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JOHN KING, USA

Government Shutdown?; Opposition Retreat

Aired April 7, 2011 - 19:00   ET

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


JOHN KING, HOST: Thanks Wolf and good evening everyone. Tonight breaking news as the president for the third time in 24 hours tries to broker a deal to avert a government shutdown. At the White House one hour from now tonight the president will meet with the Republican House Speaker John Boehner and the Democratic Senate Majority Leader Harry Reid. They are racing this clock inside 29 hours now -- 29 hours until the government runs out of spending authority.

Tonight's session comes after a lunchtime meeting and that one was a follow-up to a lengthy bargaining session at the White House last night. That's proof enough of two very important dynamics, one the leaders, especially the president and the speaker do not want a shutdown. And two, the policy differences are real and significant making compromise hard to come by despite that shared urgency.

Let's go straight to the White House now to our senior White House correspondent Ed Henry to set the stakes. Ed, we thought the meeting would begin right now. It has been delayed an hour. The president urgently, urgently wants a deal. Why is it so hard?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well John because they still have not been able to reach it. They are still pretty far apart and I can tell you that senior people here are now saying in private that the chances of averting a shutdown are now only 50/50. They are thinking this is a real possibility tomorrow night at midnight.

Interesting, the president's poster, though, he is still talking publicly about cooperation. He is not bashing the Republicans and when you talk to some of his advisers, they say that is calculated because he does not want both sides to dig in anymore and increase the chances of this blowing up. So instead he's trying to focus at least publicly less on the politics and more on the policy, the substance, talking about how FHA loans would dry up for middle class families if the government shuts down.

Military personnel will not get paychecks, but make no mistake, in private they're saying they will take the gloves off if the government is shut down and make clear that they believe the Republicans under pressure from the Tea Party shut this government down. Why would they do that? Well think about and take a step back how this week started.

On Monday this president officially filing paperwork to run for re-election, now this week may be ending with him presiding over a federal government that will be shut down. We saw how the politics played out, how explosive and radioactive it could be in '94, '95, '96. And so the bottom line is this White House is acutely aware, John that the stakes are enormous.

KING: Ed, stand by. We're going to dig deeper with you in just a moment. Between the White House meetings, the congressional leaders and their staffs, they were trying, trying to resolve differences over how much spending to cut now and perhaps more importantly whether Republican policy priorities like abortion and environmental regulation belong in this spending deal -- our senior congressional correspondent Dana Bash digging on these often contentious bargaining sessions and Dana any closer?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: It doesn't seem like that -- that that is the case particularly because of the thing that you just talked about, the differences over those policy issues. Sources of both parties say that this is very real. What does that mean? We're talking about differences over issues that Republicans put into their budget, things like restricting the EPA from dealing with greenhouse gases and also abortion.

This is something that Republicans say is abortion but Democrats say maybe not so much because what we're talking about here is a bill to fund, completely take federal funding away from Planned Parenthood. Republicans say that's because Planned Parenthood engages in and allows for abortion services at their clinics and Democrats and Planned Parenthood itself says well wait a minute.

That's not the case. We never used federal funding. Yes, we are talking about abortion and we're talking about that within the context of a spending bill, but this is one of the issues absolutely that has -- that keeps these two aside at locker heads and it could be an issue leading to this government shutdown.

KING: Dana, stand by as well. We'll bring Dana and Ed back into the conversation in a minute. Two important benchmarks though as we continue this discussion and explore what is most important, what it could mean for you at home.

One, at issue here is funding the government for the next six months, just for the rest of the current fiscal year. There's a much bigger and a much more consequential debate about spending priorities and it will begin as soon as this skirmish is settled. Two, your political views, yours likely shape who you blame tonight for this stalemate and this is a simple fact.

We would not be here if the Democrats had done their job last year and passed a budget when they controlled both chambers of Congress and the White House. They didn't because it would have meant risky votes before an election and I'll say this -- it's both sad and ridiculous that punting is now the new norm here in Washington.

David Gergen and Gloria Borger are with us as well as we continue the conversation. And David, you've been in the White House at a time of crisis. This president, he does not want a government shutdown because he wants the troops to get paid. He wants small business loans to go out. He doesn't want a disruption in the economy.

He wants that as president. He also wants that a politician because his political team thinks we probably have a decent chance of re-election. Let's not do anything that rattles the markets, rattles the confidence of the American people.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Absolutely -- absolutely. This is absolutely nuts, John, what is going on. I'm not sure -- where are we?

KING: Go ahead, David. Go ahead, David.

GERGEN: OK. John, I'm sorry. We've got a picture of the president up there. I'm a little unclear what is going on. OK, I think it's nuts what's going on right now because this is a such small amount of money. The issue should have been settled by now. The nation should not be waiting on the edge of its seat to see if the government is going to shut down, for goodness sakes.

