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. and 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. i will sign it tomorrow! [ applause ] >> 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 asked the senate to pass a simple rule, that all judicial and public servants nominations receive a simple up

or down vote within 90 days. [ applause ] >> 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 too often it's inefficient, outdated, and remote.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. [ applause ] >> finally, none of this can happen unless we also lower the temperature in this town. we need end to 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. the government should do for people only what they cannot do better by themselves and no more. [ applause ] >> 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's nothing the united states of america can't achieve. [ applause ] >> that's the lesson we've

learned from our actions abroad over the last few years. ending the 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. [ applause ] from this position of strength, we've begun to wind down the war in afghanistan. 10,000 of our troops have come home. 23,000 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. [ applause ] as the tide of war recedes, a wave of change has washed across

the middle east and north africa, from tunis to cairo to tripoli. a year ago, gadhafi 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 cannot be reversed, and that human dignity cannot be denied. [ applause ] >> how this incredible transformation will end remains uncertain. but we have a huge stake in the outcome. and while it's ultimately up to

the people to reach it, 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. [ applause ] >> 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 ironclad commitment, and i mean ironclad to israel security has meant the closest military cooperation between our two countries in history.

[ applause ] >> 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 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! [ applause ]

>> that's not the message we get from leaders around the world who are eager to work with us. that's not how people feel from tokyo to berlin, from capetown 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. [ applause ] >> that's why working with our military leaders, i've proposed a new defense strategy that ensures we maintain the finest military in the world while saving nearly $500 billion in our budget. to stay one step ahead of our adversaries, i've already sent this congress legislation that will secure our country from the

growing dangers of cyberthreats. above all, our freedom endures because of the men and women in uniform who defend it. [ applause ] [ applause ] >> as they come home, we must serve them as well as they've served us. that includes giving them the care and the 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're 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 jobs corps that will help our communities hire veterans as cops and firefighters, so that america is as strong as those who defend her. [ applause ]

>> which brings me back to where i began. those of us who have been sent here to serve can learn a thing or two from the service of our troops. when you put on that uniform, it doesn't matter if you're black or white, asian, latino, native american, conservative, liberal, rich, poor, gay, 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. you know, one of my proudest possessions is the flag that the s.e.a.l. 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 women and children from the fight, the s.e.a.l.s 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 somebody 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 50 stars and those 13 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 are joined in common purpose, as long as we maintain our common resolve, our journey moves forward and our future is hopeful. and the state of our union will always be strong. thank you. god bless you. and god bless the united states of america. [ applause ] >> president obama concluding the state of the union address to a joint session of congress tonight. the president saying that the state of the union is getting stronger. echoing there the words of ronald reagan in 1986, who said the state of the union was stronger than a year ago and growing stronger each day. president obama, in an assertive

speech, with a lot of policy specifics. also taking on a lot of the issues on which he has been most criticized, both by people within his own party and by those across the aisle. the president addressing everything from the solyndra issue, the energy department's funding of a solar panel manufacturer to his pledges as a candidate and in the early days of his presidency to change the tone, in tonight's words, to change the temperature in washington. joining us once again from washington is my colleague, chris matthews at "hardball." chris, what's your reaction to the speech? >> well, everything you said, and just to add, i thought it had a real grab for the high ground in terms of optimism. he wants the republicans to be what he calls declinists. he wants to be the optimist. that's a very powerful thing in american politics. secondly, it was a clinton-esque speech. very detailed. long enough to make the point that he was strong on all the policy questions, thereby

knocking down mitt romney's constant harangue that he's never run a company, never run a state. this guy's run a country! and he's trumped him on that. and he's made it clear that he's running the country. cooperative. talking about, i will do the stuff that's tough for me as a democrat in medicare and medicaid. even social security. you do your stuff in taxes or there's no deal. taking the side of the 99%, the populist side against the 1% on taxes, challenging congress to clean up it own act. maybe an unfair shot, but a good, strong one about insider trading and getting rid of the filibuster. very, very strong and especially talk about give jobs to the soldiers, men and women who come home from fighting our wars. i thought it covered a lot of territory. and what we've learned before in terms of the success of these speeches, people like detail, that's why they liked clinton's speeches, and they don't mind length if it has information.

