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White House Briefing with Jay Carney; Debt Deal Offer From Speaker Not Yet Received; Tea Party Driving Decision Making; Carney States Again That They Aren't Asking for Anything; Debt Deal Offer; GOP Offers Temporary Debut Limit Fix

Aired October 10, 2013 - 13:00   ET

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

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: So, that's our initial response.

UNIDENTIFIED MALE: Would the president -- would the president sign a short term --

CARNEY: Well, let's say this. We haven't -- we have seen nothing, obviously no proposal, from House Republicans yet. There's no bill to look at. As I just said, the president strongly prefers a longer-term resolution so that we can get away from this periodic brinksmanship. I mean, if there's a recognition that we can't default, why is there an insistence or the implication that you keep the nuclear weapon in your back pocket to threaten default in the near term? It doesn't make a lot of sense to us.

Having said that, you know, we'll see what the House Republicans propose. We'll see what they're able to pass and consider it then. The president said the other day that, in the hypothetical, he would be willing to do this because he thinks that we need to avoid default. But he's not -- you know, he's been very clear. He will not pay ransom in exchange for the Republicans and the House doing their job in exchange for -- pay ransom to the Tea Party Republicans to allow Congress to do its job which is to fund government and ensure that we do not default. And that position has been steady and clear throughout this period.

UNIDENTIFIED MALE: Why would not that same argument apply during a short-term extension of the debt ceiling where the president agrees to hold negotiations (INAUDIBLE) --

CARNEY: Well, yes, we -- you -- again, you keep adding things that we don't -- we haven't seen a bill yet. We haven't seen what the House -- what the speaker's going to put forward. We don't know what he could pass. Now, what the speaker said today is that he thinks there ought to be negotiations and what the other leader said is that there ought to be negotiations over the budget priorities. The president's been saying that all year long. House Republicans who rejected on 19 different occasions the opportunity to appoint conferees to match the Senate conferees so that they could try to reconcile the two budgets they passed. But why would it be the right thing to do to keep punishing the American people in order to talk about our budget priorities? That's what they're doing by keeping the government shut down. Why would it be right thing to do to do continued arm to the American economy? I didn't hear a rationale for why that is acceptable or OK and I don't think any of you did either.

UNIDENTIFIED MALE: Must the condition of extending the debt ceiling also include reopening the government?

CARNEY: Again, we -- you're asking me a hypothetical. We've said very clearly --

UNIDENTIFIED MALE: Not a hypothetical. Quick, what is your position? I'm not asking you to react to Boehner. I'm just asking if --

CARNEY: We've said all along that they should turn on the lights and open the government. They should raise the debt ceiling. You know, they should do both. So, if they -- I think the president said the other day that if they were to send them a clean debt ceiling extension, no partisan strings attached, he would sign it. But we don't know that that's what we're going to get here. If they send him a -- if the House passes, as they could right now, the bill that passed the Senate to reopen the government at funding levels Republicans set and celebrated, he would sign it.

What we haven't heard is any -- we got into this mess because Tea Party Republicans were insisting that they could use the shutdown of the government and threat of default to defund Obamacare or delay Obamacare, basically prevent millions of Americans from getting access to affordable insurance. It was a fool's errant and the people who are paying the price are the hard working Americans across this country who suffer when the government is shut down and who would suffer mightily if Republicans who seem to think default is a game to get their way.

I mean, I think, you know, we have up here -- look, these are the elected representatives sent to Washington to fulfill the responsibilities as members of Congress. Representative Ted Yoho just a few days -- just yesterday said, someone needs to convince me why we need to raise the debt ceiling. Warren Buffett, who knows a thing or two about the financial markets and the economy said, it should be like a nuclear bomb, basically too horrible to use. The head of PIMCO says, default would be a tragedy for America.

On the other hand, Senator Richard Burr, Republican senator says default is manageable for some time. The experts, macroeconomic advisors, say, default would lead to 14 percent unemployment and the worst recession since World War II. RBC capital market says, crossing the debt ceiling would be catastrophic. Senator Rand Paul, Republican, says, if you don't raise the debt ceiling, we balance the budget, the world is going to end? Well, Ben Bernanke, the chairman of the fed, says, default would be very, very costly to our economy. Martin Feldstein, Reagan's CEA chair, says, the debt ceiling is a dangerous thing to play with.

UNIDENTIFIED MALE: Right.

