House GOP abandons Boehner; conservatives in disarray

>> staying with us for the next hour. do you want to know what just happened tonight in washington ? do you want to know what just happened, with congress just unexpectedly imploding and the republicans in congress dissolving into a huge internal fight, including screaming matches within their own caucus and all of a sudden they're just turning off the light and abandoning what they were doing and nobody really knows why and nobody knows what happens next? do you want to know how we got here and why this just happened and why it's reallhere. okay? this is jim demint . jim demint was re-elected senator for south carolina not this past election, 2012 , but in 2010 . you might remember he was the guy who had the good fortune in 2010 to be running against a young man named alvin green on the democratic side. it was not a hotly contested race. mr. did emint won by 34 points. and that freed him up to spread a bunch of his own campaign cash and his own energy that year on other campaigns and other candidates that he favored. and that has been the way that jim demint has built his influence in politics. he has treated all of his time in the u.s. senate not as an opportunity to get anything passed. he has no legislative record at all. he spent his time in the senate trying to become a kingmaker, trying to make the republican party over in his own image. trying to shape other people's races. to have more conservative litmus tests for republican candidates. so jim demint was elected for the first time in '04. he was re-elected in 2010 . they serve six-year terms. right? so jim demint doesn't have to face re-election again in south carolina until 2016 . but jim demint just quit. a couple of weeks ago. he just announced with no warning that he was leaving the senate right now, immediately, before his term was out. and today jim demint gave his farewell speech , which including this very telling and weird moment.

>> i hope that we can create more common ground between the political parties by showing everyone that ideas that work for their constituents and our constituents are right in front of our faces if we're willing to set aside the pressure groups , the special interests , and just focus on what's working.

