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Days Away From U.S. Government Default; Anti D.C. Anger Grows As Deadline Nears; Stock Market Uneasy As Deadline Nears; Boat Capsizes, 30 People Rescued; Woman Rescued From Railroad Bridge; All The Talk On Capitol Hill; New Jersey Battle Enters Final Stretch

Aired October 14, 2013 - 10:00   ET

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

JOHN BERMAN, CNN ANCHOR: Thank you so much for joining us this hour.

MICHAELA PEREIRA, CNN ANCHOR: The next hour on NEWSROOM begins right now. And good morning from New York. I'm Michaela Pereira.

BERMAN: And I'm John Berman. We are both in for Carol Costello today who has earned the day off. We're going to begin this morning in gridlock Washington with the sound and the fury. Frustrations going from a simmer to a boil outside the White House as conservative protesters pile up barricades that surrounded that World War II and the Lincoln Memorials.

They are chanting and said they're fed up with the partial government shutdown and its closure of national land marks. But honestly the greatest tension in Washington right now may be building towards Thursday's deadline and the government's potential default on its debt. Will the U.S. still be able to pay its bills on Thursday?

CNN's Jim Acosta is at the White House. So Jim, we have just about 60 hours right now left on the clock. We hear from Senator Joe Manchin this morning. He says it's his belief they're 70 percent to 80 percent close to getting a deal done. Do you think that's true? If seems awfully quiet in Washington this morning and if it's not, what are the holdups?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, it seems very optimistic, John but we'll see. There's time left. You know, three days in Washington is a lifetime, you know, when it comes to dealing with these sorts of physical crises. They've been here before as you know, John.

But you mentioned Joe Manchin,, he and Susan Collins, Republican senator from Maine, they have a bipartisan deal that is supported by a number of senators that would basically, you know, satisfy a lot of the problems here in Washington.

It would raise the debt ceiling. It would pass a continuing resolution to reopen the government. There are a couple of sticking points in that agreement that don't really go over that well with the White House. I have just spoken with a Republican source that is close to the negotiations up on Capitol Hill.

And John, what I'm hearing at this point as to where this may be headed is that there seems to be a tug of war going on between Senate Majority Leader Harry Reid and Senate Majority Leader Mitch McConnell over the debt ceiling, over the continuing resolution and the length of both of those items.

The Democrats want a shorter continuing resolution because they want to renegotiate those sequester cuts. A shorter continue indication to re-open the government would basically bring the debate to the sequester cuts. So that's what the Democrats want. They want the longer debt ceiling increase because it gives more security, they feel, to the White House and that the Democrats won't be in the crisis mode in the short-term.

Now the Republicans want the opposite. They want a longer run to keep it mainly in place and a shorter debt ceiling because this would have the leverage in the nearer term. It's very complicated and very different to unpack. But basically it's a tug of war right now going on between the two leaders of the Senate, over the length and duration of both of those big items right now.

BERMAN: You call it a tug of war between Harry Reid and Mitch McConnell complicated by the fact that they have a very sort of dynamic relationship or had over the last few years. And by dynamic, I mean, there have been moments when it seems like they don't like each other very much.

ACOSTA: That's true. It almost feels like a sequel of "Grumpy Old Men" at times watching these two leaders go at each other and you remember it was just recently, John, that they were going back and forth over the nuclear option. Remember when Harry Reid was talking about that using the nuclear option to get some of President Obama's, you know, cabinet members through the Senate when they were being blocked by a variety of Republicans.

You know, there were times when both of them would go to the Senate floor and they would try to get the last word and trying to top one another. There's another dynamic play in all of this, John and that is Mitch McConnell is running for re-election next year. He is being pry primaried on the right by a Tea Party candidate named Matt Bevin in Kentucky.

And so that has been also a part of the state of play in that it sort of kept Mitch McConnell off on the sidelines a little bit, made it sort of difficult for him to get involved in this. Now he's had to get involved in this because a lot of Republicans know that he is somebody what's been there before and be able to craft these deals before, and that's why he's there now, but no question about it, the dynamic is not a great one. But perhaps they can get over it and get us to a deal.

BERMAN: Maybe the only chance we have left. Jim Acosta at the White House, thank you so much for joining us. Appreciate it, Jim.

PEREIRA: So the stalemate there in Washington is sending shudders through the stock market. Investors appeared to be losing confidence that a deal is actually going to be hammered out before the deadline. Alison Kosik is here. And it's interesting last week we sort of ended on a hopeful note going into the weekend. Negotiations happening, Monday comes and pessimism sets in again.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, that opening bell rings, we saw the Dow fall over 100 points. It has recovered quite a bit. Right now is down about 70 points. You know, I talked with one trader just a few minutes ago saying, you know what? Wall Street is a voting booth. What you're seeing played out right now is traders expressing disappointment as to what's going on in Washington, D.C.