The amount of money here is almost trivial. I was with David Walker (ph) today, a former -- you know this is our bar tab on the -- when the great ship went down the Titanic. And I think that's exactly right. This is small stuff, so my bet is they will still reach an agreement before tomorrow night.

I think they will get this done. But whether it's actually going to happen or not, we'll have to wait and see. I was more optimistic last night than I am tonight. But my bet still is they will get it done.

KING: Gloria is that your bet as well? We know the president doesn't want it and we know the speaker doesn't want it. They both think they have some political risks there. You heard Ed, the president will make it all about politics if we get to that point, but he doesn't want it. He doesn't want to rattle the markets right now. But so who blinks?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes, well it's interesting because at a certain point it's not about the president and it's not about John Boehner, both of whom don't want this shutdown as you say, but it's about those House Republicans and what do they want and how do they want to be perceived? And this is their big fight. And they came here saying you know what, we're going to stop spending.

This is their first big vote. This is symbolic to them. This is important to them. Thirty-four of them have never held elective office before. They don't remember that last government shutdown in 1995. And so this all -- is all about how John Boehner is perceived by his caucus and how he decides to lead at this point.

I just got off the phone with someone at the White House who said to me, you know what? There's not that much left to do. We've done all of our negotiating now. Are these social issues going to be in this or are they not going to be? KING: I want to show people something at home because we call this Band-Aid budgeting, what we've had over the last few months. Now I want to play this out just so you can see it. This is what has happened. This is the point I made earlier.

This is not about next year's budget. This is about the current fiscal year's budget. Imagine if you ran your family this way. The Democrats ran both the House and the Senate last time; they could have passed a budget. They didn't for a number of reasons and they will say on the Republicans were blocking this and blocking that.

Let's not go too far back, but this is what has happened since October when the fiscal year began, six different little Band-Aids, essentially. One was for 64 days, one for 15, one for just three, then 73, then 14. Now we're in a 21-day temporary spending authorization. This is about to run out.

Dana Bash, to you on Capitol Hill -- do members of both parties -- I mean do they look in the mirror and say OK we're going to debate the next budget. We can debate whether it's abortion, whether it's spending and look, the Democrats would not be in this fight over abortion or environmental regulation if they had done their jobs last year. But do any of them say, let's just stop this, stop this, and then we will finally -- then we can have the big debates?

BASH: You're hearing that more and more from the people who -- that Gloria was just talking about, the Republicans in the House, more and more that they're saying you know what, this is peanuts that they're talking about. I mean there's no question about it, cutting every last dollar from the government is important to them, but the fact that the House budget chairman, Paul Ryan, put out this plan this week that said that he wants to cut trillions of dollars in spending. That did help.

I talked to several Republican congressmen who said, look seeing that, seeing the big picture, seeing the war helps make me thing that maybe this battle is something that we can fight to a certain point but not go to the point where the government shuts down. But I got to tell you, having said that, there still is this feeling inside the Republican caucus, in the House that they really do feel that they have to just put up the good fight to get every single dollar that they can right now, particularly among the leadership, because they know that this is what they campaigned on. I mean this is it.

KING: And Ed, it's interesting the last government shutdown the troops were paid and there were technicalities involved but if you look at the regulations, the Office of Management and Budget essentially can give agencies pretty broad latitude. And so we've been trying to deal with the last couple of days, will the troops be paid?

Will their families, especially the families whose you know husbands and wives are overseas, will they get paid? And I want you to listen here. You were there at this briefing I believe today. The deputy director of the Office of Management and Budget says in this circumstance, in this shutdown, the answer is no. Let's listen. (BEGIN VIDEO CLIP)

JEFF ZIENTS, DEPUTY DIR., OFFICE OF MANAGEMENT AND BUDGET: That's actually not a decision. That comes from what is their funding source and if we have no money in the annual appropriations, we can't pay the troops. And they will continue to earn their money but they will not receive paychecks.

(END VIDEO CLIP)

KING: Essentially saying there that there's no account where they can find some money and shift it over to temporarily pay the troops. That if this happens, everybody goes without a check.

HENRY: Right and you and I both know that the federal government could probably shift some funds around if they wanted to, to make sure that certain people did get paid but it certainly dramatizes the story for the administration and puts some pressure on the Republicans to say military families are not going to be paid. That's why in fact the Republicans, as you know, in their short-term funding bill to try to kick this down the road one more week and buy a little more time, they're saying let's fund the Pentagon.

Let's make sure the military gets its money through September 30th. Both sides using the military -- they know that's a big chip here. I think the other thing to watch is what you put your finger on a while ago at the top, about the markets being rattled. I talked to a top administration official today who said back in the mid-'90s when there was a shutdown, as you know Wall Street took a hit. This was a big deal to the markets and they were rattled. Right now we're in the middle of a very fragile recovery. They are very worried at the White House what that means for people's 401(k)s, but also what it means for the president's re-election no doubt as well -- John.