CARNEY: So, this -- these are the voices that have been driving this crisis and it should end. And to the extent that there's an implication in what we heard from House Republican leaders today that they are coming to see the light. That we need to end this crisis, this manufactured crisis. That would be a good thing. But the president's position that he's not going to pay ransom to the Tea Party so that Congress can do its job remains what it was.

UNIDENTIFIED MALE: Obamacare's not part of the demand. Then you can't -- are you saying then you -- the president can negotiate?

CARNEY: Jim, I'm not sure how you can reach that conclusion. The presidents not going to pay ransom. I'm saying that this is how we got here. OK? This is -- this was the logic that led to the shutdown of the government and the logic that has led to us getting perilously close to the point beyond which the treasury can no longer use borrowing authority. And it's time for rational -- a rational approach to be taken by leaders in Congress towards these serious challenges, because they're -- we should -- as the president said all along, we should sit down and work out our differences, find common ground on our budget priorities.

The president has been meeting with Republicans, talking to Republicans all year long in search of that compromise. And we should, you know, put everything on the table. And the president has made that clear. It's exemplified in the budget proposal he put forward. But what we cannot do is continue to punish the American people, which is what Tea Party Republicans are doing, in the name of -- you know, trying to extract partisan demands that they couldn't get through the normal legislative process, and whether that's an attempt to defund, repeal or delay the Affordable Care Act or partisan demand, maybe tax breaks for millionaires or, you know, anything else they could attach for it. That's just -- it's -- who benefits from that approach? The American people don't benefit and the economy doesn't benefit. And that's why the president has taken the position that he's taken.

UNIDENTIFIED MALE: So, you have Republicans coming to the White House this afternoon. You've repeatedly said the administration isn't going to negotiate over the debt ceiling or the government shutdown. But Republicans now say think have made this suggestion, this offer of a short-term increase in the debt limit and that if the president rejects that offer, we're back to square one. What do you expect from today's meeting if not some kind of discussion about --

CARNEY: The president has always said he is willing to talk about anything. What he will not do is pay a ransom, negotiate over their demands in exchange for Congress doing its fundamental job, paying our bills, funding our government. And, yes, he looks -- you know, he looks forward to having a subset of House Republicans here. We -- our view, and the reason why we invited all members of Congress to these meetings, is that it's often the case that he or others meet with leaders of the House and then find out that the decisions are being driven by other members of the House. So, it might have been useful to hear from other members and for them to hear from him.

Be that as it may, he looks forward to meeting and he looks forward to hearing more from the speaker and the other leaders about this proposal that they talked about today.

But what we haven't seen yet is a bill. We haven't -- what we haven't seen yet is whether or not any bill that they would write could pass. And you know, we'll look forward to having that discussion. The principle remains throughout which is the American people should not be punished so that, you know, Republican leaders can save face. The American people should not be -- have to see their economy harmed, and economic growth slowed and job creation slowed and interest rates spike because the Tea Party insists on getting what it could not get through normal legislative means or through the ballot box.

UNIDENTIFIED MALE: Yesterday you expressed disappointment that not all of the Republicans -- members of the Republican caucus were coming to the White House today. What do you lose from them not being here? Were you hoping to see divisions in the Republican Party?

CARNEY: No, no. I --

UNIDENTIFIED MALE: (INAUDIBLE.)

(CROSSTALK)

CARNEY: As I -- as I just was saying, I think that we -- the president invited all members of Congress because he believes that all of them shoulder the responsibility invested in them when they swore -- were sworn into office to uphold their responsibilities and that includes making sure the government is open and functioning and funded and making sure that the United States continues to pay its bills on time and maintains its full faith in credit.

When it comes specifically to the House of Representatives and the House Republican conference, I think the president extended the invitation to all members, because we have seen that it is a very diverse and fractious conference and that discussions with the leaders have not always -- well, it is -- has become apparent, and I think -- and many colleagues and you, yourselves, have reported on it, that a subsection of the House Republican conference has been driving decision making by the House Republican leadership at least for the past several weeks, and that is, in part, why we have a shutdown.

The speaker of the House took an approach to the funding of the government and passing a C.R. that was acceptable, even though it was Republican spending levels, acceptable to the Democratic leader and the Senate, acceptable to the Democratic leader in the House, and he had to abandon that approach or chose to abandon that approach under pressure from the Tea Party. So, in our view, it would have been useful to hear to hear from them as well and to speak to them as well, directly.

