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GOP Debt Plan Not Well Received; Boehner Receives Support from McCain; Investors Weighing in on Debt Ceiling Debate; Long Way to Go on Debt Deal; Obamacare Glitch Problems Known in Advance.

Aired October 15, 2013 - 13:30   ET

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

WOLF BLITZER, CNN ANCHOR: It's a dire situation right now. They've got to do something, these House and Senate members.

Appreciate it very much.

A new plan from House Republicans not well received right now by the White House or some Democrats in the Senate and some Republicans at the same time. So where exactly does the speaker, John Boehner, go from here? Gloria Borger is here to discuss the next steps when we come back.

(COMMERCIAL BREAK)

BLITZER: Washington is a city that often runs on power struggles, especially on Capitol Hill. Now with the Senate closing in on a possible deal, House Republicans have stepped in with their own proposal.

Let's discuss what's going on with our chief political analyst, Gloria Borger.

Speaker Boehner, he's still got some major problems with his more conservative Tea Party supporters. They're not exactly thrilled with this latest offer that he has put forward.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: They think it's too soft. They think it doesn't contain enough on Obamacare, for example, which is why they waged this entire fight. And I think, you know, the "hell no" caucus said hell no to the speaker. He's got a decision to make. Does he try and strengthen it? Send it back to the Senate, knowing full well it's going to be stripped to make those guys happy, or does he call a vote, hoping he can actually cobble together enough Republicans and Democrats to make it pass?

I mean, you know, these things tend to fall apart a couple times before they come together in my experience, but the clock is ticking. There isn't a lot of time. Public opinion, headed in the wrong direction. People are appalled at what they're seeing in the Congress. And so the speaker's got a really tough decision to make, but I suspect this will go back and forth a couple times before resolution and could continue late into the evening and throughout the night.

BLITZER: It looks like the Republicans in the House, they just want something to be able to show their constituency. 15 days of a government shutdown, this whole fight they got something involving Obamacare, if you will. They're saying at least give us a delay for two years in the medical devices tax, --

(CROSSTALK)

BLITZER: -- which a lot of Democrats support as well. 79 Senators, Democrats and Republicans, voted for it in the Senate.

BORGER: My administration sources tell me that the medical device tax right now is a nonstarter. At some point down the road, if people want to discuss what to do with the medical device tax, that's fine. But not attached to any of these -- not --

(CROSSTALK)

BLITZER: But they are willing to attach some other minor tweaks in Obamacare.

BORGER: The minor tweak would be that lawmakers and elected officials would not get subsidies to buy into Obamacare. That's kind of hard to vote against, Wolf. You know, it's sort of like a lawmaker saying, OK, it's made for a campaign ad. He voted for his own subsidies that you don't get for Obamacare. You could see it. So it's kind of hard to deal with. And some will clearly vote against it because they don't want to touch Obamacare, but that's the one area that I might see there could be some agreement on. And it's hard for me to see how the White House would object to that because it doesn't really do anything to what they call the integrity of the Affordable Care Act. It just says that lawmakers would not be given subsidies to buy into it.

BLITZER: If it boils down to the nation goes into default --

BORGER: Over what? Yeah.

BLITZER: -- the government is shutdown because the president is refusing to budge a little bit on these medical devices, the tax on that the whole country is going to explode --

BORGER: Right.

BLITZER: -- because what so many Democrats themselves would like to see go away, that tax on medical devices?

BORGER: Right. They would eventually. And I guarantee you, Wolf, they're going to come back to it at some point because it does have a lot of support from Democrats in states particularly where those medical devices are made. But I think on this particular measure, the president has said no budging. Now, you may be right. We'll have to see.

In the end, I think that there are lots of Republicans, particularly in the Senate, who are saying, after 15 days of this, what have we gotten? What have we gotten here?

BLITZER: They want something. And they're basically saying to the president, give us a little something.

BORGER: But they're also saying we've dropped 20 points in the polls. We -- people don't trust us. And we're not getting much out of it anyway. So get it over with because it hasn't done the Republican Party as a whole any good, Wolf. I would argue that it's done them some real harm.

BLITZER: All right, Gloria. We'll see what happens. These negotiations coming down to the wire. I should say this --

BORGER: Stay with us tonight.

BLITZER: We'll be watching. You'll be back in "The Situation Room" later today, as well.

Meanwhile, the House Speaker John Boehner got some support today from the Arizona Republican Senator John McCain. In remarks on the Senate floor, Senator McCain called Boehner courageous. He blasted Democrats and the Obama administration for rejecting the House plan, the final House plan to resolve this fiscal standoff.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R), ARIZONA: For the majority leader and the Democrats in the House and the White House to say absolutely categorically we will not consider what the Republicans in the House of Representatives are doing, in my view, is piling on. It's piling on and it's not right.

So I urge my Democratic colleagues, let's sit down and work this out. You've got a proposal from the House. We have a proposal between the two leaders. And let's get this resolved. To categorically reject what the House of Representatives and the speaker is doing -- and I think it's pretty courageous in what he's doing -- in my view, is not serving the American people.