KING: Normally, Gloria, the way Washington works is when you get to this point everybody gets in the room and they split the difference. That the president would say, I'll give you the environmental, but I won't give you the abortion or I'll give you the abortion. I won't give you environmental and when I give you that you've got to ease off and not cut as much spending. That's normally how it works.

BORGER: Right.

KING: Are we in normal times?

BORGER: No, we're not in normal times and this is where leadership comes in because it's a question of who is leading and who is following. And we don't know the answer to that right now, particularly as it comes to House Republicans. I was talking to a Republican senator the other day who said, you know, we're coming up to 100 days on the House Republican control of that chamber. Do they really just want to have a shutdown to show for that? Is that it? And he said that's what I've been telling my colleagues in the House. They better be careful. KING: Everybody is standing by, Dana on the Hill, Ed at the White House as this meeting prepares to get underway. Our apologies to David Gergen -- we had an audio problem with David. We couldn't talk more with him tonight. Gloria is with us as well. We're going to continue to track this throughout the night as they prepare to enter those negotiations.

And also tonight another important story, a full scale retreat by opposition forces in Libya and as they ran, many of the fighters cursed the NATO-led coalition they thought was supposed to help them.

And next, she's a Tea Party favorite, a liberal nemesis and a likely Republican presidential candidate, tonight Congresswoman Michele Bachmann might surprise you with her take on the budget battle. That's next and it's shaped by this.

(BEGIN VIDEO CLIP)

AMY TERSIGNI, HUSBAND DEPLOYED IN IRAQ: It's hard enough having a relationship and dealing with everything of them being over there and not home and telling your kids when they go to bed at night, sorry, daddy is still at work, but then the financial stress of not having a paycheck and not knowing when you're going to get it doesn't help.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: A constant Democratic refrain in the blame game over a potential government shutdown is that House Speaker John Boehner can't compromise because of unyielding pressure from the Tea Party loyalists in his Republican caucus. Any truth to that -- well let's ask Republican Congresswoman Michele Bachmann of Minnesota who founded the House Tea Party Caucus this year and let's start there, Congresswoman. Does the Tea Party have the speaker in a straitjacket?

REP. MICHELE BACHMANN (R), MINNESOTA: No, I think that the conference actually is very unified. We want to work together to be able to actually cut spending, real appreciable spending out of this budget and I think that House Republicans have bent over backwards to make sure that there is not a government shutdown. So we'll see what happens.

KING: I want you to listen to one of your colleagues, Virginia Foxx, on the floor this morning. Democrats say one of the things they want ripped out of this deal right now is language that would say no funding of Planned Parenthood. Listen here.

(BEGIN VIDEO CLIP)

REP. VIRGINIA FOXX (R), NORTH CAROLINA: The American people do not want taxpayer funded abortions. That's part of what we're talking about. That's part of our ideology.

(END VIDEO CLIP) KING: I know you agree with your colleague there, but do you think for the sake of getting a deal now, should Republicans say let's get more spending cuts and give up, whether it's abortion funding, whether it's some environmental regulation, set that aside for the next battle.

BACHMANN: Well my opinion is this. I think that we should have a clean bill that makes sure that the paychecks get to the troops on time. After all, now that President Obama has us engaged in a third war in Libya, I think it's imperative that troops not pay a price and none of the families back home should worry whether or not they're getting a check.

That's why today I voted no on the bill because we heard from President Obama this morning. He was going to vote no on the Republican bill knowing that I think it's important that we do what I think 100 percent of Congress should be able to vote for and that's ensure full paycheck protection for all of the military.

We need to do that bill alone. That's just a policy bill. It's not even a continuing resolution. We should pass that bill and at least take the troops off the table. From there we can go back and fight about all of the other portions of this appropriation, but I think the troops should not be a political football. That should not be a game.

KING: I can feel my BlackBerry vibrating with the tweets I will get, the angry tweets from the left with what I'm about to say here. I'm going to say you have taken what I will describe as a reasonable position in the middle of this essentially, and tell me if I'm reading it wrong, that the Republicans should cut the best deal that they can get now in an argument that is about billions of dollars because you have a much bigger fight just ahead that's about some huge policy questions and about cutting trillions of dollars. Is that your position?

BACHMANN: Yes, my position is that we need to have the fight on Obamacare. From the very beginning I've said that we have got to have that fight. I think it is a crime against democracy because Speaker Pelosi and President Obama failed to even tell the members of the House and the members of the Senate much less the American people that if a member casts a vote for the Obamacare bill, they would also be voting to spend 105 billion.

Your viewers know, John that we've been fighting over about $61 billion in savings to the taxpayers. Well that doesn't even include the 105 billion that was just recently spent or appropriated to implement Obamacare. It's my opinion that that money should be given back because it was passed fraudulently. No one knew that money was there.

So I think that we should be fighting about that. We're not taking up that fight right now. I voted no on the bill because, again, President Obama said he was going to veto this current bill and I think let's make sure that the troops are fully -- their paychecks are fully funded now. Let's make sure that that is done and then from there let's get to the rest of this.

