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McConnell Leaves White House Filled with Optimism; Reid Says There is No Progress on a Deal; Democrats, GOP Differ; Pentagon a Target for Budget Cutters; Troops Worry about Getting Paid; Tea Party Power; Debt Limit Doozies

Aired July 30, 2011 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: Thanks very much, Don.

Happening now, crisis talks over at the White House. Washington's top Democrats go behind closed doors. Are they on the verge of offering a deal to the Republicans? On Capitol Hill, Republican leaders now say they are confident and optimistic. Their latest prediction, a national default is not going to happen. But are Democrats singing the same tune? Senators appear ready to work late into the night and lawmakers confirm there are right now ongoing talks at the highest levels. But will a deal take shape-or could it still fall apart?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

It's been a day of dramatic changes in Washington's debt crisis. Within the past few hours Capitol Hill's angry partisanship gave way to serious negotiations, and then to predictions of an agreement within the very near future, one top Republican, the Senator Minority Leader Mitch McConnell, declared and I'm quoting, he's saying he's "confident and optimistic". Moments ago the Senate Democratic Leader Harry Reid seemed to throw some cold water on the new found optimism.

Let's go to Capitol Hill. Our Congressional Correspondent Kate Bolduan is following this.

What is the very latest, Kate? What do we know?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Hey, there, Wolf, you know this just as I do, it's with this story, it is changing minute by minute. We did see what could be a significant step in the negotiations, just a short time ago, when the top Republican in the Senate, he said-who is a key negotiator in whatever the end game is-he said that those stalled debt talks that were happening, that have been stalled all this past week, he acknowledged they are talking once again. Listen here.

Actually, I don't think we have the sound, Wolf. I'm sorry. But that was Mitch McConnell who said he had spoken with the president, as well as the vice president, and that he says they are fully engaged in serious negotiations. That is a big statement. I will tell you almost as quickly as we heard that come from the top Republican in the Senate, we also heard from Senate Majority Leader Harry Reid, as he was returning to the capitol, from a meeting at the White House with the president. He was asked if they were any closer to an agreement and Reid said very firmly, no. One reason could be, is we're hearing from Democratic leadership aides in the Senate, for Reid's pessimism could possibly be that they are saying that Republicans have not moved off of their position from their original bargaining position, was that they support the House Speaker John Boehner's bill.

What we're seeing a lot of is a lot of back and forth here. It is a very fluid situation as you know, Wolf. One thing we're keeping our eye on is potential for a very late night, 1:00 a.m. vote, the first test, a test vote for Senator Reid's proposal to raise the federal debt ceiling as he's pushing that proposal forward at the same time, Wolf.

BLITZER: They need 60 votes for Reid's proposal to get through the Senate because the Republicans, at least, some of them are threatening a filibuster, as you know. They may have 58, 59. It looks unlikely they will get 60. Is that right?

BOLDUAN: It's not clear where the votes stand. From the beginning there was definite opposition from Republicans to Reid's bill. The fact of the matter is, Reid's bill has already failed in the House. The House holding the vote today just trying to prove the point it doesn't have the support to pass in the House. But you know it's moving forward. And at the end Reid may be thinking that it might be the only thing left standing. But, of course, negotiations are continuing, Wolf.

BLITZER: We are going to get that clip of Mitch McConnell because it was a powerful statement he made a couple of hours ago. We'll play it shortly for our viewers. Let's go the other end of Pennsylvania Avenue right now, over to the White House. President Obama has been meeting with the Democratic leaders, House Minority Leader Nancy Pelosi, the Senate Majority Leader Harry Reid. That meeting broke up about an hour or so ago. Our Chief White House Correspondent Jessica Yellin has been working her sources.

Jessica, what are you hearing?

JESSICA YELLIN, CNN WHITE HOUSE CORRESPONDENT: Wolf, the takeaway right now is that for the first time, in days, after so much silence and lock down, there's now conversation going on between this building and Capitol Hill, between Democrats and Republicans in both Houses. As you point out not only Harry Reid and Speaker Pelosi were here but staffs for both chambers have been in touch. Speaker Boehner has spoken to the president.

Mitch McConnell, the minority leader in the Senate, he was the one-and this is worth pointing out-he is the one who picked up the phone, I'm told, by officials in this building and called Vice President Biden, himself. And did it more, they had conversations more than once today to talk about not vague terms, but to talk about the state of play and what can get done.

