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Government Shutdown Looms; Interview With Pennsylvania Congressman Charles Dent; Interview With Missouri Congresswoman Ann Wagner

Aired September 30, 2013 - 22:00   ET


WOLF BLITZER, CNN ANCHOR: Good evening. I'm Wolf Blitzer reporting live from Capitol Hill.

The breaking news right now, less than two hours before the federal government shuts down, less than two hours until hundreds of thousands of workers get furloughed, others lose paychecks and millions of Americans lose access to vital services or maybe, just maybe, maybe not.

Just moments ago, senators on a 54-46 party-line vote rejected the House's latest bill to fund the government, a continuing resolution that puts a key piece of President Obama's health care plan hold for a year, which would seem to set the stage for a shutdown.

However, a staffer for Senator Ted Cruz of Texas, one of the GOP hard-liners, just tweeted -- and I'm quoting now -- "Hearing Boehner will offer clean vote after Reid refuses once again to compromise."

It's hard to know precisely what to make of it. But, in other words, according to this aide, John Boehner's next move could be -- could be potentially to back down, recognizing perhaps that this game of House-Senate ping-pong is a game as number of Republicans have been saying that no one can win, at least right now.

Tonight, during the House vote, they staged a rebellion.


REP. PETER KING (R-NY), HOMELAND SECURITY COMMITTEE CHAIRMAN: I don't enjoy bucking the party. I want to end this process because it's going nowhere. It's a dead end. We said two weeks ago -- the party leadership and other members said that we do not want to get into this whole defunding Obamacare and threatening to shut the government down.

They got forced into it by the Ted Cruz wing of the party, people who are more loyal to Ted Cruz than they are to what the Republican leadership wanted, people don't often vote with the leadership, but they wanted loyalty on this for themselves.


BLITZER: His effort fell short. The GOP hard-liners prevailed. And earlier tonight before the vote, President Obama singled them out. (BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But one faction of one party in one house of Congress in one branch of government doesn't get to shut down the entire government just to refight the results of an election.

Keeping the people's government open is not a concession to me. It's our basic responsibility.

Keeping vital services running and hundreds of thousands of Americans on the job is not something you give to the other side. It's our basic responsibility.


BLITZER: So he's drawn a line. The Senate has drawn a line. The House Republicans with the help of a few Democrats they have also drawn a line.

Bottom line? Unless something happens in the next two hours, the government shuts down.

Let's start with the latest developments on the lawmakers and what's going on.

Dana Bash is standing by.

Dana, less than two hours now, still an impasse. What is the latest?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You said an aide to Ted Cruz tweeted they are hearing there will be a clean spending bill that Boehner will relent on.

It sounds like that is a lot of maybe not wishful thinking, but lobbying and trying to gin up the conservative grassroots to call and make sure that's not going to happen. I just spoke with a Republican aide who said having a spending bill go through the House before midnight that does not have anything attached to it is not going to happen. So where are we right now?

We are at stalemate once again after three volleys back and forth over the past several days, two just today and the House is trying to figure out what is left to do. Deirdre Walsh just spoke with a Republican coming out of John Boehner's office saying there will be another vote with something related to Obamacare likely attached to it tonight before the night is out, and that it does look like technically, at least, the government will shut down.

I want to bring in a Republican congressman, Charlie Dent of Pennsylvania. He is the one who really tried to lead the revolt, I guess it might be, or at least lead his party to getting to where we are right now.

Thank you very much for joining us. You tried to get the votes to stop this bill that the Senate rejected in warp speed to try to stop a government shutdown. You were not successful. Now what?

REP. CHARLES DENT (R), PENNSYLVANIA: I have been arguing for some time now we need to move toward to a clean continuing resolution. Our obligation is to fund the government. We have an affirmative obligation to govern.

Right now we have to try to set aside some of these other policy differences and move forward on funding the government. I often say back home to my constituents, every day is the same in the United States Senate, they start slowly and then they wind down from there. Well, not today. They are moving at warp speed. And I predicted that the Senate would take what the House just passed and reject, this time within less than an hour.

And so now I don't know what the next move is going to be. I don't know that any of us do. After I'm done speaking with you, I'm going to go try to get a little bit more information about what will happen next.

But at the end of the day -- or maybe not the end of today -- but before this process ends, I suspect we are going to vote on a clean continuing resolution to fund the government at the sequester level. And I believe that's where we will end up.

BASH: You only needed 17 members to vote your way to effectively stop -- 17 members of your own party to effectively stop the Republican leadership and from your perspective the conservative caucus of your House Republican Party to stop this. And you couldn't even get 17 out of 233. What does that tell you? That looks to me for the most part a Republican Conference pretty united and that you are an outlier here.

