Return to Transcripts main page

The Situation Room

Interview With Congressman Peter King; Government Shutdown Day 11; Coffee & Crisis

Aired October 11, 2013 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: We're keeping you up to the minute on a potential deal and whether it's enough to defuse this crisis.

Plus, a shutdown doomsday scenario that drove the D.C. mayor to confront the Senate's top Democrat. It was very tense and very public.

And the CEO of Starbucks is trying to get customers fired up about the shutdown and America's debt. It may help the country. Could it hurt, though, his brand?

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

Personal meetings, private phone conversations -- the lines of communication between the president and the Republicans in Congress seem to be open right now, but that does not necessarily mean they're any closer to finalizing a deal to avoid defaulting on America's debt, a nightmare that could begin in only six days.

The big sticking point right now? A new Republican offer doesn't resolve the other crisis hanging over Washington, the continuing partial government shutdown.

Our chief congressional correspondent, Dana Bash, is standing by, but let's go to our senior White House correspondent, Jim Acosta, first.

Jim, what is the White House saying about the latest possible deal?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, the president, Wolf, and House Speaker John Boehner did talks earlier this afternoon, but the president essentially rejected what the House Republicans are proposing at this point and that is a raise in the nation's debt ceiling that is tied to budget negotiation.

The president doesn't want to do that. According to White House Press Secretary Jay Carney, that would be paying a ransom in exchange for not going into default. The White House is continuing to drive a pretty hard bargain at this point. The president wants both clean bills that would reopen the government and raise the nation's debt ceiling.

Here is how White House Press Secretary Jay Carney put it earlier this afternoon.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: His position, that it's unacceptable to demand a ransom from the American people in return for not defaulting, it's not going to change, and it's not going to change now and it's not going to change in six weeks, and it's not going to change at any point during his presidency.

ACOSTA: You're waiting for the white flag? You're waiting for total capitulation?

CARNEY: You want to turn this into a game of winners and losers. And the president made clear the other day that in a situation where the government is shut down and, you know, one party in Congress is threatening default, and some of their loudest voices are encouraging default, nobody wins.

(END VIDEO CLIP)

ACOSTA: Now, despite that gloomy assessment, Jay Carney did say that the White House does feel that talks are moving in the right direction, that they have been productive, that they are making progress, when you consider where they were just a few days ago, but Wolf, one very important sticking point that came up during that briefing, Jay Carney told reporters that the president has a lot of concerns about raising the nation's debt ceiling for six weeks.

We have heard that six-week number talked about for the last several days. The president is concerned that that would simply raise the nation's debt ceiling to the point where the Christmas and holiday season would start, right around Thanksgiving. He doesn't want the nation again edging closer towards the prospect of going into default right during that very critical time for the nation's economy. We may be back to the negotiating table when it comes to how far and how long that debt ceiling will have to be raised.

One other thing though that I think should be some cause for optimism, if you listen to all the assessments from Senate Republicans and from White House officials as to that conversation that happened earlier today, Wolf, they were talking about larger budget issues. It sounds as if the president is trying to entice Republicans to say, go along with me, give me these clean bills to reopen the government and raise the nation's debt ceiling, and we will talk about all of these other things that you want to talk about. We will have to wait and see.

BLITZER: Jim Acosta over at the White House, thanks very much. It was interesting they waited until 4:00 for that White House briefing after the stock markets closed, because it was a gloomy assessment right there, even though the briefing had originally been scheduled for 1:00 p.m.

(CROSSTALK)

BLITZER: Jim Acosta, thank you. Let's go to our chief congressional correspondent, Dana Bash. She's watching the latest developments up on Capitol Hill.

Any movement, any positive movement? Anything you're seeing happening right now, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: People are still huddled inside the office of the House speaker, John Boehner, which again is just right down the hall from where I am here in the Capitol.

Members of the Republican parties are coming in, from the House, from the Senate, trying to figure out if there is something that can be done to negotiate with the White House. But, even as that's happening, Wolf, something else is happening on the Senate side. It's with some of John Boehner's fellow Republicans. They're growing impatient.

I have talked to several of them who have said, look, we are going to give our friend John, meaning John Boehner, some time to try to work this out, to try to do it first in the House, but they're already saying that if things don't see fruition in the next 24 hours or so, that senators are likely to move forward more aggressively, more openly, on trying to get something passed in the Senate, which is much more likely and doable because if you have Senate Republicans who are willing to work with Democrats, they can pass something there.

In fact, I was told that just this afternoon there was a group of about 10 bipartisan senators led by Republican Susan Collins, Democrat Joe Manchin who met, already trying to figure out if they can have something ready to go on the Senate floor soon, like in the next couple of days.