i thought it was a strong, patriotic, optimistic speech, but it also had punch to it. it said to the republicans, i know where you live, i'm going after you on the filibuster, on inside trading. look out, i can fight. >> the president's speech tonight, an hour and five minutes long, throughout with an energetic and even loud, at times, tone. not a particularly angry speech, but an assertive one. going into the speech, a lot of us here on this panel in new york and those we've been talking about it with had said that we expected taxes to be the central issue of this speech. taxes certainly part of the speech, but not exactly the spine on which the whole speech hung, lawrence. what do you think about the balance of specifics, poetry, and prose? >> well, taxes was done mostly in poetry. it was all nice-sounding things with absolutely no tax specifics. the closest he came to anything specific, it was a lot of this tax fairy dust that he will sprinkle on corporate america and suddenly that will create a

hiring pattern or that will induce manufacturers to behave differently. it's never worked in the past, and most of those pieces of legislation die in the process anyway. but the one specific thing was that people making over $1 million should not pay less than 30% in effective income tax rates. and even that, when you look at the handout they gave us with some additional specificity to it, they say they want to exempt charitable contributions from being hit by that law. so as soon as you start looking at the first layer of detail on even that one, it is not at all clear how they would do that. and so it's -- what's happened for democrats is they have to use the tax code instead of spending to get to the social policies they want to get to, because of the complexities of budgeting and so that's why they have this new faith that the tax code can create economic behavior in industry that we've never seen it create. >> ezra? >> on the tax issue, i thought

the more interesting element was on the corporate tax side. he argued for something called a global minimum tax. basically, what that is, currently, a company can put their money in ireland, and ireland has a very, very low corporate tax rate. you don't have to pay taxes on that money until you bring it back, which corporations often never do or don't do until congress passes a special overseas profits tax break. under this, you would have to pay the difference between the irish tax rate and this global minimum tax every year. so you wouldn't be able to just sock your money away and never pay any american taxes on it. that's a big change to our, to the way we treat overseas corporate income, and will be if congress, in fact, does take it up, which obviously is a big if, a huge, huge fight. >> ezra, let me just ask you, on this subject, in terms of the specifics, tax or otherwise, what do you think was the most ambitious specific policy that the president laid out? not just a goal for the country, but a specific policy change? >> the buffett tax. essentially, it sounds like a 30% alternative minimum tax. and once you're a millionaire,

if what you would be paying is less than 30%, this would automatically kick in. and if you eliminate all deductions and subsidies, a home mortgage interest deduction, a health care tax exclusion for people making over $1 million, you raise an enormous amount of money. you're talking about $1 trillion or more over ten years. if they were actually able to do that, it would create a flat tax at the top of the code for high earners. if they can manage that, it would be quite a feat. >> for people who aren't wonks, there's a fairness case to be made for it. that is, listen, we've tried to give people tax breaks on, for example, the interest we pay on your mortgage or having a kid, because we as a country think those are good social policies, but zillionaires don't need those breaks and incentives. they can pay for it on their own. reverend sharpton, in terms of the overall substance of the speech, the president started with iraq and killing bin laden. he ended at the end with the same basic idea, which is that americans and particularly

politicians in washington should look to the armed forces, our very accomplished armed forces, in order to find a way to work together. what do you think of that as a rhetorical device, and as a big picture idea for the country? >> i think that from just a level of oratorical skills, he really put his opponents in an awkward position, because by using the military as his example for unity, watching each other's back, talking about the s.e.a.l.s and the flag he had, it puts them in an awkward position to attack that. it almost turns on his head this whole thing of what he proposes un-american. they look un-american. if you don't have each other's back. and he did it, as you said, he sandwiched it in by starting with iraq and bin ladin, ending with the s.e.a.l.s and bin ladin and in the middle had specifics on energy, specifics on tax, jobs. education, i mean, he went into areas that he knows his base will argue with him on.

