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Obama To Give Press Conference; Wall Street Disconnect

Aired October 08, 2013 - 14:00   ET

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

WOLF BLITZER, CNN ANCHOR: Let's bring in our senior White House correspondent, Jim Acosta. He's standing by at the White House in the briefing room.

It was pretty hastily organized, today's news conference. Only a couple hours or so ago, they announced the president would do this.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. As you know, he canceled that trip to Asia. So the president has had some time on his hands. The White House usually provides a week ahead. They didn't even do that for this week. So what you've seen the president do over the last several days is hold small, basically hastily arranged events at the last minute. Yesterday he went to FEMA. Today he's holding this news conference. On Friday, he went out for a sandwich. But every day he has made the point of saying basically the same thing, that he is not going to negotiate with House Speaker John Boehner on a continuing resolution to reopen the government or on a debt ceiling increase until they basically, in the House of Representatives, agree to do this in a clean fashion. That these things have to be done without partisan strings attached.

You mentioned, Wolf, that the president is willing to talk about some of these other issues. He has also said that. He has said he's willing to talk about budget cuts, he's willing to talk about changes to health care reform, but he wants to do that outside of this threat of a government shutdown, outside of this threat of a debt default.

But, Wolf, one thing that I'll be watching for in this news conference as it gets started here in a few minutes, is whether the president, whether this White House has really moved at all in recent days. You heard yesterday some talk of a short-term debt ceiling increase as a potential compromise that might get the government away from the brink of October 17th. You've heard members of the House talk about a super committee, another budget super committee ala (ph) 2011, that might get both sides together in a room hammering out some kind of agreement that might pull the government away from the brink. We may hear the president asked these questions.

We're probably also going to get asked -- or hear the president get asked about a debt default in general. As you said, Wolf, the country has never really gone over that edge, and so it's really unclear as to what might happen around the country to average Americans and their businesses and their daily lives if the country goes into default. The Treasury secretary, Jack Lew, has said it's risky, it's dangerous if we do go into default, but you haven't heard the Treasury Department, you haven't heard this White House specifically lay out what might happen in the event of a default. So we may hear the president talk about that.

The other thing that has been happening while all of this has been going on, Wolf, with this shutdown and this prospect of a debt default, is that the president and this White House has rolled out health care reform. They've opened up those online exchanges, but those exchanges have suffered from glitches and delays because of the mass influx of people going on to these websites, and because these websites were not properly put together. You've heard that from the Department of Health and Human Services. There have been some issues with the software and layout and the capacity of these websites to take on that flood of new people coming into the system, trying to buy insurance. So you may hear the president asked about that as well.

But this White House has had some cover in recent days because of this shutdown, because both sides have been at loggerheads and haven't really been willing to talk about this. Health care has sort of been the undercurrent in all of this. So we may hear the president asked about that as well.

But, Wolf, that -- the main thing I think we're going to have to listen for in the next few minutes is whether or not the president has moved at all in any of this. You heard House Speaker John Boehner saying earlier this morning, there's never been a president who hasn't been willing to negotiate over the debt ceiling. That will probably be one of the very first questions posed to this president, Wolf.

BLITZER: And you'll let us know when the White House gives us that two-minute warning, two minutes before the president walks into that briefing room, OK, Jim.

ACOSTA: We'll do.

BLITZER: All right, thanks very much. Jim Acosta is already there.

You know, Gloria Borger is watching what's going on.

It's interesting in this statement that the White House press secretary put out on the phone call with Boehner earlier in the day. They said the president also repeated his willingness to negotiate on priorities that he has identified, including policies that expand economic opportunity, support private sector job creation, enhance the competiveness of American businesses, strengthen the Affordable Care Act, and continue to reduce the nation's deficit. But he won't do any of that under the threat of the government shutdown -

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right.

BLITZER: Or raising the nation's debt ceiling.

BORGER: Yes.

BLITZER: So Republicans will ask, why would they give up their leverage on these other issues and go into negotiations without much leverage if -

BORGER: Right. BLITZER: If they - if they were willing to accept this demand from the president?

BORGER: But you're presuming then that the Republicans would not mind if the debt ceiling were not raised. And, you know, the Republicans I talked to actually say, you know, we all agree that that would be a bad thing. And John Boehner has said that that would be a bad thing.

