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Israeli P.M. Comes To Washington; Obama Comments On Shutdown Threat; Clock Ticking Toward Government Shutdown; Americans React to Shutdown Threat

Aired September 30, 2013 - 13:00   ET

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

WOLF BLITZER, CNN ANCHOR: Right now we're standing by for the White House briefing. What will Jay Carney say with only 11 hours to go until the government shutdown? And the House taking more shots at Obamacare. President Obama, by the way, he has just spoken out in the Oval Office about the potential government shutdown. The tape coming up momentarily.

The threat of a shutdown is certainly taking its toll on the markets. Check it out. Right now down more than 100 points, the Dow Industrials, as we speak.

Also right now, a key Middle East ally at the White House. The substance of what the Israeli Prime Minister Benjamin Netanyahu and President Obama are talking about. We have the videotape of that Oval Office meeting as well.

Hello, I'm Wolf Blitzer in Washington. President Obama has just spoken out about a potential government shutdown. He's been meeting in the Oval Office with the Israeli prime minister. Listen to what he says about a shutdown.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The bottom line is that the Senate has passed a bill that keeps the government open, does not have a lot of extraneous issues to it, that allows us then to negotiate a longer term budget and address a range of other issues but then insures we're not shutting down the government and we're not shutting down the economy at a time when a lot of families out there are just getting some traction and digging themselves out of the hole that we've had as a consequence of the financial crisis.

You know, I've said before, Congress has two responsibilities; pass a budget, pays the bills. And I am not only open to but eager to have negotiations around a long-term budget that makes sure that we're investing in middle class families, helping the economy grow, giving people who are working hard a leg up, and greater security and stability and deals with some of our long-term challenges in terms of debt and deficits. But the only way to do that is for everybody to sit down in good faith without threatening to harm women and veterans and children with a government shutdown and certainly we can't have any kind of meaningful negotiations under the cloud of potential default, the first in U.S. history. There's not a world leader, if you took a poll, who would say that it would be responsible or consistent with America's leadership in the world for us not to pay our bills. We are the foundation of the world economy and the world financial system. And our currency is the reserve currency of the world. We don't mess with that, and we certainly don't allow domestic policy differences on issues that are unrelated to the budget to endanger not only our economy but the world economy.

So you know, I suspect that I will be speaking to the leaders today, tomorrow and the next day.

But there's a -- there's a pretty straightforward solution to this. If you set aside the short-term politics and if you look at the long- term here, what it simply requires is everybody to act responsibly and do what's right for the American people. All right?

Thank you very much, everybody.

(END VIDEOTAPE)

BLITZER: All right. So, there you hear the president making a pitch to keep the government operating, fully operating, passing a simple resolution without any attachments, nothing to do with Obamacare. Keep the government operating. It's -- the ball is now in the Senate's court, then it will go back to the House of Representatives. It's now less than 11 hours and counting until the government, at least partially, would shut down.

Next hour, the Senate starts the debate on the new House bill aimed at avoiding the shutdown. It's a bill the House knew would fail in the Senate, but the president, in any case, promised a veto. It calls for a one-year delay on Obamacare.

The pawns in this political game right now, the American people. That includes the 783,000 government workers who were expected to be furloughed if this goes past midnight tonight. Then there are all those planning to go to national parks, other national historic sites.

Here's who the American people think would be responsible for any partial government shutdown, 46 percent blame Republicans in Congress, 36 percent blame the president.

Meanwhile, this is what we've been hearing this morning as the Senate prepares to open for business.

(BEGIN VIDEOTAPE)

REP. JOHN BOEHNER (R), HOUSE SPEAKER: The House has done its work. We passed a bill on Saturday night, sent it to the United States Senate, that would delay Obamacare for one year and would eliminate permanently the medical device tax that is costing us 10s of thousands of jobs that are being shipped overseas.

The Senate decided not to work yesterday. Well, my goodness, if there's such an emergency, where are they? REP. FRANK PALLONE JR. (D), NEW JERSEY: I heard the speaker say that we've -- the House has done its work by delaying Obamacare. I'd like to remind the speaker and all my colleagues on the GOP side that the work that has to be done is to pass a budget to keep the government open. The issue of Obamacare is over. It was resolved in the last presidential election when the president was re-elected and said that he was going to continue with it.

FREP. VIRGINIA FOXX (R), NORTH CAROLINA: There's so much potential for bipartisan efforts to advance this legislation in the Senate. But Senator Reid needs to bring up the proposal and adopt an attitude that is broader than our way or the highway. There's time left for us to work together. The Senate needs to hustle.