he sandwiched it with some very specific policy things, and then he ended, again, with the military. so i think where he went to poetry, wrapped in the american flag and military uniform, and the prose was very, very specific. i think it was very well done. >> in terms of what happens next, in just a few minutes, just a couple of minutes, we're expecting to hear the republican response to the state of the union. it will be delivered tonight by two-term indiana governor mitch daniels. of course, the backstory on mitch daniels is that, number one, he has a, forgive the phrase, hell of a labor fight going on right now in indiana. today democrats in the indiana state legislature did not show up in the legislative chamber to block a quorum so that the state could not be voted into being a right to work state, stripping union rights in the state. the super bowl will be hosted in indianapolis in just a couple of weekends. the nfl players association is among the forces in union politics making a very big stink about this. tonight, as the state of the union is airing in indiana, local indiana stations are also

airing an ad, a labor ad, against indiana -- excuse me, against governor daniels, reminding him of the fact that he used to say that he did not support making indiana a right-to-work state. of course, a lot of republicans wish that mitch daniels was runging for president this year. karen finnian, in terms of the partisanship in the speech tonight, how tough was the president on republicans? how brightly did he draw those lines? did you see this particularly combative in partisan terms? >> not so much combative, but i think to what reverend al was saying, he was very clear in kind of getting these guys in the corner. when he talked about things -- he calls their bluff, for example, on infrastructure. he said, you know, we can do these things, but you've got to send me the bill now. clearly a reference to the argument that republicans have been using against him about keystone. so in very specific places, he

talked about very specific things that should and could get done this year, and again, sort of left it to, i'm happy to work with you if i can, but if i can't, i'm going to look for ways to move forward. so he sort of walked that fine line between, i want to work with you, and there was also that sort of team of rivals moment, frankly, when you talk about, hillary clinton ran against met, bill gates, we should all be able to come together. and it was again reminiscent of, there is no red, there is no blue, there is one america. trying to be very optimistic and very hopeful, but also, like you say, very american. remember, the republican line against him, he is not pro-america enough, he's pessimistic about america. well, that was a very optimistic speech. and i think what we're going to hear from mitch daniels is far less optimistic and more fatalistic, and that contrast was important as well. >> chris matthews in washington, with about 120 seconds until we hear from mitch daniels, that optimism that you and karen finney were talking about bookended with the president talking again like old candidate

obama about needing to change the temperature in washington, needing to change the way things get done. was that a surprise? >> no, i think he's doing it, but he wants it on his terms. he certainly wants to get something done in terms of a trade-off, in terms of entitlements and taxes on the wealthy. of course he wants it done. he does want to end this filibuster stranglehold that has prevented any president from operating on his or her mandate. that sets a very high standard on getting anything done at all, as we saw in this last three years. so he wants to be an activist president. the ways the rules are working in the congress, they've hamstrung him, and he wants to complaining change them. if that's getting along with his opponents, fine. >> briefly, ezra, when the president specifically proposed a 90-day limit for an up or down vote on all nominees, obviously, he's saying, exclude nominations from the filibuster. has anything like that ever happened or work? >> in 2005, the bush administration tried to get rid of that, obama opposed that. he also had a proposal in his policy proposal tonight to make filibusters talking again.

you have to actually hold the floor. he didn't make that specifically in the speech, but that would be a very big change to the senate if it actually got put into place. >> 20 seconds. >> i think, also, he was brilliant in pointing out his grandfather was in patton's army, his grandmother was on -- >> the assembly line, yeah. >> so all that birther, un-american stuff, he took on early. i mean, the energy that he drew was great. >> it is a great honor in the opposition party to be asked to give the response to the state of the union. that honor this year goes to indiana governor mitch daniels, who is completing his term as indiana's governor. here now is governor daniels. he's speaking from the auditorium at the indiana war memorial building. let's listen. >> greetings from the home of super bowl xlvi. the status of loyal opposition imposes on those out of power some serious responsibilities, the show respect for the presidency and its occupant, to express agreement where it exists. republicans tonight salute our

