people. that's a challenge for the president. is he telling the idea of the government working as the solution as well as reagan sold it not being the solution? >> clinton went along and said the -- he went with that direction. but belief in government is something i thought the democrats missed a step here. want to change channels here for a second. if you believe in government and potential to help people, you have to believe in good government and serving well. you have to pass bills. you can't just yell and argue and say we're going to get blow back to rush limbaugh every night. >> on the other hand, they're going to bring a health care bill to the floor of the senate october 12th. perhaps vote for closure on october 19. this is the fundamental gamble of democrats at a time when there's an anti-government feeling, is it more dangerous to bend that feeling and pull back from moving forward on this bill or better off going forward in face of the headwind? and trying to get something done. the latter, because they tried the first strategy in '94 when

the bill collapsed. clinton's approval rating went down with it. lost control of the congress. >> if you put up the white flag you lose. >> bill clinton says you pass health care reform it gets more popular. >> bill clinton is the best witness on this. he said the other day, talking to the net roots out there, he said, you lose, you lose. no hiding from this. great having you on. i love friday now. david gregory "meet the press" this sunday with susan rice and rachel maddow. join us again monday night at 5:00 and 7:00 eastern for more "hardball." which of these stories will you will talking about tomorrow? the fight for health care reform, about to enter a new phase, the senate finance committee almost done. did the health care industry lobby get what it paid for? where does it all go from here? tonight we're joined by finance committee democratic senator maria cant well. chicago loses the 2016

olympics in the first round of voting. president obama says he's proud of the efforts. >> you can play a great game and still not win. >> the worst day of obama's presidency, the ego has landed. why do you hate america, rush? and the late show shocker, david letterman reveals a blackmail plot against him. >> he was asking for $2 million. pay up to keep his love life secret. so letterman comes clean on his show. >> i have had sex with women who work for me on this show. >> a cbs news producer is charged today with grand larceny. a look at the legal problems for the accused and any possible legal issues for letterman himself and how this bizarre turn of events could impact the career of the late-night king. all that and more now on "countdown."

>> it's been a very bizarre experience. good evening from new york, i'm lawrence o'donnell in for keith ownerman. on capitol hill, there are six health care bills for every member of congress, working on behalf of an industry that has spent $380 million in recent months to influence health care reform. the senate finance committee has completed it's markup of a health care reform bill that -- to the private insurance industry. with no public option. the finance committee finished its work at 2:00 a.m. this morning, a final vote on the measure has been delayed until next week, so budget officials can certify the bill does not add to the deficit. in a statement, president obama today said the committee's work represents a milestone, adding, quote, we are now closer than

ever before to finally passing reform. under the bill, medicaid would be expanded and the children's health insurance program would be phased out as kids on the program are transitioned to medicaid and state exchanges offering subsidized private health insurance. senator jay rockefeller of the senate finance committee -- with the committee working past midnight. senator rockefeller grew emotional as he recalled his first year in west virginia as a vista volunteer many decades ago when he tried to help a young man named eddie by getting him a john interview at union carbide. that job interview went awry when eddy who had never before been in a town with traffic lights, could close the blind. >> so then he sat down and we proceeded with the interview.

but he couldn't give his name. he had been stripped of all self-worth, what i had done to him was substantially damaging to him. and a year later he was gone and i have no idea where he is today. but he had medicaid. he had me by his side and it didn't work. he had medicaid by his side and it did work. so i like to keep poor people where they have health care benefits. i don't wish to see them handed over to the tender mercies of a private exchange or whatever.

>> one republican endorsement of the health reform bill today from former senate republican leader bill frist, dr. frist telling "time" magazine that he would vote for the legislation if he were still in the senate, but he didn't give a ringing endorsement. for one thing, senator frist predicting the bill as written when the coverage only extends to another million americans, far short of the universal health care bill that would cover 45 million americans. he believes it does not do enough to contain costs. quoting him, there is really nothing to bend the cost curve. the senate finance committee made major changes to its health care bill in its final hours of the debate, including an amendment narrowly passed that would provide above the cutoff for medicaid, but below the 200% federal poverty level. democrat maria cantwell from the