Democrats say there's a growing acceptance that a party line bill cannot get the debt ceiling raised and that progress needs to be made towards something that will not be a party line bill. And, you know, one of the outstanding questions here is we saw two Democratic leaders leave the White House. We didn't see them, but we know they came and left the White House today.

Open question will we see the Republican leadership at the White House later today? No meeting scheduled but we'll keep an eye out to see if that happens, Wolf.

BLITZER: They are talking on the phone, though, which is very encouraging because the president hadn't been speaking to any of these Republican leaders in four or five days. Isn't that right?

YELLIN: That's right. Mitch McConnell, the minority leader, had conversations with the president and the vice president. McConnell, Senator minority leader, the lynchpin to cutting a deal in the U.S. Senate with Harry Reid, the Senate majority leader; then, of course, John Boehner speaker of the House will have to shepherd that through the House of representatives and no doubt when speaker Pelosi was in there meeting with the president they must have been talking about what it would take for her to get her Democrats in the House to sign on to whatever bill the Senate will negotiate. So a lot of moving pieces, now it's a numbers game, Wolf.

BLITZER: At some point, presumably, if they have a deal or they are close to a deal, or whatever, we'll hear from the president of the United States. But as of right now, as of right now we don't have any word of that.

Let's go the floor right now. I think Harry Reid, the majority leader is speaking. Let's listen in.


SEN. HARRY REID, SENATE MAJORITY LEADER: -announced there are talks with the president, and that a bargain to raise the debt ceiling is in the works, and is close. Mr. President, members of the Senate, that's not true. I just spent two hours with the president, vice president, Leader Pelosi. And it's fair for me to say that the engagement there is not in any meaningful way.

Republican leaders still refuse to negotiate in good faith. Revenue is off the calendar. No way we can talk about revenues. Entitlements, all they are after is entitlements, Medicare, Social Security. The speaker and Republican leaders should know merely saying they have an agreement in front of the television cameras doesn't make it so.

Republican leader, at the press event, says he's engaged. Fortunately members of this caucus are, at least as far as I'm concerned, and my members, are more engaged than he is. There are meaningful talks going on with some of his members, with some of my senators.

While the Republicans leader is holding meaningless press conferences, his members are reaching out to me, and other members as I've just indicated, they are coming forward with thoughtful ideas to try to move the process forward. I welcome their ideas. And I ask all members to continue these discussions. America is watching us and they are demanding a result that's balanced. I say to my friend, and he is my friend, the Republican leader, I'll come to his office, I will go to the White House with him, I will do anything that I can do, to try to move this process forward. But I say as respectfully as I can to my friend the senior Senator from Kentucky, the process has not been moved forward during this day.


UNIDENTIFIED MALE: The minority leader, the Republican leader.

MCCONNELL: Mr. President, the fact of the matter is that the only way we're going to get an agreement before Tuesday is to have an agreement with the president of the United States. The only person in America, the 307 million of us who can sign something into law. And I'm more optimistic than my friend the majority leader. We both talked to the president today, talked to the vice president several times. I think we've got a chance of getting there.

What I think is not helpful is that process we're going through here on the Senate floor having a show votes over live quorums, having a reluctance on the part of the majority to have a vote on a measure they favor, which we've been prepared to vote on since last night.

Look, we need to be in a position where all of us in the leadership can come back here and say that we think we've reached a framework of an agreement that we can recommend to our members and be briefing our members. The sooner we can do that, the sooner we can reassure the American people we'll get a result on a bipartisan basis.

So that's what I'm working on. I'm not interested in scoring any political points. I'm interested in getting an outcome for the American people. The only way that can be done is with the president of the United States. And we're going to continue to work on that. Get this problem solved. Let everybody in the country know that we're not going to default for the first time in our history. That's how I'm going to spend my time until we get that outcome that I can come up here and recommend to my colleagues.

REID: Mr. President.

UNIDENTIFIED MALE: The majority leader.

REID: We are here today, right now, for this reason. It's spelled F- I-L-I-B-U-S-T-E-R, filibuster. There's delaying tactics proceeding right now. They won't allow us to have a vote, an up or down vote on our amendment. This is a filibuster. By any other term it's a filibuster. That's why we're here. I hope the negotiations go on. We're willing to be as fair as we can. But there has to be something that the president and Vice President Biden, and the rest of us think is a step in the right direction. I guess talking is a step in the right direction, but that is about it.

Mr. President, I ask unanimous consent that the matter that we have before us, which is Amendment No. 589, we have an up or down vote on that. As we have all the time, of course. There would be no points of order, in effect, and we do like we do here all the time, have a vote on it right now.