president, for instance, for his aggressive pursuit of the murderers of 9/11 and for bravely backing long-overdue changes in public education. i personally would add to that list admiration for the strong family commitment that he and the first lady have displayed to a nation sorely needing such examples. on these evenings, presidents naturally seek to find the sunny side of our national condition. but when president obama claims that the state of our union is anything but grave, he must know in his heart that this is not true. the president did not cause the economic and fiscal crises that continue in america tonight, but he was elected on a promise to fix them, and he cannot claim that the last three years have made things anything but worse. the percentage of americans with a job is at the lowest in decades. one in five men of prime working age and nearly half of all persons under 30 did not go to work today. in three short years, an unprecedented explosion of spending with borrowed money had

added trillions to an already unaffordable national debt, and yet the president has put us on a course to make it radically worse in the years ahead. the federal government now spends one of every $4 in the entire economy. it borrows one of every $3 it spends. no nation, no entity, large or small, public or private, can thrive or survive in tact with debts as huge as ours. the president's grand experiment in trickle-down government has held back rather than sped economic recovery. he seems to sincerely believe we can build a middle class out of government jobs paid for with borrowed dollars. in fact, it works the other way. a government as big and bossy as this one is maintained on the backs of the middle class, and those who hope to join it. those punished most by the wrong turns of the last three years are those unemployed or underemployed tonight, and those

so discouraged they've abandoned the search for work altogether. and no one's been more tragically harmed than the young people of this country, the first generation in memory to face a future less promising than their parents did. as republicans, our first concern is for those waiting tonight to begin or resume the climb up life's ladder. we do not accept that ours will ever be a nation of haves and have-nots. we must always be a nation of th haves and soon-to-haves. we're only a short distance behind greece, spain, and other european counties now facing economic catastrophe, but ours is a fortunate land. because the world uses our dollar for trade, we have a short grace period to deal with our dangers. but time is running out if we're to avoid the fate of europe and those once-great nations of history that fell from the position of world leadership.

so 2012 is a year of true opportunity, maybe our last, to restore an america of hope and upward mobility and greater equality. the challenges aren't matters of ideology or party preference. the problems are simply mathematical and the answers are purely practical. an opposition that would earn its way back to leadership must offer not just criticism of failures that anyone can see, but a positive and credible plan to make life better, particularly for those aspiring to make a better life for themselves. republicans accept this duty gratefully. the roots back to an america of promise and to a solvent america that can pay its bills and protect its vulnerable start in the same place. the only way up for those suffering tonight, and the only way out of the dead end of debt into which we've driven is a private economy that begins to grow and create jobs, real jobs,

at a much faster rate than today. contrary to the president's constant disparagement of people in business, it's one of the noblest of human pursuits. the late steve jobs, what a fitting name he had, created more of them than all those stimulus dollars the president borrowed and blew. out here in indiana, when a business person asks me what he can do for our state, i say, first, make money, be successful. if you make a profit, you'll have something left to hire someone else, and some to donate to the good causes we love. the extremism that stifles the development of homegrown energy or cancels a perfectly safe pipeline that would employ tens of thousands or jacks up consumer utility bills for no improvement in either human health or world temperature is a pro-poverty policy. it must be replaced by a passionate pro-growth approach, that breaks all ties and calls all close ones in favor of

private sector jobs that restore opportunity for all and generate the public revenues to pay our bills. that means a dramatically simpler tax system of fewer loopholes and lower rates. a pause in the mindless piling on of expensive new regulations that devour dollars that otherwise could be used to hire somebody. it means maximizing on the new domestic energy technologies that are the best break our economy's gotten in years. there's a second item on our national must-do list. we must unite to save the safety net. medicare and social security have served us well, and that must continue. but after half and three quarters of a century, respectively, it's not surprising that they need some repairs. we can preserve them unchanged and untouched for those now in or near retirement, but we must fashion a new, affordable safety net so future americans are

