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Obama Addresses Ongoing Government Shutdown and Debt Ceiling

Aired October 08, 2013 - 15:30   ET

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

WOLF BLITZER, CNN HOST: Well, let's bring in our senior White House correspondent, Jim Acosta. He was in the Briefing Room listening carefully to every word the president said.

And you did hear -- correct me if I'm wrong, Jim -- a nuance there that might, might lead to some sort of opening.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf.

I think that's something that was very important, came almost at the end of this news conference. And that was when the president said that he was open to some kind of process that could be attached to votes to open up the government and to raise the nation's debt ceiling.

He said -- and just looking at the quote here -- "They can attach some process to that that gives them some certainty that, in fact, the things they're concerned about will be topics of negotiation, if my word is not good enough" -- so, the president basically opening the door there to say, listen, I'm not going to sign off on a debt ceiling increase or a continuing resolution to reopen the government that has all these anti-Obamacare provisions or other partisan provisions.

But he said that he is willing to talk about some sort of process that can be attached to legislation that he would sign that would get the government back open again, as long as it's clean, and to raise the debt ceiling, as long as it's clean, and they can have those negotiations later.

He also said he was open to the possibility of a short-term debt ceiling increase. He hinted at that towards the end of the news conference. That would obviously give both sides some breathing room to negotiate, to work in this side process on whatever Republicans want to work on.

But the other thing we heard the president talk about, and I think we're going to hear about this in the days to come, Wolf, and that is, what happens on October 17th?

You heard the president at one point during this news conference quoting warren buffet, quoting economists across the world who have said that this would be catastrophic, like a fiscal nuclear bomb going off if the nation were to go into default.

He mentioned that Treasury Secretary Jack Lew will be testifying up on Capitol Hill on Thursday to lay some of that out.

When he was asked, well, what are some of the things, some of the trade-offs we would do, the bills that we would pay versus the bills that we wouldn't pay, he said stay tuned for jack Lew on Thursday. That's coming up.

So the president, he is holding his ground. He's saying, listen, we're not going to do anything other than clean C.R.s and clean debt ceiling increases.

But he said he's open to a process after that that might get both sides to the table, perhaps an opening, Wolf.

BLITZER: All right, good point, Jim Acosta over at the White House now.

We're going to check in with Dana Bash. She's getting reaction up on Capitol Hill from the leadership there.

We'll check in with Christine Romans. She's getting market reaction to what we just heard from the president.

And we'll also ask, where is the vice president, Joe Biden, in all of these negotiations or non-negotiations, depending on your perspective?

Much more of our special coverage here in the NEWSROOM, right after this.

(COMMERCIAL BREAK)

BLITZER: All right, so the president spending 65 minutes in the White House briefing room, answering reporters' questions and making an opening statement saying he's ready for negotiations, but only after the government shutdown ends, only after Congress votes for legislation to raise the nation's debt ceiling.

While the president was answering reporters' questions, the Senate Republican leader, Mitch McConnell, was on the Senate floor.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The other side revisiting a law, negotiated by the president, passed on a bipartisan basis that is actually reducing government spending ought not to be a part of the final outcome.

But talk, we should. The American people have given us a divided government. And when you have divided government, it means you have to talk to each other.

This is not 2009 and 2010 when our friends on the other side had a total hammer lock on all the government.

We now have divided government. It means we have to talk to each other and get to an outcome.

(END VIDEO CLIP)

BLITZER: Let's bring in our chief congressional correspondent Dana Bash. She's been getting reaction to what we just heard from the president.

Let me guess, Dana. The Democrats liked what they heard, the Republicans not so much.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Boy, you are good, Wolf. Have you seen this movie before or something?

BLITZER: Just guessing.

BASH: Yes, I mean, that's exactly right. And more specifically, I was e-mailing with some House Republican leadership sources saying, you know, give me a break.

This is what the president has said publicly so many times. He called a press conference to re-enforce his position, shouldn't be surprising since he has made it very clear, even before today's press conference, that his position is not negotiable, is not movable, that he will not sit down and talk about any kind of deal dealing with anything until the government is reopened, until the debt ceiling is raised so that America doesn't default.