DENT: Look, I believe we are going to be voting on a clean continuing resolution to fund the government. That is ultimately going to happen. Might there be something that the Senate will accept? I don't know at this point.

There needs to be more talking and a lot less volleying right now. Again, I believe -- I have said this, that it's been the intent to try to pass as clean a continuing resolution all along. That's what the Republican leadership originally wanted to do. But a few dozen members dragged the party to where we are today. And again I have said we are right now less than two hours from a government shutdown.

Look, I want to defund Obamacare and I want to repeal it and I want to delay it. I voted for that. I think it's bad for a number of reasons, the law. But we are where we are right now. And the truth is, I said that we will shut the government down and we will not defund Obamacare. That's what is happening.

I have said that for some time. So the point right now is it's important that we fund the government and make sure that people's lives are not disrupted. Certainly, there will be volatility, potentially volatility in the markets and we are going to have to debates. And we're going to continue to debate Obamacare. This rollout is not going to go very well with these exchanges. So we're going to be back at this in short order.

BASH: But in terms of the more immediate question, when the government will shut down and how you are going to pass something to fund the government, you think it's just a matter of time, maybe hours, maybe when the sun comes up. We will see. But I know you are going to go try to get information. Maybe we will get you on the way back and see if you get any scoop -- back to you, Wolf.

BLITZER: Dana, thanks very much. Thank the congressman as well.

And as you saw just a few moments ago, President Obama made his position very plain and public and apparently just a bit later by phone.

Jim Acosta is joining us now with more on both from the White House.

Jim, the president did speak with the congressional leadership, including the House speaker, John Boehner, tonight. What is the latest? What did he have to say? What do we know?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Before we talk about what the president to those congressional leaders, Wolf, we need to point out something we just heard in the last 10-15 minutes, and that is a White House official has told CNN that the president will sign into law this provision that passed out of the House unanimously, came out of the Senate as well, that would pay active-duty military personnel and some employees of the Defense Department, some civilian employees of the Defense Department in the event of a government shutdown.

Wolf, that is a pretty good indication that we are heading toward a shutdown because why would the president sign something like that or say he would sign something like that into law if we were not heading towards a shutdown? I just want to point that out.

Yes, you're right. Earlier this evening the president did call congressional leaders, House Speaker John Boehner, the minority leader, Nancy Pelosi, the minority leader in the Senate, Mitch McConnell, and the majority leader, Harry Reid. Why is that important?

In the last week, at least publicly, the White House has said the president has not spoken to House Speaker John Boehner since a week ago Friday. So, at least the president is starting to engage with congressional leaders.

But, you know, what the president said according to the White House is that he basically reinforced his position that he is not going to renegotiate Obamacare and that's what the president essentially said in the Briefing Room earlier today. Here's what he had to say. (BEGIN VIDEO CLIP)

OBAMA: Let me be clear about this. An important part of the Affordable Care Act takes effect tomorrow, no matter what Congress decides to do today. The Affordable Care Act is moving forward. That funding is already in place. You can't shut it down.


ACOSTA: So the president is saying you can't shut it down.

And, by the way, Wolf, as we have been saying, although it hasn't probably been reported enough, starting tomorrow, the Affordable Care Act, those exchanges, those online exchanges start running and they're open for business for people around the country. Not all of those online exchanges are ready to roll on time.

There have some been delays and glitches. But that is one thing that is happening tomorrow whether or not the government shuts down.

BLITZER: They have had several years to get it all ready since the legislation passed. They knew the day was coming tomorrow morning for people to start signing up for the Affordable Care Act. Why are they having all these late last-minute glitches?

ACOSTA: They say any time anything this big is rolled out, whether it's a new product from Apple or Amazon or something like that, that there will always be glitches and delays and problems. That's the administration's talking point there. Just want to point that out.

But they say that they're going to be really looking to correct these glitches and delays as the days go on here. But, Wolf, keep in mind, the president has said time and again he is not going to do anything under the threat of a government shutdown or under the threat of a debt default to tinker with Obamacare, delaying, defunding or changing it in any way.

He has said it before and he did say it again today that he is willing to look at this as part of the normal legislative process. But at this point, Wolf, it seems Republicans up on Capitol Hill just are not taking that as something they want to deal with at this point. As we are standing here right now, Wolf, at least as far as the president is concerned, we are heading towards a shutdown.

BLITZER: Less than two hours to go. Jim Acosta, thanks very much.