That is going on. The other thing I wanted to mention is, it's not just impatience primarily with reopening the government, but it's also just what you heard Jim report from the White House, a lot of concern about just doing that six-week debt ceiling increase, a lot of Republicans, these are Republicans saying maybe we should go for something a lot longer, but, of course, they too will want something from it.

The question is whether or not whatever conditions they ask for, the president will go for. But there were a lot of discussions about some give-and-take inside the meeting at the White House, I'm told, with Senate Republicans and the president.

BLITZER: Yes, I think if it would have been just between the president and the Senate, including the Republicans, I think you would have had a deal a long time ago. A lot of House Republicans though are not very happy with what's going on. Dana, thanks very much.

Still ahead, the nation's capital, that's right, Washington D.C., could run out of the cash as the shutdown drags on. The angry Democratic mayor of Washington is confronting fellow Democrats in the Senate, including Majority Leader Harry Reid.

And I will ask Congressman Peter King about his latest jab at Senator and fellow Republican Ted Cruz.

You know what? Tweet us your suggested questions for Congressman King about the shutdown, his party's divisions. Don't forget to use the hashtag SITROOM.

(COMMERCIAL BREAK)

BLITZER: Guess who else is about to slammed by the government shutdown? D.C. lottery winners. We're now hearing that no winning tickets will be cashed starting tomorrow. "The Washington Post" reports that tickets will still be told, winners will eventually get their prizes, but only after the shutdown ends. More on the shutdown pain right here in the nation's capital and beyond right after this.

(COMMERCIAL BREAK)

BLITZER: How embarrassing is this?

Washington, D.C., the nation's capital, the heart of the American democracy, is getting bitten hard by the partial government shutdown. On top of all of the furloughs and the closures, the city's cash supply is dwindling. Public services may be at risk. And the mayor is publicly pleading for help.

Brian Todd has been looking into this story for us.

Brian, what is going on?

BRIAN TODD, CNN CORRESPONDENT: He's pleading and he's publicly angry. Mayor Vincent Gray says, as you mentioned, he's running out of money to keep the city functioning. He is furious with congressional leaders for not giving D.C. access to hundreds of millions of dollars to do that. He's calling them irresponsible. It's leaders of his own party who he's the most frustrated with.

(BEGIN VIDEOTAPE)

TODD (voice-over): You're looking at one ticked-off mayor, so angry he's willing to confront a top leader from his own party in public.

VINCENT GRAY (D), MAYOR OF WASHINGTON, D.C.: We are not a (INAUDIBLE) of the government. We have our own money.

(CROSSTALK)

GRAY: We're simply trying to be able to spend our own money.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I'm on your side. Don't screw it up. OK? I'm on your side.

TODD: It's not clear what Senate Majority Leader Harry Reid meant by "Don't screw it up," but it's very clear how D.C. Mayor Vincent Gray feels.

GRAY: We're being treated like second-class citizens, almost as if we are children.

TODD: The mayor of the nation's capital is in a unique situation. D.C. raises most of its own money, but Gray can't spend a time without Congress agreeing. And during the shutdown, Congress is not approving even routine spending. The city has a contingency fund that Gray says is down to about $100 million.

(on camera): And how much does it cost you to run the city every day?

GRAY: Twenty million dollars a day to run the city.

TODD (voice-over): Gray warns that if he runs out of money, bus and subway service could be disrupted and...

GRAY: What could shut down our clinics in the city? What could shut down our aspects of our public safety procedures here in the District of Columbia? We could have schools shut down.

TODD: And just wait. For those who think Washington already stinks...

(on camera): When the federal government couldn't pay for trash to be picked up around national landmarks and federal buildings because of the shutdown, Mayor Gray ordered now the city's garbage trucks to pick it up. Now the mayor is worried that he's not going to be able to pay these guys to pick up trash along city residents' streets. That means this shutdown could reach a whole new level on city streets where a lot of politicians happen to live. What kind of a level? These guys pick up about 350 tons of trash a day.

GRAY: The rodent problem, the vermin problem the would be connected with it. There's a practical health issue for the people of the city.

TODD (voice-over): And, strangely, it's Republicans in Congress who are Gray's best allies. They're ready to make exceptions, including one to allow D.C. to spend its money. Democrats say, reopen the entire government, not just parts of it.

REID: What right do they have to pick and choose what part of government is going to be funded?

(END VIDEOTAPE)

TODD: So how is Harry Reid responding to Mayor's Gray criticism of him for not making an exception for D.C.? We have tried, but have not been able to get comment from Reid's office. We have not been able to get clarification from them on what Harry Reid meant when he said, "Don't screw it up" -- Wolf.

BLITZER: He said that directly to Mayor Vincent Gray.

TODD: He did. Yes, he did.

BLITZER: They could pass what already has passed the House, pass it in the Senate and D.C. would then be fine, but that's not happening.

Potentially, there's an even homeland security problem that could emerge if they don't let the money flow to D.C.