ELEANOR HOLMES NORTON (D), D.C. DELEGATE: The Republicans want the administration to believe that they now want only a delay. Well, why don't they state that forthrightly? Why don't they say they are now for the affordable health care act but they want to delay it because of certain issues and bring them forward?

(END VIDEOTAPE)

BLITZER: I want to show you some interesting numbers right now. On September 20th, the House passed its spending bill with no funding for Obamacare. That vote was 230 to 189. Pretty much a straight party vote with two Democrats, one Republican switching sides.

Early Sunday morning, the House voted again. It was almost identical, 231, 192. Two Democrats -- this time two Republicans switching sides. Last week, the Senate passed its version of the spending bill fully Obamacare also straight along party lines.

Our Chief Congressional Correspondent Dana Bash is standing by up on Capitol Hill. So, Dana, how is today's Senate action different from what we saw last week? I expect we'll see the same thing come out of the Senate in the next few hours.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: That's exactly right. It's going to be the same when it -- when you're talking about the outcome. It will be different with regard to how long it's going to take. We expect -- if Senate Democratic leadership sources are correct in their assessment, we expect that they're likely to reject this in warp speed.

They're coming into the Senate, which is down behind me in the Capitol, in less than an hour. And we're told that by 2:30 Eastern, so an hour and a half from now, they're likely to reject what the House sent over after midnight on Saturday night and then the ball is right back in the House's court -- Wolf.

BLITZER: So, what happens when it gets back to the House of Representatives, what they call this clean continuing resolution fully funding the government, at least for a few more weeks, what does the House of Representatives do then facing either continue to link it to Obamacare or pass some legislation keeping the government fully operational? BASH: Well, Wolf, House Republicans are going to meet in less than an hour at 2:00 Eastern to decide that. I'm told by Republican sources that their leading option isn't to send a clean bill but add yet another Obamacare related issue on it which is to delay the individual mandate.

But I have House Republican lawmaker, Congressman Charlie Dent, who actually disagrees with that. He disagrees with the way that his party has been doing this, at least right now. Congressman, tell me what you want to see your fellow Republicans do when they get this bill which is to fund the government without any strings attached. Do you think that you should just pass that?

REP. CHARLIE DENT (R), PENNSYLVANIA: Well, at this point, the hourglass is nearly empty. And I think now that we've sent over two volleys to the U.S. Senate and they rejected both, I think now it's imperative that we fund the government and get on with the business of governing. I think that's the best we can hope for right now. I would certainly discourage the Republican leadership from launching another volley back over to the Senate, because it will likely result in the same outcome which is that they will reject it and then send it back.

So, sooner or later, we're going to have to pass a clean resolution to fund the government before the end of the day. And I believe the votes are there to do it. I believe there are over 218 votes. It will be a bipartisan vote. There will be plenty of Republicans and Democrats, I believe, who would be willing to fund the government in that manner.

BASH: Now, you all are meeting in about 50 minutes. You're going to stand up in your House Republican caucus and make this argument to your colleagues saying, enough already. Let's pass a clean bill and keep the government running.

DENT: Well, I've made a number of speeches in front of our conference over the past few weeks on this issue. I intend to be vocal again and say just that, that the tactics employed up to this point, I suspect it would not be successful. Hey, I voted to repeal, delay, defund Obamacare. I have all sorts of problems with the law. But I also realize it's not going to be changed between now and the end of the day today.

So, it's imperative for us, right now, to get on with the business of governing. We have -- you know, I'd say there are over 180, probably 190 members of the House Republican conference who have a very serious sense of governance and who, you know, are the governing win of the party. You know, we have a few dozen who don't have that same sense of governance. And so, we're just going to have to get on with the business, pass the bipartisan bill and keep the government running.

BASH: And you know full well that this is likely the tactic that John Boehner would like to take. He understands the perils of the government shutting down but he has a very vocal conservative wing, their colleagues, who will considering -- consider this raising the white flag and surrendering. Isn't that a likely scenario that he could be in trouble if he goes your way?

DENT: Well, I suspect there are close to 200 members of the House Republican conference who want to see a clean CR passed. I'm not saying there would be 200 voting for it, but there are certainly that many who want to see it happen. There are many who are hoping yes and will vote no. But the point is, we've seen this before on the fiscal cliff situation, Sandy, the Violence Against Women Act. We've seen a number of members step up and put up the necessary governing votes. You see that will happen again today. I can't predict how many it will be but I'm sure it will be enough to help secure passage.

