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Yellen Nominated; Markey Rallies Slightly; Deal Struck on Military Death Benefits; Republicans Seem to Switch
Aired October 09, 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 ANCHOR: Based on -- unless there's something none of us knows, there may be some criticism of Janet Yellen, but, presumably, she's going to be pretty speedily confirmed by the Senate, wouldn't you expect that, Dana?
BASH: Likely. Unclear how fast things will move, given the state of play things are in right now, the atmosphere that we're in right now, but certainly we're going to see a very important, very lively confirmation hearing for Janet Yellen.
But, ultimately, unless something dramatic changes, it's going to be hard to see how she does not get confirmed, for lots of reasons, one of which we just have to sort of remember back several months now when she was somebody whose name was floated for Fed chair along with Larry Summers, who, of course, took his name out just a few weeks ago.
The female senators, 20 of them, sent a letter to the White House demanding -- or not demanding, but asking that she be nominated for lots of reasons, obviously, because of the groundbreaking move that this is, as the president mentioned, that she would be the first female head of the Federal Reserve, but also more importantly because of her credentials.
That gives you maybe one clue as to the ability that she has to get confirmed, and also the White House, I think, knows, especially from their dealings with Larry Summers and floating that idea, that, if they put her up, the fact that they got this far, they didn't do that without having pretty -- a lot of confidence that she's going to get nominated -- confirmed, rather.
BLITZER: Yes, I'm sure they're -- yes, I'm sure that they're very confident, eventually, she will get confirmed, unless there's something we don't know right now.
Christine Romans, it looks like the markets today they're up, what, about 60 points as we speak right now, in contrast to yesterday and the day before.
If you take a look, I think the markets, as you've been pointing out, they're pretty receptive to Janet Yellen.
ROMANS: Yes, and this rally, if you can call it a rally, is being ascribed to Yellen, and just the fact now there's no uncertainty -- for sure there's no uncertainly about who will be next at the helm of the Federal Reserve, again, assuming that there is a speedy and easy confirmation process for her.
You know, look, this is someone who is on the record, Wolf, concerned about high unemployment in the country and wanting to make sure that the Fed's policies are supporting more people getting to work.
That's why she will be, many assume, very careful in how the Fed tapers back all of that stimulus that's going into the economy. She doesn't want to hurt the job situation.
And it's interesting because the job situation is what we used to talk about every day before we were talking about government shutdowns and the process and the back and forth and back to square one with Washington.
It's only the Fed, really, that has been enacting policy, fiscal -- financial policy in this country right now.
And she's been next to Ben Bernanke for some time now. She knows exactly how the stimulus works and exactly what needs to be done to take it off the table.
And again, a steady hand at the tiller, that's what Wall Street sees in her.
BLITZER: Yes, and the markets are reflecting that to be sure, although this is no great surprise.
We've known for several, at least a week or two, that the president had made up his mind. Today, he makes it official.
Gloria Borger is here. Richard Quest is here.
Gloria, I remember when Janet Yellen worked in the Clinton White House for President Bill Clinton. She was chair of the council of economic advisers. And doing those last few years of the Clinton administration, there were budget surpluses every year.
GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Remember that?
BLITZER: And she probably had a significant -
BORGER: Jack Lew, who is now treasury secretary, was there as a budget director. Those were the good old days.
BLITZER: Budget surpluses are good. We haven't seen those budget surpluses in a long time.
BORGER: We haven't seen them.
BLITZER: But she knows how to do that, and she was giving then- President Bill Clinton good economic advice.
BROGER: Right, but don't forget, what they did when Bill Clinton was president is they cut the budget, and there was a lot of controversy within the Democratic Party at that time about whether the president was, in fact, turning into a Republican because he was cutting the budget so much.
But -- and the controversy around her, I mean, oddly enough, is that she's too liberal, she's too much in favor of easy money and stimulus.
And you heard her talk today about the mandate that she has to say -- to serve all of the American people and specifically saying, too many Americans cannot find a job. This wasn't about Wall Street.
RICHARD QUEST, CNN INTERNATIONAL'S "QUEST MEANS BUSINESS": The dual mandate, price stability versus maximum employment.
Now, I'm not a mind reader, but it's not on accident that on the two occasions there that she talked about it, jobs came before prices, maximum employment first, then stable prices.
And again, more needs to be done for all Americans. So she -- this is what the Republican critics will fear, that they're getting somebody who is too much of a liberal, who is too dovish.
And to some extent, she's reinforced that in her very early comments. She didn't seem to be a hawk on inflation, but then there isn't inflation, so why would she be?
BLITZER: It's under two percent.
BLITZER: And you've got to give Ben Bernanke a lot of credit for the job that he has done.
He was inherited, if you will, by the president, because he was named by the former president, George W., but he's really done an amazing job.
QUEST: I love the phrase that the president used just then to describe Ben Bernanke's work. He's done his job with courage and creativity, two words you would not think to put to a central bank head, courage and creativity.
