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Government Reopens; Winners and Losers of the Government Shutdown

Aired October 17, 2013 - 10:30   ET

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

(COMMERCIAL BREAK)

WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": The president of the United States getting ready to walk into the state dining room. We expect he'll speak for, what, for about 15 minutes or so? Looking ahead mostly, maybe a little bit looking back, but wants to go on now that this temporary deal has been worked out, keeps the government open at least until mid-January, avoids any -- any debt ceiling problems, at least until early February.

Let's see what the president has to say. We'll have live coverage of that coming up. He is supposed to start in a couple of minutes.

Nile Gardiner is joining us right now from the Heritage Foundation. He's the director of the Heritage Foundation's Margaret Thatcher Center for Freedom.

Nile, among Republicans right now -- we know the Heritage Foundation is a conservative think tank here in Washington -- who emerges, in a name or two, as the big winner among Republicans and who emerges as the big loser among Republicans?

NILE GARDINER, THE HERITAGE FOUNDATION: Well, let me say this first, Wolf. That this deal that was negotiated last night isn't a good deal for the United States, not a good deal for the American people. It doesn't do anything at all to address the -- the catastrophic debt situation.

And the United States, frankly, is a superpower on the precipice approaching $17 trillion worth of debt. That debt is going to increase to $24 trillion within the next decade. This simply unsustainable, so this latest deal doesn't do anything at all to address this appalling situation which the United States is facing today.

In fact, the U.S. increasingly looks more and more like countries of Europe, especially countries like Greece, Spain, Portugal, for example, that have been dealing with similar kinds of situation.

BLITZER: So obviously.

GARDINER: But -- but I have to say, Wolf, that you know there have been some individuals in Congress, figures like Ted Cruz, for example, who have stood up on a point of principle, who have stood up, saying America simply cannot afford this huge level of debt. They've also made the point that Obamacare frankly is a millstone around the necks of the American people is adding $1.8 trillion of debt to the United States. It's a job killer. It's anti-business. It's a huge tax as well on the American people.

So there have been some in Congress who, I think, have fought on the point of principles --

(CROSSTALK)

BLITZER: So Ted Cruz is one of them that you like?

GARDINER: Absolutely, I think so. I think that --

BLITZER: And so you think he is a winner from your perspective? Who is the loser among the Republicans?

GARDINER: Well, you know, I think that there have been some within the Republican establishment who have been all too quick to seek a deal with a president, frankly, who has behaved in a staggeringly arrogant fashion. We've seen no sense of humility whatsoever from President Obama over the last few weeks.

(CROSSTALK)

BLITZER: So who -- give me a name, give me a name of a Republican who is in that category.

GARDINER: I don't want to really go into names here, Wolf. I have to say that I think, that you know, those who supported this particular deal last night have done no favors at all.

BLITZER: Well Mitch McConnell, the Republican leader -- Mitch McConnell the Republican leader in the Senate now put it together with Harry Reid.

GARDINER: You know, Wolf, I think the central -- the central issue here that we have to address is that the United States really is a superpower in crisis here. And all of these deals, back-room deals being cut, like the ones we saw last night absolutely do not address the central problems that the United States faces as the world's superpower today. And I don't think that this latest deal, which as one of your commentators pointed out earlier, is filled with pork as well. This isn't going to bring down the nearly $17 trillion worth of debt.

BLITZER: All right.

GARDINER: This isn't going to do anything at all to weaken Obamacare coming in, which frankly is a huge burden for the U.S. economy and for the American people.

BLITZER: Let me bring Gloria and John back into this conversation. Gloria let's talk about Democrats for a moment. There are some Democrats who emerged well from this -- this fight, maybe some other Democrats not so well. What do you think? GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well first of all, there's nothing that has so united the Democrats as the Republican Party this time, OK? They were unanimous in the House, I believe. And when do we ever see that occur? I think what we're going to look at down the road, particularly as you talk about serious budget and deficit negotiations, is the question of now the president. And if he decides to move on entitlement reform, where is the liberal wing of his party? Where is the left ring of his party? And will he be willing to do that to make deals with more moderates.

(CROSSTALK)

BLITZER: Well he's already irritated, John, some of those liberal Democrats by even raising the notion of entitlement reform, Social Security reform, talking about CPI and cost of living index, maybe changing some of those areas.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And there areas of grievances as well if you could add Gitmo to the list, add eavesdropping to the list. There's a lot of liberal complaints that have been under the surface because you have loyalty to Democratic president. As the second term ticks on, you generally see that loyalty dissipate a bit and people start staking out their own interest and caring less about the president.

But I think you know were talking about winners or losers, the president wins without a doubt here because he did not negotiate. Republicans thought he would blink. He did not negotiate, so the president comes out of this as a winner.

