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Senate Republicans Meeting with Obama; GOP Taking Heat for Shutdown; Interview with Rep. Marsha Blackburn; Government Shutdown Continues; U.S. Budget Battle Politics Worries World; Florida Seniors Voice Concerns

Aired October 11, 2013 - 12:00   ET

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

SUZANNE MALVEAUX, CNN ANCHOR: You're watching AROUND THE WORLD. I'm Suzanne Malveaux.

MICHAEL HOLMES, CNN ANCHOR: And I'm Michael Holmes. Happy Friday.

It is day 11 of the partial government shutdown. Six more days and we hit that debt ceiling.

MALVEAUX: We have a couple of plans already, probably not going to get the votes needed to pass, but the tone of the conversation we think in Washington is getting just a little bit better.

HOLMES: That's something. The House may actually vote today on a Republican plan to temporarily raise the debt limit, the old can kicking, but it is something. It would increase the U.S. borrowing limit by six weeks so the government can pay its bill.

MALVEAUX: In extends the debt ceiling through November 22nd. In exchange, Democrats, including the president, would have to engage in deficit reduction talks during those six weeks. But here's the problem. President Obama has said he's not going to talk deficit reduction until Congress, both increases debt ceiling, also reopens the government. Those are the requirements.

HOLMES: Exactly. That is the kicker. Right now at the White House, the president meeting with Senate Republicans who have a competing plan, but will that work? Jim Acosta joining us now from the White House.

OK, what is the plan, the chances of success? Everybody is waiting.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Everybody is waiting, Michael and Suzanne. And I would say the chances of success are better today than they were at this time yesterday because both sides started talking last night. They put the talking points aside and actually started negotiating.

As you mentioned, Senate Republicans are here. They showed up about an hour ago. We saw Senator Ted Cruz among many other Republican senators showing up here at the front of the White House. They arrived in a couple of small buses. And they're meeting with the president now. And we'll see what comes out of that. And while there has been a lot of focus on the House side of the equation, the Senate on the Republican side also has some ideas and specifically Susan Collins of Maine. She has floated a proposal that we can show you a graphic that details some of this. Mirrors somewhat what House Republicans are saying, but also includes some other items that might be palatable to both Democrats and Republicans. So we'll have to see.

But it also talks about extending the debt ceiling for a short period of time, although her plan would extend it for six months. I would end the shutdown, of course. And then it would repeal the medical device tax that helps pay for Obamacare. That is something that the White House has been very cool to Democrats, at least in the leadership have been cool to and so that is a part of the plan that may not fly. And then this plan would also give federal agencies some flexibility on sequestration. The White House probably likes the sound of that. They would like to get rid of sequestration and negotiate that out of the budget as it stands right now.

So we'll have to see what happens coming out of this meeting. Not sure whether or not they'll come to the microphones, although when you have folks like Senator Ted Cruz inside, you have to expect the unexpected.

MALVEAUX: Absolutely, Jim. If only to be a fly on the wall during that meeting.

We saw earlier Ted Cruz at the Value Voters Summit and, of course, he was quite the popular person there at that meeting among conservatives.

ACOSTA: Right.

MALVEAUX: And he really gave a riling speech, if you will. I want you to listen to at least a part of this and we'll talk about it on the back end.

ACOSTA: Sure.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), TEXAS: So this afternoon, President Obama has invited the Senate Republicans to the White House. So after leaving here, I'm going to be going to the White House. I will make a request. If I'm never seen again, please send a search and rescue team. I very much hope tomorrow morning I don't wake up amidst the Syrian rebels.

(END VIDEO CLIP)

MALVEAUX: All right, Jim, a little bit of humor there. But, you know, obviously, he's going to be sitting across the table with the president of the United States. He's not the president's favorite person here. Tell us what you think the optics are here? What do you think is behind the scenes happening in terms of at least trying to move the ball forward a little bit here.