Could be a long night. It isn't over yet.

Let's bring in our panel, Democratic start Paul Begala, GOP strategist the former Newt Gingrich communications director, Rich Galen. Also joining us, Alice Stewart, the spokeswoman for the Michele Bachmann and Rick Santorum campaigns back in 2012.

Guys, thanks very much. Alice, let me read to you something the president said today in an interview with NPR. He said -- and I'm quoting -- "I shouldn't have to offer me anything. They are not doing me a favor by paying for things that they have already approved for the government to do. That's part of their basic function of government. That's not doing me a favor."

He clearly is not ready to negotiate on this. Where do we go from here?

ALICE STEWART, FORMER MICHELE BACHMANN CAMPAIGN SPOKESPERSON: We go from here by not shutting down the federal government and letting the House plan go forward.

And another thing that the president also said earlier today in that White House briefing was putting American progress at risk is the height of irresponsibility and that's exactly what he is doing with the Obamacare plan. And he says he doesn't have to compromise and he doesn't have to give up on anything. Well, he has already done that with Obamacare by delaying the employer mandate. There is no reason why he can executively decide he wants to delay the employer mandate and leave the individual mandate folks in this country out in the cold.

If he is going to issue an executive action for those under the employer mandate, Congress should have the ability to delay the individual mandate. That is an important distinction in where the divide is right now in the legislation.

BLITZER: That was in the legislation that the House passed, Paul Begala, that the Senate once again rejected. What is your response to what we just heard from Alice?

PAUL BEGALA, CNN POLITICAL ANALYST: They have the power, but they don't have the votes. Again, you know, this is how a democracy works. This is a designed shutdown, designed by Ted Cruz and other Tea Party activists.

And here's how I know that. First, I have a degree in government and I teach government at the graduate school at Georgetown. Most importantly, I watched, what was it called, "Schoolhouse Rock," and here's what happened.


BEGALA: In "Schoolhouse Rock," the House passed a budget, which it did in March. It reflected Republican priorities. I wouldn't particularly love it, but at least they did their job.

Then for the first time in four years, the Senate passed a budget, OK, responding to a very valid Republican talking point, the Senate hadn't passed a budget in many years. So, Patty Murray, the budget chairman, passes a budget on May 23, 131 days ago.

The House had its budget with Republican parties and the Senate had its with Democratic parties. So "Schoolhouse Rock" says they meet in a conference committee and negotiate this out. Guess what? Eighteen times in the last 17 weeks, Patty Murray, the chairman of the Budget Committee, said I want to appoint people to this conference committee, and 18 times, Ted Cruz or Marco Rubio or Michael Lee, the Tea Party favorite, objected and blocked it. They blocked the ability for the Senate to negotiate with the House.

Why did they do that? Because the only thing that can happen then is this kind of a crisis. When you don't have the built-in negotiation that the founding fathers intended, what you have now is government by crisis. This is a crisis totally created by the Tea Party wing of the Republican Party.

BLITZER: Let's ask Rich Galen. Will moderate Republicans like Peter King of New York and Charlie Dent of Pennsylvania, we just heard from him in the interview that Dana just had, are they likely when all the dust settles whether it's at midnight or at 4:00 a.m., 9:00 a.m. tomorrow morning, are they likely to carry the day, if you will, and pass what is called clean legislation without any Obamacare attachments that will allow the government to be fully funded?

RICH GALEN, REPUBLICAN STRATEGIST: I don't think so now. I think the time for that has probably come and gone. I think they tried to get that through in the House in the last vote and they fell short.

Paul and I were talking about this in the green room. By the way, Paul and I are the two people on screen that actually lived through the last shutdown from opposite ends of Pennsylvania Avenue.

But I think one of the problems that the Ted Cruz brand of Republicanism is wrong on, frankly, is that they believe that compromise equals capitulation. And, in a democracy, that is not the case. In a democracy, you need to compromise.

And I think at some point, someone has to sort of give. My guess is this will go on until about Thursday. Everybody will say, OK, we make our point. Let's do a clean C.R. and we will come back and litigate this other stuff under the debt limit and we will go through it again.


STEWART: If I can say something...

BLITZER: Alice, one second.

How long would that clean C.R. continue? For a week, a month, six months?

GALEN: No, no, I think they will do probably until December 15, which is what they're looking for in the bill that's on the floor.

BLITZER: Alice, what do you say?

STEWART: I think the important thing -- I agree with Rich on this point intelligent we may not all agree on the tactics that have been used here to get the situation that we're in, but the principles are what is important here, and the House Republicans are doing what the people across this country want.