state of washington. thank you for joining us tonight. >> good evening, lawrence. i know you had a long night last night, but could you tell us what exactly would your amendment do? not a lot of us had time to study before you introduced it. >> i want to ability to negotiate on behalf of the people of my state so that we can drive down the cost of insurance. as you were pointing out, the insurance costs have skyrocketed and the insurance industry is here to protect that and it's a question of whose side are we going to be on? are we going to be on the side of the people in giving them more negotiating power or rewith going to let the status quo keep driving up insurance. >> your state already has a plan like this, but if i'm a governor of one of the other states, i would be reluctant to start any of this because of whether or not it has a funding stream. does it have appropriations two

or three years down the line, when the federal government comes along and says we're going to cut it by 50%? >> i don't like the bill as it is now when we are subsidizing expensive insurance. it's not going to drive down the price. but instead, if we allow, and i'm happy to give the power to the federal government, but right now what we can do is push republicans on the notion, they like states rights, and then the state can decide whether it wants to opt in and negotiate on behalf of its citizens, so i would like republican governors to tell me, no, they don't want to bargain and drive down insurance costs for their citizens. >> now you have got chairman baucus on this amendment, but you couldn't get olympia snowe and you didn't get blanch lincoln on your side. what do you think it would take to move them closer to your position on this? >> i think the bill will come out of committee with this long on it which means i think it would have a very good chance to stay on the bill.

and i think as republicans find out more about it and hear from their individual states, they're going to realize that this is a choice about where they're going to stand with the insurance industry or whether they're going to stand with the people of their state. and with premiums having gone up 100%, and people paying $7,000 or more for insurance, and having the same benefits they had a few years ago. so if we don't stop that continued increase, then we're just going to continue to put more u.s. families into bankruptcy. so this is about governors and about us standing up for the people of our country. >> most of the democrats in the finance committee, including you are able to hold off the republican amendments attacking the tax provisions in the bill, when you get out on the senate floor, where it's a much more free wheeling environment then the chairman doesn't have complete control than he does in that finance committee room. don't you expect a lot more arguments over the tax provisions in the bill? >> well, you're going to hear a lot of things thrown at this and

basically people say, well, let's not do anything. but i think that we know if we do nothing, those insurance rates are going to double again in the next ten years, and as jay rockefeller was saying, are we going to do something for people that gives them that safety net, that security? because if you're making 40,000 a year or less and you can't afford insurance because of its exorbitant rates, are we going to continue this foolish policy of sending people to the emergency rooms for their health care? i don't think so. and that's what we have to fight to make sure that we get the message out that this is the kind of bargaining power that we need to give to the american people. >> your committee voted for a tax on cadillac plans, won't that tax automatically and virtually instantaneously drive up the premiums for those kinds of plans and/or provoke dramatic

cuts in benefits for people in those plans, so the obama plan promises if you like your plan you can keep us, starts to fall apart if that plan that i like and want to keep falls apart in my hands, doesn't. >> it that's the vote we're going to have next tuesday and it's about continuing to move a process forward, but personally i would like to drive more money out of reforms. i want to control the cost of health care, i want to drive down the cost of premiums, if health insurance is raising about 8% a year and inflation is only 2 pes%, that's where the i is, we need to keep health care more in line with inflation, so we need to talk about what we're going to do to drive down the costs of those premiums. for more on what happens next, let's bring in clarence paige, "chicago tribune" editorial board member and a pulitzer prize winning syndicated columnist.

clarence, the senate finance committee has completed it's work, it was a messy process, they finally got something out, the cbo is going to take a look at it over the weekend, do some cost estimates on it, and tell us how it affects the deficit. president obama praised this bill, called a milestone. and since it is the only bill that the committee has delivered that meets president obama's requirements, isn't the baucus bill now the obama bill. >> that's a good question. but i think it wouldn't necessarily mean it's going to be the bill that gets to president obama's desk. senator rockefeller, senator schumer still pushing for a public option, we don't have it. senator cantwell is offering sort of a quasi-public option that would be a state-based option. somewhat like the one in her home state in washington, but, the cost controls are a question, she raises a very good