ACOSTA: Well, Senator Ted Cruz is probably going to have to worry about what might happen to him inside of his own caucus. He might need a search and rescue team the next time he meets with his fellow Republicans because, let's face it, a lot of people inside the GOP are really blaming Ted Cruz right now. He was very much one of the architects of this defund Obamacare strategy that resulted in the government shutting down and the nation getting very close to default. So it will be interesting to see, I think, what Ted Cruz has to say after this meeting at the White House, not so much what the president or White House officials have to say, what he has to say because as you're starting to hear Republicans perhaps on the more moderate side or perhaps the more establishment side of the GOP starting to say, hey, wait a minute, this wasn't a good idea. John McCain saying this was never going to work all along. If Ted Cruz starts to sound as if he's softening his edge a little bit, that might give you another indication that we're starting to head towards a breakthrough.

MALVEAUX: All right, Jim Acosta, thank you very much.

And, obviously, two very different plans Republicans are putting out there on the table. So far one of them has been widely rejected by the president, that he's not going to be negotiating when it comes to the budget and --

HOLMES: And the shutdown.

MALVEAUX: Exactly, and the shutdown.

HOLMES: Yes. It's going to be an interesting day ahead.

Now, earlier we heard from the head of the House Democratic caucus. He thinks House Speaker Boehner should be forced to put to a vote a clean budget bill to end the shutdown.

MALVEAUX: So right now there are enough votes actually for it to pass, 19 Republicans, 200 Democrats. They only need 217. But Boehner does not want to bring this to a vote. Republicans, they aren't yet forcing him to do that.

(BEGIN VIDEO CLIP)

REP. XAVIER BECERRA, HOUSE DEMOCRATIC CAUCUS CHAIRMAN: We're optimistic it's because we know the votes exist and at some point, if it's not through sheer force of Republicans who want at a vote, then perhaps through the sheer force of the American people talking to Republicans and Republican leadership that have resisted a clean vote on the House floor, we're going to get there and we feel confident that ultimately the public will send a clear message to all of us in Washington, D.C., get back to work.

(END VIDEO CLIP)

MALVEAUX: So as we mentioned, there is a Republican plan in the Senate. It would end the shutdown, increase the debt ceiling by six months. That is a big difference in the six weeks on the House side. But it does keep the sequester, those forced cuts, spending cuts, in place. And that is something this the Democrats deeply oppose. I want to bring Athena Jones into the discussion here on Capitol Hill. So, how are the Democrats reacting, at least to now the Senate side, the Republican plan here? Is there any more movement, any more likelihood that that could be something that the two sides could agree on?

ATHENA JONES, CNN CORRESPONDENT: Hi, Suzanne and Michael.

Well, that's another big question mark here. We've got these different competing plans. We just heard from the chairman of the House Democratic caucus that they are still focused on House Speaker John Boehner bringing to the House floor a clean spending bill. And that's not even really part of the discussion here.

What's part of the discussion right now is this bill, this idea, this plan that House Republicans presented to the president yesterday. The president -- the White House showing they were pleased with the fact that this -- these talks are going on. The rhetoric has been dialed back. But, of course, not pleased that that plan didn't reopen the government, and so that's why you have these competing plans from Senate Republicans. You have senior Senate Republicans, people like Susan Collins, John Cornyn, Lindsey Graham saying, you know, we've got to reopen the government. These people are agreeing with Senate Majority Leader Harry Reid says -- who says, let's reopen the government and then start negotiations.

So all of this is being discussed right now and worked out. There's no real plan on the floor either in the House or the Senate right now and so this is what is being discussed behind the scenes. Something that would both extend the debt ceiling, get rid of this threat of default, and also reopen the government.

MALVEAUX: And, Athena, real quickly here, any idea of a deadline or a target here or we're just kind of in this, you know, middle ground, no-man's-land?

JONES: Well, we know for instance that Senate Majority Leader Harry Reid has filed a bill that would extend a debt limit, a clean bill that would extend the debt limit for a year. And that will face a procedural vote tomorrow. So you can just tell that there's a lot going on. We don't have anything right now on the House floor schedule that indicates that there's a vote scheduled just yet on this debt limit plan that's being worked out. So it's still very much in flux right now, guys.

MALVEAUX: Wow. OK. Athena Jones, thank you very much.