They are voting to fund the government and they're also voting not to move forward with this Affordable Care Act. It is important. Compromise is critical here. It's not about getting everything you want. But House Republicans have compromised. They have gone from a complete repeal to a delay of the entire portion to a delay of the entire bill to a delay a portion of it. And that is compromise.

We are not getting any of that from Harry Reid and Senate Democrats or President Obama. That's why we are sitting here one hour before a shutdown, because there is no compromise from the Democrats.


BLITZER: Go ahead, Paul.

BEGALA: The Democrats aren't coming with a pie in the sky wish list like the Republicans.

Senator Cruz and now the House Republicans, they have their fantasy draft of legislation. And that's fine. But it's just a fantasy. Harry Reid is not coming and saying we're going to shut down the government unless you pass the president's gun safety bill. We're going to shut down the government unless you pass the president's pre- kindergarten program. We're going to shut down the government unless you pass the president's increase in the minimum wage.

These are all things I dearly love, but they are on my Christmas wish list, not a hostage taking list, the way the Republicans are doing it. This is just no way to run government. They should not be drawing these extraneous matters into the simple question of, should we have a government for the next 60 days?

GALEN: Here's what I have would done. If I were advising Harry Reid this afternoon, here's what I have would done. I would have said let's strip out the military pay portion of this thing, let's don't give that to the House, and send this clean C.R. back to the House without the military pay, and see what they will -- see if they want to go to the wall on this thing. And I bet the House would have caved at that point.

BLITZER: Well, they didn't do that, didn't hear what you had to say, Rich, so we are where we are right now.

GALEN: Harry Reid rarely listens to me anymore.

BLITZER: Yes. Rich Galen, thanks very much. Alice Stewart, thanks to you. Paul Begala, appreciate your being here.

Up next, as we await a government shutdown or a deal to prevent it, we will ask a Republican House member why she voted to take on the White House.


REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I talked to the president earlier tonight. I'm not going to negotiate. I'm not going to negotiate. I'm not going to do this. Well, I would say to the president, this is not about me. And it's not about Republicans here in Congress. It's about fairness for the American people.


BLITZER: The House speaker, John Boehner, tonight saying the president is not ready to negotiate. They had a phone call and now it's back, though, in his court, the House's court, the latest bill to fund the government, but delay parts of Obamacare, rejected once again by the Senate, the time to a midnight shutdown growing shorter and shorter.

Joining us now, Republican Congresswoman Ann Wagner of Missouri.

Congresswoman, thanks very much for coming in.

So, what happens now? Where do we go from here?

REP. ANN WAGNER (R), MISSOURI: Well, I will go down and meet with my colleagues and we will see where we go from here.

But the fact of the matter is that it's House GOP are the only ones doing anything to keep this government open and to make sure that those who make the laws, that we are living by those laws. The amazing thing here, Wolf, that is not seeming to get covered is that the U.S. Senate just voted to exempt themselves and the president of the United States from Obamacare.

And that's wrong. The people of the 2nd Congressional District and across America believe that those who make the laws ought to live by them.

BLITZER: Why not just pass what is called a clean continuing resolution to fund the government at least for a few more weeks or a couple of months and then have this separate fight over Obamacare in a regular way, without necessarily holding 800,000 federal workers right now potentially about to be furloughed and millions of Americans about to lose services as a result of this government shutdown? Why not just pass the resolution and then fight over Obamacare the regular way?

WAGNER: Well, the only people that are fighting for the American people and to keep this government open are the House Republicans. We are the ones that have been here all weekend long while the Senate recessed.


BLITZER: The Senate passes legislation to keep the government open, but they don't include anything on Obamacare, any defunding or delay or withholding parts of the funding for Obamacare. The Senate has passed language that would keep the government open.

WAGNER: The Senate has not passed language. They haven't volleyed back and forth at all. All they have done is killed a bill time after time after time.

BLITZER: It's 54-46, along party lines. That's a majority in the Senate. They have sent it back to the House.

WAGNER: And, Wolf, in the last vote in the House on a bipartisan basis, the House voted to make sure that Congress and the president of the United States live by the same laws that they pass. That is what we're doing. We're representing our constituency.


BLITZER: In order to make these changes, some of which may be excellent as far as a lot of people are concerned, on Obamacare, but if you don't get your way, you need the Senate to go along, and clearly they're not going along. You're willing to see the government shut down, Congresswoman? Is that what you're saying?

WAGNER: Absolutely not.