KING: As you know, a lot of Democrats dispute your numbers on the health care bill. I want to save that one for another day. I want to focus on the process and the problem --

BACHMANN: Well go to the Congressional Budget Office's, their numbers?

KING: Wait. Let's focus where we are right now today though. Are you going around inside your caucus and telling, as you know, some of your fellow Tea Party members, they do want more in cuts and some of them have said if it takes shutting down the government to get them, let's do that. Are you going around to them and saying look, not now. Let's get the best deal we can now and let's -- when we get to the House Republican budget and we get to the big cuts, trillions of dollars in cuts, Medicare, your effort to defund the Obama health care plan, save your ammo for another day? Is that your message?

BACHMANN: Well, my big message has been let's change the ark of history and we do that by defunding Obamacare. The number that we cut, whether it's 61 billion or some other number won't be as decisive as actually defunding Obamacare because that will be in excess of $1 trillion that we spend in order to pay for Obamacare. I do -- I'm very excited about the path to prosperity because in that bill or in that aspirational document that we revealed this week we're looking at actually defunding Obamacare. That will be the fight in the 2012 budget and I think we needed to get on to that fight.

KING: The speaker worked around you, to keep you out of the leadership. You wanted a leadership position. Has he come to you in any of this saying I could use your help with some of the Tea Party members in the caucus?

BACHMANN: Well of course, they want to have all of our help and all of our votes on this budget and the Republicans did deliver more than 218 votes --

KING: But has he asked you as the speaker -- forgive me for interrupting, but has the speaker said, Congresswoman, some of your friends aren't happy with what I'm doing. You seem to get it, that let's fight, do the best we can now and move on to the big and more important fight, has he specifically said can you help me?

BACHMANN: Well I don't reveal those conversations that we have between us. I don't think that that's appropriate. I think it's important that we have open conversations that we can share between each other. But of course I will say that he wants to have all of our votes when they put a bill up to be voted on.

KING: The Republican congresswoman I'm speaking to is thinking about running for president of the United States. If you were the president right now, I'm not saying adopt his policy positions in this battle, but if you were the president and you were on the precipice of a government shutdown in little more than 24 hours would you do anything differently in terms of how you handle the negotiations than President Obama? BACHMANN: Yes. I think that what I would do is make sure that I have all of the leadership there in my office. We would have a list of pros and cons. We would put everything on the table and we would stay together until we actually cut a deal because I think, again, the American people want the game playing to stop and they want us to get serious.

It's tough out there right now. Gas was $1.83 a gallon the day before President Obama took office. In a lot of places in the United States it's over $4 a gallon. My son in Connecticut called me this week and said a gallon of milk there was at $4.19 a gallon. We're seeing inflation in groceries; we're seeing inflation in the price of clothing. People want government to get its act together and stop playing the games.

I agree with people. Let's get serious and get it done. I don't -- I think that it is an admission of failure when we see the government shut down. I think we need to get it done. We need to fight on principle. We need to be practical, but we also need to get the job done.

KING: And so, am I right in reading what you're saying when Speaker Boehner, Leader Reid, they're in the White House tonight. The president should look the doors and not let them out until they get a deal?

BACHMANN: I'm not saying that he should look the doors. I'm not saying that, but I do think that we have to stay focused right now and the president has left to give some speeches and he certainly can do that. But I think we need to focus like a laser beam because the American people are focusing on this right now and we need to get the job done.

KING: Some of you support the congresswoman, some of you maybe not. But a very important distinction there -- Congresswoman Bachmann breaking from others in the Tea Party, saying cut a deal now. Yes, get a good deal but don't drag this out. Don't shut the government down. That's an important distinction.

Puts her at odds, for example, with Sarah Palin who tweeted out tonight, "if necessary, shut the government down" -- more of that conversation tomorrow including her views on Libya and whether she agrees with Donald Trump who recently is stirring up a lot of trouble questioning if the president was born in America.

When we come back here though, there are more important news today including a huge rebel retreat in Libya and big questions tonight about the mission of the NATO-led coalition.

(COMMERCIAL BREAK)

KING: We're keeping our eye on an urgent White House negotiating session gets under way at the top of the hour, with the goal of heading off a government shutdown. We'll head there live or to Capital Hill live if there is any movement. In the meantime, there was a dramatic day in Libya and not a good day if your hope is that Colonel Moammar Gadhafi loses grip on power. Let's take a closer look here -- first just look at these pictures here. This is the opposition retreating, a full scale retreat. Just watch the pictures breathe (ph) out a little bit.

Now they are not in army vehicles. That's not how the opposition -- some vehicles here with their flags here -- they are in pickup trucks, flatbeds here with a rocket launcher here. Just look at them coming out, coming out, coming out -- a full scale retreat. They're stunning images in any event -- their importance magnified when you look at just how dramatically the battlefield has changed in recent days.