You have already seen a little volatility in the market. That's also because a lot of investors are actually on the sidelines. They are not really in the game trading. They're waiting on Washington to come up with a solution to the debt ceiling. Now the expectation at least on Wall Street is that a deal will happen at some point, but that is going to change this trader tells me. As we get closer to the deadline on Wednesday, you may see stocks dip lower than they are right now.

You look at the global view of the U.S. debt standoff. That was center stage this past weekend at the International Finance Conference in Washington. Among the leaders there, JPMorgan Chase CEO, Jamie Dimon, Anshu Jain that's the co-chief executive of Deutsche Bank, and Christine Lagarde, that's the International Monetary Funds managing director.

She sat down with CNN's Richard quest to express the feeling of the group.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, IMF DIRECTOR: They're all concerned because the U.S. is the biggest economy in the world and because it trades with all of them and it has massive financial consequences for them as well. So it's an international concern that was expressed.

(END VIDEO CLIP)

KOSIK: All right, so what's going to move the market today? You're going to see the market's moved only on headlines coming out of Washington. That is really going to be the focus.

PEREIRA: All right, Alison Kosik with the latest on our money, thank you so much.

BERMAN: Let's get our other top stories right now this morning. Overnight, a bottle of dry ice exploded at LAX temporarily shutting down an international terminal and delaying several flights. The explosion happened in an employee bathroom. No one was injured. The FBI is investigating.

A Columbus Day weekend celebration near Miami nearly ended in tragedy. Take a look at these incredible pictures, a 45-foot boat capsizing and dumping 30 people into Biscayne Bay. The Coast Guard and nearly boaters responded rescuing everyone including a dog that had also been on board. No reports serious injuries. The cause of this is still under investigation.

A bizarre rescue over the weekend caught on camera. That's a woman holding on for dear life after a railroad bridge in Fort Lauderdale starts going up. Now the question remains, what was she doing on this bridge in the first place?

CNN's John Zarrella joins us now to try to explain. The question, John, why?

JOHN ZARRELLA, CNN CORRESPONDENT: Well, the question still remains, John. We don't know. There was a lot of speculation that perhaps she was out on the bridge taking pictures. Perhaps she was looking for a shortcut to get home. But nobody is saying for sure what she was doing on the bridge. This is the New River in Fort Lauderdale and this is the railroad bridge in question.

Now, this is what happened on Saturday. The bridge was down. A train had just gone over it. When this woman decides for some reason she was going to walk out onto the bridge. Not a good idea.

(BEGIN VIDEOTAPE)

ZARRELLA (voice-over): Look at this. Your eyes are not playing tricks on you. That's a 55-year-old South Florida woman dangling more than 20 feet up from a raised railroad bridge.

UNIDENTIFIED FEMALE: I would have been flipping out like my goodness, my goodness.

ZARRELLA: She clung on seemingly frozen to the crossing, her legs locked, and her hands tight to the structure. For about 20 minutes she just hung there, below a crowd of onlookers snapped photos, some ended up on Twitter. After a flurry of calls to 911, the Fort Lauderdale Fire Department hoisted a 24-foot ladder and brought her down to the cheering crowd.

The ordeal over, she was safe and apparently unharmed. Sometimes you just get lucky. It is unclear what she was doing on the bridge in the first place. It is marked with a no trespassing sign and there is a warning siren when it is about to go up. There is another nearby bridge for pedestrians to cross.

The woman wearing pink had reportedly just finished a cancer walk Saturday morning called "Making Strides Against Breast Cancer" when the bridge went up with her on it. The bridge over Fort Lauderdale's New River is remotely controlled. Once you walked out on it and it started up, there was no way to stop it and no way for her to get off.

(END VIDEOTAPE)

ZARRELLA: Now, we've been out here about four hours this morning, John, Michaela, and the bridge has actually gone up and down three times. Three trains have come across it. So it's a pretty common event. It's not as if this was something that was a rare event for the freight trains to come back and forth. It takes about a minute, a minute 15 seconds after the train passes before the bridge goes back to its upright position, which is the position its in unless a train is coming -- John, Michaela.

BERMAN: Strange, strange, we certainly hope she is doing OK. John Zarrella, thank you so much. Appreciate it.

PEREIRA: Still to come right here, a little less conversation and a little more action, please.

BERMAN: It was Elvis who said that at first. But now the question is, could a compromise actually happen in Washington? Senator Joe Manchin claims they're almost there. We're going to put the question to Congressman Max Salmon, a Republican of Arizona coming up next.

