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Debt Limit Deadline Looms; Possible Last Minute Deal To End Crisis; Cracking Down On Bullying; Robert Redford On Politics

Aired October 16, 2013 - 07:30   ET

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

KATE BOLDUAN, CNN ANCHOR: Senate leaders, they say they are optimistic that they can finalize a deal today that would re-open the government and keep it funded into next year. We're told the Senate deal would fund the government through January 15th and raise the debt ceiling through February 7th.

If they do, of course, all eyes go right back to the House, where Republicans have been so busy fighting among themselves they've had to scrap plans yesterday to offer their own plan on how to get out of this entire mess.

Senate Majority Leader Harry Reid and the Republican Leader Mitch McConnell are planning to continue talking. They'll continue talking this morning to hopefully finalize a deal. Maybe we get an answer, Chris, later this morning, maybe around noon. Maybe we could hear something of a deal coming out of the Senate. Can it pass? When will it pass? And what does it mean in the House? All the big questions still.

CHRIS CUOMO, CNN ANCHOR: A lot of questions and the answers getting more and more daunting. So what does happen at midnight? What does a deadline mean for the markets, for politics? Joining us now to explain the impact it could have, first in the financial markets, we have the host of "Quest Means Business," Mr. Richard quest.

And joining us from Washington to break down the latest on deal making on Capitol Hill is CNN chief national correspondent John King. Thank you, Gentlemen. Richard, I'll start with you because you're sitting next to me. We hear about bond rating agencies and the ratings and the bond market and the concerns of fear. Why? Why is this so important?

RICHARD QUEST, HOST, CNNI'S "QUEST MEANS BUSINESS": It's so important because, as Mohammad Alabrium (ph) said last night, the United States is at the core of the global economy, and the bond market is at the core of the core. U.S. treasuries, U.S. debt is in every portfolio. It's in every pension fund. It's used by the banks to trade between each other.

You are literally talking about the glue that is holding the financial world together. And when that glue starts to become unstuck, as the prospect of a default, then the ratings agencies who grade these things, they're the ones who basically say we're in trouble.

CUOMO: Steve King says - and I'll get to John in a second about what it means politically -- but financially, he says, "I'm not OKing any deal in the next 36 hours. I don't see it happening. And we have plenty of money. We're not going to default. We've got money to pay our bills. We'll be fine for a while. This is false panic."

QUEST: My words to Mr. King are simple. Why would you want to risk it? That's the point here. Yes, Treasury is bringing in tens of billions of dollars a day but another bill comes in for veterans, Social Security, for Medicare, for a bridge somewhere that has to be paid out and at some point the ability of Treasury to rob Peter to pay Paul will run out

Nobody thinks that they're going to completely default on the entire whack of Treasury debt. But a simple delay on paying one bond will have ripple effects. It's those ripple effects that will be so damaging. Again, you come back to this question, why would you want to risk it.

CUOMO: The answer right now seems to be for political gain down the road. Let's bring in John King. John, so we're listening to Representative King. Kate Bolduan rightly says to him, you people down here aren't paying the price everyone else is. His response, "I'm not saying yes to a deal in the next 36 hours," 36 hours? How does that change the game?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Chris, it's actually interesting this morning. Again, believe it when you see it. I'm going to say that one more time. Believe it when you see it, but there is some fresh optimism this morning. I'm told by a number of sources they're very close. They are working on the legislative language of the Senate deal and hope to announce that before noon.

Then they also are hearing that they may get a message from the House, legislative gobbled gook. But if they get a message from the House, it makes it easier to go faster in the Senate, and I was just having an e-mail exchange with a top Senate aide who said he believes the Senate vote would come no later than Friday.

Then here is the interesting part, remember yesterday, those House conservatives, Steve King among them, would not let Speaker Boehner go forward with his plan. What those conservatives seemed to be saying this morning is they could not vote for that. They would have felt obligated to vote yes if it was a Republican proposal in the House.

Now they are saying they expect Speaker Boehner to bring a Senate plan to the floor and that they can all vote no, but it will still pass because you'll get most of the Democrats and the more moderate Republicans. That's this morning, the fresh optimism that perhaps this could all be resolved by the weekend. But again, we've had an interesting couple of weeks so that's what they're saying this morning, but believe it when you see it.

CUOMO: You're making my head hurt, John. You make it clear, but it's hurting my head.

KING: It's hard to follow. CUOMO: The headline this morning was Boehner is trying to herd cats. We get the impression that in the House, a powerful minority is controlling the majority. Steve King said, "I'm not OKing a deal in the next 36 hours." Is he counting wrong or is there something coming that Boehner and the rest of us don't expect?

