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Senate Rejects Latest House Spending Bill; Stalemate Shuts Down U.S. Government; Interview with Rep. Sean Duffy; Checks Could Stop for Disabled Veterans; Will Young People Buy Obamacare?

Aired October 01, 2013 - 10:30   ET

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

CAROL COSTELLO, CNN ANCHOR: Here's Rand Paul. Senator Rand Paul, a Republican, who spoke to CNN's NEW DAY.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: Our first position really wasn't so much a compromise. We don't want Obamacare. We think it is a bad idea and going to hurt people.

So we offered to get rid of it completely. But that didn't pass and so we offered a compromise to say, look, you've been delaying other parts of it, why don't we delay the whole thing for a year. That I think is a compromise position. That was rejected.

We then offered to delay only the individual mandate and the President has unilaterally done it with the employer mandate, that's another compromise that's been rejected.

Now we're offering also a clean CR for a week or two, but my understanding is that Senator Reid has rejected that out of hand as well. So really, we're offering a series of moving compromises, trying to get a middle position and we haven't gotten any -- anything back from the Democrats that they're willing to compromise.

(END VIDEO CLIP)

COSTELLO: Ok, so what's next? CNN's Brianna Keilar is at the White House perhaps to tell us. Good morning Brianna I know the President is due to speak soon.

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Yes that's right. And Carol, we don't expect at this point for him to really say anything dramatically different than we've heard him say. So I think that you'll hear him talking about how he's not going to really accept any major changes to his signature health care reform program, Obamacare. And that he will be urging Congress to pass a simple bill to basically reopen the government, to fund the government and then if there are related budgetary items, that those are things that can be dealt with in negotiations during maybe a short-term extension to fund the government.

You know, in the meantime, it was sort of interesting last night, President Obama right after the shutdown, a video of him talking directly to the military went out. There was a provision that both the House and the Senate passed. The only area of agreement really between them that came to fruition to make sure that the military is paid during this shutdown. Here is what the President said.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Unfortunately, Congress has not fulfilled its responsibility. It failed to pass a budget. And as a result, much of our government must now shut down until Congress funds it again. Those of you in uniform will remain on your normal duty status. The threats to our national security have not changed, and we need you to be ready for any contingency. Ongoing military operations like our efforts in Afghanistan will continue. If you're serving in harm's way, we're going to make sure you have what you need to succeed in your missions.

(END VIDEO CLIP)

KEILAR: But, you know, Carol and this is something I know you will be talking about, some of the people who -- there is no sort of special benefit for to make sure that they're not affected, you will be seeing veterans who will be affected. Of course, the U.S. government is huge employer and you have hundreds of thousands of government employees who are now furloughed as of today, even just in the White House, you have people who were expecting or going home at noon, putting the Blackberry away, these are people who are normally very connected to certainly just to their work at every moment. That's going to happen to them.

And then you'll have, of course, companies who direct contract with the government will start to feel affected. A lot of Americans, though, as you know, may not really feel it at first. So I think what we may be seeing President Obama doing is trying to highlight the people who are going to be affected by this. Might he do that in his -- during his remarks in the Rose Garden? We don't know at this point, but it's possible.

COSTELLO: All right, we'll be listening. Brianna Keilar reporting live from the White House. Thank you.

Joining me now, Republican Congressman Sean Duffy of Wisconsin. Good morning, Congressman.

REP. SEAN DUFFY (R), WISCONSIN: Good morning Carol.

COSTELLO: Ok so I just talked to Senator Isakson, he predicts this government shutdown will last between 10 and 12 days. What is your prediction?

DUFFY: Carol, this is my first rodeo. I've never been to a government shutdown. My hope is that we can resolve this really quickly and as you're well aware, I mean we're asking for some pretty simple things from the Senate and the President. One is that -- that the administration -- that President Barack Obama and Jay Carney and others join Obamacare, just like the rest of America. If Obamacare is good for America, it should be good for the President and his team. We've asked for that. And then we've asked that we treat individuals and America the same way that the President is treating big businesses. The President saw big business with their lobbyists and big money coming to Capitol Hill. He gave them a one-year delay in Obamacare. All we're saying is give that same delay to -- to individuals, treat -- treat my middle class families the same as you're treating big businesses and if you do those few simple things, we'll have an agreement and let's open this back up.