>> jim demint saying good-bye to the senate today, pleading with them on his way out the door that senators should stay focused on the practical, stay focused on policy, keep their heads down and stop paying attention, as he said, to these pressure groups . jim demint is leaving the senate to go run a pressure group . when i stopped doing talk radio to come work here, this would be like me on my last talk radio show saying i really loved all my time here on talk radio , but i'm going to go work on msnbc now. my closing words to you here on the radio as i leave this job to go work on cable, my closing words to you are? don't watch cable. it's a really weird way out the door, right? he's going to go run a pressure group . his closing words are don't listen to these pressure groups . doesn't really make any sense, right? so that's jim demint . consider also dick armey . former republican congressman who also left to go run a pressure group , a group called freedom works that likes to be known as a grassroots movement , just regular folks who are somehow able to cough up an $8 million golden parachute for dick armey when he announced he was leaving the group this year. diblg armey said he didn't want to make the announcement that he was leaving the group until after the election because he didn't want to give anybody the impression that his part of the conservative movement was in any form of disarray. so he waited, like jim demint , until after the election. and actually since the election with dick armey on his way out the door freedomworks does appear to be in disarray but they are trying to stay relevant. yesterday they posted this, cheering on house speaker john boehner and his big high-stakes negotiations that he's having with president obama right now. they didn't like everything john boehner is proposing, but as you can see in the headline there, they thought it was worth two cheers, two cheers for john boehner . they proclaimed it as good news that john boehner was announcing that he has pulled out of the fiscal cliff talks with president obama and is moving toward the approach that freedomworks has been urging. good news. two cheers for john boehner and his plan b . they posted that yesterday morning. we know that because our friend james carter was able to access the old web archived version of it because the current version of it doesn't look like that anymore. they had to change it. they had to change it because apparently that isn't really the freedomworks position on john boehner . at least they don't think that's their position -- actually, you know, we're not quite sure. they put up an update on their earlier announcement saying that despite their earlier support, after further review freedomworks had decided to oppose john boehner 's plan b thing. they were for it yesterday morning. they were against it this afternoon. so that's dick armey 's group. consider also grover norquist . grover norquist is the guy who founded the pressure group club for growth. he's the one with the pledge about the republicans never raising taxes no matter what. he has been telling republicans this week that it is okay, it is okay by him if republicans support john boehner 's latest proposal in his negotiations with president obama . this plan b thing. "the l.a. times ." grover norquist signs off on boehner 's plan b tax proposal. that was yesterday morning. then yesterday afternoon grover norquist came out and said he does not want to be misconstrued as being in favor of john boehner 's plan b tax proposal. huh? so jim demint , leader of the conservatives in the senate , on his way out the door from the senate to go run a pressure work that's saying don't do what john boehner wants. and on his way out the door to go run that group jim demint says don't listen to pressure groups . then you've got dick armey 's group saying what john boehner 's doing is good news and also, they're against it. then you've got grover norquist saying it's cool with him to support john boehner , and also, he does not want to be seen as supporting this john boehner guy. what's going on? we liberals have spent a generation, we've spent all of this envious time studying the strength and depth and singular focus of the conservative movement like they have got themselves so together. and then days like this you pull back the curtain and it turns out it's just this little tiny guy going i'm the big powerful oz, i'm the big powerful oz, somebody find the curtain. they are a complete mess. they are a complete mess. i'm not talking about the republican party . i'm talking about the conservative movement . and that's more important. because the conservative movement is the dog and the republican party is the tail. because the permanent infrastructure of activists like these guys in the conservative movement is what drives the republican party on policy way more than anything else in the party itself. you think reince priebus is calling the shots here? yeah, right. it's the conservative movement . and because of the chaos right now in the conservative movement , in their k street fake grassroots big money used to be a think tank revolving door conservative influence lobbying and fund-raising machine, because that is such a mess right now, republicans trying to do policy work now on capitol hill is also a mess. i mean, without any coherent guiding structure to tell them what to do and what to think, republican members of congress, their attempts to actually participate in policy on capitol hill are turning out to be total chaos . the starting point for these talks in washington , right? was the position that the president campaigned on. you might remember that he won by 3 million votes. and that was the opening position in the negotiations. what he campaigned on. last week john boehner made his opening offer in response to that. and then two days later president obama responded with a counteroffer. he actually came quite some distance toward what mr. boehner had suggested, which freaked the left out a bit, understand kimberly. but this is how a negotiation works, right? i mean, whether or not you like the content of how exactly they are negotiating, it seemed like they were making the right mechanical gestures at least. here's my start. well, here's my start. well, here's another idea. and now it's john boehner 's turn. and now john boehner 's done nothing for basically a week, until tonight. when he decided that rather than making any further offer he would insist that the house , house republicans , the house of representatives , would vote on something basically totally unrelated to the entire discussion he's been having with president obama . it's not a counteroffer. it does not address any of the things they're supposed to be negotiating over. it was in effect just a conservative wish list. tax policy center and the center for american progress looked at what speaker boehner wanted the house to vote on tonight and said that basically, bottom line, it was a way to lower taxes on rich people . also, it guts obamacare, and it screws food stamps and it screws meals on wheels for old people. it cuts wall street reform. it gives a pony as a going away present to jim demint and dick armey and grover norquist . it's just a random conservative wish list of stuff republicans like. and that's what john boehner had them doing in the house tonight. it has nothing to do with what they thought was -- what we all thought was being worked on in washington . the president's not going to sign this thing. he's not even going to have a chance to sign it because it would have to go to the senate and the senate is never even going to look at this, let alone pass it. and it turns out that the house itself, john boehner 's house , the thing he is in charge of, couldn't bring itself to vote on it because they were going to lose their own wish list. with food being brought in to the capitol in anticipation of late-night votes tonight, the house unexpectedly went into reset. this was unplanned. they passed one conservative wish list bill with cuts for food stamps and meals on wheels. they passed that. but not by much. and not by enough to make john boehner think that he could pass the rest of this supposed plan b thing that he was working on. 22 republicans voted no on their own party's plan. and then the house republicans just suddenly gave up, turned off the lights, and announced they were going home for christmas, they considered themselves to be done. nobody knew this was coming. the rends had no idea this was coming. speaker boehner issued this statement by way of explanation. he said, "the house did not take up the tax measure today because it did not have sufficient support from our members to pass." this whole episode has been like watching a puppy having a frenetic random action period before collapsing asleep in its own bowl. i mean, it is adorable. it's transfixing. but it is motion without meaning. it is motion without mastery. it's chaos. it is chaos in the caucus that john boehner is supposed to control. and the thing they are doing, this motion without meaning, even this is still controversial on their own side, making all their think tanks and their anthony visit groups and their pressure groups flip their positions even within a single day, turn on themselves and fight it out. it made them adjourn the house tonight and have a huge fight amongst themselves and ended with them walking out without voting on their own idea. and while that is interesting to watch, the reason there are supposed to be negotiations, really negotiations going on in washington right now is because something really does need to happen. i mean, the bush tax cuts expiring would not be the worst thing in the world for the country. all of the bush tax cuts expiring at the end of the year in terms of their economic impact. but congress really did set up this big trap for themselves so at the same time as the bush tax cuts expire all of these automatic things start happening, some of which you might like, some of which you might not like. but in total they would have such a totally suddenly contractionry effect on the economy. they would happen automatically and it would be such a sudden contraction in spending they would have a very serious negative impact on the economy. all sides agree we would go into a recession. if they can't get it together enough to do something. i mean, republicans right now are in a particularly thorny and dense part of their own conservative wilderness. but it matters what they do. look at jared bernstein put together today. you know they just revised the number for economic growth for the country for the last quarter. they just revised it today. and it was a good revision. it was a revision upwards. so the third quarter, this last quarter this year we were growing at a rate of 3.1%. it's up almost two points from the quarter before. if they don't get their act together, this is what the congressional budget office says is going to happen to the economic growth rate this quarter. 2%. and look what happens next quarter, the first three months of next year. that's bad. maybe as hourtd dean was saying with ed tonight, maybe we can endure that and we'll come back stronger than ever. but that's bad. that is an economic catastrophe that will hurt a lot of americans for a long time. and maybe you want to bear that brunt. but maybe that happening accidentally because of so much chaos on one side that they can't tell which way's up, which way's down and who's on their own side is not the way to get that. this is like being wheeled in for heart surgery and looking up and seeing that it is actually edward scissor hands leaning over you in a mask and scrubs ready for thorpgs on which your life depends. joining us now is jared bernstein, a senior fellow at the center on budget and policy priorities . former economic policy adviser to vice president joe biden . and he's an msnbc and cnbc contributor. jared , it is always a pleasure to have you here. thank you.