Let's look at it this way. Here's how things were when the coalition started the airstrikes. Green held by the regime -- the stripe flag that's the opposition -- so the opposition here, here, and over here. Remember this is when the coalition was put together and the first airstrikes. In the early days that led to huge opposition gains. Look at that -- the opposition moving this way here, holding over Zentan there.

The opposition going this way but watch this -- remember, stripes the opposition, this is where we are today. The regime has taken back all of this, mostly taken back Misrata and Zentan. Still some opposition forces in there. Ajdabiya is where we talked to our reporters almost all week long. Al-Brega they were the other day. Not anymore. The Gadhafi forces have come all the way right through to here.

And that's right -- since the United States and the NATO allies launched the military strikes and the no-fly zone -- remember, designed to contain Gadhafi. Instead the dictator has made significant gains on the grounds and the frontlines today, they've moved right over here. Opposition fighters in retreat, cursing the NATO-led coalition as they made their way back toward Benghazi.

CNN's Ben Wedeman witnessed the fighting and the retreat firsthand -- joins us now from Benghazi and Ben, let's describe what you saw. I've watched some of the images coming in. It is stunning. It is just a full-scale, run away retreat.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: We saw this massive pullout. We were watching as truckload after truckload of fighters with -- along with their heavy equipment, some of their multiple rocket launchers just pulled right through town. Some of them pulled up on the other side of Ajdabiya, others pulled all the way back to Benghazi.

Now (INAUDIBLE) is the head of the armed forces of the opposition said that they had informed NATO that they were moving forward with a column of tanks in the direction of Brega. And so officials here are absolutely mystified as to why this happened -- John.

KING: And you talk, mystified, you use that term -- you talk about the frustration. I saw a tweet in which you had a very clear expletive from an opposition fighter aimed at the NATO alliance. In the wake of all of this frustration, Ben, where does the opposition see as the next -- the next step? I assume they don't think they can count on NATO.

WEDEMAN: Well clearly that's the conclusion they have come to that NATO simply doesn't seem to be able to communicate with them enough so that they can actually coordinate their actions with them. But they're at a loss as to what they can do. What we saw was -- what appeared to be a complete breakdown in any resistance, any desire to put up a fight. They really pulled back about 40 kilometers at least and as I said, some of them coming all the way back to Benghazi. Obviously they're going to have to reconstitute their defenses, possibly start thinking in terms of defending Benghazi itself, because according to Abdul Fatah Younis, the head of the opposition armed forces, the Gadhafi forces were approaching Ajdabiya from three separate directions. And so, the no-fly zone, the possibility of NATO airstrikes doesn't seem to amount to much of a deterrence to Gadhafi's forces.

What you hear often times is that they would like the United States, Britain and France to become much more directly involved in the targeting of Libyan armed forces. But they realize that's a political decision that's beyond their ability to influence -- John.

KING: And, Ben, just where you are tonight speaks volumes about the state of play. Some people say a stalemate. But I think that's probably a too optimistic term in the sense of the opposition. We talked to you earlier in the week from Brega. Then, it was Ajdabiya. Now, you're back in Benghazi. This is an opposition that doesn't have stalemate with Moammar Gadhafi. Gadhafi is winning.

WEDEMAN: Certainly on the battlefield, there's no question about it. Gadhafi has the upper hand, despite the fact that at least in theory, there's a no fly zone, that there can be NATO airstrikes. But the airstrikes and no-fly zone which the rebels have put so much faith in seems to simply have let them down -- John.

KING: Ben Wedeman tonight from Benghazi -- Ben, thank you.

For some perspective on this, let's bring in CNN's Fareed Zakaria.

Fareed, when you look at the map of Libya, you look at the opposition forces in retreat. And you hear them cursing, cursing the NATO alliance. This is not what we imagined when this coalition was put together.

FAREED ZAKARIA, HOST, "FAREED ZAKARIA GPS": No. This is inevitable, though, which is they are in the middle of a fight. They're desperately trying to win. They have come to expect NATO air part to be used for them. It's one of the reasons I think that the mission should have always been described and executed in the limited fashion it was conceived by which I mean it was meant to prevent a massacre, it was meant to prevent Gadhafi's forces from killing civilians. It then turned into something that was a little more than that. We decided -- we tried and pushed forward and see if we could get lucky. It became a kind of a no-fly zone plus. And now, maybe we're withdrawing the "plus" part of it and the rebels are upset. But the mission, the U.N. mandate was always to prevent a massacre, not to actively assist the rebels as they make an onward march into Tripoli or any such thing.

KING: And yet, many people, whether they're here in the United States or around the world aren't going to read the United States resolution. They're not going to say, oh, that's it. I understand the mission here. They're going to look at how this plays out on the ground.

Is there a risk for the president of the United States, for someone to make the case, the United States was in the lead at the beginning, it steps back into the back seat and in the past week or so since the United States has gone into the back seat, the opposition has been routed and Gadhafi is carrying the day on the battlefield.