KING: He is going to vote no. I think that's what you can count on with Steve King and the 30 or 40 or so and even a greater number if it's clear the Democrats will carry the day in the House, you'll have a great number of Republicans, perhaps even a majority of the Republicans vote no because they don't like the deal.

They don't want to raise the debt ceiling to begin with, at least without getting spending cuts up front. Many of them want to continue this fight over Obamacare even though the simple math tells you that was a fool's errand to begin with.

If you get a scenario where Speaker Boehner, he has not publicly committed to this, but if you get a scenario where the Senate sends over a plan and Speaker Boehner brings it to the floor and lets the full majority, 435 members of the House rule, most of the House Republicans can vote no. Steve king included and it would still pass. That is the scenario people think will happen. Again, let's take this one minute at a time. Never mind one hour at a time.

CUOMO: OK, now, Richard, remember we had a senator on the show who said they prefer a managed catastrophe now than an even worse one later. If they do make a deal, the way that John is outlining, what could that mean?

QUEST: That's an important point there. John makes a very important point. It depends if there's a deal on the table that's working through that's likely to get passed. If it's a deal on the table that's working through, that's likely to get passed then the markets will sleep easy and you won't notice any big problems at midnight, tomorrow or into the weekend.

The danger time comes if we get through Thursday and into Friday, the weekend, and there's no deal on the table that's workable that's likely to be passed. If we go into the weekend with a huge unknown, then you're looking at the very different ball game because frankly, you're in uncharted territory. We've no rule book to follow on this.

CUOMO: The confidence that we see coming out of lawmakers who are saying we'll be fine, do you think they know what they're dealing with?

QUEST: Every time they pass Dana Bash, they say we're confident of a deal, every time Harry Reid opens his mouth, he is confident of a deal or Mitch McConnell, they are confident of a deal. I mean, you know, let's see what the deal is. The markets want to see what the deal is before they will basically say, go ahead and do it.

CUOMO: I want to thank John King. I want to thank Richard Quest. But I do want to remind you, remember that phrase, managed catastrophe. We had a U.S. senator say they'd prefer a managed catastrophe now, words that just don't make sense together, but we'll see what happens. Gentlemen, thank you for the perspective.

We're going to take a break here now on NEW DAY. When we come back, a young girl allegedly bullied to death. Now harsh charges for the girls involved. We'll bring you the latest in the case.

Plus, actor Robert Redford sails solo in his new movie "All Is Lost." The performance that could get him an Oscar, that's what we're told. He's also talking politics. You'll want to hear what he has to say.

(COMMERCIAL BREAK)

MICHAELA PEREIRA, CNN ANCHOR: Welcome back to NEW DAY. An extraordinary measure by a Florida sheriff cracking down on bullies, two girls ages 14 and 12 arrested for allegedly stalking a 12-year-old girl who killed herself last month. Now, the sheriff is issuing a challenge to parents everywhere. Our experts are standing by to weigh in. But first, here's CNN's John Zarrella.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Rebecca Sedgwick would have been 13 this Saturday. But last month after authorities say was a year after being bullied, the middle school student jumped to her death from the top of an abandoned concrete plant in the Lakeland, Florida. Now her mom says there is some peace for Rebecca.

TRICIA NORMAN, REBECCA SEDGWICK'S MOTHER: Justice is finally being served. Something is finally being done about these girls who were bullying her. That's all she ever wanted, was somebody to listen and do something about it.

ZARRELLA: What the Sheriff's Department in Polk County did about it was arrest two girls, one 12, the other 14. Both have been charged with felony aggravated stalking. The 12-year-old has been released to her parent's custody. The older one is being held. They were picked up hours after authorities say the 14-year-old posted on Facebook, quote, "Yes, I bullied Rebecca and she killed herself but IDGAF." I don't give a blank.

The attorney representing the 14-year-old says her client didn't even have access to Facebook at the time.

UNIDENTIFIED FEMALE: She denies them. She says that this is not as clear cut as it seems, that these things that were posted on Facebook recently were not by her.

ZARRELLA: It all started, authorities say, over a boy. The 14-year- old they say didn't like that Rebecca had once dated a boy she was now dating. It escalated from there, much of it on social media. Police found messages to Rebecca, quote, "You should die and why don't you go kill yourself." Rebecca's mom transferred her to another school but the taunting continued.

NORMAN: I remember telling them, you know, Becca, don't listen to them, you're beautiful. They're just jealous of you. She would say you're my mom. You have to say that. ZARRELLA: Experts say social media has allowed bullying to become 24/7. Kids can't escape it. As they did in this case, authorities are now arresting juveniles more frequently to try and curb the problem.