We're going to be following all the developments because it is still -- we still do not know what's going to happen here. And this is days away.

HOLMES: There's a lot of -- a lot of people - a lot of people I'm hearing from are saying, put it to the vote. The votes are there. Do it. But they're not doing it. So, here we go. We continue on. We'll monitor, of course.

Coming up, Republican Congresswoman Marsha Blackburn, well, she's been standing her ground in the budget standoff. What she thinks about the government shutdown and the debt ceiling deal on the table.

MALVEAUX: She's next on AROUND THE WORLD.

(COMMERCIAL BREAK)

MALVEAUX: Day 11 of the partial government shutdown. The Republican Party appears to be getting most of the blame here. Business groups from the U.S. Chamber of Commerce to the National Retail Federation, both with close ties, of course, to the GOP, well, they're now pressing for an end to what they're calling the politics of brinksmanship.

HOLMES: Yes, Congresswoman Marsha Blackburn is vice chair of the House committee on Energy and Commerce. She joins us now from Capitol Hill.

You know, obviously, we've all seen, you know, the people are mad, but the core group behind this, the group of right wing Republicans, seem to be taking the lead here and potentially damaging more moderate elements of the party. Do you feel that the party is being hijacked or that Ted Cruz is representative of how you all feel?

REP. MARSHA BLACKBURN (R), TENNESSEE: You know, I tell you what, it's so interesting to hear the way you all frame this. My goodness. And what we know is that the American people by and large have overwhelmingly said, you've got to do something about the federal spending. $17 trillion worth of debt is not acceptable.

And bear in mind, House Republicans have done a lot to try to avoid a government shutdown. We've tried to get the Senate to work with us. We've sent them four different CRs. We're asking them to work with us on the debt ceiling. We've sent them 16 different funding bills. Please take them up. We have voted to fund most of the federal government and keep it open. And, by the way, 83 percent of the federal government is open.

But I'll tell you what you are right about. People do not like the fact that there seems to be this dissension in Washington, D.C., and they have a right to be angry about that. But I tell you what, they need to be look at Harry Reid and the president, who were saying, we'll not negotiate. You can't put certain things on the table. What we are asking them to do is to join us at that table and, out of respect for the taxpayer, let's solve this problem.

MALVEAUX: I want to move the discussion forward, if we could here, talking about reopening the government here.

BLACKBURN: Sure.

MALVEAUX: There are obviously two plans from the Republicans, one on the House side, one on the Senate side. The House side doesn't necessarily guarantee that the government would reopen during that negotiating period, that six weeks where the debt ceiling is raised.

BLACKBURN: Right.

MALVEAUX: But the Senate side actually does say that that is part of the priority of actually reopening the government. Which plan would you support? I mean what are you willing to do in order to reopen the government?

BLACKBURN: I think the House has a good plan. And we want to continue to work through these funding issues. You know we have to remember --

MALVEAUX: But the House doesn't actually reopen the government. I mean the House allows a six week extension to raise the debt ceiling.

BLACKBURN: You're correct, because you've got the CR -

MALVEAUX: So how would you - how would you reopen the government? I mean the Senate Republicans do at least have that as part of their plan.

BLACKBURN: Reopening the House - I mean reopening the federal government means the Senate has got to join the House and negotiate through this continuing resolution and through a budget. And that is going to be a priority. We cannot continue to spend money we do not have for programs we do not want and passing the bill on to our children and grandchildren. $53,000 per person is what the debt load is right now. $53,000. That is not acceptable.

Continuing to look at a growing debt and annual deficits that mount up every year. Borrowing $2 billion a day. We are saying, this is not responsible. You've got to finally get a handle on it. And we're pushing to do that.

HOLMES: Is shutting down the government and putting the debt reputation of this country at risk response? Can't these negotiations happen outside of that process, which really affects the rest of the world?

BLACKBURN: You've got two separate issues. You've got the debt ceiling issue and the House doesn't want us to have a default on the debt. I think the speaker's has been very clear about that. You've got the continuing resolution that deals with the partial government shutdown. As I said, 83 percent of the federal government is open. Do you think it is good to be out here borrowing $2 billion a day? Do you think that it's good for us to have China, Japan, OPEC out here holding our debt?