And, as I said, the House are the only ones that are making sure that the government stays open. The Senate has got to come to the table and negotiate. It's flat-out wrong they are stonewalling and killing the bill.


BLITZER: Congresswoman, the House is passing legislation to keep the government open. But you are attaching language that the Senate is rejecting. The Senate has just rejected it three times.


WAGNER: We attached language that made sure, you know, that the legislature and the Congress live by the law.


BLITZER: But that has been rejected.

WAGNER: And that's wrong. I would say the American people reject that.

BLITZER: So the question is, you need two to tango. Are you ready to just pass legislation, a clean piece of legislation that will allow the government to remain open?

WAGNER: We have been dancing for a week. We just are not being met in that tango anywhere.

They shut down the Senate over the weekend. The president played golf and now they are voting actually to exempt themselves from Obamacare. The Senate just has voted that way and they voted that way for the president of the United States too. We are ready to solve this problem. We're solution-oriented. We want to come together and fund the government, but the Senate has got to come to the negotiating table and the president has to lead.

BLITZER: Congresswoman Wagner, thanks very much for joining us.

WAGNER: My pleasure.

BLITZER: Let's go back to Dana Bash, our chief congressional correspondent.

She has some breaking news. What are you hearing, Dana?

BASH: We now know the next move by House Republicans. And that is according to leadership aides, House Republican leadership aides. They are going to revote on what they voted on earlier tonight that the Senate just rejected be. But they are going to also vote to appoint what is known in technical terms as conferees, but in layman's terms negotiators.

What this means is that they are trying to acknowledge in strategy and tactics that this ping-ponging back and forth clearly is not working. And so their next move is to sort of say to the Senate, Democrats who run the Senate, fine, maybe we should sit down and negotiate. They are going to appoint people in the House to sit down and negotiate with Senate Democrats.

Now, the obvious question is, will Senate Democrats respond in kind and say, OK, fine, we will negotiate, we will appoint our own negotiators? We don't know the answer to that, because this is information that is just getting to us. We're trying to get that from the Senate.

If they are going to respond the way they have responded so far, they would likely dismiss this out of hand, but we just don't know the answer to that yet. We're going to wait and see. There will be another House vote likely before the clock strikes midnight again on what they passed before, which is a bill to fund the government, but with a delay of the individual mandate and eliminating federal subsidies for lawmakers and their staff for their health care.

But they will say, OK, this is our position. We're going to appoint negotiators to sit down with senators in order to negotiate the two positions and we will see where that goes. But the Senate and the president have said this is nonnegotiable. So, we will see how they respond.

BLITZER: It looks like an all-nighter, that this will go back and forth. The ping-pong is going to go back and forth from the House to Senate and back to the House. In the meantime, we will see if there is a conference committee, as you call it, conferees to negotiate some sort of resolution hopefully by early in the morning when a lot of people, 800,000 federal workers will be told they are being furloughed and they are not going to be paid and a lot of other federal services are going to simply go away.

Let's see what happens over the next several hours. Dana, thanks very much for the reporting.

Just ahead, we are going to hear from John King and two of the best political watchers we know, David Gergen and Gloria Borger. We will get their assessment of what is going on.


BLITZER: The breaking news Dana Bash just reported moments ago, the House not budging yet. Expected to revote soon on earlier legislation and appoint a panel of conferees to hammer out a deal with the Senate.

At the same time, the clock is clearly winding down. An four and a half or so from now there will be a government shutdown. With me now is our chief correspondent John King. Also our political analysts, Gloria Borger and David Gergen.

John, I know you've been going through the latest polling numbers, a brand-new CNN poll but you know a lot about political strategy. So what's going on right now inside the Capitol and inside the West Wing of the White House?

JOHN KING, CNN CORRESPONDENT: In the White House they're waiting and watching and trying to decide when the president would try negotiate or at least get involved.

I mean, I use the term negotiating, but Wolf, as we watch the Ping-Pong play out, there's a couple of things in play. now that the Republicans say they're going to appoint negotiators, it's an effort to show they're not being fully obstructionist, to show that they're trying. The question is will Democrats accept it.

One of the reasons they're trying is that the speaker is not in such great standing, the House speaker not in such great standing with the American people. Forty-eight percent of the American people have an unfavorable view.

But this is what I find striking. He's the most powerful Republican in the country. He's certainly the key Republican here in Washington at the moment. But only 54 percent of Republicans, excuse me, in our new pole have a favorable opinion of John Boehner. What? Because he has this schism, this fracturing in his Republican conference and it's a fracturing of the Republican Party nationally, where Americans tell us they don't want the shutdown, Wolf, but 56 percent of Tea Party supporters say they're OK if the government shuts down for a few days to make that point over the president's health- care plan.