MCCONNELL: Mr. President, reserving the right to object.


These are direct quotes from my friend the majority leader. He says quote, "In the Senate it's always been the case you need 60 votes. Always been the case you need 60 votes." This is the majority leader of the United States Senate. For him to suggest that a matter of this magnitude in a body that requires 60 votes for almost everything is going to be done with 51 votes makes no sense at all. I object.

REID: Mr. President.

UNIDENTIFIED MALE: The objection is heard. The majority leader.

REID: First of all, it's unconscionable that the Republicans would filibuster legislation and permit a default on our national obligations. Frankly, it's unprecedented, unprecedented. Since 1962 Congress has raised the debt limit 74 times, including 18 times under President Reagan and there was never a threat of a filibuster, and it was always by majority vote.

MCCONNELL: Mr. President.

UNIDENTIFIED MALE: The Republican leader.

MCCONNELL: Mr. President, I might say I actually cut short a conversation with the vice president to come out here for this important vote, on a live quorum. I would like to get back to work so we can hopefully solve this problem. And it seems to me, Mr. President, it would be a good idea for the majority to decide to allow the vote on the proposal they say they are in favor of. Therefore, I would ask unanimous consent that the vote on the pending closure motion occur at 6:30.

REID: I object.

UNIDENTIFIED MALE: Objection is heard.

REID: Filibuster?

UNIDENTIFIED MALE: The majority leader.

REID: Mr. President, you can put a lipstick on it. Nice suit, even a skirt sometimes. It's still a filibuster.

UNIDENTIFIED MALE: Clerk will call the roll.


BLITZER: So there you have a little exchange between the two leaders in the United States Senate, the Majority Leader Harry Reid, the Minority Leader Mitch McConnell. At issue right now is whether the vote on Harry Reid's proposal to raise the debt ceiling would require a simple majority 51 votes, or a 60 vote requirement if there's a filibuster of the Republicans, are filibustering. You heard Mitch McConnell say almost every important vote in the Senate, that is the nature of the game.

The Democrats don't have 60 votes to break a Republican filibuster on this so Harry Reid's proposal would go down. Mitch McConnell is saying in effect, you know what, there are important negotiations going on right now with the president of the United States, the vice president of the United States. Why are we wasting our time, he's suggesting, by these procedural votes in the United States Senate, when the country's credit worthiness, in effect, is at stake.

That's what's going on, on the floor of the United States Senate. Also significantly very different assessments of the current state of negotiations, just a couple of hours ago Mitch McConnell suggesting a deal was getting closer, he was saying there would not be a default, he was optimistic a deal could be reached. Harry Reid began his statement on the Senate floor by saying that's not true, no progress, he says, has been made. He points out he just came back from the White House where he met with the president and the vice president.

Mark Warner is a Democratic Senator from Virginia who is very much involved in all of this. He's joining us now live from Capitol Hill.

Senator, thanks very much for joining us.

MARK WARNER, (D) VIRGINIA: Thanks for having me, Wolf, but it's pretty bizarre.

BLITZER: Very bizarre. Was my summation basically accurate? You have anything you can quibble with?

WARNER: No, I don't think I can quibble, other than the fact there are procedural votes going on. It is a filibuster. There are three things that viewers ought to recognize. One, we need to make sure we get some circumstance to get us through August 2nd. Two, we sure shouldn't put the country through this again in six months. And three, if we get through August 2nd with whatever the down payment is, if we don't have an approach that's going to be really bipartisan and comprehensive, that gets us close to $4 trillion in debt reduction over the next 10 years, then I think we are really back in this problem three months, six months, nine months, 12 months from now and that's not good for the country.

BLITZER: Why don't they all go into a room? Go up to Camp David or something, or just force themselves into a room, the president, the vice president, the Democratic and Republican leaders of the House and the Senate. And they don't leave until they come up with a plan that can get a majority vote in the House of Representatives and a majority vote in the Senate? It doesn't sound all that complicated. And, frankly, the differences don't seem to be all that enormous.

WARNER: Wolf, I was a business guy for 20 years. I was a governor for four years. I can't, again, quibble with you. We ought to get the folks in the room and lock the door and nobody leaves until these things are worked through.

There's so much back and forth. There seems to be a real challenge. There's a filibuster going on right now. That's absolutely technically true. I hope we get the votes through. At the end of the day, what we've got to do is get over August 2nd, we have to make sure we don't do this again, and we give some certainty to the markets. And we got to have a comprehensive and, I think, bipartisan plan. It can't be a Democrat or Republican plan only.