BASH: So, it sounds like what you are saying is if the government does shut down, you believe it's House Republicans' fault?

DENT: Well, I'm not going to say it's the House Republicans fault but I suspect we'll be blamed regardless of whose fault it is. I think it will look bad on everyone in Washington if the government shuts down. I suspect that we -- that Republicans will be more blamed other than the Democrats will.

But I'm urging colleagues that a government shutdown is not in anyone's interest. It's not in the American people's interest. It's not in our troops' interest. It's not in the Republican Party's interest. It's certainly in no one's interest.

So, I say, get on with the business of governing, get it done. And we'll be able to debate some of these issues again with the debt ceiling. We're going to have all these debates again over the next few weeks.

BASH: OK. Thank you very much. I appreciate it.

And, Wolf, I should just say that -- make the point that this is a counter argument. We've heard -- I've talked to a lot of people privately who say what the Congressman said. I saw an interview with the congressman from Greg Sargent of "The Washington Post." I asked him to come on live. And it's certainly interesting to hear this, because we've heard so much about the intransigence of many House republicans.

Here is one who's trying to line up votes saying, enough already. Let's just pass a clean bill and move on.

BLITZER: But the speaker of the House has to make that decision. Will he allow that resolution to come up for an up or down vote, a clean Senate passed piece of legislation? What's the answer? Is John Boehner -- is he going to do that?

BASH: We don't know. The Congressman is going to go into a meeting that House Republicans are going to have in 45 minutes now. And he just told us, he's going to make the argument that enough -- that enough is enough, just pass a clean bill. And he's going to see whether or not John Boehner is willing to do that, or if he's going to go, what looks like at least their initial plans are, the other way which is to try one more time to send the Senate something that deals with Obamacare. Again, we're told that the leading option is to delay the individual mandate. So, you see here, there's definitely a split in the Republican caucus. That's not a new phenomenon but the congressman is trying to be much -- Congressman Dent is trying to be much more active in getting people to put their money where their mouth is and say, enough already and they should vote on a clean bill.

BLITZER: Let's see what happens. And the next few hours will be critical. All right, Dana, thank you.

Since this wouldn't be a complete shutdown of the federal government, there's still some confusion about what services would be available and what wouldn't be available.

Christine Romans is joining us now to help us to better appreciate what's going on. Give us some of the basics, Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, I don't appreciate any of this that's going on, I'll be honest -- I'll be quite honest with you. But let's take a look at what you would feel first if we had this partial government shutdown, Wolf. I mean, first, it would of course be the national parks. It would be zoos. It would be basically anything that's free would probably be closed, quite frankly. Many museums as well, federal museums. Federal offices and programs closed. More than 700,000, almost 800,000 people would be sent home without pay. Those are nonessential workers.

What is open? Federal courts, Wolf, can be open for about 10 days. There's enough funding to operate for about 10 days there. Passport offices -- passports are now largely funded by fees. So, passport offices would remain open but passport offices in federal buildings might be shut. So, be careful where you're going to get a passport renewed or to get a passport for the first time. Air traffic control, border protection, the key elements of the Department of Defense. The power grid would still be maintained, of course.

Also, I should point out, that the FHA, just to show you how quickly things are changing. The FHA has now updated its guidance, its contingency planning, and it will still be endorsing some mortgages, for now at least, during a shutdown. So, that's a change there from the FHA on the mortgage front. Let's take a lo9ok at other things that would still be happening. Social security checks, that's mandatory. Medicare, Medicaid mandatory. Food stamps mandatory. Jobless benefits same thing. Postal service, that would be open. So, a lot of these day-to-day things are still going to happen.

So interesting about the Social Security checks, because a lot of people, Wolf, have been saying that until main street really feels it, they're going to dismiss all of these theatrics in Washington. It's just that theatrics. By the time main street feels it, it could well be when we're at a debt default level, when we're talking about not paying our bills come October 17th or later, that's when you wouldn't see that -- those checks in the mail for, say, Social Security or jobless benefits. That would be a real problem by then.

Meantime, in terms of shutdown, of course, you still have to pay your taxes, Wolf. And members of Congress -- as we have pointed out over and over again, members of Congress will still be paid, no question -- Wolf.

BLITZER: They're essential government employees. That's why they will get paid. All right, thanks very much, Christine, --

ROMANS: You're welcome.