So the most careful thing to watch, the thing to watch closely right now, is how John Boehner tries to work itself out of this box. He doesn't want this shutdown, but he has a revolt in his own party to deal with.

BLITZER: Gloria, what's the latest you're hearing from your sources? Where is this whole thing headed? GLORIA BORGER, CNN POLITICAL ANALYST: Well, you know, to piggyback, Wolf, on what Dana was saying, it seems to me very much that they're making it up as they go along. I was just talking with a Senate Republican over here on the Hill, and he said that the game has changed from Ping-Pong to tag, you're it. And at this point, appointing these negotiators, or trying to, at least, would be one way for the Republicans to try and save face, I think, and get out of this, Wolf.

I think there's a -- there's a recognition among Republicans in the House that they need to try to find a way to get out of it because of the law of diminishing returns. The longer this goes on the more unpopular it will become. So it's clear to me they're looking for some kind of strategy to unspool this and get it over with.

BLITZER: Well, David Gergen, if in fact, the Republicans, the House Republicans say, "Let's appoint conferees to come up with some sort of language everyone can agree on," the pressure then goes to the Senate to appoint some conferees over the next few hours to try to work out some language that will at least keep the government open.

How awkward would it be if the Democrats in the Senate said we're not playing this game, no conference?

DAVID GERGEN, CNN POLITICAL ANALYST: Well, I think the conditions the Republicans are going to attach, they're going to attach, as Dana reported, if they call for a conference but they also call for a conference and insist the Senate at the same time accept some sort of changes in Obama care that's a non-starter over in the Senate.

It's clear now we're going to go off the waterfall. It's clear that a lot of people are going to get hurt and we're going to have a threat over the economy. We'll have to wait and see. It's an act of utter stupidity that we find ourselves at this point. But we're going over. And I don't think anybody knows.

The more public anger -- to go to Gloria's point, she's absolutely right. The more public anger we see that arises in the next day or two or three, the more pressure there's going to be to end the circus and get the government reopened. But I -- I don't think there is any doubt they're not going to make it tonight. They're going to...

BORGER: They could work all night. I mean, David, you know, they could end up working all night and try and get the government shutdown ended almost as soon as it begins. Because I think...

GERGEN: But -- Go ahead.

BORGER: The sense that I'm getting up here is that -- is that they're all kind of feeling enough, but they're trying to figure out a way to extricate themselves so it doesn't look like they're waving the white flag.

GERGEN: Well, but doesn't it look -- doesn't it like they are looking for political cover? They want to get negotiation started so they can say, "We're still willing to talk."

BORGER: Absolutely.

GERGEN: But we're still going to be -- we're going to be in shutdown.

KING: But the question, then, still -- the question still remains at the end, let's just say the Senate either says no or yes, but the Senate's condition is pretty clear. The president's condition is pretty clear. Will the Republicans ever accept a clean continuing resolution? Meaning a clean piece of legislation that said, "We will fund the government," for whether it's 60 days or a shorter period of time or through December with no restrictions on the president's health care plan? No restrictions at all?

Senator Rand Paul of Kentucky tonight said he's open to a clean C.R. -- again, sorry, folks, for speaking Washington language -- but a clean bill for two weeks during some negotiation. Is that a basis for compromise, or does the president, who thinks at the moment, he has the upper hand politically, keep saying no, because he thinks he can win the argument with the American people?

BORGER: Well, John, you know, I talked to a senior House Republican earlier today who talked about that -- that scenario that you just spoke about, which is essentially funding the government for two to three weeks. And guess what that then goes right into?

KING: The debt ceiling.

BORGER: The question of the debt ceiling. Exactly. And then that's the bigger fight; that's the more dangerous fight. Politically, Republicans believe that, if they tell the American public, "OK, you've got to cut the budget and health-care costs a lot of money" at the same time you've got to raise the debt ceiling that they have a better message on that.

BLITZER: David, go ahead. Because the debt ceiling, the ramifications of the debt ceiling battle and the creditworthiness of the United States and the dollar, as difficult as the government shutdown would be, that is far more serious if the U.S. does not raise the debt ceiling and allows America's creditworthiness to come into question.

GERGEN: You're absolutely right, Wolf. I think the real question tonight, the silver lining question is, will doing something utterly stupid like we're doing tonight eventually prevent us from doing something truly dangerous and that is to go into default?