protected too. decades ago, for instance, we could afford to send millionaires pension checks and pay medical bills for even the wealthiest among us. now we can't. so the dollars we have should be devoted to those who need them most. the mortal enemies of social security and medicare are those who in contempt of plain arithmetic continue to mislead americans that we should change nothing. listening to them much longer will mean that these proud programs implode and take the american economy with them. it will mean that coming generations are denied the jobs they need in their youth and the protection they deserve in their later years. it's absolutely so that everyone should contribute to our national recovery, including, of course, the most affluent among us. there are smart ways and dumb ways to do this. the dumb way is to raise rates in a broken, grossly complex tax system, choking off growth without bringing in the revenues

we need to meet our debts. the better course is to stop sending the wealthy benefits they do not need, and stop providing them so many tax press conferences that distort our economy and do little or nothing to foster growth. it's not fair, and it's not true for the president to attack republicans in congress as obstacles on these questions. they and they alone have passed bills to reduce borrowing, reform entitlements, and encourage new job creation, only to be shot down time and time again by the president and his democratic senate allies. this year, it falls to republicans to level with our fellow citizens about this reality. if we fail to act to grow the private sector and save the safety net, nothing else will matter much. but to make such action happen, we also must work in ways we republicans have not always practiced to bring americans together. 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, quarreling 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'll never be enough public revenue to pay for our safety net, national security, or whatever-sized 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, indeed, the president and his allies tell us that 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 lightbulb. 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 unaffordability of today's safety net programs are

all the government we now have. we'll fall for the con job that says we can just 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. 2012 must be the year we prove the doubters wrong. the year we strike out boldly, not nearly to avert national bankruptcy, but to say to a new generation that america is still the world's premiere land of opportunity. republicans will speak for those who believe in the dignity and capacity of the individual citizen, who believe that government is meant to serve the people rather than supervise them, who trust americans enough to tell them the plain truth about the fix we are in and to lay before them a specific, credible program of change, big enough to meet the emergency we are facing. we will advance our positive

suggestions with confidence, because we know that americans are still a people born to liberty. there is nothing wrong with the state of our union that the american people address this freeborn, matured citizens cannot set right. republicans in 2012 welcome all our countrymen to a program of renewal that rebuilds the dream for all and makes our city on a hill shine once again. thanks for listening. good night. >> the official republican response tonight, given by indiana governor, mitch daniels. governor daniels is a two-term governor of indiana. he was also george w. bush's budget director, which does cast a little bit of a panumbra of his own reputation. over some of his own comments about fiscal responsibility. chris, i have to put it to you, because you're the only person in the world to which i know of that i can complain about this, but the city upon the hill does not shine.

the city on the hill with the eyes of all people on us never shines. i don't understand why it always has to be shining. >> okay. well, i'll have to think about that. >> all right. fair enough. >> but i really like that speech by mitch daniels. i thought it was really midwestern conservatism, the best kind, honest, fiscally conservative, of course, but recognizing that we have to protect our safety net, and we have to recognize that the rich cannot get all the pension money and all the entitlement money. there's just not enough to go around. we're going to have to have means tested, and close the loopholes. a very responsible look at fiscal conservatism that recognizes that the rich can't plunder the poor anymore. if you're going to have a true conservatism, in other words, a society that will sustain itself. a society that will be at peace with itself, you need to help the people that need to get a break, and that means it's not, what i call, it's not libertarianism at all. there's nothing of ron paul in what that man said. it was a responsible, social policy of the right, which was really, i think, cast in

old-time midwest bob taff conservatism, except for some of the bromides and idiomatic crap he threw in there to make people happy. there was a sear yoisness to this speech, and now i understand why people like mitch daniels. >> chris, i could not disagree with you more about the speech. >> why, what's wrong? >> i don't have time to go into that. i think mitch daniels was there to say, the world is on fire, be afraid, run to republicans. i mean, he's talking about america as a country that is, what was the -- america adrift, going over a niagara? i mean, this was a be afraid, be afraid, this guy is trying to -- >> but he also had solutions. he had gutsy solutions. he wasn't afraid to take on the rich, and that's so rare today on the republican side. >> i will take you on that, chris, absolutely. we will take a quick break. the city on the hill is not shining. it doesn't need to shine. john winthrop just talked about it being up there in the eyes

upon the world. that was it. shining thing was a late edition. i'm sorry. bugs me. up next, we'll be talking with valerie jarrett, senior adviser to president obama. we'll be right back. it's not shining. it's not. >> 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. dn't l if you took the top down on a crossover? if there were buttons for this? wouldn't it be cool if your car could handle the kids... ♪ ...and the nurburgring? or what if you built a car in tennessee that could change the world? yeah, that would be cool. nissan. innovation for today.