I should tell you that I was told earlier that the House speaker was going to watch the president. We assume that that happened. I haven't heard back formally that that did.

We also are waiting to see if the House speaker will actually come out and rebut the president. He's going to make a statement. Again, we're not sure if that's going to happen.

But, meanwhile, while all of this was happening, you just played a sound bite from Mitch McConnell, the Republican leader in the Senate. There was actually something rare that was happening on the Senate floor, and that was what's called a live quorum.

And that's effectively when the Senate majority leader, Harry Reid, forces all of the senators to come to the Senate floor.

And he did that in order to make the case that it's time to move on, that this an embarrassment to the country, it's an embarrassment to everybody who works in government, that this shutdown is still going on, on day eight.

But another interesting moment that happened during that live quorum call, when all the senators were on the floor, was John McCain, who has been very silent about this, clearly not a fan of Ted Cruz, the Republican from Texas, and the strategy to attach Obamacare to the funding bill, which was, of course, what started this whole thing.

He came out and made a speech and said, you know, let's do this. Let's talk. Let's negotiate.

And the reason why that's interesting is because in recent months, he has been the point person that Democrats have been able to deal with because Mitch McConnell, who you heard from, is actually in a very tough re-election race, so he has sort of bowed out of the deal making business.

And so, you know, we'll see. Perhaps that is something that -- he's somebody who could find a way out of this for everybody to save face, now that he appears to have inserted himself back in the game.

So that was an interesting thing that happened, again, just as the president was speaking in the briefing room.

BLITZER: Yeah, we have a sound bite from what John McCain said. I want to play that for our viewers right now. Here's John McCain.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Why doesn't the Senate lead? I have great respect for the other side of the Capitol, but I understand the contradictions that are there and the difficulties that the speaker has. And I'm in great sympathy there.

So why don't we get together? Why don't we sit down and -- look, this body voted 70-29, I think it was, to repeal the medical device tax. My colleagues want to renounce that vote that they took on the budget?

Why don't we use that as one of the areas where we could reach agreement? What about this issue out there the American people believe that we are under a different healthcare system than they are and ours is a better deal than ours?

There's a number of issues that we could sit down and negotiate within an hour if we will stop, stop attacking each other and impugning people's integrity and honor.

(END VIDEO CLIP)

BLITZER: Clearly very frustrated, John McCain right there.

So what's the answer, Dana? He seems to be making some relatively reasonable points out there.

What's the response you're getting from Democrats?

BASH: He is, but the problem is you just heard from President Obama for more than an hour say over and over again he's not going to do that. He is not going to negotiate.

Every Democratic source I've spoken to, just like you, Wolf, and Gloria, and Jim Acosta, and Brianna, and everybody who we work with, has gotten privately from Democrats that he really means it. Harry Reid, the senator majority leader, really means it.

They don't feel that they need to negotiate because, frankly, they feel that when we get to the 11th hour, that Republicans will be the ones to back down.

So for John McCain's offer or ideas to bear any fruit, he, just like everybody else, is going to need a negotiating partner.

President Obama made very clear he's not going to do that unless and until the government reopens and congress passes an increase in the debt ceiling so America does not default.

BLITZER: Yes, the stalemate obviously clearly continuing.

Dana, stand by. I want to the get some reaction from Wall Street to what's going on. Christine Romans has been watching that.

I made a note, Christine, before the president started his opening statement, the Dow Jones was down about 123 points. It's still down, what, 108 points?

But talk a little bit about how Washington views this bitter battle unfolding here in the nation's capital?

CHRISTINE ROMANS, CNN BUSINESS ANCHOR: Well, the response, and we're seeing in the markets of late, has not been in the stock market, but in the bond market, specifically in the T-bills, the very short-end, Wolf, as you know, the 30, 60, 90-day instruments the government uses, that corporations use, money managers, mutual funds, all kinds of different companies.

