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Cracks Showing Among House GOP; The Bantering Continues; GOP Senators Hammer Cruz; Shutdown Putting Lives at Risk; President Briefed on Tropical Storm Karen; White House Press Conference on Shutdown and Debt Ceiling; Interview with Rep. Wasserman Schultz

Aired October 03, 2013 - 13:00   ET

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

WOLF BLITZER, CNN ANCHOR: Jay Carney, White House press secretary, expected to walk in fairly soon and brief reporters what's going on, answer some tough questions at the same time. This, as we are now in way deep into day three of the government shutdown. That means another day in limbo for almost 800,000 federal workers who were furloughed and another day of uncertainty for the American people.

As of right now, the toll for this man made economic disaster stands at an estimated $900 million in lost federal wages and other economic activity, that according to an independent study by the consulting firm IHS Global. Nine hundred million dollars, that's almost a billion dollars equal to the yearly budget of the small business administration.

Yesterday, the president invited Congressional leaders, Democrats and Republicans to the White House. It was a quick talk a little bit more than an hour but with no apparent results. Afterwards, the House approved three individual funding bills, one funding the national park service, a second funding the District of Columbia, and a third funding the National Institutes of Health.

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R), MAJORITY LEADER: And we are trying to find the things that we can agree on in common where there's a majority vote in both Houses. Certainly pediatric medical research, medical research for clinical trials is something, given the circumstances, that I think we ought to get done. Harry Reid ought to take up today.

SEN. HARRY REID (D), MAJORITY LEADER: The message for my mainstream Republican colleagues. If you hope to get out of this mess, if you ever hope to end this Republican government shutdown, get rid of the Tea Party direction. Work with us. Help us reopen the government. We can start negotiations today.

(END VIDEO CLIP)

BLITZER: Harry Reid making it clear they're not going to consider seriously the piecemeal legislation approved in the House of Representatives. And while members of the House and Senate debate, the president was in nearby Maryland talking about health care and the shutdown.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And if the speaker of the House, John Boehner, simply let the bill get on the floor for an up or down vote, every Congressman could vote their conscience. The shutdown would end today. The only thing that is keeping the government shut down, the only thing preventing people from going back to work and basic research starting back up and farmers and small business owners getting their loans, the only thing that's preventing all of that from happening right now today in the next five minutes is that speaker John Boehner won't even let the bill get a yes or no vote because he doesn't want to anger the extremists in his party.

(END VIDEO CLIP)

BLITZER: Once again, we're standing by for the White House briefing. Jay Carney, the Press Secretary, expected to start answering reporters' questions momentarily, important questions on the government shutdown, where we go from here. We'll have live coverage. That's coming up.

Clearly though, both sides have dug in. And speaking on CNN's "NEW DAY," the Iowa Republican Congressman, Steve King, gave his take on all how all of this will end.

(BEGIN VIDEO CLIP)

REP. STEVE KING (R), IOWA: There will be a snowball effect from each side that will roll here, and, at some point, one mass will get greater than the other. One size of the snowball will get greater than the other and one side or the other is going to have to move.

(END VIDEO CLIP)

BLITZER: Let's go to our Chief Congressional Correspondent Dana Bash. She's following all of the latest developments up on Capitol Hill. So, what are the latest developments? The House keeps passing these piecemeal funding measures. The Senate rejects that. Where do we go from here?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: You know, it's really unclear. The House speaker is continuing to have meetings with his colleagues. I just passed his office and saw some of his Republican members going in there to talk strategy. And the barbs are flying and they're getting a lot more personal, Wolf. Harry Reid just spoke on the Senate floor. He spoke at a press conference, really giving it to John Boehner sort of in the way you just heard the president but maybe even in more biting terms, saying that the two of them agreed that they -- that the House would bring up a bill to fund the government with no strings attached at the levels that they are right now. And he feels that John Boehner has given up on his word and so those are the kinds of things that are going back and forth.

Again, Senate Democrats are saying, we're not negotiating on the shutdown. We're not negotiating on the debt ceiling which as we've talked about so many times would be more catastrophic for the economy if the U.S. defaulted on its loans. And so, that's where we stand now as Republicans are going to continue to pass these piecemeal bills, maybe even through the weekend.