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thanks for being with us here on msnbc. as our special coverage of the

state of the union continues, we're joined now by white house senior adviser, valerie jarrett. miss jarrett, thank you very much for being with us here tonight. >> my pleasure, rachel. how are you doing this evening? >> i am great. i have to ask you about governor mitch daniels' address. i know you were able to hear at least some of it. were you able to hear some? >> i was certainly able to hear some of it. >> first, i guess he accused the obama administration of running a grand experiment in trickle-down government. so do you recognize what that might mean? and secondly, do you think there might be a sort of crack of light here for moving forward in a bipartisan way, after governor daniels said that we should crack down on the wealthy having so many tax privileges? >> well, i think, as the president said this evening, we are optimistic. we think that if everybody comes together, there is an opportunity to move forward. i will say i thought -- i agreed with you, rachel, i didn't think that he had a very -- that mitch daniels had a very optimistic vision about our future. so on that, we would disagree. in terms of making sure that we have a system that's fair and

equitable, that's sustainable for the long haul, where if you work hard and play by the rules, you'll be able to have a good job, send your kids to college, retire with dignity. i think that's what the president's message was tonight. and it was one that really believed in america. it believes in our manufacturing, it believes that we can be independent of foreign oil and invest in our own energy. he believes we can train the workforce to be the best for the 21st century. and he believes that we could all really come together and share a sense of values. and i thought at the ending, when he drew the analogy to our navy s.e.a.l.s, who are really all part of a team and their selfless act, it was really a role model for how we should all behave. and i think it was an opportunity for the republicans in the house to come together and work with the president and forge a path forward. >> valerie, it's lawrence o'donnell here. the president wanted to change one parliamentary rule in the senate, the filibuster rule in nominations. but there's another parliamentary rule, it's the only one that's in the constitution.

and that is that all tax bills must begin in the house of representatives, which is now controlled by republicans. so much of what the president was talking about tonight involves changes to the tax code. how does the president think he can get that kind of change initiated in the republican house of representatives? >> because i think it's what the vast majority of the american people want. they're calling for equity, they're calling for fairness. they're saying that, look, just as we saw tonight, warren buffett's secretary, who was sitting in the box, who pays a higher tax rate than he does, that's not fair and i think that's common sense that the average american can understand. so our hope and our expectation is that the american people will have a great deal of influence here and that the republicans will listen to the people who elected them and aim for fairness, aim for equity. we celebrate success in america. we celebrate somebody who can start a business in a garage and turn it into a flourishing global business. but that doesn't happen by accident.

it happens because government is there to provide the roads and the bridges and the railways and the infrastructure and the internet and all of the science and investment that we invest so that businesses can this riv and grow, and so we can develop new technologies and be able to concur diseases that have been intractable. all that is made possible when government is working in partnership with the private sector. that was a part of the president's message tonight. >> white house senior adviser, valerie jarrett, thank you for your time tonight. >> you're welcome, rachel. >> thanks. >> still ahead, we'll be talking with republican congressman reid ribble. msnbc's coverage of the state of the union continues in just a moment. stay with us. an accident doesn't have to slow you down. with better car replacement available only with liberty mutual auto insurance,