BLITZER: -- for that. For a full list, by the way, of what would be open, what would be closed, you can check out our interactive page CNN.com/interactive.

We're standing by. The White House press briefing about to begin. We'll hear what Jay Carney has to say. Also the top senior advisor to the president, Dan Pfeiffer, he'll be joining us live answering some of your questions as well. Gloria Borger is here. Much more news right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Please let's all come together on one accord. We are Americans. We need to get this together because, I mean, it's not rocket science.

UNIDENTIFIED FEMALE: Compromise is not a bad word at all. Compromise is a good word. And I think that's what it's all about. I don't have a problem with differing opinions and I don't think any of us do. I think that -- but we have to get on with our work and we have to make a decision. And this doesn't seem like that's what this is about.

(END VIDEO CLIP)

BLITZER: Meanwhile, a game of chicken effectively is being played out here in Washington. Americans are weighing in with their opinions. According to this brand new CNN poll, 68 percent of Americans think it will be a bad thing if the government shuts down, even if for only a few days. And check this out. The majority of Americans think Republicans and Democrats in Congress are acting like spoiled children and the president doesn't fare a whole lot better.

Let's bringing in our chief political analyst Gloria Borger, who's watching all of this go on.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Smart people.

BLITZER: So is there a way between now and midnight tonight to avoid this partial government shutdown?

BORGER: I think it looks less and less likely, Wolf, but I think you have to pay an awful lot of attention to the House speaker, John Boehner. Here is somebody who early on -- early on in this whole process, before this even began, said that he did not envision shutting down the government as a possibility. That he wanted to make his stand on the president's health care plan on something else, not on shutting the government down.

What's interesting is that John Boehner was in the Congress in the '90s when the government shut down. Only 20 percent of House Republicans were actually there when it occurred. So they don't have the kind of memory that John Boehner has. The big question is, is he willing to do something eventually to avert a government shutdown without a majority of his own Republicans? And as Dana pointed out earlier, we don't know the answer to that question.

BLITZER: And our new poll that just came out, we asked, who would be more responsible for a government shutdown. Forty-six percent said Republicans in Congress, 36 percent said President Obama, 13 percent said both. So I guess that's nationally.

BORGER: Sure.

BLITZER: But if you dig deeper into districts, especially gerrymandered Republican Districts -

BORGER: Sure.

BLITZER: It's very popular to say, shut the government down in order to destroy Obamacare.

BORGER: Right. They're not going to have any problem. In fact, a majority of Republicans, if you dig into our poll, a majority of Republicans, not just Tea Party Republicans but Republicans say, you know, it would be OK to shut the government down.

Here's the problem for the Republican Party. Independent voters don't want to shut the government down. So you want to retain your congressional majority, these Republicans who are concerned about being primaried on the right, you give them this vote, this works for you to keep your congressional majority. But, Wolf, if you want to win a presidential campaign, it's much, much more difficult for you because you're not going to gain those independent voters.

BLITZER: Dana, hold on for a minute, because Dan Pfeiffer, the senior visor to the president, is joining us from the White House right now.

Dan, thanks very much for coming in.

Is there any area that the president is willing to compromise at this late stage, at this late hour, in order to give the Republicans in the House of Representatives at least something, maybe even symbolic, in order to avoid a government shutdown?

DAN PFEIFFER, SENIOR ADVISOR TO PRESIDENT OBAMA: Well, no, Wolf, because what -- all the president and Senate Democrats are asking for is to keep the government funded for another six weeks, two months at the current level so we can try to work on a larger budget agreement. Something the president put forward many months ago. And so what the Republicans want is to extract some ideological concession in order to save face with the Tea Party to keep the government open for two months. What happens two months from now? What are they going to want then, full repeal of Obamacare, overturn Roe v. Wade, install Mitt Romney as president? At some point we have to bring the cycle of hostage taking and brinksmanship to an end.

BLITZER: The other day you were suggesting maybe it was almost like terrorism. Those where pretty strong words. I wonder if you wanted to shall we say correct the record or give us an explanation of what you mean by that.

PFEIFFER: Sure. That comment obviously struck a nerve with some. And -- but that's not my metaphor, it's the metaphor of Republicans themselves had used. Senator McConnell said two years ago that the global economy was the hostage worth taking. Other Republicans have said on the record that they were willing to, quote, "blow up the economy" and use that as leverage to get what they want. And so I was -- I was trying to describe the Republican position of, give us -- we're going to give you a list of demands. Give us what you want or we're going to shut down the government or try to -- or cause America to default for the first time ever and do great damage to our economy. I mean I don't know how else you want to describe their position. That is essentially what it is and they're not shy about it.