HOLMES: But kicking the debt ceiling down the road six weeks solves nothing, does it?

BLACKBURN: You know, what we have to do is get this spending under control. We don't have a revenue problem, we have a spending and priority problem. And what we in the House are saying is, look, the House controls the purse strings. You have to put these issues on the table. You cannot let the out of control spending continue. You cannot let this out of control borrowing $2 billion a day, you cannot continue to do that.

MALVEAUX: And so essentially, I mean, you're standing by the House Republican plan, which doesn't reopen the government necessarily, and to Michael's - BLACKBURN: No, we're standing (INAUDIBLE).

MALVEAUX: To Michael's point, I mean it does kick the can down, the debt ceiling debate will continue six weeks later and many of the international markets --

BLACKBURN: No, it doesn't kick the can.

MALVEAUX: The international market's already responding.

HOLMES: The International Monetary Fund is horrified at how the U.S. government is behaving.

BLACKBURN: The House - I would remind you, the House is the entity, the chamber that has put plan after plan after plan on the table and has asked the Senate and the White House to work with us. We were pleased that yesterday the White House invited some of our elected leadership down. That is a step forward. The Senate is talking with the president this morning. We would hope that Harry Reid would finally negotiate with the House and would deal with the budget issues, the funding issues. He has tried to kick these to the side every single year. We would love for them to work with us on the CR and get the government open. We are hopeful that they are going to work with us on the debt ceiling, that the president will work with us on it and make certain that there is no default.

HOLMES: Congresswoman, thanks so much. Marsha Blackburn there.

BLACKBURN: Thank you.

MALVEAUX: So clearly, they are far from agreeing here even with the Republicans, the House, the Senate Republicans, very much divided on the priorities, moving forward to make this thing -- to break this impasse.

HOLMES: And when it comes to -- we'll be talking with Richard Quest about this, too. When it comes to the world's confidence in the U.S. economy, the backbone of the world economy, they look at it going, six weeks down the road? That doesn't make anyone feel better about the system.

MALVEAUX: Yeah. It doesn't make a lot of sense.

And the debt ceiling deal, it might be in the works, but are Republicans and Democrats, are they willing to compromise? Are the Republicans willing to compromise with each other?

And, of course, as you mentioned, Michael, is the damage already done here? We're going to look at how the world views the United States move to flirt with default?

(COMMERCIAL BREAK)

MALVEAUX: Let's take a quick look at how the markets are behaving today. Stocks were flat at the open, but started trading up early here. Take a look at that. Up 93 points now, hovering around 15,000. Here's -- take a look at what happened yesterday in Washington. That's our own -- very own Richard Quest. He is moderating a CNN debate on the global economy.

The IMF managing director was there, chief White House economic adviser, also there, and some of the world's most powerful figures in global banking.

HOLMES: Now, of course, the big issue was the looming American debt limit deadline, the rest of the world watching this very closely and it has to be said with some measure of nervousness.

Richard Quest is with us now. Great job yesterday, Richard.

The people on your panel, though, they are not looking inside the borders. We were just talking with a congresswoman earlier and talking about -- do you think people in the United States are understanding, the politicians, are understanding the nervousness outside the U.S. borders?

RICHARD QUEST, CNN INTERNATIONAL'S "QUEST MEANS BUSINESS": I think that what's happening here, of course, is that the people who are at the IMF and World Bank, they are certainly understanding the nervousness, and they're certainly feeling the effects of it, and they certainly realize what could happen.

But they are absolutely powerless to do anything about it, Michael. Time and again, time and again, they are saying the U.S. needs to get its act together. The U.S. needs to put its physical House in order. The U.S. needs to raise the debt ceiling.

But time and again, they don't seem to be able to get that message across. Christine Lagarde had another go.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, IMF MANAGING DIRECTOR: It will have financial consequences that will apply not just to this country but across the globe given the strong interconnectedness across the economies not to mention the basic practicalities of how to deal with technical default, impaired/non-impaired security, given the very, very deep penetration of treasury bonds from the United States and all portfolios around the globe.