BLITZER: I would have liked to have heard a little bit from Ben Bernanke today. He didn't speak, but he'll have other opportunities.
QUEST: I'm going to go out on a bit more of a limb here. I think she'll get through easily, but I think she's going to get a rough ride on the other side of the dual mandate on maximum employment.
BORGER: Of all the fights -- I agree with you, but of all the fights the Republicans want to pick, and they're in the middle of a really big fight right now, the polls are showing their popularity have dropped like by 10 points in the last month or so.
This is the first woman nominee to the Fed. They may disagree with her on stimulus and all the rest, but I don't really see this becoming --
QUEST: They'll make a lot of noise.
QUEST: And a bit of -- you know, a lot of smoke and mirrors. I think it's a (inaudible).
BORGER: And they've got a lot of other fights going.
BLITZER: You've got to work hard if you want to be the most powerful woman in the world, and you say this job would make her --
BORGER: How do you do that?
BLITZER: You've got to go through a tough confirmation process --
BLITZER: -- to prove yourself. That's what --
BORGER: Particularly if you're a woman. OK, let's just say that.
BLITZER: All right, stand by, guys.
Up next, there's also developments here in Washington. It's an issue that many Americans find outrageous.
The government shutdown means death benefits for military families put on hold.
The Pentagon, though, may have already come up with a fix. We're going to tell you what we're learning.
Also, we're talking to a mother who lost her son in Iraq and knows just how important these benefits are.
BLITZER: Amid all the back and forth here in Washington these days, big news right now, potentially at least, about the decision to put military death benefits on hold.
Today, the president ordered an immediate fix. It looks like he may have it, the Pentagon entering into a contract with an organization called Fisher House Foundation.
Fisher House says it will pay the funeral expenses, the $100,000 death gratuity, anything the government is not paying due to the bickering going on in Congress with the administration right now.
The Fisher House saying they'll keep playing the families of fallen troops until the partial shutdown of the government ends.
That still has to go to the Senate, so now let's put a face on what is going on. Christopher Zimmerman, a Marine staff sergeant who died in Iraq in 2006, his mother Faith Zimmerman is joining us now.
Faith, my deepest condolences, all of our deepest condolences. First of all, tell us a little bit about your son and how he died. FAITH ZIMMERMAN, SON DIED IN IRAQ: My son was a Marine. He was in Iraq. On September of '06, they were on the last mission they were going to do before they came home. They came under fire.
He was killed, basically, in a small arms battle.
He was able to locate the source of the fire and was able to save his men by directing them where to return fire, and they came home safe. And he came home before they did.
BLITZER: So sad. How important was the financial help in the days, the months immediately following your son's death?
ZIMMERMAN: Oh, it was immeasurable. The gratuity came in so handy because we have a large family.
We needed to transport family in for the funeral. We needed to transport family out to the memorial service.
I took time off from work, his dad took time off from work. We could not have financially survived without the gratuity. It's immeasurable.
BLITZER: How would you have felt, and this is a hypothetical, Faith, but how would you have felt if you were one of the five families today whose loved ones are coming back from war and the government is saying, well, we're sorry, we're not going to be able to pay for the funeral expenses, help you get to Dover to see the coffins coming back?
What would you have thought if that were the case?
ZIMMERMAN: I would just think, where has the heart and soul of our government gone?
You know, these young men and women sign up as volunteers. They're not made to do this. They go freely. They know the risk.
When they paid that ultimate sacrifice, it's not -- it's the families that hurt. It's their families that suffer. It's the communities and the nation.
So I would just wonder where the heart and soul of our government is if they don't reinstate that benefit.
BLITZER: They have to fix that, and they have to fix it immediately.
Faith Zimmerman, thanks so much for coming in and once again, our deepest, deepest condolences. Thanks to your and your entire family.
ZIMMERMAN: Thank you for having me.
BLITZER: Now to one of those four soldiers whose remains returned to the United States today.
His name, Private First Class Cody Patterson, only 24-years-old, from Oregon, killed on his second tour of duty in Afghanistan. (COMMERCIAL BREAK)
BLITZER: Jake Tapper is getting ready for his show that begins right at the top of the hour, "THE LEAD."
There are some out there who suggest, you know what? If the Congress doesn't raise the debt ceiling by October 17th, you know what, there are ways the country can live with that.
Some call these people the "default deniers." Other terms out there. I know you're taking a closer look at this debate that's going on.
JAKE TAPPER, CNN ANCHOR, "THE LEAD": That's right. Another term I have heard for it is "debt truthers."
The argument is, basically, that the United States still takes in enough tax money, about $200 billion, that it can bay off the interest on the debt.
Obviously, that is an explanation to say there shouldn't be a crisis, that the United States would not have an immediate crisis, but it doesn't really answer the crisis, what do you do when other bills become due, Social Security, Medicare, paying the military?
We'll talk to a senator from Pennsylvania, Pat Toomey, a Republican, who has taken this argument. Take a listen.