However, he comes out of this a winner who then loses in this political climate because if you go back to what he listed in his state of the union for his accomplishments this year, he has achieved nothing. No immigration reform, no jobs bill, no infrastructure bank, no preschool for every kid in America, the lists goes on and on. And he's gotten nothing done.

The challenge now and he's going to mention immigration, we know that he has in recent days. Can he in this climate convince the Republicans not only to work with me on this new budget deal which would be very tough for both parties but let's move on some other issues.

That's a huge question mark and it's a challenge not just for the president to try to sell that but to go again to Speaker Boehner and say, hey, work your guys.

BLITZER: Will Cain was this a blunder on the part of the Republicans to link Obamacare to the government shutdown issue and raising the debt ceiling issue, knowing what we now know 16 days of a government shutdown and what was passed in the Senate and the House yesterday, basically pretty much along the lines of what the president originally wanted?

WILL CAIN, CNN POLITICAL COMMENTATOR: Well only in terms of strategy Wolf. I mean you asked earlier, who are the winners and losers in this deal? And there doesn't need to be a long answer to that. The answer is Democrats won and Republicans lost.

There's nothing in this deal. And you heard it from Nile, and Nile admitted it. There's nothing in this deal for Republicans to look at and get excited about. What is it, a conference committee to readdress the budget and entitlements? I mean why should I have any sense of optimism about a conference committee that we have done how many times over the last several years that has produced what?

The only time it produced anything is sequester and everybody is scrambling as fast as they can to undo the sequester. So it was a mistake because it wasn't going to accomplish the goal of defunding or rather just dismantling in some small amount Obamacare.

But once again, Wolf, look if Nile is right and I agree with many of his conclusions -- $17 trillion in debt. We have to get spending under control. Then how are we going to do it? Well these moments of shutdown and debt ceilings provide leverage. They are real, legitimate tools.

But separate -- separate legitimacy from strategy -- can it accomplish it? If it could, thumbs up. Good strategy. Go get it. And if it can't, bad strategy.

BLITZER: Hold on a second as we await the president, he's going to be walking into the state dining room over there. By the way, curious who is in the audience we're told mostly White House staffers including a whole bunch of White House staffer who had been furloughed, lost their jobs over the 16-day government shutdown.

Now let's go to Dana Bash is up on the Hill. Dana I have here in my hand this 35-page actual piece of legislation that passed the Senate overwhelmingly passed the House overwhelmingly. And when I finally went through it a lot of people went through it last night, I was pretty surprised to see a whole bunch of extraneous issues included in this legislation, very important legislation. But stuff that had nothing to do with the government shutdown, had nothing to do with raising the nation's debt ceiling. Why did they include what the critics are calling pork in this legislation?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: I'm glad you asked me that because I think it's important to give context. Because there have been some allusions to that in our discussion this morning.

If you look at what they actually put in here, there is no bridge to nowhere. There is no bee museum, there is no bike path so that somebody can go home and cut a ribbon. It's not that kind of pork, the kind of egregious earmarks that ended the practice of official earmarks. There is one thing that I know that everybody -- people have talked about that one right at the top, $2.2 billion for an Ohio River dam project between Kentucky and Illinois that conservatives are seizing on big time, blaming Mitch McConnell, which is just so indicative of the divide within the Republican Party.

Democrats are coming to his defense here on Capitol Hill, saying it wasn't him. It was something that was done as part of the process. But regardless, good luck explaining that to your primary opponent in the conservative base. But other things that you just put up -- the Interior Department getting money for firefighting, flood damage in Colorado, benefits to the VA.

Certainly, these are not things needed to reopen the government, but they are so few things that actually pass through Congress that has to do with funding, that this was a vehicle that some of these really important projects needed in order to get to the president's desk, like, you know, floods in Colorado.

So certainly, these are extraneous things, and they should be highlighted. And they should be -- this bill should be gone through with a fine tooth comb but not -- I don't think anything that's egregious with regard to some of the really eyebrow raising projects that many members of Congress for years, for decades, were able to slip in to these bills.

BLITZER: Yes I think all these issues may be very, very valid. But the question is, why put it in, in an historic piece of legislation where there's so much attention. And then of course, the drafters of the legislation knew that this would come up. Why not attach it to some other piece of legislation? And nobody is paying attention to that and then you get that kind of funding through whatever dams or flooding or whatever. But that's something now --

BASH: Yes, no, you're right. But part of the problem is that there's such a divide and there's such gridlock on any kind of spending that even those things -- that I mean remember if you go back to the Sandy, Hurricane Sandy and how much trouble John Boehner had getting aid in through the House, even though it was a bipartisan desire to do so.

New Jersey Governor Chris Christie went ballistic because he had to pull the bill because he couldn't even get that through. So that just kind of gives you a sense of yes these are extraneous issues but it really does speak to the -- the gridlock here, especially with regard to any new spending, no matter how important or well deserving the project is.