I look around this town, and for all of the critic, the so-called Gang of Six got, it is only plan in this city that has at least a third of the Senate saying let's go forward with that framework. I hope at the end of the day that gets a vote. A few months from now with whatever we get through gets us towards a solution, rather than August 2nd will just be a fix. We have to get a solution.

BLITZER: Because you were a key member of that Gang of Six, three Democratic senators, three Republican senators. You guys came up with a plan that had a lot of support in the United States Senate. This seems to be one of the major stumbling blocks right now, if not the major stumbling block. This proposal that the Republicans in the House wants, the speaker wants, for another vote next year, six months or so from now, and the president says no way, no more votes on this, we're most going to put the country through this again in the middle of an election season. How do you get over that hurdle?

WARNER: There's got to be a way through. I was a business guy for 20 years before I got involved in politics. It makes no sense from an economic circumstance to put our country through this kind of back and forth again six months from now. With the economy as fragile as it is, I don't care whether it's a Republican idea, or Democrat idea, as a business guy that makes no sense at all.

So if there's needs be triggers, if there needs be making sure we get stuff done, if there's needs a new commission that's fine. Let's make sure we actually get a vote on something that is comprehensive, that's bipartisan. That's the only thing we're asking, or at least I'm asking, and a third of the Senate that says hey, if not the Gang of Six plan let's do something else that's comprehensive.


WARNER: It won't happen in the next three days but it will, I believe, hopefully happen in the next six months. I clearly don't think there will be any appetite frankly, and there is an increasing number of Republican senators who are saying, hold on here, we don't need to go through this same political Kabuki theater six months from now.

BLITZER: That's what a lot of people think, all these maneuvers in the House and the Senate, on their respective floors, Kabuki theater is a good way of describing it.

Senator we're counting on you, we are counting on all of the lawmakers to get this done because millions and millions of people will suffer in the United States, indeed around the world if there's a default. And we hope there isn't a default.


BLITZER: But the country is getting closer and closer to Tuesday when that could happen. So go back to work and use your influence. We're counting on you. Thanks very much.

WARNER: Thanks, Wolf.

BLITZER: We'll get a different perspective from a key Republican senator, Ralph Portman from Ohio. Also very intelligent, very involved, very committed to trying to get a deal done. We'll hear from him.

We have a lot of the breaking news coverage coming up. Dramatic new developments happening right now on the Senate floor. We'll have all the live coverage coming up right here, a special edition of THE SITUATION ROOM.


BLITZER: There are fast-moving and very dramatic developments happening right now in an effort to avoid for the first time ever a U.S. government default. A little while ago the top Republicans in Congress said they are confident, they are optimistic about reaching a deal. Minutes ago, you saw it live here in THE SITUATION ROOM, the Democratic Leader Harry Reid flatly saying that Mitch McConnell, the minority leader, the Republican leader, that his assessment is not true. They are not closer to a deal.

Let's assess what's going on with our Chief Political Analyst Gloria Borger, who really knows what's going on.



BLITZER: Who is right? Is Harry Reid right when he says they are not close to a deal, or is Mitch McConnell right when he says, you know what, he's been speaking with the president and vice president, he feels optimistic. He feels close.

BORGER: Right.

BLITZER: A deal could be struck.

BORGER: Here is the thing. We know the vice president has spoken with Mitch McConnell three times today. We know that there are clearly discussions about how to reach a deal. We know the president got the Democratic lead to the White House, and they came back unhappy. So, the question that I have-and I don't know the answer-is are the Democrats worried that the White House is trying to compromise with the Republicans, rather than understanding what their needs are?

The key thing here the watch, Wolf, is Nancy Pelosi, in the House, has got to deliver an awful lot of Democrats. How many Republicans will John Boehner be able to deliver? If he loses 100 of his Republicans, is that, you know is that enough for Nancy Pelosi to deliver her Democrats?

BLITZER: Theoretically, if almost all of the Democrats support whatever emerges, about 190, or so.


BLITZER: If they get 30 Republicans, moderate Republicans, and there are 30 moderate Republicans.

BORGER: Yes, there are.

BLITZER: It's a very minority part of the Republican Party, but they have enough to get 216 votes.