point about that, but if it goes to the website for her state program they're in washington right now, you'll see that there's a notice that if you want to apply, your name will go on a waiting list because they're having trouble staying within their budget constraints. i'm sure questions are going to rise whenever the baucus bill gets to the senate floor, questions are going to rise about cost containment which is still a very real issue. >> clarence, the president likes to say we have 80% agreement on this legislation, but of course there's absolutely no agreement among the democrats, especially between the senate and the house on how to pay for the bill, which is 50% of the bill, and do you see any movement from speaker pelosi's side that they're moving closer to the baucus formula of taxing health cutting medicaid by $500 million

and not going what charlie wrangle proposed on the other side. >> she's listening very carefully to all the facts here, but whether or not there's actual movement in that direction right now, it's hard to tell. because there's really -- so much wrangling still going on. i think she is going to try to put some kind of cost containment in there before it gets to the conference phase. exactly how they're going to do it, though, still isn't very clear. >> now, clarence, doesn't senator -- former senator bill frist suddenly sound very reasonable now that he's not longer the republican majority leader and saying today he would vote for it if he was still there? if he was actually still there, even if he wasn't the majority leader, wouldn't he be feeling all that party pressure that they're bringing to bear on everyone in the republican party

and line up against it just like everyone except olympia snowe it seems at this point? >> to hear himself express dissatisfaction with the cost containment, that it doesn't have enough and that it would only cover as he says 20 million more people, not the 42 that you're looking for if you want to have something approaching universal coverage. so bill frist, it sounds like he's debating with bill frist, but if you're satisfied with the bill as it is, i'm sure the insurance industry will be happy, but folks that are pushing for a public option. and let's remember, the senate floor is more liberal than the senate finance committee, this is what senators rockefeller and schumer are talking about when they say that they're still going to try to push for something that offers some competition to the insurance industry and offers some choice on the part of the public so that they will be able to as president obama says, keep the private insurancers hinsurancer

honest. >> we're a couple of weeks away in finding out how close the bill s thanks for our time tonight. a quick correction on something from last night's "countdown," we reported that senator jeff binghamton of new mexico voted against the public option. that was incorrect, he voted for both the rockefeller and the schumer amendments in the finance committee which would have included the public option in that bill. we regret that bill. coming up on "countdown," rio dejannero wins the 2016 olympi olympics. the right wing shows it's true colors and celebrates the fact that the president wasn't able to tip the scales to the usa. and later, the david letterman extortion plot,

viewers of the late show got a big surprise last night. we'll show you letterman's admission, look at the facts around the admission, and we'll look at -- ahead on "countdown."

it was a loss for the country, but the reaction from the left was celebration. and later, the plot to extort $2 million from talk show host david letterman. that's next. chef's meal with pommes frites perhaps a night at the theater with extra special seats additional hotel night, our treat

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after a week's worth of his derricks, after mall lining, mocking and chastising president obama's appeals to bring olympics to an american city, as obama is handed a stunning defeat, the right wing claims victory. the city of chicago given a swift rejection from the international olympic committee. knocked out of the running to host the 2016 olympics after the first round of voting. the power of two obamas and an oprah didn't get the windy city an edge over the competition. after an impassioned plea from its president, all eyes were on brazil. >> rio dejaniero.

>> president balm returning from copenhagen this afternoon, congratulations rio on their victory. while adding he could not be prouder of his hometown. >> i believe it's always a worthwhile endeavor to promote and boost the united states of america. >> those in disagreement of a conservative right, today perversely gleeful over america's defeat. >> please, please, let me break this news to you, oh, it's so sweet. is it possible this is the first head of state of any major country that has ever gone over and made the pitch in person and then failed? oh, man, oh, man, oh, man, the worst day of obama's presidency, folks, the ego has landed.

>> the drudge report trumpeting the headline, "the world rejects obama" the redeemer statue being struck by lightning. meanwhile the conservative group americans for prosperity actually applauded chicago's defeat, demonstrating they are actually opposed to prosperity in chicago. the very first vote, they did not have any chance for negotiating, they were out on the first vote. >> joining us now is msnbc political action affairs columnist johnathon alter. good evening, johnathon. i was so, so wrong on this one, i had your fellow chicagoans on this show, richard daly, they wouldn't let him get on the plane without the fix being in. what happened here?