Yes, Jim.

UNIDENTIFIED MALE: Jay, if a short-term debt ceiling bill comes to the president's desk, and it does not come or carry with it a continuing resolution to reopen the government, the president would at the very least sign that bill even though you haven't seen it, clean debt ceiling bill to raise the nation's debt limit?

CARNEY: Again, I think, as I've stated at the top, the president believes that if there is a recognition that we cannot default, that we must ensure that we can continue to pay our bills and, therefore, the Congress must raise the debt ceiling, that they ought to do it for longer than a few weeks. But if clean debt limit bill is passed he would likely sign it. Again, we'd have to see it. We're speaking of a bill that does not, at this point, exist. And it's not at all clear based on what the speaker said that that's what we're going to see.

The point is they don't get anything in exchange for holding the economy hostage. They don't get anything in exchange for doing continued harm to the American people. They ought to, and they could -- you know, the meeting, I think, would go very well indeed if, prior to arriving here, the House Republicans put on the floor the continuing resolution already passed by the Senate, passed it in the House, and then we would know that the government can reopen and that all of the various problems caused by the shutdown could end today.

UNIDENTIFIED MALE: But given the fact that you might not get everything that you want here --

CARNEY: Here's the thing. We're not asking for anything. We're asking for the government to be open at spending levels set by Republicans and for Congress, you know, at the (INAUDIBLE) of the Tea Party not to default on the United -- on the United States full faith in credit for the first time in history. That's not -- we're not asking for concessions. That's just asking for Congress to be responsible.

UNIDENTIFIED MALE: But I guess my point is that all you may be able to get right now is the clean debt ceiling increase for the time being to get default --

CARNEY: Again, I think I said the answer is, you know, the president has always said he would sign a clean debt limit increase. It is far preferable that it be longer. And what I said yesterday holds true today, short term, medium term, long term, it will always be the case when it is Congress' responsibility, again, to ensure that our bills be paid, that he will not pay a ransom, that he will not allow the Tea Party to hold the American people hostage in exchange for doing its job.

UNIDENTIFIED MALE: But we may have a scenario where the debt ceiling is raised, default is averted, --

CARNEY: Yes.

UNIDENTIFIED MALE: But we may still be in the position of having a government shutdown ongoing.

CARNEY: Well, if that were to happen, what would the Republican rationale for that be? The continued punishment of the American people and the continued harm that would do to the American economy. Why?

UNIDENTIFIED MALE: But --

CARNEY: Why? Just open the government at levels set by the Republicans and then let's talk about our budget priorities, then let's talk about solving these issues for the longer term.

UNIDENTIFIED MALE: One (INAUDIBLE) at a time. He can take one bite at a time here?

CARNEY: Again, I've been clear in answering the question.

UNIDENTIFIED MALE: Can I just ask a very straightforward question?

CARNEY: I'll come back to you, Jim. Go ahead, John, straightforward.

UNIDENTIFIED MALE: Straightforward. Is the president willing to engage in budget negotiations with the Republicans if the government is still shut down?

CARNEY: I think the president's been very clear on that. If the -- if the -- if the Republicans think, if the Tea Party that is driving the Republican decision making thinks that they extract concessions by punishing the American people, by punishing the American economy in order to get what they want, the answer is no. The president is meeting with House Republicans today. So, the idea that this is about having a conversation, well they're having a conversation today.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: That they can extract concessions by punishing the American people, by punishing the American economy in order to get what they want, the answer is no. The president is meeting with House Republicans today. So the idea that this is about having a conversation, well, they're having a conversation today. But they will not, whether it's Obamacare or tax breaks for millionaires or any other of their possible demands, they're not going to get it in exchange for funding the government at -- in a CR that was set by Republicans.

Remember, the whole point of a short-term CR, as proposed by the speaker, originally, basically a clean CR set at existing levels, was to allow for time to have budget negotiation. So what's the rational for refusing to do that in order to have budget negotiations? There is none. The only -- it's spite. It's -- it's deliberate harm to average folks out there, some of whom are directly affected because they can't go to work, others who are affected because they can't get a small business loan or, you know, they can't get access to services that are important to them. There is macro-economic harm done the longer the government is shut down and there's no - there's no logical rational for it. And I would say that they're doing harm to the American people, they're doing harm to the American economy and by all accounts they're doing harm to the Republican Party, which is bad for America. We need two strong parties that can work together and not, you know, not be in a situation where one faction of one house of one branch of government is, you know, forcing shutdowns or default.