BORGER: They do. The question that I have, and I think this is the holy grail, which is what is enough for Nancy Pelosi to say OK, we have a deal. If I'm going to pass this, if I'm Nancy Pelosi, I'm going to pass this in the House. I'll put my people on the line. What are the Republicans willing to give up for me to supply the votes, which is why the "Wall Street Journal" editorialized this week about Tea Party Republicans, and said to them, you know what? You're are actually empowering Nancy Pelosi. So, those are the kinds of discussions that are taking place right now, and maybe the Democrats feel the Republicans are not willing to give up to get --

BLITZER: My own sense is if the president of the United States-who is in effect, the leader, he is the leader of the Democratic Party-if he says this is good enough for me, Nancy Pelosi, the Democrats in the House, and the Democrats in the Senate, they will salute the president, the commander-in-chief and say yes, sir.

BORGER: You know, they have been griping about him, as you know, throughout his tenure, that he hasn't-that he sort of left them behind, sometimes. And that he hasn't paid enough attention their concerns. Is this whether this is going to be another one of those times where the president feels, as president, he can not let the country go into default, he has to tell Nancy Pelosi to deliver. I think she wants to deliver. But she probably wants to get something out of it, right?

BLITZER: The other thing that is intriguing to me, and I think you get the same sense, Mitch McConnell, who is a key player in all of this, the Republican leader in the Senate, he may like Harry Reid but he doesn't trust him very much. I think he trusts the president and vice president more to make a deal something they can live with, than Harry Reid.

BORGER: I think he does. But I think he also believes in this particular case Mitch McConnell could really prove to be an ally of his.

BLITZER: Gloria, don't go to far away. We'll continue the breaking news coverage here in THE SITUATION ROOM. It is a minute by minute change of events, the drama unfolding. The Rob Portman, the Republican senator from Ohio has been a key player in all of this. He's standing by live. We'll go back to Capitol Hill to get his assessment of what's going on. Stay with us, you're in THE SITUATION ROOM.


BLITZER: Tonight we're getting conflicting signals about whether or not there's a possible debt deal is near. Republican leaders say they are confident and optimistic, but only moments ago the Democratic leader in the Senate, Senator Harry Reid said no when reporters asked if an agreement is near.

Then he went on the Senate floor and repeated that. He said reports that they are closer to a deal quoting Mitch McConnell, the Republican leader in the Senate in Harry Reid's words not true.

Let's get an assessment from Republican Senator Rob Portman of Ohio. He's a former budget director during the Bush administration. Senator, thanks very much for coming in.


BLITZER: It sounds like Mitch McConnell is optimistic that a deal is close. Harry Reid very pessimistic, he says there's no progress really been made today. Where do things stand from your vantage point?

PORTMAN: Well, I just left the floor of the Senate where Senator McConnell talked about his discussions with Vice President Biden and the president today. He believes that they are close. I think there's an agreement now that there has to be real and credible reductions in spending as we extend the debt limit.

If you look at the Boehner proposal compared to the Reid proposal, there are some similarities. So I'm hopeful that we will be able to come together. It's important we extend this debt limit, but it's absolutely critical that while we do that we also deal with the underlying problem.

And if we don't, Wolf, which you know, we'll still have some of the same economic problems that Moody's and Fitch and Standard & Poor's and other so-called credit agencies are warning about.

BLITZER: Because even if there is a band-aid, even if there is some sort of solution, a short term solution right now and there's no guarantee that there will, but even if that were that wouldn't necessarily preclude the possibility of a AAA credit rating going down, a deterioration. The credit rating agencies could still say America's credit worthiness is not worthy of AAA. Are you concerned about that?

PORTMAN: I'm very concerned about it. I think there will be even broader ramifications. We've seen what the market has already done in the last few days so Americans would be hurt across the board, anybody who borrows including people who have car loans and student loans and credit card debt. Certainly mortgages would be going up. So interest rates going up make it harder for small businesses to create jobs and opportunities. So this is of serious concern and that's why the leadership on the republican side has been saying we need to extend the debt limit.

But we need do it with spending cuts as well because if we don't get at the under lying problem. The fact that our fiscal house is out of order, we'll still have these problems related to the economy.

BLITZER: Harry Reid's proposal does have more than $2 trillion in spending cuts and that was scored by the Congressional Budget Office, more than enough to keep the debt ceiling high enough throughout all of next year into 2013, what's wrong with that?

PORTMAN: Well, unfortunately the Congressional Budget Office has come back and rescored. Both the Boehner proposal and the Reid proposal and on top of that part of the savings that the Majority Leader Reid hopes to get is from the war in Afghanistan and Iraq beginning to wind down.