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from the blows we've dealt 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! >> america is back. president obama, again, echoing ronald reagan tonight. let's turn now to congressman reid ribble of wisconsin. he is a republican in his first term. congressman, we feel lucky to have you tonight. thank you for being with us. >> rachel, i'm glad to be with

you. thank you. >> ezra klein is our resident wonk, and he has a wonk question for you. so i'm going to hand thing over to ezra. >> hey, good evening. >> governor daniel's speech was mostly about debt. and one of the points he made is that the debt has run up quite a bit under president obama. "the new york times" recently did an analysis, an apples to apples of debt under the two presidents from their policies, not the economic policies around them. the bush tax cuts versus the stimulus. they found that under push, the policies themselves amount to $5 trillion under bush and obama, $1.5 trillion. so it seems that daniels has a worse record than obama. doesn't that undermine the credibility of those comments a bit? >> i haven't seen the analysis, so it's difficult for me to speak to it. you know, i think you can fudge numbers quite a bit a lot if you are debating what the recession actually did. listen, i was no big defender of the bush policies as far as deficit and spending. i think we have to be serious about how we're managing this country's finances, whether republicans are in the white

house or whether democrats are in the white house. >> congressman, al sharpton. the president laid out some challenges to the congress in terms of tax reform, in terms of energy, in terms of education. what are you prepared, and your colleagues, prepared to do to work with the president on the things he outlined? is there anything that you heard tonight that you're prepared to commit right now to say, i'm willing to work with the president on that? >> oh, you bet. if he's willing to actually do real tax reform, and i'm not talking about just nibbling around the edges, listen, our tax code is over 10,000 pages long. it's overly complex. there's a tax on a tax, for what americans have to pay to have their tax returns done. i'm an advocate of throwing that tax code out and starting over. that would give us the opportunity to eliminate some of the subsidies and tax expenditures that the president spoke of. i think that's a step in the right direction. i was encouraged by his all-in type of energy policy. i would agree with that. so, yeah, i think there are some things that we certainly could reach for and work together with

the president. >> congressman ribble, one of the intangibles the president talked about tonight was the temperature in washington. this idea that the parties have to be locked in mortal combat all the time. does that, as a first-term congressman, as someone who was elected in 2010 when republicans did so well, does that call resonate with you at all? do you think that's at all possible? >> well, i think it's possible. rachel, you know, some of the bickering happens a little bit above my my grade. i sat tonight with kurt schrader, a democrat representative from oregon, a very good friend of mine. we're able to work together. i think in the halls of congress, men and women are able to talk across the aisle and get things done. the real test of what the president said tonight is not what he actually communicated tonight, but what he communicates on his own campaign tomorrow. if he's willing to control his own rhetoric on the campaign trail and he's willing to soften that a little bit, he might find a more cooperative congress. >> congressman reid ribble, republican of wisconsin, it's

nice to have you here with us tonight. thank you for your time, sir. >> thank you, rachel. >> appreciate it. karen, in terms of what congressman ribble was just talking about there, when you were in the clinton white house, of course, one of the things you were talking about earlier is how important the next thing is that the president does after the state of the union, in terms of making the message sink in. congressman ribble there saying he would like a softer tone from the president towards republicans. do you expect that? >> i don't think the president has had a harsh tone towards republicans. >> it's been more combative, though, in the last six months. >> you say combative, i say firm. we'll have to agree to disagree. >> i like both. >> but absolutely, this practice of the president on the days after the state of the union sort of traveling around the country to different parts of the country, maybe states that happen to be, you know, important in the election, but talking more about the idea. so he's going to be in las vegas, he's going to be in detroit. in michigan. he's going to be talking about some of the pillars that we heard him speak to tonight. just one thing i want to mention before we go. one of the things that i really liked in terms of the way he

talked to corporations and was not combative, because he said, ask yourself what you can do for your country. what can you do? a very kennedy-esque moment there. >> lawrence, your last thoughts? >> i think the speech writers have to be very careful, because the ending was so strong, that story about the navy s.e.a.l. flag, i wouldn't have let him use that unless the speech writers can tell me they've got something better for the convention speech. that is as strong a finish as the speech could possibly have, and i -- they better have something as strong for the convention. >> i thought it was striking that they chose to begin -- i was shocked, at the very beginning of the speech, when i saw him beginning with, there is no more war in iraq and osama bin ladin is dead. i thought, you're going to use osama bin laden is dead in the first three seconds before anyone's started to really pay attention. i was thinking, you've got to use that for the great climax of the speech. but to come back to it was unavoidable and i was shortsighted. this is what's going to happen tonight.