BLITZER: Through the weekend. And so, they'll pass the House. They won't go anywhere in the Senate. And they'll -- the recriminations will go back and forth.

You're going to be sitting down with Senate majority leader, Harry Reid, in a little while, right, Dana?

BASH: That's right. I'm going to be sitting down with him in his suite back there in the Capitol to talk about all of these things, to talk about maybe some -- an interesting exchange that he and I had that got a little bit of play yesterday about why they're not passing these piecemeal bills if they could help even some people, for example, the National Institutes of Health which is dealing with clinical trials. Why not do that? We'll certainly talk about that and much, much more about what he's willing to give on.

One thing I should say is that Republicans in the House do seem to be moving away from Obamacare and moving towards the other fiscal issues, the other economic issues that they were talking about, you know, two years ago and they've been talking about for years, the bigger issues, entitlement reform, tax reform, things like that.

I'm told that John Boehner brought that up or at least tried to with this -- with the president in that private meeting last night. And so, you know, the question is whether or not there is any give on those issues just to, frankly, allow some Republicans to save face, particularly on raising the debt ceiling which is difficult for many of them to do politically.

BLITZER: Dana's interview with Harry Reed, the Majority Leader, will air 3:00 p.m. Eastern. A lot more will air in "THE SITUATION ROOM" 5:00 p.m. Eastern as well. We'll stand by to hear what the majority leader has to say. Dana, thank you.

The shutdown is taking a major financial toll on everyday Americans and, in some cases, people's lives are actually at risk. New clinical trials at the National Institutes of Health, they are now on hold and that means every week 200 patients, 30 of them children, won't get the treatment they need. Our Senior Medical Correspondent Elizabeth Cohen talked to the family of a little girl who is now fighting for her life.

(BEGIN VIDEOTAPE)

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: McKenna Smith spends most of her time in this wheelchair because of a rare genetic disease. Doctors say she probably won't see her 20th birthday.

MCKENNA SMITH: Sometimes I don't even feel like I want to get up because my back is aching so bad.

COHEN: The pain she feels is caused by tumors that wrap their way around her nerves and compress her organs. There's no cure but there is hope. On Monday, McKenna and her dad, Justin, arrived here at National Institutes of Health in Bethesda, Maryland, so McKenna could start taking an experimental drug that might shrink the tumors. But with the government shutdown, including most of the NIH, the family was told there was a chance McKenna might not get the medicine.

MCKENNA SMITH: I hope it doesn't affect me or anybody else who needs this drug.

COHEN: Her father waited and worried, tweeting Wednesday morning, government shutdown needs to end. Now hurting sick people. Have the House come here to apologize to my young daughter and others.

JUSTIN SMITH: I'm very angry. Now finally, we're here and our government can't get its act together.

COHEN: They thought might have to go home to Florida without getting the medicine. But late Wednesday, a turnaround. The family was informed McKenna's treatment could go forward. McKenna's fortunate. About 200 other new patients, including some 30 children, aren't so lucky. They won't get to join NIH studies just yet. These patients are being put on hold until the government is back in business. McKenna's dad says this just isn't right and he has a message for leaders in Washington.

JUSTIN SMITH: Get your act together. This is not a game. You're not -- you can't play politics over children's and other patients' lives.

(END VIDEOTAPE)

BLITZER: What a heartbreaking story that is. Let's hope for the best.

Let's go to the White House right now. Jay Carney speaking to reporters.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY (live): The president received an update on Tropical Storm Karen which is currently located in the southeastern Gulf of Mexico. The president was briefed on efforts underway to prepare ahead of any impact from the storm as well as the extensive resources FEMA already has on hand along the Gulf Coast. FEMA, through its regional offices, has been in touch with state and local officials in the Gulf states and stands ready to assist our state and local partners as necessary.

Based on applicable legal requirements and consistent with its contingency plan, FEMA has begun to recall currently furloughed employees necessary to serve functions of the agency that protect life and property as they prepare for potential landfall for Tropical Storm Karen -- or of Tropical Storm Karen.