(END VIDEO CLIP)

QUEST: And that's the point, Michael and Suzanne. Everybody, every bank, every insurance company, every mutual fund, many governments, ordinary investors in their portfolios and their pensions have some form of U.S. government securities in their banks, and the ripple effects could be quite tremendous if the worse comes.

But, of course, I'm going to come back to what the markets are saying. The markets do not believe the worst will happen. That's what you saw yesterday. That's what you're seeing in the numbers today. MALVEAUX: Richard, is there damage done internationally? When you talking about investor confidence, how long is that going to take to get, you know, people to actually feel good about what the United States is doing and even if they do break the logjam?

QUEST: Well, this is a really interesting point because there is an absolute opposite effect here.

On the one hand everybody is feeling good about the United States' economy, whether it's because of shale gas oil, the resurgence in manufacturing, back on-shoring, all those sort of things.

People are feeling good about U.S. economic growth at two percent to two-point-five percent.

But then immediately on the other side, you get these issues of budget, debt, deficit, debt ceiling, and they are clouding what people here would say should otherwise be a spectacularly sunny prospect for the U.S. economy.

HOLMES: Richard, I've got to squeeze this in because I know you've got the world view.

If they kick this down the road six weeks, what is the big picture view of how the U.S. is being governed? If this happens, and it happens again next year, and it happens in two years from now, and this sort of politics impacts the running of the economy and, therefore, the world economy as well gets impacted, how does the outside world look in on how the U.S. is being governed, the system?

QUEST: It doesn't look good. The market prices it in. People yawn and sigh and say, well, we'll have to live with it.

But underneath, the damage is done and the interest rates start rising just a little bit and the confidence evaporates and people start to look elsewhere. It's very small, but it will happen over time.

HOLMES: Interesting. Richard, always great to have you on the program. Richard Quest there.

MALVEAUX: Not to mention the fact that the value of the dollar, I mean, they're looking at that as well. People hold our debt, China and Japan. They're looking at the value of the dollar. What happens to the value of the dollar?

HOLMES: Absolutely. And a lot of investors turning more to the euro. We see that happen.

MALVEAUX: All week we have been hearing what people have to say about the government shutdown.

And coming up, we're going to actually go to Florida for some messages to Washington, people, very frustrated still.

(COMMERCIAL BREAK) HOLMES: Well, it's no secret to say that a lot of you are frustrated with this partial shutdown of the federal government, and you are telling us just how upset.

MALVEAUX: Our John Zarrella, he is hearing from seniors. This is in Fort Lauderdale, Florida.

So, John, what are they saying? I mean, you know, this is going on and on. We don't see an end in sight just quite yet.

JOHN ZARRELLA, CNN CORRESPONDENT: Yeah, and they are certainly quite frustrated, Suzanne, Michael.

We are here in this community called Lauderdale West, and about 2,500 people live here. They live in single-family homes, duplexes, quads.

They'll you that they live comfortably, but they're not wealthy. and many of them are on fixed incomes and they don't want any compromise in Washington to include Social Security or Medicare. And that's one of the messages they want out there.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Exactly. People here living in this community are on a fixed income, a lot on social security.

Interest rates are so low, it's ridiculous. You can't make any money on whatever money you do have, and it's just -- it's wrong. It's absolutely wrong.

UNIDENTIFIED MALE: I would like to tell them to go down to Washington and do your job the way we want you to do it. Do it for the country, not for your pockets.

UNIDENTIFIED MALE: The stock market's gone down. I've lost thousands of dollars. It's gone down over 500 points. And that will hurt many people and I don't know what will happen in the future.

(END VIDEO CLIP)

ZARRELLA: And that's one of the big concerns, too, because a lot of these folks for 30, 40, 50 years, you know, have stock portfolios that they have done real well with lately, but that's their nest egg.

And when they see things in Washington impacting the stock market, it certainly worries them, certainly the people here in this Lauderdale West community.