I think what we're looking at, Wolf, is a way -- these parties all need to find a way to figure out how to talk to each other without talking to each other. They have to come up with a new definition for the word negotiate or they have to have other people do the negotiations for them because they are so dug in, the speaker is so dug in, the president is so dug in, there is no wiggle room in this statement you were just reading from. There is no wiggle room here. The president said he's willing to negotiate with the Republicans, but only after you remove the threat of the government shutdown and default. And that's his clear position. That's why there are no negotiations going on. Dana Bash just sent us all an e-mail saying she talked to a senior Republican on The Hill who said, nada, nothing. Nothing's going on. And I think they have to figure out a way around it. And I think they know they have to figure out a way around it, and there are people working to figure out a way around it, but I don't think they're there yet.

BLITZER: As we're awaiting the president, he's going to be walking into the Briefing Room within a few moments, we're told.

BORGER: Right.

BLITZER: Let's go to Capitol Hill. Dana Bash is standing by up there.

The -- I assume that's the major Republican fear, if they were willing to accept these demands from the president, no negotiations as far as the debt ceiling, no negotiations as far as ending the government shutdown, their leverage would be lost in terms of dealing with maybe some revisions on Obamacare and some of these other sensitive issues. Is that their big fear?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Absolutely. You know, I think that's true for both sides. Both sides feel that they -- the only way that they have leverage at this point is sticking to their guns.

I should tell you that John Boehner just walked by here on the way to the House floor a few minutes ago and I asked what he wanted to hear from the president and he just looked at me like, really, because he has said so many times publicly what he says he wants to hear from the president, which is, come on down, let's have a conversation. I should also say that it is John Boehner's policy, since he's been speaker, not to talk to reporters in the hallway as he's walking to and from the House floor.

But regardless, what Gloria just said is very true. I've been talking to people in these halls, just even in the past 15, 20 minutes, saying, really, is there anything going on? Any quiet conversations? Anything that you're just not telling us about? And the answer really is no. It's not that there aren't ideas along the lines perhaps of what, again, Gloria was talking about, a way for everybody to save face, a way for the president to still say and Democrats to say they didn't negotiate on the debt ceiling, but Republicans to say that they at least got a process moving to do things maybe in tandem and not attached to one another.

I mean this sounds very process-y and very, you know, maybe for a lot of people out there looking in saying, you know, maybe childish, but that is where we are right now. Their -- both the Democrats and Republicans have so much at stake here with regard to their credibility, not just with each other, but more importantly with their bases, that they're all telling them to fight and to stick to their guns. And so there needs to be a way out of it and there just aren't any discussions in order to get the ball rolling to find that - that way out, that way to thread the needle to get out of this mess that everybody is in. Once those discussions start, it's probably easy for them to find that way.

BLITZER: They need to find some way out of this because it is a horrible, horrible situation on all -- by all accounts. All right, stand by for a moment, Dana.

Christine Romans has been watching the markets. She's been watching what's going on.

If we take a look at the president, let's say he makes his opening statement, Christine, and then he answers a bunch of questions from reporters, I assume we'll probably see some fluctuation in the Dow Jones, some of the indices, investors reacting to what they hear from the president. Talk about the - what some are suggesting, though, maybe a disconnect between Wall Street and Washington.

CHRISTINE ROMANS, CNN BUSINESS ANCHOR: There really is right now. And I'm going to tell you that the people I talked to on Wall Street, my sources say they just don't believe that Congress could be so stupid as to push the U.S. past the brink here. They think that there's going to have to be some sort of deal - some sort of deal to raise the debt limit. But there's no evidence of that. And that's why you've got some folks starting to get a little bit nervous - a little bit nervous about just how much damage could be done to your nest egg, your 401(k).

You still have stocks up very, very big this year. Only -- the S&P has only taken off about 3 percent since the shutdown started and all of this drama over the debt ceiling began. So, really, Wall Street is telling you, Wolf, that they think that this is going to have to be resolved.

But you know the politics. You know the politics. And the politics right now aren't looking so good. When I look at the accounting, when I look at the numbers, October 17th and the month after that, I see tens of billions of dollars of bills that are coming due. Just November 1st, you look at the bills that are coming due November 1st, I mean you've got some $43 billion just to seniors on that day. You've got military pay coming the next day. A few days later, you've got $6 billion or $12 billion on interest on our loans. I mean one after another, there are some big bills that are coming due after that October 17th date and there just isn't enough money to pay all those bills. The American government finances itself. That's what this fight is about right here. And Wall Street just doesn't believe - doesn't believe they could be stupid enough to do this.