>> the fix was in a couple of weeks ago when we were talking to folks that the white house really didn't want him to go because they knew that because the olympics had never been in south america before, that there was a very decent chance that rio was going to get these games. so there was this big debate the chicago people were pushing hard for him to go on the off chance that they could catch, you know, win at the tape. and he finally decided that if he didn't go and they lost, he would then get blamed for it, so he might as well go and give it the big effort. >> and this is a job creation. i mean if you bring the olympics to chicago, you're going to push an awful lot of jobs in that direction. so this seemed to me to be a perfectly reasonable use of presidential time. >> it wasn't very much time. i mean most of it was overnight, the complaints about this are kind of pathetic, really, i mean sure it's embarrassing for him, for a couple of days, but does it cause any lasting political

damage? can you imagine somebody at the next election, you know, an independent voter, i was going to be for president obama, but then he wasted those 18 hours back in 2009 going across the ocean to copenhagen, so i'm not for him. we're in such cloud coo coo land here, in terms of what's of lasting political importance. and i don't even think it scored have many short-term points for the right wing because they were seeming to be exaltant about the fact that chicago wasn't going to get the olympics. >> i hold in my hand a zogby poll showing that 84% of americans supported chicago having the olympic games. >> that's actually more than the percentage of chicagoans. there were a lot of chicagoans

who thought it wasn't a great idea. >> it can mess up your traffic. >> not just that, but the budget numbers were a little dicey there. i don't think that even a governor going abroad trying to bring business to his or her state or a president, bringing a big opportunity to the united states. that's part of what presidents are supposed to do is represent the best interests of our country. if it doesn't consume a lot of time and it didn't, why not try? and also the idea that he's supposed to succeed or the bid has got to be in or why bother, that means that you have to do less if you're not willing to try and risk failure. so we have to put ourselves out on the line and not be afraid to fail. >> doesn't it demonstrate for the glenn becks out there, that

they can't help but tripping -- they're out there gleefully dancing on the idea that america has lost a big one. >> there was a good column by david brooks this morning on the "new york times" this morning arguing that glenn beck and none of these guys really have any power, it's all just entertainment, none of them have actually moved any voters, they do things to entertain their base, get their base all revved up. but mostly it's much adieu about very little. >> johnathon alter of "newsweek," and msnbc, sorry about this loss for your hometown today and thank you very much for your time tonight, gentlemen. >> thank the cubbies. coming up, the late-night bombshell on cbs, david letterman reveals an extortion plot against him, in talking about the blackmail efforts, he also admits he had sex with some of his employees. we'll show you letterman's admission and discuss the impact

on this career and whether he too could face possible legal troubles. and the details about the suspect, robert halderman, a cbs news producer, we'll talk about the allegations he pled not guilty to today. ahead on "countdown." another family used to live here before they filed for bankruptcy. 62% of personal bankruptcies are caused by medical debt. this man is living his dream while this family lives a nightmare. if the insurance companies win, you lose. we need good health care we can afford with the choice of a public health insurance option. some people like to pretend... a flood could never happen to them... and that their homeowners insurance... protects them. it doesn't. stop pretending. it can happen to you.

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still ahead tonight on "countdown," the plot to extort david letterman out of $2 million, the suspect is a producer, robert halderman is

accused of trying to cash letterman's fake check after threatening letterman that he would expose the talk show host for having sex with his employees. coming up, the details surrounding the plot, and the problems for the dean of late night. he admitted to sexual relationships with his employees. might there be legal troubles for him? and what about the impact with his viewing audience? he with,ed the controversy with sarah palin smoothly, will he be as successful this time around? e morning because my back hurt so bad.

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it is less than 24 hours since late show host david letterman revealed he was being extorted for having sex with women on his staff. today the bizarre picture is coming into focus. today the facts as we know them. letterman himself broke the facts last night with a riveting account of the plot against him including the embarrassing

revelation of sex with his staff. a cbs news producer has been arrested for the crime, and we're learning more about a female late show producer caught up in this whole mess. here now, peter alexander. >> do you feel like a story? >> it was an extraordinary late-night confession that many of letterman's audience member mistook for a joke. he told the viewing audience that last month he got a pack can in his car. >> there was a letter in this package, and it said, i know that you do some terrible, terrible things. >> letterman also made another startling admission. >> i have had sex with women on the show. >> and today more details became public as prosecutors charged 51-year-old robert joe halderman, a producer for cbs programs including 48 hours with