If these next few days can be used not only to settle some of these issues -- tweaking Obama care and doing something on tax reform and the rest -- if that helps to purge the system of all of this partisanship and this poison and so that we can settle down and get through the whole debt ceiling crisis around the corner, then it will have been worth it.

Because the debt ceiling issue is far more dangerous than what we're going through right now. This is -- this is unsettling; it creates clouds over the economy; it's going to disrupt the lives of a lot of people. But you know very well, Wolf, nobody even knows just how dangerous, but all the experts say you can have a worldwide financial meltdown if the United States goes into default.

So that's what we need to head off. And that's why we need to use this period constructively.

BLITZER: All right. David Gergen, John King, Gloria Borger, guys, don't go too far away. We'll have more to discuss later.

Up next, breaking news on a shutdown, paychecks for America's fighting men and women.


BLITZER: We have more breaking news coming in right now. President Obama has just signed legislation into law guaranteeing servicemen and women will still be paid if -- if -- the government shuts down at midnight.

Our Pentagon correspondent, Chris Lawrence, is joining us now with more.

Chris, the military will get paid as a result of this legislation the president just signed into law. Civilian employees of the Defense Department, not so much.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: No, Wolf. In the morning about 400,000 federal of them are going to get their furlough notices. Basically, the only civilians who are exempt are certain security personnel and those who are required to directly support military operations around the world.

Now, during past shutdowns, workers who missed days could count on Congress to authorize back pay for any days they missed. There's no guarantee of that this time.

But remember: because of the last big crisis in government, a lot of these workers have already lost about six paid days to furlough already this year. So that's why you saw Defense Secretary Chuck Hagar [SIC] -- Chuck Hagel earlier today send them a letter, basically thanking them for their service, saying thank you for hanging in during this rough time.

BLITZER: What about veterans of the United States military, and there are millions of them out there? How would this government shut- down affect them and their benefits?

LAWRENCE: Good question. The V.A. health care is funded a full year in advance. So they could still go to hospitals. The disability and G.I. Bill checks for October, they've already gone out.

But if this thing stretches into weeks, towards the end of October the V.A. will run out of money. That means certain disability checks, pensions checks, some up to $3,000 a month, could be stopped in the month of November. You're talking about some elderly, some severely disabled vets, many of whom are living check to check. That could be a very, very big development we'll have to keep our eye on.

BLITZER: That could be -- a lot of people could be suffering as a result of this. Chris Lawrence, thank you.

Let's get some more now on which government services will close and which ones will remain in business. For example, if the government loses funding, federal attractions such as the Statue of Liberty in New York Harbor, national parks and museums all across the country, they will likely close. Tom Foreman gives us a rundown of what may next happen.


TOM FOREMAN, CNN CORRESPONDENT: The first thing you may notice about a government shutdown, if one comes, is that there's really not that much to notice, because we're not talking about a single grand event but rather a series of events that simply start with the shutdown.

So if you go to the airport, it's still going to be operating, the military, customs, Border Patrol will all be in business, the postal service, the federal courts, the banks will all be open. And of course, all those local services that are paid for by your local taxes, like schools and police and firemen, they'll still be in business.

Still "USA Today" did an analysis where they said about 41 percent of the government will shut down. That's got to be producing an effect somewhere, so let's bring in the next layer here and talk about that.

If you go to a national park or a museum or a monument connected to the federal government you may find that it is closed. If you need a loan for your business or your home backed by the federal government, you may find that that becomes a very slow process. And if you need a new passport or a gun permit, that may also be slowed down.

There may even be a delay in some federal checks like Social Security, although generally, lawmakers try to keep that from happening.

And then there would be the real immediate effect. If you're, for example, a federal worker, you very well could be told, "Go home. You won't get a paycheck until this thing is over." And even then, retroactive pay, which has happened in the past, is not a guaranteed thing.

With all those federal workers missing, if you have to contact a federal office to, for example, sign up for Medicaid, you may find you can't really do that. And of course, a lot of congressional staffers will have time to go to the beach.

Time is really what this is about. If this only lasted a few days we would probably all stay back in the green zone, not really that much aware of it; not really seeing that much in terms of the results. But the longer it goes on, the more economists and analysts say the red zone here, these things will start spilling over, and more of us would feel the impact, and the whole economy could ultimately suffer.

BLITZER: All right. Tom Foreman, thank you.

Up next, we're going to check back with Dana Bash, who's got the breaking news we're following. Stay with us.


BLITZER: Back to the breaking news here on Capitol hill. In about an hour and ten minutes, the federal government will shut down. Our chief congressional correspondent, Dana Bash, is joining us once again with the latest back and forth on what we're learning. What's the latest, Dana?