And the CBO has looked at that and said well, you know, there's a trillion worth of savings that aren't real savings because everybody knows the war is going to wind down. So that when you look at it as I see it Harry Reid's proposal is about $950 billion worth of savings.

John Boehner is about $917 billion. They're actually quite similar, but it's not the 2.2 or 2.4 that's being talked about. So we do have to do more in term of the immediate cuts in order to extend it for the period of time the president would like.

The alternative is this two-step process where we do about a trillion dollars now and then have this special committee that would meet and report by the end of November and then there would be additional savings under the Boehner proposal. That's almost $2 trillion additional savings, 1.8 trillion --

BLITZER: The president says he doesn't want to have another formal vote next year and put the country through this ordeal once again right in the middle of elections. He has a point there, right?

PORTMAN: Well, Wolf, he doesn't have much a point in terms of putting it past the election because that's sort of an arbitrary deadline. I think he does in terms of the certain need for the market.

But the way it's structured once the committee reports assuming this committee does its work, there would be an automatic renewal based on the amount of savings found. What's at issue right now frankly is whether there's some fail safe so-called trigger mechanism to ensure those savings occur.

And I think we're getting down to some pretty specific issues here that can be resolved. The difference between the debt limit, short term and long term won't be the full $1.8 trillion in the Boehner commission, which is very similar to the Reid commission. It would be less than that. And so under the current plan, I think you would see the debt limit extended until about to mid-February. The committee reports the end of November. The savings should be there. If they're not, there certainly is a failsafe method that could be put into place that could be immediate.

So you wouldn't have this last minute debt issue. I personally, of course, think we ought to reduce spending. Therefore have sequestration across the board, which would encourage the committee to do its work.

It seems like a sense of a logical approach and the savings wouldn't have to be the full amount, but about a trillion dollars to get it past the election. So this is a bare minimum in my view. If we don't do that in any case, Wolf, we'll have real problems in terms of what you talked about earlier, the credit agencies downgrading our debt and impacts on our entire economy.

BLITZER: Senator, thanks very much for coming in.

PORTMAN: Thank you, Wolf. Appreciate you having me on.

BLITZER: Good luck. We'll continue to watch this. We're not leaving this story because it is so critically important to the U.S. and indeed to the world.

When we come back the chairman of the Joint Chiefs of Staff Admiral Mike Mullen was in Afghanistan today and soldiers asked him will they get paid next week.

Can you imagine American soldiers worried about getting paid next week? They are on the front lines of the war in Afghanistan, they ask a question to Mike Mullen of this nature and he basically says I don't know the answer to that question.

Wow. Barbara Starr is over at the Pentagon. We'll check in with her. Continuing the breaking news coverage right after this.


BLITZER: Lots of confusion about what will happen to the United States military if the U.S. can't pay its bills come due starting on Tuesday. A spokesman for Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff telling CNN the admiral doesn't know what the impact would be for the military as far as pay and compensation are concerned.

He reinforced Defense Secretary Leon Panetta's message that the United States mission in Afghanistan will continue, but it's an issue very much on the minds of troops. Our Pentagon correspondent Barbara Starr is here in THE SITUATION ROOM working this part of the story.

Barbara, a very dramatic development today in Afghanistan. Mullen goes there and troops start asking him, troops who are risking their lives fighting for the United States in Afghanistan, will they be paid next week? BARBARA STARR, CNN PENTAGON CORRESPONDENT: These are young troops, Wolf, in combat. You and I have covered the Pentagon for a long time. Have you ever seen anything like this? They are on the front lines.

The chairman of the Joint Chiefs spends the day in Afghanistan. He wants to talk about the war. The troops have a different idea in mind. They want to know will they get paid and will their families be taken care of.

But, Wolf, this is just the beginning because now with all the talk in Washington about money, money, money, the Pentagon itself is right in the cross hairs.


STARR (voice-over): The Pentagon spends nearly $700 billion a year on wars, fighter jets, bombings and bullets. It's a rich target for congressional efforts to cut spending to reduce the deficit. President Obama's incoming top military adviser is playing ball to an extent.

GENERAL MARTIN DEMPSEY, JOINT CHIEFS CHAIRMAN NOMINEE: If we don't show that we recognize that the nation has a significant economic problem and then do our part whatever that part may be to help solve it, we will be seen as simply putting up barriers.

STARR: The White House already wants to cut $400 billion in Pentagon spending over the next 12 years. But some in Congress want to cut security spending by more than $800 billion, which doesn't sit well with Dempsey.

