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THE SITUATION ROOM

Congressional Women to the Rescue?; Governing By Crisis; Interview With Texas Republican Congressman Joe Barton

Aired October 15, 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 HOST: Happening now, a SITUATION ROOM special report. Government shutdown, day 15.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Do what's right. Open the government and make sure we're paying our bills.

(END VIDEO CLIP)

BLITZER: As the hours wind down toward an unprecedented debt default, an effort to reach a compromise balked, efforts are bugging down to reach that compromise, the president calls on Congress to somehow pull a deal out of hat.

And a credit rating agency within the past hour issues a grim warning to the United States.

Women to the rescue. Female lawmakers are playing a key role right now in efforts to break the stalemate. Can they keep America from drowning in red ink?

And even if a last-minute deal is reached, we will likely need another one several weeks later and then again another one? Why is Congress staggering from crisis to crisis?

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

And 30 hours from now, the United States faces the grim possibility of going into default on its debt, and the credit rating agency, Fitch, Fitch has already issued a warning of a possible downgrade from America's current AAA status. One way or another, the Washington standoff is in its endgame. A Senate deal is on hold. House Republicans have tried to put together a tougher counteroffer, but it looks like they may not necessarily have the votes the speaker wants.

Let's go to our chief congressional correspondent, Dana Bash. She's following every step.

Dana, what is the very latest?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: This is not a nail- biter that anybody wants politically or as you just said because of the financial markets and the consequences there, but that's exactly where we are right now.

House Republicans have delayed a Rules Committee meeting. And what that means in layman's terms is they have delayed the process needed to get this bill on the House floor tonight. And the reason, according to a Republican aide that we're talking to, is that they're still scrambling to make sure they have the votes to pass it.

Our congressional producer Deirdre Walsh were also told by a House Republican aide that it's possible that this vote might not even happen tonight. It is really, really up in the air. So that's what we're being told. And then we also have something that's kind of proved just how much danger House Republican leaders think they're in of losing this vote. This is something that CNN obtained, that I obtained from a Republican source that went out to Republican offices.

And it is what is called a whip notice. And on the top of it, it says, "If your boss has any concerns and plans to vote no, it is imperative that you contact the whip office immediately by phone." And we have actually seen not just -- obviously we wouldn't know if there's a phone call, but we actually have seen some of the most conservative members of the Republican Caucus walking down this corridor down where I am right now down to the suite where John Boehner has his office, where the House majority leader, Eric Cantor, has his office as well.

Some of those members are saying they're not telling us how they're going to vote. That really gives you an indication. One other thing I wanted to show you, and you know what, Wolf, the font is so big you might even be able to read it from here. This is a notice that went out from a very sort of critical conservative grassroots group called Heritage Action Fund, saying vote no on the House spending and debt deal.

That was not what House Republican leaders needed at this time when they're counting every single vote in their caucus trying to get this passed.

BLITZER: Why doesn't the Senate just come up with a vote and send it to the House and let the speaker make a decision about whether or not to let that come up for a vote?

BASH: It's a great question. And ultimately if the House speaker can't corral enough of his own Republican brethren, his own rank and file, that might actually be what happens.

The problem is the clock. The problem is the calendar. And that, you know, certainly, we saw a framework that we were reporting on yesterday in the Senate for a deal to open the government and to increase the debt ceiling, but that's not a done deal. And we're told that now by sources in the Senate it's not totally firm. That's number one problem.

And number two, maybe even a more important one, is that just the process takes a lot longer if this starts in the Senate. The Senate rules just allow for senators to drag it out. And it could take a lot longer, and this deadline is two days away. BLITZER: The clock is clearly ticking. All right, Dana, stand by.

House Democrats met with the president earlier this afternoon, and they're keeping the pressure on.

Let's go to our senior White House correspondent, Brianna Keilar, right now.

Still no deal, but the president has spoken out about the speaker, John Boehner. Brianna, what is he saying?