JONATHAN KARL, ABC NEWS: So that was a very long answer to a yes or no question. I just want to be sure I had it right. The president will not engage in budget negotiations with the Republicans until the government is reopened, is that his position on this?

CARNEY: Our position is clear. They ought to turn on the lights, they ought to pay our bills. The president has been ready all year long. I mean the fundamental question -

KARL: (INAUDIBLE).

CARNEY: The fundamental question for Republicans is, why is the price of negotiations the president has been willing to engage in all year long doing harm to the American people and doing harm to the American economy and threatening the global economy? It's preposterous.

KARL: Because the - because the Republicans have proposed this six- month extension because they -

CARNEY: Weeks. Weeks.

KARL: I mean, six - I'm sorry, six weeks. Don't get excited, six week extension to give time for these budget negotiations they think will happen while the government remains shutdown. Are they diluting themselves?

CARNEY: Just think about the proposition here, Jon. You're suggesting that --

KARL: No, I'm not suggesting anything. I'm asking you to respond to what they -

CARNEY: No, no. No, I understand, but, again, since we've seen nothing from the Republicans yet beyond a very brief press conference, we don't know what they're actually going to propose or what they may try to get passed in the House. But the suggestion, in your question, is the Republicans would think that we can resolve all of our significant differences over the budget, and that while we work that out, we should do sustained harm to the American economy and sustained harm to the American people. And their rational for that would be what?

KARL: To put pressure on you guys.

CARNEY: So to - OK. I love the crystallization here.

KARL: Yes.

CARNEY: That's right. They want to use harm -- I'm not -- obviously not suggesting that this is your view. I'm saying that the logic here is that they would harm the American economy and American people in order to try to extract concessions from the president and their counterparts on Capitol Hill. That's an unsustainably bad proposition. It's bad economics. It's bad governance. It's bad politics.

KARL: Well, the president would sign a clean, truly clean, six-week extension of the debt ceiling, he's going to need a clean CR before he will sit down and engage in negotiations of a longer budget?

CARNEY: Again, I -- to continue to talk about ifs and buts, as the speaker said, doesn't get us anywhere. We haven't seen anything from the House Republicans yet. The president believes they ought to pay our bills. The president believes they ought to turn on the lights. And the president has always been willing to negotiate and work out and find common ground with Republicans over our long-term budget priorities. But he's not - you know, again, going back to it, like the assertion that they're going to use punishing the American people as leverage, doing harm to the American economy as leverage, that's unacceptable to the president, and I think he's made that clear.

WOLF BLITZER, CNN ANCHOR: All right, so there you have it, the White House press secretary, Jay Carney, reacting to the House speaker, John Boehner's, earlier proposal. All of this very interesting. House Republicans about to enter the White House now for a separate meeting with the president of the United States. John Boehner, earlier in the day, proposed a six-week extension, raising the debt ceiling. In exchange, the government would still remain shut down but a dialogue presumably would continue, a condition laid out by the House speaker and the majority whip, Kevin McCarthy, that House/Senate conferees would begin to discuss the Budget, even while the government remained partially shut down.

You just heard Jay Carney say, while extending the debt ceiling for six weeks is at least an encouraging sign, that's a direct quote, the president doesn't want to engage in that kind of House/Senate conference dialogue while the government remains partially shut down.

Let's get some analysis of what we just heard. Our senior White House correspondent Brianna Keilar is standing by, our chief congressional correspondent Dana Bash, also our chief political analyst Gloria Borger.

I think - I think, Brianna, that he was precise there. They want a -- what they call a clean piece of legislation extending the debt ceiling and reopening the government. And then after all of that is approved, then they can begin the House/Senate conference committee report dialogue on whatever they want. But that's not exactly what I heard from Kevin McCarthy, the House majority whip.

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, that seems to be what he's saying, Wolf. It's a little confusing. What we do know is clear, is that there's agreement here on a six-week extension of the debt ceiling. But when it comes to funding the government, it does sort of sound like Jay Carney's is saying they're not going to sit down for those negotiations, which essentially they've agreed to have because of this agreement on the debt ceiling for six weeks.