It's the backing of trillions of dollars of loans, and those interest rates have been rising, showing there's concern, starting to be concern at least in the very short end of the bond market that you could be headed into a difficult situation without raising the debt ceiling.

The stock market still, you know, less than three percent below where it was before the shutdown began. They're still really betting there in stocks that this is going to somehow be averted.

If it's not, you're hearing from money managers and market strategists, trying to handicap just how bad the damage could be in the stock market.

The consensus I'm getting from Wall Street insiders today, Wolf, is that if the debt ceiling is not raised, the damage comes to the stock market.

The bond market, ironically, the bond market could see a flood of interest of people going to U.S. treasuries because if we undermine or destabilize the rest of the world, treasury bonds still are the place to be.

So the stock market ultimately would be the big reaction, even though right now it's in T-bills where we're seeing those concerns start to percolate.

BLITZER: And as I pointed out earlier, in 2008, when there was a recession, we saw the Dow Jones go from above 14,000 to under 7,000.

2011, where there was a fight over raising the debt ceiling, 2,000- point collapse within a relatively brief period of time. So there are a lot of nervous investors out there right now for good reason.

All right, Christine. Thanks very much.

Let's get some more analysis from the left and from the right. Chris Kofinis is joining us now. He's a Democratic strategist. Also, Will Cain, our CNN political commentator.

Chris, a lot of folks are saying, what's wrong with negotiating these two issues, the government shutdown and raising the nation's debt ceiling?

Whenever there has been a divided government in the past and there's been a stalemate, they get together. They sit down. Smart guys come in the room or whatever and they work it out.

The president is saying, though, no negotiations. Go ahead and explain because a lot of people still are confused when they hear the Republicans want to negotiate, the Democrats don't.

CHRIS KOFINIS, DEMOCRATIC STRATEGIST: Well, there's nothing wrong with negotiating. And I think one of the misnomers people have is Democrats have negotiated.

The spending limit that the Democrats have agreed to is the Republican spending limit. That is a significant -- it's around a $980 billion CR. That's a significant amount lower than what Democrats, I can guarantee you, wanted.

Now in terms of the idea of negotiating with Republicans, I'm just curious. Are we negotiating with Republicans that wanted to defund Obamacare, then they wanted to delay Obamacare, and then they want to do something else in terms of spending cuts.

I mean, how do you negotiate with someone that doesn't know what position they have? I think that's the problem with this, not to mention the fact that it's an incredibly dangerous game the Republicans are playing, negotiating, particularly when it comes to the debt ceiling, and ignoring the fact -- you know, if the debt ceiling is -- if we default, it's not going to hurt Democrats. It's not going to hurt Republicans. It's going to hurt the entire country, so I think that's the problem.

BLITZER: It could hurt the entire world, given the economic ramifications from the U.S. defaulting and the importance of the U.S. dollar.

Go ahead and respond to that, Will. You just heard Chris make the case that, you know, the president is taking a reasonable position.

WILL CAIN, CNN POLITICAL COMMENTATOR: Yes, I agree. Jacking around with the debt ceiling is a bad idea. It has the capability to roil the marks, upset the world economy, which leads to a question.

Why won't the president negotiate? Look, I think I might be more fearful of the debt ceiling, reaching it, than the president.

In fact, I would offer you two pieces of evidence of that. First of all, in 2006, the president specifically said then that he would not vote for a raise in the debt ceiling. At that time he didn't think it was so important.

And, second, as you noted earlier, the debt ceiling has been negotiated dozens of times over the last 30 years that accompanied spending restraints. It was accompanied by spending restraints dozens of times, most recently in 2011 with this president on the other side of the bargaining table.

So now to say no way, no chance, I'm not negotiating, who's taking us closer to the debt ceiling brink? Who's taking us closer to defaulting on our debt, the party that won't negotiate or the party that's saying, let's talk?

BLITZER: Go ahead, Chris.

KOFINIS: Here's the problem with that argument. There's not a single Republican that can tell me what the Republicans want.

What is the position that you want the president to negotiate about? What? What do you want to cut? What do you want to stop?