ZAKARIA: Sure. And I think that's very important that the administration decides what it wants to do and be disciplined about it. By which I mean the administration has articulated a limited use for a limited goal.

If they want to do more, if they want to win, if they want to make sure that Gadhafi leaves power, they want to make sure the rebels take Tripoli -- that is going to require a substantially greater use of American military power. That might mean a much heavier aerial campaign. It may mean more than just an air attack.

I think the administration doesn't want to go there. I would support them in that. I think that ratcheting this up militarily is a very dangerous proposition. You end up owning Libya and the question is: do you want to own Libya? And so, what they have to figure out is: can they keep this limited? Can they resist the media commentary that says Gadhafi has won? Can they resist events on the ground that are going to make it look bad?

In the long run, Gadhafi is cornered. He's up against an international coalition. He is sanctioned, quarantined. He is under air attack. It's not a pretty place for him to be.

They should push the political track, see if they can squeeze, see if there is an exit strategy. But if the only way to get him out is to actually use much more American military power, I'd be wary of that.

KING: And you express your wariness to that. The question then is: what are the options in the short term? Most people now think Gadhafi, as you say, backed into a corner, maybe weeks, probably months before he would agree to go and then you have stalemate advantage Gadhafi, but stalemate with the opposition still in control of Benghazi.

Some people start talking about what -- do you partition the country? Are there any other things that you can do short of Gadhafi leaving? Or does the president have to say, no, regime change is the ultimate goal, we live the coalition in place and we wait it out?

ZAKARIA: I think you summarized the scenario well. There's a stalemate that could end up with the de facto partition, until Gadhafi leaves. It's not so bad.

I mean, to put it completely bluntly, for the United States, having lots of small oil-producing states as opposed to one big one isn't such a bad thing. It means that they are less powerful. But more importantly, it creates a situation in which thing are unresolved until Gadhafi leaves.

The one complication that has arisen, and this one you brought up on your show yesterday brilliantly, John, is the issue of the potential indictments from the International Criminal Court. If Nicholas Burns was on your program and he has articulated this very clearly, if the criminal court decides to indict Gadhafi, you lose a lot of room to maneuver. There isn't an easy plea bargain strategy because we don't have authority over that court. We can't say, well, we're going to commute that indictment or wave it.

Then you've got to find an African country which will accept Gadhafi that has not accepted the jurisdiction of the International Criminal Court, or some such safe haven where he's not going to be indicted, but then he's got to leave there for the rest of his life. He can't travel very much.

So, that is actually a larger complication than people realized and it really shows you the tension here between the needs of justice on the one hand and the needs of stability and acceptable outcome on the other hand.

KING: And if you can climb into his mind, which is a difficult thing to do, because we're not sure it is, if he believes that is a ultimate threat, being indicted by the International Criminal Court, the emphasis for him, the decision for him would most likely be stay and fight, would it not?

ZAKARIA: You'd have to assume that at the very least it makes him less willing to agree to any other solution. That it puts his back up and makes him think, well, what do I have to lose?

But I'm hoping we can be creative here and come up with a solution, and I'm hoping that perhaps even in an informal way, there would be some mechanism to talk to the court about this.

I've always been somewhat wary of these indictments of the International Criminal Court that they make. I think it basically makes it more difficult to solve the problem that you're dealing with. In Sudan, they have indicted President Bashir and it makes it more difficult to imagine an eventual settlement where you get him out of office because as long as he is in office, he controls the country. You know, nobody is going to send an army in to get him. Once he leaves, he's going to be thrown into a prison in The Hague. So, what have you solved by having this International Criminal Court people willy-nilly. And yet, I understand those who say, look, the guy has committed atrocities. He has to pay. It's a real tension.

KING: A lot at stake and across the region. Fareed Zakaria, thanks.

ZAKARIA: Pleasure, John.

KING: Next, sentencing day for the man convicted of threatening to kill a high-ranking member of Congress. That's next.

Also ahead, tsunami warnings and a powerful earthquake rock an already fragile Japan. We'll have the latest.

(COMMERCIAL BREAK)

KING: Welcome back.

If you're just joining us, here's the latest news you need to know right now:

President Obama and congressional leaders expected to meet about 20 minutes from now at the White House to try to end the stalemate over the 201 budget. The federal government will shut down at midnight tomorrow, a little more than 24 hours from now if no agreement is reach. We're tracking those negotiations.

A two-year prison sentence today for a man who threatened Virginia Congressman Eric Cantor, the number two Republican in the House. Norman LeBoon of Philadelphia pleaded guilty last fall to posting a YouTube video threatening to kill Cantor, the powerful House majority leader.

An explicit warning from Egypt's ruling military council which now runs the country. It will prosecute any soldier or civilian who takes part of a planned protest tomorrow if that person is wearing a military uniform. Thousands are expected together in Tahrir Square and soldiers have posted YouTube videos saying they'd like to join that protest.