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf.

President Obama gave interviews to three local stations, so three local anchors. And he talked about his frustration with the speaker, essentially saying negotiating with him is pointless.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Speaker Boehner, for example, him negotiating with me isn't necessarily good for the extreme faction in his caucus. It weakens him. There have been repeated situations where we have agreements. Then he goes back and it turns out that he can't control his caucus.

(END VIDEO CLIP)

KEILAR: Now, he also sent a message of he's not giving any concessions to House Republicans, even though Senate Democrats and of course in concert with the White House have capitulated with some Obamacare concessions to Senate Republicans and now stalled negotiations.

He made it pretty clear he doesn't want to negotiate with Republicans who the White House and President Obama feel are being controlled very much by Tea Party Republicans.

BLITZER: The White House reacting to what Fitch has now done to go ahead and do a negative warning, if you will, a watch for the U.S. AAA credit rating?

KEILAR: Oh, we do not -- I have inquired, Wolf. We do not have reaction to that. Of course, it's not certainly the same as a downgrade. But they're certainly watching this very carefully.

You will recall, after the downgrade that followed the 2011 negotiations or, pardon me, the 2011 downgrade, in the Monday following that downgrade, Americans lost $1 trillion in the stock market. So these are the kind of notices that certainly are something that could lead up to that.

There's a lot of concern from the White House and from their point of view, it just really reinforces that something needs to get done quickly.

BLITZER: It certainly does. All right, Brianna, stand by.

Just a little while ago, that Wall Street credit rating agency Fitch did put the United States on what is called rating watch negative, not a downgrade from the AAA rating, certainly a grim warning of what could happen if that default clock gets down to zero.

Listen to the Senate majority leader, Harry Reid.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: Mr. President, the debt is here. The deadline is looming. Rating agencies are talking about downgrading us as early as tonight again.

(END VIDEO CLIP)

BLITZER: He made that statement on the Senate floor just before Fitch actually did put the U.S. on a rating watch negative.

Christine Romans is here, our CNN business anchor.

This is a very ominous and serious development. Give us some perspective.

CHRISTINE ROMANS, CNN SENIOR BUSINESS CORRESPONDENT: All right, this is no way to run a country, and that's basically what Fitch is saying, Wolf, saying that the United States did not raise its debt ceiling in a timely fashion early enough for the Treasury Department to be able to alleviate all these concerns about which bills to pay. And that's the problem here.

And the White House -- the Treasury Department, not the White House, the Treasury Department, an official there saying, yes, this shows we need to have some action here in the very near term. It's not a downgrade. Very important to point out it's not a downgrade. But it is Fitch saying, when you look at how we're running our business in Washington, our elected officials, they're not doing a good enough job to garner that AAA, that sterling credit rating forever, putting the country and investors on notice that the United States is not acting properly to keep that status.

BLITZER: Because, as you know, two years ago, S&P did downgrade the U.S. from that AAA rating, Moody's not yet. And it caused enormous harm.

ROMANS: Look, this is no way to run the biggest business in the world. And this is what investors are so worried about. It's still pretty sanguine on Capitol Hill about what the impact will bill.

We're already seeing the results -- $20 billion is the cost to the economy so far of the shutdown. Mark Zandi says about a million jobs have been lost since 2009 when we started this whole budget wrangling in the first place. It's not politics and process. It's really hurting kitchen table economics and could it hurt investors? That's what Fitch is warning about.

BLITZER: Mark Zandi, a well-respected economist.

ROMANS: Yes, absolutely.

BLITZER: Christine, thanks very much.

ROMANS: You're welcome.

BLITZER: Still ahead, the women of the United States Senate said to be -- quote -- "sick and tired" of people throwing insults at each other on TV, we're taking a closer look at their critical role right now in crafting the latest proposals.