(COMMERCIAL BREAK)

BERMAN: So despite the protest and all the anger aimed right at Congress and the president, this partial government shutdown is about to enter its third week. Can you believe it? And really, will it end any time soon? That's anyone guess. All we know right now is both sides say they're talking.

(BEGIN VIDEO CLIP)

SENATOR HARRY REID (D), MAJORITY LEADER: I've had a productive conversation with Republican leader this afternoon, our discussions were substantive.

SENATOR CLAIRE MCCASKILL (D), MISSOURI: I will continue to talk to my friends across the aisle. All of us are having these conversations.

SENATOR SUSAN COLLINS (R), MAINE: There are a lot of constructive discussions going on behind the scenes.

(END VIDEO CLIP)

BERMAN: All right, so forget the talking. Americans really would like to see action in the next three days, more than just the rhetoric. This defaulting on the debt could come as soon as Thursday. I'm joined now by Republican Representative Matt Salmon of Arizona. Good morning, Congressman. Thanks so much for being with us.

REPRESENTATIVE MATT SALMON (R), ARIZONA: Good morning, John. Thank you.

BERMAN: I want to get a sense of where things stand this morning. We had Joe Manchin on CNN a little bit earlier and there's talk of a compromise that he's been discussing with Republican Senator Susan Collins of Maine. The details are funding the government for six months, extending the debt limit until the end of January and delaying the medical device tax for two years. If that were to somehow pass the senate or something close to it, is that something you could support, sir?

SALMON: Well, first of all I thought that my information was that the president and Harry Reid summarily rejected that idea over the weekend. And it leaves me a little bit non-optimistic as far as going forward. If they can't even accept a bipartisanship proposal from Susan Collins and Joe Manchin, it seems like they're not interested in anything.

BERMAN: Well, Manchin has told us he is still talking with a group of senators. Is that something that you and your House Republican colleagues could support?

SALMON: Well, for me personally, there are three things I want to see accomplished. Number one, an end to the shutdown. Number two, some mitigation of the harmful effects of Obamacare to hard working Americans out there. And third, I want to make sure that we can cut spending and start living within our means not pile up another trillion dollars this year to the deficit.

BERMAN: So you still are talking about in some way defunding, delaying or derailing at least parts of Obamacare. It sounds to me that you're saying even if a compromise was passed in the Senate, even if that was passed, it would not have the elements that you are looking for?

SALMON: What I'm saying again, I'll be very, very clear, is that most Americans out there have not gotten any relief from Obamacare. And it was clear last week that it was not ready for prime time. I believe Wolf Blitzer said that the president should have taken the Republicans' deal. It's hurting a lot of Americans.

And I want to do everything that I can, to make sure that average people, regular people, not just big business who have connections here in Washington, D.C., that average Americans get the same kind of benefit. Also, I want to see us cut our spending. The Democrats keep talking about spending as far as the eye can see.

That is not the way that the Americans have to do business and that's not the way Washington should do business. We've got to get our physical house in order right now. Because there will be a day when Americans are going to have to pay the piper. And it's not going to be pleasant for our children and grandchildren. This, to me, is an epic battle over Washington versus America. And I hope America wins.

BERMAN: It's almost three weeks now. It started largely because house Republicans kept on passing the measured that had some kind of direct impact on Obamacare and the Senate would not take that up. You're still talking about it, sounds like insisting on those measures. They're still a requirement for you to pass anything?

SALMON: You mentioned that that was Republicans. The last proposal that we submitted to the president, which he rejected was that we delayed the individual mandate, allow it to be voluntary, allow it to keep going, but allow it to be voluntary for Americans like it is for big business and then get rid of the special dispensation created for members of Congress.

That measure had a bunch of Democrats on our vote. I think it's reasonable. I think that ultimately the American people are speaking very loudly about trying to get some relief and I think we ought to give it to them.

BERMAN: Last question. Better than fifty-fifty chance that we'll get out of this by Thursday or do you think we're headed to the debt ceiling default?

SALMON: Up until this weekend when our leaders, John Boehner walked in with the president and put a deal on the table that was basically just to create a conference committee, just to talk and negotiate and then give a six-week debt ceiling, the president was very, very warm to that. He was very supportive of that idea.

And then he afterward, he talked to Harry Reid and then he changed his position. If the president relegates his power and authority to Harry Reid and continues to do that, we're never going to get a solution. The president has to realize that he has to come to the table and work with members of all parties to mitigate this crisis and I believe that we can get it done if the president is willing to do that.

BERMAN: Let's hope all sides are at the table this week. We are just a few days away from this default. Congressman Matt Salmon of Arizona, thanks for being with us. Appreciate it.

PEREIRA: Still to come, he enjoys celebrity status in the media, but Cory Booker may not be quite as popular with the voters at large. We'll be right back.