COSTELLO: Let's say Republicans win and Obamacare is delayed for a year or longer. What exactly does that mean for people signing up on health care exchanges today? Signing up for insurance? Will that mean their insurance policies will go away? What does that mean?

COSTELLO: No, so in our latest offer, the exchanges are still up, the subsidies are still there, all we're saying is don't have the mandate that an individual has to sign up. Just like you've given a one-year exclusion to big business, that they don't have to sign their employees up, don't make the individual. But the exchange will still be there.

COSTELLO: So Republicans -- so Republicans like the exchanges? They think it is a good idea, think they're a good idea, yes?

DUFFY: No -- obviously we don't think they're a good idea, but we're trying to find agreement, we're trying to find compromise to keep the government open. And so what I want to be clear to your viewers is we have offered something really simple. We have come off our defund, we have come off our complete delay. All we've asked for is that individuals don't be required to sign up for Obamacare just like businesses.

(CROSSTALK)

COSTELLO: Even though that was upheld by the U.S. Supreme Court?

DUFFY: Well listen, the President said big business doesn't have to sign up. He gave them a one-year delay. We should treat my middle class families the same as the President is treating big business.

(CROSSTALK)

COSTELLO: Wasn't that a compromise?

DUFFY: Well there are -- no, he did that unilaterally. He didn't agree with us to that. We're just saying everyone should be treated equally --

COSTELLO: But you agree with it, right?

DUFFY: I do. But, Carol, why shouldn't my middle class family be treated the same as the big business that came up to Capitol Hill with their lobbyists and got a one-year exclusion? Give my -- give my middle class family that same exclusion, treat them fairly.

And Carol what I think is the biggest rub here, why they won't go for this, is that the administration, Barack Obama, Jay Carney and others, they don't want to be on Obamacare. They've excluded themselves.

And all we said is if this bill is good for America, Mr. President, it should be good enough for you and your team in the administration. Everyone should join. You shouldn't get your own special health care. You should join us in Obamacare. We in Congress are in it, so too should you be.

Listen, they don't -- Carol, they don't want that --

(CROSSTALK)

COSTELLO: Ok so let me ask you -- let me ask you another question that affects all of Americans.

DUFFY: Sure.

COSTELLO: And I get what you're saying. But let me ask you another question. So another part of Obamacare that's already in effect, people with pre-existing conditions, they can't be denied insurance. Would that go away if Obamacare is done away with? If the Republicans win, would that be done away with?

DUFFY: So in our current plan, no, that would still be there and listen I'm one, I'll put out my own package of health care reform a year ago. And I think having people with pre-existing conditions, being able to get health care, is really good. There are some good things in Obamacare. And that's one of them.

And if we get health care reform in a bipartisan fashion, where both parties sit at the table and work together, allowing people to have affordable health care with preexisting conditions is a key tenor.

(CROSSTALK)

COSTELLO: But see this is what's confusing people, Congressman. So we're hearing all of this, there are some aspects of Obamacare that Republicans like. You just, you've just -- you know, you just said some of them, so why are we having this big argument? Why is the government shut down?

DUFFY: Well, as I just said, we have offered some very simple easy solutions for our friends across the aisle. They have dig -- they dug their heels it and they're not willing to come to the table, which leads me to believe that they want this government shutdown. They think it's a political winner for them. But again the American people lose.

COSTELLO: But -- but when you start -- but when you start with a bill, that includes defunding Obamacare outright, right, I mean, that doesn't exactly engender trust with the other side, does it?

DUFFY: Maybe not but when we actually move to the middle to try to work with them I think that is a sign of goodwill. But Carol I want to make sure that your viewers understand, we didn't vote for Obamacare. This was a one-party bill. Democrats chose to work by themselves and pass this bill by themselves they didn't include us and now they want to come to us and say they Republicans to fund it.

I'm willing to work with them. I want to make sure this government is open. And that's why we have come so far to go a couple of small little tweaks, give the individual the same benefit as the employer and include yourselves in Obamacare. That's all we're asking for right now. We open the government up, we all get back to work, this is pretty simple stuff.