BLITZER: All right. Stand by, Dana. Everyone stand by. We're waiting for the President of the United States. He's going to be making a major statement on the deal that passed the Senate and the House last night. We'll have live coverage right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back to our special coverage. We're awaiting the president of the United States momentarily. He will be walking into the state dining room. Over at the White House, you're seeing live picture there is. He will be speaking about the budget deal that passed the Senate overwhelmingly, went out to pass the House of Representatives overwhelmingly; last night, late at night, he signed it into law. Federal workers have returned to work this morning.

As we await the president, let's get a critic of the president back into this conversation. Nile Gardiner of the Heritage Foundation is joining us. Nile, knowing what you know now, knowing what S&P said last night, Standard and Poor's, their ratings service, that this 16- day government shutdown cost the U.S. economy $24 billion.

And now the uncertainty of a deal or no deal in January or February, they're downgrading their estimate of economic growth in the fourth quarter here in the United States from three percent, closer to two percent. Some are saying it will even be lower. That means fewer jobs, less revenue coming into the government, greater deficits -- all that kind of stuff.

Here's the question. Was it a blunder for Republicans to link Obamacare to what they knew they were going to lose in the end, which was getting the government reopened?

GARDINER: Wolf, I don't think it was a blunder, actually, to fight this battle against Obamacare. Obamacare is vastly expensive. As I mentioned earlier it's going to add $1.8 trillion to the national debt. America simply cannot afford that. I think it was right that conservatives stood their ground. They fought against this.

(CROSSTALK)

BLITZER: But excuse me for interrupting now, but you knew there was no way it was going to pass any defunding or delaying of Obamacare in the Senate and even if it were to pass in the Senate, you know the President would have vetoed it, requiring two-thirds override votes in the House and Senate. You were just, as the "The Wall Street Journal" editorial page said and so many other Republicans said, this was a really major blunder politically, strategically, to go forward with what had absolutely no chance of success.

GARDINER: Wolf, you know, I don't think it's ever a blunder to stand up for your principles. And a lot of conservatives have fought for conservative principles and they fought for the American people here. And I do think that Obamacare is unaffordable for the American people. It was right that conservatives took a stand against this. I don't think this was a blunder.

And let's not forget that the majority of American people are opposed to the Affordable Care Act or the unaffordable care act, as it is. And they want to see this repealed. The President has been tone deaf -- tone deaf to public opinion.

BLITZER: All right. Hold on a second, Nile. Let me bring Will into this conversation. Well, you're a conservative, like Nile. You know that the only way that Obamacare will ever go away in any significant manner is if the Republicans take control of the House and the Senate and then in 2016 to avoid any Presidential vetoes, Republicans take the White House.

Here is the question to you and you're a good political observer, did this most recent battle undermine that opportunity for Republicans to get majorities not only in the House but in the Senate and then capture the White House in 2016?

CAIN: No, no. Do you remember Syria? Are we talking about Syria today? The news media has a short memory. The American public has a short memory. Do I think this government shutdown will punish Republicans a year from now? What would that be? 2016, two and a half years from now? No, I don't think there will be a punishment.

BLITZER: All right. Gloria?

BORGER: I disagree. I think, as pollster Peter Hart said -- he is a Democrat -- but as he said, there are certain moments when the American public is focused. And the American public is focusing on this fight. They didn't like the government shutdown. Republicans have dropped in the polls precipitously.

If by chance there's some budget negotiation where everybody ends up singing "Kumbaya," the deficit gets under control, maybe they'll change their mind. But just like other moments in history, I would argue Hurricane Katrina, perhaps for George W. Bush, the 47 percent for Mitt Romney. I think this could be a crystallizing moment.

KING: Unless the continued problems with the roll-out of Obamacare make this forgotten.

BORGER: Exactly.

KING: That's what the Republicans are betting on.

BORGER: That's where it was a blunder because Republicans stepped on their own message about Obamacare, which by the way now, of course, everybody can talk about. But this has been happening for the last couple of weeks. We've been talking about the government shutdown and the debt ceiling when, in fact, they could have made an awful lot of headway on the issue they really, really cared about and that's what they started this.

BLITZER: All right guys -- hold on for a moment. Let's take an opportunity to take another quick break.

We'll get to the president -- hopefully he will be walking into the state dining room momentarily. We'll hear what he has to say then we'll have full analysis immediately afterwards.

Our special coverage here on the CNN NEWSROOM continues after this.

(COMMERCIAL BREAK)

BLITZER: All right. So the government is now fully operational. You know what that means. The panda cam here in Washington at the National Zoo is now operational. You can go online. You can watch those adorable pandas over at the National Zoo. It was out of business during the 16 days of the government shutdown because those workers who manned the panda cam were considered nonessential federal employees. Panda cam back up.