I mean, here's the problem. If you can't negotiate amongst yourselves, and I'm talking about the Republicans, if the Republicans can't agree in terms of what their positions are, and you see that in the House when at least 20 Republicans are willing to vote for a clean c.r., then how is the president supposed to sit down and negotiate with Republicans?

I mean, at some point, this madness needs to stop. And I think the frustration of the American people have is the Republicans have nice rhetoric, but the reality is far different. You cannot govern this way.

If you want to be serious about negotiating, then pass a short-term extension. You can put in a string attached in terms of we have to sit down and negotiate in terms of the budget, the c.r., you know, the debt ceiling. You can do all that if you were serious.

But politics is what they're playing, and that's unfortunately the consequence of what we're seeing.

CAIN: You know, I think with all due respect, Chris, that those are talking points that confuse the American public. One thing that can shed enlightenment is separating the debt ceiling debate from the government shutdown debate.

And I'll give you the answers on both those, if you'd like. On the government shutdown debate, it's been clear. They want to address Obamacare. They want to address compromises in Obamacare, whether or not that's the individual mandate or whatever it may be.

And that's been the condition for getting the government up and running again.

On the debt ceiling debate --

KOFINIS: It's not going to happen.

CAIN: You're right. We're not going to negotiate here on TV because they have to do that between President Obama and the Republican Party, the table that President Obama is unwilling to come to.

But some ideas being forwarded are things like tax reform, further spending restraints, Chris. That's the kind of thing you negotiate over the debt ceiling.

KOFINIS: But the president has made it clear that he's willing to negotiate, and this notion about the president --

CAIN: I thought we just listened to an hour-and-a-half Obama saying he's not.

KOFINIS: It's a standing law. I know the Republicans don't like it, but the reality is it's a standing law. And you expect the president to negotiate his law away?

If this was reversed and the Democrats were in the minority and they telling the president, a Republican president, listen, unless you guys pass background checks, we're shutting down the government and we're defaulting, Republicans would be out here saying, you guys are crazy.

And that's exactly, I think, what the American people are seeing, a party that's completely out of touch.

BLITZER: Guys, unfortunately we're going to have to wrap it up right now, but a good, excellent debate.

Chris Kofinis, Will Cain, guys, thanks very much.

We'll take a quick break. Gloria Borger is here. She's been doing some reporting.

Where is the vice president, Joe Biden, when it comes to all of these efforts to get the government fully operational and to raise the debt ceiling?

Stand by.

(COMMERCIAL BREAK)

BLITZER: During this entire government shutdown crisis, we haven't heard a lot of the name Joe Biden, the vice president of the United States.

He certainly has been front and center so many of the earlier showdowns between the White House and the Congress, but what's going on this time?

Politico's Jonathan Allen is joining us right now. He's got a new article. Among other things he writes Biden's deals rubbed Democrats raw. He gave up too much, they said, and for that, they have frozen him out at least for now.

Jonathan is here. Gloria is here as well.

So what do you think, Jonathan? Where has the vice president been? We haven't seen him a lot publicly but is he playing a significant role as far as you can tell behind the scenes?

JONATHAN ALLEN, POLITICO SENIOR WASHINGTON CORRESPONDENT: It appears that he's been completely frozen out, Wolf.

Majority leader Harry Reid went to President Obama this summer. They had a private meeting on their debt limit strategy, this strategy we are seeing playing out of not negotiating on the question of the full faith and credit of the United States, and majority leader Reid said he had one stipulation for going along with Obama's plan and that was to keep Joe Biden out of negotiations.

They feel -- Senate Democrats, in particular, feel -- that Joe Biden's deals in 2011 and again in 2012 really sold Democrats down the river. They don't want to see him swoop in at the end and cut a deal with Mitch McConnell like he did those times for fear that once again, Democrats would find themselves on the losing end on policy.