So let's stop this. Let's stop it, sit down, consider the speaker's proposal, get our proposal done, and then get this resolved, which we could do in the next 24 hours.

(END VIDEO CLIP)

BLITZER: Senator McCain urged the White House and Democrats to stop the condemnation -- his words -- and consider the Republican plan. He says it's a serious plan. Certainly, he says, it's a basis for some sort of deal. We'll see what happens.

Investors are weighing in once again today on what they think of this debt ceiling talk situation here in Washington. Their impatience clearly growing. We're going to check the markets when we come back.

(COMMERCIAL BREAK)

BLITZER: As the stalemate here in Washington continues, the markets reflecting that frustration. The rally we've seen in the last few sessions has ground to a halt. There you see the Dow right now. Take a look at it. The Dow Jones Industrials down 60 points or so.

Right now, Zain Asher is over at the New York Stock Exchange.

So, Zain, are investors reacting to the lack of a deal, fears that a deal might not be coming forward? What's the mood up there?

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: The mood is a lot of people can't believe we only have a day and a half left and still have nothing concrete to go on. There's a lot of frustration when you talk to people downstairs, traders are telling me they feel as though they have their hands tied and the market is being held hostage. Investors are scared to make decisions. No one wants to be caught off guard. Things are volatile, lows last week, highs last week. Today, the Dow fell 85 points at one point. It moved into the plus column. Yesterday, the Dow fell 100 points and ended higher.

There really is only one story on Wall Street. Nothing, not even earnings from big names like Citigroup is driving trading. Traders are telling me they're having trouble concentrating on anything else until all of this is over -- Wolf?

BLITZER: We've also been hearing, Zain, the past two weeks, a lot of warnings from major CEOs up in New York about how problematic Washington gridlock is turning out to be for them. Is there an indication already that it's affecting business, big businesses hiring people to come to work for them, expanding, investing? Is there any indication along those lines?

ASHER: Well, listen, uncertainty is never good for business. Like investors, companies are also feeling the need to play it safe. Companies are sitting on $1.8 trillion in cash, basically, $500 billion more than five years ago during the height of the recession. So, all of this uncertainty in Washington. And with this idea of continuous short-term fixes, a lot of people are asking how on earth are businesses that depend on government contracts like Lockheed Martin and United Technologies supposed to make hiring decisions when they know they'll come up against another brick wall in a few months? I think it is certainly having an impact on business and consumer confidence, as well -- Wolf?

BLITZER: Zain monitoring what's going on on Wall Street for us.

Zain Asher, thanks very much.

While time is of the essence for a deal on the debt ceiling, even if a deal is reached, still a long way to go. We're taking a closer look at the road ahead when we come back.

(COMMERCIAL BREAK)

BLITZER: So there's a lot going on here in Washington right now. The road ahead could be particularly complicated and frustrating.

Brian Todd is here watching what's going on.

Brian, give us a little sense of what lies ahead. BRIAN TODD, CNN CORRESPONDENT: What we're hearing today, Wolf, even if a deal is reached today, which it may happen, that getting that grand bargain between President Obama and the Republicans for a budget deal that's really kind of going to last for a while, not very likely.

President Obama actually relayed some of this frustration several days ago about kicking the can down the road. He's blaming Republicans for that. Here's what he had to say about that.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: House Republicans need to stop careening from one crisis to another in everything they do. Have you noticed that? Since they've taken over the House of Representatives, we have one of these crises every three months. Have you noticed? And you keep on thinking, all right, well, this is going to be the last one. They're not going to do this again, and then they do it again.

(END VIDEO CLIP)

BLITZER: So President Obama blaming the House Republicans in particular for one crisis after another. But objective, the analysts you speak to say there's plenty of blame to go around. The Democrats dig in, they won't negotiate. President Obama saying he won't negotiate.

And what we're hearing now is even with a deal reached today, again, it's kicking the can down the road. You're going to go from one crisis to another because on the core side, on the one side, you've got House Republicans who are dug into this "no new tax" pledge. That's the key here. You're not going to get the grand bargain on the budget because they're going to refuse to raise taxes because they know, if they do that, Tea Partiers, conservatives in their home districts will work against them in their next primary challenges. That's at the core of what they're concerned about.

On the Democratic side again, the Democrats and Harry Reid and the president think they've got the upper hand on the Republicans as far as the overall political scope of the country, and so they are less likely to negotiate.

So a lot of analysts are saying, deal or no deal today, you'll still have the crises down the road.

BLITZER: You've been speaking to a lot of experts.

TODD: Yes.

BLITZER: Is there a long-term way out of this crisis situation?

TODD: David Gergen, who is respected on both sides of the aisle, told me today it's going to take, after this deal is reached today or tomorrow or whatever, both sides to kind of take a breath, just recede for about a week, then really start to negotiate. President Obama and Joe Biden will have to be involved actively. He says House and Senate Republicans have to be at the same table.

Is that going to happen, though? Some people believe it's not going to. Again, when you've got some of these conservatives in these safe districts who are just -- have to stick to their pledge not to raise taxes or they could be fearful of re-election, that's going to be tough to strike a deal down the road, and that's what we're hearing.