Welcome back to our continuing coverage. We're waiting for the President of the United States to go into the state dining room over at the White House and talk to all of us about what has happened here in Washington -- the votes yesterday in the Senate and the House, he signed it into law late last night. And now he wants to move forward.

We'll hear -- specifically, I'm curious to hear what issues will he put on the agenda today as his priority, looking toward the next three years of his presidency.

Like any battle, the fight here in Washington over the partial government shutdown and debt crisis yielded what we're calling some winners and some losers.

Tom Foreman takes a closer look at who can claim victory.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: Out of the turmoil of the shutdown and threat of a debt default, Washington is sorting out the winners and losers. And in pure political terms, the president appears on the winning side, betting everything that Republicans would blink first and they did.

OBAMA: You don't get to hold the American people hostage or our economy hostage in order to extract concessions.

FOREMAN: Winning with him Senate Majority Leader, Harry Reid who relentlessly echoed the White House line, even if now he is softening his tone.

SEN. HARRY REID (D-NV), SENATE MAJORITY LEADER: This is not a time for pointing fingers of blame.

FOREMAN: On the Republican side, traditional conservatives and moderates may have taken the worst shellacking, first pushed around by the Tea Party and then bested by the Democrats.

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: This is far less than any of us had hoped for frankly.

UNIDENTIFIED MALE: Mr. Speaker, good afternoon.

FOREMAN: Oddly enough, John Boehner seems to have come out OK losing the battle, but for now, winning the war by holding on to his position of speaker of the House.

SEN. TED CRUZ (R), TEXAS: I don't like them Sam I am. I do not like green eggs and ham.

FOREMAN: Senator Ted Cruz who held the Senate floor for 21 straight hours with hopes of repealing Obamacare lost that quest along with his Tea Party pals but he reportedly raised three-quarters of a million dollars for his campaign war chest. That's a lot of green eggs and ham.

Senate women, Democratic and Republican get some credit in the winning column, talking up cooperation even as the crisis deepened.

SEN. BARBARA MIKULSKI (D), MARYLAND: I think what you saw really led by a lot of energy created by the women.

FOREMAN: Although it is worth noting, polls say the public disapproved of everyone, from the President on down for the handling of the crisis. Still in the big picture --

SEN. JOHN MCCAIN (R), ARIZONA: The only people that are losing right now are the people of this country.

UNIDENTIFIED FEMALE: I'm sorry, the park is closed today.

FOREMAN: Americans far and wide may have been the biggest losers.

CROWD: Let us do our work.

FOREMAN: Some pushed out of work. Others locked out of parks and federal offices and still more missing out on business related to government. All together it cost the struggling economy billions of dollars. Sure, fans of the National Zoo's panda cam will be winners once it lights up again, but that money is gone for good.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

BLITZER: We'll take a one minute break and continue our coverage as we await the President, right after this.

(COMMERCIAL BREAK)

BLITZER: I'm Wolf Blitzer in Washington. We want to welcome our viewers in the United States and around the world. We're waiting to hear the president of the United States react. He is about to speak in the White House on the deal that was delivered last night for him in the House and the Senate -- a deal that reopens the federal government at least until the middle of January and avoids any debt ceiling problem until at least early February.

Now House and Senate budget conferees, they're going to be meeting to talk about some of the bigger issues. We're going to be hearing from the President now as he gets ready to move to the next phase of what's going on. The president has his own issues there.

Jim Acosta is standing by at the White House. Dana Bash is up on Capitol Hill. John King is here, Gloria Borger, Will Cain, Nile Gardiner.

Jim, set the scene for us. He was supposed to start, what, almost half an hour or so ago? He's running a bit late.

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

BLITZER: That's not unusual. Obviously, stuff happens over at the White House. But we anticipate fairly soon he will be speaking.

ACOSTA: Well, keep in mind the White House is just getting back up to ramming speed. They had a good chunk of their workforce furloughed during the extent of this crisis. What we can tell you about this event that's going to get started here we hope in a few moments is that all of the people seated in that room, according to the small pool of reporters in that room where the President will be, are federal workers, are White House workers who have been on the job throughout this ordeal.

I think that's enough of a signal Wolf that he's going to thank those workers for their hard work during this crisis. The other thing that we're going to hear from the president is something we've been talking about the last half hour. He is going to extend the olive branch down Pennsylvania Avenue, call for compromise on these big budget issues that he, himself, has said he wants to get his hands dirty dealing with.

He wants to deal with entitlement spending he says. He wants to deal with taking a look at Obamacare, if there are issues with the health care law that he is agreeable to, that perhaps members of Congress who want to deal with. He wants to talk about that as well. I think that's going be a part of the larger conversation. As Gloria, John and everybody else was talking about in the last half hour, the president's healthcare law is going to be a concern for this White House in the coming days --

(CROSSTALK)

BLITZER: Jim hold on. Here's the president.