BLITZER: It's interesting, Gloria, when the president's 65-minute news conference, he did mention the role that Denis McDonough, the White House chief of staff, is making talking to Republicans on the hill but I didn't hear any reference to the vice president.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: No. Look, I think there's much more of a low profile for Joe Biden this time and it is because, as Jonathan reports, that the Senate Democrats were none too happy with some of the deals that he struck with the Republican leader, Mitch McConnell.

But I would also tell you, this is a different kind of negotiation. You've got the House Republicans to worry about. Joe Biden is a former senator, deals with senators. Harry Reid has a united caucus on this. He's not so worried about losing those red state Democrats and the strategy is a non-negotiation strategy as we just heard for the last hour from the president of the United States.

So there aren't any back room deals that are being cooked up. They're just not talking to each other. but Biden has been in these meetings. It's very clear, though, that harry Reid has said I'm taking the lead, I'm the guy this time around.

BLITZER: A little awkward, indeed. Jonathan, good reporting. Thanks very much.

Gloria will stick around. We just heard John Boehner, the speaker of the House, will be making a statement reacting to the president within the next half hour.

We will, of course, have live coverage right here on CNN (COMMERCIAL BREAK)

BLITZER: Let's get some more reaction to what we heard from the president of the United States.

Amy Holmes is joining us right now. She's a conservative commentator, anchor on The Blaze.

Also joining us, David Sirota, a syndicated columnist.

Amy, the speaker of the House, John Boehner, he's going to be speaking, we're told, within the next half hour, reacting to the president.

What do you think he should say?

AMY HOLMES, ANCHOR, "HOT LIST," THE BLAZE.COM : What he should say is what he's been saying, which is that he wants to sit down with the president and negotiate a way out of this government shutdown and debt ceiling limit that's coming up on October 17th.

You know, I think it's important to point out that the president actually holds a more extreme view on the debt ceiling than the American public.

A poll out today finds that six in 10 voters want to see spending cuts attached to the debt ceiling hike. They don't want to see it coming after. They want these things put together. It's the same six in 10 that was found going into the government shutdown.

BLITZER: David, what do you think?

DAVID SIROTA: Well, look, I think that we have to look at the broad strokes here about what's actually happening.

There's been a lot of talk about who's going to win, who's going to lose, and I think what's been lost in this is that the Republicans have actually -- and conservatives have actually won a lot of this.

Remember, we're talking right now about spending levels. Essentially it's sequestration levels. That's what we're arguing about.

We all remember a couple months ago when having a sequester at all was considered really, really controversial.

Additionally, what's on autopilot in the government shutdown, what is actually not shut down, are parts of the military industrial complex, parts of the national security state that are Republican priorities.

So in the broad view, the Republican Party and the conservative movement has won until the president actually draws a line in the sand and Democrats draw a line in the sand and say, no more, you've won enough.

BLITZER: Because Amy, as you know, a lot of -- Democrats made a major concession by accepting the Republican number basically in this continuing resolution, which is 70 or 80 or 90 billion dollars less than they wanted.

Some say they already conceded.

HOLMES: They also say they refuse negotiate, which we heard over and over by President Obama and, in terms of continuing resolutions, that's been going on for the past five years.

We still don't have a working budget, but in terms of moving forward, I think there's a lot that can be put on the table.

We have the Keystone oil pipeline, for example, that could be discussed with Democrats, were they willing to come to the table.

But look, at this point, it looks like the voters are blaming everybody. The blame is going all around.

Your own poll at CNN found that, while 63 percent of folks blame Republicans, another 57 percent blame Democrats. That seems to me that that should be motivation for both parties to come to the table.

BLITZER: A lot of blame going around for everyone, David?

SIROTA: Absolutely. There is a lot of blame going around. This is a teachable moment where I think the president in his press conference today and Democrats are going to need to start articulating the idea that the debate has moved way far to the right, too far to the right, and that we need to be having a discussion about actually funding the government, not just at sequestration levels, but at a lot stronger levels in a very, very tough economy.

BLITZER: Guys, thanks very much.

I'll be back in one hour in "THE SITUATION ROOM," but our special coverage continues right now with "THE LEAD," Jake Tapper picking up our coverage.