TODD: That's right. Mayor Gray is warning about that because his city gets grants for homeland security, but they also administer grants to neighboring counties in Maryland and Virginia, like Fairfax, Montgomery County, to spend on firefighters and people who respond to terrorist attacks.

He says while the government is shut down, they can't give those grants out to those neighboring counties, so there's a vulnerability.

BLITZER: Certainly is. I hope they resolve that and resolve it quickly.

Brian, thanks very much.

People all across the United States are angry about this government shutdown, but some have bigger platforms to vent, more power to influence the debate.

The CEO of Starbucks certainly falls into that category.

CNN's Poppy Harlow spoke with him.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNN CORRESPONDENT (voice-over): The place where you may go to grab your morning joe has become an activist hub of sorts.

HOWARD SCHULTZ, CEO, STARBUCKS: Open the government immediately. It's just insanity

HARLOW: Howard Schultz, the CEO behind the ubiquitous green siren, wants you to do more than buy his coffee. He wants you to sign a petition to Washington, demanding three things, open the government, pay our debt and pass a long-term budget deal.

SCHULTZ: We must provide a level of pressure and concern delivered to Washington, so they understand that the American people are watching, the American people are serious.

HARLOW: Starbucks' footprint is, well, enormous, with 45 million customers a week in the U.S. This mega-petition is Schultz's most recent jump into hot-button politics.

SCHULTZ: We too have to do something. We can't wait for Washington.

HARLOW: In 2011, Schultz, a registered Democrat, called for an end to all political donations until Washington stopped the partisan gridlock.

SCHULTZ: It seems what people are interested in reelection, and that reelection is -- the lifeblood of it is fund-raising.

HARLOW: He's spoken out supporting same-sex marriage.

SCHULTZ: We employ over 200,000 people in this company and we want to embrace diversity of all kinds.

HARLOW: Last month he joined the divisive gun debate.

SCHULTZ: Guns should not be part of the Starbucks experience.

HARLOW: But taking a political stand doesn't appear be hurting the brand. Starbucks stock has been on a tear, nearly doubling in the past two years.

(on camera): Does this help him sell more coffee?

PETER SHANKMAN, BRANDING AND SOCIAL MEDIA CONSULTANT: It interjects the name Starbucks into the conversation that otherwise would not, so, yes, there's no downside in that regard. The shutdown is affecting everyone. It does make sense in a way. If the CEO of an airline did this, they could potentially lose routes. They have to appease the government. They have to make the government happy. You're not going to have a coffee tariff against Starbucks because he's outspoken. He really has nothing to lose in this regard.

HARLOW: Is there a risk to being so outspoken on so many different issues?

SHANKMAN: There is. You can alienate a bigger and big audience every time you say something. He's making his statements known. Any CEO has the right to do that. Most of them choose not to, to avoid the controversy. He likes to stir it up a little bit.

HARLOW: Stirring it up or brewing debate, Schultz is doing much more these days than just selling coffee.

Poppy Harlow, CNN, New York.

(END VIDEOTAPE)

BLITZER: We have late word that so far more than a million people have signed the Starbucks petition.

Just ahead, I will speak live with Congressman Peter King. We will talk about the shutdown. Could it cost Republicans control of the House of Representatives?

You know what? Tweet us your suggested questions for Congressman King. Don't forget to use the hashtag SITROOM.

And a captain from the hit show "Deadliest Catch" tells Congress the shutdown is killing his business.

(COMMERCIAL BREAK)

BLITZER: A desperate appeal to Congress today by a captain featured on the hit TV show "Deadliest Catch." The Alaska crabbing season begins next week, but get this. No crabbing permits are being granted because of the government shutdown.

(BEGIN VIDEO CLIP)

KEITH COLBURN, "DEADLIEST CATCH": On behalf of all fisherman, I'm asking Congress to end the shutdown now. I'm a small businessman in a big ocean with big bills. I need to go fishing.

(END VIDEO CLIP)

BLITZER: Up next, much more on the shutdown, including my interview with the House Republican Peter King.

(COMMERCIAL BREAK)

BLITZER: Let's continue our coverage of the government shutdown right now.

We are joined by someone who has now become a relatively frequent critic of some members of his own party, especially during this government shutdown.

Republican Congressman Peter King of New York is joining us.

Congressman, thanks very much for coming in.

REP. PETER KING (R-NY), HOMELAND SECURITY COMMITTEE CHAIRMAN: Thank you, Wolf.

(CROSSTALK)

BLITZER: These poll numbers, especially for Republicans, are awful, but they're awful for everyone right now.

The NBC News/"Wall Street Journal" poll, vote to defeat and replace every member of Congress, including your own representative, 60 percent of the American people say, yes, 35 percent say no.

You have been in Washington, you have been around for a long time. Has it ever been this bad, this lack of faith in Congress?