(BEGIN VIDEO CLIP)
SENATOR PAT TOOMEY (R), PENNSYLVANIA: There's zero chance that the U.S. government is going to default on its debt.
It's unfortunate that people have conflated this idea of not raising the debt ceiling immediately on October 17th with somehow defaulting on our debt.
You know, we bring in in tax revenue about 12 times as much money as it takes to pay our interest on our debt.
(END VIDEO CLIP)
TAPPER: Wolf, a lot of Republicans that I have had on the show this week say that might be technically true, but we shouldn't be playing this game. We shouldn't be taking this risk.
So we'll be talking to Senator Toomey, also Senator Dick Durbin, Democrat from Illinois, and much more coming up on "THE LEAD."
BLITZER: We'll be watching right at the top of the hour, Jake, sounds good. Thank you, "THE LEAD," starting 4:00 p.m. Eastern.
It's been a rallying cry for Republicans during this whole shutdown, defund Obamacare program.
Now, a new message from Congressman Paul Ryan, and guess what? It doesn't make one specific mention of Obamacare. Could this be a solution to getting the government restarted? That's next.
BLITZER: Obamacare, Obamacare, Obamacare, that's the drumbeat that the Republicans have been beating as to why they refuse to pass a spending bill that doesn't derail the president's healthcare law as well.
But today there are hints of a possible new strategy by the GOP. Here's part of what Republican Congressman Paul Ryan wrote in "The Wall Street Journal,"
"The president is giving Congress the silent treatment. He's refusing to talk, even though the federal government is about to hit the debt ceiling.
"We need to pay our bills today and make sure we can pay our bills tomorrow. So let's negotiate an agreement to make modest reforms to entitlement programs and the tax code."
Paul Ryan's op-ed failed to include one word, Obamacare.
Now listen to what the House speaker, John Boehner, said in his message to the president on the House floor just a few hours ago.
(BEGIN VIDEO CLIP)
REPRESENTATIVE JOHN BOEHNER (R-OH), HOUSE SPEAKER: We want to reopen our government and provide fairness to all Americans under the president's healthcare law.
You know, the law had a big rollout last week, but it's been called, quote, "an inexcusable mess," "a rolling calamity."
Consumers face dramatically higher rates. Many remain locked out. They are surprised their premiums went up.
Instead of making it easier for people to get health insurance, it's going to be a lot tougher.
What a train wreck.
(END VIDEO CLIP)
BLITZER: Let's bring in our chief political analyst, Gloria Borger.
So, Paul Ryan, very carefully scripted op-ed, doesn't mention Obamacare, but the speaker -- are they on the same page?
BORGER: I think they're trying to cover all bases. I think it's clear to Republicans that they were stepping on their own message.
They're on very firm ground when they talk about tying raising the debt ceiling to budget cutbacks, the public actually, when you look at the polling, the public actually thinks you should do that. And they may be on firmer ground talking about the roll-out of Obamacare than they were when they were talking about tying closing the government to defunding Obamacare.
So they've stepped on their own message. They've seen public opinion polls go down like 10 points for Republicans in the last month or so, Wolf.
That's a tremendous --
BLITZER: The president think's job approval numbers are very, very low right now, too.
BORGER: Right, and nobody -- I should say, you're right. Nobody is benefiting from this, Wolf, but the Republican are the ones being hurt by it most of all.
So what I think what they're trying to do is kind of retool and get a little more nuanced, and so John Boehner can still say, look, we still don't like Obamacare. Look at how terrible the roll-out has been.
Because at the president's press conference yesterday, did anybody ask -
BORGER: -- a question about Obamacare?
So what was it all about? It was about the shutdown and not about the thing that they were promising to defund.
And also, I think there's a real realization that they were promising something they just couldn't deliver, Wolf.
They were never going to be able to kill the president's signature legislative achievement on a resolution to keep the government running.
BORGER: It just wasn't going to happen.
BLITZER: We've got more on this coming up in "THE SITUATION ROOM" later, in about an hour or so.
Gloria, thanks very much.
We'll take a quick break. More news, right after this.
BLITZER: CNN has learned that Washington now has tacit approval from Libya to conduct operations against suspects linked to the deadly attack on the U.S. consulate on Benghazi.
Four people were killed back on September 11th, 2012, including the U.S. ambassador Christopher Stevens, a senior U.S. official tells CNN that U.S. forces could enter Libya to pursue the suspects without the Libyan government knowing the exact location or timing of any such operation.
An important story, more on that coming up.
Take a look at the Dow Jones, up 29 points right now as they're getting ready for the closing bell.
Twenty-nine points, 30 points, right now, that's a lot better than yesterday when it was down more than a hundred.
We'll see what happens in the days to come.
I'll be back in one hour in " THE SITUATION ROOM," much more news coming up then.
Among my guests, John McCain will talk about the government shutdown, the need to raise the debt ceiling.
In the meantime, the news continues right now with "THE LEAD" with Jake Tapper.