SHERIFF GRADY JUDD, POLK COUNTY, FLORIDA: But I can tell you we're all devastated by this, when a 12-year-old baby jumps off the top of a cement plant for any reason, that's terrible event. That's a tragic event. And I can tell you all of us that worked that case and worked around that case, we've lost sleep over that child dying, needlessly. And we want to see things change. We want to never, ever, ever have to investigate a case like that again. Not only here but any place.

ZARRELLA: Rebecca's memorial Facebook page with hearts reads, quote, "Stop bullying. No one deserves to feel worthless." John Zarrella, CNN, Miami.

(END VIDEOTAPE)

PEREIRA: For more on this story let's bring in CNN legal analyst, Sunny Hostin and CNN digital correspondent Kelly Wallace. Sunny, we'll start with you, strong, strong words and much needed words from that sheriff. A lot of people are wondering why aren't the parents involved or why weren't the parents involved? And why wasn't the school district or even the school itself involved?

SUNNY HOSTIN, CNN LEGAL ANALYST: Well, they all failed miserably, right. I mean, I think the number one issue here is where were the parents? Why didn't school do anything about it and legally, you know, there really isn't a place for this. I think there should be. I think people have to legislate criminal responsibility for parents. Yes, you can hit them in their pockets. I think this family can certainly sue them civilly, intentional affliction of emotional distress, but I think you have to have parental criminal responsibility.

PEREIRA: Some places have that?

HOSTIN: Yes, but very, very limited, very, very limited. We have to get there. I really was so surprised when I heard about this case. I think we're living in that post-Tyler Clementi anti-bullying type place. You would think that zero tolerance. You see all these PSAs about bullying, but this is still happening. I mean, where were the parents here?

PEREIRA: One of the big concerns, Kelly, is that we know parents are being better about monitoring what kids are doing online, Facebook, Twitter, but there are new sites that our kids are always ahead of us.

KELLY WALLACE, CNN DIGITAL CORRESPONDENT: Exactly.

PEREIRA: There are new sites they're using.

WALLACE: That was the takeaway here. This mom felt she did everything she could, going to the school, taking her out of the school, closing down her Facebook page, but guess what, her daughter was on some of these other sites such XFM and Kick. These are social media, text messaging applications and the key here is you can be anonymous.

So you can have the cyber-bullying coming in and then law enforcement officials want to try and track these people down but they can't. That's the issue. Parents don't know about these sites. They have to keep up on what's going on and keep the conversation going with their kids about what they're doing and learning on these sites.

PEREIRA: That's another angle to hit, too. I'm curious about if the websites are taking a stand and doing anything because one would wonder if they can come back and be held responsible at all.

HOSTIN: It's a third party platform situation.

PEREIRA: It's hard.

HOSTIN: It's really difficult. I think that at least this case, this sheriff is sending a message to the children saying you're going to be charged with cyber stalking, which is basically what this charge is. The exposure is up to five years in prison. That's really significant. But again, I'm sort of coming from the perspective of these still are children.

As parents we need to teach them how to relate to other children, how to treat people like human beings. I'm surprised that there isn't more legislation. I'm surprised there aren't more laws holding parents responsible. We hold parents responsible when their kids don't go to school, right, criminally?

CUOMO: First of all, you get a big amen for the points that you're both making right now. I just can't believe we're living this again.

HOSTIN: Yes.

CUOMO: I mean, how many of these do you have to cover before there's a change and let's look at why there isn't a change. If it's so common sense, why isn't there a change? Here's why. Your schools are lawyered up anything happens. There's a PC culture and protecting kids and everybody's privacy rights. You have to find a way to bust down on the schools. There is almost zero chance the school on some level wasn't aware of this behavior.

PEREIRA: I agree.

CUOMO: There's almost zero chance that these parents on some level weren't aware of the behavior.

HOSTIN: Or should have been aware.

CUOMO: It happens. This kid's face becomes the face of the problem only to be replaced by the next face unless something is done.

PEREIRA: We have a case in Massachusetts.

CUOMO: Usually the cops are part of the problem. Not this time. Not this sheriff. He is doing the right thing. It's harsh to punish a child criminally, but what do you do to send the message that it is not tolerated?

WALLACE: I thought the sheriff was powerful, parents, you don't have to be a best friend with your kid.

CUOMO: Telling them is not enough.

WALLACE: Also, maybe they shouldn't have the Smartphone at age 12. Maybe they could have a flip phone. Have the discipline, put the standards in place.

PEREIRA: That kind of behavior is noticeable.

WALLACE: Exactly.

PEREIRA: Early on.

HOSTIN: It is criminal behavior. I have two small children, and I had a situation with my son. I specifically called the parents and said, "I'm not going to speak to a child unless you can't."

PEREIRA: Right.