KING: Wolf, I don't think so. And I was here during the impeachment. I have been here during some rough times, obviously here in 2008 during the meltdown. No, I have never seen anything like this.

And I think the numbers are especially bad for Republicans, the fact that the gap between Democrats and Republicans has widened, the fact that we are down to 24. And this was very predictable going back three or four weeks ago, when Ted Cruz started us on this maniacal crusade and started Republicans on this maniacal crusade which it was a dead end. It couldn't go anywhere.

It antagonized the American people and it was a totally fraudulent effort. And now it's time for us to break loose from this and just open the government, work the best arrangement we can on the debt ceiling, which we should have been doing for the last six weeks, rather than getting bogged down and dragged into this morass by Ted Cruz.

BLITZER: You just tweeted a little while ago. I follow you. And you said, "It's time to reject Senator Ted Cruz and reach an agreement as soon as possible."

I must say, you have been predicting these dismal numbers for president -- and you're a Republican -- since the very beginning. You thought it was a major blunder to throw in Obamacare in this effort to avoid the government shutdown, if you will, and deal with raising the nation's debt ceiling.

But it's not just Ted Cruz. It's a whole bunch of other Republicans as well, especially in the House of Representatives.

KING: Yes, there's about 30 or 40 Republicans in the House of Representatives who have tied themselves to Ted Cruz.

Now, I voted against Obamacare 42 times. I want it repealed. The fact is, you don't shut down the government if you don't get your way. You elect more Republicans and you elect a Republican president. That's how you do it in a democratic society.

No, we had a number of Republicans in the House who went against what John Boehner wanted to do. The speaker did not want to go this route. But we had 30 or 40 people who basically said they would bring the House down, they would bring everything to a halt unless this was done.

And Ted Cruz promised that once it got to the Senate, he would take care of it. Well, the fact is, he didn't. I just wish -- Wolf, you mentioned the fact that I had spoken out against this three or four weeks ago. I wish other Republicans around the country had also spoken out against Senator Cruz.

But, rather than stand back, I think it would have helped John Boehner if national Republicans had specifically said this is wrong, not just say that Congress is dysfunctional or the Republicans aren't working, but actually -- you're talking about it's a handful of people who have driven this, and they should have been targeted.

And I hope in the future that's one lesson we can learn and not allow this to happen again.

BLITZER: If this goes on and on, you think it could cost the Republican Party the majority in the House next week?

KING: It is certainly going to hurt us, especially when you talk to Republicans in competitive districts, because they're stuck between a Republican base that could be energized by Ted Cruz with primaries who will cost them tremendous amounts of money to get through a primary.

Then they will have an energized Democrat to run against. In some of these very red districts, even if that person should lose a primary, it's still going to be a Republican who wins. But in the competitive districts that make the majority, districts in New York and New Jersey, and Pennsylvania, and Ohio, you know, they're the districts that make the majority.

There's a number of members there who are -- who could face real battles. These are good Republicans. These are guys who are absolutely committed conservatives, but they don't want to shut the government down, like Ted Cruz does, and it leaves them vulnerable.

BLITZER: We asked our Twitter followers to send us some suggested questions for you. We got this one. I will put it up on the screen. "Ask Peter King when he is planning to switch parties."

OK. Go ahead.

KING: I actually resent that question. I am a lifetime Republican. I was at Barry Goldwater rallies in the 1960s.

I have a conservative rating of 75 percent. I'm absolutely proud to be Republican. There's nothing at all Republican about shutting down the government when you don't get what you want. There's nothing at all Republican about people like Ted Cruz and Rand Paul who want to filibuster against drones which defend America against terrorist attack.

So, no, as far as I'm concerned, those guys are the RINOs. I'm the real Republican.

BLITZER: If you take a look at the government shutdown right now, all the talk about that, it sort of really upstaged some of the glitches in the rollout of Obamacare.

You oppose Obamacare, but lot of people aren't necessarily paying attention to it because of this huge and it's understandable, this huge fight over the government shutdown and raising the debt ceiling. How do you feel about that?

KING: I think President Obama should send a campaign contribution to Ted Cruz.

He has done more to boost -- to help Obamacare than anyone. The numbers on Obamacare have gone up by about 7 percent during the worse week that it should be having because of such a terrible, terrible breakout that it had. It was just terrible.

And yet all the attention was on the government shutdown. So, again, Ted Cruz wanted to stop Obamacare, they want to defund it. That's what his supporters wanted to do. And instead Obamacare is going ahead, it's being fully funded, and it's not getting the criticism that it should. If anything, its popularity has gone up, which is really, really disgraceful.

BLITZER: Peter King, as usual, thanks very much coming in.

KING: Wolf, thank you. BLITZER: That's it for me. Thanks very much for watching.

"CROSSFIRE" starts right now.