BASH: The latest is that we do expect the House to go back in and have at least one more vote. But that does not mean the government isn't going to shut down. In fact, just the opposite.

At least technically, we do expect at this time the clock will strike midnight, and there will be no resolution, no bill that funds the government that will be heading from the Capitol to the president's desk.

What the House Republicans' plan is now is now, is to revote on what they passed earlier that the Senate rejected just an hour and a half or so ago. But along with it, ask for the -- for there to be what's called a conference committee appointed. But what that means is, in layman's terms, is they want to negotiate. They want to sit down with the House Republicans, with Senate Democrats and negotiate in a room.

This is an acknowledgment that the Ping-Pong isn't working; a tactical move to try to get the Senate to the table. And if they don't, it will give them politically the ability to say, "See, we tried to negotiate, even in what they call regular order here, and Senate Democrats aren't doing it."

We don't know if Senate Democrats are going to say yes or no yet. We're waiting to hear back from them. I think they're trying to kind of take it all in and figure out how they want to respond to this latest move.

But that's where I think we stand right now. What the headline is, is that we are little more than an hour away from, technically, the government shutting down, and it does not look like there is any chance that that will be averted.

BLITZER: So -- and let's assume the Democrats in the Senate -- it's a big assumption -- say, "Yes, we'll have a conference; we'll meet for the next few hours. We'll meet from midnight to 3 a.m., 4 a.m. or whatever. We'll come up with some sort of compromise." Is it guaranteed that the speaker would allow that to be voted on in the House and then it would be passed, presumably in the Senate? Any assurances along those lines?

BASH: No. We haven't even gotten that far to ask those questions. But that is a really good question. I think that the likelihood that they would be able to appoint these conferees or negotiators tonight is very slim. I was talking to a Republican source who said that the idea was just to sort of get it out there and get it on the table, so to speak, that they want to have these negotiations but not necessarily expect the negotiations to begin overnight.

At this point, like I said, it is more of a tactical move, a way to say, "Look, we want to negotiate; we're willing to negotiate," but it will not happen before the government shutdown -- shuts down or even before the sun comes up when you're going to see the padlocks on the buildings and you're going to see people who are federal workers who are going to be furloughed will get those furlough notices.

BLITZER: Eight hundred thousand federal workers will be told don't both showing up for work and forget about your paychecks, at least for now.

All right, Dana. Thanks very much.

Back in a moment with continuing coverage as the clock ticks down towards midnight.


BLITZER: Senate Majority Leader Harry Reid is on the Senate floor speaking. Let's listen in briefly.

SEN. HARRY REID (D-NV), MAJORITY LEADER: ... millions of people being affected in tomorrow, in 65 minutes, actually. Republicans are still playing games.

As I indicated to the -- speaking through the chair to the senior senator from Illinois, a couple hours ago, just take a couple of examples.

We have 15,000 people a day come to Lake Mead, spending huge amounts of money to help the economy. They come there to boat, to fish, to recreate. Tomorrow morning, they can't go.

We have a beautiful area, recreational area just a short distance from Las Vegas. When you fly to Las Vegas you can see those beautiful red hills. It's called Red Rock. Over a million people a year come to visit them. Not tomorrow.

Now the Republicans are shutting down places like that all over America, because they don't believe in government. And tomorrow will be a bad day for government, a day of celebration in the Republican- dominated House led by the Tea Party over there. We hear the next gambit the House is to request a conference on the C.R. At present, we like to resolve issues. In the Senate chamber tonight is Chairwoman Patty Murray, chairwoman of the budget committee. She worked so hard to pass a budget in this body. We worked until 5 in the morning to get it passed. We wrote over 100 of these. We passed a budget. We passed a budget, because it's the right thing to do, and the Republicans said we should pass a budget, and we did.

Senator Murray has for more than six months requested a conference on the budget, 18 times. So we like to resolve issues. But we will not go to conference with a gun to our head.

The first thing that the House has to do is pass a clean six-week C.R. They have that before them; they can do that right now. If they do that, then we'll agree to work with the Republicans on funding for the government for the remainder of the fiscal year.

BLITZER: All right. So there is the breaking news from the House majority leader, Harry Reid. They are not going to accept the request from the House side to appoint conferees to try to come up with some sort of compromise.

It looks like the government is about to shut down one hour for now.

That does it for this edition of A three -- AC 360 LATER. Live coverage of the breaking news here on Capitol Hill continues next with "ERIN BURNETT OUTFRONT."