And now, check this out, I'm going to take a walk. An unwanted visitor expected to visit Hawaii within the year. Look at these pictures. Tons of floating debris -- where is this debris from? It's coming from Japan, the earthquake and the tsunami.

Look at it coming across. All of the homes, the cars, the trees, all the damage and debris washed out to sea now, making its way across the Pacific. That debris is expected to hit the West Coast of the United States by 2014. Something for people to watch in the years ahead. A dramatic, dramatic visualization there.

Up next here: another powerful earthquake strikes northeast Japan jut today. Any additional damage to the already crippled Fukushima Daiichi nuclear plant? We'll ask that question in a live report from Tokyo, next.

(COMMERCIAL BREAK)

KING: A powerful 7.1 earthquake struck Japan today, rattling the same region devastated by last month's massive quake.

Workers inside the crippled Fukushima Daiichi nuclear complex were evacuated. But the plant's owner though says it does not appear this new quake caused any additional damage.

Let's get (INAUDIBLE) live in Tokyo. CNN's Kyung Lah is with us.

And , what a horrible thing for -- what a horrible, horrible thing for the people of Japan to go through. But any sense, any sense of injuries, deaths, anywhere near of the scale before.

KYUNG LAH, CNN CORRESPONDENT: I can hear the --

KING: All right. We've lost our connection. We'll get back to Kyung Lah if we can.

Let's turn now to Arnie Gundersen, a nuclear safety advocate who consults with Vermont state government about the Vermont Yankee nuclear plant.

Arnie, I want to go over the wall here to show you something because the Nuclear Regulatory Commission and Congressman Ed Markey, the Democrat on Capitol Hill says that they now believe -- they now believe that there's been some leakage from the containment vessel in reactor number two of the six at the plant. And I'm playing this animation here as this plays out. They're saying they do not believe that there's been a total breach, but they believe there's been a leak down here in reactor two.

Help us understand the significance.

ARNIE GUNDERSEN, NUCLEAR SAFETY ADVOCATE: It's serious. It's what's causing these large volumes of radioactive water to be in the other buildings on site. Inside that containment is where the core is. And it's clearly rubble at this point.

Now, the water is in touch with the rubble. It's running out on to the floor and the flaws in the containment building are now running into other buildings. And the problem is that it's very, very radioactive material. The volume is such that it's really difficult to get to a demineralizer like a Britta filter, a large Britta filter, to be able to process it all.

KING: And so, they say they believe there's a leak. There's a problem here. But they don't think they have a total breach. Explain the difference and the significance.

GUNDERSEN: Well, there's -- a week ago, a prominent G.E. scientist said that he felt the nuclear reactor had a breach in the bottom of it and yesterday, the NRC told Representative Markey the same thing. What that means is that the pressure cooker has got a hole in the bottom of it. It's not that the entire reactor core is coming out that hole but all of the water that you're putting into the top can run out the bottom.

And then, yesterday, we talked about the containment flaw. So, now, it's coming in the reactor, out the bottom, and out the containment flaw. It's going to generate a lot more liquid radioactive waste.

KING: And so, I asked this question probably too often because we don't seem to be getting to the point where we think we have stability and then you deal with the long-term problems. But now, when you hear this latest information about what's happening here, other concerns have been raised by the Nuclear Regulatory Commission and that we've learned more information from TEPCO, the utility involved, what's your sense again of where we are and the what the biggest -- your biggest immediate questions and concerns are?

GUNDERSEN: Well, it's a race against time. The first month that nuclear core decaying rapidly so there's less and less decay heat. And you know, they were dealt a crappy hand and they've done well with the hand that they were dealt. But in the process, they added salt water and now, they're paying the price for adding that salt water because it in itself is corrosive.

So, they bought a month, but in the process now we've got a tough problem in front of us.

KING: Bought a month, tough problem in front of us. We'll stay on top of it.

Arnie Gundersen, appreciate your help tonight. We'll count on you again to help us in the future.

I believe we fixed our connection with Kyung Lah in Tokyo.

And Kyung Lah, at the top, another earthquake today, which just not only has to rattle the land but just rattle confidence of Japanese people. Help us explain, we think, hopefully, not as bad in terms of damage this time, correct?

LAH: Not as bad, but there are certainly are reports of damage and injuries, John. I can tell you that in the phone call that I've made, I'm only halfway through my call list, we have almost 50 injuries, some of those are serious. We're getting reports of building fires, house fires, some building collapses.

The biggest problem, though, especially when we talk about the psyche of people, is some of that infrastructure that was put back online after that March 11th quake, that's starting to fall apart this morning. Water is out in some prefectures, phone lines, the mobile phone connections which are really vital up here, those are also out.

And 4 million people this morning, John, are without power. Power that was restored but now is gone.

KING: Four million people without power. Obviously, the question people will ask, not only in Japan but around the world, any impact on the efforts to contain and stabilize the Fukushima plant?