Plus, it's a movie we have seen before, and it's maddening, Congress trying to come to an 11th hour deal just to kick the can further down the road. When did governing by crisis become the norm here in Washington?

(COMMERCIAL BREAK)

BLITZER: Wall Street ended the day in the red as the threat of an unprecedented default inches closer to reality. The Dow dropped more than 100 points. The Nasdaq fell as well. It was the first decline for both indices in five days. Much more news right after this.

(COMMERCIAL BREAK)

BLITZER: We're now 15 days into the partial government shutdown and inside 30 hours until the United States hits its borrowing limit. Right now both proposals in the House and Senate would only fund the government through the holidays early into 2014. There are no serious discussions going on right now about a long-term fix to this very serious situation.

Our Brian Todd has been looking at how governing by crisis after crisis has now apparently become the norm here in Washington.

Brian, what is going on?

BRIAN TODD, CNN CORRESPONDENT: It has become the norm, Wolf, and it has been that way for at least two years.

Even if there is an agreement reached within that 30-hour period that Wolf just mentioned, the political atmosphere in Washington is so toxic right now, that a long-term deal really seems unattainable.

(BEGIN VIDEOTAPE)

TODD (voice-over): Even if there is a deal this time, that gnawing in your gut could well return in a few weeks.

NORMAN ORNSTEIN, RESIDENT SCHOLAR, AMERICAN ENTERPRISE INSTITUTE: You're governing by crisis, and that is no way to govern.

TODD: Congressional expert Norman Ornstein believes there will be more cans kicked down the road until the next shutdown or debt ceiling crisis. The chance now of a long-term so-called grand bargain, almost zero, he says, because on one side, far-right conservatives in the House will never agree to raise taxes, even a little. That would go back on their no taxes pledges. And Tea Party and other conservative leaders would work against them in their reelection bids.

ORNSTEIN: The nature of primaries, the fact that so many people live in homogeneous districts that become echo chambers, all of that makes it harder to overcome now a set of realities where our political process is driven by a small group of Americans who are more ideologically driven, and not by the vast majority of Americans who still say, come on, compromise a little bit and move us forward.

TODD: How did it get this way? Ornstein says it goes back to the financial collapse of 2008, when George W. Bush was president. Far- right conservatives, he says, hated the bailout.

ORNSTEIN: The resentment against political leaders working with Wall Streeters to bail them out while the rest of the country paid for it just deeply amplified the kind of resentment against government, per se. Then the continuing sluggish economy created the Tea Party movement.

TODD: But analysts say it's not just the Tea Partiers who have dug in and created this mess.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: There's blame all around, including the White House.

TODD: Meaning democrats may feel they have had the upper hand politically, making them less willing to negotiate. It's created a more personal, deep-seated reason why a real long-term agreement between these key players may be elusive.

GERGEN: The trust has disappeared and it's increasingly being replaced by hatred. There is a lot of deep alienation and just plain don't like each other, don't want to sit down at the same table with each other.

(END VIDEOTAPE)

TODD: Or, as Norman Ornstein says, it's become tribal in nature. Leaders on both sides saying, if you're for it, I'm against it, even if I was for it yesterday.

It's that bad in Washington right now, Wolf, so a long term deal, we just probably can't even look toward that.

BLITZER: What a sorry state of affairs that is. All right, Brian, thank you.

One group of senators has already had some success working together to try to end this crisis. We're talking about the women in the United States Senate.

CNN's Athena Jones has that part of the story.

(BEGIN VIDEOTAPE) ATHENA JONES, CNN CORRESPONDENT (voice-over): Will the women of the Senate save the day? Well, they have certainly been trying to.

A plan by Republican Senator Susan Collins formed the basis of a key proposal to reopen the government and avoid a first ever default on the government debt. While that plan's prospects may now be uncertain, Senate women are still front and center. Collins worked with a bipartisan group of senators, men and women, to put her plan together. But women were at the forefront. And she says that's no coincidence.