COSTELLO: Well I hope you're right about that part of it. Congressman Sean Duffy, thank you so much for joining me this morning. I appreciate it.

DUFFY: Thanks Carol.

COSTELLO: While Republicans and Democrats can't agree on much of anything as they battle over a spending plan but they did agree on one thing. To keep on paying troops. Still, another concern is how the government shutdown may hurt veterans in the long run.

CNN Pentagon correspondent Barbara Starr with that side of the story. Hi, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, good morning, Carol.

Yes, the troops, even those on the front lines, that's now been resolved. They will be paid, funny thing that anyone was considering they wouldn't be.

But now the impact is growing and it is the veterans that may feel the brunt.

(BEGIN VIDEO CLIP)

STARR (voice-over): For 3.3 million disabled veterans, the budget mess in Washington is about to affect them in a big way.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Veterans who sacrificed for their country will find their support centers unstaffed.

STARR: If the government shutdown stretches late into the month, the Department of Veterans Affairs will run out of money. Disability and pension checks could stop for elderly and ill veterans. Advocates are outraged.

TOM TARANTINO, IRAQ AND AFGHANISTAN VETERANS OF AMERICA: That's what they need to pay rent, to pay food. It's not their total income, but it is a significant part of it and taking that out of the mix, because the government can't get its act together, is really dangerous for these men and women who need it the most.

STARR: Disability payments can reach $3,000 a month. For the nation's war wounded, it can be a financial lifeline. Tom Tarantino is an Iraq war combat veteran.

TARANTINO: Members of Congress, members of the administration, any politician needs to understand that if you are holding veterans hostage for the sake of political gain or if you're trying to balance the budget on the backs of the men and women who have served and sacrificed for this country, you are going to pay a political price.

STARR: For America's 1.4 million troops still on duty, and their families, paychecks will come on time. But some services are going to be affected.

Eileen Huck, a Navy wife, says there is still plenty of anxiety about what will happen.

EILEEN HUCK, WIFE OF U.S. NAVY CAPTAIN: Short-term, you know, the commissaries where we do a lot of our shopping will be shut down and for those of us who get our health care, our children's health care at military children's facilities, it's possible that that's going to be affected as well. Routine appointments are not going to be available.

STARR: Still, 400,000 civilian Defense Department personnel will be furloughed until Congress and the White House reach an agreement.

(END VIDEO CLIP)

STARR: And Carol, here we are, this is the furlough notice now being circulated to those 400,000 Defense Department workers this morning. Three pages of bureaucratic language, but the bottom line is, by noon today, they will be sent home without pay and they are being told that this could last up to 30 days. That's what they are being told this morning -- Carol.

COSTELLO: Wow. Barbara Starr reporting live from the Pentagon this morning, thank you.

Still to come in the NEWSROOM, if you're young, healthy and think you don't need health insurance, well, think again. Get covered or get fined. Up next, we'll discuss some new options that the government says could leave more money in your pocket.

We'll be back.

(COMMERCIAL BREAK)

COSTELLO: You're young, you're healthy and you probably think you don't need health insurance. I'm talking to all the uninsured 20- somethings out there who think paying for health care coverage will put them into more debt.

And you might want to learn the lingo of deductibles and premiums because if you are not covered, you are going to be fined.

Joining me now is Jen Mishory, she's the deputy director for The Young Invincibles, a nonprofit that helps educate young people about health care. Good morning, Jen.

JEN MISHORY, DEPUTY DIRECTOR, THE YOUNG INVICIBLES: Good morning, thanks for having me on.

COSTELLO: Ok, thanks for being here. Because I think you have one of the hardest jobs out there. I mean, can you gauge how successful you've been so far?

JEN MISHORY, DEPUTY DIRECTOR, THE YOUNG INVINCIBLES: Well, you know, there is a lot of work to do. Young people, they do want health insurance. We have actually talked to a lot of young people. We have seen the national polls. Young people value health coverage. They value health coverage a lot, actually. They get sick. They go to the emergency room, they tear their ACL.

