critical infrastructure and key resources overseas, including factories, pipelines, and oil terminals, so vital that if they were destroyed, it would immediately affect the public health, economic security, and/or national and homeland security of the United States.

The catalog spans the globe, from a cobalt mine in the Congo to an insulin plant in Denmark, as well as the sole provider of snake anti-venom in Australia.

ERIC HOLDER, U.S. ATTORNEY GENERAL: We have a very serious criminal investigation that is underway. And we're looking at all the things that we can do to try to stem the flow of this information.

ALEXANDER: Facing arrest for the allegations of sexual misconduct, Assange is threatening to release what his attorney has referred to as a thermonuclear device in the electronic age, a secret cache of uncensored documents that Assange says he'll expose if he is arrested or his website is shut down.

He told online readers of a British newspaper that he has distributed heavily encrypted files, believed to include documents on BP, Bank of America and Guantanamo Bay, to more than 100,000 people worldwide. They're coded for now. But Assange warned, "if something happens to us, the key parts will be released automatically." One file is reportedly named "insurance," locked by a 256 digit password.

This evening, Assange's own attorney was more measured.

MARK STEPHENS, ASSANGE'S ATTORNEY: There has been no implied threat in relation to the Swedish arrest warrant. Wikileaks is an organization of many thousands of journalists across the planet, and the scheduled release of information from the bank of cables will continue.

ALEXANDER: Assange is being isolated both physically and electronically, with a Swiss bank the latest financial institution to freeze assets or block donations to Wikileaks. The site servers have been shut down in the U.S. and France, but hundreds of mirror sites set up by Wikileaks supporters have popped up online.

(END VIDEOTAPE)

SEDER: NBC's Peter Alexander.

The half governor of Alaska turns down a job. Michael Steele's to be exact, next.

(COMMERCIAL BREAK)

SEDER: It was an impassioned plea/job offer to the half-term governor of Alaska, delivered by a Tea Party leader: you must run. No less than the survival of our country is at stake. Yet in our number one story, Sarah Palin declines, perhaps because the job she was being recruited for wasn't president but Republican party chair.

The Tea Party Nation president, Judson Phillips, calling for a conservative takeover of the RNC, in part to, quote, "rescue the party from those who would make this party socialist light."

In an open letter to Sarah Palin, Phillips makes his case. "We need you as chairman of the RNC. You have shown in the past no hesitation to take on the establishment. You did it in Alaska. If we end up with establishment control of the GOP and their support for an establishment candidate in 2012, Obama and the socialists will have won."

Phillips suggest Palin's current role as superstar would help the RNC with some of its financial woes. As the "Washington Times" reports, the RNC under the leadership of Michael Steele will enter the 2012 elections 20 to 25 million dollars in the hole.

Steele hasn't indicated whether or not he will run for reelection in mid-January, but he could point out that the RNC spent 75 times more on Sarah Palin's clothes than it did on its widely reported field trip to a West Hollywood bondage-themed nightclub. Just something to consider.

But Chairwoman Palin would have to deal with the day to day grind of managing the committee's 168 members, as well as a dramatic cut in pay. And oh, yeah, she wouldn't be able to run for president. So it should come as no surprise that Palin declined the Tea Party proposal through a statement. "I respect the desire to have someone in charge of the RNC who understands the wishes of the conservative grassroots and understands that power resides with the people and not the vested interests in D.C. However, the primary role of the RNC chair seems to be that of fundraiser in chief, and there are others who probably could be much more comfortable asking people for money than I would be, and they would definitely enjoy it more."

So for now, Palin will continue to operate in her comfort zone, asking people to buy her books, pay to hear her speak and to watch her reality show in which she makes 250,000 dollars per episode to do this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's coming right here. Just wait, wait until it turns broadside and stops.

SARAH PALIN, FORMER GOVERNOR OF ALASKA: OK.

UNIDENTIFIED MALE: Go ahead.

PALIN: Good.

UNIDENTIFIED MALE: There you go, baby! There you go.

PALIN: In the words of Ted Nugent, we thank that mighty animal for living a good life and now sustaining -

(END VIDEO CLIP)

SEDER: Two hundred and fifty grand.

Now time to call in MSNBC political analyst and author of "Revival, the Struggle for Survival Inside the Obama White House," Richard Wolffe. Good evening, Richard.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Sam, good evening.

SEDER: Let me ask you this: if Palin doesn't believe in her ability to ask people for money, how does she intend to run for president?

WOLFFE: Oh you people in the reality-based world are so quaint. Don't you know the Mama Grizzly don't go with the flow? This is a dead fish argument here. There are people who would be raising money for her. And there are people who come up with her foreign policy.

You don't need to do this sufficient as a non-traditional candidate. So why the question in the first place? Look, if she wanted to solve the RNC's money problems, she wouldn't have to raise money. She's just have to come up with a couple more books and she would be fine.

The question here is behind the false modesty - oh, she cannot do this stuff - she knows she can do it and do it that much better. And running for president is going to require a vastly more money. And whether she does it or other people will do it, she'll find it quick enough when she runs.

SEDER: So what are we to make of this letter from Judson Phillips? Because obviously he is a fan of Sarah Palin's. One would expect that he would want her to run for president. Was this some type of attempt to sideline her?

WOLFFE: You think?

SEDER: Well -

WOLFFE: Yeah.

SEDER: So is that an indication that the Tea Party is coordinating with some other elements of the Republican party to get her out of the way?

WOLFFE: Let me tell you about a conversation I had with a quote/unquote Tea Party candidate who owes a lot, you would think, to people like Sarah Palin, not least because she backed this particular individual. And the way they were talking about Sarah Palin did not suggest that they had any admiration for her, any gratitude, any sense of obligation to her.

In fact, they raised all the same concerns that these establishment folks have been raising, both privately and in some cases publicly about her. So the idea that the Tea Party and Sarah Palin and the Republican party are all in the same place here isn't actually true, because you come up against personal ambition. You come up against different ideology and the very real concerns from people, even inside the Tea Party, who have looked at the numbers and say Sarah Palin cannot make it, because at least 40 percent maybe more of Republicans say she is not qualified to be president, and all the independent voters do not think - they don't approve of what she is doing.

So they can see the numbers just as well as anyone else can, in spite of the rhetoric and the campaigning that we've seen.

SEDER: So is this just the opening salvo? Does it get a little bit more hostile after this?

WOLFFE: Well, if it doesn't now, it will later. And the problem for all of these people is that what doesn't kill Sarah Palin will make her stronger. The more they oppose her, the more the good old boys come out there and give her a lesser job, or say that she is not qualified, as they're all saying behind the scenes in Washington, the more she will say look, it's me against the old boys, the establishment, the same old way of doing politics. And that will be her base, her momentum.

So it's a self-defeating proposition. That's why you see people like Karl Rove who stuck his neck out saying she wasn't qualified now coming back and maybe keeping his mouth shut.

SEDER: And she must know this was an attempt to sideline her. That's why she quashed it so quickly?

WOLFFE: Well, if you think you're going to save the country from a socialist president, and you're seeing these crowds and everyone is saying you can do it, you should do it, why would you want the RNC of all places? It's going to be sidelined as it was in the last election. It's a functionary job. It's the kind of thing she will fill with her own people from Alaska, for all we know.

SEDER: Right. Richard Wolffe, MSNBC political analyst, many thanks.

That's December 6th. I'm Sam Seder, in for Keith Olbermann tonight.

Thanks for joining us. Have a good night.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END