So I do think it's a little unclear in that - in that regard. But what the White House has always kind of been going for, I think, is a short-term funding bill for the government. I don't think they expected that they were going to get a long-term one. And it seems like they're sort of lobbying here to get a short-term funding of the government. What's sort of the, I think, confusing part is that the White House may say that a funding bill is clean, but it could also have some sort of conditions on it. Maybe we've seen this in the past where perhaps there's something else, maybe a negotiation on it, but at this point I think it's actually - it's not quite as clear as the debt ceiling portion of this.

BLITZER: Yes. Let's go to Dana Bash. She listened very closely to what the House speaker said, what Kevin McCarthy, the majority whip, the majority leader Eric Cantor said. What did you think about the reaction, the official reaction from the White House to what we heard earlier in the day, this idea of having a short-term extension of the debt ceiling for six weeks and the conditions that were attached to that?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: He was very -- Jay Carny was very clearly open to the idea of this short-term debt ceiling bill to increase the debt ceiling for six weeks. Where he was -- looked like very sort of intentionally squishy, to use a technical term, was on the whole issue of the government shutdown. We heard from Republican leaders, we were talking to Republican sources, and they made clear that their position is that this whole debt ceiling idea is predicated on the fact that they will then immediately begin to sit down and talk. And among the first things that they will do in those bipartisan negotiations is figure out a way to reopen the government. So when it comes to the government shutdown, we still might be in a chicken or an egg situation, which is going to come first. So those things have to be worked out, Wolf.

As Jay Carney was speaking, I spoke to a Republican leadership source who's trying to kind of clarify what exactly this so-called clean debt ceiling bill would be. And I am told that there is -- when you're looking at the actual legislative language, that there is going to be one condition, and that condition will be to take what are known as extraordinary measures away from the Treasury secretary in order to do that - or the reason that they would do that is, Republicans say, to make sure that the Treasury Department can't monkey around with that date. To make it very clear that the date would be November 22nd. That is when the country would default and that is the date that negotiators would be working up against to find a way to deal with some of the things that Republicans and Democrats have been talking about for a very long time, having to do with entitlements, tax reform, so on and so forth, dealing with the debt and deficit.

So the extraordinary measures, taking that power away from the Treasury secretary, that, I'm told, would be in legislative language. The other demands would be outside and it would - it sounds like it would be more of a gentleman's agreement to sit down with budget conferees, to deal with the broader issues and, of course, as I said, starting with negotiating to reopen the government.

BLITZER: Yes, let's see if the administration would accept that condition of extraordinary measures being taken away from the Treasury secretary. That sounds like a significant concession there.

Gloria Borger is listening carefully. Do you understand what's going on right now because it sounds a bit murky right now, but maybe that's deliberate.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Look, it's clear that what everybody agrees on, as Dana was just saying, is that they want -- they don't want to collide with the debt ceiling. And the White House would like it longer than six weeks. Republicans are saying six weeks.

I think Jay Carney just threw the proverbial fly in the ointment here, tough, by saying, wait a minute, until we agree that the government's going to open, we're not going to negotiate on budget issues. And that's clearly what the president is going to say to Republicans when he meets with them. It's like, OK, this is a fig leaf for you, we understand that, OK, but you need to find out a way to get out of the mess we are in and we're willing to give you this six-week thing. But I need to fix the other part of the problem, which by the way the president will say you created, so we need to figure out a way to open the government because we are not talking about any budget issues until this entire thing is solved.

Whether that will fly with the hell no caucus among House Republicans really remains to be seen. Lots of Democrats don't like this idea because they think the president's actually throwing out too much of an olive branch. They don't want to go back at this and be here for Thanksgiving. So, it is murky, Wolf, but you see a negotiation starting. But it's very clear the White House says, you've got to reopen the government. This is crazy.

BLITZER: Yes, they still have a long ways to go, even though Jay Carny said at least this is an encouraging sign, referring to the willingness to extend the debt ceiling for six weeks.

BORGER: Right.

BLITZER: And we'll see where we go from here.

All right, we're going to continue the breaking news coverage. The White House, they're getting ready to receive the Republican congressional leadership. The president is going to be meeting with all of the congressional -- Republican congressional leaders. Yesterday he met with the Democratic leaders, all the Democrats in the House, I should say. Chris Van Hollen, one of those Democrats, the ranking member of the House Budget Committee, standing by live. We'll discuss what's going on.

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