DEMPSEY: Based on the difficulty of achieving the $400 billion cut, I believe 800 would be extraordinarily difficult, and very high risk.

STARR: Former defense secretary and one time Republican Senator William Cohen says there may be an unusual political alliance forming.

WILLIAM COHEN, FORMER DEFENSE SECRETARY: Some of the Republicans who want to disengage and say that we're over committed and we should come home, America, may find compatibility and comfort with some on the Democratic left who would argue that we should come home, America and focus our energy and resources and attention here at rebuilding the American economy.

STARR: Pro-defense House Republicans are still playing the danger card.

REPRESENTATIVE RANDY FORBES (R), VIRGINIA: One of the biggest fears that I have is these enormous budget cuts that we see coming down the pike.

STARR: And making sure the brass is heard.

GENERAL JOSEPH DUNFORD, ASSISTANT COMMANDANT OF THE MARINE CORPS: I think if they would exceed $400 billion, we would start to have to make fundamental changes in the capability of the Marine Corps. (END VIDEOTAPE)

STARR: So, playing this military card support for the military, the Republicans and the Democrats are both playing this card right now, but what about Leon Panetta, the brand new defense secretary. Why haven't we heard from him?

What's interesting, Wolf, is late last night a statement from Panetta suddenly appeared on the Pentagon web site. Nobody knew it was coming. The troops didn't know. The veterans groups didn't know.

And all he said on this statement was that he was concerned and he going to try to continue to support the troops, but he didn't say, Wolf, that they would get paid and that remains issue number one.

BLITZER: Pretty shocking when you think about it. Soldiers in Afghanistan asking the chairman of the Joint Chiefs, are we going to get a paycheck next week? They're worried about their families.

He says I don't know. It's a message, a powerful message to lawmakers here in Washington and to the White House, get this done and get it done quickly.

STARR: The troops want their pay checks.

BLITZER: And elderly want their Social Security and Medicare. Everybody wants what they've been promised. Thank you, Barbara.

All right, the debt crisis highlights the growing power of a relatively new player here in Washington D.C., just how powerful is the Tea Party? Standby, we'll take a closer look.


BLITZER: The debt showdown isn't just at fight between President Obama and congressional Republicans. Republicans are fighting amongst themselves with moderates on one side and a new breed of conservatives backed by the Tea Party on the other.

Has the Tea Party turned into the ultimate power broker here in Washington? Let's go to CNN's Brian Todd.

BRIAN TODD, CNN CORRESPONDENT: Wolf, the Tea Party's influence on the House vote this week, how much they swayed John Boehner is a huge story in the debt ceiling debate. They've been unified, uncompromising, an effective performance, no doubt. But some believe this was a dangerous political play for them.


TODD (voice-over): You've seen it on John Boehner's face when he emerged from the meetings with his party, the strained look of the speaker who has been pushed and pressured into a debt ceiling bill that's left little room for compromise.

Who's done the pressuring? A relatively small, but very powerful group of Republicans, the Tea Party.

(on camera): How does the Tea Party shaped this debt debate in Washington?

DARRELL WEST, BROOKINGS INSTITUTION: The Tea Party has forced Speaker Boehner more to the right that involves deeper spending cuts and also support for the balance budget amendment. So they have had disproportionate impact on the entire congressional debate.

TODD (voice-over): Extraordinary considering the portion of the House they make up.

(on camera): The Tea Party caucus in the House has 60 members. That's a quarter of the total number of Republicans in the House. But when John Boehner had to delay the vote on his bill to get more votes, the Tea Partiers made up more than half of the Republicans who were prepared to vote no.

(voice-over): It's a continuation of the momentum triggered last fall when the Tea Party captured political lightning in a bottle and helped elect dozens of new congressman. They came in on a promise to shock Washington into spending less and cutting more.

Their unwillingness to compromise has changed the way the government handles its debt. But now even Senator John McCain, a budget hawk himself, says they risk overreaching if they never compromise.

SENATOR JOHN MCCAIN (R), ARIZONA: To hold out and say we won't agree to raising the debt limit until we pass a balanced budget amendment to the constitution. It's unfair. It's bizarro.

TODD: Are Tea Party lawmakers playing with fire?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: If they take us into default, the Tea Party is going to pay a huge price.

TODD: It may already be paying that price. In CNN ORC polling since January of last year, public disapproval for the Tea Party has been steadily growing from 26 percent to 47 percent now.