attempted grand larceny, said he wrote letterman a letter claiming he needed a large chunk of money. >> we will not tolerate the coercion of extortion of anyone rich or poor, famous or anonymous. >> reporter: prosecutors say last month letterman's attorney met privately with halderman twice secretly recording their conversation before giving halderman a fake $2 million check, that he tried to deposit yesterday. his attorney says he's not guilty. >> there is another side to the story, it's not the open and shut case that you just heard about. >> these cases happen with some frequency, and typically when they happen, the defendant knows the victim, because otherwise they wouldn't be able to extort them or at least know something about them that puts them in close proximity. >> reporter: halderman was

living with stephanie berkman, letterman did not name any of his co-workers last night. would it be embarrassing if it were made public, perhaps it would, perhaps it would, especially for the women. >> reporter: although some in the audience laughed uncomfortably, letterman was the center of controversy after he made a joke about one of former vice presidential candidate's daughter. so were these new revelations appropriate in letterman's production company worldwide pants issued a statement today saying that dave is not in violation of our policy and no one has ever raised a complaint against him. letterman was not at work today with his show pretaped and audiences still unsure how to react. >> the ed sullivan theater woody

harrelson and the kardashian they would get a ten-minute story filled with details of a plot to blackmail david letterman and more than they ever expected to know about his sex life. judging from the audience reaction, either the theater was filled with french tourists or america at least dave letterman's america has become very simple threat i believe to men in the middle of what used to be call sex scandals. >> i get up early and i go to work early, and i go out and i get into my car and in the back seat of my car is a package, i don't recognize and have never seen before and don't usually receive packages at 6:00 in the morning in the back of my car. i guess you can, i guess some people do. so i get to looking through it, and there's a letter in the

package and it says that i know that you do some terrible, terrible things. and i can prove that you do these terrible things and sure enough, contained in the package was stuff to prove that i do terrible things. what this is is a guy is going to write a screen play about me. and, you know, that's good news for the anyone, isn't it really? and he seems to in this packet, there seems to be quite a lot of terrible stuff he knows about. and he's going to put it into a movie unless i give him some money. yeah. so i call my attorney, and he takes a look at it and he says, well, let's schedule a meeting with the guy just to see what he has in mind. so there's a meeting with the guy and it turns out, yes, in fact he wants a large sum of

money or he's going to produce this screen play of all the terrible things that i do. embarrassing, terrible things. so then we call an operation called the special prosecution bureau, which is a division of the manhattan district attorney's office, we called down there and we say can we run a couple of things by you guys? and so we took the stuff down there and they said, whoa, hello, this is blackmail. if there's a light hearted moment in any of this, and i'm not sure there really is, the third meeting is arranged whereby he's given the check. now i don't think i ever mentioned the amount up until now, but he was asking $2 million. i had to go downtown to testify before the grand jury. and i had to tell them how i was

disturbed by this, i was worried for myself, i was worried for my family. i felt menaced by this and i had to tell them all of the creepy things that i have done that were going to be -- now why is that funny? that's -- i mean -- so the idea if they believe in fact a crime has been committed then they issue a warrant and that's exactly what happened and a little bit after noon today the guy was arrested. [ applause ] now of course, we get to what was it, what was all the creepy stuff that he was going to put into the screen play and the movie, and the creepy stuff was that i have had sex with women who work for me on this show. now my response to that is, yes, i have.

i have had sex with women who work on this show. and would it be embarrassing if it were made public? perhaps it would. perhaps it would. especially for the women. it's been a very bizarre experience. i feel like i need to protect these people. i need to certainly protect my family, i hope to protect my job and the friends of everybody that has been very supportive through this. and i don't plan to say more about this on this particular topic, so thank you for letting me bend your ear. >> portions of letterman's stunning admission last night on the late show. coming up, the legal ramifications of the case, the suspect arraigned in court today, where does the case go from here and is there any legal jeopardy ahead for letterman or

cbs with these sexual relationships happening with letterman's co-workers? and later, will letterman pay a price for this scandal, professionally or personally. and the impact on his audience and letterman's image.

