Joining us now is Democratic Senator Bob Menendez of New Jersey. He‘s on the Senate Banking Committee. He‘s also chairman of the Democratic Senatorial Campaign Committee, which means he‘s the guy in charge of getting Democratic senators elected and re-elected.

Senator Menendez, thank you so much for joining us tonight. It‘s a pleasure to have you on the show.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: Great to be with you, Rachel.

MADDOW: On Tuesday, Politico.com published a memo from the campaign committee which you run. The memo was about how Democrats should try to drive a wedge between the Republican Party and the tea party movement.

Do you agree with the analysis I laid out about this bank fee being one way that Democrats may be able to drive that wedge?

MENENDEZ: Absolutely. Look, this is about-and last night was a perfect example, of who do you stand with? Whose side are you on?

You know, Republicans sat on their hands on the question of a reasonable bank fee to pay back the money that American taxpayers laid out in order to stop the bleeding of the financial institutions and the consequence that would have meant to our overall economy and Main Street. They sat on their hands when the president talked about overturning or finding a way to limit the Supreme Court decision that would allow even foreign corporations to determine the outcome of elections of members to Congress versus average citizens. They even sat on their hands on regulatory reform, which is to ensure that we corral the bulls on Wall Street and make sure that we don‘t have excesses in a free market.

We all believe in a free market. There‘s a difference between a free-market and free-for-all market.

So, basically they showed last night-and our candidates and our incumbents need to make a real case to the American people of contrast-they showed whose side they stand on. And they do not stand with the average citizen.

MADDOW: In terms of that contrast and the political power of this as an issue-and I wouldn‘t be leading with it if I didn‘t think it was potentially powerful-it seems important to me that there is a sharp difference between the parties on this. If Democrats end up having a lot of blue dog defections on these issues of taking on the banks and the issues of trying to curtail the impact of that disastrous Supreme Court decision, if there are a lot of conservative Dems defecting, that‘s going to sap the overall strength of trying to use this against Republicans, is it not?

MENENDEZ: Well, I would suspect that these are issues that even blue dogs have to be onboard. And, you know, I served in the House before I came to the Senate. I served with many of the blue dogs, know them well.

Look, how can you be about not recovering the taxpayers‘ investments when you have record bonuses taking place on Wall Street? How can you be for allowing a foreign corporation to spend, and big money interests, to roll over the average citizen, puts the average citizen in a David versus Goliath set of circumstances? That‘s not blue dog philosophy.

So, at the end of the day, I‘ve got to believe that on these core issues, we are going to be united and we‘re going to put it to the Republicans. I think this is an opportunity for contrast.

I‘ve said to our incumbents and our candidates that this election needs to be a contrast. You need to define yourself. You need to define your opponent. And most importantly, you need to give the electorate a choice.

When they have a choice, they‘re not going to go back to the policies that brought us to the disaster that we were on the brink of and this president saved us from.

MADDOW: When you are advising candidates and incumbents on how to create that sort of distinction, obviously, the bank fee and other issues about financial regulation are right there in terms of making that case. What else is in that case? Or what else helps you make that case? What are the other key issues on which you expect Senate candidates and incumbents to be saying, "We‘re like this, Republicans are not"?

MENENDEZ: Well, you know, I start off with simply saying, now, start now, getting the differences between, quote-unquote, "moderate Republicans," the ones that the Republican Senatorial Campaign Committee wants, and the tea partiers and the extreme right-wing of their party-drive a wedge there.

Ask them: Do you believe Barack Obama as citizen of the United States? Ask them: Do you believe the Tenth Amendment doesn‘t allow for health care for every citizen in the country? Do you believe that Medicare and Social Security and Medicaid is socialism?

I mean, I think these questions need to be driven to them. It needs to be put to them. And then, as we move towards the general election-so that‘s in a primary context, I‘d get those candidates out there now defining these people as to where they stand.

And then secondly, in the general election, I think that driving these substantive issues as we create jobs and even there, you know, I want to see Republicans, what they‘re going to say, when it comes time to cast a vote to create jobs in America. You know, when we have an emergency in this country, like flooding or hurricane disasters-we consider a disaster-when 15 million American breadwinners don‘t have a job, I consider that a disaster, one that has to be responded to by the federal government.

Let them choose on whose side are they on, in trying to get families back to work in America or taking care of big business? That‘s going to be an interesting choice.

MADDOW: Democratic Senator Robert Menendez of New Jersey, chairman of the Democratic Senatorial Campaign Committee, coming out of a very tough loss in Massachusetts-but with what you laid out here, obviously, a plan for how to avoid that in the future. Thank you for your time tonight, sir. Appreciate it.

MENENDEZ: Thank you. Good to be on with you.