The problem traditionally has been there hasn't been a lot of low cost options for young people and that's where these new Obamacare exchanges come in. So when a young person is going online today for the first time, and looking at healthcare.gov, they're going to see there are new lower cost options like Medicaid or like getting a lower tax credit that's going to lower that monthly premium for a young person. So there's a lot of new options out there.

COSTELLO: Ok, so, you know, I remember what it was like to be young. I couldn't afford health insurance, I chose to eat and pay my rent and pay for my college tuition. So how much in general will it cost a young person, let's say a 27-year-old or -- let's go younger, 24-year- old, how much will it cost them for insurance every month?

MISHORY: Well, it is a great question. And it is going to vary by state. But if you take an average uninsured, say, young 25-year-old, they're actually only earning an average income of about $16,000 -- $17,000. That's pretty low, right? So they're actually going to qualify for a lot of these monthly tax credits. In fact, so much of these tax credits that they're going to be looking at options that could be as low as $10, $20 a month; if they want more comprehensive coverage -- $30, $40 a month. These tax credits will really lower that monthly premium quite a bit for the young uninsured population.

Ok. So it seems to me, as a person who is an adult and makes a good amount of money, that that's really cheap. But does someone making $16,000 a year who thinks nothing is ever going to happen to them, that still takes a lot of convincing. You could tell them it will cost them ten bucks a month and maybe that wouldn't work.

MISHORY: Well, you know, I do think there is a myth of this young invincible out there that young people think they're invincible. They think they're not going to get hurt. And that's just not true. Young people value coverage and they know, they know they themselves have gone to the emergency room. Their friends have gone to the emergency room. So they have interacted often with the system.

In fact over half of young people who are uninsured have struggled with some sort of medical bill or medical debt. So this isn't necessarily a population that is so skeptical of insurance, like you might often read in the media.

Now, there are going to be folks for whom they're going to have to sit down and make that decision. It is going to be a personal decision. It is going to be a personal health and financial decision. And they're going to have to sit down and figure out what makes sense for them.

COSTELLO: Jen Mishory, thank you very much for joining us. We appreciate it.

MISHORY: Thanks so much.

COSTELLO: Still to come in the NEWSROOM, national parks close, Congress' approval rating in the toilet and nearly a million federal employees out of work this morning. Why is one budget analyst saying it is a serious exaggeration to call Washington's stalemate an actual shutdown? We'll talk to that man next.

(COMMERCIAL BREAK)

COSTELLO: 800,000 federal workers off the job today because of the government shutdown and needless to say, they're not happy about that. In fact many are quite scared because it is not like they're on paid leave. They're not getting paid while they remain off the job.

Erin McPike is in Washington getting more reaction to this government shutdown. What are workers telling you, Erin?

Erin, can you hear me? I don't think Erin can hear me. All right. Well, we -- while we tame our technical demons, we'll go on to our next guest and then get back to Erin. But as you might expect federal workers are not so happy this morning.

The largest employer of Americans closed for business. Today's government shutdown means nearly -- as I just said -- nearly 800,000 federal employees are on unpaid leave, a move that could cost the economy about a million dollars every single week in lost pay and that's just the tip of the iceberg.

Economist Tad Dehaven is a budget analyst at the Cato Institute. He's also worked as a budget policy adviser to republican senators Jeff Sessions and Tom Coburn. Welcome, sir.

Oh, no. Not another technical demon.

Good morning, can you say good morning to me once again?

TED DEHAVEN, BUDGET ANALYST, CATO INSTITUTE: Yes, good morning. I can hear you.

COSTELLO: All right, now I can hear you. Thank you so much.

You have an interesting take on all of this. You said it is, quote, serious exaggeration to call this a government shutdown. Explain for us.

DEHAVEN: Yes, if we truly had a government shutdown, I would be sitting here with a glass of champagne in my hand. But the fact of the matter is most of what the government does it's going to still continue to do. Most government employees will come to work and although many won't get paid, when this is all said and done, and it will all be said and be done very shortly, they probably will get paid. They most likely will get paid.

As the days continue for this so-called government shutdown, the NSA is still going to spy on us. The military is still going to police the world and protect the interests of wealthy allies. The Social Security checks are going to go out. Most Americans really aren't going to notice much unless they're headed to Yellowstone today.