SEN. SUSAN COLLINS (R), MAINE: Although the women of the Senate span the ideological spectrum, we certainly don't think alike, we do share an interest in problem solving. And we tend to be more collaborative in our approach than many of our male colleagues.

JONES: Fellow Republicans Lisa Murkowski and Kelly Ayotte were among the first to sign on. Ayotte says to expect more women taking the lead in the future.

SEN. KELLY AYOTTE (R), NEW HAMPSHIRE: We have 20 women in the Senate now. That's an historic number. We can have many more, but we're not shy. We're stepping up. We're going to lead.

JONES: Democrats like Heidi Heitkamp, Amy Klobuchar, and Jeanne Shaheen also got on board.

SEN. JEANNE SHAHEEN (D), NEW HAMPSHIRE: We trust even other. And I think that's very important when you get to this kind of a delicate negotiation.

JONES: And Collins spent all weekend phoning and e-mailing with Democrat Patty Murray to craft budget language. Women members have a history of coming together on the softball field as well, facing off against the press in a year fund-raiser.

And Congresswoman Debbie Wasserman Schultz says when it comes to negotiating, they bring something else to the table.

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: Women are not as focused on obliterating the other side. They want to find a way to get to yes.

JONES: Collins says Senate women have forged close relationships over the years through monthly bipartisan dinners, bonds that can be key.

COLLINS: There is a sisterhood here that transcends party lines, and I think in this case has helped us to produce some results.

(END VIDEOTAPE)

JONES: And, Wolf, I don't know about you, but I think it would be pretty awesome to be able to attend one of these dinners that Senator Collins is talking about with Senate women. Unfortunately, no reporters are allowed -- Wolf.

BLITZER: All right. Well, maybe that will change one of these days. Thanks very much, Athena, for that report.

Just ahead, he said no deal is better than a bad deal. I will ask Republican Congressman Joe Barton of Texas whether he would risk a government default in this current standoff. And what else do you want me to ask the congressman? You know what? You can tweet us a question or two. Use the hash tag SITROOM.

(COMMERCIAL BREAK)

BLITZER: Toyota announcing special payment deferrals for customers hit by the government shutdown. The company's financing arm says it will allow federal employees and others impacted to defer up to three months. Today's announcement follows similar plans from Hyundai and Nissan.

Our special report continues in a minute.

(COMMERCIAL BREAK)

BLITZER: Government shutdown, day 15, only about 29 hours left until what could be an unprecedented default for the United States. So what is it going to take at this point to reach an agreement?

Joining us now, Republican Congressman Joe Barton of Texas. He's been in the House for, what, 29 years.

Thanks, Congressman, very much for coming in.

REP. JOE BARTON (R), TEXAS: My pleasure.

BLITZER: Is there going to be a vote in the House of Representatives tonight?

BARTON: The Rules Committee has postponed consideration. So, that usually means that the leadership from the House Republican side doesn't have the votes. So my guess would be there will not be a vote tonight.

BLITZER: So what does that mean?

BARTON: Well, it means the speaker and the majority leader in the House go back to the Republican Conference and also touch base with Senator Reid and Senator McConnell in the Senate and maybe Nancy Pelosi and see what can be worked out.

BLITZER: Are you ready -- would you have voted for some sort of continuing resolution, if the speaker had put it up for a vote tonight?

BARTON: I had turned myself in as a no-vote on what they...

BLITZER: Why?

BARTON: Because there's no structural reform. There's no cost savings. It's kick the can down the road another six weeks or two months. BLITZER: But aren't you afraid about a credit down rating of America's AAA status? Look at Fitch. They just -- within the past hour, hour-and-a-half, they put the U.S. on what is called rating watch negative from its AAA rating.

You know what kind of impact that would have on your constituents and people all over the country, indeed around the world, if America's credit rating goes down, how much -- how many jobs would be lost, how much money would be lost, how much investment income would be lost for millions and millions of people out there if interest rates went up?