BLITZER: Todd, thank you very much. Appreciate it.

Dozens of veterans meanwhile very angry about the partial government shutdown. They rallied at the national World War II Memorial here in Washington earlier today. The group wanted to draw attention to what veterans will face if there's no deal. The Department of Veterans Affairs says it won't be sending out more than $5 million in benefits checks starting November 1st.

Here's what one veteran who attended the rally thinks about that.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Just crazy is what it is.

UNIDENTIFIED MALE: Politics.

UNIDENTIFIED MALE: Absolute politics.

UNIDENTIFIED MALE: All politics.

UNIDENTIFIED MALE: They forgot about the people. I had buddies that are -- I got buddies names on that wall over there. This is ridiculous.

(END VIDEO CLIP)

BLITZER: The amount of that pay and benefits for veterans adds up to more than $6 billion.

Two weeks after its launch, the Obamacare website still plagued with some serious problems. When we come back, we'll hear about how there were plenty of warnings out there that the site wouldn't be ready for action.

(COMMERCIAL BREAK)

BLITZER: Former San Diego Mayor Bob Filner pleaded guilty to three charges today, all related to sexual harassment allegations that drove him out of office. Filner admitted to one felony count of false imprisonment and two misdemeanor battery charges. The pleas were part of an agreement with prosecutors. Filner, also a former nine-term Democratic congressman, resigned from the mayor's post in August after at least 19 women accused him of sexual harassment and boorish behavior.

Since it was launched more than two weeks ago, the Obamacare website has been plagued by serious problems. Some people are still having trouble signing up for an account, even getting on the site. Today, we're expecting an update from the federal government on how healthcare.gov is doing.

In the meantime, our Drew Griffin explains there were serious warnings that the site would have a big problem.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): Since day one, CNN's senior medical correspondent, Elizabeth Cohen, has tried, day after day, night after night, even in the wee hours of the morning to sign up for Obamacare. It was not until day 14 she could finally log in.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: You know, even with your own computer, you have to be incredibly diligent. I mean, I sat there and tried to log in three times and failed and had to create three new accounts in order to get success. It took a lot. Not everyone is going to want to game the game the way that I did. It took a huge amount to get in today. This was on day 14.

GRIFFIN: What's troubling here is that the failed rollout wasn't a surprise to anyone involved with it.

ROBERT LASZEWSKI, HEALTH POLICY AND STRATEGY ASSOCIATES: Insurance executives have been warning the administration bluntly that this whole system is not ready for primetime.

GRIFFIN: Bob Laszewski heads a group that tries to help guides physicians, HMOs and major health insurance companies through the industry changes.

LASZEWSKI: The administration didn't seem to understand the seriousness of it. They were blase about it. They continued to assure the industry that there weren't going to be any problems.

GRIFFIN: Back in June, two more alarms. The government's own accounting office found the rollout was having technical problems, critical deadlines not met. One report concluded that despite the $394 million spent, "nevertheless, much remains to be accomplished within a relatively short amount of time."

In fact, even before the rollout, the Obama administration, behind the scenes, was warning there would be glitches. No big deal. A theme even the president himself repeated once the rollout got off to a troubled start.

OBAMA: Consider that just a couple weeks ago, Apple rolled out a new mobile operating system. And within days, they found a glitch, so they fixed it. I don't remember anybody suggesting Apple should stop selling iPhones or iPads, or threatening to shut down the company if they didn't.

GRIFFIN: The main problem with the system, according to the administration, is it is just overloaded, suffering from its own popularity, too many people in need of health care rushing to sign on all at once, even though they have until March 31st to sign up. That sounds good, but is it what's really going on? Short answer: It's impossible to tell because the administration won't tell us how many people have signed up, and have changed their story in the process.

At first, the administration said it didn't know.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: 48 hours, no, we don't have that data.

GRIFFIN: Then we were told to ask someone else.

CARNEY: You should ask HHS. I don't have the number.

GRIFFIN: A few days later, wait a month.

CARNEY: I want to clear this up. We will release data on regular monthly intervals, just like was done in Massachusetts and just like what was done and is done when it comes to Medicare Part D.

GRIFFIN: So while we can't get the national numbers, we got a hint by calling individual states. As of this Monday, in the 14 states and the District of Columbia that have their own state-run health care run exchanges, we were able to get the actual numbers of people who have signed up and paid for Obamacare. That number? 20,994. There are another 96,980 signed up who have not yet paid.

Drew Griffin, CNN, Atlanta.

(END VIDEOTAPE)

BLITZER: We're going to continue to watch this story as well.

Later here in "The Situation Room," a major debate coming up. Congressman Steve Israel, a Democrat from New York, will debate Darrell Issa, a Republican from California. That debate coming up at 5:00 p.m. eastern in "The Situation Room."

In the meantime, we're watching all of this news. I'll be back later today. Thanks very much for watching.

NEWSROOM continues right now with Brooke Baldwin.

BROOKE BALDWIN, CNN ANCHOR: Wolf, thank you very much.