BLITZER: You know, it's hard to believe - and just to give it some perspective, a lot of us remember that in 2008 when the markets collapsed, the markets were -- correct me if I'm wrong, because you watch this a lot more closely than I do -

ROMANS: Yes.

BLITZER: They were above 14,000, went down to be below 7,000 as a result of that recession that impacted the U.S. And then in 2011, when there was a similar battle over raising the debt ceiling, the Dow Jones, what, collapsed about 2,000 points within a matter of a few days as well. Is that -- am I right in my recollection?

ROMANS: You're right. You're right. And, I mean, here's the thing. I mean, how sad that a government responds to market forces and not to, you know, maybe getting together and deciding how you're going to run a country, how you're going to run a budget.

I mean one thing that's important to remember here is that the debt ceiling is the symptom. It's not the disease. It's not the problem. The problem is the fact, you haven't had a budget since 2009. These two parties can't agree on how to run the government's business, right?

The debt ceiling is just paying for what Congress has already spent. I get it that I think there are a lot of people who think they have to have an intervention into the way business as usual. The only thing they have - and Obamacare quite frankly - and the only thing they have to work with is this debt ceiling. But when you look from Lloyd Blankfein at Goldman Sachs, to Warren Buffett, to Charlie Munger, who also works with Warren Buffett, to PIMCO, to every kind of person who has their hand in the global economy, they say, you must raise the debt ceiling. You will hurt the U.S. economy, you will destabilize - you risk destabilizing the globe. You must raise the debt ceiling. With one voice they're all saying that. And I think, you know, Washington just simply has to listen. The politics, though, are not there yet.

BLITZER: Yes, well, we'll see what happens. The Dow Jones, right now, let's put it up on the screen. I want to just see where the number is right now, because then I want to compare it after the president is done with his opening statement, after he's done with his Q&A. Right now it's down 123 points or so, 14,812. Let's see what the number is when the president wraps it all up. I'm guessing 20 minutes or half an hour or so from now.

Christine, don't go too far away.

Gloria, we got some new poll numbers. I want to put them up on the screen, because the public is angry almost at everyone there. BORGER: Everyone.

BLITZER: More angry -- a little bit more angry at the Republicans. But 53 percent say they're angry at the president, and 57 percent say they're angry at Democrats, and, what, 60 some percent say they're - 63 percent say they're angry at Republicans. So, no one is coming out of this looking well.

BORGER: No, they're angry. Look, the voters are angry. You can't get half of the people in this country to agree on anything. And more than half of them agree they're angry at somebody. And they may disagree on whom they're angry at. But, look, Wolf, it's terrible, they see what's going on in Washington, they see this train wreck coming, they see Congress being unable to deal with it, they see -- you know, at first they were blaming the Republicans an awful lot more because of attaching the president's health care reform plan to the -- keeping the government open. Now the Republicans are probably gaining a little traction with their talk that the Democrats are unwilling to negotiate. So maybe that's helping them to a certain degree.

But the big picture here is, if you step back, they see a dysfunctional government, they - a Congress which has an approval rating at, what, 10 percent, and this is not what they bargained for after this last campaign. We heard the president after the campaign and John Boehner after the campaign talk about how they had to work together and get along. And, of course, everything is dissolved. The president's agenda is on hold. We're trying to just keep the government running and fund our credit card bill. And we can't even do that. So why shouldn't they be angry?

BLITZER: Let me go back to Jim Acosta, if he's still there.

I think you're still standing in the Briefing Room.

ACOSTA: I'm with you, Wolf.

BLITZER: Jim, if -- all right, good. Did - did -- do we know if the -- at the end of the conversation that the president had with the speaker, John Boehner, today, did they say, let's continue these phone conversations, let's have dinner, let's have a meeting, let's go play golf?

ACOSTA: No.

BLITZER: Did they wrap it up on a note of continuing this conversation, or they just said good-bye?

ACOSTA: I think they just said good-bye, Wolf. I - you know, I do think they will talk again, but here comes the president now, Wolf.

BLITZER: All right. Let's listen.

ACOSTA: We'll go back to you.

(SWITCH TO LIVE PRESIDENTIAL PRESS CONFERENCE)