This morning, FEMA reactivated the hurricane liaison team that is embedded with the National Hurricane Center in Miami. The president directed his team to ensure that federal resources and personnel needed to support state and local preparation efforts are available and on the job. The president directed his team to keep him appraised as weather conditions change and as preparations continue. He urged residents in potentially affected areas to follow the instructions of local response and law enforcement officials. Julie?

UNIDENTIFIED FEMALE: Thank you. There's been a lot of focus over the last day or two on the debt ceiling both in the presidential remarks, the treasury phone call today (INAUDIBLE) lawmakers yesterday. Is that a sign that the White House now sees this government shutdown lasting to a point where it runs into the debt ceiling and that becomes just one big fiscal fight?

CARNEY: It's a sign that we are very concerned about the possibility that Republicans in the House will employ the same unfortunate tactics when it comes to their fundamental responsibility to raise the debt ceiling and make sure that the United States doesn't default, as they have employed in shutting down the government.

And as the president said today, there are many negative consequences of shutting down the government and he talked about them. Our businesses suffer, hundreds of thousands of workers live with uncertainty as to whether or not or when the next paycheck will come. And that is bad by comparison, an economic shutdown. The result of a default would be catastrophic.

And, unfortunately, we've seen from Republicans in the House where one faction of one party of one House in one branch of government is driving the train. There seems to be a willingness to engage in a strategy that threatens default and perhaps ultimately causes default. So, that's why it's important for people to understand the consequences and because we don't have a lot of time.

UNIDENTIFIED FEMALE: Coming out of the meeting last night, is the White House viewing this as the most likely scenario being that the government shutdown lasts up until I think it's October 17th when Secretary Lew says the debt ceiling --

CARNEY: We don't have a way to predict behavior among Republicans in the House that's any more sophisticated than what we're reading and seeing in your reports and the colleagues -- reports of your colleagues. There is the possibility, and we hope that it is a possibility that could come true, that Speaker Boehner puts a clean bill to fund the government on the floor today. We know with great certainty that that bill would pass with Republicans and Democrats voting yes and the government could reopen and that problem could be solved.

So, I don't have a way to predict for you how this will play out except to say that every day the Republican allow the government to stay shut down, they're causing harm to, you know, real Americans out there and real businesses that are suffering because of that decision. And, again, it's a decision that -- you know, as the president said, we have had shutdowns in the past in our country and they have always been about disputes over spending.

And what is unique about this one, of course, is that this is about an ideological crusade to sabotage a health care law that reduces the deficit. So -- in that the Republican Party no has no prospect of -- an effort that they have no prospect of succeeding in, the president will not allow the full faith in credit of the United States to be held hostage by this -- by these partisan ideological demands.

UNIDENTIFIED FEMALE: Do you also have any update for us on the president's travel to Asia? And if not, can you give us a sense of when you might have word on that?

CARNEY: I don't have an update. As I said yesterday, we are evaluating the president's trip in light of the shutdown, you know, sort of regularly and daily. And as we have new assessments to provide to you and information to provide to you, we'll do that right away. As of now, we are where we were which is that the back end stops have been canceled. But it's -- if and when more information becomes available, we'll make it available to you.

Yes?

UNIDENTIFIED FEMALE: How can the president even be contemplating still going on that trip when things are so uncertain here?

CARNEY: Well, again, if the speaker of the House allows a vote and allows the majority to speak, the government will reopen right away, and, obviously, that would affect the way we determine the presidential travel. So -- and it is absolutely the -- you know, an important aspect of the presidency that he or any of his successors be able to travel to help find markets for our American goods and find investment here in the United States from our foreign competitors and partners.

So that's what this trip is about and it would be certainly a welcome thing if the speaker were to allow a vote in the House so that a majority of the House, Democrats and Republicans, could reopen the government.

UNIDENTIFIED FEMALE: There have been reports, just today, that Speaker Boehner has said that he won't let the nation default. And I'm wondering if that's something that he expressed in the meeting last night, or if the White House has any comment or takes any insight from these reports?