>> my pleasure.

>> let me ask your opinion as somebody with a background in economics that you have about how big a deal it would be if we don't do anything. i refuse to use the word "cliff" on this show. so please try to avoid using that. because i won't say it out loud even if i'll put it in a graphic. but how big a deal do you think this would be? how much pain are we talking about risking here?

>> if we went over the thing and stayed over, it would be a very big deal . the numbers that the cbo predicts -- i've been watching this kind of thing for a long time. i don't recall the cbo ever predicting that policy x would lead to recession y. but they did in this case because it's such a huge fiscal contraction to all take in one year. so if we go over and stay over, we'll return to recession. and that means that the gains that we've been making on the unemployment rate , too slow, mind you, but gains that have been pushing the rate in the right direction would reverse. and if we stay over the cliff, the unemployment rate could go up as high as 9% by the end of next year. this would be a disaster for people who are still struggling with the residual of the great recession. if you look at middle incomes or paychecks, people are still climbing back. and so all that alice down the rabbit hole craziness that you just took us through with great aplomb over the last few minutes really does end up in a place that matters to people because it's going to hurt the real economy and undermine a recovery that has a little bit of momentum to it at this point.

>> well, what does it say to you that the republicans dissolved essentially tonight and went home? i mean, eric cantor put out a statement saying we are going home , good-bye, maybe we'll see you after the holiday. they're essentially giving you. i mean, what we saw they were planning to do tonight is they were planning to spin their wheels. when they tried to spin their wheels, the engine wouldn't start. so they just left the thing sit k in mud and went home. are you unnerved by this? did you expect this?

>> no, i am completely unnerved by this because i figured that if they had the theatrical vote on this plan b , which i thought was already a really terrible idea, but at least they wouldn't have the vote unless they had the votes to win it. so this is political dysfunction on steroids here. i mean, the idea that we would even shift to this plan b -- earlier in the week you actually saw leader boehner working with president obama to come up with a compromise, more of a balance. and you described it very well in your introduction. the president started at 1.6 trillion on revenue. he came down to 1.2 trillion. john boehner started at 800 billion on revenue. they weren't that far apart. earlier this week they were haggling over price. and some of us thought maybe they'd get there. i never thought they could bring the house republicans along. but you know, at least they were in a place where a deal maybe was taking shape. now boehner has gone exactly the other way. he was at 800. now he's down to something like 300 on revenue. but even that couldn't get over their transom. so really what happens next, i mean, unless some very weird scenarios that i could spin out for you that are about as likely as the president joining the tea party unfold, i think we have to put on our cliff parachutes at this point.

>> wow. this is a weird situation anyway, a self-designed crisis. but to be failing in this way, careening into it, seemingly totally out of control, with the republicans blaming each other, it's a very strange situation to be in.

>> and remember, rachel, this is -- i know you know this, but we also have to remind ourselves, this is a completely artificial, self-inflicted wound. a trap we set for ourselves with dysfunctional politics. you know, our xhoi is very resilient. as you see, it is improving. you showed the graph earlier. but you have to ask yourself, how much policy abuse can this economy take? and my judgment is not a whole lot more.

>> this was designed to be a big enough jolt to the economy to be scary, and now we're just taking it. amazing. jared westernstein of the center of budget and policy priorities. we'll be talking to you more about this shortly, i'm sure. thank you, jared .

>> thank you, rachel.

>> we'll have more on this breaking news, really this amazing breaking political news coming out of congress tonight where the republicans in the house have basically just decided to have a big fight, scream at each other, blame each other, send out competing press releases, turn out the lights , and go home saying they quit. a night in washington that we did not expect. a report live from capitol hill