HOSTIN: So you need to shut this down. I'll tell you; it got shut down. That's parenting. Those are parents being responsible.

CUOMO: But you have a culture in place. Kids will be kids, Sunny. Tell your kids to toughen up. That's what you hear.

WALLACE: We have to tell our kids that is not the way you treat people. If you see this, quote, "gang mentality online," we have to teach our kids to be strong enough and courageous enough to step up and say that's not OK.

PEREIRA: These conversations are really important. There's passion about this because it was a 12-year-old baby who wanted to continue online. Please follow us on Twitter, #newday. Get more information on Kelly Wallace@cnn.com/living and of course, Sunny Hostin, we always appreciate you joining us and giving your expertise for this topic.

WALLACE: An important one.

PEREIRA: Thanks, Kelly. Thanks, Sunny.

CUOMO: There's no story I'd rather never report on again when this happens. It's so senseless. Thank you for this.

Coming up on NEW DAY, one-on-one with a man named Robert Redford. Why the acclaimed actor believes the gridlock in Washington is all about race.

(COMMERCIAL BREAK)

CUOMO: Welcome back to NEW DAY. Hope the morning's going well for you so far. Robert Redford staring in the critically acclaimed new movie "All Is Lost," a title many say could apply to the situation in Washington right now. Why that segue way? Because the actor has a lot to say about what's going on down there. He sat down with entertainment correspondent, Ms. Nischelle Turner who joins us live.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: The last time I spoke with Robert Redford was right after President Obama was re- elected. You know, I wanted to talk to him about what he thought about how the president was doing in his second term. When I sat down to talk with him about his movie I asked how he thought things were going right and let me tell you he did not hold back.

(BEGIN VIDEOTAPE)

TURNER (voice-over): Robert Redford calls his new move "All Is Lost" pure cinema.

ROBERT REDFORD, ACTOR: No dialogue, no barriers between you and the viewing audience. I like that.

TURNER: This movie is a journey and all Redford, but we don't know his character's name, his back story, and we almost never hear him speak, a mere three lines of dialogue in almost two hours of film.

REDFORD: It was more like a silent movie, and I liked that. I liked the idea of can you tell a story without having any dialogue? You should be able to do that and this gave you the chance.

TURNER: One topic the acclaimed actor and director can't stay silent on the real life political drama playing out in D.C.

(on camera): It's funny we can name "All Is Lost" with what's going on in Washington.

REDFORD: Don't get me started on that.

TURNER: But I wanted to ask because the last time we spoke, President Obama had just been re-elected, and we were talking about what you wanted to see for his second term. What do you see right now and what do you think so far?

REDFORD: Well, what I wanted to see was, is turning out to be a dream that never came true. I don't envy his position. I think he's a good man. I think he's an intelligent man, a compassionate man who can't function in that environment. It is so decrepit. It is so paralyzed and the worst of it is that it's paralyzed by intention. There's a body of congressional people that want to paralyze the system. I think what's unfortunately underneath it is racism involved, which is really awful.

TURNER: Is that the elephant in the room nobody wants to talk about?

REDFORD: I think, I don't know whether it's an elephant. It's some kind of animal.

TURNER: The snake?

REDFORD: Whatever it is, I think it's in the room but there are other issues. It's not just racism. I think it's a group of people that are so afraid of change and they're so narrow-minded that when you see some people when they see change coming get so threatened by change they get angry and terrorized and they get vicious.

TURNER: Is that change universal healthcare? Is that change having a, someone that doesn't look like the norm as the leader of the free world?

REDFORD: Doesn't look like the norm, in their mind, but I think just the idea of giving credit to this president, giving him credit for anything is abhorrent to them, so they'll go against it, never mind it's the better good of the people, never mind that they're supposed to be in office representing the interests of the public. They're representing their own self-interests, which are very narrow and in some cases just bigoted.

(END VIDEOTAPE)

TURNER: You know, I'm going to bring you part two in the next hour, where I ask him that despite all this government, despite all of this, that government still has to function, so I asked him what do you and he's got some very clear ideas about that, too, and that is up next in our next hour.

CUOMO: Plenty to talk about with what's going on in D.C., so let's get back down to D.C. itself, Kate, what's going on there right now?

BOLDUAN: If I knew exactly what was going on this whole thing would have been solved by now. We're going to be covering this story unfolding from all angles, Congress racing against the clock to get a debt deal done, can they beat the midnight deadline, what are the contours of a deal? What would it look like? We'll ask one of the people who would know, Republican Senator Kelly Ayotte, joining me at the top of the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BOEHNER: The idea of default is wrong, and we shouldn't get anywhere close to it.

(END VIDEO CLIP)

BOLDUAN: The 11th hour, we are in it. Now just hours away from the debt ceiling deadline.