CARNEY: Well, we provided a readout of the meeting, and I've noted in the past that Republican leaders have long said that they wouldn't allow a default but they allowed the flirtation with default to occur for the first time in 2011 and the consequences were serious for our economy and for the middle class. And even in the story that you cite, which, you know, reports that the speaker said something privately to Republican members, one of his spokesmen, was on the record basically reiterating the same list of demands associated with raising the debt ceiling that we've seen in the past. So, obviously, we support the idea that the debt ceiling should just be raised without drama or delay and that government ought to be reopened at current spending levels. Spending levels that nobody who understands this stuff would suggest reflect the demands of the president or of Democrats. And then we can get about the business of continuing to discuss and debate and negotiate a broader budget deal.

And the president has been willing to do that all year long. He has put on the table a budget proposal that proves that willingness and he's had conversations all year long with Republican lawmakers who have expressed an interest in finding common ground here in Washington on these very important matters. But that has to happen absent the threat of continued shutdown and absent the threat of default.

WOLF BLITZER, CNN ANCHOR: So Jay Carney, the White House press secretary, repeating what the president has said, other administration officials have said. They're willing to negotiate a lot of these issues but not within the context of raising the nation's debt ceiling, not within the context right now of getting this federal government back working. We're going to get reaction to what we just heard from Jay Carney from the president.

House members, they are reacting seriously to what the president is saying. Up next, the Florida Democrat, Debbie Wasserman Schultz, she's the chair of the DNC, I'll ask her if the president is doing enough to get the government up and running.

(COMMERCIAL BREAK)

BLITZER: President Obama was very firm today during a stop at a Maryland construction company right outside Washington, D.C., and he took square aim at House Republicans.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The worst part is, this time it's not because of a once in a lifetime recession. This isn't happening because of some financial crisis. It's happening because of a reckless Republican shutdown in Washington.

(END VIDEO CLIP)

BLITZER: Joining us now, Florida Congresswoman Debbie Wasserman Schultz. She's also the chair of the Democratic National Committee.

Thanks very much, congresswoman, for coming in.

REP. DEBBIE WASSERMAN SCHULTZ (D), DNC CHAIRWOMAN: Thank you for having me. Appreciate it.

BLITZER: So a lot of people wonder, why not accept these piecemeal House bills that are passed in the House, they go to the Senate, they die in the Senate? Why not fund, for example, children who need clinical trials, clinical work at NIH, they have cancer, why not at least allow this to go forward?

SCHULTZ: Well, Wolf, as you know, I am a cancer survivor.

BLITZER: That's why I asked you the question.

SCHULTZ: So it would be hard for me to care more about cancer survivors. The reason that we are not going to do this in piecemeal approach is that in 15 minutes we have vote on the House floor. The Republicans could call up the clean CR and we could - we have the votes. We know 20 or so of their members are willing to vote for a clean CR. We could reopen the government for all cancer patients and we could stop - they should stop allowing their Tea Party extremist members to hold the economy hostage and to hold cancer patients hostage. And this is all over - if they really care about cancer patients -

BLITZER: As a cancer survivor yourself, how difficult was it for you to vote against funding of NIH so children could get cancer treatment?

SCHULTZ: Because I care about cancer survivors, because the Affordable Care Act is so critical for cancer survivors, as of January 1st, insurance companies can't drop us or deny us coverage because of our preexisting condition. I have a small business owner who posted on my FaceBook page today that she was able to finally get insurance coverage. Before she paid $1,240 a month. When she signed up for Obamacare on Tuesday, her insurance premiums per month were cut in half.

So if the Republicans really care about cancer patients and cancer survivors, they'll reopen the government, allow those trials to continue. They'll work with us on implementing the Affordable Care Act so we can make sure that peace of mind is there for all cancer patients.

BLITZER: I raise the question because there was an exception already made for military men and women. They do get their paychecks. There was separate legislation, a piecemeal piece of legislation which the House passed, the Senate passed, the president quickly signed it into law so that men and women serving in the military would get their paychecks on time. That's important. I'm not saying that's not important. It's very important.

SCHULTZ: Right.

BLITZER: So you already made one exception. Why not make another exception for veterans so they get their benefits, for children with cancer, for the District of Columbia, all these piecemeal pieces, accept that and then continue to fight over Obamacare?