(COMMERCIAL BREAK)

PEREIRA: It's 22 minutes after the hour. When Cory Booker jumped into the race for the United States Senate, many thought that this high-profile Newark mayor would be a shoe in. However with the special election now just two days away, his Republican rival, Steve Lonegan is proving he is a fierce competitor. This weekend, Lonegan looked to another political power house to help him seal a deal. Jason Carroll is here with more. He had chance to catch up with Mayor Lonegan.

JASON CARROLL, CNN NATIONAL CORRESPONDENT: And you know, he is pulling out all the stops. He is gaining in name recognition and in the polls. It's down to the wire. The New Jersey Senator race and Steve Lonegan is fighting fire with fire. He recruited a Republican powerhouse to help him beat Booker.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: It's time we held the line.

CARROLL (voice-over): What does a candidate do if you're down in the polls days from the election and your opponent is a political celebrity? Answer, bring why your own celebrity.

UNIDENTIFIED FEMALE: Can the rest of the America count on you to send Steve Lonegan to the United States Senate?

CARROLL: That's exactly what New Jersey's Republican Senate Candidate Steve Lonegan did. He's facing an uphill battle against a man well known on the national stage, Newark's Mayor, Cory Booker. Palin and Lonegan paint the race as a national referendum under the president's policies including Obamacare. STEVE LONEGAN (R), NEW JERSEY SENATE CANDIDATE: When we go to Washington October 17th, it's going to be Barack Obama, Nancy Pelosi and Harry Reid that are going to fold.

ANNOUNCER: Cory Booker, radical, liberal, extreme.

CARROLL: Thanks in part to Lonegan's aggressive ad campaign, Booker's double dig lead dipped in august to 12 points. Not surprising to some voters here.

UNIDENTIFIED FEMALE: And I believe that there are a lot of people in the state that have conservative values but just don't know it.

UNIDENTIFIED MALE: I'm a Republican, but I think Lonegan is a little too far to the right.

UNIDENTIFIED FEMALE: He's very much a movement conservative. I think that makes his uphill battle that much steeper because of his identification as a Tea Party conservative.

CARROLL: Lonegan is anti-abortion and anti-gay marriage. His and his campaigns views on Mayor Booker seem to be getting all the attention. Lonegan fired one of his top advisors Friday after he gave a profanity laced interview ridiculing Mayor Booker for having a Twitter exchange with a stripper saying, I don't know, it was like what a gay guy would say to a stripper.

LONEGAN: I have hundreds of activists and I can't be responsible for what they all say. I will take responsibility, so I terminated the gentleman for his inappropriate comment.

CARROLL: Lonegan has been criticized for his own comments about Booker. This after Booker addressed questions about whether he was gay and saying, so what does it matter if I am.

LONEGAN: He was kind of weird as a guy I personally like being a guy.

CARROLL: And then there was a comment Lonegan made during last week's debate about where taxpayers' money from the suburbs and rural areas goes.

LONEGAN: All that income tax and sales tax money gets s poured into the big black hole of Newark. Newark's budget is a big black hole and it sucks in millions and billions of taxpayer dollars and we never see it again.

(END VIDEOTAPE)

CARROLL: Well, the Lonegan camp was encouraged by a new poll out today that shows Mayor Booker's lead is now at 10 points thanks in part to independent voters who seem to be swaying to Lonegan. But this is a special election and likely to be decided by the party faithful. And according by vote by mail returns, Democrats are expected to turn out with stronger numbers than both independent and Republicans.

PEREIRA: I'm curious how Bookers 'team is reacting to the narrowing gap.

CARROLL: As you know, I spent time with Mayor Booker on Saturday. I asked him about a number of questions about Lonegan. And what they attribute the narrowing in the polls is the negative campaigning on Lonegan's part. That's one thing, but they're expecting Democrats to turn out in high numbers.

BERMAN: Ten points is a pretty sizable lead two days before the election.

CARROLL: Absolutely, no question. He's got an uphill battle.

BERMAN: Thank you so much. Great to have you here. Still to come for us, two senators work to bridge the divide in Washington. Presenting a deal to their colleagues to end the shutdown and perhaps make a deal on the debt ceiling as well. The big question is, if this deal gets on the floor, could the White House accept it? Our political panel weighs in.

(COMMERCIAL BREAK)

PEREIRA: Welcome back. The Senate back in session this afternoon hopefully in an attempt to make a deal on the debt ceiling and shutdown.

BERMAN: And they can have a new plan as a starting point. Thanks to a bipartisan proposal from Senator Susan Collins of Maine and Joe Manchin of West Virginia. Now speaking to CNN earlier this, Manchin expressed optimism about getting a deal done.