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there's more to cholesterol. get the picture. guilty in a manhattan courtroom this morning after paying a bond of 200,0$200,000. it seems that robert halderman has seen one too many "48 hours." there are potential legal implications associated with sleeping with people you employ. john q. kelley is a former district attorney and currently a criminal and civil legal defense attorney. at a press conference today, manhattan d.a. robert morgan referred to the screen play that

halderman was trying to sell to letterman about detailed sexual encounters with women on his staff. he had a wry smile when he talked about a screen play. was this in fact a valid commercial exchange, letterman was paying the going price for this screen play of mine? >> looks like that's the way he initially intended to set it up. apparently all the details that are very fact specific to letterman, the coercion part of it, the threatening part of it is included in that screen play also. so that in effect is the blackmail letter also. >> now it seems that the prosecutors who got involved in this coaching letterman and his lawyers along suggested that they actually go through the process of giving him a check. how much more does this add to the criminal case that they the gave him the $2 million check and then he then tried to cash the $2 million check.

>> it's complete to the elements of the crime. if they had ended the investigation when letterman received the package and just verbally received the threat and demand, it would have been a conspiracy charge, conspiracy to commit grand larceny in the first-degree. all you needed then is some talk about an act. then you go to the forceful demand for property or a person under the force of threat and not only did he make the threat, he took the money and he deposited the money so the intent was there to followthrough from start to finish. so it's a very strong case from start to finish. >> in a high-profile case like this, grand larceny, $200,000 bail, what kind of sentencing is this guy facing if we ever get to the point of a conviction like this? >> being violent a -- a maximum

of five to 15 years. >> you consider what the issues might be for david letterman. where are the lines in the workplace in terms of sexual harassment and other possible civil issues that might come up in a situation like this? >> well, first of all, let me point out, last night letterman himself said he's worried about his job, so he knows there are implications there. every human resource manual strictly prohibits, you know, consorting between the superiors and subordinates in the workplace. and david clearly did that on a number of occasions. everybody's coming to his defense saying nobody's claim it's been coercive, nobody's claiming it's been rape. it's just inherently coercive, you may have women who step forward and say i went along with it but i was afraid not to

because he was my boss. or other people would come forward and say i knew he was having this relationship with this other women and she was getting favorable treatment. so cbs will have an exhaustive in house investigation and the worst thing that could happen to david letterman is one of these women is going to say, i really didn't like this, i went along with it, now that it's out there, my name's out there, i'm going bring a sexual harassment suit and that's going to be letterman's worst nightmare if that happens. >> i just want to clarify, nothing like that has happened yet. in fact the letterman company put out a statement saying there were no complaints filed against him. no sexual harassment laws were violated, no complaints filed against him so far. j. beyond the legal ramifications of this case, what are the professional implications for letterman. after his controversy with sarah palin this summer, will he

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if you had any awkward ten minute confession in the middle of the show last night n our number one story, if you want to know how letterman will carry on, the path as they say may be pro log. go back to the nbc days when his home was invaded to by a stalker and he turned it into a routine joke. he continued to flog alaska's ex-governor in his monologue. go back to last night's

monologue, minutes before the revelation of his own sexual escapades when he delivered the following joke. >> president obama and his lovely wife michelle are in copenhagen and they're making a pitch to bring the 2016 olympics to chicago. barack obama is very -- you think about it as an unusual democrat, he's on a business trip with his wife, i mean what is that? isn't that odd? >> a are you going to hike on the appalachian trail? >> who knew that the appalachian trail led to the ed sullivan theater? >> the monologue clip from last night, is that a sign of how letterman's going to be going forward with this just

continuing to find the jokeses where they are? >> that clip was before he made the confession in the ten-minute monologue that you talked about. i think that's one of the things we're going to be watching for going forward, late-night hoss,s under cut david letterman's ability to do that are jokes about bill clinton. >> we look at the ratings issue here, letterman's going to have a huge number monday night when he comes back on the air, people are going to want to see what he's going to say next. >> there's certainly going to be some interest in the next few days. i don't want to be a rude guest, but the best thing that's happening to david letterman's ratings right now is the

collapse of the nbc prime ttime lineup. >> we'll have no more of a rude awakening. i was really struck by an audience that when he says, yes i did have sex with some of my workers here, he gets laughs that then morph into a very strong round of applause. this audience, they have been on television a long time. late-night television, you were watching him, you feel like you know him, he still has great -- >> to talk about their flaws and their problems than a late-night talk show. he really got ahead of this issue, presented it in the way he wanted to.