SCHULTZ: If that's the Republican -- we shouldn't be fighting over Obamacare and we're not going to allow the Republicans to hold the economy hostage, shut the government down, over whether or not we're going to implement affordable health care for all American. And, you know, what the Republicans are trying to do is cherry pick the most painful things. Politically for them, they want to cast a shroud over what they've done and the impact that it has on Americans when they've closed down the government and so we're not going to allow them to have that release.

BLITZER: Is there anything - is there anything you, as a leader of the Democratic Party, you're the chair of the Democratic National Committee, anything you could give the speaker, John Boehner, so that he would allow this clean bill to come up for an up or down vote? Is there any concession, anything you're willing to negotiate?

SCHULTZ: We should - I said on the appropriations committee, like we always do, we should negotiate over the levels of spending. Democrats have already agreed to the Republican number for the continuing spending resolution. We don't like $988 billion. We think it's much too low, it hurts people, but we'll agree because we're not engaging in my way or the highway politics to their number so we can make sure the government reopens. What we won't allow them to do is to use Obamacare as a ransom for making sure that we can get the government reopened. That is - that's on them.

BLITZER: You heard - you heard the president today say that, as difficult as this government shutdown is, if two weeks from today, if they don't raise the nation's debt ceiling, it's going to be a disaster for the overall U.S. economy.

SCHULTZ: And he's right.

BLITZER: Social Security checks are going out right now on time, but they may not go out on time if there's no increase in the debt ceiling.

SCHULTZ: Look, let me tell you -

BLITZER: Here's the question.

SCHULTZ: Sure.

BLITZER: You represent south Florida. You've got a lot of seniors in your district. Is there anything you're willing to give the Republicans on this issue to make sure that Social Security checks go out on time?

SCHULTZ: Right now we have seniors all across the country who are able to -- who would normally be able to apply for new Social Security benefits and can't because the Republicans have shut the government down. We need to pass a clean, continuing spending resolution, reopen the government. We need to make sure in two weeks - before two weeks, because that's safer, that we pay our nation's bills, raise the debt ceiling and then, like we've done for more than 200 year, Wolf, if there are problems as the Affordable Care Act is implemented, we should work together.

Of course there are going to be kinks. But let me tell you what this is really about. Greg Walden (ph), the congressman who is now the chair of the National Republican Congressional Campaign Committee, what he said the other day, this week, to donors at a luncheon, was that what this is really about is the Tea Party because -- they said they had to shut the government down because a lot of their members would lose to Tea Party candidates in a primary. That's what this really -- is really about for them.

BLITZER: All right, a lot -

SCHULTZ: (INAUDIBLE) change (ph).

BLITZER: A lot of members are saying they're going to forgo their own paychecks even while -- because 800,000 federal workers aren't going to be getting their paychecks. What about you?

SCHULTZ: I am continuing to accept my paycheck because I think that everybody in the entire government -- if you work for the federal government, we should reopen the government and everybody should be paid. Where all Democrats are for opening the government, the Republicans refuse to open it and we need to all make sure we're coming to work and doing everything we can to let all the federal employees, 800,000, get their paychecks.

BLITZER: And once -- once they come back to work, retroactively, you'll vote to approve that they get their back pay?

SCHULTZ: Yes. And I hope my Republican colleagues, who've kept them without their pay, vote to do the same.

BLITZER: Debbie Wasserman Schultz, thanks very much for joining us.

SCHULTZ: Thank you. Thanks, Wolf. Thank you.

BLITZER: I just want to point out to our viewers, later today on "Crossfire" -

SCHULTZ: Yes.

BLITZER: A very special "Crossfire," 6:30 p.m. Eastern, you will be in the "Crossfire" with Reince Priebus, the chair of the Republican National Committee. Debbie Wasserman Schultz versus Reince Priebus.

SCHULTZ: Looking forward to it.

BLITZER: I suspect you will be from the left, Reince will be from the right.

Thanks very much.

SCHULTZ: Thank you.

BLITZER: Good luck in that debate.

SCHULTZ: Thank you very much.

BLITZER: The Republican strategy going forward, working piece by piece to try to fund the government. But can that hold up under the pressure of moderate Republicans and the president? I'll get a different perspective. The Republican Congressman Tim Huelskamp, a key supporter of the current strategy, part of the powerful Tea Party supported group of legislators, he's standing by to join us right after this.

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