LAH: Yes, that's the biggest concern now. Right now, this morning, we did give TEPCO a fine call. And TEPCO says it doesn't appear that there's any more immediate damage to the plant. But they've really got to get their eyeballs on the entire ground. That's proven difficult since March 11th.

So, at this point, they're saying no more damage. They did have 383 workers on the premises last night when this quake happened. They did have to evacuate almost everybody. Those workers are back.

But how much significant work they can get done today, they still don't know.

KING: Kyung Lah, live for us -- it is now Friday morning in Tokyo -- Kyung, thank you for the report. We'll stay in touch there.

When we come back, we're just moments away from a high-stakes meeting at the White House. The president of the United States, the Republican speaker of the House, the Democratic Senate majority leader, are trying to avoid a government shutdown. Now, just a little more than 24 hours away.

We'll explain the stakes for you when we come back. And also, our senior congressional correspondent Dana Bash has just spoken to one of the key participants, the Senate Majority Leader Harry Reid.

We'll be right back.

(COMMERCIAL BREAK)

KING: Live picture of the White House there.

We're just moments away from an incredibly important meeting, the president of the United States with the Republican speaker of the House and the Democratic Senate majority leader. At stake: a government shutdown, now just a little more than 24 hours away. Can they broker a deal is the big question, big debates over how much spending to cut. Some Republican policy initiatives.

Just moments ago, our senior congressional correspondent Dana Bash had an exclusive conversation with one of the three big players, the Democratic Senate Majority Leader Harry Reid, who, on his way to the White House, listen here, sounds frustrated.

(BEGIN VIDEO CLIP)

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: People out there want to know what's going to happen. You've been here a long time. Can you just a give a sense of what you think the chances are at this point that the government will shut down?

SEN. HARRY REID (D-NV), MAJORITY LEADER: Right now, I'm hopeful, but I think that the odds are no better than 50-50. I've been terribly disappointed in what we've heard from the leadership in the House these last 24 hours. It just hasn't been as positive as I would like it to be.

We should be able to get this done, but we can't continually negotiate with ourselves. This is not a debate between Democrats and Republicans. It's a debate between Republicans and Republicans.

(END VIDEO CLIP)

KING: Dana is still with us live on Capitol Hill.

Now, that has been Harry Reid's staple line. This is the debate between Republicans and Republicans.

But, Dana, if we're going to resolve this tonight, he says it's a 50/50 chance. The two Democrats and the Republican in the room are going to have to do business. Is Harry Reid ready to deal?

BASH: You know, he insists he is ready to deal, but -- but you've just heard him say that we've given and given and given. And I can tell you that there was a meeting of Senate Democrats earlier today and the Democrats on their side that they made clear that they're kind of fed up with giving from their perspective.

Now, the other perspective, of course, which is important to give here is that on the Republican side, that they don't feel the Democrats are giving enough, that they don't feel they get it. The "it" being that the country and this was seen in the election made clear that they want things differently and they want to cut spending. And that is why they say they're holding the line on the Republican side to say, even if it's just a couple of billion dollars they want to try to get it.

KING: And, quickly, is there any chance of another Band-Aid, another short term for a week or so? Or is this cut a deal tonight or we shut the government down tomorrow?

BASH: Unclear. It is unclear. The president of the United States has said that if they get close, he hopes that they can put a Band-Aid on just for a couple of days to prevent it, but it's unclear if that can happen.

KING: Unclear if that could happen. Dana Bash live on Capitol Hill tonight. She'll keep track of this. We have White House reporters and the meeting is about to begin.

You might say this is all political conversation in Washington. What does it mean to you?

If the government shuts down, let's say you're in college, maybe you have a kid about to go off to college.

This is what the Department of Education tonight says it would do. Furlough 93 percent of its federal employees -- meaning a dramatic impact on higher education programs. Colleges would not have the authority then to fund federal loan programs, federal work-study programs. You have a work study job on campus -- I remember those days, it's a while ago. Federal supplemental education opportunity grants, the government would say, you don't have the authority to spend that money when the government has no more authority to spend.

What about the Food and Drug administration? Let's take a peek at that if we can. That's 13,000 workers, won't say exactly how many will be furloughed just yet because an agency can decide, who do we need, who is necessary and vital to the safety of the American people in this case.

But inspections would be reduced. Inspections would be reduced and prioritized by the risk -- the risk to the food safety supply, the risk to drug safety.

In an emergency situation, furloughed staff could be called in.

The Center for Tobacco Products would remain fully staffed.

This is going on in every agency all across the government. Who do we absolutely need to be here? Who would come in? What are our powers and what are our authorities? And then making a listing -- making a listing of what would be at risk and what wouldn't happen.

If you go to CNN.com, you can find an excellent comprehensive list of what we know about what will happen if the government shuts down. We hope it doesn't happen.

We're on top of the negotiations. They begin in seconds at the White House, the third meeting in 24 hours, as we track them.

We'll see you tomorrow.

"IN THE ARENA" starts right now.