BARTON: Well, I agree that that's a concern.

But $17 trillion in debt already, and a president wants a blank check with no accountability. I don't know how much money the federal government can borrow, but we're beginning to get to where it's a real concern.

BLITZER: But it's really just paying for what the Congress has already appropriated, if you go ahead and avoid that kind of debt ceiling default. You have already spent that money. You have paid for it. Now the U.S. has to make sure it doesn't default.

BARTON: Well, that's why we need to bring the entitlement programs into the picture.

BLITZER: But you can't do that within a day or two, within the next two days.

BARTON: Well, we can at least start the process.

BLITZER: Well, this deal that the speaker was ready to do would start the process between now and mid-December. There would be House-Senate conferees that would get together and try to deal with these long-term problems, entitlement reform, tax reform issues that you really want to deal with. They have a parallel arrangement as part of this deal, if it were passed by the Senate and the House.

BARTON: If we're going to give the president $100 billion or $150 billion, we ought to get some cost savings or some commitment. The president has said he wants to reform Social Security. So, I think that would be a good place to start.

BLITZER: He does want to do that. He wants to maybe deal with the cost of living index and all of that, but right now there's an immediate crisis. You can see it unfold.

And people are very, very nervous, not only here in the United States, but around the world. You have got to solve this immediately. Otherwise, who knows what's going to happen.

BARTON: Well, kicking the can down the road for six weeks or two months is not solving the problem. It's just not.

BLITZER: But it does immediately solve the current crisis. That's what it -- if you kick the can down to January or February, at least you have got some time to deal with those structural issues you want to deal with. And you have been in Congress for a long time. You want to start talking about those long-term...

BARTON: Why not pick one and deal with it right now? Let's take Social Security off budget.

(CROSSTALK)

BLITZER: You have got 24 hours, again. And you're not going to resolve that in 24 -- you might not resolve it in the next few weeks, but in 24 hours, you're not going to deal with a long-term Social Security, entitlement reform, or any of those other major entitlement reforms.

BARTON: Let's make Obamacare voluntary. I have a bill to do that. Why don't we try that for a year?

BLITZER: But that's the law of the land, Obamacare. You have already lost that vote. The Supreme Court has ratified it.

BARTON: If it's that great, then the people will join up. And if it's not that great, they won't.

BLITZER: But it's the law of the land right now. You're not going to change it. And in the meantime, aren't you worried that your Social Security recipients, they are not going to get their check November 1 if the U.S. has to default?

BARTON: That's why I want to make the Social Security trust fund a real trust fund.

BLITZER: Yes, but that's -- you're not going to do that in the next 24 hours. That takes a long time to deal with those kinds of issues.

BARTON: Once you put it up for a vote, it takes 10 seconds to put your card in and vote. And in the Senate, it takes five seconds to say yes or no.

BLITZER: So you're willing to risk what potentially could happen over the next few days in order to try to achieve Social Security reform or tax reform within the next couple days?

BARTON: It's not going to get any easier six weeks from now or two months from now.

We have had all year to talk about it. Now's the time to at least start doing something about it. I'm not saying finish the process. I accept your point on that.

BLITZER: They're ready to start, Congressman. They're ready to start.

BARTON: The president hasn't said he wants to do anything, except have us give him another check.

BLITZER: No, no, no. He said end the government shutdown, make sure that there's the debt ceiling extended. He's willing to start these talks. And House-Senate conferees, Budget Committee members and others, they can deal with it, including you.

BARTON: He could sign a bill and save some money, and then we can talk some more.

BLITZER: Yes. Well, the danger is immediately there, Congressman.

Thanks for coming in.

BARTON: Thank you, sir.

BLITZER: I know you're worried about it. But we will see what happens. Thanks very much.

BARTON: Thank you.

BLITZER: That's it for me. Thanks very much for watching.

"CROSSFIRE" starts right now.