COSTELLO: You say that so cavalierly, though. 800,000 people are sitting at home wondering when the next paycheck will come.

DEHAVEN: Yes, but there is also millions of workers out there today who have taken pay cuts in the last two years through a recession whose income goes to those people who have actually had it pretty darn good, the federal employees in Washington over the past few years while the rest of the country suffered having to pay their bills.

COSTELLO: Seriously? I mean --

DEHAVEN: Seriously.

COSTELLO: These people, they would say they work -- they work really hard, they deserve to get paid. That's what they signed up for. You're saying they don't deserve what they're getting?

(CROSSTALK)

DEHAVEN: I'm saying keep in mind that there is no free lunch had when it comes to paying a federal employee. Their money comes from where? It comes from taxpayers. People in the private sector that work, their money comes from providing goods and services voluntarily. People voluntarily part with their money and that turns into income for a private sector worker. For government employee, that money that they get comes from taxpayers who had no choice but to pony up the funds or go to jail.

COSTELLO: Ok. Well, let's talk about the economy then. Moody's analytics estimates three to four week shutdown, which you're not calling a shutdown, but they are, will cost the economy about $55 billion. Can the economy really take a hit like that?

DEHAVEN: Look, this is Mark Zandi and his forecasting.

(CROSSTALK)

COSTELLO: No, it is not just Mark Zandi. The U.S. Chamber of Commerce wrote to lawmakers and saying please, please, do not shut down the government because you're going to affect the economy. This is the U.S. Chamber, a Republican-leaning group.

DEHAVEN: The last time we had a government shutdown, the stock market was fine, the economy was fine, and look I'll put it to you this way. If it is true that the actions of 535 people in congress are that critical to the economy, I think we should be second guessing whether or not we want to put such power in the hands of human beings because I can tell you, having worked in the senate, there is no wizard behind the curtain there.

COSTELLO: So I'm getting the drift that you believe no government is the best government and who cares what they do. DEHAVEN: I think we need a smaller federal government. I think the American people who are rightfully upset in looking at the circus-like atmosphere we have now should be questioning should we have so much power placed in the hands of these men and women. I think today is another example that it shouldn't be. And this is just one battle of many battles we've had and many battles to come.

Here comes the debt showdown. This is a temporary CR. We're going to be back to fighting to keeping the government open. In January, sequestration kicks in, and on and on and on it goes.

COSTELLO: Well no one could disagree with that, sadly. The Cato Institute's Tad Dehaven, thank you so much for joining me this morning.

DEHAVEN: Thank you.

COSTELLO: We tossing to break? Oh, we got to go to Erin McPike. We have her technical demons worked out. She's been talking to the federal workers who are off the job this morning. Tell us what they're saying, Erin.

ERIN MCPIKE, CNN CORREPONDENT: Well, Carol, I am standing in the middle of several federal buildings. These are the Department of Transportation buildings behind me. And people have been coming out all morning, talking about how angry they have been because they have just come to work and signed furlough notices. One woman just came out and talked to us. Here is what she had to say.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Knowing that we elected these people and now we're the ones who have to bear the brunt of their inability to agree and reach any kind of consensus. So, of course, you know, I'm hoping all the federal workers like myself will remember this at election time and express our views.

(END VIDEO CLIP)

MCPIKE: Now, we have been hearing from many of these people that they're working paycheck to paycheck, many are worried about how they're going to pay their mortgages -- Carol.

COSTELLO: All right, Erin McPike reporting live from Washington.

Thank you so much for joining me today. I'm Carol Costello.

"LEGAL VIEW" with Ashleigh Banfield after a break.

(COMMERCIAL BREAK)

ASHLEIGH BANFIELD, CNN HOST: Hello, everyone. Welcome to the "LEGAL VIEW". I'm Ashleigh Banfield. And it is Tuesday, October 1st. What a day it is.

And so it begins. And when I say it begins, I mean it is the shutdown. It is on, folks. Federal government is 11 hours and counting into a gradual partial hiatus, which may not sound disastrous to you, but how do you feel about America's largest employer laying off about a quarter of its workforce? That stings on the economy.