BLITZER: Well, because, you know, there's -- a lot - a lot of people have raised this and I asked my Twitter followers what they would ask you and a lot of people have pointed out the administration already has delayed implementing various parts of the Affordable Care Act, Obamacare as it's known. Why not delay it a little bit more? Get it ready? There have been some last-minute glitches, even as we know these last few days. Why not take some of those steps in order to make sure the government as a whole doesn't shut down?

PFEIFFER: Well, Wolf, first, I'm sure you have excellent health care at CNN. I'm fortunate to have good health care here at the White House. There are millions of Americans who have waited years and years and years to have access to affordable health care. They have lived every day in fear of being one disease away from bankruptcy. They have foregone health care that they needed because they couldn't afford it. Starting tomorrow, they will have a chance to assess that. Why should we delay that process just so the Tea Party Republicans can finish the grieving process over the 2012 election? That doesn't really seem to make a lot of sense and I don't think it's fair to ask those people to wait to get the health care they need and deserve.

BLITZER: If you've delayed it for big business, implementing various parts of the mandate, why not delay it for average folks out there as well?

PFEIFFER: Well, because, first, that would be - that would be denying millions of Americans, many of whom live in the districts of these Republicans who are forcing this shutdown, denying them access to health care. Second, I think it's important to accurately describe -- not sort of regurgitate the Republican talking point here, but accurately describe what -- when you're talking about the business delay. Ninety-eight percent of businesses already provide health care - who are affected by the law, already provide health care. They are not affected by it. This is simply the reporting requirements for 2 percent of businesses. That is not a reason to ask Americans who have gone without health care for so long to go even longer.

BLITZER: Here's another question that a lot of people want to know. Why was the president, at a critical moment like this, with almost 800,000 federal employees about to be furloughed, playing golf over the weekend, not engaging in talks with the Republican leadership in the Senate and the House? Why hasn't he been more actively engaged the way, let's say, Ronald Reagan used to be engaged with Tip O'Neill when they had a big fight. They would go - they would at least meet and talk. As far as we know, the president has not been reaching out to the Republican leadership over the past several days to avert this government shutdown.

PFEIFFER: Well, first, I think it - it, I think, does a disservice to the sort of bipartisan negotiations that Tip O'Neill engaged in the suggest that the sort of brinksmanship that's happening on the House right now is anything like that at all.

What -- the problem here is not Democrats and Republicans disagreeing. There are majorities in the House and Senate who today would vote to pass a bill that would keep the government open without any sort of concession or demand from the Republicans about Obamacare. That could happen now. The problem is not Democrats and Republicans. It's Republicans and Republicans who are disagreeing over core issues. Right now, 60 to 70 House Republicans are preventing Speaker Boehner from putting a bill on the floor that would cause all of this problem to go away. And so that's a decision he has to make. Speaker Boehner has to decide if he is going to shut down the government to try to rerun the 2012 election. I think that's a big mistake for the economy and so that's a choice he has to make.

BLITZER: So no delay at all on the individual mandate, is that what you're saying, in exchange for any concession from the Republicans?

PFEIFFER: Absolutely not. No. The Republicans, they have two jobs, pass a budget, pay the bills. You do not get to extract, try to pass ideological positions that you cannot win in an election or pass through Congress on their own by threatening shutdown of the government or a shutdown of the economy. That's - it's a very clear position.

BLITZER: And one final - one final question. At the photo op in the Oval Office with the prime minister of Israel, we heard the president say he'll be speaking with the leaders over the next day or two. Any meetings planning, any dialogue planned at least right now, anything expected today?

PFEIFFER: Well, you can expect that he -- as you said, he'll be speaking to them, I think he said today, tomorrow or the next day. He'll be in touch with leaders throughout this process.

BLITZER: Including the speaker of the House, John Boehner?

PFEIFFER: I'm confident he will be part of that list.

BLITZER: Dan Pfeiffer, thanks very much for joining us.

PFEIFFER: Thank you, Wolf.

BLITZER: Playing the blame game as the clock ticks down. We'll talk to half of the "Crossfire" crew, Newt Gingrich and Van Jones. They are here. We'll ask them, who's going to get tagged with blame if the government puts out a closed sign and if it will be a repeat of the last time that happened back in '95, '96.

(COMMERCIAL BREAK)