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Deal or No Deal; Politics, Pawn and Poker?; Paid to Tweet; Trimming the Fat

Aired November 9, 2013 - 09:30   ET


POPPY HARLOW, CNN HOST: And on "Your Money" today, the freedom to be fat. With the cost of obesity reaching epidemic proportions, do Americans need the government to outlaw unhealthy foods? "Your Money" starts right now.

204,000 jobs created in October, but what kind of job growth could we have seen if Washington was actually working?

I'm Poppy Harlow, in for Christine Romans today. This is "Your Money."

Once upon a time, there was talk about a big deal. It would (INAUDIBLE) America's debt by reforming Medicare and social security and tax code all at once. The elusive grand bargain, do you remember that?


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: A larger agreement. A bigger deal, a grand bargain.

UNIDENTIFIED MALE: We are happy to do the grand bargain.

UNIDENTIFIED FEMALE: We support a grand bargain.


HARLOW: The grand bargain. That was then. These days, a goal less grand as members of the House and Senate try to hammer out a budget agreement trying to replace those force budget cuts known as the sequester. Those cuts have enemies on both sides of the aisle. Democrats don't like cuts to programs like Head Start, Meals on Wheels and medical research. Many Republicans don't like the cuts to Defense, which military leaders have argued hurt the readiness of U.S. armed forces.

Just ask former Defense Secretary Robert Gates who served under both President George W. Bush and President Obama.


ROBERT GATES, FORMER DEFENSE SECRETARY: There may be a more stupid way to cut the budget than sequestration. But if there is, I have not been able to identify it. But these are across-the-board mindless cuts that make no differentiation between what's important and what's unimportant is a crazy way to try and deal with the budget issue.


HARLOW: So can Congress find a way to fix it or is Washington's dysfunction destined to doom this effort as well?

Let's bring in two folks to talk about it. They know a whole lot about this. John Avlon, a CNN political analyst and executive editor of the "Daily Beast", and my friend Jeanne Sahadi, a senior writer for CNN Money. Both my friends here joining us. I appreciate it guys.

I hope it's better this time around. But to you, John, the sequester was supposed to be like this poison pill. So awful that we wouldn't go that far, that we'd find a smarter better way. What about this time?

JOHN AVLON, CNN CONTRIBUTOR: Well, that's exactly right. Every time we've set out the self-imposed markers designed to scare Congress and to finding way to work together somehow they've managed to blow past it. I mean, the impulse in charge of the bayonets on the part of these folks is endless and the super committee was a super fail.

But this is a real second chance. There are public polls that even now they've got to say look, we've got to do something. And bottom line, this isn't rocket science. This is a budget reconciliation committee. This is the kind of thing that used to be done (INAUDIBLE). So whether Patty Murray and Paul Ryan can get it together, that's what the country should be focused on. We all need to ratchet up the heat.

HARLOW: But there's no real, real last-minute deadline here. Right? So there's this December 13th date but --

JEANNE SAHADI, SENIOR WRITER, CNNMONEY: Well, there is one deadline. It's January 15th. Because if they fail, we see even more sequester cuts in 2014.

HARLOW: The Congressional Budget Office, nonpartisan, came out with this estimate, this number saying how many jobs could likely be created in the next year if we didn't have sequester.

SAHADI: Right.

HARLOW: What are they telling us? And does it look like Republicans and Democrats are coming closer to finding something to replace it with?

SAHADI: Yes. The CBO has basically said it won't be often for jobs. They think that if we could get rid of the sequester for 2014, we could create up to 1.2 million jobs. Their middle of the range estimate is about 800,000.

Can Democrats and Republicans get over themselves and pass something that's good for the country? Yes, they can. But they're going to have to pay for it. So everybody wants to replace the sequester. And I -- I should say, the Democrats also don't love the defense sequester, but they definitely don't like the nondefense folks getting cut, too.

HARLOW: Right.

SAHADI: So what they might do is add some spending to both sides of the equation and replace it by raising things like user fees. As opposed to cutting more deeply into the budget, they'll try to raise revenue that's not actually taxes. So user fees. They might change the way pension funding rules are that can raise more revenue in the near term. Stuff like that that's not going to feel very tangible to you and me.

HARLOW: But, John, to you, the sequester, if it keeps going, reduces deficits by more than $1 trillion over a decade. So I wonder, stepping back, and looking at it, is that a victory of sorts for Republicans if they don't really want to give up?

AVLON: So you just stumbled upon or pinpointed the real underlying issue here. Folks like Senator Mitch McConnell have been pointing to the sequester no matter how stupid and painful it is. No matter how opposed to it even Paul Ryan is.

HARLOW: Right.

AVLON: As an ideological victory. So they said look, we've got ideological victory baked in the cake, it's in the baseline. And they realized they don't have the numbers in the Senate to actually put forward their perfect vision. So they've got to find a way to sell to their base a different plan. Now this should be logical because the current plan is opposed by everybody. But because it is painful, because there's massive long-term deficit reduction, it has its ideological constituency.

What it doesn't have is reality on its side. Economic reality or constituent reality. So this is where the creativity needs to come. This is where this whole group needs to grow some cojones and find a way really to reason together and bridge that gap. It shouldn't be impossible.

HARLOW: Guys, thank you both, Jeanne and John. Appreciate it.

AVLON: Thanks, Poppy.

HARLOW: Getting to a deal. We hope they get to one, but we know it won't be easy. No one ever said Washington had all the answers.

Our Christine Romans looks outside the beltway for a way to get to yes.


CHRISTINE ROMANS, CNN ANCHOR (voice-over): This is no way to run the world's largest business.

SEN. JOHN MCCAIN (R), ARIZONA: The real losers were the American people.

UNIDENTIFIED MALE: Both sides deserve a spanking for this.

ROMANS: Washington leadership to the rescue.