Analysts Darrel West say that may not hurt Tea Party congressman themselves in their next elections because many come from safe districts but --

WEST: The Republican presidential nominee may end up suffering the consequences because Obama certainly is going to tie that GOP nominee to the more extreme elements within the Republican Party in Congress.


TODD: But many Tea Party lawmakers seem to relish that fight saying voters sent them to Washington on a mission and they are more cutting spending than winning a popularity contest. Wolf?

BLITZER: Brian Todd, thanks very much. When we come back, we'll speak with Gloria Borger. She is getting ready to speak to Mitch McConnell. We'll preview that interview when we come back.


BLITZER: Gloria Borger's back. You're going to be speaking with Mitch McConnell tomorrow morning. You're filling in for Candy Crowley on the "STATE OF THE UNION." This is going to be a critically important day tomorrow because, you know, I guess there's just a few hours left.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right. And you know, Mitch McConnell is clearly the key man here. He's somebody that they believe can really bring along a Senate majority, can put some pressure on some Republicans in the House to go along with this.

And so he's clearly the person that the White House has picked among all Republicans to deal with. And McConnell could not deal until the Boehner bill had gotten through the House because he supported the Boehner bill.

So now I think they're entering negotiations in earnest. The question is -- where are the Democrats in all of this?

BLITZER: Who else is on "STATE OF THE UNION" tomorrow?

BORGER: Well, we also have Chuck Schumer who's kind of the key message-man in the Senate for the Democrats. And we have Gene Sperling, one of the president's top economic advisers, to talk about where we are in these negotiations and whether we're going to get it done.

BLITZER: It's 9:00 a.m. tomorrow morning, a live show. We'll be watching. Gloria, thanks very much.

When we come back, Jeanne Moos finds some humor on what's going on in this debt crisis.


BLITZER: The U.S. debt limit is inspiring some folks out there. Here's CNN's Jeanne Moos.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): A rap video, a cops and robbers movie, and Amy Winehouse -- what do they have to do with the debt ceiling fiasco?

Remy Munasifi is a comedian from Virginia who likes doing political videos.

REMY MUNASIFI, COMEDIAN: All this spending kind of fits in well with like a bad rap. I happen to be a bad rapper. MOOS: Speaking of bombs, was that really the a-bomb dropped by House Speaker John Boehner as he tried to get his fellow Republicans to get in line?

UNIDENTIFIED FEMALE: Is it true that you told some of the republican members this morning that you need to get your a-word in line behind this debt ceiling bill?

REPRESENTATIVE JOHN BOEHNER, HOUSE SPEAKER: I sure did. Listen, it's time it do what is doable.

MOOS: The "Washington Post" reported that the House majority whip played a movie clip to motivate Republicans to pull together. The clip featured Ben Affleck as a bank robber planning revenge in the town.

UNIDENTIFIED MALE: I need your help. I can't tell you what it is. You can never ask me about it later, I'm going to hurt some people.

UNIDENTIFIED MALE: Whose car are we going to take?

MOOS: But Democrats turned the car against the Republicans.

UNIDENTIFIED MALE: They chose to inspire their house freshmen, one of the crooks governors a pep talk to the other right before they both put on hockey masks, bludgeon two men with sticks -- and shoot a man in the leg. Ladies and gentlemen, this is your House Republican majority.

MOOS: Asked about Republicans playing his clip, Ben Affleck said, "I don't know if this is a compliment or the ultimate repudiation -- but if they're going to be watching movies, I think "the company men" is more appropriate." A film about corporate layoffs.

UNIDENTIFIED MALE: You're firing me?

MOOS: Now here's a head-scratcher -- what possible connection could there be between the debt and the death of singer Amy Winehouse?

Republican Congressman Billy Long from Missouri tweeted, "no one could reach Amy Winehouse before it was too late. Can anyone reach Washington before it's too late? addicted -- same fate?"

Long later apologized saying he meant no disrespect to Winehouse with his analogy about Congress' addiction to spending. If this keeps up, we'll have to raise the limit on debt-related doozies. Jeanne Moos, New York.


BLITZER: Thank you very much for watching. I'm Wolf Blitzer. Join us week days in THE SITUATION ROOM from 5:00 to 7:00 p.m. Eastern, every Saturdays at 6 p.m. Eastern right here on CNN and at this time, every weekend on CNN International.

Tomorrow night 9:00 p.m. Eastern, Don Lemon and I will be co-anchoring a special on the debt crisis. You will want to see what's going on the stakes are enormous. CNN "NEWSROOM" with Don Lemon starts right now.